They always planned to become financially independent and retire early — and buying a home in cash would bring them one step closer
. Sure, they didn't have to worry about mortgage payments, but they estimate that they've actually lost money on the deal — at least $19,000.About four years after buying their condo, the Keys decided to crunch the numbers to learn what would have happened if they had gotten a mortgage rather than paid in cash. If they had
Looking back to 2016, they assumed a 30-year mortgage rate of 4%, and an annualized return of 11% on the stock market. They would have been borrowing money at a 4% rate, but earning money at an 11% rate. Steven said he hasn't done the updated math, but he suspects that $19,000 would be closer to $30,000 by now.Steven and Lauren would have had a larger investment portfolio right now had they invested more aggressively rather than bought a home in cash, but they don't regret their decision.
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