What's your current mortgage rate and are you considering paying off your mortgage early or investing? PS: Be aware of the spam/scam comments in the below comment section. I just purged a bunch, but there will inevitably be more that pop up. If theres ever a comment with a lot of likes but they're referring you to some random person's name and promises of returns...its a scam.
4.25%, been paying $100/month extra since day one. Already investing close to 50% of take home pay. Accelerating payoff next year to about 2k extra per month.
I have 3.12% townhome and have 60% going to HYSA. I want to buy single family home in 3yrs so investing seems risky. I just put about 1k in ETFs about 1-3months. I already Max out Roth, 401k contributions
2.25% and NEVER will I pay this house off!! Keeping this thing for the rest of my life. Refinanced it one year into the pandemic. Located in northern Virginia, about 45 from D.C., I bought a 3k sqft single family house for just south of $500k. Fun fact - while listening to the amortization portion of the video, I'm remembering that my interest rate was so low, and the loan amount was pretty low too that the principle portion of my payments were larger in my first month than my interest portion. I was sooooo excited to see that.
@@jeremiahcampbell2 dude, we must be neighbors. Same here with the house 45 mins west of DC, 4500 sq ft home bought during the 08' meltdown at a steal of a price. Never letting this thing go, value has doubled since I purchased.
As a CFP I LOVED to see you bring into this conversation the effect the amortization schedule has on the interest savings for paying off a home early. No one ever talks about that and your example laid it out very clearly. Keep up the great work!
It should have been clarified that the high interest up front isn't some choice by the bank, it is the only way the math works with compound interest. too many people have this perception that the high interest in the payment is the bank gouging them, or as Humphrey said, "the bank needs to get paid first". that is not accurate. the math actually benefits the borrower by allowing the interest to drop as more principal is paid in.
As a CFP maybe you should have spotted his fundamental error when comparing extra payments on the mortgage ($500 per month) vs investing the $500 instead. The investment calculation was for 25 years whereas the mortgage payments were only 16 years.
@@blanketwodahs6741 Exactly right. There is no magic to paying off a loan early, late or with extra payments. Mortgages are simply the outstanding daily balance.
You made a fundamental and glaring mistake in your calcs for paying down the mortgage by $500 per month VS. Investing $500 per month. (7:41) You compared investing for 25 years BUT paying extra on the mortgage ended up only being for 16 years. There's the difference in totals NOT anything to do with "compounding" in the investments. Compounding also occurs in paying down the mortgage, in that any outstanding amount accrues interest each year.
Time is the most critical factor in investment growth. The longer you wait, the significantly less you’ll have down the road. If you're aiming to retire by 60, it's not financially ideal to prioritize paying off your mortgage early before the age of 45.
We might be more concerned about paying off our mortgage if it were larger (or if our jobs weren't as secure), but right now, investing offers a better return. Bloomberg and other finance media have been documenting stories of people making over $250k in a couple months.
Keeping a 3% mortgage and investing cash in the market, growing at 10-20%, is basic math. Look up dividend aristocrats, companies with a 25+ year dividend track record. Also, its advisable you work with a CFA for a well-structured portfolio.
@@AddilynTuffin Agreed. Through working with a CFA, I've grown a well-diversified portfolio to $2 million, experiencing exponential growth since I began. Success in stocks requires not just money but also knowledge, persistence, and resilience.
Jennifer Leigh Hickman is the licensed CFA I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
If you don't a mind can I get more info..like age you did it. Price. Interest rate. City. Stuff like that. I'm getting pretty aggressive on my extra principal payments but still investing
Same here. Paid it off at 30 year old, few years back and not regretting at all. And after paying off, interest rates went so high I can imagine what monthly payments i would have had. Maybe its considered not as an investment but I saved so much :D
Starting with just 55k two months ago and reaching 290k today feels incredible. Monica Ronald, your guidance and insights have been instrumental in this journey, and I’m deeply thankful for your support and knowledge.”
Diving into the digital market is definitely advisable, but it requires expert guidance,someone like Monica Ronald. and She is a popular licensed broker and fund manager. Her guidance and high level of expertise in digital markets has been a game changer for me andyou can’t go wrong.
Wow, it is so refreshing to see my mentor being praised. I thought I was the only one who knew about Ms. Monica Ronald. Her remarkable work speaks for itself; she has built an impressive legacy.
These concepts are best understood under fire. Like being laid off and you’re now only living off your spouses salary…. I GUARANTEE you would wish your mortgage was lower or paid off.
To play the devil's advocate, lets say over the course of 5 years you sunk in 500-1k a month trying to pay it off faster. Would that money not be nice to have in that situation until you get another job?
You can cash out rather easy. Once you pay off your mortgage your money is stuck in walls. Good luck getting a credit with no salary. Same money invested in stock can be cashed out.
Paid my house off in about 9.5 years dumping everything i could and renting out rooms for half of those years. Bought it FHA with 3% down with a 5.25% and a PMI, then refied to a 15 yr after about 2 years to a conventional at 4.35%. Opened my 1st 401k/stock account the next year and now trying to catch up there. Very glad i did it that way, the peace of mind is priceless and the flexibility to not need any other forms of debt will continue to make my dollars efficient.
I feel like the peace of mind you have with a paid off mortgage is just so exhilarating. This is my plan then just tackle my retirement accounts full force when I no longer have that major debt. The interest alone makes me rather pay it off to avoid all that money you have to pay back over time.
A well-balanced video. Mortgages can involve paying a lot of interest, but if your mortgage is 5% or less you're likely to do better long-term in the stock market. I'm retired but with a 2.625% interest rate I have not bothered paying off my mortgage, in four years the payments will end.
I say do a bit of both. I’ve been maxing out my 401 for several years now while also working towards paying off our house. We paid off our 375K loan in 12 years with a 3% rate. Now I’m dumping a bunch of cash into a brokerage account, beefed up kids’ college investment fund, and also maxing out HSA (8,200 in 2024) and investing that too (I’ve been doing that for years too). I’m 42 and hubby is 45 so we still have plenty of years until retirement, although we’re shooting to retire within the next 15 years or so. We don’t own expensive cars, toys, second homes, or designer bags. We do travel though, that’s about the only thing I’ll go all out for. But we keep it to pretty much one big family trip per year.
This approach makes total sense to me too but I never hear anyone mention in these videos. I like to think “don’t put all your eggs in one basket”… almost like diversifying
Great video, no bias whatsoever. I ask myself this question often enough. I have opted for paying down on my mortgage. You just demonstrated that the savings are massive with those calculations. Thanks!
From paying for day care and college, to managing mortgage payments. I'm approaching retirement yet inflation is getting worse and recession is biting harder by the day. How can I generate more income to retire with at least $3m for long term care? I have about 750k in savings.
That is so amazing, I’m trying to get onto the investing ladder at 40. I wish at 55 I will be testifying to similar success. investors like you should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder.
Accurate asset allocation is crucial, I used hedging strategies to allocate part of my portfOlio to defensive assets for market downturns. Expert guidance is vital for achieving this. This approach has helped me stay financially secure for over five years, yielding nearly $1 million in returns on investments.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
I just Googled her name and her website came up right away. It looks interesting so far. I'm going to send a mail to her and let you know how it goes.Thanks for sharing truly!
Love this video! One important factor to keep in mind when paying off your mortgage early, freed up cash flow! That payment can go back and accelerate any other debt or investment.
There is a consideration that was neglected during the example of $500 extra invested vs extra principle payments at 7:41. Between the two scenarios it neglects that the mortgage is paid off early in ~17 years. As a result you need to account for an additional 8 years of money which isn’t being put towards the mortgage. When you do that the cost difference between the two is nearly identical.
This is what people don’t understand. Investing for me is math vs emotion. Being debt free gives me peace of mind even though I know my money is better off investing. Being debt free allows me to have the “fk it” attitude
@@Kujakuseki01 you have to pay off it every single month! I hated that burden. Now I can save a ton more. Plus you have unexpected emergencies such as a roof leaking, car breaking, pinhole leaks in the pipes etc. was living paycheck to paycheck with a house mortgage. No longer!
I paid off my $328k 2.625% 15 years loan in 25 months. Started in October 2020 last payment was November 2022. Now totally debt free with 3 paid off rentals. Love having no debt for the last 1.5 years.
I have has been aggressively paying down our 5.5% I/Y home loan. As a finance guy I ran the numbers and I know we would be better off investing, but this decision was bases on quality of life. Once we pay off our house effectively we just received a 30k pre-tax bonus. For a family that will likely bring in 150k - 200k in 7 years from now that will be life changing.
I’m paying extra on my 2.99% mortgage to achieve my goal of no mortgage by the time my kid graduates high school. It’s fun to track progress on the amortization schedule.
@@Thewealthwarehousepodcast Seems self explanatory but IMO it's a financial goal, no mortgage is a great thing, your freed up money now goes to other investments or savings. Making the banks rich is not my goal.
@ljshoreslokal we definitely don't have the goal of making banks rich either. We don't do business with banks. Our view is that while you were aying off the house faster, where could that money have been going to work for you instead of being tied up in the walls of the house. To each their own though.
There's no way I would put an extra dime in to a 2.99% mortgage. Sure you can pay that off and THEN start working on other investments. Don't forget to look at all the growth you missed out on in the stock market. If I could borrow money at 2.99% I would borrow AS MUCH AS I COULD at that rate and get it invested like right now. I'd happily pay that 2.99% for life.
I went in the opposite direction. In 2018 I could have paid off my mortgage on the primary but instead tapped 7 figures of the equity and bought 2 oceanfront STRs in Hawaii. Now those properties pay for themselves and the interest portion of my primary. But also the equity in those properties has grown to almost as much as I tapped in 2018. My guess is that by the time I turn 55yo, those properties will be able to pay for my living expenses too and I can retire. Maybe your path feels more amazing, I wouldn’t know… but mine feels pretty great too.
