My brother asked me the other day..."So how many more payments do you have on this house." So proud to say "None." Yes...The grass feels better! PAY OFF THE HOUSE!!!
What about property taxes? That’s included in my current mortgage. I’m in this same situation. Also 40 yrs old. Difference is my stocks are like $500k and my mortgage balance is the same
@@jimroscovius this again? sure, this works for some but very naïve to say its THE answer. Nothing wrong with a mortgage if its a low rate and you have the the funds available to cover. Why would anyone pay off a 2% mortgage when you can get 1.5x easily in a savings account today? Sell investments to pay taxes? If you have to sure but the math doesnt work. Peace of mind, yes, thats the primary reason to pay off low interest mortgage debt. Nothing wrong with that, its tiring to keep hearing its THE only answer and BEST. Do what works for you.
I paid the last 127,000 off of my house April 19 2023 at 51. And Paid my taxes It’s still sinking in that I have no more Mortgage. Anyone can do it keep pushing and grinding and your dream of paying off your house something u will never regret or forget
@@alisatjaden3906 What is your mortgage balance? I make triple principal payments, and will be done in 4-5 years, shaving 16-17 years off a 30 year loan. I am down to $60k. I didn't always make triple payments.....I started just rounding off to the nearest hundred when making the payment, then went to double payments, now triple payments.
What Dave says at the 4:15 is spot on! We paid off our house September 2022 (with a combined income of $65k). The grass feels different, the stress of cost of consumables hurts, but is not incapacitating. Level of risk with the mortgage company is gone. Favorite DR phrase : 100% of foreclosures happen to homes with a mortgage.
@@chucksmith9633 While I fully agree with paying off your house, the statement "100% of foreclosures happen to houses with a mortgage" is incorrect." For instance, people lose their houses for not paying the HOA fees, not even talking about property taxes.
You should NOT sell stocks when they are down to pay off a low interest debt. I think Dave is overestimating the risk on this one, if this guy loses his job he can slowly sells stocks as needed to make ends meet until he gets a new job.
In 2020, stock prices skyrocketed, cash some out and decided to pay off my mortgage. One of the BEST decisions I have made! To see that Deed sent to me was sureal! That original mortgage payment can now be re-directed to other investments. Being DEBT FREE is a stress relief.
I just paid off my mortgage and it was awesome!!!! I love not owing on my house and won't go back. I feel totally free - and my mortgage payment was only $571 per month...still feels great.
The ironic part about this is that he would not be in the position to pay off his house today with 180k if he didn't invest. The investment outperformed extra principal payments.
When ever you are making a big financial decision, you should calculate different scenarios and based them on a 5 or 10 year time line. There are many elements to consider when deciding to pay off the house. I have a rule in life, NEVER LIQUIDATE YOURSELF COMPLETELY. You don't know what life may throw at you and it's always good to be prepared for the unexpected. He has to do what is financially healthy for his family based on his options.
Your average person will just overthink it. Money isn't that complicated. I have read tons of comments from people who paid off their house and they are happy and loving it. Not a single one of them regrets it.
LOL! "I make 300k a year and owe a 180k on my mortgage." Dude, you could pay off the house in a couple years and not touch the stocks. Why do people like this even call? Just to show off and feel good about themselves. Stupid.
I’ll take a line from Dave’s book, you cant hide from math. If you got a interest rate of 3.5% you can get more money putting into a high yield savings account at 4%…no risk whatsoever. Your money won’t go down at all and you’re making more on your money. Dave always says to not make emotional decisions with money and yet paying off his house in this case is 100% emotional. I know this is gonna get a lot of hate on here but remember Dave’s line, you can’t hide from math.
Yeah, and he recommends people invest in mutual funds saying that the only people who get hurt on the roller coaster are the ones who jump off in the middle of the ride. Then, when it comes to investing instead of paying off the house early, that's "risky". How is dumping all your cash into the mortgage less risky than keeping it invested?? Dave's dogma has turned him into a liar when he is challenged on it.
This is where the phrase “the juice isn’t worth the squeeze” comes from. You’d make more by just paying it, leaving your mental bandwidth free of stress to make more money
@@timothyrosman6371 True, but the interest on HYSA could keep going up. If they get to 5-6%, there is a difference in terms of how fast one gets to the finish line in terms of a mortgage. Making extra principal payments on mortgages in the 2-3% range doesn’t make sense versus taking that BS6 money and using a HYSA to get to the finish.
It's going to cost them thirty to forty thousand dollars in taxes to pay his house off with this income he could just make extra payments and have it paid off in just a couple years
Not true -- the interest is going down year by year, especially if he were to throw an extra 5k a month. Just up his charity giving and stuff like that. This year it seems like my mortgage interest didn't make as much of a difference in what I owed, but when I put in what I donated, that made a large decrease in the taxes I owed.
I agree with the premise of using income to pay off the house, but I don't think we can know how much he would pay in taxes if he sold the stocks. How long has he held them? How much have they gone up? The taxes only apply to the gain, not the entire amount.
Right! Why create another taxable even by cashing out the stocks. They make enough money to pay that mortgage off in less that two years. Without paying extra taxes.
To me it seems really stupid to sell off the portfolio at his income level he would pay a third of that money in taxes. Why not just throw everything at the mortgage at this point and pay it off in a couple of years?
At their income level it's 24% on the capital gains, and if he has owned the individual stock for more than a year it's 15%. You're right in principle but just wanted to provide some insight to others.
He could pay half this year and half next year if he’s worried about losing some gains in his investments or a stash of cash. But he makes so much, it seems he could pay it off sooner.
Great advice. Just great advice. As a child, I knew a lady who mortgaged her house to invest in real estate. The investments failed. She came just MILLIMETERS from ending up homeless. Pay off the house. You can climb a LOT higher if your ladder is on a stable foundation.
Dave completely ignores taxes here. Although it's not all gains, so it's not 15% of the full 180k, but we don't know how much is gains. If we assume it's half then taxes are $13.5k, which means he's short $3.5k. given his salary I think he can deal with that.
Why lose value by cashing out investments to taxes just to pay off a low interest mortgage, plus future returns by starting over? If he wants to speed it up, pause investments and dump all future funds.
Another thing to consider is the capital gain taxes to pay if he cashes out. In the US, I think 15% on gains he made in those 170k. We may be talking about 15.000+ USD in taxes.
He's choosing between two great options. Pay off your home, hence lower your monthly expenses, or continue to invest, hence increase your income. One is guaranteed and the effect is immediate. The other is a high probability depending on how the money is invested and how long you plan to keep it invested without touching any of it.
