Historically, mortgage rates are at historical lows and average rates were about 6%, so in that context, a 5% mortgage is good (assuming it’s a fixed rate or, at the least, won’t adjust in less than 5 years).

The ultimate answer in your case is tied to how comfortable you are with risk…

In an ideal situation, you don’t need to work, you have no debts, and have assets that can cover your living costs. This is relatively easy to achieve, however most people do not strive for this – or at least want to take the easiest route.

As an example, if I had stayed at my parents after finishing school at 16 and getting a full-time (dead-end) job in a supermarket or such (I guess through educating myself or internships I could have got a better job), I could easily earn £12k/yr after tax. By now (I’m 21), assuming I spent little and my parents didn’t charge me rent, I would have at least £50k cash. I could easily buy a house for this: http://is.gd/6S6Vz (I love the boarded up windows , a better example is probably this: http://is.gd/6S775). You could then work part time and easily pay off bills and what have you, and have nothing but free time to do as you wish.

So the question is why do more people not do this? I took the typical route, I went to university, I now have ~£18k in debt (UK student loans are rather good, as such I don’t really consider it debt). I was working part time throughout the whole thing, so unlike some people I don’t have bank overdrafts, I am around £2k in the black. I have a good job paying a typical graduate wage, however as I live in London my living costs are rather extortionate (about £800/mo) – that doesn’t even include going to the pub and getting lunch out, so tack on another couple of hundred per month, and that means I’m spending about £1k/mo just to live. If from my wage I say I can save £500/mo (yeah right – I’m a sucker for gadgets), we can make some comparisons.

If I didn’t go to uni I would have:
- A house (An asset of ~£30k)
- At least £20k in cash
- Living costs of ~£2k/yr (food + bills)
So from this I could potentially live for 10 years without working a day.

Going to uni I have:
- A degree
- £2k in cash
- A job leading to savings of ~£6k/yr
Lets also not forget working for ‘the man’.

So which is better?

Money either works for you or against you.

I do !!!

(Mortgage + house) – mortgage = house

(Business loan + business) – business loan = business

(Student loan + completed coursework) – student loan = degree, certification, license, etc.

That means you’re not just talking about my house, stocks, and bonds.

You’re also talking about my cookware, sewing needles, and other tools that help me keep my expenses down. Also, my cookbooks and other reference sources. Maybe also some of my skills and knowledge.

Thought you’d like this site (and your readers, too): http://mikeruppert.blogspot.com/

Great info and links to current intelligence, environment and economic news. Also, see his book and the film based on it.

And can I just say, I envy people who are naturally interested in investing etc. Whenever you have a passion for something, things tend to work out better than if you’re just doing it as a means to an end–as I am.

“Money is in some respects like fire; it is a very excellent servant but a terrible master”
PT Barnum

debt = money is your master
no debt, no assets = no master, no servant
assets = money is your servant