@@poonekar Oof, I'd be way to scared to buy rental properties with a second mortgage (i.e. home equity loan). What if there are major issues? What if your tenants trash the place? What if the rental market crashes and now you can't charge enough to make the loan payments?
@@Spivonious I didn’t use and wouldn’t recommend using home equity loan for buying properties. I did a cash out refi and it made sense also because I was getting a better rate, which may not be the case for most properties today.
@@nope7548 Yeah, property tax and insurance are part of the joy of home ownership. Definitely not for everybody. If you're just a single guy or gal, renting an apartment or small house makes a lot more sense most of the time. Low-maintenance and relatively low-cost.
I currently have a $280k stock portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and QQQ overlap too much to make sense holding both?
You might also follow a lots stocks across other industries. I'll advise you to work with a financial advisor who can assist you decide when is the best to buy and sell the shares or ETFs you want to acquire since you don't have to act on every forecast.
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goaL.
that's a double up in two years! seeing a lot of news on the rally, investors will make tons of profit with the right picks. would you mind disclosing info of this person guiding you please? my problem is I do not trust my guts in today's mkt
My CFA *Julianne Iwersen Niemann* a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
This info is great but I wanted to point out there’s discrepancy in the time lines. The $500 towards the mortgage vs investing should only be over 17 years since the loan will be paid off early. So it’s only $215k invested not the $473k shown
I love this video!! It actually makes sense the way you explained it. I bought my house last year at 7.25% and this year I am putting an extra $700 (at least) toward the principal. My goal is to get my balance below $100,000 by the end of the year. Less than $8k to go!
Creating wealth entails establishing positive routines, I had only $78k to my name at 42 when I first woke up to this reality. I chose the stock market as a medium of growth, got an excellent financial advisor, Financial management is a vital subject that many avoid, often leading to future regrets.
Indeed, currently I'm managing my finances wisely and being frugal. In the last 19 months, my investments grew by 43%, adding over $500K in profits. However, I've had losses in the past month, making me anxious. I'm unsure whether to sell everything or wait.
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
I feel investors should focus on under-the-radar stocks, considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises plummeting stocks that were once revered. I don't know where to go here out of devastation.
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
Yes. It is very easy to buy in on trending stocks but the problem is knowing when to sell or hold, which is why a coach is important. I've been in touch with one for about a year now and although I was initially skeptical about it, I will say I've made more progress within a year generating 6figure profit
We are paying down our mortgage aggressively (while still investing) because I was in high school during the '08 turmoil and my dad lost his job. My parents were extremely stressed about losing their house, and I never want to feel that way. For everyone saying you can draw from your investments if you lose your job, you could potentially take a huge hit if that happened to be in a down market. Ultimately, this is a personal decision but for me, I prefer the peace of mind
As with everything, it depends on other factors too. My peace of mind comes from the fact that I bought a house maybe 60% the price I could technically afford with my salary at the time, and I always keep several months of expenses in emergency savings accounts. So I’m very comfortable putting my excess into volatile investment accounts, because the chances of me touching it are very very low, and the worst possible case might require using a tiny fraction of it in a down market. It shouldn’t be your only savings, but it gives peace of mind that you have that backup in a worst case scenario if normal savings aren’t enough. But that only works if you buy a house well within your budget, which apparently few people do (the bank I got my loan from was shocked I wasn’t trying to buy a more expensive house at my income, and that made me realize most people are spreading themselves too thin)
Wow yes this is exactly why for me. I've been though two foreclosures as a kid, I never want to go through that again. Obamas loan modification bailed us out. Otherwise we would have been out of a home. Now that I bought my first home, I can't wait to pay it off. If the economy crashes again, I don't want to be SOL
The way I see it. My mortgage represents a living expense. Living expenses are why I go to work. Less living expense less need for a job / income. I will not have kids so I'm just trying to enjoy my life
Foreclosures occur on properties without mortgages as well. Property taxes need to be paid as well. Property taxes mean that you never truly OWN your house…
I have never heard anyone say " wow, I really wish I didn't pay off my mortgage.." I think paying off mortgage was the smartest decision my wife and I did 👍
100% Agree. I have both paid off my house early and invested. Getting out of debt and paying off the house early was by far the best financial decision my wife and I ever made. It changed my entire mindset about debt and money. Zero debt will change you to the core and even people at work will notice there is something different about you. - the fact that you don't need your job as bad as you once did. I make different decisions at work and am a much more powerful manager than I once was (I can fight for my team so much better with no fear of losing my job). I also sleep like a baby with zero stress about money or bills. Its great!
I've read 2-3 comments of people who have said this in this comments section. Because now their money is stuck in walls instead of able to be used for something more impactful. That said, paying it off isn't bad.
I agree. The interest rate you have on your mortgage will largely determine if you should pay it off early. However since I work in tech field, the job isn't that stable, so I decided to pay my mortgage off early to gain "piece of mind" after I was able to accumulate enough in savings and retirement that I feel comfortable with
This is my fifth year after retirement. I’e been following the 4% rule thing I saw on a youTube channel, but this isn’t really how hard I expected things to be. After I cashed out a lump sum, I still have about $760k left, but at this rate, and with how the market is (we were putting money away in an index fund), I’m starting to get really worried.
Not a lot of people are able to save that much in a lifetime. But now you are retired and depend on your investment, it’s best you redistribute your capital. To simplify the process, you could allocate your resources with the help of a financial advisor.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800k
My CFA ’Stacy Lynn Staples’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Great explanation. Most people have no idea they are paying interest instead of drawing down the principle amount for the first half of their mortgage term. Good job. People understand only when the bank reposes their houses.
Good video and I like how he brought up the fact that paying off your home isn’t always a financial decision. The freedom was worth any stock market gains we could have made. Also paying off your loan is guaranteed, the stock market isn’t. The freedom of no mortgage allowed my wife to stay at home with the kids and for our savings and investing to explode further down the line.
Keep up the good videos Humphrey! We're paying our mortgage off early mainly so that we don't lose money to interest payments. Aiming to pay it all off by year 8 (only $45k left) so anything after will probably be invested in the market/retirement. Not having the mortgage will give us piece of mind and more flexibility
If your mortgage interest rate is relatively low 3%-4%, hmm investing in assets that offer higher returns stocks or real estate with ya mortgage could provide a greater long-term financial benefit. of course with the help you a financial advisor
@@KennyHopkinsF2000 If you value security and the emotional benefit of owning your home outright, paying down your mortgage early can provide peace of mind, even if the financial benefit isn’t the most optimal in the long run, so don't be afraid get yourself a financial advisor.
@@OrvillePayneW10000 if that so you can check on ophitkathrynjones my consultant who has been managing my portfolio's and cash flow. you can look her up.
I had a windfall during Covid and paid off my mortgage that was at 3%. 6 months ago I had a big real estate opportunity arise, but had to take out a loan again in order to capitalize on it (couldn't take it out directly on the property for "reasons"), but at 6.75%. You can't predict what is going to happen, but I really, really regret paying off the low-interest mortgage now. Had I invested the payoff amount, I would have been so far ahead now and with a very reasonable mortgage instead of my high-interest one now...
Super helpful video! We have a 6.8% rate on our mortgage and it feels like a huge burden. We’ve been weighing making extra payments vs investing. Ultimately we are doing a combination .
this is a great video. I wish I had known this when i paid off my house. would have made a ton of money earlier. but the peace of mind knowing I could never lose my house even if i lose my job made me super chill over covid.
I just turned 44 and awfully late to investing with barely any portfolio except my 401k, I have a decent amount of cash saved up and with inflation currently soaring AGAIN, I’m getting worried about retirement, my intention is to retire at 55. How best do I maximize my savings of over $400k
Retirement is now more difficult than it was in the past. it's all about balancing your risk tolerance with your long-term goals. Maybe consider speaking to an advisor to help in diversifying your portfolio to spread out the risk.
Many people often underestimate the effectiveness of a financial adviser in planning for retirement. Over the past 5 years, my FA has consistently restructured and diversified my portfolio and expenses, resulting in over $1 million in gains. While it might not seem like a huge amount, retirement now feels within reach.
Teresa L. Athas is her name. She is regarded as a genius in her area and works for Empower Financial Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
Great video!!! One of the most misunderstood parts about real estate is how a 30 year fixed mortgage has an amortization curve behind the scenes which front loads the interest. Love that we got an explanation here. This video will probably be criminally underrated, but definitely one of my favorites!
Thanks for the video! I've been trying to calculate the best path forward as I'm in this scenario now. I think the two cases are a lot more similar than may have been suggested in this video (LONG analysis ahead, sorry!) I used the 8% interest stocks vs mortgage example from the video (Let's assume no taxes on the stocks since 8% already bakes that in). If you start with a 400k loan 5 years in, that's about 380k left. The payments were 2935/month. You have an extra $500/month to dedicate to either stocks or mortgage payoff. Consider the two scenarios: Scenario STONKS: You put the entire extra 6000/year into stocks, getting you 213k by 16.75 years (100k invested). You will have 211k left on your mortgage, which will take 8.25 years to pay off. You will have paid a total of 690k (590k towards home loan, 100k towards stocks). Scenario HOME: You put the extra $6000/year into mortgage, so 3435/month instead of 2935. The loan is fully paid in 16.75 years, and you paid a total of 690k (690k mortgage, 0k stocks). Now, what about the next 8.25 years? Well, STONKS continues contributing the spare $500/month to stocks, resulting in a total of 473k after 25 years (assuming the same 8% interest). Scenario HOME now has the full $3435 to put towards stocks per month, since the loan is paid off, so we do. After 8.25 years of 8% interest, we have about 470k in stocks. At the end, both scenarios paid off their homes in full after 25 years, and have nearly the same in stocks. (This obviously assumes very smooth stock performance, and in reality most rises come from random spikes and its better to have money in the market longer since maybe those last 8 years weren't very good, etc.). So STONKS ended up paying a total of 880500 on the loan, 150k on stocks after 25 years. HOME paid 690435 on the loan, and 340065 towards stocks. Both of these sum to $1,030,500, and both have about the same in stocks. This makes sense, because both of these scenarios are approximately equivalent. Paying off the mortgage at 8% compounds just like stocks do, because if you hadn't paid that principal off, it would continue compounding every year. The net lesson here is that stocks provide better average returns, with risk and taxes, whereas the mortgage offers guaranteed returns that are likely more modest. My mortgage rate is 7.5% right now so I'm currently plugging money into that. When rates drop, I may refinance and even pull some equity out to put into stocks since at that point it would perform better on average (assuming mortgage rate is 4-5% or lower, etc.)
