Get A 15 Year Mortgage Or Save To Buy A House With Cash?

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[@apt62]

I bought my first house for 250k during the recession it’s worth 550k now. If I waited 10 yrs to saved up 250k I would hv to pay double.

[@nealp885]

Wade H yes but he said he would be buying in a rural area so to count on any significant appreciation wouldn't be that smart.

[@pmbarro]

Yea but the market it high right now so his situation of different today. He should save now and buy when the market drops again.

[@khwajaabdullah5199]

If you had waited, you would have made three times the money since you would have been 'free' of the payment pressures and all the other obligations that come along with borrowing ... and you'd probably have 2 houses by now.... Being not in debt gives you the freedom to explore evenues, and increase wealth..... That's what Dave meant...... Sometimes it's beyond maths

[@djflash7503]

Wade H your going to pay double for the house anyway if you have a mortgage. Read your mortgage note. One thing Dave doesn’t talk about.

[@apt62]

Depends on the interest. Back in 2011 15 yrs was only 2.5%.

[@ayc1997]

When I’m in the mood to make dumb financial moves, I listen to Dave first. Helps me to get rid of those thoughts

[@RickyandGandi]

I am going to do the same.

[@2012misspink]

Right ! He saved me a lot of money and trouble !!!

[@philos_theos]

Same here

[@swaugertim]

That's what he's there for.

[@zzzarkka]

Not just Dave. The people that call make me feel better tbh.

[@frenchyalicea649]

Currently im working +100hrs a week determined to pay my debts and everything off. It feels like itll never happen and really tests my fortitude and belief that ill get there...but step by step im trusting in the Lord.

[@luisvargas1520]

Anything you put your head to you can accomplish, it’s just a matter a consistency. Keep doing it bro💪🏼

[@camerontheboy]

How you doing, man? How much debt left? How much did you have? You’re killing it.

[@Dflonn]

Keep on pressing on.

[@aurelfrancis]

100hours , I hope you making like 10k per month.

[@speakingtruth9924]

Frenchy Alicea hope your doing well, remember you can do all things through Christ who strengthens you

[@ChristopherAbelman]

I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?

[@JosephineKenney]

"Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close a deal." All the best, buying on sale is actually one of the best ways to invest in stocks, and advisors are ideally suited for such task

[@FinnBraylon]

Until the Fed clamps down even further I think we're going to see hysteria due to rampant inflation. If you are in cross roads or need sincere advise on the best moves to take now with financial markets will be best you seek a fin-professional with fiduciary responsibilities who knows about mortgage-backed securities for proper guidance.

[@HildaBennet]

this sounds considerable! think you know any advisors i can get on the phone with? i'm in dire need of proper portfolio allocation

[@FinnBraylon]

I'm not sure whether I'm permitted to say this, but I'd suggest searching for “Sonya Lee Mitchell” as she gained a lot of attention in 2020. She is both my coach and the manager of my portfolio.

[@FinnBraylon]

Sonya Lee Mitchell and do your own research. She has portfolio management down to a science

[@tracydoverspike5255]

My husband and I took your class a few years ago. We were pleased to learn that we were already on your Baby Step 5. I'm happy to report that a week ago we paid off our home. Before we took your class we had a twenty-year mortgage but after your class, it was our goal to pay off our home as quickly we could. We're debt free and it really is the best feeling in the world. Thank you for your program.

[@bestofa-z9751]

Highly doubt he reads these comments

[@keepitsimpleydb6151]

Congratulations 🎉🎉 🎉!

[@pneron2032]

Congratulations!

[@pneron2032]

@@bestofa-z9751 He does

[@veralgsouza]

Congratulations! How did u stay focused 😱😱👏🏼🙏🏼

[@4uanC]

I regret not taking out a loan to buy a house 3 years ago. I could have bought a nice house for $180k-200k. Instead, I tried saving up to buy a house cash and home prices keep increasing. Those same houses are now $250k-$300k. I finally gave up and got a loan. If I would have gotten a loan 3 years ago, I could've paid it off already.

[@rm5282]

You're correct.

[@ArneWidding]

Yet in his case Dave is right as always! The bubble will burst soon enough, and they can get an Amazing House with the money they save in the next few years!

[@dasmaverick1063]

@@ArneWidding Your crystal ball says the bubble will pop? Tell me more, which stock do I go all out in? Please help.

[@bnepaul9268]

Not every advice is for everyone

[@blahblahblah747]

you could've just put that money in a stock or index fund. They all went kaboom in the same time period. I don't think Dave Ramsey is wrong here. He's not saying to do nothing with your money, so don't compare it to that lol.

[@jg9109]

his whole point about bankers is right on point. I own my house debt free and I paid rent while saving cash making 60 to 100k per year to pay for my house. I was thinking about getting a bigger house with a mortgage. after talking to a credit union about all the fees they wanted to hit me with I decided to buy what I could afford with my cash I saved.. Thanks to dave

[@matthewbartke4424]

If he combines the 2, he can get the house on a 15y mortgage and then pay it off in a few years anyway.

