Depends where you are. My gf and I are 28 and 26 in no and combined we make 205k and she is set for promotion in July which should bump us up another 15k or so.
There are some folks who would argue that he should invest, instead of paying off the house. But the simple truth of it is, he's not doing that and just holding cash. Why? Probably because he can't mentally get around investing while he has to pay the mortgage. If paying the mortgage off gets him to be more flexible with his money, then it's the best thing for him.
I think financially it's the Smartest move too, but yes your comment was great. Paying off the house will have so many psychological benefits that will allow him to do better with his money.
Paying off the mortgage is a guaranteed saving the interest that will be owed if he did not pay it off. Investing in the stock market or mutual funds is not guaranteed return and could lose value. Then there is capital gains tax if he did make something.
I agree. I would invest 100k and continue to make the payments. The interest on the investment would be much greater than the interest that’s owed on the house. He’d never catch up to investing. Example. Invest 100k for 30 years at 10% interest a year and contribute just $150 a month to it he would have 2 million. But do what Dave said and start at zero and invest 9k a year for 30 years and same 10% interest and have 1.48 million. You lose out on 500k
He just lives in Tennessee is all. Easy when there's hardly any property tax, no income tax, and you can get a nice house for not much more than 100k lol I'm thinking about moving there myself.
I’m on pace to pay off my 15 year mortgage 10 years early. By early 2022 I will be completely, utterly free of all my debt including the mortgage. I love seeing that remaining principal amount and interest paid number get smaller and smaller every month. Can’t wait to kick the bank out of my house!
That's because he's all about security. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
@@seanfatzinger It's about managing risk. Paying off your mortgage is a GUARANTEED 3% return. There are no guarantees with the stock market. Yeah, it might go up -- but it might go down too.
It's a great *feeling* to pay off your house. But smarter people are not ruled by emotions and feelings. They know how to do math and math tells you not to forgo retirement savings in favor of a low interest home mortgage.
Yeah. In your case, I'd pay off the house today like Dave said and then start funding your retirements like it's on steroids. You still have 30+ years to invest. Just don't forget to do something fun and enjoy life along the way.
30 years to invest, becomes the default justification to delay investing. But life is mortal. People die. Our goal while alive should be to get as much unearned income as possible, as fast as possible. A secondary goal is property ownership. Financial freedom is a much higher priority, than owning a residence.
@Jarod Armstrong Agreed!Renting allows flexibility to move for higher wages. When we no longer need earned income, and we want to stop traveling, then we buy.
I mean it's easy to have that amount if you're 32 and literally never invested anything. He should have started a roth IRA and his 401k years ago and his net worth would be double. Keeping that much in savings is a rookie mistake.
@@memes4life231 no, I have more thanks to beginning my long term investments at 23 when I kicked off my career. not sure you read my comment correctly.
@@harisadu8998 Dave acknowledges how the math works out. But he believes the psychology matters because it will encourage you and you will be more likely to succeed. He advocates a plan that is easy for many people to follow, but not mathematically ideal in a risk neutral scenario.
Doesn’t matter. This kid can do both, sounds like. You can’t invest more than 6k/year in an IRA anyway. Pay off the house. Start investing as early as possible. Pay off the house and look for other investment avenues if you have all that extra disposable income.
And I am 59 now. owe 70k to house, saved a little money in bank and no other investments and retirements. I wish I had advice and come across him earlier.
Mortgage rates are at all time lows, it is not the best move to pay off a house right now instead of investing that money. I understand the debt free mindset, however, interest rates are too cheap to be paying off any mortgages right now. Regardless, congrats on being in a position to do so
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
@@lennoxmutterick6434 However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.
The math says you should invest however, your mental health is worth something. Paying off your house can be a huge thing as far as freeing your mind and finances up to growth opportunities.
This guy should not invest, simply because he doesn't know what he's doing. Having 100k in a bank account is a big red flag to me and tells me they need a financial advisor before investing any of that money. He's better off paying off the house and then investing IMO, he's going to be behind what he could have if he invested it all, but he has less of a chance of destroying his finances by poor investing decisions.
Prior to caller, Dave looked at Rachel and said “how bout you take this next one, sport?” Rachel then gives advice which Dave butts in and contradicts LOL CLASSIC DAVE
I was shocked by her response. The guy has 100k and owes 80k. And the guy and his wife are working. Pay the house off and invest every dime going forward. You don't need to be a financial "expert" to figure this one out.
@@Scott-nj9gq 100% agree with you. I was highly surprised with her advice. That just shows that you don’t always act or think the way you were raised. But I do remember her saying she has a spender type of personality. The baby steps clearly say to get out of debt before investing. The house is debt haha.
@@Scott-nj9gq I know baby step 2 says “except the house”, but in this man’s case, he can afford it and still have 20k left over. He should definitely get out of his debt because he’d still be well off, not dirt poor again.
Her advice is better : the longer the money is in the market, it will beat any interest in mortgage. Its sad that he gives such advice that is really shortsighted
Agree with Rachel’s advice...I would not just pay completely off my house with no investments...a dollar today is worth so much more tomorrow especially now. He can definitely do both and get both accomplished eventually...!
Dave contradicts Dave. Dave says a good mutual fund pays 12% a year but you should instead get 3% by paying off the mortgage. Over 30 years Dave is preventing a ton of wealth creation.
You get it. This video is 3 years old now. If he put 80k in VOO back in 2021, he’d be sitting at 122k today. He’d still have to he 20k in his savings and 2 years left on his house.. bad math by dave
Rachel is right. Dave says people aren't mad about paying their house off early, but people would be mad if they realized how much time value they lost by not investing in their retirement just to pay off their amortized house early.
Thanks for putting it that way. I needed to see this comment. All my friends are investing and it’s tempting to do the same. But I want to be the only one who doesn’t owe anybody while risking money.
Math ; you may also have less money if you invest it. Not every stock investment pays off. Only on youtube it appears nobody losses anything while investing.
@@Alwaysbeclosing1774 that’s if you do some single stocks or sell early. If you invest for the long term in something like a S&P 500 index fund as long as you hold it for the long term you can lose.
@@Alwaysbeclosing1774 Yes, you could lose money. Its what stops many people from investing. Yet somehow many business take out loans everyday to expand their business and make more money. Yes there is a risk, but there is also a reward. You have to decide whether you are comfortable with the risk. Those who end up succeeding are the ones you see on RUclips saying they did what everyone else didn't do. You could lose a lot, but you could also gain a lot. I'm currently taking risks right now. I've watched my investments lose money since the start of the year. However, I haven't had to sell any of them so I technically haven't lost anything as yet. I'm also still investing despite the losses.
Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
Dave advises people to pay off the mortgage because of the emotional peace it gives people, not because it’s the best investment strategy. There’s a huge difference if this guy invests 100k now compared to only 20k (if he pays off his mortgage), and that will likely be several hundred thousand dollars difference in 30yrs when he retires.