IMO you should max out beyond the match. the tax savings outpace the interest. Once you fully fund any tax deferred accounts and still have money leftover, then pay down the mortgage.
@@blanketwodahs6741so how does paying ordinary income tax at future (unknown) tax rates for unmatched 401K investments beat the other strategy. I’m genuinely curious and not trolling.
If we would've had a mortgage when COVID hit, we would've been in a world of hurt. So thankful we went the 'Peace of Mind' choice. These surprises have hit us 3 times in 3 decades of marriage. Pay off all debt, best decision ever. You never know what's around the corner. Love your videos! Thanks so much from Texas.
3:37 interest is front loaded because the borrowed money is front loaded. frankly the American 30 year fixed rate mortgage is a gift to the American home buyer, compared to the Canadian 5 year renewable and floating rate UK systems. the key is to not live beyond your means because the bankster who sold you your mortgage encouraged you to be overleveraged. an easy rule of thumb is to take the 30 year loan, but build your budget on a 15 year fixed, and pay that 30 year like its the 15 year mortgage.
I like how you didn't presume your viewer already had a basic understanding, and after each segment, you took a moment to sum what you had just said into a simple rule which makes all the difference. I think the 8% investment vs mortgate comparison was especially powerful. I'll subscribe because I'm curious as to how well you're able to simplify other investment advice. I'm 32 and married. We put 20% down on our home in 2018 and signed for biweekly payments on a 20 year amortization schedule - variable interest rate (5.65% currently). I work in the public sector where 10% of my pay is automatically placed into a pension plan. And I've always wondered if our additional savings should go towards our mortgage, or if we should start investing. Following your advice, because we have many years until retirement yet, and our interest rate is well below the average return on investment considering income tax, we should look into investing. Thank you!
Paid off my mortgage in 6.5 years(interest rate was 5% in 2016, refinanced to 2.7%, and paid off in 2022) while maxing out my 401k for the last 15 years. So, my "investing" came in that form with the employer-matching contribution. Started my brokerage account last year and been daily cost averaging and plan to keep at it until I retire. Paying the bank more interest than I need to is something that doesn't sit right with me. Could I have made more gains investing outside of my 401k during that 6.5 year period? Maybe. For me, I didn't have the tolerance, discipline, or knowledge to be an effective investor at that time. Not being indebted to ANYONE is peace of mind and something I hold in high regard. Love your page @humphrey.
Great video. I’ve been asking myself this same question. I’m investing a significant amount every month and while I could pay off my home in ~9 years, due to compounding interest I’ll earn a lot more by investing. So that’s the path I chose. But it’s something I still struggle with
Well said. Good job. I'm a financial analyst of 20yrs and follow this method of running the numbers vs average market returns, it really adds of quickly the small hacks. Much better than your competition clear_value tax. He's a CPA from Chicago like myself. But he had a similar vid and made it sound like interest payments where spread evenly, so I put a comment explaining the math and telling his viewers that he was spreading miss information. But it got deleted, hopefully this will not happen with this one. Good job I like watching these and feeling good about what I'm doing right due to sacrifices I take. Take care, keep up the good work. 😊
@@brandon8531 Hi Brandon, I would avoid clear value tax channel, hes a CPA, but he tends to simplify the information too much, probably for views, but in turn it spreads mis information and cost people money, seek out his mortgage vs investment vid and judge for yourself, but Andrew is spot on about the pros and cons of the mortgage vs investment, I've been doing this method for almost 15yrs and look I'm finally seeing the fruits of my sacrifices vs my peers
As a fan of investment, I frequently ponder how successful high-level investors make millions of dollars. I have more than $545K in equity from a house sale, but I'm not sure what to do with it. Should I wait for another opportunity or buy stocks now?
For the average Joe, the tactics are fairly demanding. In actuality, professionals with extensive knowledge and skill sets are able to execute these deals with the majority of success.
I concur that investing with a broking advisor is fantastic! Before speaking with an advisor, I was having a terrible time investing during the 2008 financial crisis. In summary, I started with a $350,000 investment and, with the assistance of my advisor, have amassed almost $2 million.
Annette Marie Holt is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
Really informative video! The point about investing vs. mortgage payoff depending on time horizon was especially interesting. At what mortgage rate would you personally start prioritizing extra payments over investing?
I made the mistake of getting on a variable rate plan, so I'm currently on a 6.14% rate. I just added an extra 50 bucks a week to my payment schedule. Thank you for this information
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying it’s ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains with months, I'm really just confused at this point.
Yes, a good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge.
It all depends on how long you're willing to hold for, stocks might likely tank further, but making serious gains in this downtrend wouldn't be a problem if you're a pro.Reason I decided to work closely with an brokerage-adviser ever since the market got really tensed and the pressure became so much(I should be retiring in 17months) so I've had an brokerage-adviser guide me through the chaos, its been 9months and counting and I've made approx. 650K net from all of my holdings
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
I work with Elisse Laparche Ewing as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
Cool video with a lot of good numbers and insight. I think one more metric that should be part of the total savings/total interest calculations is the amount of interest a homeowner should expect to make by investing the remaining years of if their monthly payment after paying off their house early. This number should get added to the interest saved. This could help make people make their decision.
I'm so happy I made productive decisions about my finances that changed forever. I'm a single mother living in Vancouver Canada, bought my first house in October and hoping to retire soon if things keep going smoothly for me.
If you don't find a means of multiplying your money, you will wake up one day and realize that the money you thought you had, had been exhausted. Investment is a ladder to climb the financial wall.
We've so-far paid off our two mortgages in 10 years or less, by making extra payments to a 15 year mortgage, even though the last and current houses had ~2% mortgages. Possibly not the best financial move, but it's really great to know you own the house.
The peace of mind crowd favoring paying off the house early vs investing more neglects one incredibly important factor. If you do get laid off, or wind up in some emergency where you need to have access to a lot of cash quick (after you’ve exhausted your emergency fund first) it is far easier to sell shares of your investments piecemeal than to sell a house. Besides, you can’t sell off only a portion of your house either, like who’s going to buy a single bedroom or closet? I guess you could try a HELOC but that’s still borrowing money.
Chances are if you lost your job it’s because of layoffs which means the stock market is down so you’d still have to make your mortgage payments in a down market selling for a loss to cover your bills.
Just because they paid off there mortgage doesn’t mean that they haven’t saved along the way. We are paying off our mortgage aggressive that doesn’t mean we aren’t saving money for big emergencies such as a job loss.
I was really hoping to see what if you paid your house off early, than took whatever you were paying and started investing that in the market to see how that would benefit you. For example pay your house off 15 years early and than take all that mortgage and extra payments but put in all in the stock market for another 15 years. To see the difference if you just invested that smaller amount for 30 years or the larger amount for 15. Which would be better? I know it can differ a lot because of interest.
its nearly a wash. It comes down to how you oersonally want to play it. It also deoends on the market. you put everything in and market hits a recession, all your value goes down, you might lose your job, and still stuck with payments. VS market rockets you still oay on house for a while but can sell off stock to pay mortgage off earlier. No wrong answer both are acceptable.
I paid off my mortgage at age 35. The peace of mind in knowing that I own something in this world is greater than the math. I fully admit the money would have been better used in investments, but I have never regretted my choice. I love living without a rent/morgage payment. It's a great life.
Successful investing is hard work because it means disciplining your mind to do the opposite of human nature. Buying during a panic, selling during euphoria, and holding on when you are bored and just craving a little action. Investing is 5% intellect and 95% temperament.
Government policy has thrown the future under the bus for decades. The day of judgment is near. I predict an 80% drop in the stock market. Investors will abandon stocks in favor of real estate. There will be no money in banks... You must devise a strategy for survival.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to over $750k.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
Great video! I'm a piece of mind kind of guy. We have a 2.87% interest rate on a 30-year fixed. The goal is to have the house paid off in 10-13 years. I know that if I crunch the numbers it would be better served elsewhere but I won't care as I'm doing backflips with no mortgage. The wife and I are both contributing 15 and 20% into our retirement as well so its not like we are halting our retirement for the house. Cant wait for that day! Again...Great video!
I started paying $5K principal with each payment last year. About 3 months into that I started getting bombarded with calls from Wells Fargo asking if I wanted to restructure. They sold my mortgage about 6 months later. Dont think they liked losing all that money.
I took the lump and paid off a 7% mortgage i was 2 years deep in on a 30yr term. Having a house free and clear is the best peace of mind I've ever had.
I just sold a property in Orange County and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $450k gains within months, I'm really just confused at this point.
target date funds made me a multimillionaire but i also watched them drop 40% in a very short time and take a long time to recover. my best suggestion is that you seek the guidance of a fiduciary to avoid mistakes
I totally agree with you. I started out investing on my own too and lost quite a bit. After the 2020 crash, I managed to pull out about $160k. I then invested that money with an analyst, and in just seven months, I made almost $580,000. It's amazing how having the right guidance can turn things around!