[@BigHayes7771]

Yes people forget a big down payment helps a lot on monthly mortgage

[@turbomustang8417]

I agree totally. Buy the house and add the rent to it to pay it off quickly.

[@outdoorsnevada4138]

True

[@stringX90]

Yeah I thought the same thing. Why didn't Dave suggest that?

[@koolandblue]

He could even get a 10 year mortgage if he put down enough of a down payment.

[@knpstrr]

A mortgage is an okay debt. That being said, you shouldn't buy too much house, which sometimes people do since they think they can afford the payment. That is trouble.

[@MrMikey1273]

Yep definitely not a good idea to get a huge load for the biggest place they approve you for. You may always need home repairs, a new car or need some of your income for many other things. I spent about 40k less on a home than I could have. Why I didn't want to be chained to that payment and not able to go on vacation get a nice dinner out once in a while or things like that because I was house rich and cash poor.

[@judymckee5992]

@@MrMikey1273 , I used to be a used car dealer. I finance folks maximum 50% and only $2K that have to be paid in 10 months, no interest. You come across folks that had a $200k in mortgage!!! I myself lived in $104k house, fully paid. Financial stupidity is what ruin people's life.

[@zeynand4039]

Okay because its a necessary evil. You still have to live, most people can't pay rent, save money for a house. A mortgage lets you live in that house and you can save to pay off thar house. Just check protocols becaue I see people paying off mortgage but the mortgage cobtracts we have here are saying you pay a penalty is yoi pay off more then lets say 5000 a year in top of your regular payments. So you see, that's nothing for a house that's 450k. It will still take msny many years. I don't m ow what to do.

[@canadianjatti]

@@zeynand4039 this is all discussed when you sign up for the term. Mine allows me to pay 20% of the principal each calendar year as extra payments. If you get an open mortgage then of course no penalties to pay off or pay down.

[@foreigncontaminant2015]

It's so easy to think of the monthly payment and sign for that mortgage. But when you get to work and save the entire cost of a home, that's when you truly grasp what it takes. Another way I think of the interest is measuring it in brand new BMW's. How about having a few of those parked out front and the bank comes for them? That's interest!

[@TheRosswise]

I built a house during the recession, it turned out to be the best time to build a house as I built a house for $75k that appraised for $130k when it was finished. I then paid the house off in full 4 years later. I didn't have the cash to build a house when I did, now my house appraises for $230k. I am anti-debt too, but sometimes biting the bullet and getting a mortgage is the right thing to do.

[@outdoorsnevada4138]

TheRosswise It is true. Prices can go up real fast. Homes I was looking at 5 months ago are $40,000 more now today. They likely will go back down but then again they might not any time soon. Always a gamble. So a decision like this may result in a home price going up 10s of thousands of dollars.

[@keyroncampbell]

Why people say they built a house? It's not like you built it yourself, just say you purchased a house and someone built it the way you wanted.

[@akg_table]

@@keyroncampbell Because everyone knows what you mean when you say you built it. I don't tell you I got in my car and on the highway to get to the store, I just tell you I went to the store. Less words is better

[@keyroncampbell]

@@akg_table 2 guys I work with actually built their own houses with their own 2 hands so no everybody wouldn't know what to talking about.

[@judymckee5992]

TheRosswise, Timing is everything in housing or you get bust. 2018 is the height of the housing market!!

[@Lourd-Bab]

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.

[@Lourd-Bab]

@Ingridlourd02 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 commitment.

[@Lourd-Bab]

@Ingridlourd02 Clementina Abate Russo is her name

[@Lourd-Bab]

Lookup with her name on the webpage.

[@Lourd-Bab]

@Ingridlourd02 You are welcome .

[@kevindashid]

He said have a paid off house in 4 years at the age of 31. If he got a 15 year fixed mortgage, he’d have the house in faster than 4 years because he’d pay what he’s paying for rent towards the mortgage plus whatever he’s saving to pay the house off with. You can run this up mathematically and I bet it makes sense. For Dave, this is just pure principle and so that’s why he said he couldn’t be mad either way.

[@rushellrousseau9197]

Houses come with unexpected expenses that renting doesn't. If you don't factor in extra for something small like a water pump getting destroyed or something as big as having to redo your entire roof, then the whole plan falls through. If you were renting and any of these things happened, you'd just call the landlord... The owner pays

[@THEFAMILYGRIND]

@@rushellrousseau9197 that’s not entirely true. Nowadays if you’re renting a townhome or house YOU are responsible repairs beyond a water pump or broiler. Landlords are placing those responsibilities on tenants in writing... in the lease...

[@rm5282]

@@rushellrousseau9197 you do know that you should get the home inspected prior to buying it. Also, if you have an event that causes the need for a new roof your property insurance minus your deductible and your new roof is paid for. Also you renters have an unhealthy fear of an an unrealistic assessment of home maintenance costs.

