<p>I think vicariousparent has the understanding of POIH correct. THE POIH’s are basically a family with a conservative financial planning philosophy and some money to manage. </p>
<p>Looking back at some of the “worthless advice from internet strangers”, very little of it is applicable to their conservative financial philosophy.</p>
<p>One thing I do have to point out that is not correct thinking is the idea of paying off a house that may be losing value is a bad strategy. The mortgage on the house is payable no matter what the value on the house is. Yes, some folks seem to be walking away from houses worth less than the mortgage balance and IIRC this year and this year only, the IRS is letting folks off the hook for imputed income from the part of the mortgage not recovered at the bank auction. However, in any other year, if you walk away from a 100K mortgage and the bank only recovers 80K from the auction, you get a 1099 from the bank that says their $20K loss is your $20K income and you get to pay income tax on that!</p>
<p>Bottom line here is that a mortgage must be paid eventually regardless of what the house is worth.</p>
<p>In the end POIH is asking for a valid reason why paying off the mortgage isn’t the best conservative ROI for their available cash. He has indicated that there is plenty of cash cushion beyond the funds necessary to do this, and is wondering if there is anything he is missing. I haven’t seen anything mentioned so far.</p>
<p>BTW, having the mortgage paid off after the children are finished with college (the first years use of the extra cash flow) will allow them to rebuild more cash savings with plenty of time (given their early 40’s age) to retire comfortably (although I’d bet they are probably well ahead on that front as well).</p>