On... To Mortgage or Not?

To mortgage or not to mortgage, that is the question. I say, to mortgage, at least at this point in my life.

Let me tell you a story about a friend who I made back in 2004. We joined the company at about the same time. One day, we were having dinner and he asked me, "If you have enough money, would you pay off your mortgage? Or will you use your money to get extra mortgages and buy more properties?". Guess what my answer is at the time. Pay off my mortgage. He chose the latter. And now 20 years later, that man is a multi millionaire. And I'm just me, still grinding to make my first million.

As a rule of thumb, always put your money where the return or interest is the highest. For example, if there are 2 banks, put your money in the bank which is paying the higher interest. So, my friend chose the right path and I chose the wrong one. Why? Consider this. Which is higher? Property appreciation rate or the loan interest rate? If a property appreciates 10% annually and your mortgage rate is 5%... you're leaving 5% returns on the table if you pay off your mortgage.

I believe with my current knowledge and abilities; I can outperform my mortgage interest rate. Just think of the mortgage as a liquid loan, that I can put to work in the markets. If I pay off my mortgage, I would have no more liquid to invest.

Of course, everything has to be taken in context and depends on your situation at the time of decision making. Paying off my mortgage back in the days, was the best decision I ever made. It allowed me the freedom to leave my job and move to another country without the fear that I cannot service my loan.

In my current situation and considering all circumstances, I believe the best course of action is to hold on to the mortgage and invest the money instead (Although this is a hypothetical scenario; at the time of writing my liquid is not enough yet to pay off my mortgage).