Putting that money into maxing 401ks and IRAs also gives a lot of room to invest.... I'd lean towards maxing out the retirement post-tax (absolute max of paycheck allowed going into 401k) and drawing living expenses from the savings, maxing both Roth IRAs from the savings, if you are close to end of the year doing that again at the beginning of that year, then taking anything lwft above 15k or so and putting it towards the house. Then do 15% into retirement while paying off the house ASAP, but I'd get as much of that money into retirement as quick as possible. Had they done that originally instead of 100k in the bank they would have 15k in the bank and 150-200k in retirement (if it was invested of coursel. Then again, if it was invested instead of in the bank they'd have about the same outside the IRA. Listed kids, saving is good to a point, but INVESTING is what will let you retire or become rich. Its difficult to save your way into wealth. Not impossible, but difficult. Its easy to invest your way to wealth, especially if you start in your early 20s. Even $400 a year turns into 200k or so by age 70. Strive for an absolute minimum of 1-2k a year with 5k a year being better. Donthat from age 21-35 and your retirement will be great (so long as you dont do something dumb like pull it out or keep it all in "safe" funds the whole time).
Agree. To me it’s a no brainer, why put 15% towards retirement and kick the can (mortgage) down the road for 5 more years, when you can pay it off today and invest 30%+++ in retirement starting next paycheck! No brainer
Well compounding growth in your early 30s would create more wealth in the long run by using that 80k, however from a peace perspective a paid for home is amazing.
Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
@@seanfatzinger The way a mortgage is amortized makes it a terrible deal for the borrower, regardless of the low interest rate. I'd payoff the house immediately if I were in this caller's position.
I saved up and paid cash for my house(lived at home and worked as much overtime as possible and saved like crazy). Best decision I ever made for building wealth. I hate being at the mercy of landlords raising the rent whenever they feel like it.
I would pay off the house because THAT is the ULTIMATE ASSET and POTENTIAL INVESTMENT/Future Capital Source Option. Nothing beats it. And it is the ultimate necessity of life
If I had paid my house off instead of investing this year I would have a paid off house. I invested instead and now I can pay it off then buy 4 more of them with cash. I disagree with Dave.
you’re right. but this guy has no idea about investing, so for low financial intelligence people it may be the better move. and that’s most of his callers.
Not everyone is good at investing. I’ve seen a couple of people try doing investments, who didn’t know what they were doing and actually lost all their savings and put themselves into further debt.
One thing I find it is interesting is how people don't talk about some of the reasons to pay off your house early. I don't even hear Dave Ramsey talk about how paying off your house really saves you a huge amount of interest. why don't people talk about that? Especially if you have the cash to pay it off in full. Which I have heard several callers say they would be able to do. to me it's just a no-brainer. Not only does this caller have the opportunity to be able to pay off their house in full. But they still have 20,000+and savings after that is done. The peace of mind of having your house paid off is worth every effort to get it done early. I know. I've done it.
I think that if you stick to the same strategy when times change you are bound to become different. If i stick to a car that drives on gas while everyone drives an electric vehicle i'l be Unique too. If i stick with a landline while everyone uses a smartphone il set myself apart from the rest of the bunch. Just a different way of saying that his advice is about 30 years outdated.
Only if the numbers work out. It's a case by case basis. This caller will probably benefit with paying off the remaining balance of the mortgage and have enough to invest in his 401k / ROTH IRA and still live comfortably. If some has no debt, but makes $25K a year, has a wife and 3 kids, no other savings except $10K in the bank, putting the $10K towards paying off the mortgage today would be unwise, especially with no emergency fund and no savings of 3-6 months of expenses. He would have to work on the baby steps, and possibly get to where he is putting extra towards the mortgage loan principal amount. Again, it's a case by case basis.
Before the pandemic I would have agreed. Now I think I'd pay 1/2 of house down, refinance it to small payments & save more cash. Health emergencies are very expensive.
I sorta think the college savings is outdated or soon to be outdated advice. I mean, go ahead and save but don’t get it wrapped up in accounts that force you to use it on college. Studies would likely show that kids who have their college paid for don’t know much about the cost vs return of things.
Depends. I wasn’t told my college was going to be paid (through a 529) for until I’d already looked and applied to colleges so I still picked a smart major and school that wasn’t extremely expensive.
Unfortunately, starting back in the 1980's, we were all fed the idea that if you didn't get a college degree you were doomed to be a loser. At least that's what they were pushing in my High School.
You can make the choice whether you want to save for your kids college that’s up to you. But here’s why a 529 is good. If they go to college you get growth money tax free and can use it. Even if they don’t go to college all it is is you have to pay some taxes on it just like other stuff or you can not withdraw and let them have it for their kids or somebody else in your family
Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
You would also end up a lot worse off in the end than if you did the reverse. The feeling of being mortgage free is a perk, but all things being equal you will be worse off financially in the end. Not a debatable fact.
@@mastermind6767 Not debatable from a financial perspective. But again, everyone has different goals and desires. For some, security is paramount to everything.
I don't know how Dave got 5 to 7 Million Dollars in 35 years? Between a 7 to 11 percent ROI, I see his family at 1.5 to 3.5 Million Dollars. I feel like that is Dave's go-to number no matter how much the person makes or has in retirement. Do I have to send you an HP 12c, Dave?
im 31, mrs is 32 from Melbourne AUS. Will have our 480k mortgage paid off by start/early 2027. We took out the loan end of 2019. We are not investing until that time, possibly never. Our first priority was always to pay off our house as soon as possible - second hand fully paid cars, no international holidays etc until then. Don't invest when you're so close. The best feeling on the planet is owning your own home fully, and not being a slave to the big banks, and we are so close i can feel it.
Paying off your house saves you expenses. While you’re not generating income with the capital you used to pay the house off, you’re lowering expenses, interest expense, that is. If you pay 600 a month in interest and remove that expense, it’s almost the same as generating 600 a month in income.
Very true, but its a bit different if you choose to invest. You could lose you invested money, but you could also make money. I feel like when people talk about investing they equate it to throwing away money when it really isn't. If you invest and get a higher rate, you can still sell your investment and pay off your mortgage at any point.
Why pay off the house when he is likely paying 3-4% interest on it and can put the 100K into a mutual fund and earn 6-7% on it? All that interest on top is extra earnings... a ten year analysis would show him having a higher net worth in the situation I mentioned.
She will guide you on your trading or invest with her ...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..) Do well to tell her i referred you. She's my expert....
There's NOTHING like being free from a mortgage. Life is better and if you get laid off, you don't fret as much. I got laid off...but I had paid the house off early many, many years ago..so it didn't matter much.
Imagine though you were paying more each month to the mortgage and then got laid off before the house was fully paid off what do you do then. Another reason why it’s better to invest
The problem I have with him investing, is that he obviously has no idea what he's doing with money. He has 100k sitting in a bank account, that money should have already been invested.
@@jeffmorse5599 disagree completely. He can literally pay off his house today and invest 30-40% into retirement starting next paycheck. Why kick the mortgage down the road when you can X3 or X4 you’re retirement on your next paycheck.
