I payed off my house this year. I’m 33 with a combined income of 120k. I can actually breathe now and I’ve even cut back a few hours so I have me time and time for my 2 kids. It’s the best feeling in the world!
That is what I find amazing. Just having that more me time ( or timr with your kids or just to live life ). You accomplished an amazing goal. I currently am a rad travel tech so I travel across the US working at different hospitals. It’s exhausting but I keep telling myself I am doing this to pay my mortgage off in a year. I know emergency things can happen so I have a stash for that but if I had my mortgage paid off I would cut down in my working hours or just find something I could enjoy more doing. Anyways … im happy for you !
It may not make the most financial sense to pay off your house early, but I can tell you it’s 100% worth it. As we enter a recession and possible layoffs, the peace of mind we have with no house payment is priceless.
@@randymillhouse791 Yep. It's also important to choose a home in an area with relatively low taxes. A paid off home AND low property taxes...that's a nice situation. But, you can't escape those property taxes. The county will come after you very quickly. I had a check bounce once on property taxes (because I used an old check book that had been cancelled) and within a month I had a huge fee charged to my property and a very threatening letter from the auditor.
@@jasonhatfield4747 Sounds like gotcha Capitalism to me. Is it possible to pay off a house and still have monies paid into escrow each month? That would be like auto-pay of the property taxes.
As a soon to be 43yo in a couple years, I'll have paid off 2 mortgages by then. I think the second one being paid off will be even better than the first one and that one felt pretty awesome. The security in which you gain making that last payment on the mortgage is priceless and the stress just disappears, you made it, you did it you got to that finish line of ultimate debt free. Now picture doing it again and being able to sit on an investment that you can sell at a later date if need be and hopefully the interest paid on the lifetime of that mortgage is much less than the capital appreciation it's made of that time. Pretty freakin' sweet is what that is. Thanks Dave!
I don’t have any stress from it. Never had a debt other than my mortgage, and payments are a small percentage of my income. Even if I lose my job I can easily get another. If I ever need more cash I could sell some of my shares. So where’s the stress?
Pay off your house for cash flow. Not having to make a mortgage payment leaves cash flow for investments. I paid mine off to reduce my cash flow needs prior to retirement. A paid off house means you need less income.
@@debz7682 Life expectancy in the US is now 76. I am 64. I have a paid off house. I have investments, but there is only so much I want to leave behind. Investment strategies depend on your stage of life. Sitting on equity and hard assets isn't wrong when you want to live on a fixed income like Social Security and pensions.
Ramsy will never run out of work, he tells everyone the same thing...on every video... and i still watch every one of his videos.... and dont learn....
Once you own the house you'll never go broke , because regardless how bad thing can go in life , you can always sell the house, buy something more affordable and keep the cash difference
@@HM-ke1qm, and you don't have to have the house paid off to sell it for cash. As long as you have positive equity it's will generate cash (after transaction costs, etc.).
Right---My Mom died in April. She hadn't had a mortgage payment since 1969. She was in her 70s when I heard her ask---Where am I going to work to be able to pay rent?
I did the same thing, I moved and pulled money out of the house sale and put it into the market instead of the new house. When the S&P drops 22% you end up wishing you had put that money into the house, and God help you if you tried individual stocks in that time
What a silly reason to not to invest. You don't take money out and the market recovers on average you get 10% returns and the bear markets are much shorter than bull markets
Agree! While I would continue to pay a 2.5% mortgage since I can get more than double that on my investments I would NEVER reborrow money on my house once it is paid off. Why? Because it does feel good psychologically to not have that obligation hanging over you any more!
The key to borrowing and financing is to always be solvent if you have to be. I have my own business for 30 years and have borrowed money in the past but never borrowed against my house. I haven't had any debt for the past 15 years.
I totally agree... its hard finding a great house in a great neighborhood and if you are lucky enough to find this gem, you hold it for life. Im totally staying in my home for life.
What people don't realize is that when you have a paid off house there is a huge psychological burden lifted. This one act allows you to be more aggressive in your other investments while still sleeping easy at night. At the end of the day if you can cover your annual property taxes you will have a roof over your head.
I'm an investor and I've done both. There is nothing worse than having cold dead cash trapped in a paid for house. Much better to use the banks money and put your capital to work than let it rot in dead home equity!
Makes no sense…. It’s not dead cash because the home is gaining value.. oh and what about that $2000-2500 a month that you have now to invest instead of giving the bank money every month
Dead cash is the obscene amount of interest you pay on a mortgage every month. Complete waste of money! Pay off the house, save tens or hundreds of thousands in interest, have no stress, and add that mortgage payment to your monthly cash flow! No brainer!
Paid off our 30 year mortgage in 13 years. The feeling of not having to pay another payment felt great. Also we don’t have any car payments. My wife and I were 50.
@@rlchick5774 Because most people suck at investing. Own the roof over your head. THEN you can invest safely in index funds. When you have enough in indexfunds to survive on 4% you can play with money.
I bought a house with cash in 2021. The insurance and property taxes have doubled since then, and now costs more than I ever paid in rent in my life. I feel that I would be better off living in a studio apartment in a warehouse again and investing the money in anything else.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you're careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn't king at all in this time!
@Mussa653 I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same. Is there any chance you could recommend who you work with?
I struggled with the idea of paying off my house last month because of my 3.5% loan rate. I thought about and stressed about it and finally wrote a check and payed it off. Felt great for a brief moment because I just received word I will not have a job by end of the year. At least I do not have to worry about a $1,900 monthly payment until I get things figured out in regards to a job.
Glad for you. Some of it for me depends on how much is owed. I would rather take income from municipal bonds now that they are yielding 4 to 5% tax free in my state. This gives income to pay the mortgage, especially at a low rate.
If you aren't sure what to invest in or how to invest and then sell when you shouldn't, you need to pay off the house, maybe even buy more real estate with the remaining, rather than do something you don't understand
I am about to pay off my mortgage at age 31. I can't wait to have all my money in my pocket and not the banks pocket when I get payed. I just need 75k more to go on a 90k income 😀
Investing requires time to compound. The earlier you invest more the more time your investments have to compound. Your fixed rate mortgage stays the same. You're throwing away money.
We owe $250k on a $550k house... and while the payment is less than 25% of our monthly take home pay... having that much debt hanging over my head is still very stressful for me and causes me to be hesitant to take any risks career wise. No way I could talk my wife into selling it and buying a $300k house with cash though... so the best I can do is throw all of our extra $$ into getting it paid of as soon as possible.
You have 300K in equity. Assuming you have other investments like a 401k, Roth, liquid, etc. you could retire to South America and live like a KING for 25 years.
When I was 20 years old, I bought my first house. I paid it off by the time I was 25. I wasn’t financially savvy and no clue about investing. It felt good to have a paid off property under my belt. Don’t have to worry about rent or mortgage repayments.
@@gumshoe7237 He didn't have help. He worked hard and paid it off. I've been there and done that. I didn't have help either. He didn't comment back because he is too busy working!
Bought a house at 20 andpaid it off in five years without being financially savvy? Either this was the 1950s or you had a lot of help. That’s not even close to possible anymore.
I have one sitting at Chase for 50k for emergencies, it's easy to do. It has no balance but provides peace of mind. Also if I need to buy another investment property quickly I can write a check from it. It's a great tool to have sitting there.
I'm glad that you had the common sense not to leverage your house. Whoever give you that advice is very ignorant about wise Financial decisions. Dave's study of millionaires shows that once they fully pay their mortgage, they never have any debt again. They used to increased cash flow to put more money into their investments. The shortest distance to wealth is being debt-free, no payments.
For all the people that have 2-3.5% interest fixed mortgages, if you kept the money in a savings account(5% interest now), after taxes you are still up, why would you get rid of your flexibility and liquidity for no gain? If the money is in your bank account you can always pay the mortgage.
S&P returns 13%, historically. The US gov is in a situation now that it has to print up an ungodly amount of money. That will make assets go up and fixed rate mortgages cheaper and cheaper.