SHERRY DAWN CARRICO is her name. She is regarded as a genius in her area and works for Empower Financial Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
I crunched all of my numbers in depth last night, actually. In my case, paying off early will cost me about 300k over the next 22 years compared to investing the same amount.
It would be interesting to see your math on this. Other people have posted similar responses to articles like this and included their numbers - asking people to do their own calculations if they did not believe them. In all cases, the original numbers posted were hopelessly optimistic and the gains through investing (if any) were a fraction of what was originally posted.
I’m 58 and have about $225k liquid in savings which I plan to put towards becoming a homeowner, but based on the current high prices on real estate, do you suggest I hold from buying and look at dividend paying stocks instead?
After studying the trajectory of great asssts like real estate, dividend paying stocks and gold, my conclusion is to buy and nvest in what you can afford today
I believe that advisers' roles should not be undervalued. I personally don't have the time for stock analysis because of my job, therefore I employ a reliable advisor. I don't like to boast, but from the start of last year, my $1 million portfolio has averaged a 55% return on investment.
Victoria Louisa Saylor is my financial coach. I recommend conducting your due diligence, you will find essential information online to help you schedule an appointment.
Thank you for sharing, I must say, Victoria appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive. I reached out and scheduled a call
A 15 year fixed mortgage at 6.5% is about 2,800 a month on a $400,000 house. In order to abide by the 25% of post income tax rule the individual or household would have to make about 190k a year. This is before factoring in home insurance and utilities in that 25%. Seems like owning a home is indeed getting further and further away. I need to get into the stocks market, how do I start as a newbie?
Indeed, I sought the assistance of a fiduciary adviser after experiencing significant losses in 2022 while handling my own account. By diversifying and restructuring my $600k portfolio with dividend-paying equities, mutual funds, exchange-traded funds (ETFs), and REITs, I was able to generate an average yearly gain of 38%.
Yes, that's true. I learned this in 2020 when I lost almost everything. But then I started using a financial advisor, and now I make at least $25-30k every quarter, so I’ve continued investing with an advisor.
Sure, "Lauren Christine Campbell'' is the licensed advisor I use. Just research the name. You’d find necessary details on the web to set up an appointment
With around $120k invested in Palantir stocks, any suggestions for additional stocks to diversify across various markets? Looking for a well-rounded portfolio that balances risk aversion with returns meeting yearly inflation concerns.
Prioritize two goals: strategically buy stocks to limit losses and maximize gains, and be prepared to capitalize on market shifts. Consult a financial advisor or professional for personalized guidance.
@@FostersCapones I agree with you. As an early investor in NVDA, AVGO, ANSS, and LRCX, my financial advisor's advice was incredibly helpful. Over the past seven years, she has helped me find stocks that have performed 10x multiple times. With her help, I've grown my portfolio to over a million dollars.
@@BettinaBischof The beauty of MARGARET MOLLI ALVEY approach is her dual focus: while aggressively pursuing profit opportunities, she's equally tenacious about shielding investors from potential pitfalls. It's a balance few can achieve.
Paying off the mortgage early you have to consider other costs such as insurances. Many banks will require you to have certain insurances in place when setting up a mortgage (life insurance, payment default insurance, etc). Another factor that I consider is also overall cashflow. Yes, your monthly payment is comprised of principal plus interest, and although you amortize your capital payment, its still outgoing cashflow.
When you own your home your "survival mode" can be reduced to property tax, insurance and utilities. If the economy crashes I'm covered and I don't feel recessions. The sooner you can quit working the sooner you can take better care of your body and live with far less stress, so I do.
A mortgage payment is more than just two parts. There’s also a third part called escrow that you pay into. The escrow covers property tax, home insurance, and any other fees you may have associated with the home/mortgage.
I see a lot of comments for paying off your mortgage for "peace of mind" in here. One thing to consider here is that when you make payments towards your mortgage that extra money is now stuck in that asset. By investing in stocks, cash, etc. you will have that money and any returns on it still available for use in case of an emergency or even an opportunity. There is an opportunity cost with paying your mortgage early that you are sacrificing for "peace of mind". If you can earn a better return putting your money elsewhere besides into your mortgage, I don't think the choice should be that close.
That analysis neglects the value appreciation of the property itself, while admittedly slower to do, is available for sell. The last home I sold in 2020 significantly outperformed the market in the 5 years I owned it.
@@mandypdx Think of it this way... You could have your property paid off, or you could have the same value invested in Dividend Kings, paying out the same amount to cover your mortgage bill, while also growing principal and yearly dividend payouts.
Thanks for going over this Humphrey! I was actually thinking about this today. I have a car payment tho, not a mortgage, but I am paying more than the monthly to beat down the interest. Luckily my work has an ESPP (employee stock participation program) that gives me shares at a discount. 🎉
What's your current mortgage rate and are you considering paying off your mortgage early or investing? PS: Be aware of the spam/scam comments in the below comment section. I just purged a bunch, but there will inevitably be more that pop up. If theres ever a comment with a lot of likes but they're referring you to some random person's name and promises of returns...its a scam.
4.25%, been paying $100/month extra since day one. Already investing close to 50% of take home pay. Accelerating payoff next year to about 2k extra per month.
I have 3.12% townhome and have 60% going to HYSA. I want to buy single family home in 3yrs so investing seems risky. I just put about 1k in ETFs about 1-3months. I already Max out Roth, 401k contributions
4.1% paying extra 100 or so monthly
2.25% and NEVER will I pay this house off!! Keeping this thing for the rest of my life. Refinanced it one year into the pandemic. Located in northern Virginia, about 45 from D.C., I bought a 3k sqft single family house for just south of $500k. Fun fact - while listening to the amortization portion of the video, I'm remembering that my interest rate was so low, and the loan amount was pretty low too that the principle portion of my payments were larger in my first month than my interest portion. I was sooooo excited to see that.
@@jeremiahcampbell2
dude, we must be neighbors. Same here with the house 45 mins west of DC, 4500 sq ft home bought during the 08' meltdown at a steal of a price. Never letting this thing go, value has doubled since I purchased.
As a CFP I LOVED to see you bring into this conversation the effect the amortization schedule has on the interest savings for paying off a home early. No one ever talks about that and your example laid it out very clearly. Keep up the great work!
Glad it was helpful! Thanks Jack :)
It should have been clarified that the high interest up front isn't some choice by the bank, it is the only way the math works with compound interest. too many people have this perception that the high interest in the payment is the bank gouging them, or as Humphrey said, "the bank needs to get paid first". that is not accurate. the math actually benefits the borrower by allowing the interest to drop as more principal is paid in.
As a CFP maybe you should have spotted his fundamental error when comparing extra payments on the mortgage ($500 per month) vs investing the $500 instead. The investment calculation was for 25 years whereas the mortgage payments were only 16 years.
@@blanketwodahs6741 Exactly right. There is no magic to paying off a loan early, late or with extra payments. Mortgages are simply the outstanding daily balance.
Valuable info my dude.
I paid off my mortgage, best decision I ever did.
Amen
Definitely now I go heavy in the market.
Good choice, bet it feels good to not have to pay interest any more
Anytime a "financial advisor" tries to convince you that being in debt is better than not being in debt find someone else to "advise" you.
Awesome!
You made a fundamental and glaring mistake in your calcs for paying down the mortgage by $500 per month VS. Investing $500 per month. (7:41) You compared investing for 25 years BUT paying extra on the mortgage ended up only being for 16 years. There's the difference in totals NOT anything to do with "compounding" in the investments. Compounding also occurs in paying down the mortgage, in that any outstanding amount accrues interest each year.
Agree. That’s what I thought. This video needs to be revised.😅
😮😮 observant ! I had to re watch
Time is the most critical factor in investment growth. The longer you wait, the significantly less you’ll have down the road. If you're aiming to retire by 60, it's not financially ideal to prioritize paying off your mortgage early before the age of 45.
We might be more concerned about paying off our mortgage if it were larger (or if our jobs weren't as secure), but right now, investing offers a better return. Bloomberg and other finance media have been documenting stories of people making over $250k in a couple months.
Keeping a 3% mortgage and investing cash in the market, growing at 10-20%, is basic math. Look up dividend aristocrats, companies with a 25+ year dividend track record. Also, its advisable you work with a CFA for a well-structured portfolio.
@@AddilynTuffin Agreed. Through working with a CFA, I've grown a well-diversified portfolio to $2 million, experiencing exponential growth since I began. Success in stocks requires not just money but also knowledge, persistence, and resilience.
Well it seems like a lot of your interest is riding on your source, I could really get well accustomed to your viewpoint, get me involved.
Jennifer Leigh Hickman is the licensed CFA I use and i'm just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
Paid off my mortgage early a few years back and have not regretted it once. Still feels amazing!
If you don't a mind can I get more info..like age you did it. Price. Interest rate. City. Stuff like that. I'm getting pretty aggressive on my extra principal payments but still investing
Same here. Paid it off at 30 year old, few years back and not regretting at all. And after paying off, interest rates went so high I can imagine what monthly payments i would have had. Maybe its considered not as an investment but I saved so much :D
@@jaredfrazier2216 I’ll make a video on this topic
Starting with just 55k two months ago and reaching 290k today feels incredible. Monica Ronald, your guidance and insights have been instrumental in this journey, and I’m deeply thankful for your support and knowledge.”
If I may ask, how do you manage to earn so much? What are your strategies? And who is Monica Ronald?
Diving into the digital market is definitely advisable, but it requires expert guidance,someone like Monica Ronald. and She is a popular licensed broker and fund manager. Her guidance and high level of expertise in digital markets has been a game changer for me andyou can’t go wrong.
I keep hearing a lot about Ms. Sophie; she must be really good.
Trading offers investors numerous opportunities to build a strong portfolio, despite the current economic situation.