@@TheMopar97 Because a mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early. Same reason he encourages paying 20% down to avoid PMI. If you have the money to put 20% down, you are far better off investing that money. The PMI typically falls off for people after 5-10 years. Worst case scenario, it has to fall off after 15 years. That invested money will have DRASTICALLY outgrown the piddly PMI amount you will have paid during that same time period.
Im curious, considering the gentleman has what seems to be a stable income and has a plan to pay off the house in 5 years, wouldnt it be more financially sound to invest the 80-100k now and then start contributing whatever is free from the paid off mortgage after 5 years? 80k invested for 5 years might be more than 20 invested + a paid off house at this point in my very novice opinion.
I understand Dave's baby steps and why he advocates them. He took on excessive risk and had real trauma. We had to invent the process ourselves because when we started Dave wasn't well-known. It really worked for us! But I also understand people with more risk tolerance balancing things differently.
Paying off the house with money you have in the bank is a great idea. Saving thousands of dollars in interest and the money is not gone it's equity in the property that you can get whenever you want.
God Bless this ministry of giving freedom from this modern day slavery created by the devil. Praying for you that feeling this heavy load to stay focus and encourage to keep moving forward.
New formula for show: 1: Caller asks question. 2. Guest host gives meandering, wishy-washy, vague answer. 3. Dave steps in and directly answers the question in a straightforward way, with better advice. I assume DR is trying to work on a succession plan for this hugely popular show, but it's pretty clear there's nobody who is going to fill his shoes.
She will guide you on your trading or invest with her ...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..) Do well to tell her i referred you. She's my expert.
She will guide you on your trading or invest with her ...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..) Do well to tell her i referred you. She's my expert.. ..
I've been really second guessing a 529 vs a Custodial account. Especially with the bath you'll take if the Kid doesn't (or doesn't need to) go to college, when you take that money out.
Claxton when my daughter was in kindergarten I put $200 a month into a 529 and had my then wife do the same. Also threw some extra into it now and then. So 16 years later have over $100,000 saved for her. Have not had to touch it fortunately because she goes to local branch of a major 4 year school. So lives at home (which she hates LOL!). So no room and board and gets $2000 per semester for being in an honors program. But she is hoping to get into med school (applying in april) if short of that, grad school. So that money will get spent and then some. If for some reason does neither (but not likely) I would have to pay tax on gains. But isn't much cause only earns like 4%. They keep those pretty conservative. You get your principle back. But a guy I work with told me he had trust funds for his kids and when they turned 18 turned them over so they could pay the tax or no tax or very little tax cause of their tax bracket. Perhaps you could do better then the 4%. Didn't think about this back then. Disappointed in people that don't believe in their kids when born thinking they aren't going to amount to anything so why bother. Even if you can only save a little they might be inclined to go if they know their is something their for them. I only went to a community college but still ended up a millionaire but got lucky and fell into IT before it even called IT. Like 42 years ago. Ouch. Oh well. Kudos to you thinking about this. And to vent a little, interest forgiveness on student loans for STEM I can go along with. French fabric technology in medieval times. No. And what do you tell this upcoming freshman class. Where is their break? But reality is feds make huge money off of the interest so not likely to ever happen.
Even if the kid doesn't go to school, it's still not a disaster. 529 accounts are transferable to other individuals, such as siblings, grandkids, or even yourself. Worst case scenario, pay the 10% penalty and pull it out. After all, it's additional money that you never figured on using in the first place, and most parents of college-aged kids would still have time to re-invest the money and get hefty returns before retirement.
Without paying off the house there's an immediate 80k to start investing with, but no extra monthly budget. With paying off the house, investing starts at zero, but there's a huge extra budget to invest every month. Pure math almost always favors investing while keeping the mortgage, especially if the rate is low/reasonable, and especially at young age. Psychology favors getting rid of the stress/risk (no you can't "just sell some investments when times are rough" because it'll most likely be at a stupid time to sell investments), having extra monthly budget, and seeing the number on your investments rise considerably every month. I'm doing a bit of both, but I'm nearing 40 and I can't just pay off the mortgage in one go at the moment.
@@ClaxtonBay123 This isn't most Americans though, this is the Dave Ramsey show where most people are more financially savvy. Paid off 100-200k house in mid 30s isn't a big deal when you don't have any investments. 500k by mid 30s or 1 mill by 40s is impressive and brag-worthy.
I think it’s important to know if the caller plans to stay in the home or upsize for his growing family. If they’re happy there, then paying off the mortgage might give him more peace of mind (though personally I prefer Rachel’s approach to invest). But if they plan on moving, then I don’t see the sense in paying off the mortgage. That money would be better invested elsewhere.
Yup. Knowing his mindset I knew he’ll interject right away.
5 месяцев назад
Instead of paying down the house faster I invested and doubled my investment in the past few years... Would I feel relief with a paid off house? Not really.
We 100 thousand, I’ll buy 2 properties of 500 thousand each and rent them and get passive income. When the girls are ready for college, sell the property and make $100,000 on each property
@@anadeibyV sounds risky. What kind of properties? Multi-plex apartments? I'm asking because I also have $100k that I'm still contemplating what to do with.
I personally see no problem with doing both. You can invest a little and pay off the house. Don’t miss out on the opportunity cost of investing while you are young. I also know that once my mortgage is paid off I will have that much more money to invest. I see the benefit in both, but I’m not going to all or nothing and miss out on years in the stock market.
@@markg999 Exactly. I’m only 26 and I just bought my first house. I’m working on aggressively paying off student loans, investing, and then I will get around to my mortgage once the student loans are eliminated.
I like Dave’s advice since this guy has the money to pay off the house, but if you can’t pay it off in full then I think doing both is a good solution. It doesn’t have to be all or nothing.
I don’t know man. My mortgage interest is less than 2% My portfolio has been returning 10%. If I paid down my house instead of invested, my current networth would be a lot less.
@@matttzzz2 dividend stocks are what I invest 80% of my income in, you also have to do your own research to gain knowledge about what to invest in also.
Just paid off our house and it is a great feeling of security more than anything because it took us 25 years to do it. I wish I paid it off early but again Life came in the way, I am in my late 50's and wife in her late 40's but we have an amazing home fully equipped for the way we like to live. You see it's not all about accumulating wealth there must be goals for what you want in Life, after all you only get 1 shot at this Life so only you can decide because you are Unique.
There are multiple reasons. Caller is obviously not an experienced investor. There is a high chance he will loose money if he tries to invest 100k. Therefore it's very good advice to payoff early and then learn to invest.
On what planet is this guy gonna have $5-7M with only investing 15% of $60k. That’s only $9k a year. At 10% for thirty years that’s $1.5M. Even at 14% returns that’s only $3M. Dave, I love you brother. Don’t lie to people!
Rachel gave the baby steps and Dave didn't. I rarely see the guest give advice consistent with Dave's. Kinda makes the Dave+guest format hard to watch.
In 2010, houses in my subdivision sold for ~$40K. ~$10K down, $175/mo It was a true Shark feeding frenzy. 5 people bought 30+ homes My home will sell this year for +$300K. I will go to Rural USA and buy a $100K home.
