For many people, few financial goals are more satisfying than making that final mortgage payment and owning a home free and clear.

But in an era when technological breakthroughs like AI and private space exploration are creating new investment opportunities — and new fortunes — the decision to pay off a mortgage early isn’t as straightforward as it once was.

The question is: Should extra cash go toward eliminating debt or building wealth?

For David Root Jr., founder and CEO of the Pittsburgh firm DBR & Co., the answer depends on a variety of factors, including a homeowner’s mortgage rate, age and appetite for risk.

His firm manages more than $1 billion in private wealth and advises on roughly $9 billion in 401k company plans and institutional assets.

Root believes the country is living through one of the most transformative economic periods in its history, comparable to the Revolutionary War and the industrial expansion that followed World War II.

But that doesn’t mean everyone should rush to invest every dollar. A homeowner who locked in a 2.5% mortgage rate in January 2021 faces a much different decision that someone carrying a mortgage of 6.5% or higher. Likewise, a person in their 30s may have decades to ride out market fluctuations, while someone approaching retirement may place a higher value on eliminating debt.

While Root is a strong advocate for investing, he acknowledges there’s something that can’t measured on a balance sheet — the pride, security and peace of mind that comes with owning a home outright.

Q: For decades, the conventional wisdom has said that investors should keep a low-interest mortgage and put their extra money in the stock market. Do you agree with that advice today?

A: Yes, absolutely. Many homeowners were fortunate to purchase or refinance homes at the height of COVID when the 30-year mortgage rate was 2.5%, in January 2021. Today, the 30-year mortgage rate is 6.5%. In the meantime, the S&P 500 has returned over 120% since then. Looking back, that was a pretty good trade!

As for today’s rate, I’d be advising to pay down that mortgage as quickly as possible.

Q: You have said that we’re living through an economic period comparable to major turning points such as the Revolutionary War and WWII. What makes this moment different from other times in recent history?

A: Clearly technology is the biggest difference.

Today, we are fighting wars with drones, unmanned aircraft and boats where we’re fortunate the soldier casualty count is next to zero. Fingers crossed that the peace holds in the Gulf of Hormuz.

At the same time, we’ve witnessed the largest IPO (SpaceX) in market history this week, making its founder the first trillionaire and over 4,000 employees millionaires overnight.

These turning points in history (usually every 80 years) are born out of a time of war that author Neil Howe talks about in his book the “Fourth Turning,” where the aftermath leads to an even greater age of peace, prosperity and technological advancement — periods, in hindsight, that have made railroads, oil, automobile and now space/tech barons generationally rich in America. Why would we not want to be investors during these times?

Q: If someone has extra cash each month, should their first priority be paying down the mortgage, investing or trying to do both?

A: I would advise doing both, especially if one has a mortgage rate closer to today’s 30-year rate. In many ways, it’s like investing in a 60/40 portfolio — 60% stocks and 40% bonds — where your mortgage at today’s interest rates [6.5%] resembles a high-yield bond.

Q: Does your advice change depending on a person’s age?

A: Absolutely. Someone in their 30s has their whole life ahead of them and can afford to take responsible risk in the stock market. Whereas someone approaching retirement may be facing the rest of their life on a fixed income where it makes more sense to pay off a higher-priced mortgage.

Q: What are the biggest mistakes you see homeowners making when deciding whether to pay off the mortgage early?

A: Generally, it’s having a ‘debt is bad at any cost’ belief that may stand in the way of allocating capital and investing wisely for the future.

Q: Some would say the real benefit of paying off a mortgage isn’t financial — it’s emotional. How much value do you place on the peace of mind that comes with owning your home free and clear?

A: No question there’s peace of mind in owning your home outright. Is there a better feeling than burning the mortgage contract when it’s paid off? I’d offer that retiring without a care in the world is right up there!

Q: If we are entering a once-in-a-generation economic opportunity, where should ordinary investors be putting their money today?

A: By investing in the unparalleled growth of the USA … think like a baron. Participating fully in employer-sponsored retirement plans, especially those that provide matching contributions. By dollar-cost averaging into low-cost, high-performing stock funds as an owner not a lender.

Parents and grandparents should take advantage of education-funded 529 plans and Trump savings accounts on behalf of the next generations. And those headed towards retirement should consult their tax advisers about converting taxable retirement accounts to a Roth IRA in order to enjoy a more tax-efficient retirement.

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