<prompt> Human: Im 34 with a wife and two little kids. My wife does not work. We owe 120k on our house and I have 122k in savings. Should I pay the home off or invest? I will say upfront that the idea of not having a mortgage and the peace of mind that would bring is very enticing. 4.25 rate. 110year salary. Purchased the home brand new in 2015 for 205k. No other debt. Wife does not have a degree nor a strong earning potential.  <response>: First, let me say youve put yourself in a very enviable situation - what a great problem to have. Dont fret too much no matter what direction you go. A few thoughts:Paying off debt any debt IS an investment. The math might look better to put money in the market with 8 annual return assumptions versus your mortgage rate, but return is only one side of the coin, the other being risk. Risk of a large cash outlay, loss of employment, risk of lower than expected market returns. Yes, if this was 2009, in hindsight avoiding the mortgage and levering to the markets would have paid off handsomely. However, that last risk is a big one right now. Equity markets have been strong for almost 9 years, interest rates are at historic lows, bond prices are at record highs. 8 return is a grossly optimistic assumption to me. Others will no doubt disagree, but they will agree that your next mortgage payment will come regardless of market performance. Lastly, its hard to put a price on the pride of ownership and financial peace of mind, but its as important as any number crunching. Sounds to me you may already know what situation will make you sleep best at night. 