Thoughts about completely paying off mortgage of your home

So, this came to uncle's mind recently. I stopped working for many months already, and I still have outstanding mortgage on my home. While I could liquidate a large chunk of my assets to completely pay off and own my home, I chose not to do it. Why?

1. The rates are still reasonable low compared with what I can get from my investments

2. Having liquid cash/cash-equivalent provides a lot of flexibility vs having a lot of money locked into the walls of the roof over your/your family's heads. As long as you keep up with the mortgage payments, you won't lose your home. 

3. Should you decided to change to a different home, you may not qualify for a new mortgage since you have no steady employment income, so you may need the cash to pay off upfront for the next home, and then sell off your current one to get back some money. 

4. You can't even refinance your existing mortgage with a different bank as they will require proof of income. 

So, Uncle simply reprice my current mortgage with same bank to new rate when it went out of lock-in period. While this means I will continue to need to pay mortgage every month, I retain my investments and allow them to compound. Anything that goes into mortgage payment, I don't see it as expense, but as part of adding equity to my home, which I can get back when I sell it. There is no real need to pay of the entire loan, unless rates shoot up to crazy levels, which is very unlikely. 

Fortunately, I expect my current apartment to continue to increase in market value over next 3-4 years, and this coupled with the already paid up equity so far, I am potentially able to sell it in 4 years time and get back at least $1.4M of my money. 

Things are very fluid when you have leverage (mortgage). Once you close that opportunity of leverage, it becomes very inflexible and limits what you can do with your finances. it's not just about how much you have in total, but how they are managed. The worst scenario I like to avoid is to be "stuck" and then forced to liquidate things at the worst time/prices. 

Yes, I used to think like many others, who always say "pay off your home loan, you no longer worry about your roof, and you have peaceful days!". BUT seriously, is it?

What if you have a full paid home, but you have very little cashflow (e.g. loss of job, and no investments to generate cashflow)? You are staying in your home, so it doesn't generate cash for you! So what do you do? Sell your home? How does that work? Do you then go rent a place, incur expenses of moving, and probably sell your home at sub-optimal price? Trust me, when shit happens, it all happens at same time. E.g. economy is bad, you lose job/income, and property prices all fell also. So you sell your home at the lowest price, losing out potential higher profits, and then get gouged by landlords on rent. Plus, you incur costs of moving, and also created instability for the family/kids by moving around. Your landlord could raise rent after 1-2 years, and you have to move again. You call this "peaceful" days? Is this what you "gain" by using up large chunks of your cash to pay off your home?

I think this thinking has to change. Rates are low and make use of it. 

Close to 10 months of not working...status

 Do I enjoy it? 

Of course!!

I exercise a lot more frequently now, doing more reps for chin up, pull up, leg raises. Clocking more steps and cycling longer distances. 

And I am eating well and sleeping well.

Life has been good to me. 

If you have been working non-stop for 15 years or more, slogging for your money and building up your family, if you can afford to, I stronger suggest taking a break of at least 6 months and do nothing. Just live your life. But make sure you have things lined up, friends to talk to and hang out regularly, as it certainly helps to keep your mind active and not end up rotting away. Trust me, unless you are filthy rich already, this will always feel scary initially. Scared that all the property and equity markets will crash and wipe your assets off the surface of the Earth. Scared that you will lose confidence as a person as your job has almost become your identity and image. 

But don't be. Because it is exactly such perceived fears that will prevent you from experiencing something different. We only live once, and time waits for no one. 

Yes, it's prudent to worry about things so that you can be prepared. But, you can NEVER be 100% covered. So you have to set a threshold on what is considered sufficient readiness and just go forward. What is the worse that can happen? What is the probability of that? it will be non-zero, but it will almost not be high like 20% or more. Just like someone who always worry about getting cancer, and spending all his money on insurance premiums, getting slammed by the premiums, become stressed out of the premiums, and not living your life and not enjoying your moments. It's tragic and I feel I will sure regret such a mentality when I am near end of life. 

I do have possibly of re-entering the workforce soon, but ironically, I am hesitant to forgo my good life in the last 9-10 months. I will miss my leisure morning breakfast, where I take my time to prepare and consume and think about my life and plans for the day. I will miss my random kopi sessions with friends whenever they are free, since I am always free lol. I will miss the opportunity to just change and go for a long walk in the trails, get fresh air, get sun. All these flexibility will be missed if I go back to an office job. 

So the job must be damn attractive to make me give this lifestyle up. Even then, I don't see me working more than 2.5 years before calling it quits on working life and permanently retire and enjoy my remaining runway. I won't be super rich in terms of material things, but I will life a rich life, a life rich with experiences, memories, joys, moments, freedom.