Quote Originally Posted by JBrunner View Post
Then he said "Smart people earn interest. Stupid people pay interest." He was right. The only interest that makes any sense at all is on a home, and that should be dispatched as quickly as possible.
I agree with all the post, and I arrive to say that also regarding houses smart people earn interest instead of paying it.
I mean that if people knew some financial mathematics they would easily understand that it is much cheaper to rent a house, and save and invest the difference between rent and mortgage, than paying a mortgage.

I have actually put my house on sale. I will invest the sale proceed in shares, earning dividends (very easy to make 5% after taxes nowadays, I hope I sell my house before the next stock bubble). The dividends will pay for a nice rent on the outskirts of Rome, plus a comfortable "rent" living.

Mortgages make people poor. Buy a house when you have the money to pay it cash, I say. A mortgage is a way to pay interest on a large capital. Saving is a way to earn interest. A mortgage instalment is much bigger than a rent for the same house if the market is in a normal state. The monthly difference, properly invested for the long term, will buy a house faster than the mortgage.