Reader Questions

Should I Be Debt Free? – Robert

I’m 50 years old, self-employed, with a total net worth of about 1.2 million. Our combined income varies from $80,000 to $150,000 a year, although in recent years business has been bad, and in my industry, people are being laid off and prices are stagnating.

My Father was laid off at age 55. My brother just lost his government job (an neat trick) at age 53. I worry that while I am making good money now, our debt servicing requires a fairly large cash-flow and if it is interrupted, well, all heck will break loose.

I am selling my vacation home (yea, poor me) because the overhead and amount of work is just too much. We have a $340,000 mortgage on our primary residence and a $30,000 balance on credit cards, mostly because I had to pay a capital gains bill on another property a year ago (my accountant had brain cancer, it’s a long tragic story) and I put it on a credit card. The rest of our savings is tied up in SEP, 401(k), IRA and life insurance investments.

By selling the vacation home, we can pay off all our debts and be debt-free. This means if my income drops (as it did this year) I don’t have to worry about making mortgage payments. It also means I can fully fund my SEP and IRA plans, etc. each year from here to retirement.

Should I pay off all my debts and be debt free? Some of these self-styled economic “gurus” say I should keep the debt and “invest” the $400,000 in stocks so I can make more money and take tax deductions.

My gut reaction is that the tax code is a lousy investment guide, and you can’t deduct your way to wealth.

Also, when I crank the numbers, the difference between investing the money (and making mortgage payments and paying interest for another 10 years) and paying off the mortgage and then investing the freed-up payment money is about a wash at my age. I have maybe 10 years more before I retire.

See also  Be Magically Debt Free Today - The Best Christmas and Hanukkah Gift

And if the stocks tank, well, there was my one shot at being debt-free, and now I’m broke and have this huge mortgage to pay off. And if I lose my job, wow, I’d have to tap into my 401(k) to live. Ouch.

Are the “Gurus” right and I am missing something? Or should I go for the brass ring and be debt-free at age 50? I guess you can see which way I am leaning. But this is the biggest decision of my life and I want to make sure I do this right. I don’t get a “do over” on this one.



This reader question was submitted for site members to answer.

This is your chance to be a hero and help out this person by providing your feedback and answer to the question. Post your response in the comments section below.

If you have a credit or debt question you’d like to ask just use the online form.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


  • I agree with the other comments and think you made the right choice to sell your vacation home.  While I’m sure it’s hard to see it go, I think the relief you will feel for doing so, will be worth it. Good luck to you.  I hope you are able to avoid the health issues you are worried about.

  • If you click on the link right below the ads it will take you to the site terms which explains why the ads are there and everything you want to know about ads.

  • I like your site and you provide some good advice. One thing that is troubling, is that many of the Google advertisements on your site appear to be for some of the very same “debt relief” and “credit repair” companies that your postings are warning against……

    I hope your readers don’t think you are endorsing those companies whose ads appear at the top of your pages….

Leave a Comment

Scroll to Top