I was finally able to do this: first by refinancing from a 30 to a 12-year mortgage. Then by biting the bullet and paying off the last $5K. While I was only able to pay it off 5 months ago, having it off my back has freed up $800/month that goes to savings. Finally. The improved cash flow eases things in so many ways. In fact, I’m still getting accustomed to it. That’s something that’s pretty obvious, but it’s still jarring. Needed repairs wait in the wings, but I’m so grateful to have managed this. It’s energising and a huge weight off my shoulders. The savings from both steps was $28K in interest.
To me its balance - Yes you can in theory make more money investing. BUT in the back of my head - what if I lose my job or have to take a step back in pay. If I paid down my house enough - I can always refi and lower the monthly. Keeping a roof over my head is always my top focus.
This is a very simplistic view, and for most people, that is all they can understand. If you do it right and you had a 3% or less mortgage, it makes little sense to focus on the mortgage. There are tax benefits to having a mortgage and if done correctly, over time you can earn way more in the market. Dollar cost averaging is the way to go. If you aren’t averaging 10% or better, you need to make changes. Don’t try to time the market either. Even if you pay your house off you never really own it. You will always be paying rent to the government in the form of property taxes. I’m very seen many “paid off” houses sold at tax sales.
@ to be honest, it would be a tougher decision, BUT my investments have been doing very well over the past 5-6 years. Covid year was bust and I was down 30% in one account, BUT, the other 4-5 years have been up to or very near 30%. I really didn’t expect those gains as my target is 10-12%. These aren’t high risk investments either, just large cap growth funds. My other accounts are 12-15% the past few years. I have wanted to move too, just can’t do it holding a 3% mortgage.
@@av8rgrip I would keep a 3% mortgage too. I would pay down 7%. To me 4% return is about all you can estimate long term and anything above that is a bonus.
I understand the risk of losing money however why would one pay-off 2.5% mortgage when s/he can get 4-5% in savings accounts or T-Bills or CDs without any risk of losing money. If these interest rates drop then you can always move money to pay-off mortgage. This caller will comfortably get monthly $2K in interest if she move all her money in safe deposits like SA, CD, T-Bill.
Paying the home off is safe and sensible. Theres allot of factors to consider here, age of the women she mentioned she wants to retire, then very little outgoings is extreamly wise. If she was young and wanting to work for 20 more years she could leave it and keep investing.
The 30 year treasury note pays higher interest than the bank is charging me. Paying off your low fixed rate mortgage is just dumb. Let inflation whittle it away.
Yeah, but if you've got 20 years to work, perhaps it would make sense to pay off the house and then invest heavily for that 20 years. Or, in the event of job loss or other major events, have the security of a paid off house. With the house paid off, a person might also want to change career and with a lower monthly budget need, you can take more risks. (Opening a business, pivoting careers, etc.)
@@sbrazenor2 correct. Either way it should work. But if you got 30 years ahead of you and you got the money. Maybe you pay off the house and regardless of the opportunity cost, you minimized the risk and can still invest
I keep coming back to this question over and over again. Each time I decided to keep the mortgage and invest, which has honestly paid off quite well. Still, it bothers me to have a mortgage. If I pay it off right now, I can have a $1mil paid for home and $250k in the bank, with no other debt at 37. That sounds pretty tempting. But if I keep the money invested I should mathematically net more.
That's a great situation to be in. I am in a similar situation and also struggle with blowing the wad to pay off the home. But, from the security standpoint, it has to feel pretty damn good to have the house paid off. Less worry. Less stress and that is better for a healthy life. Stress kills. I say pay it off. Especially if you're going to have $250k left over.
@@tannercc I hear you. I'm realizing there's a certain amount of money that will be "enough." Trying to get more than that will demand additional sacrifice in the form of time, sleep, and stress. I'm leaning towards paying it off now but emotionally it's hard to let go of the investments.
@@fwb777 Yea, but the experts are saying the interest rates are near peak. There's always a mathematical or economic argument for keeping the debt. I don't think I can math my way out of this one, but the psychological aspect of debt is draining, which is why I think paying it off would be wise, personally.
@@tannercc I actually think there is much less stress keeping a large amount of liquid investments even if it means having debt. If I have $200k in investments and $200k in mortgage debt, I have much more flexibility in an emergency. If I have $0 in investments and $0 in debt when there is an emergency, I have no options.
Because it is awesome. When you know others that live around you are making $3500-$4000 per month payments and you are cutting a check only once a year for that amount in taxes and insurance.
I am working on it.....got my 30 year mortgage 10 years ago, and if I keep up the pace, I'll be done in 2 years, shaving 18 years off my 30 years mortgage and saving more than $60k in interest....to hell with the investor naysayers!
@@ybois3 yes but retiring means different things to different people, I think that was their point. Some people love to just hang out at home and watch tv, others can't sit still.
People who are not disciplined then paying off the house is the best. If you discipline then just do S&P 500. Numbers are simple, but people do not know this. Average S&P 500 life return 7% her house is at 2.7%. Math
@@SIFON5CS are those the same 60% of people that carry $10k plus monthly credit card debt, and only paying the minimum payment because the monthly interest portion of the bill is huge?......and that 60% could also be the 60% of people that stand in the Starbucks line everyday for overpriced coffee-flavored mud.
@@miqueasmurga8698 Then you liquidate the stock and pay off the house... Or you put the money into a high yield saving account - they are paying 4-5% right now. Having cash on hand in a HYSA to pay off the mortgage is better than paying off the house...
I don’t like listing your house as part of net worth because you have to live somewhere.. granted, you could sell, and then downsize (assuming that will give you additional cash)…
Two words: opportunity cost. If I told you to pay my $1000 mortgage in exchange for $1500+ a month for the next 30 years, then once you are done making those 30 years of payments you could keep the paid for house for free. Would you do it?
Well some people are dumb and some people don't have the money and some people that have the money are really dumb,i never got a mortgage waited till i had the money then bought a house
The correct answer is.... Don't pay it off if you don't want to. Sadly people are used to being on payments and will be until they die. Paying off your house brings freedom. I'm a fan of it
This is such a simple one to understand if you take the time to look at both angles..... Yes, you can make more investing than you save against a typical mortgage interest rate, so for all those who would rather invest than pay of a mortgage, look at this other angle which is in theory identical. Once you have a house paid off, would you take out the equity to reinvest it? 95% will say no, because its unnecessary risk, which is why you shouldn't invest over paying off the mortgage in the first place. If you are however that way inclined that you would always release equity to invest, then yes do it, as you just enjoy the risk. For most of us however, the right answer is to get debt paid off
Bad logic. Its silly to pay off the home, then take a heloc and invest it because you’ve lost the time value. The time is why I’ll take 6-10% over 2.5%
Helocs are not wise. This whole hyper leverage thing has been sung too much by gurus and gambling minded people jump on the band wagon. My father did the same, not heloc, but he borrowed up to his eyeballs. He has so much debt, it crippled him. He thought he would double his investment in less than a year. He's years further and still in the hole.
I look back on the years of my past self paying a mortgage, compared to me being mortgage free, puts me in a mental place of reality that is only understood being debt free.
If all your money is tied up in your house it’s a lot trickier to get the money then if your money is tied up in stocks. Plus what if you have your big emergency while you are actively paying off your house? Then you still have a house payment AND you don’t have as much liquid cash. Paying off your house early is risky too.
@@Argedis cool so since I have an emergency fund it doesn't make sense to pay off a low fixed interest mortgage. 10% compounding returns beats 2.5% simple interest.
@@aaront936 💯 money is meant to work for you, and their is good debt and bad debt. No mortgage broker, accountant or financial consultant will look at a mortgage as debt this old school logic and rhetoric. Another thing to consider is interest paid in is usually covered by the change in house value. So a 25 year mortgage on a 300K house may have half that interest be covered on the house price increase.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
@@BrandonIvan-c6e However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.
@@israelramirez8891 "sO pAy yOuR tAxEs" Makes no sense why so many Ramsey folk are so eager to pay off their mortgage 🤷 Still will never truly own your home unless property taxes are abolished.