There is a point in the mortgage where there is very little interest on it. At that point, don't pay off the house, fund retirement due to time value of money.
He is in a really good position. I honestly think though he would come out ahead if he invested the $100k into the S&P. If he does that now, by the time he is 64 that $100k investment will be about $1.7 million. Plus he can still pay off his house over the next five years like he talked about.
Really appreciate the calls from people making actual money, not $200k+
Yes...agreed!
Need more 36k-50k a year calls. We can all relate to around that amount
For real
Depends where you are. My gf and I are 28 and 26 in no and combined we make 205k and she is set for promotion in July which should bump us up another 15k or so.
That's funny, I would not call it actual money until $200K+ LOL
I paid my house off at 43, and it freed up $3000 a month to invest every month. Best decision I ever made.
Would you do the same if it was only 1300 a month
@@Imhere12345 always
There are some folks who would argue that he should invest, instead of paying off the house. But the simple truth of it is, he's not doing that and just holding cash. Why? Probably because he can't mentally get around investing while he has to pay the mortgage. If paying the mortgage off gets him to be more flexible with his money, then it's the best thing for him.
Good point!
I think financially it's the Smartest move too, but yes your comment was great. Paying off the house will have so many psychological benefits that will allow him to do better with his money.
Paying off the mortgage is a guaranteed saving the interest that will be owed if he did not pay it off. Investing in the stock market or mutual funds is not guaranteed return and could lose value. Then there is capital gains tax if he did make something.
I agree. I would invest 100k and continue to make the payments. The interest on the investment would be much greater than the interest that’s owed on the house. He’d never catch up to investing. Example. Invest 100k for 30 years at 10% interest a year and contribute just $150 a month to it he would have 2 million. But do what Dave said and start at zero and invest 9k a year for 30 years and same 10% interest and have 1.48 million. You lose out on 500k
Right to the point. Not everyone knows how to invest or doesn’t want to get into it as it’s not their cup of tea.
Wow 60k salary and a paid for home at 34. He's in the top 10% and doesn't even know it
He just lives in Tennessee is all. Easy when there's hardly any property tax, no income tax, and you can get a nice house for not much more than 100k lol I'm thinking about moving there myself.
@@user-jy7yw5kw3w texas probably better bet.
@@devoywilliams3956 too hot, and property taxes too high for my taste.
Sad part about people moving in to Tennessee from other areas actually believe raising property taxes are in order. It's unreal
@@user-jy7yw5kw3w come to Arkansas. My property taxes are only $700.00/year! My nice house is paid off. It's wonderful.
Did the caller say he's 34 years old. He sounds like he's 70. Just wondering
He said he's 34, while the video title says he's 32. His wife was 32 and she wasn't on the call.
As a 32 year old...yeah I thought he was over 50 based off his voice.
@@aliciahunt2608 Looks like there was a typo in the video graphics. The caller is 62.
@@costco_pizza he said he’s 34
He’s 42, the phone call adds 10 years
I’m on pace to pay off my 15 year mortgage 10 years early. By early 2022 I will be completely, utterly free of all my debt including the mortgage. I love seeing that remaining principal amount and interest paid number get smaller and smaller every month.
Can’t wait to kick the bank out of my house!
Your rich!
Yo!!! I want an update. Did you pay it off bro?
Did you pay it off???
3rd person here asking, did you pay it off???
This guy just went through all of his baby steps in 1 call. Well done!
I knew IT! I knew Mr. Dave was going to change Rachael’s response to the caller.
I was surprised at her response, I knew Mr.Ramsey would say pay off the house.
Just pay off the house already and immediately start a Roth IRA, now if I could just figure out how to have 100,000 laying around
Thank you!!
Wrong answer you invest the lump sum and it sets you up nicely
Why do people call in with questions like this? Dave is NEVER going to suggest building wealth while having debt. Never. It’s not his formula.
People call for Advice. That's why he called.
That's because he's all about security. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
@@seanfatzinger there is that and the fact that Dave knows he has to dumb down his program to the lowest common denominator.
@@seanfatzinger It's about managing risk. Paying off your mortgage is a GUARANTEED 3% return. There are no guarantees with the stock market. Yeah, it might go up -- but it might go down too.
It's a great *feeling* to pay off your house. But smarter people are not ruled by emotions and feelings. They know how to do math and math tells you not to forgo retirement savings in favor of a low interest home mortgage.
Yeah. In your case, I'd pay off the house today like Dave said and then start funding your retirements like it's on steroids. You still have 30+ years to invest. Just don't forget to do something fun and enjoy life along the way.
Great point!
Would you do just 15% or more?
30 years to invest, becomes the default justification to delay investing. But life is mortal. People die. Our goal while alive should be to get as much unearned income as possible, as fast as possible. A secondary goal is property ownership. Financial freedom is a much higher priority, than owning a residence.
@Jarod Armstrong Agreed!Renting allows flexibility to move for higher wages. When we no longer need earned income, and we want to stop traveling, then we buy.
15% for retirement, is that before tax or after tax? Sound like a lot to me
Everything was relatable to me until he mentioned he had 100k saved up. Lol
Lol
I mean it's easy to have that amount if you're 32 and literally never invested anything. He should have started a roth IRA and his 401k years ago and his net worth would be double. Keeping that much in savings is a rookie mistake.
@@ImTaylorGang massive mistake by have that much cash uninvested on hand
@@ImTaylorGang jealous much😂😂
@@memes4life231 no, I have more thanks to beginning my long term investments at 23 when I kicked off my career. not sure you read my comment correctly.
Paying off houses feels so good! I know I have done it twice!!! I am 31! Thanks dave and rachel and of course the Good Lord!!
Nice, I did it at 33.. wish I did it even sooner
Wow, Two homes paid off by 31. Great job!
Damn I'm 33 and haven't 😢
Dave for getting out of debt. The Money Guy for building wealth.
Mathematically, Dave's snowball method isn't best. It is only for psychology.
The Money Guy?
@@harisadu8998 Dave acknowledges how the math works out. But he believes the psychology matters because it will encourage you and you will be more likely to succeed. He advocates a plan that is easy for many people to follow, but not mathematically ideal in a risk neutral scenario.
Dave if you can't stay out of debt. The money guy if you can.
MONEY GUY SHOW IS THE BEST 🦾🦾🦾🦾
Paying off the house will give you a sense of financial freedom and peace!
Only a "sense", though. Math doesn't lie.
@@superblump87 fluctuation doesn’t either
@@superblump87 Neither does risk.
Doesn’t matter. This kid can do both, sounds like. You can’t invest more than 6k/year in an IRA anyway. Pay off the house. Start investing as early as possible. Pay off the house and look for other investment avenues if you have all that extra disposable income.
@@jimroscovius there is zero risk if you invest in index fund. you could only lose your money if you invest in individual companies
Paying off a house must feel like paying a car off but X10 better
True that, feels so freeing.
Paid mg car off a couple if months ago. Feels nice to not have that payment anymore! 💯
I just buy cars cash because they depreciate and it's not worth spending much of my net worth on a car.