[@dylannikkels3772]

Mathematically it does not make sense to save up. Ur gonna throw 4 years of rent in the the dirt because of a principle. Get the freaking mortgage and pay it of as fast as u can!

[@hunkydude322]

if you can paid cash period. Cash is king,

[@liamwelsh5565]

@@hunkydude322 In this situation, no. He said he could save up for a house while paying rent in 4 years. That means he could easily get the mortgage and pay it off in 4 years as well while paying less interest then you would rent.

[@Mukation]

@@liamwelsh5565 Yupp, if his mortgage is roughly the same as the "rent" then it would stand to reason that he would be able to pay of the mortgage faster than 4 years of saving for it. But i mean, i get the whole cash is king and being free of debt is true freedom. It's a though choice, but i bet most guys wouldn't end up paying more than bare minimum on their mortgage, though (which is sort of why Ramsey is against borring money in the first place)....

[@nicford1486]

Renting first gives the luxury of a greater income once you move in. It would be very nice to move in to a new house, debt free, and your income skyrockets with no mortgage and no having to save for the house. Alternatively, you save money overall by getting the mortgage, but your income is hampered for a few years. Which prolongs any other thing you might want/need (car, etc.). With their income, rent for them is a drop in a bucket at any reasonable place (outside big cities).

[@hoguejp]

I think few people will actually pay a mortgage off in 4 years. And the interest paid in those first 4 years is close to rent, it's horrible. Depends on what your're doing of course.

[@second2none07]

Why continue to pay rent in order to save up to buy a house cash? Wouldn’t it be better to put that rent money towards the house?

[@morgandawn6413]

I agree. When you rent you are giving away your money to pay for someone else's dream.

[@MrDpms2010]

absolutely if he can pay for it in cash in 4 years then get a 15 and pay as if it were a 7 year loan if he can buy cash in 4 years he can do that who knows what interest rates will be in 4 years

[@dpxprhulc4xkl]

Jaco Silvis this is not an apples to apples comparison. You’re forgetting that whatever interest you pay, you can write off in your taxes. With renting you don’t have that option

[@sandeeakasha3269]

It depends on how much is saved already. Saving for a 20% dow npayment to avoid PMI could save money in the long run. Why pay PMI when it doesn't insure anything for the home buyer?

[@second2none07]

Sandy Otis I thought he said they have $52,000 saved up for the house already.

[@philmarsh3859]

I waited and paid cash for my house because I didn't want to EVER be unemployed with a mortgage.

[@ralphy1989]

Im uneployed all the time and my mortgage is 40k a year.

[@ocvegasproperty]

Where did you live in the meantime? Not everyone wants to burn rent money or can live with their parents or some unsafe environment.

[@williamlewis3582]

I moved in my van fulltime ill ne buying a hoise for cash.

[@Applauseify]

It is such a legit fear

[@imexotica9209]

So you chose to rent and risk being unemployed instead? Doesn’t seem any different to me?

[@cunn1n6ham]

Lots of interesting comments and good points...but I’d like to think DR is doing something, that in the military we referred as providing a rule set for the LCD (lowest common denominator)...which unfortunately was often time the majority. Many will be in markets where it makes sense to jump in, get a loan and ride the wave up...but bottom line is unless you have a crystal ball these options are gamble...where with DRs advice you will never completely lose, you may have been able to make more by taking risks, but you will never end up homeless by buying a house cash.

[@cashboy7406]

He's not a DR. doctor

[@dominicdolenti8699]

Exactly. He preaches the peace mind owning property out right with cash. Market can be up or down but it doesn’t effect you cause it’s 100% yours 🙏🏼

[@jason_v12345]

I hear that excuse for Dave a lot, but he spent about half of this very video asserting that _avoiding_ risk (e.g., mortgages) is what leads to wealth.

[@omichaelnato5388]

Excellent point as well. Nothing wrong with living a risk-free, somewhat boring life. Safety is a good feeling. Can’t let other people around you dictate how you perceive money

[@Kevinschart]

@@dominicdolenti8699 if you don't participate in a money earning market it absolutely does affect you. it's called opportunity cost. And Dave's method ensures that you opportunity cost is as expensive as possible. Dave is straight up lying to his listeners when he says that mathematically it doesn't make sense to borrow money. Dave failed at leveraging debt so he thinks no one else should do it. The frustrating part is the he shows a fair amount of disrespect for his listeners by not telling them the whole story. Basically he thinks they are too stupid, greedy, undisciplined to leverage debt, spread payments over time, and invest the rest.

[@make-trix4036]

110% take the mortgage unless it is a really cheap house (which really don’t exists in most places anymore). You will end up having to save up at least double the amount of money to keep up with the appreciation. Take the mortgage, use the money you would have used for rent on a mortgage, profit from appreciation, and if you want get a roommate/renter.

[@ominous450]

You make $200K a year. Save up enough for 25% down payment and 6-12 months of emergency fund then pull the trigger and buy the house. You don't need to save up $300K-$700K all in one go.