Wow, it is so refreshing to see my mentor being praised. I thought I was the only one who knew about Ms. Monica Ronald. Her remarkable work speaks for itself; she has built an impressive legacy.
These concepts are best understood under fire. Like being laid off and you’re now only living off your spouses salary…. I GUARANTEE you would wish your mortgage was lower or paid off.
Exactly. Plan for the worst case and you can't go wrong.
Agreed
So damn true!
To play the devil's advocate, lets say over the course of 5 years you sunk in 500-1k a month trying to pay it off faster. Would that money not be nice to have in that situation until you get another job?
You can cash out rather easy. Once you pay off your mortgage your money is stuck in walls. Good luck getting a credit with no salary.
Same money invested in stock can be cashed out.
Paid my house off in about 9.5 years dumping everything i could and renting out rooms for half of those years. Bought it FHA with 3% down with a 5.25% and a PMI, then refied to a 15 yr after about 2 years to a conventional at 4.35%. Opened my 1st 401k/stock account the next year and now trying to catch up there. Very glad i did it that way, the peace of mind is priceless and the flexibility to not need any other forms of debt will continue to make my dollars efficient.
I feel like the peace of mind you have with a paid off mortgage is just so exhilarating. This is my plan then just tackle my retirement accounts full force when I no longer have that major debt. The interest alone makes me rather pay it off to avoid all that money you have to pay back over time.
@@JeffFindlay nice! how old were you when you opened your 1st 401K/stock account?
@@whenifeellow about 36-37
A well-balanced video. Mortgages can involve paying a lot of interest, but if your mortgage is 5% or less you're likely to do better long-term in the stock market. I'm retired but with a 2.625% interest rate I have not bothered paying off my mortgage, in four years the payments will end.
I say do a bit of both. I’ve been maxing out my 401 for several years now while also working towards paying off our house. We paid off our 375K loan in 12 years with a 3% rate. Now I’m dumping a bunch of cash into a brokerage account, beefed up kids’ college investment fund, and also maxing out HSA (8,200 in 2024) and investing that too (I’ve been doing that for years too). I’m 42 and hubby is 45 so we still have plenty of years until retirement, although we’re shooting to retire within the next 15 years or so. We don’t own expensive cars, toys, second homes, or designer bags. We do travel though, that’s about the only thing I’ll go all out for. But we keep it to pretty much one big family trip per year.
This approach makes total sense to me too but I never hear anyone mention in these videos. I like to think “don’t put all your eggs in one basket”… almost like diversifying
Good yet simple to follow advice
Great video, no bias whatsoever. I ask myself this question often enough. I have opted for paying down on my mortgage. You just demonstrated that the savings are massive with those calculations. Thanks!
From paying for day care and college, to managing mortgage payments. I'm approaching retirement yet inflation is getting worse and recession is biting harder by the day. How can I generate more income to retire with at least $3m for long term care? I have about 750k in savings.
That is so amazing, I’m trying to get onto the investing ladder at 40. I wish at 55 I will be testifying to similar success. investors like you should be cautious of the bull run, its best you connect with a well-qualified adviser to meet your growth goals and avoid blunder.
Accurate asset allocation is crucial, I used hedging strategies to allocate part of my portfOlio to defensive assets for market downturns. Expert guidance is vital for achieving this. This approach has helped me stay financially secure for over five years, yielding nearly $1 million in returns on investments.
this is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
Her name is “Melissa Terri Swayne” can't divulge much. Most likely, the internet should have her basic info, you can research if you like
I just Googled her name and her website came up right away. It looks interesting so far. I'm going to send a mail to her and let you know how it goes.Thanks for sharing truly!
Love this video! One important factor to keep in mind when paying off your mortgage early, freed up cash flow! That payment can go back and accelerate any other debt or investment.
That’s so incorrect 😂
There is a consideration that was neglected during the example of $500 extra invested vs extra principle payments at 7:41. Between the two scenarios it neglects that the mortgage is paid off early in ~17 years. As a result you need to account for an additional 8 years of money which isn’t being put towards the mortgage. When you do that the cost difference between the two is nearly identical.
Paid off my house in 2019 at 31 years old. Debt free ever since. Zero stress anymore
This is what people don’t understand. Investing for me is math vs emotion. Being debt free gives me peace of mind even though I know my money is better off investing. Being debt free allows me to have the “fk it” attitude
lol. Paying off a home loan (good debt) is hilariously bad financial management. Why would you be stressed about a mortgage?
@@Kujakuseki01 you have to pay off it every single month! I hated that burden. Now I can save a ton more. Plus you have unexpected emergencies such as a roof leaking, car breaking, pinhole leaks in the pipes etc. was living paycheck to paycheck with a house mortgage. No longer!
I agree. Just bought my house and have plans to pay it off early. The freedom it provides is worth not investing imo.
I paid off my $328k 2.625% 15 years loan in 25 months. Started in October 2020 last payment was November 2022. Now totally debt free with 3 paid off rentals. Love having no debt for the last 1.5 years.
I have has been aggressively paying down our 5.5% I/Y home loan. As a finance guy I ran the numbers and I know we would be better off investing, but this decision was bases on quality of life. Once we pay off our house effectively we just received a 30k pre-tax bonus. For a family that will likely bring in 150k - 200k in 7 years from now that will be life changing.
I’m paying extra on my 2.99% mortgage to achieve my goal of no mortgage by the time my kid graduates high school. It’s fun to track progress on the amortization schedule.
why is the goal to have no mortgage at that time? what advantage would that give you?
@@Thewealthwarehousepodcast Seems self explanatory but IMO it's a financial goal, no mortgage is a great thing, your freed up money now goes to other investments or savings. Making the banks rich is not my goal.
@ljshoreslokal we definitely don't have the goal of making banks rich either. We don't do business with banks. Our view is that while you were aying off the house faster, where could that money have been going to work for you instead of being tied up in the walls of the house. To each their own though.
F the amortization in the A
There's no way I would put an extra dime in to a 2.99% mortgage. Sure you can pay that off and THEN start working on other investments. Don't forget to look at all the growth you missed out on in the stock market. If I could borrow money at 2.99% I would borrow AS MUCH AS I COULD at that rate and get it invested like right now. I'd happily pay that 2.99% for life.
The feeling of having no monthly rent or mortgage payment is AMAZING. It changes your entire outlook. That should be what retired life feels like.
I went in the opposite direction. In 2018 I could have paid off my mortgage on the primary but instead tapped 7 figures of the equity and bought 2 oceanfront STRs in Hawaii. Now those properties pay for themselves and the interest portion of my primary. But also the equity in those properties has grown to almost as much as I tapped in 2018. My guess is that by the time I turn 55yo, those properties will be able to pay for my living expenses too and I can retire. Maybe your path feels more amazing, I wouldn’t know… but mine feels pretty great too.
@@poonekar Oof, I'd be way to scared to buy rental properties with a second mortgage (i.e. home equity loan). What if there are major issues? What if your tenants trash the place? What if the rental market crashes and now you can't charge enough to make the loan payments?
@@Spivonious I didn’t use and wouldn’t recommend using home equity loan for buying properties. I did a cash out refi and it made sense also because I was getting a better rate, which may not be the case for most properties today.
My house is paid off… but my property taxes and my home owners insurance pretty much a mortgage .. you never really pay anything off 🥴
@@nope7548 Yeah, property tax and insurance are part of the joy of home ownership. Definitely not for everybody. If you're just a single guy or gal, renting an apartment or small house makes a lot more sense most of the time. Low-maintenance and relatively low-cost.
I currently have a $280k stock portfolio consisting of 33% S&P, 33% Total stock, and 33% international. I feel a need to focus on complete growth so I went 100% stocks, but does the SP500 and QQQ overlap too much to make sense holding both?
You might also follow a lots stocks across other industries. I'll advise you to work with a financial advisor who can assist you decide when is the best to buy and sell the shares or ETFs you want to acquire since you don't have to act on every forecast.
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goaL.
that's a double up in two years! seeing a lot of news on the rally, investors will make tons of profit with the right picks. would you mind disclosing info of this person guiding you please? my problem is I do not trust my guts in today's mkt
My CFA *Julianne Iwersen Niemann* a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her..
I had this conversation with some friends out at a bar like 2 years ago, and I'm pretty sure it saved me thousands in the long run.
saving this video because i wanna help my mother pay off our mortgage. thank you sir Humphrey!!
There are a ton of these types of videos out there, but this explanation is by far the most thorough and well-reasoned.
This info is great but I wanted to point out there’s discrepancy in the time lines. The $500 towards the mortgage vs investing should only be over 17 years since the loan will be paid off early. So it’s only $215k invested not the $473k shown
That’s what I thought!
The Value of the house is not included as well. After those years hopefuly the house as increased in value.
I was looking for someone to make this video and you read my mind. Thank you so much.
I love this video!! It actually makes sense the way you explained it. I bought my house last year at 7.25% and this year I am putting an extra $700 (at least) toward the principal. My goal is to get my balance below $100,000 by the end of the year. Less than $8k to go!
Creating wealth entails establishing positive routines, I had only $78k to my name at 42 when I first woke up to this reality. I chose the stock market as a medium of growth, got an excellent financial advisor, Financial management is a vital subject that many avoid, often leading to future regrets.
Indeed, currently I'm managing my finances wisely and being frugal. In the last 19 months, my investments grew by 43%, adding over $500K in profits. However, I've had losses in the past month, making me anxious. I'm unsure whether to sell everything or wait.
No doubt, having the right plan is invaluable, my portfolio is well-matched for every season of the market and recently hit 100% rise from early last year. I and my CFP are working on a 7 figure ballpark goal, tho this could take till Q3 2024.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
Her name is 'Amy Desiree Irish’. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
I feel investors should focus on under-the-radar stocks, considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises plummeting stocks that were once revered. I don't know where to go here out of devastation.
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks.
