This millionaire shares why he ‘regrets’ paying off his home mortgages: ‘I felt trapped’

I paid off the mortgages on two houses three years ago. One was our main home, and the other was a three-bedroom house that my wife and I rented out for $1,500 a month.

I was on the right track with my money. I was finally out of debt and had a successful music blog and business coaching service that made me a total of $1 million per year. My family and I had been living on food stamps before that. But now that I’m 39, I wish I hadn’t paid off both of my mortgages. Just one year after we paid off our mortgages, my wife and I put our daughters in a school an hour away from our Tampa, Florida, home.

It would have been best to move closer, but most of our money was already invested in real estate. We didn’t have many choices, and I felt like I was stuck. But I learned a few important things from the experience:

1. Have your own money philosophy.
I didn’t grow up learning much about money, but I knew I needed to get my finances in order after I married at 22. So I turned to self-help books and experts for guidance. Having watched family and friends struggle with debt my entire life, I was pulled into the camp of money advice that advocated for zero debt, even mortgage debt.

But different people have different situations. Eliminating my bad debt while maintaining lots of liquidity would have given me the most financial flexibility. After months of struggling with banks, I was able to refinance one house and buy a new one closer to my daughter’s school. But this time around, I followed my money philosophy. After selling my old one, I only put 50% down on my new house and invested the remaining 50% of the new house’s value into an index fund.

2. It’s okay to get emotional about money.
Money can cause stress and hardship, and it’s okay sometimes to let your emotions play a role in your decisions. I assumed that having a paid-off house would relieve my stress. As it turned out, a paid-for home with little access to money ruined my sleep. I needed to develop a more practical approach to my mortgage debt.

My investment of 50% of my house’s value into an index fund wasn’t just an attempt to build wealth; it was primarily for peace of mind that I’d be able to access my money in case of an emergency or a significant life change. If you’re about to make a significant financial decision, do a “sleep test.” In any given economic situation, ask yourself, “Which choice will help me sleep better at night?”

3. Your money goals should constantly be evolving.

Even though I still think that paying off mortgage debt is a good goal, it took me a while to realize that my goals were changing. At first, my only concern was making enough money to take care of my family. Then I wanted to get out of debt, so I used all of the money I made from my business to pay it off.

But now that I make $1.6 million a year, keeping my money handy and making more money are more important to me. I also try to give more. I want to give at least half of my earnings to my church and causes I care about.

What is one goal you could work on that would make it easier for you to reach all of your other goals? Is it getting rid of debts? Trying to make more money? Setting up a savings account There is no right answer, only one that makes you want to do something.

Graham Cochrane started The Recording Revolution and wrote “How to Get Paid for What You Know.” He has helped more than 3,000 people start their own businesses and make them better.

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