Young homeowners often get bad advice that confuses accounting and economic costs. What is the fallacy in each of the following pieces of advice? Can you alter the advice so that it makes sense?

1. Owning is always better than renting. Rent payments are just money down a ‘‘rat hole’’—making house payments as an owner means that you are accumulating a real asset.

2. One should pay off a mortgage as soon as possible. Being able to close out your mortgage and burn the papers is one of the great economic joys of your life!