[@erok562]

I’m 27 right now renting to the point that I can save. Hopefully in 5-7 years I can buy a beautiful home cash instead of stressing out while paying 15-30 years. This video was very informative. Thank you.

[@deanslegos1990]

Good luck, stay focused and dedicated

[@judymckee5992]

Bryant argueta, I used to rent a 5 bedroom house and rent out all the other rooms. I got to buy a house cash.

[@reesercliff]

we need a 2022 update on your house

[@NomadOverNormal]

Were you able to? Or were you priced out?

[@wade_says]

It’s crazy to me how much most of these callers make per year. Good grief.

[@Dom-xi8je]

Wade Williams right! I enjoy them but they need a playlist for the 50k households 😂

[@ShakespeareCafe]

You do know these are all fake callers

[@Morbidzero]

It's not crazy at all, if you are in Tech and Health care those are average salaries. They hired a new guy with little experience whatsoever 4 months back at my job in Palo Alto, CA, his base salary is 135k a year plus signing bonus of 15k and stock options plus 401k match etc etc.

[@Morbidzero]

@@_blah CAD & Physical Design Engineer.

[@MM-zt4oe]

Lt. Aldo Raine is audio / media production industry a good one ?

[@renesilva6132]

I would never recommend for someone to buy their firs home cash. If you have the money by all means do it. But if you are renting for 1800 a month and you can get a mortgage for around the same, is better to buy in payments and just send more money to the principal. I bought my first home in 2000 for 100k. The same house in 2005 was 295k now is 359k. If you try to save for a house to pay cash, you might no be able to buy just because the houses appreciate in value specifically in high demand markets such as California

[@js5072]

It depends, the housing market is too inflated, but in colorado he would be fine because everyone wants to live there.

[@djflash7503]

The same house you payed for in 2000 for 100k was only 50k in 1996 you will never get ahead.

[@oliden4977]

Rene Silva I agree with you here. I am in the New England area, rent for 2 bedrooms are 1800 and 3 bedrooms for 2500+. By the time you try to save to buy cash the same 400k house may be 600k.

[@renesilva6132]

@@oliden4977 for sure

[@thestrappingentrepreneur2822]

I'd put a morgage payment that's lower because when you buy it's not just the payment it's the taxes and maitnance of the property as well. So if all of those things are less then your current payment then it makes sense

[@AlonsoRules]

go to Detroit and buy a whole street for $1000

[@yodaflyz]

Lol! I herd about that. Sadly if the cost of cleanup & repair work on them propertys didn't kill ya, the property tax on that land likely would kill you before you could manage to sell it. There's a reason construction businessed don't try to milk that opportunity. Also, squatting was made a felony charge in the state of Michigan a few years ago (probably because someone squatted in the wrong state politicans home). So Michigan homeowners actually got it better then most of the country when it comes to squatting.

[@lllHABITATlll]

Anthony Kernich that cost like $250k in repairs

[@jamesramirez8133]

The r/WallStreetsBets way

[@josemv25]

And still lose money

[@Paarthurnaxdova]

If the repairs didn’t kill you, the lovely inhabitants would.

[@marcosalazar5339]

I hope married couples hear that: “she likes where you ended up, but she didnt like how we got here.” Its not about today, its about tomorrow.

[@formula112967]

Most women don't want to run the marathon....they just wait at the finish line for the winner.

[@jerryk3280]

I'm turning my finances around thanks to you Dave! It really does start with baby steps. Thanks for all you do!

[@jatiprasetyonusossn4982]

"Next time you see me in a Bank is Because I'm Buying it...!!!" Wooow...Savaaaage...😊😊

[@cashboy7406]

Wells Embargo will eat his emergency fund u so quick.

[@mandymaphosa9401]

Yes sir!

[@rm5282]

Dave deals with banks. I am willing to bet his money isn't stored in a safe nor a sock drawer.

[@ludwigvonsowell5347]

27 year old literally sounds like a 40 year old. Good lord.

[@dariuss.3500]

Alex Minor lol

[@daved.rogers1170]

same thing I said.He wish he was still 27 lol

[@insertnamehere9154]

😂😂😂gotta love KZbin comment section... yall dont miss a beat🤣🤣🤣 I was thinking the same thing.

[@nightfangs2910]

maybe a heavy smoker

[@7ra44]

kid WAS RAIDED RIGHT?

[@erinfrancisco8707]

OK. I'll save up $1,000,000 right now. Bye

[@yayyareaa2997]

Erin Francisco lol right

[@JesusPaidItAll]

Are you done yet?

[@heatherholliehaller]

Erin Francisco I am trying to save for my meds

[@independenceday3764]

Erin Francisco that’s about the going rate for a mediocre house in a decent neighborhood in any city where the good jobs are. It’s terribly out of balance.

