<prompt> Human: I live in northern California. Decent houses in good school districts are very expensive. I have a wife and two young children and my wife isnt working. Right now I own a 450k rental property outright and generate income from that, but I have notified my tenants that their lease wont be renewed. I plan to sell the house and buy one in the city I live in. I have another 100k invested very conservatively as an emergency fund. The houses I want to buy are in the 650-700k range. Thats just the price it costs to buy a decent house as crazy as it sounds - unless I want an insane commute. I make 100k a year with a very stable job. I am contributing to a pension I contribute 6, my employer contributes 8, and I also contribute an additional 8 to a 403b that isnt matched. I am also contributing to a 529 plan and make a 450 car payment.Is there a huge reason why this would be a bad idea if I have an emergency fund in order already?Assistant: Id rather not tie all my assets up in a home, especially with interest rates being so low. If you put 20 down, and get a 30 year loan at 4, that will leave you 300k to invest. Assume over 30 years you get a 7 return on an index portfolio and youll have made a tidy sum. Due to compounding, its better to invest in growth now, rather than paying off the mortgage earlier and investing more later in life.Having more assets outside of your house also decreases the chance that a catastrophic event will cause you to go into foreclosure.Human: Would it be wise to have a 560k mortgage with a 100k salary? That sounds like a recipe for disaster too. Id also like to be more diversified, but Im not sure how its possible with housing costs so high.  <response>: I paid off my mortgage and dont regret it. Ive never heard of someone who paid off a mortgage and did regret it.That being said, I do wish I thought to buy a duplex or a 4-plex and renting the other units out. 