Paying off a 3% mortgage seems to me a very conservative/safe move. I'd liken it to owning a Treasury Bond netting holder a guaranteed 3% after taxes. As safe investments go, in an era of minuscule bond & CD rates, that 3% guaranteed return doesn't look bad.

Assuming you itemize deductions, you need to compare with a Treasury yielding 3% beforetaxes. It's a common mistake - one that Mr. Burns made as well, and that I commented on above.
The pretax cost of the mortgage is 3%. When you itemize, you get to reduce your taxable income. This results in a tax savings (and so lower net cost of the mortgage). So your aftertax cost of the mortgage is 3% x (1 -r%), where r% is your tax rate.
That's exactly the same equation and net yield on a Treasury with a 3% pretax rate. Same idea - income taxes reduce the magnitude of any figure - the yield of a mortgage or the cost of a mortgage.
The "lock" problem cuts both ways. In order to get a Treasury yielding 3% (pretax), you have to go out 30 years. Odds are, your mortgage has fewer years to go. The only way to get a better return on the cash is to take on more risk. As you suggested, rates might rise to 5-6%. In the meantime, you've put money into a lower yielding, shorter term Treasury, hoping (risk) that rates will rise soon enough and fast enough that you come out ahead. Or you've invested in a more risky vehicle to get a higher return.
TANSTAAFL.

Personally the best thing my wife and I have done financially was to convert our 30-year mortgage to a 15-year mortgage years ago. We will have no mortgage when we retire. That is huge.

@davidmoran
Oops - thanks for the correction!
No - the term's not original. "Sleep factor" comes up a lot when discussing investments. As it should. So, you really need to look at the mortgage decision in the context of all your investments and liabilities.
Paying off a 3% mortgage seems to me a very conservative/safe move. I'd liken it to buying a Treasury Bond netting holder a guaranteed 3% after taxes. As safe investments go, in an era of minuscule bond & CD rates, that 3% guaranteed return doesn't look bad.
The only fly in the ointment ... that 3% mortgage likely has a "lock". Should interest rates move up to 5-6% during the term of the loan, you'll feel very smart having kept the mortgage. In that case, bragging rights would go to those still holding 3% mortgages.
-
PS: I'm in the group that values home ownership. I like to be able to kick that dirt under my feet. However, many in our society lead perfectly normal happy lives as renters. Some of the upper level "rentals" in NYC @$10,000+ a month don't look too shabby!

FYI: If your mutual fund is run by a woman, it is a rarity.
Regards,
Ted
http://www.wsj.com/articles/SB11670627175020993366304581066292742744646

Bubbly + Help from state-backed margin finance company = What ???
Chinese shares dropped almost two percent in early trading, reversing much of gains made on Monday following unprecedented steps to stabilise a plummeting market.
Asian assets were also increasingly burdened by rising concerns over massive losses in Chinese stock markets over the past month or so.
Unprecedented emergency measures from Beijing helped Chinese stocks to bounce on Monday but trading remained highly volatile.
In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company, which in turn would be aided by a direct line of liquidity from the central bank.
"Prior to the selloff the Chinese market looked bubbly, kept rising even as the economy is slowing. It will take some time for the market to calm down," said Shuji Shirota, head of macroeconomics strategy group at HSBC in Tokyo.
"Judging from Japanese experience it is not easy to support share prices just by price keeping operation," he said, referring to Japanese attempts in the 1990s to shore up the stock market by using public funds to buy shares.
Fears of instability in the Chinese economy dented many types of assets that are thought to be leveraged to demand from China.
In the currency market, the Australian dollar fell to a six-year low of $0.7452 on Monday and last stood at $0.7485.
Shanghai copper posted its steepest daily drop in 5 months on Monday, while Chinese steel prices are at their lowest level since the depths of the global financial crisis. Iron ore has fallen 17 per cent since mid-June.
http://profit.ndtv.com/news/market/article-asia-shares-win-reprieve-but-greece-china-concerns-limit-gains-778868
Related to China margin stabilization efforts.
"The stocks exemplify one of the keys to China’s recent market selloff: Some of the biggest losers are companies with a relatively small portion of their shares freely traded, many of them bought using borrowed money."
http://www.wsj.com/articles/chinese-firms-discover-margin-lendings-downside-1435653636

Yes, I'm afraid to spend money, esp. the portion of cash flow I allocate to reinvesting to build cash flow for next year, and the next, and the next. Looks like this portion will need to be increased now, for next year already.
Obamacare sticker shock arrives
http://www.zerohedge.com/news/2015-07-06/obamacare-sticker-shock-arrives-insurance-premiums-soar-20-40
"The rate requests are the first to reflect a full year of experience with the new insurance exchanges and federal standards that require insurers to accept all applicants, without charging higher prices because of a person’s illness or disability."
http://www.nytimes.com/2015/07/04/us/health-insurance-companies-seek-big-rate-increases-for-2016.html?_r=2
“No matter how cynical you become, it's never enough to keep up”
--------Lily Tomlin

http://money.usnews.com/money/personal-finance/articles/2013/09/05/are-you-afraid-to-spend-money
Junkster and I have been posting similar threads - money and retirement.
I'm wondering how many people here, in retirement, under-spend out of fear or some other issue - must see net worth grow, net worth must grow for ego issues?????????
I grew up poor but I always enjoyed life. I have a strange issue, I don' t like to spend money on thing that take up space. I don't care about cars, as long as they work. But, I'm OK with spending money on things like travel and food.
To be truthful, I have a spreadsheet projecting out my net worth out to 100 and even when adjusting for inflation I a great final net worth - something many would envy. That is with conservative spending and growth.
We all may remember people who lived through the Great Depression. In later years they might have a great deal of money but, they could not spend it. They were OK with giving it to other but they just could not spend it on themselves.
I'm in great health and plan to spend more. BUT, IT IS STILL A PURPOSEFUL EFFORT, TO SPEND.
I try to remember, will I be on my death bed wishing I spent less??
So, what is your story on spending?