Not true for everyone. Some need mortgage to avoid paying higher taxes. If mortgage is your only debt don't pay off the house and then lose cash is prices plunge.
I would never advise keeping a mortgage for tax reduction purposes. The main reason to keep a mortgage is because you have an extremely low interest rate and can invest that money elsewhere with potential for far higher gains.
I'm hoping to pay off my last 73k mortgage at 2.75% within a month or two, the stress of the recession/uncertainty just isn't worth it! Can't wait to be totally free!
Its a tough call but I think I would pay off the house. Its more about peace of mind then getting the most financial return. I've learned the hard way there is something about having everything paid off and no debt. They can always take a out a HELOC and buy tesla calls if they change mind feel different. 😆😆
@@mechy2k2000 the problem is that you never own your house. failure to pay tax or HOA can result in losing your house. Better to invest that money and use the income from investment to pay house given the low interest rate. If the interest rate was higher, I would pay the house.
I don’t understand why anyone wouldn’t WANT to get rid of what is usually the largest monthly payment. Once that is paid off your flexibility is greatly increased. Your stress goes way down. Risk is mitigated. I know this because I paid off two homes and now in a good position. Once your huge payment is freed up you can throw a ton into investments. Or you can juggle 27 balls and wonder why you’re stressed out.
His advice is for people who aren’t disciplined and educated in investments, it’s not terrible advice but paying off a 2.5% mortgage when interest rate in a savings account averages over 4% is stupid.
I’ve been doing some math on our mortgage calculator and it seemed like there was a sweet spot of paying it off fast but not too fast. It showed me I understand nothing about finances, investments, and interest rates
I agree, but remember you need to adjust that 4% for tax (assuming you take the standard deduction and therefore the mortgage interest doesn't matter), so the difference isn't as large as it would initially appear.
It's a cash flow decision. Map out the cash flow and bake in some uncertainty. Paying off a 2.5% mortgage is probably not a good idea as long as you are disciplined about investing. Remember: you get ALL of the property value increase regardless of how much you owe.
Why would you keep giving money to the bank? Not matter the low interest, that's money you're giving to a bank. You can use your cash flow to invest. Debts are not good at all.
@@rosarabin824I can't believe I have to explain this, but here goes: if you have 100k, if you put it in a 4% interest savings account - you get 4k a year. If you put the 100k into your 2.5% interest mortgage by paying it off, you saved 2.5k in interest. The difference is 1.5k that you gained by not paying off your mortgage.
If you do the math, its smart if you want to be debt free style, but, inflation and housing market increase, make minimum payment on your home and invest in more homes. Rent them out. Whe. You retire and have someone else paying your mortage, after home is paid off, u have that monthly income , way more than your work 401k will pay you monthly
@formula112967 ur rite, banks got bailed out and we got screwed. But u can pause ur mortgage payment for free too. But now u just gota put in contract no matter what happenes ifnu dont pay ur booted. Find good renters because as soon as that crap eneded, evections started and rent went up to make up the loss.
Oh dear lord, how can they have that much money and be so clueless as to what to do with it. She should just pay off her house, clearly she does not know how to invest it.
@@DrGearHeadSS a sign of wisdom for sure. I remember a woman criticizing me for having a financial advisor when I know so much about investing. I told her it's impossible to know everything and it's far better to get a second opinion than to go through life thinking you know it all. Everyone has blind spots and it takes wisdom and maybe a little humility to accept that.
It's wrong approach. Mortgage rate 2-3%. Investmentment retun 8-10% +. Throw it at the heaviest return, IE Investments. . Make your $$ work harder for you. It's not rocket science
Or do what I did, work a high paying stressful job you hate for a some years and pay off your mortgage and then finally quit and get a normal job that I enjoy and be happy.
Yeah, Dave is always about getting 11% in the stock market (as if that were 100% guaranteed which, of course, it isn't). I think his argument is basically "it feels good to have it paid off" --okay, but that's not a very mathematically sound argument.
Most financial people never tell you if their house is paid off. They trying to mske money online by acting smart but they to are in debt. Im 44 and i buy and sell businesses. Currently selling 2 within the next few months and can pay my house off before 50. 50 always been the goal bevause if you bought at 20 . A 30 year mortgage should be paid by 50. I see it happening sooner but 50 the target. Without a mortgage in todays time you can uber or door dash when you want and make 50k a year. Livimg modest. Thsts many vacstions and half into investments. I have 4 kids and yougest is 13 , oldest 24 so i can focus on them instesd of having to work 60 to 70 hours a week. My dad has a car from the 90s and hss almost 400k miles. Toyota. He so proud he got that car with so many miles. It made me not buy a expensive car. I paid 6k for a car 2011 and its running like a champ. I own 2 box trucks paid for business wise. I dont have credit card debt. No matter with inflation. If you have no debt, no mortgage, then you can travel and be happy off a Walmart salary.
I've sold a property in Michigan and I’m considering investing the proceeds in stocks. With the current market optimism, I'm unsure if it's the right time to buy stocks and how long it will take for a full market recovery. I'm also puzzled by how some are making substantial gains of over $320k within months in the same market
It's remarkable, but considering my portfolio's current poor performance, I really do need their help. Could you please provide me with a way to contact your mentor?
Should I spend ~1/2 of my retirement fund to pay cash for a house --- or should I continue paying someone else's mortgage (aka: rent)? I am 68 years old, retired, in good health, have no debts and will still have an annual pension income ~$60k.
Why not put the cash in a CD for 4.10 percent annual growth (US Bank Jumbo CD promo). That's a guaranteed paycheck. Do not pay the house off. Your interest rate is too low to pay the house off. It's just math. Drop your money mkt account into the CD for no risk and do not pay the house off. I've asked myself this question. Pay the house off or make the cash work harder than my interest rate?!!!! Wrong answer MR. Ramsey! Love you and you're nearly always right! Get debt free people other than your house because it's a tax shelter and you can make that money work harder for you elsewhere.
The weight being lifted off your shoulders when you become mortgage free is a real thing...but so is a large sum of cash in your bank account knowing you can pay off that mortgage with a click of a button, when youre ready.
But the longer you wait to pay off the mortgage, the more interest you pay....I have been really paying down my mortgage....I took my 30 year loan 10 years ago and I am 13 years ahead and have already saved over $60k in interest.
I don’t know about this one. I guess it would make sense if they have no other debt to worry about. She says she wants to retire and if that time is sooner than later then hopefully they will have a good income to live on during retirement.
I was happy to see the number that came up when I googled how many millionaires there are. That being said, the 10,000 millionaires study Dave did needs to be updated. 10,000 is just not a large enough sample size
She sold her home and kept the money then purchased another home with a mortgage, essentially borrowing against her home. PAY IT OFF. How is this hard? Just go right ahead and be proud of paying interest every month to the bank, I'll pass on that deal.
My goal right now is to have my condo paid off in one year. When I looked at how much I owe versus the interest I owe ( the interest I owe is over 20 grand ). I have a cheap HOA fee. My HOA is 200 a month ( I know others who HOA is 800-1200. So i feel 200 a month that covers siding , roof , lawn maintenance, water . Yup. Water. So I would say that’s not bad and my condo is in a very nice neighborhood . I know I would have property tax but just not having a mortgage and thinking of that over 20 grand of interest that can be going toward something else. I also have Roth IRAs and traditional IRAs that never lost in this recession. I am currently a rad tech that takes contracts across the US. I’m making double of what I would make as a staff tech. Right now I’m paying something to publish a book series ( that I believe will make me some money as well long term ). Right now I hate my career and it is stressful traveling so much but I know when I meet my goal of paying off my mortgage ( that I’m hoping will happen within one year ) then I know I can change careers or go part time bc I will not have that mortgage to pay. The only things that I do factor in is surprise things that might happen like a sudden health issue or a sudden pets health issue or car issues or emergency repair on my home. Some things we can’t control so I try my best to always have that emergency stash fund that I don’t touch except for things like that. I am cooking at home , packing my work lunches and I dropped cable. I have just one streaming channel ( HuLu. ). I hope I reach my goal
The problem with paying off your house is that it is easier for the government to take it from you if you were to fall behind on paying property taxes. They could never take it so easily from a bank. I recently heard of this poor lady who paid off her $300k house but owed about $3500 in property tax. The county put a tax lien on the house, sold her house to recoup the taxes owed and kept the rest of the profit while the new owners evicted her and made her homeless. And this is happening in many places around the USA. we are caught up in a never ending cycle of debt and an unaffordable way of living. The best is to be as frugal as possible, own nothing, autopay all your bills and live within your means while paying cash for everything.