And when you learn how to fix it on your own car and house it’s X1000 better!
@@cecilleflowerfarm 100%!
He’s got a lot of good options because he’s made some good, difficult decisions up to this point!
You are so right!
I wish I had paid attention to channels like this when I was younger. This channel is really helpful.
And I am 59 now. owe 70k to house, saved a little money in bank and no other investments and retirements. I wish I had advice and come across him earlier.
Mortgage rates are at all time lows, it is not the best move to pay off a house right now instead of investing that money. I understand the debt free mindset, however, interest rates are too cheap to be paying off any mortgages right now. Regardless, congrats on being in a position to do so
Yep he should have contacted me $80k earlier, lol. What a waste of potential.
Also should capture a low rate through refinance if he hasn't already.
407k mortgage at 2.82%. Invest or pay off the house?
@@lukem5962 invest.
@@kartboarder22g17 invest in what though.
Paid off my primary residence in 2016. No regrets so far.
If you took that same amount and invested in amazon in 2016..... Kidding. Good job!
@@randymorrison1761 exactly. but your know 90% of American people are focused on paying debt off
@@narutovskiba88 seems to me a good half of America doesn’t seem to care about debt at all.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.
Hi. I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second child. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks
@@lennoxmutterick6434 However, if you do not have access to a professional like Clementina Abate Russo, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments.
@@MathewOliver486 Oh please I’d love that. Thanks!.
@@lennoxmutterick6434 Clementina Abate Russo is her name.
Lookup with her name on the webpage.
The math says you should invest however, your mental health is worth something. Paying off your house can be a huge thing as far as freeing your mind and finances up to growth opportunities.
This guy should not invest, simply because he doesn't know what he's doing.
Having 100k in a bank account is a big red flag to me and tells me they need a financial advisor before investing any of that money.
He's better off paying off the house and then investing IMO, he's going to be behind what he could have if he invested it all, but he has less of a chance of destroying his finances by poor investing decisions.
You down here in the comments of all the videos I watch.
@@SchroederSport Well he does have his own page to promote
Only death will free up the mind, theres never peace, theres only temporary treatment, no cure
@@johndone8045 creep
Prior to caller, Dave looked at Rachel and said “how bout you take this next one, sport?” Rachel then gives advice which Dave butts in and contradicts LOL CLASSIC DAVE
I was shocked by her response. The guy has 100k and owes 80k. And the guy and his wife are working. Pay the house off and invest every dime going forward. You don't need to be a financial "expert" to figure this one out.
@@Scott-nj9gq 100% agree with you. I was highly surprised with her advice. That just shows that you don’t always act or think the way you were raised. But I do remember her saying she has a spender type of personality. The baby steps clearly say to get out of debt before investing. The house is debt haha.
@@Scott-nj9gq I know baby step 2 says “except the house”, but in this man’s case, he can afford it and still have 20k left over. He should definitely get out of his debt because he’d still be well off, not dirt poor again.
He said that's good advice but let me tell you what you should do.....lololol
Her advice is better : the longer the money is in the market, it will beat any interest in mortgage.
Its sad that he gives such advice that is really shortsighted
Agree with Rachel’s advice...I would not just pay completely off my house with no investments...a dollar today is worth so much more tomorrow especially now. He can definitely do both and get both accomplished eventually...!
I'm 34 and just paid off my house in January. It feels good. A whole lot of hard work but it was worth it....
Do you ever second guess it?
Dave contradicts Dave. Dave says a good mutual fund pays 12% a year but you should instead get 3% by paying off the mortgage. Over 30 years Dave is preventing a ton of wealth creation.
You get it. This video is 3 years old now. If he put 80k in VOO back in 2021, he’d be sitting at 122k today. He’d still have to he 20k in his savings and 2 years left on his house.. bad math by dave
never been this early but love this show, from the UK, hope everyone is well on the other side of the pond.
It's not. Our country is pretty much falling apart, but thank you for the well wishes! You stay healthy over there.
@@trailrunnah8886 Once you turn off the news, things aren’t so bad
Things will start to get much better on January 20th! Thanks for the well wishes.
Times are tough on both sides of the pond, but I think our countries have been through worse. Wishing you well in the UK!
@@johnrandom3903 Our economy doesn't get better because you close your eyes. You're what's wrong with America.
Rachel is right. Dave says people aren't mad about paying their house off early, but people would be mad if they realized how much time value they lost by not investing in their retirement just to pay off their amortized house early.
What is your Net Worth Subzero?
Math: you'll have more money if you invest it
Emotional: you'll have more peace of mind if you pay it off
Thanks for putting it that way. I needed to see this comment. All my friends are investing and it’s tempting to do the same. But I want to be the only one who doesn’t owe anybody while risking money.
Math ; you may also have less money if you invest it. Not every stock investment pays off. Only on youtube it appears nobody losses anything while investing.
@@Alwaysbeclosing1774 that’s if you do some single stocks or sell early. If you invest for the long term in something like a S&P 500 index fund as long as you hold it for the long term you can lose.
@@Alwaysbeclosing1774 Yes, you could lose money. Its what stops many people from investing. Yet somehow many business take out loans everyday to expand their business and make more money.
Yes there is a risk, but there is also a reward. You have to decide whether you are comfortable with the risk. Those who end up succeeding are the ones you see on RUclips saying they did what everyone else didn't do.
You could lose a lot, but you could also gain a lot. I'm currently taking risks right now. I've watched my investments lose money since the start of the year. However, I haven't had to sell any of them so I technically haven't lost anything as yet. I'm also still investing despite the losses.
Math : think of a number
Emotional : Sleep at night in your own home
On average one would expect in say 20 years he'd be wealthy having had invested the money, but in the shorter term it may prove otherwise
as long as the caller doesn't consume the money, investing or paying down debt will result in more wealth for him.
Black vito!! Millennial money! Hope all is well bud
Yea or a year or so holding the right cryptocurrencies. Then moving it to something with lower risk like mutual funds.
Glad he jumped in because his clarity to the customer was needed.
Dave’s exactly right. Not having any debt payments gives you a lot of room to use for investing and saving. Good advice Dave!
I always like to think of it as, what is my price of freedom(from debt or anything else)!
Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
Dave advises people to pay off the mortgage because of the emotional peace it gives people, not because it’s the best investment strategy. There’s a huge difference if this guy invests 100k now compared to only 20k (if he pays off his mortgage), and that will likely be several hundred thousand dollars difference in 30yrs when he retires.
Putting that money into maxing 401ks and IRAs also gives a lot of room to invest.... I'd lean towards maxing out the retirement post-tax (absolute max of paycheck allowed going into 401k) and drawing living expenses from the savings, maxing both Roth IRAs from the savings, if you are close to end of the year doing that again at the beginning of that year, then taking anything lwft above 15k or so and putting it towards the house. Then do 15% into retirement while paying off the house ASAP, but I'd get as much of that money into retirement as quick as possible. Had they done that originally instead of 100k in the bank they would have 15k in the bank and 150-200k in retirement (if it was invested of coursel. Then again, if it was invested instead of in the bank they'd have about the same outside the IRA.