I’m a tax account and what Dave says completely ignores the tax consequences of this decision. I’m baffled why anyone would do this? I could pay off my house tomorrow with my investments but there’s no way I’m paying those taxes! I did donate stock to a charity that I would have given cash to and used that cash to pay down the house. I don’t pay gains then - it’s a win. We’re just buckling down and getting the house paid off with our income. Seems the best overall option.
Bad advice. He said he is paying mostly principal at this point. So you would pay 20% in taxes or so (add in NYS!) to pay off a mortgage so then you can just start investing again? MAKES ZERO SENSE! Double pay the payments if it makes you feel better... but dont give yourself that kind of tax liability for no reason.
I just paid off my mortgage last year, best decision i ever made. I feel different, stress free. I cant imagine someone getting a mortgage with today’s interest rates
I disagree with this. The compound interest that you lose by liquidating your investments is huge. Starting again at 40 yrs old is even worse. I'd just divert whatever new money I was investing to start paying down the mortgage.
I Agree with you on this. I decided to Max out My Roth IRA this year and throw an extra $500 a month towards my Principal on my mortgage so I can build compound interest and pay off my house quickly
Forget about their stupid plan, u make 260k, only 170k mortgage, just keep the investment, paying off their house is NOT the right way, this is stupid He should have ZERO stress making 260k having 170k mortgage There is NO risk in his equation with his income, toxic advise
If you can get a 4% in a high yield savings account and have a 3% mortgage, why not just keep it in your savings account at least until interest rates go back down? It's basically risk free...
Dave doesn’t accurately account for risk in his “math.” He believes a 75 year old on social security and a 40 year old making $260k should have the same risk assessment.
When did he say that? When did he compare a 75 year old with a 40 year old? Besides BOTH would be better off without a mortgage NO matter what. The only people who disagree have mortgages, LOL
I was laid off at the age of 62 and was unemployed for a year and a half. Just before that, I had an instinct to cash in a 401K and pay off my house. I did so. Had I not done this I would have lost the house after paying mortgages for 39 years. I would have been living on the street or, at age 70, struggling to pay rent. Best decision I ever made.
Dave himself said mutual fund’s return is 12% and the chance of losing money over the long run is minimal. Based on that, how could he justify paying off the 3.5% mortgage? The caller would be leaving over 1 million on the table if he pays off the mortgage now. The “risk” is also minimal since it’s a 30-fixed mortgage, unlike the 90-day bank notes Dave used decades ago. I understand the psychological side of it but the math clearly doesn’t work.
Mine just went up too, so now I'm throwing extra money in there instead of towards the mortgage. Once the interest rate drops enough below the mortgage rate, I will just take all the savings + growth out and throw it at the mortgage. Extra emergency fund with virtually no risk!
25 yo, 2.875% mortgage, 70k net worth right now. I don't really see the point of paying off my 2.875% mortgage early instead of putting it into index funds, especially considering my age, mortgage contract, and career
This guy should just buy 30-year bonds if he wants a guaranteed return better than his house payment. If you're only paying off your house for psychological reasons, then work on your psychology, not your house payment
The caller is very right. If he is happy to hold onto debt and let inflation do the heavy lifting then who is to argue against that. It's easier to f-up, for sure, and I understand DR's stance but the risk manageable. I paid off my mortgage, then changed my stance on it and took on a new (bigger) mortgage, and don't regret it, so there is no right or wrong here. Different people are willing to do different things.
Same here. I'm in Texas too. Out of a $2000/month mortgage, only about $900 goes to the bank. The rest is taxes and insurance. Pay off my house and I'm still paying over $1000/month just to live in my PAYED OFF house.
You all are missing the point. No matter what, you have ins. & taxes. That is a wash. It is not the payment but the amount of debt & interest. Yes Ramsey sometimes exaggerates the funds freed up, but the point about the debt is the same.
@@aolvaar8792 FIRE - Financially independent , retire early? This movement works for some people but I'd rather not live as a minimalist. I'd rather retire and enjoy the same quality of living afterwards.
The part where he says what millionaires do isn't good reasoning. He doesn't provide evidence of causation, i.e., that paying off the mortgage early is what *caused* the growth of wealth. It could easily be the case that there's a correlation between being the kind of person who aggressively saves and being the kind of person who likes to pay off debt, and that the typical millionaire would have actually ended up with even more money had he not paid off the mortgage early. Of course, this may *not* be the case, but the point is he just asserts a correlation as if it has some sort of causal value.
The other thing is that taxes insurance escrow etc on a mortgage could be half the cost. So you pay off the mortgage and still get half the bill regardless.
3:30 That was a great way to look at it. Our first, extra payment on our house begins next month. I know that if we invest the money we have a chance of making more money in the long run, but right now the focus is on reducing our mandatory expenses. Another reason we are focusing on paying off the house is the added flexibility. We were going to move this year but didn't because it would mean buying another house and financing it with today's mortgage rates. Ouch! If the house was already paid off, when we transfer the equity to the new house the price difference would be small enough that we might not even need a loan. Even if we got a loan we'd be able to pay it off quickly. If I could do it over again, I'd buy a cheap house as soon as I started working and could afford one, then pay it off. I'd essentially be paying rent to myself and building equity in an asset I can sell, or rent, later if I want to move.
He can’t pay off his house with his investment account. Unless we all pretend the IRS will just say it’s ok not to pay taxes on the gains when he sells his shares and withdraws the $ from his account
According to Dave, you can get 10%/yr in the market. That $180K would grow to $1.2M in 20 years. Assuming his mortgage is $1200 a month, if he invested that over 20 years it would grow to ~$870K. The math says don't pay it off.
Hope the caller enjoys his 2023 tax bill. Giving that unilateral advice without even asking about cost basis in a taxable account is setting someone up for a nasty surprise. And talk about factoring in risk, if something were to happen, now you've just erased all your liquidity. You really need to be able to mathematically represent risk in a meaningful way even if its using some type of fuzzy logic approach but to say someone is not factoring risk into the equation, you ought to yourself be able to show more defined risk than...oh you just wont lose your house. Which, in a worst case scenario, if things are bad enough you very well may need to sell it anyways to recapture that liquidity. Why not give yourself a liquidity buffer so you can sell some stock when needed to pay for the mortgage and other emergencies that might overrun your 4-6 month reserves. And keep your annual tax bill manageable. I think a more defined, complete, and honest risk assessment would shed some more light on the "right" approach for the caller. Another strategy the caller might do is divest the taxable account incrementally to make mortgage payments.
