[RockinRight]

I’m saying borrow the million as a mortgage, leave the other million alone in my example.

$1,000,000 earning 10% per year after 30 years:

$17,449,402.00

Cost of borrowing $1,000,000 for 30 years at 7% interest:

$2,395,087.20 in principal and interest at an amortized payment of $6653.02/mo principal and interest (we don’t count principal in cost since it is re-added to home equity and assets)

Net result, not including tax benefits of a mortgage:

$15,054,314.80 plus a paid-off house at the end of 30 years.

Alternative:

Spend the million on the house. You now have zero. Let’s forget for a moment the inherent risk in spending every dime you have.

Put the mortgage payment equivalent in an account earning 10% - that’s $6653.02/mo for 360 months. With no interest deduction. The interest deduction matters because you’re investing what your interest would have been, so your monthly outgo is the same.

Total Investment Value after 30 years in this example:

$15,039,071.00

$15243 more to take the loan and leave the million alone. Not a huge difference, until you consider that it would also take the ENTIRE 30 years to build up the same amount you would have had had you left the million alone. Also - you have to consider the tax benefits of a mortgage.

[Big Giant Head]

Let’s forget for a moment the inherent risk in spending every dime you have.

Well, then let's forget for a moment the risk of being in debt for a million dollars....

Risk works both ways.

[Ignatz]

I see what your saying. I guess for me it's a safety factor.
"The debtor is slave to the lender". My preference in most cases is to NOT be in debt, and use my income to build my own wealth rather than use my income to make payments to build someone else's wealth. Should I (God forbid) become unemployed for whatever reason, I'd still have my "possessions" and my investments to see me through, instead of trying to satisfy debtors.
Plus, paying cash on large purchases typically strengthens my negotiating position re: the purchase price.