Thanks to OJ & davidmoran for their thoughtful and considerate thoughts.
I agree a lot has to do with comfort level (the sleep factor as OJ put it).
We deal with a fine local bank. If anything changed in that regard, we'd pay them off and get out fast. The two "re-fi"s in recent years went to pay for a couple additions on the house. So our equity rose along with the debt. Also, I refuse to go out farther than 15 years on a mortgage no matter how attractive the rate.
Actually, have recently considered paying off all of the mortgage - as it's getting harder and harder to earn 3% in the bond/equity markets without going out there quite a bit on the risk curve. Am only around break-even YTD.
So it goes.

One day inflation is going to kill all retirements. That said I see the problem two ways and I'm not sure I would call one of them about "financial literacy". Some other literacy maybe.
1) Some people just don't make enough to save. It is easy to preach saying you should at least save a little etc. However, it is not easy to make argument it is going to matter if its too little.
2) People need to figure out the difference between iWant and iNeed. In our iWaste my iMoney on iWatch culture, that's the biggest problem. It is all about iWant. That's not financial literacy. That is something else.
Finally let me add or economy seems to be running primarily on consumption. If people start saving and not consuming we will have other problems. This is an excellent example of an article that makes rounds once a quarter or so. I call such articles the "who killed Marilyn Monroe" variety. When you don't have anything to report this is always a stock article to pull out and pen. Like the 1% vs 99% article. We keep discussing it, but there is no real actionable result, ever.

I try to convey this fact to all that will listen. This is as much of a National crisis as Health care and yet resolving this will not buy votes for either of the primary Parties.
1) How do you fix a problem which requires a certain level of financial literacy?
2) How do you address an issue which is viewed differently based upon your own personal views (politics)?
3) In a so called free society, how do you impose a policy on all to protect all?

Microsoft is changing the name of their browser with Windows 10. It is the same Explorer, just refreshed and updated.
I prefer Safari and Chrome.

http://finance.yahoo.com/news/retirement-account-balance-compares-peers-143234713.html
Is it any wonder so few are prepared for retirement?

My 120k debt is at ~3.6% fixed and I can do better than that not paying that amount off but investing it. If I could refi at 40y (age 68), I would do so. It all comes down to sleep-at-night factor, that's all, hardly worth discussing in other, absolute terms. Orman vs Edelman, etc.

I don't have a mortgage either and it is a nice feeling.
I'm thinking that at some point it may be advantageous to take out a mortgage. With low interest rates AND a fixed rate mortgage AND the offing (I'm guessing in 10 years) might look good.
Think back to the 1960s when people had low interest rates; then in the 70s interest rates rose.

FYI: Fallout from Greece’s “no” vote on whether to accept its creditors demands in exchange for bailout funds is garnering most of the attention from market watchers early Monday.
Regards,
Ted
http://blogs.barrons.com/focusonfunds/2015/07/06/oil-prices-plummet-to-three-month-low/tab/print/

You cannot 'austere' (if that is what is meant) your way here to economic improvement or health.

You might enjoy this (if it links ok).
http://translate.google.com/translate?hl=en&sl=de&u=http://www.zeit.de/2015/26/thomas-piketty-schulden-griechenland&prev=search

Piketty: When I hear the Germans now say that they maintain a very moral dealing with debt and firmly believe that debts must be repaid, then I think: That's a big joke! Germany is the country that has never paid his debts. It can be obtained in other countries no lessons.

Tend to agree with bee. Assuming that money is money, it would appear to be a question of whether you want that money invested in the equity of your home or in some other productive asset like mutual funds.
We've always had a mortgage or rent payment of some sort. Guess we've grown used to it. The current one at 3% has about 10 years to run. I'll rather miss it when it's paid off. Think of a fixed rate mortgage as an "anti-bond" - or a bet on higher interest rates. It can serve as an inflation hedge by stabilizing housing costs during periods of rising prices.
I'd argue that you have more control over the money if it's in a highly liquid asset like a fund than in home equity. But, will admit that the home is the "safer" of the two investments and apparently (to many) has a greater emotional value.

Tax deductions (itemized deductions) can and/or will be altered if one's mortgage interest deduction is large enough to "help" move one into the itemized deductions portion of a tax return. This deduction then allows one to gather all of the other smaller deductions to become a larger value which may be a large enough dollar value to be of benefit to reduce taxable income.
'Course, everyone's circumstance will vary with this.
Many years ago, with the elimination (payoff) of our mortgage; we no longer had enough other deductions to itemize them on the 1040. But, the mortgage interest was gone and all is well.