Actually, the tax rate on a $2000 capital gain is 1/2 that of income, so your math is off.  Here's one to make your head spin.  Take that $1,000 and pay down the mortgage.  Then, take $1,000 from your secured LOC at prime, and invest in a dividend stock paying 4%  You pay $32 in interest per year, collect $40 in dividends.  You pay tax on just $20 of that dividend, or let's say, $8.  You deduct $32 in interest payments from your taxes, saving $12.80.  At the end of the day, you made $12.80 without making a capital gain, paid down $1,000 on your mortgage, and still have the potential of cap gains on the investment you bought.  Now, multiply that by $300,000 and retire early.  The interest deduction is a gift for high income earners when it can save you 43% or more at the top end of your marginal tax rate.  Dividends and cap gains are taxes at 50% the rate of other income.