Listed kids, saving is good to a point, but INVESTING is what will let you retire or become rich. Its difficult to save your way into wealth. Not impossible, but difficult. Its easy to invest your way to wealth, especially if you start in your early 20s. Even $400 a year turns into 200k or so by age 70. Strive for an absolute minimum of 1-2k a year with 5k a year being better. Donthat from age 21-35 and your retirement will be great (so long as you dont do something dumb like pull it out or keep it all in "safe" funds the whole time).
@@seanfatzinger Agree totally with your point.
Both great advice. Initially I was thinking pay off the house too. he’ll be free to build wealth quickly with no ball and chain called debt.
Agree. To me it’s a no brainer, why put 15% towards retirement and kick the can (mortgage) down the road for 5 more years, when you can pay it off today and invest 30%+++ in retirement starting next paycheck! No brainer
Well compounding growth in your early 30s would create more wealth in the long run by using that 80k, however from a peace perspective a paid for home is amazing.
@@alexr3950 exactly I agree with her more than dave, its more upfront but longterm you're losing out
Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
@@seanfatzinger The way a mortgage is amortized makes it a terrible deal for the borrower, regardless of the low interest rate. I'd payoff the house immediately if I were in this caller's position.
I saved up and paid cash for my house(lived at home and worked as much overtime as possible and saved like crazy). Best decision I ever made for building wealth. I hate being at the mercy of landlords raising the rent whenever they feel like it.
Great ideas don't even trade without investing with an experience expert or.. Signing up for mentorship
You're right sir trading without an expert or mentorship blow your entire account off
How old are you
We bought because we wanted a place of our own and also because of yearly rent increases. We should have bought sooner.
Wow this man sounds like he’s at least 60
He's probably lived a lifetime with 2 kids already.
@@TraumaER There was a typo in the title. The caller is 62.
@@costco_pizza 【ツ】
He’s just that advanced financially!
I thought the same.
I would pay off the house because THAT is the ULTIMATE ASSET and POTENTIAL INVESTMENT/Future Capital Source Option. Nothing beats it. And it is the ultimate necessity of life
If I had paid my house off instead of investing this year I would have a paid off house. I invested instead and now I can pay it off then buy 4 more of them with cash. I disagree with Dave.
you’re right. but this guy has no idea about investing, so for low financial intelligence people it may be the better move. and that’s most of his callers.
Wow, you must have had a lot of capital. I made a 24% return on stocks this year but nowhere near enough starting capital to change too much
Yes but many don't want that. He already has a job and likely doesn't care if he makes the absolute most possible.
@@ianrobinson4200 not a ton of capital but my cost basis on tsla is about 70 dollars per share😀
Not everyone is good at investing. I’ve seen a couple of people try doing investments, who didn’t know what they were doing and actually lost all their savings and put themselves into further debt.
One thing I find it is interesting is how people don't talk about some of the reasons to pay off your house early. I don't even hear Dave Ramsey talk about how paying off your house really saves you a huge amount of interest. why don't people talk about that? Especially if you have the cash to pay it off in full. Which I have heard several callers say they would be able to do. to me it's just a no-brainer. Not only does this caller have the opportunity to be able to pay off their house in full. But they still have 20,000+and savings after that is done. The peace of mind of having your house paid off is worth every effort to get it done early. I know. I've done it.
He has talked about it in past videos.
He would make more investing the 100k
This is what separates Dave Ramsey from everyone else. If you have the money to pay off the home do it.... debt free for life🤙🏾
I think that if you stick to the same strategy when times change you are bound to become different. If i stick to a car that drives on gas while everyone drives an electric vehicle i'l be Unique too. If i stick with a landline while everyone uses a smartphone il set myself apart from the rest of the bunch. Just a different way of saying that his advice is about 30 years outdated.
Only if the numbers work out. It's a case by case basis. This caller will probably benefit with paying off the remaining balance of the mortgage and have enough to invest in his 401k / ROTH IRA and still live comfortably.
If some has no debt, but makes $25K a year, has a wife and 3 kids, no other savings except $10K in the bank, putting the $10K towards paying off the mortgage today would be unwise, especially with no emergency fund and no savings of 3-6 months of expenses. He would have to work on the baby steps, and possibly get to where he is putting extra towards the mortgage loan principal amount. Again, it's a case by case basis.
Dave is so consistent on his message.
Compounding interest compounds faster that fixed interest accrues.
Investing > paying off mortgage
I love when Dave makes people mad, because when he does, he is usually right.
Who did he make mad, other than perhaps his co-host which he disagreed with.
Before the pandemic I would have agreed. Now I think I'd pay 1/2 of house down, refinance it to small payments & save more cash. Health emergencies are very expensive.
I’ve listened to this several times. It’s so awesome and I’m so happy for this couple.
I sorta think the college savings is outdated or soon to be outdated advice. I mean, go ahead and save but don’t get it wrapped up in accounts that force you to use it on college.
Studies would likely show that kids who have their college paid for don’t know much about the cost vs return of things.
Depends. I wasn’t told my college was going to be paid (through a 529) for until I’d already looked and applied to colleges so I still picked a smart major and school that wasn’t extremely expensive.
Unfortunately, starting back in the 1980's, we were all fed the idea that if you didn't get a college degree you were doomed to be a loser. At least that's what they were pushing in my High School.
You can make the choice whether you want to save for your kids college that’s up to you. But here’s why a 529 is good. If they go to college you get growth money tax free and can use it. Even if they don’t go to college all it is is you have to pay some taxes on it just like other stuff or you can not withdraw and let them have it for their kids or somebody else in your family
With 100k in the bank and 80k left on the house. I would pay off the house right now then start investing right away
Great spot to be in here
Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
@@seanfatzinger you already said that this video
You would also end up a lot worse off in the end than if you did the reverse. The feeling of being mortgage free is a perk, but all things being equal you will be worse off financially in the end. Not a debatable fact.
@@mastermind6767 Not debatable from a financial perspective. But again, everyone has different goals and desires. For some, security is paramount to everything.
I don't know how Dave got 5 to 7 Million Dollars in 35 years? Between a 7 to 11 percent ROI, I see his family at 1.5 to 3.5 Million Dollars. I feel like that is Dave's go-to number no matter how much the person makes or has in retirement. Do I have to send you an HP 12c, Dave?
Agree! It irks me when I hear Dave throw out bloated numbers. Yes Dave, you will be “half wrong”!!!!
Dave has always based his calculations on 12% growth, and his 15% guideline calls for 15% of the gross before taxes not take home.
@@SonnyBubba Dave’s numbers are wrong here even with a 12% return which is high it would e less than $5 million
im 31, mrs is 32 from Melbourne AUS. Will have our 480k mortgage paid off by start/early 2027. We took out the loan end of 2019. We are not investing until that time, possibly never. Our first priority was always to pay off our house as soon as possible - second hand fully paid cars, no international holidays etc until then.
Don't invest when you're so close. The best feeling on the planet is owning your own home fully, and not being a slave to the big banks, and we are so close i can feel it.
