I think you are in agreement with ChristianKl (i.e., you both think the OP overlooks the emotional disutility of knowing that you have debt), but your tone seems to me to indicate disagreement.
Nope. I think the OP doesn’t overlook the emotional disutility of knowing you have debt, and that seems to me sufficient justification for what I think Christian is objecting to.
What text from the post suggests accounting for the emotional disutility of indebtedness?
Here’s a quote that to me seems to argue against it:
The question becomes: what risk-free rate of return is equivalent to your best available investment? If you pay a higher interest on your debt than that, you should pay it off. If the rate you’re paying is lower, you should invest.
Following this algorithm suggests investing in a risk-free 3.01% return before paying off debts costing a net 3% in interest.
There’s a bit of section 5 that accepts emotional disutility of volatility, but that’s not the same thing.
As for ChristianKl, they comment that to them it doesn’t make sense to value indebtedness at zero, agreeing with you that the disutility should be accounted for.
Oh! I’ve been interpreting Christian’s comment differently from you. Christian, could you clarify whether “value the psychological factor of having debt at zero” means (1) “place zero value on the psychological consequences of having debt” (which I think is what rossry has been taking you to mean) or (2) “place positive value on the psychological consequences of having zero debt” (which is what I was taking you to mean)? Thanks!
I think probably you’re right, and in any case you’re right that section 5 is about the emotional disutility of volatility; I was misremembering it as having said something about the emotional disutility of being in debt. Sorry about that.
… And having written that, I see that adrusi has made the same point about ambiguity. I’ll leave this here anyway.
OK. Then I confirm that I agree with you: there surely is (for some people if not all) a psychological difference between having debt and having no debt, and it’s surely (for most of those people if not all) in favour of the latter, and Jacob’s article might have been improved by taking that into account.
But here’s a counterargument: he isn’t claiming to offer a complete analysis of debt and why one might choose to take it on or not; he’s pointing out one thing about debt, its “anti-investment” character, and looking in some detail at that. When I started writing this comment I wrote “would have been improved” at the end of the paragraph above, but the more I think about the point in this paragraph the less I believe that, hence the weaker language that stands there now.
I think you are in agreement with ChristianKl (i.e., you both think the OP overlooks the emotional disutility of knowing that you have debt), but your tone seems to me to indicate disagreement.
Nope. I think the OP doesn’t overlook the emotional disutility of knowing you have debt, and that seems to me sufficient justification for what I think Christian is objecting to.
What text from the post suggests accounting for the emotional disutility of indebtedness?
Here’s a quote that to me seems to argue against it:
Following this algorithm suggests investing in a risk-free 3.01% return before paying off debts costing a net 3% in interest.
There’s a bit of section 5 that accepts emotional disutility of volatility, but that’s not the same thing.
As for ChristianKl, they comment that to them it doesn’t make sense to value indebtedness at zero, agreeing with you that the disutility should be accounted for.
Oh! I’ve been interpreting Christian’s comment differently from you. Christian, could you clarify whether “value the psychological factor of having debt at zero” means (1) “place zero value on the psychological consequences of having debt” (which I think is what rossry has been taking you to mean) or (2) “place positive value on the psychological consequences of having zero debt” (which is what I was taking you to mean)? Thanks!
I think probably you’re right, and in any case you’re right that section 5 is about the emotional disutility of volatility; I was misremembering it as having said something about the emotional disutility of being in debt. Sorry about that.
… And having written that, I see that adrusi has made the same point about ambiguity. I’ll leave this here anyway.
I meant (1).
OK. Then I confirm that I agree with you: there surely is (for some people if not all) a psychological difference between having debt and having no debt, and it’s surely (for most of those people if not all) in favour of the latter, and Jacob’s article might have been improved by taking that into account.
But here’s a counterargument: he isn’t claiming to offer a complete analysis of debt and why one might choose to take it on or not; he’s pointing out one thing about debt, its “anti-investment” character, and looking in some detail at that. When I started writing this comment I wrote “would have been improved” at the end of the paragraph above, but the more I think about the point in this paragraph the less I believe that, hence the weaker language that stands there now.