How much do taxes change after paying off the mortgage? As far as I know (I could totally be wrong which is why I’m asking) there’s only a tax deduction regarding the interest paid… If someone is steadily paying off the house year after year then they are seeing the interest drop significantly over time. That should reflect in prior year tax returns, right?
Dave always references their famous “millionaire study” in which (surprise, surprise) 90% of all millionaires have a paid off house. Well, duh! If I was a multi- millionaire, I’d have a paid off house too! But what Dave doesn’t mention (to my knowledge) is exactly WHEN in the journey their house was paid off! Many of the millionaires in this study are in their 50’s, 60’s and 70’s so it’s really no surprise that their houses are paid off- it’s something that took them 30 years to do- just like everyone else! Or in some cases, people made big bold (maybe even risky) moves with their money (in business, real estate, the stock market) which paid off and THAT gave them the money to pay off their mortgage early. So yes, millionaires WILL pay off their houses (because they CAN) but that doesn’t mean that paying off their house (with “gazelle intensity”) is what MADE them a millionaire!
As much as I am against borrowing money, it is tough to ignore having a 2.5% mortgage when inflation is 10%, give or take a bit depending on how you calculate it.
Yup. Especially with no other debt. Soon a I paid off my home in 2008 I began taking off up to 3-4 months work without pay each year on top of my six weeks paid vacation. From 2009 to 2019 that $1500/mo. became additional funds going to savings,investments,and contributions. Early retirement as well.
I bought my house at 4% interest. My dads opinion is dont pay extra to pay it off. My opinion is get out of debt. And get it paid off. So i guess right now im going to beef up my emergency fund. Im taking ppl change their mind on what to do a lot. But im just happy i can live within my means
Im not cashing out 180k of stocks all at once to pay off a low interest mortgage. The capital gains taxes he would pay next year would wipe out anything he's able to save from here on. Leaving him still with that 10k that was left over. I'd build an emergency fund that wasnt in stocks. Then pay as much as i can toward the house for a few years.
didnt realize how good dave was until he wasn't on the show all the time. the other hosts are just robotic parrots that just push the product by saying the same lines over and over again. dave is actually trying to help these people
This quite possibly is the worst financial advice I've ever heard. He would be losing so much in annual compounded returns if he paid off his mortgage early.
dave doesn't take into account taxes of selling the stocks. is it at least long term capital gains?? if not i don't like that loss.. he makes enough money, that combined with any dividends from the stocks that he holds can pay it off really fast.
This is what makes Dave Ramsey so unique. The financial math heads out there like to bash on him. But they’re much like the new CEO who is a “Numbers guy“ that ends up driving the company into the ground bc he didn’t know how to relate to people. There is a psychological aspect to finances that no one else, except Ramsey talks about. This affects your behavior and decision-making in ways that are positive, but not easily quantifiable
There is little way those numbers work out at mortgage rate of 3%. You will lose 20% to long term capital gains. If the market goes down, you are just buying it on sale. If the psychological high of no debt is worth it (and it may be) then do it. You have not done it yet because the numbers don't make sense. Also it was not established how long he had on his mortgage which is critical to make that decision. Plus depending on when this call came in and what the stock market has done that year there could be substantial short term capital gains. You can't treat every question like this the same as Dave does.
I'm kinda in the same situation but currently rent. I now have enough money to buy a decent home outright but it's trying to get the balance between the peace that no doubt comes with full ownership of a house and what that money could turn into through future stock market returns. A difficult dilemma.
Thanks Dave I am following you since 2020 Thanks to RUclips to get such a wonderful content. Winning with money would start with our Healthy Mindset & Paid for House. Thanks Dave Love from India
So we should be diversified against risk but a 40 year old with 180 grand in retirement accounts should dump it all into a single property. I love how the guy comes back at him "would you take 170 grand out of your house and put it into SINGLE STOCKS?" Why didn't he say diversified index funds? Because it could have been argued. Ask someone in Ohio whom just lost their house because of train derailments not covered by insurance if you should have all your net worth in your home.
For real, the people that say that you will still need to pay insurance, taxes and maintenance... Guys, you pay that PLUS the mortgage! The point is getting rid of the mortgage payment. Are you expecting not paying anything for housing? Where? How?.... perhaps renting? Well, you have to have renter's insurance and you still pay the taxes in your rent, because the landlord is not going to rent you the house or apartment without considering the costs of taxes in it. Guys, just wake up and do the right math!
Love Dave but when he says “you don’t factor in risk” I would pull a reverse uno card on him and say “well you don’t factor in the risk if I don’t start investing right now vs my mortgage off” Meaning if you have a very low mortgage rate, paying the minimum balance while aggressively contributing to retirement may mathematically be better. That’s the risk you actually may run into.
Dave's study of millionaires only covered 1 in 44000 millionaires. Questions that weren't asked weren't answered. I have met millionaires who made most of their money in single stocks. It may not be the most popular way, but to say no one has done it either ignorance of the facts or dishonesty. Look at it this way, would you sell a business worth $180k to pay off a mortgage of $170k, then start a new business? I certainly hope not. Treat your investments like a business.
I did a calculation myself and thought that for every dollar I put extra towards the mortgage I save $1 on interest and didn't significantly alter the payoff date.
If i paid off my house, it would brealy touch my overall payment as most goes to taxes and insurance. If i can't make those payments, I still lose the house even if i don't owe the bank anything.
I am debt free house and all. My HYSA savings account pays me $1,000 a month! I use that money to live on and 100% of my paycheck goes back into savings. It feels so good to have no fear of the economy, no fear of losing my job, because I have financial freedom and I will be okay. RICH people earn interest. POOR people pay interest. That's the bottom line.
I paid off my house 8 1/2 years early 2 months ago. My head is so big now; I have to dial down my ego and the house looks and feels better than when it was new. Thank you for the good advice Mr. Ramsey
@@jimmymcgill6778 that's not different from renting, Is like living with someone pointing a gun in your head waiting for us to make a mistake or for something to happen! I would pay it off 100% then I will pay the mortgage to myself
Have great respect for Dave Ramsey, but this is the one and only area where I respectfully disagree with him, and only under one circumstance If you have a 3% or lower mortgage (not current mortgage rates....if you have a very recent mortgage at 7% plus pay it down)... this is historic and may never come around again in your lifetime or in your children's lifetime. The last time was following the great Depression. So this is the cheapest loan that you will likely ever have. Be wise with the surplus. I have a 2.625% 15 year mortgage. Municipal bonds in my state (AAA) are paying 4% - 5% federal and state tax free. I would be an idiot to pay off a 2.625% loan with a risk free / tax free return of 4-5%.
