I know people that ran up credit cards on consumer junk with the attitude “well, if worse comes to worse I’ll just declare bankruptcy”. People got more house than they needed with the attitude that they could just walk away if the house didn’t appreciate. It’s a horrible way to live financially speaking.

While I agree completely with you on your point of the perspective one brings to paying down a mortgage, I only have a problem with the perception people have about people paying off the home mortgage and the stigma attached to it.

An individuals well being is just as, or more, important than the bottom line of a business. If a business can take a strategic default on a contractually obliged debt, then it would hold equally true that an individual should be able to do so as well (within the limits of their contract).

The problem I see most people having with this idea is that it affects their neighborhood and their house value. This leaves the person who wants to default living as a slave (not to sound too hyperbolic) to their neighbors. Maybe the tacit agreement that people in a community hold so dear was never actually an agreement at all.

Hmm, I think I should put my thoughts together on this topic together in a more coherent way. But, I felt as though I should comment.

Hooyah.

If you go into a mortgage agreement with default in mind, you’re less likely to make extra payments to pay off the house early.

If you go into the agreement with the attitude that you’ll never walk away and you’re going to pay it off as soon as possible, you probably will.

Now who is better off? The you who walked away or the you who owns a home free and clear?

I wouldn’t worry about wild swings in house prices. Prices aren’t falling because people are walking away, people are walking away because prices are falling and they now owe more than the house is worth. Prices will continue to fall until they are back in line with fundamental supply and demand. Defaults may speed the fall because banks are more concerned with selling quickly than getting top dollar, which pushes prices down, but the ultimate destination of the market is still the same.

Preferred Financial Services

I worry, however, that current home prices reflect the fading notion of moral obligation to paying. As people start to view it more in line with the business contract that it actually is, we may see house prices swing wildly. Or, they might just be priced rationally.

Maybe not against Armageddon, but Financial funny games flee from gold.

Please Read Ayn Rand : Atlas Shrugged

Gold performs well as MONEY. You need to save it to have it. Its not like stocks, bonds or other Currencies. Once you spend it its gone. No cake & eat it too.

In Deflationary environments, the price may drop, but the price of goods will as well- This is the “Financial Armageddon” – Nothing gets economists like yelling “DEFLATION!”

Normal Inflationary Environments, this will preserve the WEALTH value you’ve put in. Silver in the 1940s: 1.40$ But that bought you a steak, potatoes & dink. – at 10-20$ now, same thing.

In a ‘Financial Armageddon” of the other sorts, Currency Crisis, There is no other asset that will protect you better then gold & silver. – This is why you should have SOME gold and silver in any portfolio.

Gold and Silver where NOT on the top of list of priorities:

1. 6-12 Months of Food Stored: Check.
2. Renewable Food Sources, Trees, Garden, Chickens: Check.
3. Lead & Lead Delivery Devices: Check.
4. Gold & Silver: Check

Rules to Remember:
1. Don’t Panic.
2. If you panic, be the first to panic. He who panics first, panics best.

Oh, and I wholeheartedly second the “Myth of the Tax Deduction.” I also happened to write on that same subject just a few days ago myself: "Tax Savings" Far Overshadowed by Interest Paid

I truly enjoy a lively debate about passions and finances (especially when authors speak from personal experience making it much more personable to read) and the realism that with much compromise, both can go hand-in-hand.

I used to feel bad about how many mistakes get through my own proof-reading efforts. I try hard to mash down mistakes. But then I wrote the book. It was comforting to see that everyone along the way makes errors — even the copy editor!

I’m not trying to justify my typos and mistakes. I’m just rationalizing them.

(speaking of which… “just posted” not “just post”)