We have a 2.75% interest rate on our house worth about $550k. Our monthly payment is $1,100. We owe $150k. There is no logical reason for me to pay it off now. Its less than 10% of our income. The bank is basically paying me to borrow the money with inflation. If I had some life sucking monthly payment it makes a lot of sense.
Do both🤔🧐🤷🏻♂️ My mortgage is $1600 month, but my girlfriend and I contribute $2000 month. We max out our Roth IRA’s, and we each have regular brokerage accounts that we invest in. We’re both travel nurses.
Lots of the financial gurus, don’t get it. That ease of mind not having a mortgage, owning something that can pass on generations property is worth way more then a million dollar portfolio in any investment. It’s freedom. You only got one life either spend it in freedom or chasing $.
In 2003 I bought a house for $100K. In 2007 the value was at $240K. By 2010 the value was at $48K. Pay off the house? NO! Let the value rise as you continue to pay extra on the principle. Liquidity is the only known. Investments are unknowns.
@@timothymacdonnell9079 The 2008 crash caused it. Today it is valued at $298K. No regrets, I have saved way more than this house has grown in value over the past 13 years. I was not going to stick around and hope that all of my eggs in one basket were going to rise in value. That is why I refuse to fight to pay off a house. Diverse investing and liquid savings are more important to me. That house could have stagnated in value or grown back to $100K by today. It was a total unknown. Glad I bailed.
Hi Dave, hope you could answer my question. I have a mortgage with 2% interest rate taken 2 years back. I have 13 more years left. I have emergency funds, 401k and 529 in place. Should I payoff mortgage with the extra cashflow or invest in mutual funds (average rate 8%) . I am 40yrs old. Please advise
Bad advice Dave. CDs are now at 5.55% and her mortgage is 2.5%. I also love how your advice always rules out the market going down OR staying the same for many years. It has for over a decade in the 1960s and 1970s.
Paying off your house is NOT the smartest choice mathematically, but if you want to for emotional reasons it wouldn't be the end of the world. The mathematical best option would be to invest the entire sum (minus cash on hand reserves) into the stock market according to your risk tolerance, NOT money market earning next to nothing.
I payed off my house this year. I’m 33 with a combined income of 120k. I can actually breathe now and I’ve even cut back a few hours so I have me time and time for my 2 kids. It’s the best feeling in the world!
That is what I find amazing. Just having that more me time ( or timr with your kids or just to live life ). You accomplished an amazing goal. I currently am a rad travel tech so I travel across the US working at different hospitals. It’s exhausting but I keep telling myself I am doing this to pay my mortgage off in a year. I know emergency things can happen so I have a stash for that but if I had my mortgage paid off I would cut down in my working hours or just find something I could enjoy more doing. Anyways … im happy for you !
Good for you Janet
*paid
It may not make the most financial sense to pay off your house early, but I can tell you it’s 100% worth it. As we enter a recession and possible layoffs, the peace of mind we have with no house payment is priceless.
Invest 300 k or keep the mortgage
Default on property taxes can result in the loss of your house. Or do you own a shotgun and your brother is Sherrif?
As soon as you said paying off your house early doesn’t make the most financial sense, you lost the argument.
@@randymillhouse791 Yep. It's also important to choose a home in an area with relatively low taxes. A paid off home AND low property taxes...that's a nice situation. But, you can't escape those property taxes. The county will come after you very quickly.
I had a check bounce once on property taxes (because I used an old check book that had been cancelled) and within a month I had a huge fee charged to my property and a very threatening letter from the auditor.
@@jasonhatfield4747 Sounds like gotcha Capitalism to me. Is it possible to pay off a house and still have monies paid into escrow each month? That would be like auto-pay of the property taxes.
As a soon to be 43yo in a couple years, I'll have paid off 2 mortgages by then. I think the second one being paid off will be even better than the first one and that one felt pretty awesome. The security in which you gain making that last payment on the mortgage is priceless and the stress just disappears, you made it, you did it you got to that finish line of ultimate debt free. Now picture doing it again and being able to sit on an investment that you can sell at a later date if need be and hopefully the interest paid on the lifetime of that mortgage is much less than the capital appreciation it's made of that time. Pretty freakin' sweet is what that is.
Thanks Dave!
How did you manage that? Did you pay off the first house first then mortgage a second one?
The stress that is unconsciously tied to practically any debt is tangible...and avoidable.
Not if you understand what leveraging that debt is ultimately doing for you. But many people don’t.
There's always some kind of debt.
I don’t have any stress from it. Never had a debt other than my mortgage, and payments are a small percentage of my income. Even if I lose my job I can easily get another. If I ever need more cash I could sell some of my shares. So where’s the stress?
Pay off your house for cash flow. Not having to make a mortgage payment leaves cash flow for investments. I paid mine off to reduce my cash flow needs prior to retirement. A paid off house means you need less income.
Doesn't work that way. The greatest asset for an investor is time, you are never getting it back
@@perotal The greatest asset for a retiree is peace of mind. A paid off house is peace of mind.
@@dementeduncle your sitting on equity and should invest
@@debz7682 Life expectancy in the US is now 76. I am 64. I have a paid off house. I have investments, but there is only so much I want to leave behind. Investment strategies depend on your stage of life. Sitting on equity and hard assets isn't wrong when you want to live on a fixed income like Social Security and pensions.
@@perotal you’re broke in real life.
Ramsy will never run out of work, he tells everyone the same thing...on every video... and i still watch every one of his videos.... and dont learn....
Once you own the house you'll never go broke , because regardless how bad thing can go in life , you can always sell the house, buy something more affordable and keep the cash difference
Not always true.
@@HM-ke1qm, and you don't have to have the house paid off to sell it for cash. As long as you have positive equity it's will generate cash (after transaction costs, etc.).
Just a thought of having my mortgage payment in my pocket every month is enough for me to pay my house
I paid off my home 8 1/2 years early and saved $52,000 in interest. It feels great to never have to worry about a mortgage again.
Right---My Mom died in April. She hadn't had a mortgage payment since 1969. She was in her 70s when I heard her ask---Where am I going to work to be able to pay rent?
I did the same thing, I moved and pulled money out of the house sale and put it into the market instead of the new house. When the S&P drops 22% you end up wishing you had put that money into the house, and God help you if you tried individual stocks in that time
What a silly reason to not to invest. You don't take money out and the market recovers on average you get 10% returns and the bear markets are much shorter than bull markets
@@liptongtr Paying on your house is investing
Your primary home should never be used as a bank. Get it paid off and never even think about borrowing against it.
Agree! While I would continue to pay a 2.5% mortgage since I can get more than double that on my investments I would NEVER reborrow money on my house once it is paid off. Why? Because it does feel good psychologically to not have that obligation hanging over you any more!
The key to borrowing and financing is to always be solvent if you have to be. I have my own business for 30 years and have borrowed money in the past but never borrowed against my house. I haven't had any debt for the past 15 years.
Sound advise.
I totally agree... its hard finding a great house in a great neighborhood and if you are lucky enough to find this gem, you hold it for life. Im totally staying in my home for life.
What people don't realize is that when you have a paid off house there is a huge psychological burden lifted. This one act allows you to be more aggressive in your other investments while still sleeping easy at night. At the end of the day if you can cover your annual property taxes you will have a roof over your head.
Definitely
🤡
I'm an investor and I've done both. There is nothing worse than having cold dead cash trapped in a paid for house. Much better to use the banks money and put your capital to work than let it rot in dead home equity!