[@crammit6601]

Erin Francisco it's possible

[@fistcover3831]

"Next time you see me walking into a bank its because I'm buying it" Most savage Dave statement ever Love it

[@JoanSweet]

I’m so glad I watched this! I’ve been so confused because I am praying about acquiring my first property. I did not want to get into heavy debt so I was thinking of saving up for what I can afford to pay for fully right now. Once I have a roof over my head, I can always proceed from there. Thanks so much. God bless 🙏🏾✨

[@coralheimer]

Curious what happned here

[@Mute2024]

@@judymckee5992 and even more inflated now

[@ivarlosna6516]

Unless he can live for free with his parents while saving up to that house, I don't see renting as a good strategy here.

[@judymckee5992]

Ivar Losna, Renting is a good strategy in 2018,2019,2020,2021. After the housing market tank than you can buy $1million dollar home for $300k. I know somebody that bought $1m for $100k in 2009

[@jwfriar]

Dave is plainly wrong. Assuming 2 scenarios where you take the same amount of “money for your house” and either get a mortgage and pay it off or you rent and save until you can buy outright, you will own the house outright MUCH faster isn the mortgage scenario. The reason is when you get a mortgage, part of your money is paying off principal. When you rent, that part pays the principal of the landlord. Renting while saving to buy a house outright is silly.

[@jeeves6490]

@@judymckee5992 Ah, the housing market tank. That old chestnut.

[@XFizzlepop-Berrytwist]

Judy Mckee I just dont see it tanking again. Not unless the gov raises rates to 10% like they used to be. Even then, there are more protections than ever after 2008. Plus, the gov lets in immigrants by the millions, which drives up housing costs even further. It just simply wont go down without some major changes by the gov.

[@quister53]

Finally someone who understands not to borrow for anything 🙌

[@nieceylanair65]

If his rent is the same amount as a mortgage w/ interest payment, then he should get the 15-year mortgage and pay it off ASAP. Someone raised a great point: Why help another person pay their mortgage when you can pay your own?

[@rm5282]

Exactly. People get too trapped into what Dave sells. He has great principles for getting out of debt but he doesn't tell people that renting is dumb. It is dumb to rent if you can afford to save enough to buy a home for cash in four years. There are plenty of mortgage lenders that allow early payments. Early payments are better than late payments or defaulted loans.

[@JamesSmith-cm7sg]

@@rm5282 Renting is half the cost of buying a house

[@rm5282]

@@JamesSmith-cm7sg maybe if you live in a run down place. A person that lives somewhere clean and a place that is less likely to be burglarized will pay more. I would rather buy. I have rental properties and I can tell you my tenants covered my mortgage, taxes, insurance and HOA dues. I still had income off each property after all of that was covered by their rent payments to me.

[@iceman2921]

Get the house... you are doing just fine.... turn that house into a home and be happy...

[@jonbrion7240]

I’ve always wondered why Dave would say renting costs more than owning in the short term and I’ve finally figured it out. He considers 15 year not 30 year morgage

[@nikolaig1]

I never Understood whats wrong with 30 year morgages.

[@IamSeeryka]

⁠@@nikolaig1 hello. I think is less stress having to worry about how much time you have to pay off the debt.

[@dmp762]

If you have to save for 10 years to buy a house, then you're paying rent for 10 years. 10 years of rent is probably going to be more than the interest on the mortgage.

[@penguin12902]

Facts. Unless you have a place to live for free, a low interest rate mortgage is not bad debt. At least you're paying yourself instead of paying someone else. Sure the bank gets a piece, but the piece they get is smaller and smaller the faster you pay it down.

[@seinfan9]

Live with mom and dad to save up. Really only way and that's sad, isn't it?

[@DirtyPrancing]

Not to mention housing costs just seem to go up and up. 10 years later and that 300k house might be 500k

[@rm5282]

@@seinfan9 not really sad if it works for you all. It is better to give your parents money on the mortgage or their taxes than to pay rent.

[@robw763]

Why not pay your own mortgage instead of paying someone else's.

[@privateprivate8366]

Most times, property tax is not mentioned. My mother owns 2 properties and no mortgages on either. But, if she doesn’t continue to pay the property taxes, there would be a tax lien foreclosure on the properties anyway. What she pays in property taxes is about what I pay in rent yearly. So, people are, indeed, foreclosed upon without even having a mortgage and property taxes, even without having to pay a mortgage are much like paying rent on property you already own.

[@jcdom3841]

Dave, thank you. You have changed the course of my life.

[@ThatModernMombie]

Our situation was different: We had to get out of a bad situation with our slumlord. I applied for a mortage and I was approved. We're on a 10 year mortage and only owe 56K. We'll have it paid off way before then.

[@user-fp8xc8lf3f]

Just to be clear the *only* two options in your life were rent from a slumlord, or get a mortgage? lol.

[@Nilsosmar]

*The answer would depend on how fast housing prices are going up in the area that in which you're buying a house. If they're going up rapidly, it would be silly to wait four years while saving up the cash. The house price could double in that interval. So I'd say, buy now... get a 10 or 15 year mortgage... then pay an extra couple thousand dollars a month (the caller can clearly afford it) and pay off the house in the next four or five years. You'll pay almost nothing in interest. (A friend of mine who followed this strategy paid off her house in four years, and calculated that she had paid less than one percent in actual interest.)*

[@orlandogomez7776]

You need to consider rent if you doing what Dave said. Rent is more than interest in most states. So dave is wrong.

