How I think about debt

> outside of a potential rise of property taxes, my "rent" payment will not exceed a certain number of dollars

And home insurance, too. But generally, yes: over the course of decades an American fixed-rate mortgage really is a wonderful thing.

There is also the possibility of deflation to worry about, although deflation comes with many other problems. I personally think that worrying about deflation is like worrying about a meteor, or the collapse of the local government: if it happens, so many other bad things will also happen that my mortgage will be the least of my concerns.

Graeber's book is about how debts work in different societies and cultures and what they mean. i finished the book being more confused about debt and money than when i started. that said, it was an interesting read, i don't regret reading it.

in contrast, this brief blog post by Morgan Housel gives a small visual metophor and a rule of thumb about how too much debt might be fatal when operating a business. arguably it teaches you something actionable, but doesn't tell you anything about your society.

Graeber's book is not at all concerned with giving you actionable advice on how to best use (or avoid) debt to run a business within your society.

that said, Graeber's book may give you some actionable advice on how to get along better with your neighbours, family and community. the tip would be: try to have everyone in the village owe each other debts. the idea is everyone should feel they have some obligation to others that they can never fully repay, but maybe they can return some other incomparable favour or assistance in future. this encourages cooperation.

trying to fully repay or balance these debts would be frowned upon -- such behaviour is what one might do if one were seeking to not participate in society any more. not pro-social.

> > it's okay to make financial decisions that don't make any sense on paper if they work for you

I consider that to be (mostly) pernicious nonsense, like ‘it’s okay to walk off of a cliff, if that works for you.’ To a very great degree, finances are a mathematical/legal reality: the path of wisdom is to adjust one’s emotions to that reality rather than to imagine that reality matches one’s emotions.

There is some degree of truth to it, of course: at the end of the day, life is not about maximising one’s finances, and one’s emotions definitely have a role to play in one’s happiness. But the sooner one learns to defer immediate gratification, save for the future and build up a nest egg, the happier one is likely to be.

The purpose of a 30-year fixed mortgage is to build up equity in a home you otherwise couldn't afford. If OP moves, they now only have to take on a smaller mortgage for their new home and then keep paying that new mortgage off.

The goal is that by the time you reach retirement age, you have paid off the mortgage and own your home free and clear. Thus, you only have to pay the property taxes and have more financial security than someone who never built up equity because they always paid rent.

Furthermore, if you have children, that home is potentially a source of generational wealth. They can sell it after you pass and invest the proceeds, or live in it themselves if they want. Worst case, if you find you didn't save enough for retirement, you can tap into the home equity to keep food on the table, although this is not optimal.

This is an overly simplistic model which happens to have applied very well to Japan but would break down if applied in other economies where inflationary risk is present.

I'm pretty sure there's a joke about there being three types of economies: developed, undeveloped, and Japan.

Cash is useless if the value of the cash goes down by 10,000% and you don't have an inflation adjusted revenue stream. You have to do something with the cash to get enough interest to keep up with inflation.