Makes no sense…. It’s not dead cash because the home is gaining value.. oh and what about that $2000-2500 a month that you have now to invest instead of giving the bank money every month
Exactly, be your own bank and pay yourself that monthly payment. @@currenteventsenthusiast9477
Dead cash is the obscene amount of interest you pay on a mortgage every month. Complete waste of money! Pay off the house, save tens or hundreds of thousands in interest, have no stress, and add that mortgage payment to your monthly cash flow! No brainer!
@@cindiexoxoxo3773nope. I'm selling instead
If my investments are earning 13% year over year and my mortgage is 3.5%, why would I pay it off?
Paid off our 30 year mortgage in 13 years. The feeling of not having to pay another payment felt great. Also we don’t have any car payments. My wife and I were 50.
Congratulations. Now, are you helping others do the same?
So how did you ignore the people that say to invest? I can pay mine off too thanks to inheritance.
@@rlchick5774 Because most people suck at investing. Own the roof over your head. THEN you can invest safely in index funds. When you have enough in indexfunds to survive on 4% you can play with money.
I bought a house with cash in 2021. The insurance and property taxes have doubled since then, and now costs more than I ever paid in rent in my life. I feel that I would be better off living in a studio apartment in a warehouse again and investing the money in anything else.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you're careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn't king at all in this time!
@Mussa653 I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same. Is there any chance you could recommend who you work with?
I just Googled her name and her website came up right away. It looks interesting so far. I sent her an email and i hope she responds soon.
Or you can buy a trailer by the lake and invest the rest of your profits 📈 in the stock market.
How much has increased the value of your house since then? If you regret of a paid off house, you can sell and get a mortgage.
I struggled with the idea of paying off my house last month because of my 3.5% loan rate. I thought about and stressed about it and finally wrote a check and payed it off. Felt great for a brief moment because I just received word I will not have a job by end of the year. At least I do not have to worry about a $1,900 monthly payment until I get things figured out in regards to a job.
Yeah, but you still have to worry about property tax, insurance, repairs… duh
@@realhzl1807 No shit!!!
But if the money was in your bank, why were you worried
@@realhzl1807All of those things will become much more affordable without a mortgage.
Glad for you. Some of it for me depends on how much is owed. I would rather take income from municipal bonds now that they are yielding 4 to 5% tax free in my state. This gives income to pay the mortgage, especially at a low rate.
Wonderful position to be in! Way to go! Enjoy your retirement!!
If you aren't sure what to invest in or how to invest and then sell when you shouldn't, you need to pay off the house, maybe even buy more real estate with the remaining, rather than do something you don't understand
This makes no sense at all.
There are investments that do a lot of that work for you. I have a Roth IRA through Fidelity. I don't make the buying/selling decisions.
I am about to pay off my mortgage at age 31. I can't wait to have all my money in my pocket and not the banks pocket when I get payed. I just need 75k more to go on a 90k income 😀
A paid-for house would feel awesome. You could truly enjoy your retirement without worrying about any debt and then steady invest. Way to go!
Investing requires time to compound. The earlier you invest more the more time your investments have to compound. Your fixed rate mortgage stays the same. You're throwing away money.
Yeah but people keep focusing on feeling good today. I will be very happy paying a 2.75 rate 20 years for now
A paid off house is still a debt. You have utilities and property taxes.
Doesn’t feel that awesome. Still have insurance, taxes, utilities, and maintenance. The monthly expenses never ends for a house.
Would be nice to payoff taxes and home owners insurance, they make up 40% of my mortgage.
We owe $250k on a $550k house... and while the payment is less than 25% of our monthly take home pay... having that much debt hanging over my head is still very stressful for me and causes me to be hesitant to take any risks career wise. No way I could talk my wife into selling it and buying a $300k house with cash though... so the best I can do is throw all of our extra $$ into getting it paid of as soon as possible.
What's your interest rate?
I feel you man. I’m in the same boat
You have 300K in equity. Assuming you have other investments like a 401k, Roth, liquid, etc. you could retire to South America and live like a KING for 25 years.
@@randymillhouse791 South America? I’d love to because I lived there for a long time but it’s not for everyone...
@@ChrisBorghi22 When 250K goes as far as $750K then South America is the easiest choice.
When I was 20 years old, I bought my first house. I paid it off by the time I was 25. I wasn’t financially savvy and no clue about investing. It felt good to have a paid off property under my belt. Don’t have to worry about rent or mortgage repayments.
sounds a lot like you got some help along the way .
@@gumshoe7237 He didn't have help. He worked hard and paid it off. I've been there and done that. I didn't have help either. He didn't comment back because he is too busy working!
Bought a house at 20 andpaid it off in five years without being financially savvy? Either this was the 1950s or you had a lot of help. That’s not even close to possible anymore.
@@tylerk.7947maybe his house was worth less than $100k when he bought it.
Did you win the lottery or inherit money?
Someone asked me why I don't take out home equity loans and invest it since my house was paid off. No thank you.
That’s actually what a lot of investors do!
I have one sitting at Chase for 50k for emergencies, it's easy to do. It has no balance but provides peace of mind. Also if I need to buy another investment property quickly I can write a check from it. It's a great tool to have sitting there.
I'm glad that you had the common sense not to leverage your house. Whoever give you that advice is very ignorant about wise Financial decisions. Dave's study of millionaires shows that once they fully pay their mortgage, they never have any debt again. They used to increased cash flow to put more money into their investments. The shortest distance to wealth is being debt-free, no payments.
@@ryankiel4895 having no payments and limit income, is not goin to create wealth
@@ryankiel4895 I bet his house payments, wasn’t even that much money
For all the people that have 2-3.5% interest fixed mortgages, if you kept the money in a savings account(5% interest now), after taxes you are still up, why would you get rid of your flexibility and liquidity for no gain? If the money is in your bank account you can always pay the mortgage.
U have to pay income tax on that interest
S&P returns 13%, historically. The US gov is in a situation now that it has to print up an ungodly amount of money. That will make assets go up and fixed rate mortgages cheaper and cheaper.
I was finally able to do this: first by refinancing from a 30 to a 12-year mortgage. Then by biting the bullet and paying off the last $5K. While I was only able to pay it off 5 months ago, having it off my back has freed up $800/month that goes to savings. Finally. The improved cash flow eases things in so many ways. In fact, I’m still getting accustomed to it. That’s something that’s pretty obvious, but it’s still jarring. Needed repairs wait in the wings, but I’m so grateful to have managed this. It’s energising and a huge weight off my shoulders. The savings from both steps was $28K in interest.
To me its balance - Yes you can in theory make more money investing. BUT in the back of my head - what if I lose my job or have to take a step back in pay. If I paid down my house enough - I can always refi and lower the monthly. Keeping a roof over my head is always my top focus.
This is a very simplistic view, and for most people, that is all they can understand.
If you do it right and you had a 3% or less mortgage, it makes little sense to focus on the mortgage. There are tax benefits to having a mortgage and if done correctly, over time you can earn way more in the market. Dollar cost averaging is the way to go. If you aren’t averaging 10% or better, you need to make changes. Don’t try to time the market either. Even if you pay your house off you never really own it. You will always be paying rent to the government in the form of property taxes. I’m very seen many “paid off” houses sold at tax sales.
I disagree.
@@oldhag2881 time value of money.
You make a good point but hindsight is 20/20. You can’t get a 3% mortgage right now. Would you do the same thing right now at a 7% mortgage?
@ to be honest, it would be a tougher decision, BUT my investments have been doing very well over the past 5-6 years. Covid year was bust and I was down 30% in one account, BUT, the other 4-5 years have been up to or very near 30%. I really didn’t expect those gains as my target is 10-12%. These aren’t high risk investments either, just large cap growth funds. My other accounts are 12-15% the past few years.
I have wanted to move too, just can’t do it holding a 3% mortgage.
@@av8rgrip I would keep a 3% mortgage too. I would pay down 7%. To me 4% return is about all you can estimate long term and anything above that is a bonus.
Nothing like not having a house payment-
I bought and paid cash for mine in July 2020
I understand the risk of losing money however why would one pay-off 2.5% mortgage when s/he can get 4-5% in savings accounts or T-Bills or CDs without any risk of losing money. If these interest rates drop then you can always move money to pay-off mortgage. This caller will comfortably get monthly $2K in interest if she move all her money in safe deposits like SA, CD, T-Bill.
