Money Lessons You Don't Need To Follow
What used to be bedrock advice for your parents' generation might not be the best strategy in the 21st century. Here's how to keep pace with the brave new post–piggy bank world.
Old Lesson: Pay Off Your Mortgage ASAP
Here's what I've been taught about money: It's not good to be in debt, and therefore it is good to pay off debts as quickly as possible, including a mortgage. Turns out, this conventional wisdom is a holdover from a different time.
Carmen Wong Ulrich, the president and co-founder of ALTA Wealth Management
, told me: "People think that it's a good idea to pre-pay a mortgage and/or pay a mortgage off ASAP." What's wrong with that? "This advice comes from a previous couple of generations who had horrible interest rates on their mortgages—in the 1980s, the average mortgage interest rate was in the teens. Imagine—my dad, who had great credit, was paying 17% on his mortgage. That's expensive. Today, mortgage rates are at incredible lows—you should be in no rush."
Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.