When looking at investment strategies, two key elements have to be considered; risk tolerance, and investment term (or length of the investment period). There are lots of investment vehicles out there today. You can invest in almost anything you can think of. Of course there are stocks, bonds, and mutual funds. There are also precious metals, options trading, real estate, and some folks even think that going to the track or the casino is an investment!

Though all of those things (except maybe the track and casinos) are investments, they are not the best investments! The best investment you can make right now is to eliminate all of your consumer debt, including (and perhaps most importantly) your mortgage!

Interest is a two edged sword. When you're earning it, it's great! But when you're paying it, it's the pits! Canceling out interest owed is exactly the same as making that same amount of interest. In other words, if you have a credit card with an 18% interest rate and you pay that card off, you are saving that 18% interest you would have had to pay. By paying that card off, you have just "made" 18% on that investment.

An asset by definition is something of value. Most folks consider their home their largest asset. However, in most cases, it's NOT an asset because it's owned almost entirely by a lender! If you tried to liquidate that asset, in today's market, you'd probably have lost money. Remember, you haven't lost ANYthing until/unless you sell! As long as you hold/own the asset, it's worth (to you) is whatever you believe it to be worth.

Now, a lot of folks are going to say; "but if I pay off the mortgage, I lose the "tax advantage!" OK, let's look at that statement for a moment... First off, the government put that "tax advantage" into place to make homes more affordable to the average person. They did it not so much to help you the consumer, but to help builders increase sales and profits, which by the way, also increased taxable business income as well as providing jobs, which hence provided additional income tax dollars!

The next thing we need to look at is the supposed tax advantage. The average mortgage loan is (let's say) around $250,000.00. The average loan is in its 2nd year of amortization. We'll use an average interest rate of 6.0%, so in essence, the mortgage interest tax write off is about $14,727.00 for that tax year. That's the amount of interest you've paid the bank over those 12 months. By having that tax write off, it probably moved you to a lower tax bracket. The average person is in the 15% range, so that write off saved you $2,209.00 in federal taxes. Each state is different, so I'll leave that out for now. You can figure your savings there if you wish.

Now, if you didn't have that tax write off, you would move up to a higher tax bracket, but we'll do a worse case and say that you'll be in the 30% bracket. So, if you didn't pay that mortgage interest, you'd end up paying $4,418.00 more in Federal taxes! Mortgage lenders have sold you a bill of goods along with that mortgage! Now, just to point out the obvious... If you're concerned about losing the "tax advantage" of the mortgage interest write off, then what you're really saying is that you would rather pay the bank $14,727.00 (in interest) than pay the government $4,418.00 in taxes! Are you palm-slapping your forehead right now? You should be!

Why did you get the mortgage in the first place? It WASN'T for the tax advantage; it was because you couldn't afford to pay cash for your home! The tax advantage just made it a little more affordable in the long run. If you had the cash, you may have financed because there were other investments available at that time that paid higher interest than what the mortgage lender was charging. That's very difficult to find today!

So there you have it folks! The best investments you can make right now, today, in any economy are to eliminate all personal debt INCLUDING (and most importantly) your mortgage!