One of the things that keeps getting left out of the equation is the fact that mortgage interest is deductible - so if you cash out your equity you're borrowing the money for almost free at the current low rates. If you sit down and play with some of the online calculators that take into account your tax rate and your assumptions about how much money you can make investing and so forth, the different scenarios are pretty interesting. As a business owner, does it make more sense to pay down your mortgage or invest the money in new equipment? If you cash out the equity, you can invest in your business without borrowing money, and use the money to make money.
Manufacturing is the real way to make money. People in service professions, like me, are limited by our personal output. When I was in printing, man, oh, man - it was almost as good as printing money. I had a couple of brief stints as venture partner in printing projects where the return on investment were phenomenal. For entrepeneurs, paying down your mortgage isn't the best use of your money, capital investment in your business is, unless you've got more cash than you need. |
