Should You Crush Your Mortgage?

This Week’s Real-Life Lesson: Should You Crush Your Mortgage?

Should you crush the mortgage—or use those dollars to power appreciating passive investments? Here’s how I thought through it, why my wife and I are debt-averse, and what happened when we first paid off our primary home mortgage and then turned toward building passive income.

Where I Was

I grew up believing debt was something you only took on when you had to—and you got out of it as soon as you could. That mindset followed me into medicine and into entrepreneurship. Years ago, my wife and I made a decision that many spreadsheets would argue against: we paid off our primary home mortgage early. No arbitrage. No “but the market averages X%.” Just a clean title and a good night’s sleep.

If you’ve read my writing for a while, you know I often push you to think like an owner, not a passive passenger. Owners choose their constraints. For us, the constraint was simple: no personal debt. We didn’t want our family’s basic shelter to be tethered to interest rate cycles, job changes, or market swings. That choice anchored the next phase of our journey—building passive income streams after the mortgage was gone.

Along the way, I’ve written about decision frameworks that help you evaluate big choices objectively—like housing (renting vs. buying) and when to prioritize elimination of “bad” debt on your path to independence. If you want a quick refresher on those concepts, I unpack rent-ratio thinking here and debt-versus-invest tradeoffs here: Renting vs Buying.

What Happened

When we wired the final payment, the change was immediate and visceral. I felt a reduction in cognitive load that no spreadsheet can model. With no mortgage, our household breakeven dropped dramatically. That did three things for our entrepreneurial life:

1. Lower personal “burn rate” → higher risk capacity in business. Because our monthly obligations were lean, I could make braver—but still sane—bets inside my business, as well as invest in new business ventures. I didn’t need every experiment to work on the first try.

2. Clear cash-flow reallocation. The “mortgage payment” didn’t vanish; we re-deployed it into appreciating assets. Our first moves were conservative: cash reserves, diversified index funds, and eventually real estate—with a lot more wisdom than when I started. (If you want my hard-won lessons in real estate, I summarized many of them here.)

3. Psychological freedom that compounds. Freedom isn’t just math. It’s also the ability to think long-term, to endure a slow quarter, to say “no” to misaligned work, and to build at a sustainable pace. I’ve written about the identity shift from employee to owner and the covenant to minimize unnecessary debt; both shaped our path.

Now, let’s be real: there’s a credible case for keeping a low-rate mortgage and investing the spread. In some interest-rate regimes, that’s rational, like if you hold one of those 2.5-3% mortgages presently! But here’s the counterintuitive thing we discovered: by erasing the mortgage, we actually accelerated our investing because we were more consistent and less anxious. Consistency beats optimization when your life is full.

What You Learned (and What I Learned)

Over the years I’ve coached many clinicians through this same decision. Here’s the distilled learning:

• There are two returns: the financial return and the sleep-at-night return. If paying off the house gives you a 7% “emotional APY” in resilience, it can outperform an 8% back-tested spreadsheet that you can’t stick with.

• Sequence-of-returns risk is real—emotionally. Even if you understand it technically, a market downdraft while you’re highly leveraged can cause you to “tap the brakes” or sell at the wrong time. De-leveraging your personal life can inoculate your business decision-making.

• Debt policy is part of your operating system. In my writing on roadmaps to financial independence, I emphasize eliminating high-interest debt early. That principle extended, for us, to a values-based choice about our primary residence. Once we met that conviction, our investing discipline improved because we didn’t argue with ourselves every month.

• Micro-corporation + low personal overhead = unfair advantage. A lean household and an owner’s entity structure (your PC/PLLC taxed as an S-Corp, for many of you) can produce durable free cash flow you can reliably direct into appreciating assets. I’ve written about that engine—and why it’s often the missing lever for physicians.

The Surprising Micro-Business Insight

Here’s the twist most people miss: debt decisions shape your entrepreneurial behavior more than your investment spreadsheet.

When your mortgage is gone (or when you’ve created ample offsetting cash flow), your time horizon lengthens. You get choosier about who you serve and how. You say “no” to low-fit work sooner. Your risk shifts from financial to reputational: you’re building assets—content, systems, relationships—that appreciate.