Build it up in investments or savings and when it's more than your balance you can decide to pay off the mortgage if you want. If you prepay, you still need to pay the monthly payment, even if you lose your income. The younger you are the more important it is to make sure you're saving for retirement instead of prepaying low interest debt.
@Joseph Mulloy No one is saying not to invest, but once you are out of debt except the house, you invest only 15%, and throw the rest at the house. Once it's paid off, you can invest like crazy, like we're doing. We maximize our Roths, and then throw more into traditional IRAs. Getting house paid off reduces risk, which is better than paying with math.
Yeah sure go ahead and put all off your money in cardboard vinyl covered box that produces nothing and yet still requires paying taxes on it and maintenance.
Don't forget about home value appreciation and taxes on capital gains. The factors are more than just the interest rate differences between a mortgage and investing. Buy a bigger house with the investment money.
Pay off your house. We did it and now we're debt free. Huge stone lifted off shoulder. Im always thankful to God to the decision we made, giving us wisdom to make a right decision in life.
Dave always brings up the “risk” when this question is asked. Is there really any risk in having a low interest mortgage that you could pay off at any time if needed? What about the risk of emptying your savings so now you have no cushion if something comes up?
Dave should just admit he's a religious fanatic and doesn't like debt because he thinks that's what the Bible says. It is almost impossible for a guy like this caller to get in trouble with a mortgage: high-income, not overleveraged at all, high liquid funds, very low interest rate (heck, since his mortgage rate is below the rate of inflation, the bank is basically paying *him* interest!).
I know several millionaires who have a mortgage well into their 50s/60s because of a low interest loan. And put money into investment vehicles. So yes mathematically, you don't have to be debt free/mortgage free to be wealthy.
My brother asked me the other day..."So how many more payments do you have on this house." So proud to say "None." Yes...The grass feels better! PAY OFF THE HOUSE!!!
Congratulations and Yes it is nice to not have a house payment
We've calculated the month and year that this will happen for us. I'm praying that things go better than planned.
@@TheFirstRealChewy Amen!!!
Congrats. I would take the peace of mind of having the mortgage paid off over buying a shiny new car.
* - except for property tax, insurance, and maintenance
We paid off our house at the end of 2020. Now we just invest the same amount as our mortgage payment.
We do the same. People who won't pay off their house are not thinking clearly.
What about property taxes? That’s included in my current mortgage. I’m in this same situation. Also 40 yrs old. Difference is my stocks are like $500k and my mortgage balance is the same
@@brownbunnnyyou just pay them yourself once a year. Usually at the courthoise
@@jimroscovius this again? sure, this works for some but very naïve to say its THE answer. Nothing wrong with a mortgage if its a low rate and you have the the funds available to cover. Why would anyone pay off a 2% mortgage when you can get 1.5x easily in a savings account today? Sell investments to pay taxes? If you have to sure but the math doesnt work. Peace of mind, yes, thats the primary reason to pay off low interest mortgage debt. Nothing wrong with that, its tiring to keep hearing its THE only answer and BEST. Do what works for you.
@@cmartin1549 well put. I don’t like when people say the other person is wrong.
He’s making $250k a year. Just use your income to pay off your house.
Right, unless he’s lying about his debts.
40-50% of that is gone to taxes
@@cameronsmith8986it’s unreal that ppl don’t get this
250k is the new 100k
@@cameronsmith8986 peasants don't understand that
I love how people call Dave, and try to convince him of their ideas. And each time Dave cuts to the chase! Lol haha 😂 lol😂
Yeah, like "you called me" - what did they think he would suggest?
So many people think their "plan" is better. Then later they wonder why they have no wealth and are further in debt.
Facts. Lol.
Lol like when the caller said “so I bought the home in 2012”
Dave: “doesn’t matter” 😂
Even when Dave's wrong, he still cuts to the chase
I paid the last 127,000 off of my house April 19 2023 at 51. And Paid my taxes It’s still sinking in that I have no more Mortgage. Anyone can do it keep pushing and grinding and your dream of paying off your house something u will never regret or forget
It's nice to have the boss back. None of the hosts are as good as Dave Ramsey himself.
I'm waiting for Dave to ask the callers if they feel safe..
I agree 👍🏾
@@wahinepaddler4 LOL
@@wahinepaddler4 which episode was this?
I like most of the current ones 😊
I paid my house off on Black Friday 2015. Amount of time I’ve spent regretting that decision? “ZERO.”
Got 39k left on the house cant wait to feel that weight lifted off
@@And1one757 Me too! Can't wait to have it paid off
@@alisatjaden3906 What is your mortgage balance? I make triple principal payments, and will be done in 4-5 years, shaving 16-17 years off a 30 year loan. I am down to $60k.
I didn't always make triple payments.....I started just rounding off to the nearest hundred when making the payment, then went to double payments, now triple payments.
What Dave says at the 4:15 is spot on! We paid off our house September 2022 (with a combined income of $65k). The grass feels different, the stress of cost of consumables hurts, but is not incapacitating. Level of risk with the mortgage company is gone.
Favorite DR phrase :
100% of foreclosures happen to homes with a mortgage.
Love it ❤ bravo
"100% of foreclosures happen to homes with a mortgage".
I like that one
@@lukasbryant9881 lien foreclosure, tax foreclosure, condemnation foreclosure, ......
@@aolvaar8792 These don't happen on homes not owned by the bank on a note because without a payment, the taxes and upkeep are easily affordable.
@@chucksmith9633 While I fully agree with paying off your house, the statement "100% of foreclosures happen to houses with a mortgage" is incorrect."
For instance, people lose their houses for not paying the HOA fees, not even talking about property taxes.
You should NOT sell stocks when they are down to pay off a low interest debt.
I think Dave is overestimating the risk on this one, if this guy loses his job he can slowly sells stocks as needed to make ends meet until he gets a new job.
If the guy had no mortgage payment, then losing a job wouldn't be too much of an issue.
@@glennmorris6071 Then he would have no money to pay bills.
@@glennmorris6071 Your County Property Tax Collector would like to say hello; their cousin REALLY wants to buy your house at auction for 5000.
@@jimmymcgill6778 But a mortgage wouldn't be one of the bills he'd have to worry about.
