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Originally Posted by DementedReality
although, when you save a dollar outside an RRSP, the govt comes and takes $0.40 of all the interest you earn. whereas if you put that dollar down against your mortgage, you gain $1.00 of equity that can be used later via a HELOC if required.
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Extremely good point, and something that wasn't really touched on yet. Paying off your mortgage is not a bad investment, and most importantly it's extremely safe. There is nothing that can possibly go wrong (that I can think of) and it still gets you about 5% return, without you having to pay taxes on that 5%. Absolutely no risk + small reward + extra benefits = good investment for sure. That's why a good chunk of my personal finances goes against my mortgage. And that last part is very true as well. The guy at my office who owns 13 properties says that he could never have possibly done what he did if he didn't have so much of his mortgage paid off.
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i dunno, i got tired of paying extra taxes, so i saved up enough cash to ensure i wasnt living pay cheque to pay cheque, covered my RRSP's and then decided to ramp up my mortgage payback, instead of just adding more cash to my portfolio. since i am a rather unknowledgeable investor, i decided to use this route.
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I know some people my age who are in the same situation as me family-wise, who still live paycheck to paycheck and don't put a dime towards RRSPs or any other type of investment ever. I suppose that's necessary for them, unfortunately, although I see all of them buying vehicles that they have to borrow to buy and spending money that I'd never spend. I suppose it's a priority thing, but I'm always terrified of the idea of still living paycheck to paycheck when I'm 45, and still don't have any RRSPs.
Your way of doing things is probably what the majority of people do, at least those who have the inflow of cash that allows them to do something at least. And there's really nothing wrong with it. Risk-free, you're still getting ahead, and loving life. In fact, I do all of those things as well with my personal finances, but it's the borrowed money that I'm using to try something bigger and better.