Yes. It is very easy to buy in on trending stocks but the problem is knowing when to sell or hold, which is why a coach is important. I've been in touch with one for about a year now and although I was initially skeptical about it, I will say I've made more progress within a year generating 6figure profit
Her name is 'Kenia Giordani Borges’ Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Buy s&p500 notnindividual sticks
@@ticynara1scammmm
We are paying down our mortgage aggressively (while still investing) because I was in high school during the '08 turmoil and my dad lost his job. My parents were extremely stressed about losing their house, and I never want to feel that way. For everyone saying you can draw from your investments if you lose your job, you could potentially take a huge hit if that happened to be in a down market. Ultimately, this is a personal decision but for me, I prefer the peace of mind
As with everything, it depends on other factors too. My peace of mind comes from the fact that I bought a house maybe 60% the price I could technically afford with my salary at the time, and I always keep several months of expenses in emergency savings accounts. So I’m very comfortable putting my excess into volatile investment accounts, because the chances of me touching it are very very low, and the worst possible case might require using a tiny fraction of it in a down market. It shouldn’t be your only savings, but it gives peace of mind that you have that backup in a worst case scenario if normal savings aren’t enough. But that only works if you buy a house well within your budget, which apparently few people do (the bank I got my loan from was shocked I wasn’t trying to buy a more expensive house at my income, and that made me realize most people are spreading themselves too thin)
100% of foreclosures occur on those “with” a mortgage.
Wow yes this is exactly why for me. I've been though two foreclosures as a kid, I never want to go through that again. Obamas loan modification bailed us out. Otherwise we would have been out of a home. Now that I bought my first home, I can't wait to pay it off. If the economy crashes again, I don't want to be SOL
The way I see it. My mortgage represents a living expense.
Living expenses are why I go to work.
Less living expense less need for a job / income.
I will not have kids so I'm just trying to enjoy my life
Foreclosures occur on properties without mortgages as well. Property taxes need to be paid as well. Property taxes mean that you never truly OWN your house…
I am focusing my mortgage because of the peace of mind it offers.
I have never heard anyone say " wow, I really wish I didn't pay off my mortgage.." I think paying off mortgage was the smartest decision my wife and I did 👍
100% Agree. I have both paid off my house early and invested. Getting out of debt and paying off the house early was by far the best financial decision my wife and I ever made. It changed my entire mindset about debt and money. Zero debt will change you to the core and even people at work will notice there is something different about you. - the fact that you don't need your job as bad as you once did. I make different decisions at work and am a much more powerful manager than I once was (I can fight for my team so much better with no fear of losing my job). I also sleep like a baby with zero stress about money or bills. Its great!
I've read 2-3 comments of people who have said this in this comments section.
Because now their money is stuck in walls instead of able to be used for something more impactful.
That said, paying it off isn't bad.
Just bought a house, first payment is in February. This was greatly informative and will be valuable as we start to pay it off.
I agree. The interest rate you have on your mortgage will largely determine if you should pay it off early. However since I work in tech field, the job
isn't that stable, so I decided to pay my mortgage off early to gain "piece of mind" after I was able to accumulate enough in savings and retirement that I feel comfortable with
Peace of mind = priceless
2.5% 15yr with 12yrs left to payoff. Everything extra (about 10%) is going into brokerage account. Great video
This is my fifth year after retirement. I’e been following the 4% rule thing I saw on a youTube channel, but this isn’t really how hard I expected things to be. After I cashed out a lump sum, I still have about $760k left, but at this rate, and with how the market is (we were putting money away in an index fund), I’m starting to get really worried.
Not a lot of people are able to save that much in a lifetime. But now you are retired and depend on your investment, it’s best you redistribute your capital. To simplify the process, you could allocate your resources with the help of a financial advisor.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800k
My CFA ’Stacy Lynn Staples’ , a renowned figure in her line of work. I recommend researching her credentials further. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
Pay the mortgage to 30 percent of balance then take the reverse. Boom....no mortgage payment
PM me for help with this. (I'm a loan officer)
Great explanation. Most people have no idea they are paying interest instead of drawing down the principle amount for the first half of their mortgage term. Good job. People understand only when the bank reposes their houses.
Good video and I like how he brought up the fact that paying off your home isn’t always a financial decision. The freedom was worth any stock market gains we could have made. Also paying off your loan is guaranteed, the stock market isn’t. The freedom of no mortgage allowed my wife to stay at home with the kids and for our savings and investing to explode further down the line.
Yes! 🙌 I love to hear that! I’m paying off my mortgage as fast as I can. I can’t wait to get rid of our mortgage. I don’t care what people think!
Keep up the good videos Humphrey!
We're paying our mortgage off early mainly so that we don't lose money to interest payments. Aiming to pay it all off by year 8 (only $45k left) so anything after will probably be invested in the market/retirement. Not having the mortgage will give us piece of mind and more flexibility
I have a 2.125% rate on a 15 year with 12 years left on it. I am investing the extra right now. The returns will be better in the long.
Better off pumping that extra cash into VOO, FXAIX (s&p 500 etf’s) than paying off a mortgage with such a low interest rate
@@Optimus-Prime-Ribthat’s what he said lol
no doubt
With that low of a rate, it'd be pretty silly to pay it down early unless you are just sitting on a few extra million.
@@bellmattwebb It would be silly to pay that off no matter how rich you were.
If your mortgage interest rate is relatively low 3%-4%, hmm investing in assets that offer higher returns stocks or real estate with ya mortgage could provide a greater long-term financial benefit. of course with the help you a financial advisor
right, the average annual return of the stock market (S&P 500) has been around 7%-10% after inflation.
@@JonahHoward0997 the idea of being debt-free is worth the sacrifice of not having a large investment portfolio.
@@KennyHopkinsF2000 If you value security and the emotional benefit of owning your home outright, paying down your mortgage early can provide peace of mind, even if the financial benefit isn’t the most optimal in the long run, so don't be afraid get yourself a financial advisor.
financial advisor who can help you analyze your personal situation, understand the numbers, and provide a strategy tailored to your financial goals.
@@OrvillePayneW10000 if that so you can check on ophitkathrynjones my consultant who has been managing my portfolio's and cash flow. you can look her up.
I had a windfall during Covid and paid off my mortgage that was at 3%. 6 months ago I had a big real estate opportunity arise, but had to take out a loan again in order to capitalize on it (couldn't take it out directly on the property for "reasons"), but at 6.75%. You can't predict what is going to happen, but I really, really regret paying off the low-interest mortgage now. Had I invested the payoff amount, I would have been so far ahead now and with a very reasonable mortgage instead of my high-interest one now...
Currently, I'm saving 25% of my gross, since I'm also behind overall on retirement savings, and any extra will go towards the mortgage.
Super helpful video! We have a 6.8% rate on our mortgage and it feels like a huge burden. We’ve been weighing making extra payments vs investing. Ultimately we are doing a combination .
The GOAT IS BACK. Welcome back Humphrey, always love your videos.
Appreciate it!!!!
this is a great video. I wish I had known this when i paid off my house. would have made a ton of money earlier. but the peace of mind knowing I could never lose my house even if i lose my job made me super chill over covid.
I just turned 44 and awfully late to investing with barely any portfolio except my 401k, I have a decent amount of cash saved up and with inflation currently soaring AGAIN, I’m getting worried about retirement, my intention is to retire at 55. How best do I maximize my savings of over $400k
Retirement is now more difficult than it was in the past. it's all about balancing your risk tolerance with your long-term goals. Maybe consider speaking to an advisor to help in diversifying your portfolio to spread out the risk.
Many people often underestimate the effectiveness of a financial adviser in planning for retirement. Over the past 5 years, my FA has consistently restructured and diversified my portfolio and expenses, resulting in over $1 million in gains. While it might not seem like a huge amount, retirement now feels within reach.
Hello, I'm interested in trying this out. Who is your FA, I'm gasping for breath. Have been doing things myself but it's clearly not working
Teresa L. Athas is her name. She is regarded as a genius in her area and works for Empower Financial Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
Unfortunately, you’ll need a few million to think of retiring anytime soon! 🤣
the best explanation i ever found..this is what i expected when i asking this question...this video ending my wonder...thanks man!🎉
Excellent! This is the best breakdown on RUclips!
Great video!!! One of the most misunderstood parts about real estate is how a 30 year fixed mortgage has an amortization curve behind the scenes which front loads the interest. Love that we got an explanation here. This video will probably be criminally underrated, but definitely one of my favorites!
Really great information, this has been on my mind lately, and been trying to help decide what to do first. Thank you!
Thanks for the video! I've been trying to calculate the best path forward as I'm in this scenario now. I think the two cases are a lot more similar than may have been suggested in this video (LONG analysis ahead, sorry!)
I used the 8% interest stocks vs mortgage example from the video (Let's assume no taxes on the stocks since 8% already bakes that in). If you start with a 400k loan 5 years in, that's about 380k left. The payments were 2935/month. You have an extra $500/month to dedicate to either stocks or mortgage payoff. Consider the two scenarios:
Scenario STONKS: You put the entire extra 6000/year into stocks, getting you 213k by 16.75 years (100k invested). You will have 211k left on your mortgage, which will take 8.25 years to pay off. You will have paid a total of 690k (590k towards home loan, 100k towards stocks).
Scenario HOME: You put the extra $6000/year into mortgage, so 3435/month instead of 2935. The loan is fully paid in 16.75 years, and you paid a total of 690k (690k mortgage, 0k stocks).
Now, what about the next 8.25 years? Well, STONKS continues contributing the spare $500/month to stocks, resulting in a total of 473k after 25 years (assuming the same 8% interest). Scenario HOME now has the full $3435 to put towards stocks per month, since the loan is paid off, so we do. After 8.25 years of 8% interest, we have about 470k in stocks. At the end, both scenarios paid off their homes in full after 25 years, and have nearly the same in stocks. (This obviously assumes very smooth stock performance, and in reality most rises come from random spikes and its better to have money in the market longer since maybe those last 8 years weren't very good, etc.).