@@ricecake4588 if he has an extra savings account of $180k earning 4.5% he doesn't need to worry about paying the mortgage payments
In 2020, stock prices skyrocketed, cash some out and decided to pay off my mortgage. One of the BEST decisions I have made! To see that Deed sent to me was sureal! That original mortgage payment can now be re-directed to other investments. Being DEBT FREE is a stress relief.
If you had put the cash into a good savings account instead, would you be more stressed now? The point is you managed to sell high.
I just paid off my mortgage and it was awesome!!!! I love not owing on my house and won't go back.
I feel totally free - and my mortgage payment was only $571 per month...still feels great.
Paid off our house Jan 2021…happy birthday, merry Christmas and a happy new year to me!
Yep, the emotional and psychological effect of paying off all your debt - including the mortgage - is wonderful.
If you have the principle sitting in a high interest rate account, why the hell would you take it out , to pay off a low interest rate mortgage?
The ironic part about this is that he would not be in the position to pay off his house today with 180k if he didn't invest. The investment outperformed extra principal payments.
How do you know he made any money in that investment account? He may have put 200,000 in the account and only has 180,000 for example.
@@econ0003the caller said he made good money. You'd have to be a bad/risky investor to lose money in the past 5-10 years
When ever you are making a big financial decision, you should calculate different scenarios and based them on a 5 or 10 year time line. There are many elements to consider when deciding to pay off the house. I have a rule in life, NEVER LIQUIDATE YOURSELF COMPLETELY. You don't know what life may throw at you and it's always good to be prepared for the unexpected. He has to do what is financially healthy for his family based on his options.
Your average person will just overthink it. Money isn't that complicated. I have read tons of comments from people who paid off their house and they are happy and loving it. Not a single one of them regrets it.
We own our house free and clear and I sleep like a baby at night knowing we will never be homeless or have to worry about it.
AMEN PAID OFF MINE .
The tax collectors would like a word with you...
That's a bit extreme.
You don't have to pay property tax?
LOL! "I make 300k a year and owe a 180k on my mortgage." Dude, you could pay off the house in a couple years and not touch the stocks. Why do people like this even call? Just to show off and feel good about themselves. Stupid.
I’ll take a line from Dave’s book, you cant hide from math. If you got a interest rate of 3.5% you can get more money putting into a high yield savings account at 4%…no risk whatsoever. Your money won’t go down at all and you’re making more on your money. Dave always says to not make emotional decisions with money and yet paying off his house in this case is 100% emotional.
I know this is gonna get a lot of hate on here but remember Dave’s line, you can’t hide from math.
I hate to break it to you but the after-tax difference between 3.5% interest vs a 4% HYSA is peanuts.
Yeah, and he recommends people invest in mutual funds saying that the only people who get hurt on the roller coaster are the ones who jump off in the middle of the ride. Then, when it comes to investing instead of paying off the house early, that's "risky". How is dumping all your cash into the mortgage less risky than keeping it invested?? Dave's dogma has turned him into a liar when he is challenged on it.
This is where the phrase “the juice isn’t worth the squeeze” comes from. You’d make more by just paying it, leaving your mental bandwidth free of stress to make more money
@@timothyrosman6371 True, but the interest on HYSA could keep going up. If they get to 5-6%, there is a difference in terms of how fast one gets to the finish line in terms of a mortgage. Making extra principal payments on mortgages in the 2-3% range doesn’t make sense versus taking that BS6 money and using a HYSA to get to the finish.
The peace of mind of having no mortage debt is priceless
It's going to cost them thirty to forty thousand dollars in taxes to pay his house off with this income he could just make extra payments and have it paid off in just a couple years
His networth does change, he's losing 10's of thousands in taxes...
Not true -- the interest is going down year by year, especially if he were to throw an extra 5k a month. Just up his charity giving and stuff like that. This year it seems like my mortgage interest didn't make as much of a difference in what I owed, but when I put in what I donated, that made a large decrease in the taxes I owed.
I agree with the premise of using income to pay off the house, but I don't think we can know how much he would pay in taxes if he sold the stocks. How long has he held them? How much have they gone up? The taxes only apply to the gain, not the entire amount.
Right! Why create another taxable even by cashing out the stocks. They make enough money to pay that mortgage off in less that two years. Without paying extra taxes.
To me it seems really stupid to sell off the portfolio at his income level he would pay a third of that money in taxes. Why not just throw everything at the mortgage at this point and pay it off in a couple of years?
At their income level it's 24% on the capital gains, and if he has owned the individual stock for more than a year it's 15%. You're right in principle but just wanted to provide some insight to others.
I agree, use income to pay off the house early.
Two things Dave thinks are imaginary: Taxes and Inflation
agree. this is all around poor advice from dave.
He could pay half this year and half next year if he’s worried about losing some gains in his investments or a stash of cash. But he makes so much, it seems he could pay it off sooner.
Paying off my mortgage from an inheritance was so unbelievably liberating that I went into a semi denial about it. Just do it and you won't regret it!
Great advice. Just great advice. As a child, I knew a lady who mortgaged her house to invest in real estate. The investments failed. She came just MILLIMETERS from ending up homeless. Pay off the house. You can climb a LOT higher if your ladder is on a stable foundation.
He won’t be able to pay off his house if he owes 170k and has 180k in Stocks after paying capital gains tax
They NEVER consider taxes. Cashing out his stocks is so financially stupid, especially if he’s in index funds.
Dave completely ignores taxes here. Although it's not all gains, so it's not 15% of the full 180k, but we don't know how much is gains. If we assume it's half then taxes are $13.5k, which means he's short $3.5k. given his salary I think he can deal with that.
@@jdmulloy NY taxes capital gains at the state income tax rate.
How much would he owe in taxes on cashing out $180k from a taxable account?
"The grass feels different" what a great quote! My house is paid off and I completely agree what a feeling knowing it is MINE!
I love to hear Mr. Dave, his insight is very CLEAR.!!!!!
Why lose value by cashing out investments to taxes just to pay off a low interest mortgage, plus future returns by starting over? If he wants to speed it up, pause investments and dump all future funds.
I paid my mortgage off in my 40s and i dont make anywhere close to 250k a yr.
Another thing to consider is the capital gain taxes to pay if he cashes out. In the US, I think 15% on gains he made in those 170k. We may be talking about 15.000+ USD in taxes.
He's choosing between two great options. Pay off your home, hence lower your monthly expenses, or continue to invest, hence increase your income. One is guaranteed and the effect is immediate. The other is a high probability depending on how the money is invested and how long you plan to keep it invested without touching any of it.
