Originally Posted by
Trip7
It's simple math. Your loan is at 0% amortized over several years. Plenty of money market accounts are yielding above 3% risk free. Simplicity comes at a high cost paying off that loan. Does a Delta Pilot need to leverage a cheap mortgage? No, but a cheap mortgage is basically free money that can be leveraged to build wealth. Paying off free money early is poor capital allocation.
Nobody is arguing with your simple math. Notenuf and I have both ack’d that.
I am saying most people, my household included, will be more likely to spend that cash than let it sit in your risk free MM acct which starts eroding the purity of the mathematical comparison. If you have a 2.5% mortgage you are essentially paying 2.5% interest on every latte, tank of gas, etc as long as that debt exists.
Hold while I get my pompous lecturing stick out, ahem: spending on anything while you are still paying interest elsewhere is poor allocation of capital. It’s just simple math 😂
Your Tesla is your status symbol. Mine is taking a month off whenever I want. Neither is a poor decision if you can afford to do it, and we’re both fortunate to be able to do so. Choices are good. Cheers.