Biggest question: how does Fabrice's analysis play out for someone that isn't extremely wealthy?<p>Yes, if you have $20 M dollars and are talking about simply allocating assets he is probably correct. However, what about for the avg working person who's buying a house with money that isn't his (a mortgage) so that by the time he retires, he isn't burdened with paying for a place to live.<p>Also, as an aside: I think most people don't have the personal fiscal discipline to take the money they would save by not paying a mortgage and invest it--they spend it. A mortgage is like a forced savings account for many.
What I don't understand is why people who say, "Why should I pay rent? That money is just going down the drain" never think to themselves, "Why should I pay interest on a mortgage? That money is just going down the drain."