I’m a tax account and what Dave says completely ignores the tax consequences of this decision. I’m baffled why anyone would do this? I could pay off my house tomorrow with my investments but there’s no way I’m paying those taxes! I did donate stock to a charity that I would have given cash to and used that cash to pay down the house. I don’t pay gains then - it’s a win. We’re just buckling down and getting the house paid off with our income. Seems the best overall option.
Stocks are volatile yes ,but the current CD is around 4.5% APR. If your home loan is 3.5%. How does it make sense to pay off your home loan..?
Because you have to pay taxes on that annual gain in the CD.
Bad advice. He said he is paying mostly principal at this point. So you would pay 20% in taxes or so (add in NYS!) to pay off a mortgage so then you can just start investing again? MAKES ZERO SENSE! Double pay the payments if it makes you feel better... but dont give yourself that kind of tax liability for no reason.
I just paid off my mortgage last year, best decision i ever made. I feel different, stress free. I cant imagine someone getting a mortgage with today’s interest rates
but he would have to liquidate his investment to do it. Makes no sense.
I disagree with this. The compound interest that you lose by liquidating your investments is huge. Starting again at 40 yrs old is even worse. I'd just divert whatever new money I was investing to start paying down the mortgage.
I Agree with you on this. I decided to Max out My Roth IRA this year and throw an extra $500 a month towards my Principal on my mortgage so I can build compound interest and pay off my house quickly
Forget about their stupid plan, u make 260k, only 170k mortgage, just keep the investment, paying off their house is NOT the right way, this is stupid
He should have ZERO stress making 260k having 170k mortgage
There is NO risk in his equation with his income, toxic advise
"No risk" yeah right
If you can get a 4% in a high yield savings account and have a 3% mortgage, why not just keep it in your savings account at least until interest rates go back down? It's basically risk free...
Dave doesn’t accurately account for risk in his “math.” He believes a 75 year old on social security and a 40 year old making $260k should have the same risk assessment.
Ackshuallly Dave doesn’t …. 🤓
When did he say that? When did he compare a 75 year old with a 40 year old? Besides BOTH would be better off without a mortgage NO matter what. The only people who disagree have mortgages, LOL
Dave: "you can get 12% return on a mutual fund
Also Dave: "pay off that 3.5%" because I asks thousands of millionaires out of 20m of them.
Ramsey doesn’t do math
I was laid off at the age of 62 and was unemployed for a year and a half. Just before that, I had an instinct to cash in a 401K and pay off my house. I did so. Had I not done this I would have lost the house after paying mortgages for 39 years. I would have been living on the street or, at age 70, struggling to pay rent. Best decision I ever made.
Having the strong urge to pay off my house just in case that happens now at 56!!!!!
Dave himself said mutual fund’s return is 12% and the chance of losing money over the long run is minimal. Based on that, how could he justify paying off the 3.5% mortgage? The caller would be leaving over 1 million on the table if he pays off the mortgage now. The “risk” is also minimal since it’s a 30-fixed mortgage, unlike the 90-day bank notes Dave used decades ago. I understand the psychological side of it but the math clearly doesn’t work.
I'm paying 2.5% interest on my house. My HYSA is earning me 3.5%. Do the math.
Mine just went up too, so now I'm throwing extra money in there instead of towards the mortgage. Once the interest rate drops enough below the mortgage rate, I will just take all the savings + growth out and throw it at the mortgage. Extra emergency fund with virtually no risk!
How much is the monthly mortgage payment (minus taxes) vs how much you're putting into the account monthly?
@@dr_pinna543 The actual amounts don't matter. That's the neat things about percentages.
Pay off house its terrific
25 yo, 2.875% mortgage, 70k net worth right now. I don't really see the point of paying off my 2.875% mortgage early instead of putting it into index funds, especially considering my age, mortgage contract, and career
With his income, I'd be throwing $5000/month at the mortgage. I'm in a very similar situation.
Lifestyle creep
Good point, he could pay off the house in a couple years and not touch his stocks.
Same. I’d just throw a lot extra on the mortgage each month since his income is high enough , not cash out of what I currently have in stocks.
Why wouldn't you just put it into savings paying 4.5-5%?
This guy should just buy 30-year bonds if he wants a guaranteed return better than his house payment. If you're only paying off your house for psychological reasons, then work on your psychology, not your house payment
The caller is very right. If he is happy to hold onto debt and let inflation do the heavy lifting then who is to argue against that. It's easier to f-up, for sure, and I understand DR's stance but the risk manageable.
I paid off my mortgage, then changed my stance on it and took on a new (bigger) mortgage, and don't regret it, so there is no right or wrong here. Different people are willing to do different things.
Too bad here in Texas paying off my mortgage early would only decrease our payment by half.
Same here. I'm in Texas too. Out of a $2000/month mortgage, only about $900 goes to the bank. The rest is taxes and insurance. Pay off my house and I'm still paying over $1000/month just to live in my PAYED OFF house.
Same in Illinois
Out of $3500 payment the mortgage is $1,800, I would still be paying $1,700 taxes and insurance
You all are missing the point. No matter what, you have ins. & taxes. That is a wash. It is not the payment but the amount of debt & interest. Yes Ramsey sometimes exaggerates the funds freed up, but the point about the debt is the same.
@@ge0dude1 not just the high property taxes- we have super high homeowners insurance because of the hail storms!
My house was paid off in 2019. Instead of directing that payment to the bank for my mortgage it just now goes to my brokerage to buy stocks....
Well done sir.
I have no accounts, Why?
I have a large pension and lifetime family healthcare.
Retire young and just live
@@aolvaar8792 FIRE - Financially independent , retire early? This movement works for some people but I'd rather not live as a minimalist. I'd rather retire and enjoy the same quality of living afterwards.
@@ricksherman34
With pensions, we make more than when we worked
@@aolvaar8792 Harder to find jobs with pensions lately
The part where he says what millionaires do isn't good reasoning. He doesn't provide evidence of causation, i.e., that paying off the mortgage early is what *caused* the growth of wealth. It could easily be the case that there's a correlation between being the kind of person who aggressively saves and being the kind of person who likes to pay off debt, and that the typical millionaire would have actually ended up with even more money had he not paid off the mortgage early. Of course, this may *not* be the case, but the point is he just asserts a correlation as if it has some sort of causal value.
I would love to get an update from this gentleman to see if he paid off his mortgage.
The other thing is that taxes insurance escrow etc on a mortgage could be half the cost. So you pay off the mortgage and still get half the bill regardless.
Yeah, you still pay taxes, insurance, upkeep, etc…
3:30 That was a great way to look at it.
