Remember, however, that you'll be taking a fair amount of risk in the hopes of earning a high-enough return that you might not achieve. You can also do the comparison after taxes, as some people argue that you should, because mortgage interest is generally tax-deductible. However, you must also consider that your investment returns are ultimately taxable. Some people like the peace of mind afforded from being mortgage-free. I want to put money into an individual retirement account.
Retirement accounts are just a shell.
When you establish a retirement account, you might not realize that it is simply a shell or shield that generally keeps the federal, state and local governments from taxing your investment earnings each year. You still must choose what investments you want to hold inside this retirement-account shell. Mutual funds are an ideal choice, as they offer diversification and professional management. The primary advantage of floating-rate bonds is that they do not lock investors into what could become a relatively low interest rate should overall interest rates rise. The floating rate is adjusted according to the terms of the bond agreement.