No it does not, because they have to live somewhere. You either throw away on average 1,200 a month on rent or take a huge bite out of your mortgage for a starter home. Then you utilize all that freed income to invest or as you see fit. Yes, interest sucks on a mortgage and sometimes home values dip, but overall and overtime for most people a home is a good investment, so long as they purchased it correctly and put some sweat equity into it. Will investing in a home or rental property make you rich? No, not overnight, it takes time and patience to accumulate real wealth. But OP might find a certain sense of pride in ownership and building a home for themselves if they've decided to settle down in their area. (Do not buy a home if you don't plan on living where you are for at least the next five years).
Life without a mortgage and having a place to call home is a worthwhile investment for most people, but there are no guarantees in real estate or generally speaking when you invest. There is actual risk associated with every investment and it's up to the investor to do their due diligence and invest in something they know, understand, and believe will have a reasonable chance for success over the long term based on facts and figures. What would you do if you had an $14,000 a year to invest after paying off your home? That's what life is like without a mortgage or having to rent or lease your home.
A 6.5% APR return on investment on $50,000 is a little over 3K per year, which in my opinion and current rate of pay just doesn't make any sense. For me personally I would rather hold onto the money so that I can utilize it in an investment that will yield 100-500% of the investment over a 5-10 year period. Utilizing patience and taking the time to research a company before you invest in its stock is well worth forgoing a 5-10% annual return for one year or so while you look for the right opportunity.
OP wants advice on what they could do with their capital. Thanks for adding to the discussion.
OP just make sure you research your options and do what makes the most sense for you, because running out and buying that fully loaded BMW M3 might seem like fun at the time (and it is hella-lots of fun), but any expenditures that results in depreciating assets or investments that provide no positive income generation are just tomfoolery. You have a chance to better yourself and your future family. Invest your windfall, but invest it wisely and in businesses, stocks, mutual funds, or real estate that you know and understand.