Where to Invest
The economic climate today hardly resembles the conditions that were present in recent years. The entire landscape has changed, so investment strategies that were once valid do not hold the same appeal today. There was a time when a home mortgage could be used as a personal savings account. The money that was stashed in the mortgage was safe and sound with little threat of loss. The savings realized by a consumer were also significant when mortgages were paid ahead of schedule. Interest rates were generally high, so advance payments that mitigated future interest expenses yielded a significant return. Home values continued to grow at a steady rate, so there was some predictability to the notion of investing in a home.
Today all bets are off when it comes to investing in your primary residence. Current mortgages are characterized by low interest rates, so paying ahead to mitigate interest does not provide an attractive strategy. Home values continue to decline, so the return on investment is low when money is placed into a home e. There is even risk of losing money in a mortgage. Savvy investors like to use tax free savings accounts as a conservative cornerstone in their investment portfolios. The place that was once occupied by the home mortgage is now held by other conservative investment vehicles.
