It is easy to look back at the past and say “I should have done this.”  The “this” can be any number of things.  I knew about Bitcoin long before the average person on the street, yet I didn’t invest (more like speculate) in it.

When stocks were hitting all-time highs in the U.S. in late 2017, it was easy to find people who said they wish they would have known there would be such a great bull run in stocks.  While this is rather obvious, we still hear it all the time (and not just about investing).

But if we could go back in the past knowing what will happen in the future, then a lot of things would be easy.  It reminds me of Back to the Future II where Biff goes back in time with a sports almanac and is able to become very rich by correctly betting on the outcome of sporting events.

I have discussed paying down or paying off a mortgage.  I even released a special report on the subject several years ago.

Most people who pay off their mortgage do not later regret doing so.  But I have heard people challenged by others for doing so, saying they could have received a better return on their money elsewhere.  The person who paid off their mortgage will respond that they would have put their money in stocks instead if they had known that we would experience this great bull run.  But, of course, nobody knew for sure that stocks would boom to the extent that they have.

The person who paid off their mortgage understands that life is unpredictable, which includes the investment markets.  In fact, it is because of this unpredictability that they paid off their mortgage.  It is a way to add an element of certainty in our uncertain world.

If you have a mortgage with a 4% interest rate, you would be much better off putting the money in stocks or some other investment if the other investment could guarantee you a return of 8%.  (Even here, you have to consider that you would owe taxes on the gains.)

I think most people who are advocates of paying off their mortgage would even agree that the investment with the 8% return would be a better use for their money than paying down their mortgage.

But in our real world, there are no guaranteed investments with a return of 8%, at least that I know of.  There are ways to guarantee savings though.  If you have a credit card balance that charges 12% interest, you can save yourself the 12% (guaranteed) by paying it off. And if you have a home mortgage with a 4% rate, you can give yourself the equivalent of a 4% guaranteed rate of return (tax free if you don’t itemize) if you put your extra money towards it.

Don’t get me wrong here.  There are reasons that you shouldn’t pay down your mortgage.  Most importantly, it is an illiquid asset that will tie up your money.  But having knowledge of the past returns of other investments is not an argument for not paying down your mortgage.

If this were the case, you could also walk around saying, “I sure regret buying car insurance last year, because I didn’t get into any car accidents last year.”  That is either stating the obvious, or worse, just irrational thinking.

Therefore, you shouldn’t regret your past decisions just because you now know the results of the past.  If you are going to reflect, you should put yourself back in the position you were in then of not knowing what the future would bring.  You may have made a bad decision, but it isn’t because of things that happened beyond your control.

If you put all of your money in tech stocks in late 1999, you can look back and say it was a bad decision.  But it wasn’t a bad decision because tech stocks subsequently crashed.  It was a bad decision because you did not take the risks into account and properly diversify.

Nobody can predict the future with any certainty.  You certainly can’t predict the investment markets, because it is made up of millions of people buying and selling.  They are based on human action, which we cannot fully predict, and we certainly can’t account for all of the variables.  We have no idea what stocks will do tomorrow or next year.

One thing you can predict is that when you pay off your mortgage, you will no longer be paying interest to the lender.