After we paid off our mortgage, we turned to appreciating, cash-flowing assets—and we did it with intention. We prioritized:

• Businesses and digital assets that grow with marginal effort (courses, memberships, intellectual property). That is how PEA-SimpliMD was birthed.

• Selective real estate with multiple exit options and conservative underwriting.

• Paper assets (broad-based index funds) on an automated schedule.

If you’re debating this yourself, you might appreciate my newer post that frames the decision head-on—What’s Better? Pay Off Debt or Invest?—and an older piece that bookends our two-decade journey from debt-free to purposeful investing. Both offer mental models you can adapt.

A Simple Decision Framework You Can Use

1. Clarify your values (safety, autonomy, speed). If the primary value is peace, paying down the mortgage can be “worth it” even at the expense of theoretical spread.

2. Check your rate reality. Low fixed rates argue for investing; high variable rates argue for paying down. Re-run this annually.

3. Compute your real breakeven. What’s your household cost to survive? Drop it. Every $1,000/month you remove buys you enormous optionality as an entrepreneur.

4. Decide a policy and automate. If you’re keeping the mortgage, automate a “mortgage-equivalent” monthly investment into appreciating assets. If you’re paying it off, automate the former payment into investing once it’s gone.

5. Keep your owner engine healthy. Your micro-corporation should spin off consistent free cash flow. That—not clever leverage—is what lets you sleep at night and scale responsibly. (If you’re new to the micro-corp concept, start here: The Physician Entrepreneur Roadmap.)

Mini Case Study (Anonymized)

“Dr. L,” a hospital-employed specialist with a low-rate mortgage, felt stuck. She disliked debt but loved the math of investing. We modeled two paths:

• Path A: Keep mortgage; invest $4,000/mo into a low-cost index fund; use her new micro-corp to create $2,000/mo of additional cash flow via expert witness work and a small digital product.

• Path B: Pay off the mortgage within 24 months using a blend of bonuses and locums income; then redirect the entire former mortgage into a diversified portfolio and one carefully underwritten STR.

She chose Path B because it fit her values. By month 30, her household breakeven was down 38%, and her monthly investing exceeded what Path A projected—because she never paused contributions during market volatility. Behavior beat optimization.

Related Posts You May Find Helpful

• What’s Better? Pay Off Debt or Invest? (fresh perspective on the tradeoff) https://www.simplimd.com/blog/what-s-better-should-you-pay-off-debt-or-invest

• Renting vs. Buying: Why 18 Is the Number to Watch (rent-ratio concept for housing decisions)https://www.simplimd.com/blog/rentingorbuyinahome

• The Roadmap to Financial Independence (see Step 3 on eliminating bad debt)https://www.simplimd.com/blog/the-roadmap-to-financial-independence-10-steps-to-secure-your-financial-future

• The 40 Things I Wish I Had Known About Real Estate (my personal lessons learned)https://www.simplimd.com/blog/the-40-things-i-wish-i-had-known-about-real-estate-before-i-started

“Is This Deductible?” Sidebar

Quick tip: I’m teaching physicians this week at a PEA CME course in Ireland. For travel tied primarily to business/education, ordinary and necessary expenses may be deductible—airfare, lodging, ground transportation, and registration—if you substantiate the business purpose and keep records.

Join the Movement

“Clinicians who become owners don’t just chase returns—they design lives.” Ready to join them?

Join PEA Explorer Membership → https://www.simplimd.com/PEAMembership

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• Your E-Books Library (Free) → https://www.simplimd.com/e-books-available-on-simplimd

• Doctor Incorporated (Free Chapter) → download the intro chapter and start your autonomy playbook. Download Here.

Bonus: Act on It This Week

• PEA Coaching (4-Pack – save 30%) → Fast-track your plan from idea to execution: Get started today for 30% off by going here!

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Final Word

There isn’t a “right” universal answer to pay off vs. invest—there’s a right answer for your values, rate environment, and entrepreneurial stage. Our family chose to slay the mortgage first, then channel freed-up cash into appreciating assets. That single act simplified our lives, sharpened our decisions, and gave us the durable confidence to build.

If you’re standing at the same crossroads, you don’t need a perfect spreadsheet. You need a policy you’ll follow—and an owner’s engine (your micro-corp) to fund it relentlessly. I’m cheering for you.

Disclaimers: Educational purposes only; not tax, legal, or investment advice. Consult your professional advisors.