Paying off your house saves you expenses. While you’re not generating income with the capital you used to pay the house off, you’re lowering expenses, interest expense, that is. If you pay 600 a month in interest and remove that expense, it’s almost the same as generating 600 a month in income.
Well said!
Very true, but its a bit different if you choose to invest. You could lose you invested money, but you could also make money.
I feel like when people talk about investing they equate it to throwing away money when it really isn't. If you invest and get a higher rate, you can still sell your investment and pay off your mortgage at any point.
Why pay off the house when he is likely paying 3-4% interest on it and can put the 100K into a mutual fund and earn 6-7% on it? All that interest on top is extra earnings... a ten year analysis would show him having a higher net worth in the situation I mentioned.
She will guide you on your trading or invest with her
...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..)
Do well to tell her i referred you.
She's my expert....
RUclips search "Dave Ramsey why pay off debt if i can invest at a higher rate" and really LISTEN to those clips
Good that he is thinking about this and looking to get out of debt!! Should still definitely put money into a ROTH right now tho
There's NOTHING like being free from a mortgage. Life is better and if you get laid off, you don't fret as much. I got laid off...but I had paid the house off early many, many years ago..so it didn't matter much.
Looking for a comment such as yours. Thank you!
Imagine though you were paying more each month to the mortgage and then got laid off before the house was fully paid off what do you do then. Another reason why it’s better to invest
*Personally I would invest because of the opportunity cost*
And he's only 32 ❤️
That's why ur not a millionaire.. lol
The problem I have with him investing, is that he obviously has no idea what he's doing with money. He has 100k sitting in a bank account, that money should have already been invested.
@@matttzzz2 stock market
🏡
@@matttzzz2 Total market / SP500 ETFs.
pay off the house! Since the kids are very young you don't have to worry about college yet. u don't know i they even want to go or not.
Although I lean towards the invest option, I would confess it's like trying to pick between two right answers.
I would rather do a utma account instead of a college fund. As you say, the kids may not want to go to college.
Hence, DAVE the GOAT 🐐 .. guy just sees it from way up there!!
Did Dave just disagree with his co-host?
It's not a new thing. Sometimes he doesn't agree.
She is smarter than Dave at least when it comes to this answer.
@@jeffmorse5599 disagree completely. He can literally pay off his house today and invest 30-40% into retirement starting next paycheck. Why kick the mortgage down the road when you can X3 or X4 you’re retirement on your next paycheck.
He constantly has to give a better answer than Rachel. I can’t stand when she is on
@@TheMopar97 Because a mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.
Same reason he encourages paying 20% down to avoid PMI. If you have the money to put 20% down, you are far better off investing that money. The PMI typically falls off for people after 5-10 years. Worst case scenario, it has to fall off after 15 years. That invested money will have DRASTICALLY outgrown the piddly PMI amount you will have paid during that same time period.
Got linked up to her from LinkedIn never knew her here she's a genius
I wont pay the house in one payment. Especially if the interest rate is low.
Why did not you ask him about the interest rate??
Exactly
Im curious, considering the gentleman has what seems to be a stable income and has a plan to pay off the house in 5 years, wouldnt it be more financially sound to invest the 80-100k now and then start contributing whatever is free from the paid off mortgage after 5 years? 80k invested for 5 years might be more than 20 invested + a paid off house at this point in my very novice opinion.
@45 HDS No doubt, im just thinking about the optimal course of action in this scenario. This dude is already miles ahead and will be fine regardless.
I understand Dave's baby steps and why he advocates them. He took on excessive risk and had real trauma. We had to invent the process ourselves because when we started Dave wasn't well-known. It really worked for us! But I also understand people with more risk tolerance balancing things differently.
Paying off the house with money you have in the bank is a great idea. Saving thousands of dollars in interest and the money is not gone it's equity in the property that you can get whenever you want.
Why give the bank money when you can invest it instead.
@@jimroscovius Your not giving the bank anything, you are ending the loan and the interest on the property.
@@jimroscovius you give the bank money when you pay interest...
@@superblump87 Right - that's why I pay off the house. I don't want to give the bank money.
@@jimroscovius ah, got it. The way you worded your comment made it seem like the opposite.
dave killed the execution. lady approach was delayed
God Bless this ministry of giving freedom from this modern day slavery created by the devil. Praying for you that feeling this heavy load to stay focus and encourage to keep moving forward.
New formula for show:
1: Caller asks question.
2. Guest host gives meandering, wishy-washy, vague answer.
3. Dave steps in and directly answers the question in a straightforward way, with better advice.
I assume DR is trying to work on a succession plan for this hugely popular show, but it's pretty clear there's nobody who is going to fill his shoes.
I belive he should not pay the house, since the interest rate in that loan in the best you can get!!!. He should invest
She will guide you on your trading or invest with her
...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..)
Do well to tell her i referred you.
She's my expert.
Do BOTH......make those extra payments onto the principal....and continue investing. I did - it worked out well.
She will guide you on your trading or invest with her
...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..)
Do well to tell her i referred you.
She's my expert.. ..
I get the feeling Dave is grooming Rachel to replace him... she is getting close ... but notice his advise was a little different.
I really don't think you can go wrong here. Invest in your future and keep going strong.
I've been really second guessing a 529 vs a Custodial account. Especially with the bath you'll take if the Kid doesn't (or doesn't need to) go to college, when you take that money out.
Doing a custodial account for my kids
Claxton when my daughter was in kindergarten I put $200 a month into a 529 and had my then wife do the same. Also threw some extra into it now and then. So 16 years later have over $100,000 saved for her. Have not had to touch it fortunately because she goes to local branch of a major 4 year school. So lives at home (which she hates LOL!). So no room and board and gets $2000 per semester for being in an honors program. But she is hoping to get into med school (applying in april) if short of that, grad school. So that money will get spent and then some. If for some reason does neither (but not likely) I would have to pay tax on gains. But isn't much cause only earns like 4%. They keep those pretty conservative. You get your principle back. But a guy I work with told me he had trust funds for his kids and when they turned 18 turned them over so they could pay the tax or no tax or very little tax cause of their tax bracket. Perhaps you could do better then the 4%. Didn't think about this back then. Disappointed in people that don't believe in their kids when born thinking they aren't going to amount to anything so why bother. Even if you can only save a little they might be inclined to go if they know their is something their for them. I only went to a community college but still ended up a millionaire but got lucky and fell into IT before it even called IT. Like 42 years ago. Ouch. Oh well. Kudos to you thinking about this. And to vent a little, interest forgiveness on student loans for STEM I can go along with. French fabric technology in medieval times. No. And what do you tell this upcoming freshman class. Where is their break? But reality is feds make huge money off of the interest so not likely to ever happen.
Even if the kid doesn't go to school, it's still not a disaster. 529 accounts are transferable to other individuals, such as siblings, grandkids, or even yourself. Worst case scenario, pay the 10% penalty and pull it out. After all, it's additional money that you never figured on using in the first place, and most parents of college-aged kids would still have time to re-invest the money and get hefty returns before retirement.