My brilliant husband sold our home in CA and with the equity we bought a home in NV for CASH !! We are retired debt free !!!! Life is good !
Geo arbitrage is genius!
Paying the home off is safe and sensible. Theres allot of factors to consider here, age of the women she mentioned she wants to retire, then very little outgoings is extreamly wise.
If she was young and wanting to work for 20 more years she could leave it and keep investing.
The 30 year treasury note pays higher interest than the bank is charging me. Paying off your low fixed rate mortgage is just dumb. Let inflation whittle it away.
100% and daves folks don't get this at all
Yeah, but if you've got 20 years to work, perhaps it would make sense to pay off the house and then invest heavily for that 20 years. Or, in the event of job loss or other major events, have the security of a paid off house. With the house paid off, a person might also want to change career and with a lower monthly budget need, you can take more risks. (Opening a business, pivoting careers, etc.)
@@sbrazenor2 correct. Either way it should work. But if you got 30 years ahead of you and you got the money. Maybe you pay off the house and regardless of the opportunity cost, you minimized the risk and can still invest
@bill joseph you're financially illiterate.
I keep coming back to this question over and over again. Each time I decided to keep the mortgage and invest, which has honestly paid off quite well. Still, it bothers me to have a mortgage. If I pay it off right now, I can have a $1mil paid for home and $250k in the bank, with no other debt at 37. That sounds pretty tempting. But if I keep the money invested I should mathematically net more.
That's a great situation to be in. I am in a similar situation and also struggle with blowing the wad to pay off the home. But, from the security standpoint, it has to feel pretty damn good to have the house paid off. Less worry. Less stress and that is better for a healthy life. Stress kills. I say pay it off. Especially if you're going to have $250k left over.
@@tannercc I hear you. I'm realizing there's a certain amount of money that will be "enough." Trying to get more than that will demand additional sacrifice in the form of time, sleep, and stress. I'm leaning towards paying it off now but emotionally it's hard to let go of the investments.
@@fwb777 Yea, but the experts are saying the interest rates are near peak. There's always a mathematical or economic argument for keeping the debt. I don't think I can math my way out of this one, but the psychological aspect of debt is draining, which is why I think paying it off would be wise, personally.
@@fwb777 Mortgage interest can't rise unless your in an ARM though
@@tannercc I actually think there is much less stress keeping a large amount of liquid investments even if it means having debt. If I have $200k in investments and $200k in mortgage debt, I have much more flexibility in an emergency. If I have $0 in investments and $0 in debt when there is an emergency, I have no options.
Because it is awesome. When you know others that live around you are making $3500-$4000 per month payments and you are cutting a check only once a year for that amount in taxes and insurance.
Can’t wait!
@@janinesimon6076 👍
I am working on it.....got my 30 year mortgage 10 years ago, and if I keep up the pace, I'll be done in 2 years, shaving 18 years off my 30 years mortgage and saving more than $60k in interest....to hell with the investor naysayers!
How does having your house paid off feel? “I feel like retiring”
Sometimes we as humans need motivation to work.
Can you elaborate, isn’t retiring the end goal to a more fulfilling lifestyle after so many years of labor?
@@ybois3 yes but retiring means different things to different people, I think that was their point. Some people love to just hang out at home and watch tv, others can't sit still.
I kinda agree with that. Hungry dogs run faster mentality but not having much debt is such a huge subconscious weight off my mind.
Define "work." Define "motivation." Does each necessarily involve earning pay?
@@randymillhouse791 I would say no !
If you got a paid for home and car you don't need to worry about job pay offs as much either.. you can live on a lower income
People who are not disciplined then paying off the house is the best. If you discipline then just do S&P 500. Numbers are simple, but people do not know this. Average S&P 500 life return 7% her house is at 2.7%. Math
Great but what if life happens. What if you can’t work or make less money with a new job or you get injured.
@@miqueasmurga8698 Then you use the money that you have accumulated at greater interest return and pay your bills.
Statistically 60% people just don’t pay off their mortgage
@@SIFON5CS are those the same 60% of people that carry $10k plus monthly credit card debt, and only paying the minimum payment because the monthly interest portion of the bill is huge?......and that 60% could also be the 60% of people that stand in the Starbucks line everyday for overpriced coffee-flavored mud.
@@miqueasmurga8698 Then you liquidate the stock and pay off the house... Or you put the money into a high yield saving account - they are paying 4-5% right now. Having cash on hand in a HYSA to pay off the mortgage is better than paying off the house...
I don’t like listing your house as part of net worth because you have to live somewhere.. granted, you could sell, and then downsize (assuming that will give you additional cash)…
I don't understand how people don't understand the concept of paying your house off!!!!
Two words: opportunity cost.
If I told you to pay my $1000 mortgage in exchange for $1500+ a month for the next 30 years, then once you are done making those 30 years of payments you could keep the paid for house for free.
Would you do it?
Well some people are dumb and some people don't have the money and some people that have the money are really dumb,i never got a mortgage waited till i had the money then bought a house
Thanks Dave
3-6 month emergency fund is no longer good. Times have changed. One needs 7-10 months at least.
Not true. Cut your lifestyle. Then 3-6 works fine.
Please enlighten us. Can you give us specific information, preferably a citation? Platitudes and clichés don’t really frighten me.
If you need that much reserve you must work in a bad field
You don't want to hold large amounts of cash during high inflationary periods.
7-10 months emergency fund is no longer good. Times have changed. One needs 3-5 years at least.
The correct answer is.... Don't pay it off if you don't want to. Sadly people are used to being on payments and will be until they die. Paying off your house brings freedom. I'm a fan of it
This is such a simple one to understand if you take the time to look at both angles..... Yes, you can make more investing than you save against a typical mortgage interest rate, so for all those who would rather invest than pay of a mortgage, look at this other angle which is in theory identical. Once you have a house paid off, would you take out the equity to reinvest it? 95% will say no, because its unnecessary risk, which is why you shouldn't invest over paying off the mortgage in the first place. If you are however that way inclined that you would always release equity to invest, then yes do it, as you just enjoy the risk. For most of us however, the right answer is to get debt paid off
Bad logic. Its silly to pay off the home, then take a heloc and invest it because you’ve lost the time value. The time is why I’ll take 6-10% over 2.5%
From the point of releasing equity, its the same on both sides. Opportunity cost isn’t lost at all. Check your maths.
Helocs are not wise. This whole hyper leverage thing has been sung too much by gurus and gambling minded people jump on the band wagon. My father did the same, not heloc, but he borrowed up to his eyeballs. He has so much debt, it crippled him. He thought he would double his investment in less than a year. He's years further and still in the hole.
I would not take out the equity, because home equity loan rates are at 7.7% where I live. That's worse than what I'm making with no risk.
I look back on the years of my past self paying a mortgage, compared to me being mortgage free, puts me in a mental place of reality that is only understood being debt free.
I’d rather invest the extra money instead of paying off the mortgage.
And the math generally agrees with you unless your interest rate is horrendous
Crazy how some of these people call in with a good situation like they have actual problems
Thank you Mr. Ramsey and Mr. Coleman!
If all your money is tied up in your house it’s a lot trickier to get the money then if your money is tied up in stocks. Plus what if you have your big emergency while you are actively paying off your house? Then you still have a house payment AND you don’t have as much liquid cash. Paying off your house early is risky too.
That's what an emergency fund is for
You're acting like you're gonna need 100k cash for a big emergency
@@Argedis right!! Thats why Daves advice is to save 3-6 months of expenses. Have a good cushion. Paying off your home is the best thing you can do.
@@Argedis cool so since I have an emergency fund it doesn't make sense to pay off a low fixed interest mortgage. 10% compounding returns beats 2.5% simple interest.
@@aaront936 💯 money is meant to work for you, and their is good debt and bad debt. No mortgage broker, accountant or financial consultant will look at a mortgage as debt this old school logic and rhetoric.