Our first, extra payment on our house begins next month. I know that if we invest the money we have a chance of making more money in the long run, but right now the focus is on reducing our mandatory expenses.
Another reason we are focusing on paying off the house is the added flexibility. We were going to move this year but didn't because it would mean buying another house and financing it with today's mortgage rates. Ouch! If the house was already paid off, when we transfer the equity to the new house the price difference would be small enough that we might not even need a loan. Even if we got a loan we'd be able to pay it off quickly.
If I could do it over again, I'd buy a cheap house as soon as I started working and could afford one, then pay it off. I'd essentially be paying rent to myself and building equity in an asset I can sell, or rent, later if I want to move.
He can’t pay off his house with his investment account. Unless we all pretend the IRS will just say it’s ok not to pay taxes on the gains when he sells his shares and withdraws the $ from his account
According to Dave, you can get 10%/yr in the market. That $180K would grow to $1.2M in 20 years. Assuming his mortgage is $1200 a month, if he invested that over 20 years it would grow to ~$870K. The math says don't pay it off.
I love Dave Ramsey, I love these shows.
Hope the caller enjoys his 2023 tax bill. Giving that unilateral advice without even asking about cost basis in a taxable account is setting someone up for a nasty surprise. And talk about factoring in risk, if something were to happen, now you've just erased all your liquidity. You really need to be able to mathematically represent risk in a meaningful way even if its using some type of fuzzy logic approach but to say someone is not factoring risk into the equation, you ought to yourself be able to show more defined risk than...oh you just wont lose your house. Which, in a worst case scenario, if things are bad enough you very well may need to sell it anyways to recapture that liquidity. Why not give yourself a liquidity buffer so you can sell some stock when needed to pay for the mortgage and other emergencies that might overrun your 4-6 month reserves. And keep your annual tax bill manageable. I think a more defined, complete, and honest risk assessment would shed some more light on the "right" approach for the caller. Another strategy the caller might do is divest the taxable account incrementally to make mortgage payments.
Was thinking the same thing...
How much do taxes change after paying off the mortgage?
As far as I know (I could totally be wrong which is why I’m asking) there’s only a tax deduction regarding the interest paid…
If someone is steadily paying off the house year after year then they are seeing the interest drop significantly over time. That should reflect in prior year tax returns, right?
@@seadragon1456 Yep
@@seadragon1456 there will be a tax bill for selling stocks. I usually recommend setting aside 30 percent of what you sold to pay taxes.
Stop making sense and using sound logic.
I paid off my house in 2021, I can't explain the peace of mind that comes with no bond payments. I am at peace and I am able to save & invest more...
Dave always references their famous “millionaire study” in which (surprise, surprise) 90% of all millionaires have a paid off house. Well, duh! If I was a multi- millionaire, I’d have a paid off house too! But what Dave doesn’t mention (to my knowledge) is exactly WHEN in the journey their house was paid off! Many of the millionaires in this study are in their 50’s, 60’s and 70’s so it’s really no surprise that their houses are paid off- it’s something that took them 30 years to do- just like everyone else! Or in some cases, people made big bold (maybe even risky) moves with their money (in business, real estate, the stock market) which paid off and THAT gave them the money to pay off their mortgage early. So yes, millionaires WILL pay off their houses (because they CAN) but that doesn’t mean that paying off their house (with “gazelle intensity”) is what MADE them a millionaire!
As much as I am against borrowing money, it is tough to ignore having a 2.5% mortgage when inflation is 10%, give or take a bit depending on how you calculate it.
Grass doesn’t feel different at all… our taxes are way more than our mortgage ever was. Illinois
You clearly live in the wrong country
I'd pay it off and semi-retire, that's the whole point of paying off a house is so you don't have to work so much anymore.
Yup. Especially with no other debt.
Soon a I paid off my home in 2008 I began taking off up to 3-4 months work without pay each year on top of my six weeks paid vacation.
From 2009 to 2019 that $1500/mo. became additional funds going to savings,investments,and contributions.
Early retirement as well.
@@blackworldtraveler3711 Excellent!!
I bought my house at 4% interest. My dads opinion is dont pay extra to pay it off. My opinion is get out of debt. And get it paid off. So i guess right now im going to beef up my emergency fund. Im taking ppl change their mind on what to do a lot. But im just happy i can live within my means
I would do half and half.. use half the investment money to pay half of the house off the. and use that job income to pay off the house
Im not cashing out 180k of stocks all at once to pay off a low interest mortgage. The capital gains taxes he would pay next year would wipe out anything he's able to save from here on. Leaving him still with that 10k that was left over. I'd build an emergency fund that wasnt in stocks. Then pay as much as i can toward the house for a few years.
So what if your mortgage is 3.8% but you can invest money in bonds today at 5.3% risk free. Why pay off mortgage?
You pay taxes on that 5.3% bond interest. The 3.8% mortgage interest savings is non-taxable.
My place is paid for in full! Best thing ever!
didnt realize how good dave was until he wasn't on the show all the time. the other hosts are just robotic parrots that just push the product by saying the same lines over and over again. dave is actually trying to help these people
Especially John!
I think Rachel is great!
Dang man you are right. They have a few good points at times but Dave gets to the point bluntly
@@melissab0515 Yes, but to be fair, Rachel is Dave's daughter so it's essentially the female Dave. 😅
@@PhilipMarcYT Love her!
Dave is forgetting the tax bill due for selling his investments.
This quite possibly is the worst financial advice I've ever heard. He would be losing so much in annual compounded returns if he paid off his mortgage early.
dave doesn't take into account taxes of selling the stocks. is it at least long term capital gains?? if not i don't like that loss.. he makes enough money, that combined with any dividends from the stocks that he holds can pay it off really fast.
This is what makes Dave Ramsey so unique. The financial math heads out there like to bash on him. But they’re much like the new CEO who is a “Numbers guy“ that ends up driving the company into the ground bc he didn’t know how to relate to people.
There is a psychological aspect to finances that no one else, except Ramsey talks about. This affects your behavior and decision-making in ways that are positive, but not easily quantifiable
There is little way those numbers work out at mortgage rate of 3%. You will lose 20% to long term capital gains. If the market goes down, you are just buying it on sale. If the psychological high of no debt is worth it (and it may be) then do it. You have not done it yet because the numbers don't make sense. Also it was not established how long he had on his mortgage which is critical to make that decision. Plus depending on when this call came in and what the stock market has done that year there could be substantial short term capital gains. You can't treat every question like this the same as Dave does.