[@kuzjoe]

One thing Dave did not take into account was the four years of wasted money on rent payments while saving to pay cash for a house. With a mortgage they could write off the interest and take all the would be rent payments and apply to the principal. Probably knock out the 15 year mortgage in 7 years and pay less in interest than they would have paid in rent.

[@DuuuuuvaaalllllRips]

Not a waste when you're using the shelter

[@ryanlowe7315]

Ur faded

[@douglasthompson9070]

Sometimes I think these callers are just calling to brag.

[@robertoramos8257]

Idk sounds like a legit question

[@Larry_M6790]

Lol these callers, I swear. Obviously the guy is responsible, he doesn't need Dave's advice, he just wanted everyone to know he has his act together financially.

[@insertnamehere9154]

Ikr😏 this caller gets the side eye... I was wondering when the disparity part was gonna kick in.

[@dabiz4272]

Exactly

[@NicE-jq3wv]

No one knows who he is. Your green eyed monster is showing. It was a legitimate question and if you ever get yourself in his position (which is doubtful with your attitude) you’ll understand that when you have options like this kid does, it can be paralyzing and you need advice from those you trust to pull the trigger.

[@drrush3421]

Exactly

[@lefthanded5473]

Still better than the couple making 1.7mil a year asking if they could afford a house. They obviously called to flex.

[@pagingnurserose2215]

in tears, i am literally on a journey now saving to buy a house cash and some people make me feel silly for doing so. thank you so much for helping me see that i am on the right path.God bless you.

[@pagingnurserose2215]

Jamal McLovin Thank you and God bless💋

[@anshasmith6936]

True

[@user-ch1dz1jx1u]

“ Next time you see me in a bank it’s cuz I’m buying it “ 😂😂

[@2legit2Kwit]

Never wait. Take advantage of the low interests rates, buy below your means and pay it OFFFFFFF

[@robertmcgee141]

What’s the difference, renting is throwing away money also. Just as bad as debt.

[@armstrongchiwade3408]

If you save up for 5 years, the property prices don't remain the same. It makes sense to get that bond, lock the property price, accelerate bond payments and use rent payments towards selling the bond. Where will you be staying in those 5 years?

[@kingjames256]

$10 million by 40 ?? 200,000 a year .., he is 27 years old how in the heck is he supposed to be worth 10 million in 13 years???

[@darkshadow955]

I was thinking the same thing. Ramsey was being major fake news.

[@pondboy3682]

It's that same (imaginary) investment account that averages 12% a year that he loves to talk about, yet never names. I guess it's a plug for his Smartvestor Pros.

[@mikemaclean6704]

I'm 27 started investing 2 yrs ago I've averaged 11.5 % not quite 12 but close

[@pondboy3682]

@Ostin I watch DR because I like his Baby Steps in general, and can get inspired by both successes and failures on his show. I also enjoy the challenge of critical thought, and regularly listen to many people I don't 100% agree with. I find it leads to more truth than the opinion echo chamber of only listening to your favorites. As for me investing, I've only been at it for a couple years, but I've read several books on it. 12% is not an average you can count on. Stocks average 7-8%, and a good investor can squeeze out 10-12% most years, but planning a retirement based on a 12% average return is stupid.

[@Iamonepercent]

@@pondboy3682 far too many people don't understand "know thy enemy." Echo Chambers breed ignorance.

[@pmbarro]

Getting a mortgage is actually a dumb idea and if you could save and buy cash, its the best. I was a loan officer at a bank and saw how the bank screws you everytime. There's 4 main categories when dealing with a loan. Interest, principle, taxes and PMI(if you don't have at least 20% down). Its simple, if you save cash, ALL the money you saved goes into the complete purchase of the home. If you finance, a small portion of your monthly payment(usually $200-300 worth) of the entire payment goes into the complete purchase of the home and the rest to everyone else(Bank, Taxes, PMI). Essentially, throwing your money away. Might as well burn your money. So dont throw your money away to these banks. Note:Yes taxes are an every year expense even if your home is paid off but when saving you don't have to pay that until you purchase it. So what you save goes to the purchasing of the home initially.

[@chrisdexter2940]

Unless they're living for free at your parents, how much are they saving over a 4 year period in interest compared to rent? if they are able to save the principal over 4 years, then the rent better be lower than the interest they would pay in a 4 year pay off. The tax is additional, but they also get a write-off on the interest, and since they're in a hight bracket, that'll come close to offsetting the property tax. They will probably pay more renting, while they are paying the landlord's principal, interest, taxes, AND profit

[@muyoso]

Mortgage is a dumb idea if and only if the money you were going to use to buy a house with sits in a mattress slowly paying your mortgage over 30 years. If you invest it in a reliable investment like an index fund, your mortgage is basically free. I borrowed 100k for my first house and put 21k down as a downpayment. I could have easily bought it straight cash. Instead, that 100k I didnt have to put down will exponentially grow and will be worth 250-300k by the end of my 15 year mortgage term. It makes ZERO financial sense to have thrown all that money into the house by buying it cash.

