What financial strategy is generally considered less beneficial according to studies?

The strategy of prepaying a mortgage is often considered less beneficial when compared to other financial strategies like investing in retirement funds, mutual funds, or maintaining an emergency savings account. This is primarily due to the opportunity cost associated with tying up capital in mortgage prepayments rather than investing that money elsewhere.

Studies suggest that the return on investment from stock markets or retirement accounts typically outpaces the interest saved through prepaying a mortgage. Prepaying a mortgage may provide a guaranteed return equal to the mortgage interest rate, but this return is often lower than the potential gains from long-term investments. Additionally, investing in retirement accounts can offer tax advantages, making them more beneficial in the long run.

Moreover, maintaining sufficient liquidity in savings accounts for emergencies is crucial for financial stability, which is not achieved by funneling extra funds into mortgage payments. Therefore, while prepaying a mortgage might seem like a safe strategy to reduce debt, it often does not offer the same potential for wealth accumulation as the other options mentioned.