Another thing to consider is interest paid in is usually covered by the change in house value. So a 25 year mortgage on a 300K house may have half that interest be covered on the house price increase.
they will have a huge chunk of cash stil, and/or a bunch in easily liquidable assets or worse case they can get a heloc in the worst case situation.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
@@BrandonIvan-c6e However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.
@@Bestjudy001 Oh please I’d love that. Thanks!.
@@BrandonIvan-c6e Clementina Abate Russo is her name.
Lookup with her name on the webpage.
Can’t wait to have a paid off house! OWN your home and you’re so much safer in my opinion
2008...
Guess you haven't heard of tax foreclosures...
@@15KHPCLUB So pay your taxes ? lol one payment vs 12 is a big difference...
@@israelramirez8891 "sO pAy yOuR tAxEs"
Makes no sense why so many Ramsey folk are so eager to pay off their mortgage 🤷
Still will never truly own your home unless property taxes are abolished.
OWN😂😂 You are borrowing it.
Not true for everyone. Some need mortgage to avoid paying higher taxes. If mortgage is your only debt don't pay off the house and then lose cash is prices plunge.
just stop.
I would never advise keeping a mortgage for tax reduction purposes. The main reason to keep a mortgage is because you have an extremely low interest rate and can invest that money elsewhere with potential for far higher gains.
I'm hoping to pay off my last 73k mortgage at 2.75% within a month or two, the stress of the recession/uncertainty just isn't worth it! Can't wait to be totally free!
Could put the leftover (after paying the house off and emergency fund) in T bills, they are even available directly from the treasury.
It's simple you shouldn't. I have a 2.5% 30 year fixed I'd have to be financially illiterate to pay extra instead of investing.
Its a tough call but I think I would pay off the house. Its more about peace of mind then getting the most financial return. I've learned the hard way there is something about having everything paid off and no debt. They can always take a out a HELOC and buy tesla calls if they change mind feel different. 😆😆
@@mechy2k2000 the problem is that you never own your house. failure to pay tax or HOA can result in losing your house. Better to invest that money and use the income from investment to pay house given the low interest rate. If the interest rate was higher, I would pay the house.
@@mechy2k2000 cool so you can't do math. Why should I take financial advice from someone that can't do math?
@@aaront936 way rather have a paid off house and super low overhead then beable to throw alot every month into investments then trying to Juggle.
@@jondoe5305 you're plan loses out to compounding interest everytime.
2% interest. Never paying mine off.
This was good, sound advice! Glad I watched
I don’t understand why anyone wouldn’t WANT to get rid of what is usually the largest monthly payment. Once that is paid off your flexibility is greatly increased. Your stress goes way down. Risk is mitigated.
I know this because I paid off two homes and now in a good position.
Once your huge payment is freed up you can throw a ton into investments.
Or you can juggle 27 balls and wonder why you’re stressed out.
If you have a 6mo emergency fund, why would you stress?
I do. I don’t want payments but if that’s your style go for it.
Flexibly increasing and risk being mitigated is many times not true. Paying off your mortgage can actually make these worse.
Ryan 😂
Why not just split the difference and pay the house down quicker to minimize risk. Invest the other half to boost investments
His advice is for people who aren’t disciplined and educated in investments, it’s not terrible advice but paying off a 2.5% mortgage when interest rate in a savings account averages over 4% is stupid.
I’ve been doing some math on our mortgage calculator and it seemed like there was a sweet spot of paying it off fast but not too fast. It showed me I understand nothing about finances, investments, and interest rates
I agree, but remember you need to adjust that 4% for tax (assuming you take the standard deduction and therefore the mortgage interest doesn't matter), so the difference isn't as large as it would initially appear.
It's a cash flow decision. Map out the cash flow and bake in some uncertainty. Paying off a 2.5% mortgage is probably not a good idea as long as you are disciplined about investing. Remember: you get ALL of the property value increase regardless of how much you owe.
Why would you keep giving money to the bank? Not matter the low interest, that's money you're giving to a bank. You can use your cash flow to invest. Debts are not good at all.
@@rosarabin824I can't believe I have to explain this, but here goes: if you have 100k, if you put it in a 4% interest savings account - you get 4k a year. If you put the 100k into your 2.5% interest mortgage by paying it off, you saved 2.5k in interest. The difference is 1.5k that you gained by not paying off your mortgage.
Dave often advises eliminating risk. "I have the money to pay off my house anytime"----Until your investment tanks.
Depends on the interest rates
If you do the math, its smart if you want to be debt free style, but, inflation and housing market increase, make minimum payment on your home and invest in more homes. Rent them out. Whe. You retire and have someone else paying your mortage, after home is paid off, u have that monthly income , way more than your work 401k will pay you monthly
Tell that to all the landlords who weren't getting the rent payments through covid.
@formula112967 ur rite, banks got bailed out and we got screwed. But u can pause ur mortgage payment for free too. But now u just gota put in contract no matter what happenes ifnu dont pay ur booted. Find good renters because as soon as that crap eneded, evections started and rent went up to make up the loss.
What will Dave Ramsey say to people paying 6 percent interest in mortgage 😢
Oh dear lord, how can they have that much money and be so clueless as to what to do with it. She should just pay off her house, clearly she does not know how to invest it.
That's why she is calling the show. She is smart enough to ask for help.
@@DrGearHeadSS whether she is smart or not, my question stands.
@@DrGearHeadSS a sign of wisdom for sure. I remember a woman criticizing me for having a financial advisor when I know so much about investing. I told her it's impossible to know everything and it's far better to get a second opinion than to go through life thinking you know it all. Everyone has blind spots and it takes wisdom and maybe a little humility to accept that.
In her case yes pay the house off. She will never make money on her investments
It's wrong approach. Mortgage rate 2-3%. Investmentment retun 8-10% +. Throw it at the heaviest return, IE Investments. . Make your $$ work harder for you. It's not rocket science
Or do what I did, work a high paying stressful job you hate for a some years and pay off your mortgage and then finally quit and get a normal job that I enjoy and be happy.
Yeah, Dave is always about getting 11% in the stock market (as if that were 100% guaranteed which, of course, it isn't). I think his argument is basically "it feels good to have it paid off" --okay, but that's not a very mathematically sound argument.
Most financial people never tell you if their house is paid off. They trying to mske money online by acting smart but they to are in debt. Im 44 and i buy and sell businesses. Currently selling 2 within the next few months and can pay my house off before 50. 50 always been the goal bevause if you bought at 20 . A 30 year mortgage should be paid by 50. I see it happening sooner but 50 the target. Without a mortgage in todays time you can uber or door dash when you want and make 50k a year. Livimg modest. Thsts many vacstions and half into investments. I have 4 kids and yougest is 13 , oldest 24 so i can focus on them instesd of having to work 60 to 70 hours a week. My dad has a car from the 90s and hss almost 400k miles. Toyota. He so proud he got that car with so many miles. It made me not buy a expensive car. I paid 6k for a car 2011 and its running like a champ. I own 2 box trucks paid for business wise. I dont have credit card debt. No matter with inflation. If you have no debt, no mortgage, then you can travel and be happy off a Walmart salary.
Hey Dave, how do you tell your landlord you won’t be able to pay rent for a couple of months. It’s either food, or rent.
Snuggies and shake weights is where I put my money.
I'm investing all my money in Snuggies cause Dave said too
Gummy bears
Better than I deserve
I love that phrase from Dave
BECAUSE THE FEELING OF FREEDOM AND SECURITY IS THE BEST FEELING YOU CAN HAVE. Regardless of what goes on now, OUR HOUSE IS SECURELY OURS...!!!
Unless you default on the property taxes. Then the house is no longer yours.
Not really. Try skipping that tax bill.
I've sold a property in Michigan and I’m considering investing the proceeds in stocks. With the current market optimism, I'm unsure if it's the right time to buy stocks and how long it will take for a full market recovery. I'm also puzzled by how some are making substantial gains of over $320k within months in the same market
It's remarkable, but considering my portfolio's current poor performance, I really do need their help. Could you please provide me with a way to contact your mentor?