[@flowergrowersmith449]

Wages are flat and houses are generally going up fast in value so it's extremely difficult to keep up with house prices. Just borrow the money and pay it back as fast as humanly possible. You'll be fine. Just this once..!!

[@Ravenousyouth]

Bubbles pop

[@Libervation]

You don't get rich from paying rent either, which is often more than a mortgage payment.

[@bigdawgc2164]

true...but peopple also forgot about property taxes ontop of morgage and that ads up

[@Questioneverythingx]

Eh. My best friend just bought a house thinking he’d save. His rent $500 and his mortgage almost $800. Plus, take in account taxes and if anything happens to the home, it’s on you.

[@Libervation]

I'm sure that's the case for your friend, but with rent, you're building zero equity over time. Most of the broke people I know rent.

[@bigdawgc2164]

@@Libervation yes your not building equity but theres soooooo many expenses when it comes to a home besides just morgae and property tax, plus all the upkeep like cutting grass and snow plowing and garbage disposol. the list goes on. renting means you dont pay for all the extra stuff and usualy the landlord takes care of it. say you buy a 200k home and in 30 years pay it off and then it increases value to 250k when you decide to sell. ok you just made pay your 200k and then some, but you dont get back probably the other 100k you spent in upkeep and bills and property tax. so you maybe made 100-150k. somone who is renting can save that much themselves if they just save an extra $420 a month or so over 30 years. both ways have their pros and cons. just renting or owing a home insnt going to get you rich unless you start renting part of that home out or a room. people use a mortgage as a glorified savings account putting money into it for he next 30 years and then getting some back on their return depending on the market.

[@Libervation]

I agree. Well, the house I bought was $20,000. It's almost 2,000 sq. feet and on 14 acres of land. I'm paying $400 a month towards it with 0% interest (I owe around $6,000 on it now). Total taxes are around $200 a year and I have a snow blower and take care of everything else as far as utilities...other than electricity (which is around $90 a month). It needs some work, but nothing too major. Rent in this area is normally $800 to $1,200 a month. My situation is pretty unique though.

[@jks211]

It's 2018, most houses cost 3-5x people's salaries. IDK what this dude is smoking if he expects people to pay cash.

[@djflash7503]

jks211 he’s mainly talking to people from the south where houses are cheaper

[@nuera3173]

Yeah you can buy a 2BR 1Bath brick house in NC for $25,000.

[@proatcards4763]

He`s not talking to someone who works at Mc Donalds. He is talking to someone who projected his household income at $198,000 for this year. If you are making that kind of money it is reasonable to think you can save $50,000 a year for 4 years then buy a house for $200,000 cash.

[@Lightwing]

That's why I want a tiny house/RV.

[@JF-ns5zs]

Monaco Jones in NJ a nice house is 500k min lol

[@chopra1073ify]

I love Dave Ramsey’s principles! He is a common sense genius whether you believe it or not.

[@LA-xj3tz]

You are STUPID!

[@jcrowley1985]

Just make sure there is no prepayment penalty on the mortgage and you can always pay it off early if you have extra money. I got a 30 year mortgage and hope to pay it off in less than ten

[@ivarlosna6516]

"Saving to buy a house" - A house is around $1 million where I live. You'll be renting till you're 60 on a regular wage, meanwhile the guy who saved up $150k to pay the first down payment would be buying that house and rent out most of it.

[@bcuphunk]

You need to move. You must live in California or New York.

[@conorharrigan9311]

Wish there'd be some elaboration on the "shortest path to wealth is being debt free." What? Lots of very wealthy folks would deeply disagree with this.

[@Kennan_Davis]

conor harrigan exactly. I like Dave Ramsey for his get out of debt advice, but his “wealth building” advice is absolutely horrible. There are far better sources to get an understanding of how to build wealth. You listen to Dave Ramseys advice if you just want to be an average middle class person for life.

[@Spawn223311]

There isnt a straight answer to become wealthy, but being debt free is very important. Obviously choosing the best option will always be situational.

[@lefthanded5473]

@@Kennan_Davis Well how do you get wealthy if your saddled with debt. Dave's advise will help you become a millionaire with no debt. Rather than a millionaire with 500k+ in debt... See the difference.