Without paying off the house there's an immediate 80k to start investing with, but no extra monthly budget.
With paying off the house, investing starts at zero, but there's a huge extra budget to invest every month.
Pure math almost always favors investing while keeping the mortgage, especially if the rate is low/reasonable, and especially at young age. Psychology favors getting rid of the stress/risk (no you can't "just sell some investments when times are rough" because it'll most likely be at a stupid time to sell investments), having extra monthly budget, and seeing the number on your investments rise considerably every month.
I'm doing a bit of both, but I'm nearing 40 and I can't just pay off the mortgage in one go at the moment.
Wow this guy is in amazing shape! Good for him!
Love comments like these over the usual “he just called in to brag” comments!
@@NicE-jq3wv 100k in your mid 30s isn't much to brag about, especially when you don't know how to invest lol.
@@Lolatyou332 Depends where you live.
@@Lolatyou332 it is a lot to brag about he's in a better position than MOST Americans
@@ClaxtonBay123 This isn't most Americans though, this is the Dave Ramsey show where most people are more financially savvy. Paid off 100-200k house in mid 30s isn't a big deal when you don't have any investments.
500k by mid 30s or 1 mill by 40s is impressive and brag-worthy.
“That’s great” condescending 😤😅😜
2:06 “You’re in a fantastic position on paper”??? No - he’s in a fantastic position in cash, not paper.
Yup, he needs to invest that money now.
I think it’s important to know if the caller plans to stay in the home or upsize for his growing family. If they’re happy there, then paying off the mortgage might give him more peace of mind (though personally I prefer Rachel’s approach to invest). But if they plan on moving, then I don’t see the sense in paying off the mortgage. That money would be better invested elsewhere.
She keeps nodding but Dave told him to do something completely different than she did.
Yup. Knowing his mindset I knew he’ll interject right away.
Instead of paying down the house faster I invested and doubled my investment in the past few years... Would I feel relief with a paid off house? Not really.
FBC fund and their algorithm is the best, there is no point in arguing with this
Does anyone know why there are two hosts sitting at the desk on this show these days instead of one? I personally prefer Dave by himself.
Dave is training them to replace him someday, I think. I prefer Dave by himself too though. Other personalities just don’t match him.
She didn't answer the question . This is why Dave kicked in and gave sound and sensible advice with precise instructions. Rachel is rambling.
Im also 32 and this came out just as I was contemplating this very issue 🙏
Same. Definitely invest.
We 100 thousand, I’ll buy 2 properties of 500 thousand each and rent them and get passive income. When the girls are ready for college, sell the property and make $100,000 on each property
@@anadeibyV sounds risky. What kind of properties? Multi-plex apartments? I'm asking because I also have $100k that I'm still contemplating what to do with.
Go broke quickly doing that.
Do both.
I personally see no problem with doing both. You can invest a little and pay off the house. Don’t miss out on the opportunity cost of investing while you are young. I also know that once my mortgage is paid off I will have that much more money to invest. I see the benefit in both, but I’m not going to all or nothing and miss out on years in the stock market.
Sort of what we did...like 8+ years ago we invested Strong and around 2 years ago pulled out money to pay off house.
@@markg999 Exactly. I’m only 26 and I just bought my first house. I’m working on aggressively paying off student loans, investing, and then I will get around to my mortgage once the student loans are eliminated.
So your in debt giving advice to someone who is debt free and has cash to invest? Sorry, not listening to you. Find another channel
I like Dave’s advice since this guy has the money to pay off the house, but if you can’t pay it off in full then I think doing both is a good solution. It doesn’t have to be all or nothing.
@@rachaelv1140 You don't understand how it steals your wealth. Debt does that ,even when you sleep
I don’t know man. My mortgage interest is less than 2%
My portfolio has been returning 10%. If I paid down my house instead of invested, my current networth would be a lot less.
Exactly DON’T pay the mortgage off
there is a lot more to money, and especially financial peace which is what Dave teaches, than math
Cash Flow: The movement your money makes as it disappears down the toilet.
what?
Haha
Everyone says to invest, but nobody tells you how to
Pay it off Zach, at 32 your still young and to start investing and end up a multi-millionaire.
Everyone here says "invest" but no one says what to invest IN. Stocks are like gambling. You DONT KNOW how they will go, up or down. Invest in WHAT?
@@matttzzz2 dividend stocks are what I invest 80% of my income in, you also have to do your own research to gain knowledge about what to invest in also.
@@josephcoatofmanycolors what stocks are those specifically? Sell or buy? You manage them yourself or hand your money over to a money manager?
He is 34! just to let you know.
@@bitkamp9215 still young
This doesn't make sense. Rachel says to invest for retirement and Dave says pay off mortgage because of feelings.
“Better than I deserve” 🤟
Just paid off our house and it is a great feeling of security more than anything because it took us 25 years to do it. I wish I paid it off early but again Life came in the way, I am in my late 50's and wife in her late 40's but we have an amazing home fully equipped for the way we like to live. You see it's not all about accumulating wealth there must be goals for what you want in Life, after all you only get 1 shot at this Life so only you can decide because you are Unique.
The fact that they didn’t even ask what the mortgage rate is pretty bad. If his mortgage rate is 2.5% there is no reason to payoff early
There are multiple reasons. Caller is obviously not an experienced investor. There is a high chance he will loose money if he tries to invest 100k. Therefore it's very good advice to payoff early and then learn to invest.
On what planet is this guy gonna have $5-7M with only investing 15% of $60k. That’s only $9k a year. At 10% for thirty years that’s $1.5M. Even at 14% returns that’s only $3M. Dave, I love you brother. Don’t lie to people!
pay it off
Rachel gave the baby steps and Dave didn't. I rarely see the guest give advice consistent with Dave's. Kinda makes the Dave+guest format hard to watch.
Mortgages are financial killers...Definitely pay off the mortgage
Even more so are car payments. Zero return
Invest! You need time for your money to compound. Especially for a larger investment of 80-100k.
That’s a Pittsburgh number but Dave’s in Tennessee.
Nice to have a normal caller who is in a great position for once. No house payment in his 30s is the dream.
agree
In 2010, houses in my subdivision sold for ~$40K.
~$10K down, $175/mo
It was a true Shark feeding frenzy.
5 people bought 30+ homes
My home will sell this year for +$300K.
I will go to Rural USA and buy a $100K home.
There is a point in the mortgage where there is very little interest on it. At that point, don't pay off the house, fund retirement due to time value of money.
Some of these callers are suspect on this show
He is in a really good position. I honestly think though he would come out ahead if he invested the $100k into the S&P. If he does that now, by the time he is 64 that $100k investment will be about $1.7 million. Plus he can still pay off his house over the next five years like he talked about.
The peace of mind of having a paid off house is priceless, even if some may argue you can earn more if you use the money to invest.
U can have your “peace of mind” while I have more money. And with more money if you ever feel like it you can pay it off early
I was skeptical at first but after getting referred by my aunt i had no cause to be worriors anymore
Spam fail