So STONKS ended up paying a total of 880500 on the loan, 150k on stocks after 25 years. HOME paid 690435 on the loan, and 340065 towards stocks. Both of these sum to $1,030,500, and both have about the same in stocks. This makes sense, because both of these scenarios are approximately equivalent. Paying off the mortgage at 8% compounds just like stocks do, because if you hadn't paid that principal off, it would continue compounding every year.
The net lesson here is that stocks provide better average returns, with risk and taxes, whereas the mortgage offers guaranteed returns that are likely more modest. My mortgage rate is 7.5% right now so I'm currently plugging money into that. When rates drop, I may refinance and even pull some equity out to put into stocks since at that point it would perform better on average (assuming mortgage rate is 4-5% or lower, etc.)
Max out 401K match and Roth IRA first. All remaining goes to mortgage principal. That’s my strategy with a 6% rate
Lets go!
6% rate? 100% would go towards that.
@@CurieBohr You would still want to max out your 401k match as you are getting a 100% return up to the match or possibly 50% depending on the plan.
IMO you should max out beyond the match. the tax savings outpace the interest. Once you fully fund any tax deferred accounts and still have money leftover, then pay down the mortgage.
@@blanketwodahs6741so how does paying ordinary income tax at future (unknown) tax rates for unmatched 401K investments beat the other strategy. I’m genuinely curious and not trolling.
If we would've had a mortgage when COVID hit, we would've been in a world of hurt. So thankful we went the 'Peace of Mind' choice. These surprises have hit us 3 times in 3 decades of marriage. Pay off all debt, best decision ever. You never know what's around the corner. Love your videos! Thanks so much from Texas.
3:37 interest is front loaded because the borrowed money is front loaded. frankly the American 30 year fixed rate mortgage is a gift to the American home buyer, compared to the Canadian 5 year renewable and floating rate UK systems. the key is to not live beyond your means because the bankster who sold you your mortgage encouraged you to be overleveraged.
an easy rule of thumb is to take the 30 year loan, but build your budget on a 15 year fixed, and pay that 30 year like its the 15 year mortgage.
I like how you didn't presume your viewer already had a basic understanding, and after each segment, you took a moment to sum what you had just said into a simple rule which makes all the difference. I think the 8% investment vs mortgate comparison was especially powerful. I'll subscribe because I'm curious as to how well you're able to simplify other investment advice.
I'm 32 and married. We put 20% down on our home in 2018 and signed for biweekly payments on a 20 year amortization schedule - variable interest rate (5.65% currently). I work in the public sector where 10% of my pay is automatically placed into a pension plan. And I've always wondered if our additional savings should go towards our mortgage, or if we should start investing. Following your advice, because we have many years until retirement yet, and our interest rate is well below the average return on investment considering income tax, we should look into investing. Thank you!
Paid off my mortgage at 30. We still have hundreds of thousand invested.
Lots less stress.
I really like that you run actual numbers instead of just 'sharing stories'.
Paid off my mortgage in 6.5 years(interest rate was 5% in 2016, refinanced to 2.7%, and paid off in 2022) while maxing out my 401k for the last 15 years. So, my "investing" came in that form with the employer-matching contribution. Started my brokerage account last year and been daily cost averaging and plan to keep at it until I retire. Paying the bank more interest than I need to is something that doesn't sit right with me. Could I have made more gains investing outside of my 401k during that 6.5 year period? Maybe. For me, I didn't have the tolerance, discipline, or knowledge to be an effective investor at that time. Not being indebted to ANYONE is peace of mind and something I hold in high regard. Love your page @humphrey.
Nice work.
Get money buy assets
Everything else works out ❤
Great video. I’ve been asking myself this same question. I’m investing a significant amount every month and while I could pay off my home in ~9 years, due to compounding interest I’ll earn a lot more by investing. So that’s the path I chose. But it’s something I still struggle with
We’ve been blessed to do both 🎉🎉🎉
So have I and my wife.....The Lord has been good to us.
Always Thank Baby Jesus !!
This information is worth it’s weight in gold
Thank you so much for potentially saving me more then 6 years of debt
I paid off my mortgage a couple of years ago. One of the best decisions I've made.
thats great... but don't you ever get enticed to buy a bigger, better, shinier house?
@@outbackandabout yes, I always want more. But I decided to buy 10 properties cash before upgrading. That way it's more fun and the house won't own me
@GuillermoSanchez-Apex hmm, that's a great insight. Thanks for replying
Well said. Good job. I'm a financial analyst of 20yrs and follow this method of running the numbers vs average market returns, it really adds of quickly the small hacks. Much better than your competition clear_value tax. He's a CPA from Chicago like myself. But he had a similar vid and made it sound like interest payments where spread evenly, so I put a comment explaining the math and telling his viewers that he was spreading miss information. But it got deleted, hopefully this will not happen with this one. Good job I like watching these and feeling good about what I'm doing right due to sacrifices I take. Take care, keep up the good work. 😊
Heyyyy I listen to clear value tax too!
@@brandon8531 Hi Brandon, I would avoid clear value tax channel, hes a CPA, but he tends to simplify the information too much, probably for views, but in turn it spreads mis information and cost people money, seek out his mortgage vs investment vid and judge for yourself, but Andrew is spot on about the pros and cons of the mortgage vs investment, I've been doing this method for almost 15yrs and look I'm finally seeing the fruits of my sacrifices vs my peers
As a fan of investment, I frequently ponder how successful high-level investors make millions of dollars. I have more than $545K in equity from a house sale, but I'm not sure what to do with it. Should I wait for another opportunity or buy stocks now?
For the average Joe, the tactics are fairly demanding. In actuality, professionals with extensive knowledge and skill sets are able to execute these deals with the majority of success.
I concur that investing with a broking advisor is fantastic! Before speaking with an advisor, I was having a terrible time investing during the 2008 financial crisis. In summary, I started with a $350,000 investment and, with the assistance of my advisor, have amassed almost $2 million.
Please can you leave the info of your lnvestment advsor here? I’m in dire need for one
Annette Marie Holt is the licensed coach I use. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
Annette Marie Holt is the licensed advisor i use
Really informative video! The point about investing vs. mortgage payoff depending on time horizon was especially interesting. At what mortgage rate would you personally start prioritizing extra payments over investing?
I got 6% interest, I’m definitely throwing all extra money at the principal
Why? Bad idea
I made the mistake of getting on a variable rate plan, so I'm currently on a 6.14% rate. I just added an extra 50 bucks a week to my payment schedule. Thank you for this information
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.
I have tried to explain this to my son and have never really gotten the point across. I will make sure he see this. Thanks
I just sold a property in Portland and I'm thinking to put the cash in stocks, I know everyone is saying it’s ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $200k gains with months, I'm really just confused at this point.
Yes, a good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge.
It all depends on how long you're willing to hold for, stocks might likely tank further, but making serious gains in this downtrend wouldn't be a problem if you're a pro.Reason I decided to work closely with an brokerage-adviser ever since the market got really tensed and the pressure became so much(I should be retiring in 17months) so I've had an brokerage-adviser guide me through the chaos, its been 9months and counting and I've made approx. 650K net from all of my holdings
How can I participate in this? I sincerely aspire to establish a secure financlal future and am eager to participate. Who is the driving force behind your success?
I work with Elisse Laparche Ewing as my fiduciary advisor. Simply look up the name. You would discover the information you needed to schedule an appointment.
Thank you for the lead. I searched her up, and I have sent her a message. I hope she gets back to me soon.
Cool video with a lot of good numbers and insight. I think one more metric that should be part of the total savings/total interest calculations is the amount of interest a homeowner should expect to make by investing the remaining years of if their monthly payment after paying off their house early. This number should get added to the interest saved. This could help make people make their decision.
I'm so happy I made productive decisions about my finances that changed forever. I'm a single mother living in Vancouver Canada, bought my first house in October and hoping to retire soon if things keep going smoothly for me.
Cryptocurrency/stock investment, but you will need a professional guide on that.
Facebook 👇
Evelyn C. Sanders
Is she really that good? I have seen lots of videos about her.
If you don't find a means of multiplying your money, you will wake up one day and realize that the money you thought you had, had been exhausted. Investment is a ladder to climb the financial wall.
WOW! Love the data. So much work and I appreciate that.
this is a complicated concept and you did a brilliant job explaining it
Investments are the roots of financial security; the deeper they grow, the stronger your future will be."
The deeper your investment roots, the stronger your financial security will be in the future.
Exactly! With my adviser, I’ve cultivated deep investment roots, strengthening my financial security for the future.
I would love an introduction to an adviser who can help me strengthen my financial roots.
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further.
Thank you for this amazing tip. I just looked the name up and wrote her.
We've so-far paid off our two mortgages in 10 years or less, by making extra payments to a 15 year mortgage, even though the last and current houses had ~2% mortgages. Possibly not the best financial move, but it's really great to know you own the house.
The peace of mind crowd favoring paying off the house early vs investing more neglects one incredibly important factor. If you do get laid off, or wind up in some emergency where you need to have access to a lot of cash quick (after you’ve exhausted your emergency fund first) it is far easier to sell shares of your investments piecemeal than to sell a house. Besides, you can’t sell off only a portion of your house either, like who’s going to buy a single bedroom or closet? I guess you could try a HELOC but that’s still borrowing money.
if you paid it off, you can survive on mcdonalds wages and possibly still save a bit until something better comes along.
How would you have felt having to sell your portfolio in 2020?
Chances are if you lost your job it’s because of layoffs which means the stock market is down so you’d still have to make your mortgage payments in a down market selling for a loss to cover your bills.