Yes, i just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. Thank you
There not they are bull shitting you!
Should I spend ~1/2 of my retirement fund to pay cash for a house --- or should I continue paying someone else's mortgage (aka: rent)? I am 68 years old, retired, in good health, have no debts and will still have an annual pension income ~$60k.
Why not put the cash in a CD for 4.10 percent annual growth (US Bank Jumbo CD promo).
That's a guaranteed paycheck. Do not pay the house off. Your interest rate is too low to pay the house off. It's just math.
Drop your money mkt account into the CD for no risk and do not pay the house off.
I've asked myself this question. Pay the house off or make the cash work harder than my interest rate?!!!!
Wrong answer MR. Ramsey! Love you and you're nearly always right! Get debt free people other than your house because it's a tax shelter and you can make that money work harder for you elsewhere.
The weight being lifted off your shoulders when you become mortgage free is a real thing...but so is a large sum of cash in your bank account knowing you can pay off that mortgage with a click of a button, when youre ready.
But the longer you wait to pay off the mortgage, the more interest you pay....I have been really paying down my mortgage....I took my 30 year loan 10 years ago and I am 13 years ahead and have already saved over $60k in interest.
@@formula112967 , not at all. Because the lump sum of cash is in a 6% CD making more interest than my 3% mortgage.
I don’t know about this one. I guess it would make sense if they have no other debt to worry about. She says she wants to retire and if that time is sooner than later then hopefully they will have a good income to live on during retirement.
I was happy to see the number that came up when I googled how many millionaires there are. That being said, the 10,000 millionaires study Dave did needs to be updated. 10,000 is just not a large enough sample size
Bad advice. Never pay off a mortgage with your retirement fund. When your older you need that money working for you.
She sold her home and kept the money then purchased another home with a mortgage, essentially borrowing against her home. PAY IT OFF. How is this hard? Just go right ahead and be proud of paying interest every month to the bank, I'll pass on that deal.
Except, he never said pay off the mortgage with your retirement fund. SMH
Thank you for posting this! Any thoughts on I bonds from treasury direct?
Always be buying!
I’m 30 and I was able to pay off my house at 28. Freed up cash flow for me to be able to renovate my house .
My goal right now is to have my condo paid off in one year. When I looked at how much I owe versus the interest I owe ( the interest I owe is over 20 grand ). I have a cheap HOA fee. My HOA is 200 a month ( I know others who HOA is 800-1200. So i feel 200 a month that covers siding , roof , lawn maintenance, water . Yup. Water. So I would say that’s not bad and my condo is in a very nice neighborhood . I know I would have property tax but just not having a mortgage and thinking of that over 20 grand of interest that can be going toward something else. I also have Roth IRAs and traditional IRAs that never lost in this recession. I am currently a rad tech that takes contracts across the US. I’m making double of what I would make as a staff tech. Right now I’m paying something to publish a book series ( that I believe will make me some money as well long term ). Right now I hate my career and it is stressful traveling so much but I know when I meet my goal of paying off my mortgage ( that I’m hoping will happen within one year ) then I know I can change careers or go part time bc I will not have that mortgage to pay. The only things that I do factor in is surprise things that might happen like a sudden health issue or a sudden pets health issue or car issues or emergency repair on my home. Some things we can’t control so I try my best to always have that emergency stash fund that I don’t touch except for things like that. I am cooking at home , packing my work lunches and I dropped cable. I have just one streaming channel ( HuLu. ). I hope I reach my goal
The math says invest instead of paying off your house..... However math does not account for a sense of security and for the variables of life.
It is your largest monthly expense.
The problem with paying off your house is that it is easier for the government to take it from you if you were to fall behind on paying property taxes. They could never take it so easily from a bank. I recently heard of this poor lady who paid off her $300k house but owed about $3500 in property tax. The county put a tax lien on the house, sold her house to recoup the taxes owed and kept the rest of the profit while the new owners evicted her and made her homeless. And this is happening in many places around the USA. we are caught up in a never ending cycle of debt and an unaffordable way of living. The best is to be as frugal as possible, own nothing, autopay all your bills and live within your means while paying cash for everything.
That’s terrible. I didn’t even know that could happen.
Terrible advice
Or you could just pay your taxes, which are still substantially cheaper than a mortgage.
Not today - Invest in a high yield CD 5.35% and keep your low Interest mortgage 2.25 % your upside is monthly $600 bucks
Park in short term treasuries. Nice yields now with inverted yield curve.
Snuggies are a gift to humanity idc what Dave says 😂
You don't need to pay a broker to manage a fund? just invest in the S&P 500 and dollar cost average long term.
My mortgage is 2.5 I’m getting 5 percent in CD I’m not paying off my mortgage.
We have a 2.75% interest rate on our house worth about $550k. Our monthly payment is $1,100. We owe $150k. There is no logical reason for me to pay it off now. Its less than 10% of our income. The bank is basically paying me to borrow the money with inflation. If I had some life sucking monthly payment it makes a lot of sense.
Love it
How does it feel to have your car title in hand now imagine that’s a house deed :)
Do both🤔🧐🤷🏻♂️ My mortgage is $1600 month, but my girlfriend and I contribute $2000 month. We max out our Roth IRA’s, and we each have regular brokerage accounts that we invest in. We’re both travel nurses.
Girlfriend? what is has to do with your house!
I host travel nurses in a spare room. Y’all make good money! Many of my guests are trying hard to pay off debt/loans. Me too. It’s a win/win.
@@summerforever6736 he’s just probably trying to brag.
@@spankynater4242 haha brag that I have a girlfriend?😅
@@summerforever6736 Split expenses.
Lots of the financial gurus, don’t get it. That ease of mind not having a mortgage, owning something that can pass on generations property is worth way more then a million dollar portfolio in any investment. It’s freedom. You only got one life either spend it in freedom or chasing $.
In 2003 I bought a house for $100K. In 2007 the value was at $240K. By 2010 the value was at $48K.
Pay off the house? NO!
Let the value rise as you continue to pay extra on the principle. Liquidity is the only known. Investments are unknowns.
Excellent point
How did the value drop so much? What is the value now after the economy rebounded?
@@timothymacdonnell9079 The 2008 crash caused it. Today it is valued at $298K. No regrets, I have saved way more than this house has grown in value over the past 13 years. I was not going to stick around and hope that all of my eggs in one basket were going to rise in value. That is why I refuse to fight to pay off a house. Diverse investing and liquid savings are more important to me. That house could have stagnated in value or grown back to $100K by today. It was a total unknown. Glad I bailed.
@@randymillhouse791 thanks
2008 is never going to happen again. Why? Blackrock.
Hi Dave, hope you could answer my question. I have a mortgage with 2% interest rate taken 2 years back. I have 13 more years left. I have emergency funds, 401k and 529 in place. Should I payoff mortgage with the extra cashflow or invest in mutual funds (average rate 8%) . I am 40yrs old. Please advise
What about id your mortgage is at 4% bit the savings account is 6%. Surely jn this scenario its better to save the money
Bad advice Dave. CDs are now at 5.55% and her mortgage is 2.5%. I also love how your advice always rules out the market going down OR staying the same for many years. It has for over a decade in the 1960s and 1970s.
Yep, there is a smug confidence about what the market will do that is just not based on facts.
Paying off your house is NOT the smartest choice mathematically, but if you want to for emotional reasons it wouldn't be the end of the world. The mathematical best option would be to invest the entire sum (minus cash on hand reserves) into the stock market according to your risk tolerance, NOT money market earning next to nothing.
Most of the financial advisors at the local bank are terrible.
Be careful.
Yep! Find a good RIA, do not use a broker.
Index funds out preform mutual funds by over 80%. Ramsey gets commissions on steering clients to them.
Wrong, Dave speaks to this. Why would one pick Funds with high commissions?
He will not admit that.
And they also have a higher turnover ratio.
Index funds are a type of mutual fund. Jebus Christ. You clearly failed to understand the basic.
@@JonathanIvy221 The Dave trolls will never get it.
A mutual fund is merely a basket of stocks, guess what? Index funds are a basket of stocks..