I'm kinda in the same situation but currently rent. I now have enough money to buy a decent home outright but it's trying to get the balance between the peace that no doubt comes with full ownership of a house and what that money could turn into through future stock market returns. A difficult dilemma.
Thanks Dave I am following you since 2020 Thanks to RUclips to get such a wonderful content. Winning with money would start with our Healthy Mindset & Paid for House. Thanks Dave Love from India
So we should be diversified against risk but a 40 year old with 180 grand in retirement accounts should dump it all into a single property. I love how the guy comes back at him "would you take 170 grand out of your house and put it into SINGLE STOCKS?" Why didn't he say diversified index funds? Because it could have been argued. Ask someone in Ohio whom just lost their house because of train derailments not covered by insurance if you should have all your net worth in your home.
For real, the people that say that you will still need to pay insurance, taxes and maintenance... Guys, you pay that PLUS the mortgage! The point is getting rid of the mortgage payment. Are you expecting not paying anything for housing? Where? How?.... perhaps renting? Well, you have to have renter's insurance and you still pay the taxes in your rent, because the landlord is not going to rent you the house or apartment without considering the costs of taxes in it. Guys, just wake up and do the right math!
Love Dave but when he says “you don’t factor in risk” I would pull a reverse uno card on him and say “well you don’t factor in the risk if I don’t start investing right now vs my mortgage off”
Meaning if you have a very low mortgage rate, paying the minimum balance while aggressively contributing to retirement may mathematically be better. That’s the risk you actually may run into.
A house has NEVER been a 'wealth building tool'. It's a place to sleep in relative safety. A bonus is that the payments eventually end.
Terrible decision to pull your investments out ( which are down right now) to pay off your mortgage.
I am glad to be mortgage free. I would choose it 20 times. I now invest the mortgage.
Think of all the compound interest he is throwing away if he cashes out now. What a shame.
Personally, I want some leverage to invest in real state. My mortgage is less than 2x my annual income so I don’t have any pressure with the payments.
Dave's study of millionaires only covered 1 in 44000 millionaires. Questions that weren't asked weren't answered. I have met millionaires who made most of their money in single stocks. It may not be the most popular way, but to say no one has done it either ignorance of the facts or dishonesty.
Look at it this way, would you sell a business worth $180k to pay off a mortgage of $170k, then start a new business? I certainly hope not. Treat your investments like a business.
I did a calculation myself and thought that for every dollar I put extra towards the mortgage I save $1 on interest and didn't significantly alter the payoff date.
If i paid off my house, it would brealy touch my overall payment as most goes to taxes and insurance. If i can't make those payments, I still lose the house even if i don't owe the bank anything.
This guy has over 200k income. I would challenge why he has a mortgage at all.
I am debt free house and all. My HYSA savings account pays me $1,000 a month! I use that money to live on and 100% of my paycheck goes back into savings. It feels so good to have no fear of the economy, no fear of losing my job, because I have financial freedom and I will be okay. RICH people earn interest. POOR people pay interest. That's the bottom line.
LOL, cash out, pay capital gains, pay off your house with 3.5 percent mortgage.
I paid off my house 8 1/2 years early 2 months ago. My head is so big now; I have to dial down my ego and the house looks and feels better than when it was new. Thank you for the good advice Mr. Ramsey
That’s the biggest controversy in the US, every time I say I would pay the mortgage always someone argues
Oh yes. People think the good times never end. How many foreclosures must happen before people wake up?
@@dpeagles If you don't miss a payment, you won't get foreclosed on.
@@jimmymcgill6778 that's not different from renting, Is like living with someone pointing a gun in your head waiting for us to make a mistake or for something to happen! I would pay it off 100% then I will pay the mortgage to myself
@@victors16811 What?
Because the math says to invest the money long term
Have great respect for Dave Ramsey, but this is the one and only area where I respectfully disagree with him, and only under one circumstance If you have a 3% or lower mortgage (not current mortgage rates....if you have a very recent mortgage at 7% plus pay it down)... this is historic and may never come around again in your lifetime or in your children's lifetime. The last time was following the great Depression. So this is the cheapest loan that you will likely ever have. Be wise with the surplus. I have a 2.625% 15 year mortgage. Municipal bonds in my state (AAA) are paying 4% - 5% federal and state tax free. I would be an idiot to pay off a 2.625% loan with a risk free / tax free return of 4-5%.
My wife and I have the same debate. Put our extra income into investments or towards paying off the house.
Amen - great spot to be in but still is tough, especially with home % being as low as they have been
Pay off the house.
@@jimroscovius That's what I want to do. My wife wants to put it into mutual funds.
Build it up in investments or savings and when it's more than your balance you can decide to pay off the mortgage if you want. If you prepay, you still need to pay the monthly payment, even if you lose your income. The younger you are the more important it is to make sure you're saving for retirement instead of prepaying low interest debt.
@Joseph Mulloy No one is saying not to invest, but once you are out of debt except the house, you invest only 15%, and throw the rest at the house. Once it's paid off, you can invest like crazy, like we're doing. We maximize our Roths, and then throw more into traditional IRAs. Getting house paid off reduces risk, which is better than paying with math.
That Dave doesn't factor in interest rates is irresponsible on his part.
Or capital gains taxes
@@bradyrhodes107
Or opportunity cost
Yeah sure go ahead and put all off your money in cardboard vinyl covered box that produces nothing and yet still requires paying taxes on it and maintenance.
Don't forget about home value appreciation and taxes on capital gains. The factors are more than just the interest rate differences between a mortgage and investing. Buy a bigger house with the investment money.
Pay off your house. We did it and now we're debt free. Huge stone lifted off shoulder. Im always thankful to God to the decision we made, giving us wisdom to make a right decision in life.
Dave always brings up the “risk” when this question is asked. Is there really any risk in having a low interest mortgage that you could pay off at any time if needed? What about the risk of emptying your savings so now you have no cushion if something comes up?
Dave is like: "Mathematically, the grass FEELS different when you have paid off your house"
Dave should just admit he's a religious fanatic and doesn't like debt because he thinks that's what the Bible says. It is almost impossible for a guy like this caller to get in trouble with a mortgage: high-income, not overleveraged at all, high liquid funds, very low interest rate (heck, since his mortgage rate is below the rate of inflation, the bank is basically paying *him* interest!).
I know several millionaires who have a mortgage well into their 50s/60s because of a low interest loan. And put money into investment vehicles. So yes mathematically, you don't have to be debt free/mortgage free to be wealthy.
my mortgage interest rate was 3.5, key word WAS. Don't ever have to worry about any house payments.