Just because they paid off there mortgage doesn’t mean that they haven’t saved along the way. We are paying off our mortgage aggressive that doesn’t mean we aren’t saving money for big emergencies such as a job loss.
Nice to see an unbiased look at both sides. Great video 👏
I was really hoping to see what if you paid your house off early, than took whatever you were paying and started investing that in the market to see how that would benefit you.
For example pay your house off 15 years early and than take all that mortgage and extra payments but put in all in the stock market for another 15 years. To see the difference if you just invested that smaller amount for 30 years or the larger amount for 15. Which would be better? I know it can differ a lot because of interest.
its nearly a wash. It comes down to how you oersonally want to play it. It also deoends on the market.
you put everything in and market hits a recession, all your value goes down, you might lose your job, and still stuck with payments. VS market rockets you still oay on house for a while but can sell off stock to pay mortgage off earlier.
No wrong answer both are acceptable.
I paid off my mortgage at age 35. The peace of mind in knowing that I own something in this world is greater than the math. I fully admit the money would have been better used in investments, but I have never regretted my choice. I love living without a rent/morgage payment. It's a great life.
Successful investing is hard work because it means disciplining your mind to do the opposite of human nature. Buying during a panic, selling during euphoria, and holding on when you are bored and just craving a little action. Investing is 5% intellect and 95% temperament.
Government policy has thrown the future under the bus for decades. The day of judgment is near. I predict an 80% drop in the stock market. Investors will abandon stocks in favor of real estate. There will be no money in banks... You must devise a strategy for survival.
It's often true that people underestimate the importance of financial advisors until they feel the negative effects of emotional decision-making. I remember a few summers ago, after a tough divorce, when I needed a boost for my struggling business. I researched and found a licensed advisor who diligently helped grow my reserves despite inflation. Consequently, my reserves increased from $275k to over $750k.
Recently, I've been considering the possibility of speaking with consultants. I need guidance because I'm an adult, but I'm not sure if their services would be all that helpful.
Her name is 'Amy Desiree Irish’. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
Great video! I'm a piece of mind kind of guy. We have a 2.87% interest rate on a 30-year fixed. The goal is to have the house paid off in 10-13 years. I know that if I crunch the numbers it would be better served elsewhere but I won't care as I'm doing backflips with no mortgage. The wife and I are both contributing 15 and 20% into our retirement as well so its not like we are halting our retirement for the house. Cant wait for that day! Again...Great video!
I started paying $5K principal with each payment last year. About 3 months into that I started getting bombarded with calls from Wells Fargo asking if I wanted to restructure. They sold my mortgage about 6 months later.
Dont think they liked losing all that money.
Sorry but they sell these loans often. It’s normal and typical regardless if you were paying it off faster or not.
I took the lump and paid off a 7% mortgage i was 2 years deep in on a 30yr term. Having a house free and clear is the best peace of mind I've ever had.
I just sold a property in Orange County and I'm thinking to put the cash in stocks, I know everyone is saying its ripe enough, but Is this a good time to buy stocks? How long until a full recovery? How are other people in the same market raking in over $450k gains within months, I'm really just confused at this point.
target date funds made me a multimillionaire but i also watched them drop 40% in a very short time and take a long time to recover. my best suggestion is that you seek the guidance of a fiduciary to avoid mistakes
I totally agree with you. I started out investing on my own too and lost quite a bit. After the 2020 crash, I managed to pull out about $160k. I then invested that money with an analyst, and in just seven months, I made almost $580,000. It's amazing how having the right guidance can turn things around!
Please who’s this consultant ?
SHERRY DAWN CARRICO is her name. She is regarded as a genius in her area and works for Empower Financial Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
Finally a simple explanation that makes sense. Math and emotional reasoning. Thank you!
I crunched all of my numbers in depth last night, actually. In my case, paying off early will cost me about 300k over the next 22 years compared to investing the same amount.
😅 that means you have to keep working for that long, tho for the monthly payments. I'd rather relax
Maybe
It would be interesting to see your math on this. Other people have posted similar responses to articles like this and included their numbers - asking people to do their own calculations if they did not believe them. In all cases, the original numbers posted were hopelessly optimistic and the gains through investing (if any) were a fraction of what was originally posted.
Thanks
My rate is 2.75% and i have 26.5 years left on my mortgage. Definitely investing
below 3% id probably do the same
probably below 3.5 to be fair
Ayyyy we have the same rate and almost same time left 😂 TWINSIES
@@jpnguyen11 So you got yours around December 2020?
Good times for mortgages.
That is an incredibly great interest rate, but 100% of foreclosures occur on a home with a mortgage.
Your video is clear, well educated and helpful. Thank you very much.
I’m 58 and have about $225k liquid in savings which I plan to put towards becoming a homeowner, but based on the current high prices on real estate, do you suggest I hold from buying and look at dividend paying stocks instead?
After studying the trajectory of great asssts like real estate, dividend paying stocks and gold, my conclusion is to buy and nvest in what you can afford today
I believe that advisers' roles should not be undervalued. I personally don't have the time for stock analysis because of my job, therefore I employ a reliable advisor. I don't like to boast, but from the start of last year, my $1 million portfolio has averaged a 55% return on investment.
Please can you leave the info of your investment advisor here? I’m in dire need for one.
Victoria Louisa Saylor is my financial coach. I recommend conducting your due diligence, you will find essential information online to help you schedule an appointment.
Thank you for sharing, I must say, Victoria appears to be quite knowledgeable. After coming across her web page, I went through her resume and it was quite impressive. I reached out and scheduled a call
Do a bit of both. I'm focusing on my mortgage course of the peace and mind it comes with.
A 15 year fixed mortgage at 6.5% is about 2,800 a month on a $400,000 house. In order to abide by the 25% of post income tax rule the individual or household would have to make about 190k a year. This is before factoring in home insurance and utilities in that 25%. Seems like owning a home is indeed getting further and further away. I need to get into the stocks market, how do I start as a newbie?
It's best to buy growth, blue-chip, or large-cap stocks. As a beginner, you should also work with a financial advisor to set up a good portfolio.
Indeed, I sought the assistance of a fiduciary adviser after experiencing significant losses in 2022 while handling my own account. By diversifying and restructuring my $600k portfolio with dividend-paying equities, mutual funds, exchange-traded funds (ETFs), and REITs, I was able to generate an average yearly gain of 38%.
Yes, that's true. I learned this in 2020 when I lost almost everything. But then I started using a financial advisor, and now I make at least $25-30k every quarter, so I’ve continued investing with an advisor.
Glad I found this discussion. My portfolio hasn't done well lately, and I think I need a financial advisor. How can I reach the person helping you?
Sure, "Lauren Christine Campbell'' is the licensed advisor I use. Just research the name. You’d find necessary details on the web to set up an appointment
Thank you for all the numbers and explanations as always. It is really helpful for us to make decisions. 👍👍
With around $120k invested in Palantir stocks, any suggestions for additional stocks to diversify across various markets? Looking for a well-rounded portfolio that balances risk aversion with returns meeting yearly inflation concerns.
Prioritize two goals: strategically buy stocks to limit losses and maximize gains, and be prepared to capitalize on market shifts. Consult a financial advisor or professional for personalized guidance.
@@FostersCapones I agree with you. As an early investor in NVDA, AVGO, ANSS, and LRCX, my financial advisor's advice was incredibly helpful. Over the past seven years, she has helped me find stocks that have performed 10x multiple times. With her help, I've grown my portfolio to over a million dollars.
@@JacobReynolds-t7v Please can you leave the info of your investment advisor here? I’m in dire need of one.
@@BettinaBischof The beauty of MARGARET MOLLI ALVEY approach is her dual focus: while aggressively pursuing profit opportunities, she's equally tenacious about shielding investors from potential pitfalls. It's a balance few can achieve.
@@JacobReynolds-t7v I will give this a look, thanks a bunch for sharing.
Paying off the mortgage early you have to consider other costs such as insurances. Many banks will require you to have certain insurances in place when setting up a mortgage (life insurance, payment default insurance, etc). Another factor that I consider is also overall cashflow. Yes, your monthly payment is comprised of principal plus interest, and although you amortize your capital payment, its still outgoing cashflow.
Pay off your mortgage and drop your home owners insurance. You are a genius.
When you own your home your "survival mode" can be reduced to property tax, insurance and utilities. If the economy crashes I'm covered and I don't feel recessions. The sooner you can quit working the sooner you can take better care of your body and live with far less stress, so I do.
A mortgage payment is more than just two parts. There’s also a third part called escrow that you pay into. The escrow covers property tax, home insurance, and any other fees you may have associated with the home/mortgage.
That isn't relevant.
I see a lot of comments for paying off your mortgage for "peace of mind" in here. One thing to consider here is that when you make payments towards your mortgage that extra money is now stuck in that asset. By investing in stocks, cash, etc. you will have that money and any returns on it still available for use in case of an emergency or even an opportunity. There is an opportunity cost with paying your mortgage early that you are sacrificing for "peace of mind". If you can earn a better return putting your money elsewhere besides into your mortgage, I don't think the choice should be that close.
I personally want to free up $3500/mo before i retire
@@mandypdxwell yeah you should pay it off before you retire for sure but maybe not early in your 40s
That analysis neglects the value appreciation of the property itself, while admittedly slower to do, is available for sell. The last home I sold in 2020 significantly outperformed the market in the 5 years I owned it.
@@mandypdx Think of it this way... You could have your property paid off, or you could have the same value invested in Dividend Kings, paying out the same amount to cover your mortgage bill, while also growing principal and yearly dividend payouts.
Have you ever been laid off AND had a house payment? I think not.
Thanks for going over this Humphrey! I was actually thinking about this today. I have a car payment tho, not a mortgage, but I am paying more than the monthly to beat down the interest. Luckily my work has an ESPP (employee stock participation program) that gives me shares at a discount. 🎉