[@Kennan_Davis]

NPC lol...Dave Ramsey’s advice is for people with little to no financial intelligence. You can utilize debt as leverage to increase your income and net worth dramatically more than you ever will being debt free. It’s call OPM, other peoples money. You should learn a thing or two about it and lose this bad advice given by Dave Ramsey. The fastest way to wealth is OPM, not being 100% debt free. Why do you think just about every corporation has debt on their balance sheet? Surely if debt was this evil boogeyman then they wouldn’t. Like I said, Dave Ramsey gives advice for people with no financial intelligence. The key is using debt to make you money. Not use debt to go on a shopping spree

[@MrMikey1273]

Real estate debt is not really bad. Your home is providing you shelter as you pay it off. It is growing in value usually too. And owning often cost much less then rent once you have the down payment to get in to owning. Mortgage interest is tax deductible too so that can help save on taxes. Since real estate goes up most of the time. It's silly to rent and save to buy cash when you could buy with a loan then work to pay it off. Say you want to save for a $150,000 house and it takes you ten years to save up the cash. Then in ten years the house will cost $ 200,000. You still can't buy what you could have with the loan. Real estate debt isn't really all that bad. Credit card debt is the worst. Never get into long term debt on credit cards.

[@Nilsosmar]

One more comment about this. Dave's advice is generally good but one size (of advice) does not fit all, and does not apply at ALL is areas in which housing costs are rocketing out of sight. I was just visiting with a friend who lives in Seattle ... he bought his house for $85,000, fifteen years ago ... it is now worth $760,000 (he recently refinanced, and had it appraised)! He actually paid it off in under 10 years by making interest prepayments... his total interest paid was under $20,000. Total cost: $105,000 for a house now valued at three quarters of a million dollars. He is not and was not rich; housing values starting skyrocketing right after he put down his initial $15,000 down payment. He was far better off buying WITH a mortgage, than waiting and paying the full $760,000. Or waiting five years till he had the whole $85,000 saved up, because by then it would have cost him about $450,000, based on comparable prices in his neighborhood. I love Dave's advice to live on Ramen and save to pay CASH if you can. If more people did it, the world would be a better price. But there are times when you're better off buying "in" with a down payment, than saving up to buy a house outright for cash.

[@mikell.6064]

I'd wait for prices to drop. Buy the cheapest house in a nice neighborhood that needs repairs cash and if needed take a loan to pay for the repairs. Worse comes to worse you already own your house and it will most likely appreciate. Seen a lot of people do this and not one is in debt, plus they have a pretty nice savings account and everything paid off. (My uncle, my best friends dad, my best friend, and my co worker). Am in the process of saving and waiting for the market dip.

[@15KHPCLUB]

Dave has to have some middle ground with leveraging debt when it comes to home buying because he knows deep down that most people in this world simply don't have over $50 million lying in their bank accounts and therefore, paying cash for a house is unrealistic for the masses.

[@bnepaul9268]

Exactly what am saying also, not everyone is rich like Dave, some people have to get a mortgage like it or not

[@Crusader926]

He grew that organically he wasn’t born into it

[@15KHPCLUB]

@@Crusader926 Your comment is completely irrelevant to this topic but whatever

[@lauromartinez8948]

You don’t need 50 million to buy a house cash. You just need 300K - 500K depending on the area.

[@15KHPCLUB]

@@lauromartinez8948 I bet you don't have $300-$500k Dave is in a whole different universe and needs to sit down and be quiet His generation made life much more difficult for younger people and refuse to take responsibility for it

[@foreigncontaminant2015]

A big plus when buying cash is you can invest your savings as you reach the amount needed. It can take years to save for a house, as it did for me, but even if there's a housing bubble growing, there will be a stock bubble to invest into at the same time.

[@martinhebert3223]

Dave Ramsey talks about debt like my fathers in law talks about mutual funds. They both got burns in the past and both avoid it 100%. Having a mortgage is amazing, in a sense that i dont have to worry where im gonna pile up my cash flow. Pay back debt is a sure and garanteed investement. If u have no debt, it makes things more complicated. If u like to randomly invest your money in any random mutual funds, ill say like Dave, its just Dumb. Balance is the key of success in life. Moreover, having a rent or having a mortgage are both liability that put pressure on your free cash flow. If u plan to buy and hold for a very long term, having a mortgage is much better.

[@victoriavyvy]

100% foreclosures happen on property with a mortgage... is that even true? You can get foreclosured cause of property taxes / insurance i thought

[@sumitron2k]

Please borrow money purchase a house and pay it off as soon as possible 5-8year period. You can calculate the interest, processing fees and pit it against potential increase in value of the house and rent you will pay. Dave’s guidelines do work best for people who do not have control of managing money which definitely not true in your case ...please do not end up buying a house more than 250-300k else u fall in that mismanagement bracket ( basically u should be able to pay it off using 1/3rd of your yearly income in 5yrs )

[@CH-ku1qe]

Great advice Dave! Debt free is the way to go.

[@AndrewDaniele87]

Put the price of the house in investments, and mortgage it out, now you have the investments growing and equity on the house growing at the same time, that's what I'd do

[@cap8e]

So pay for rent+save for home in 4 years. or Just get a mortgage and pay it off in 4 years. how are you not saving money with the second option.

[@DustinSilva]

The interesting thing is the guy is "renting" a house...Lets say hes paying $24,000 a year: that seems like he'd be paying more to rent than in interest...

[@willlyons6174]

true but you have to factor in mortgage insurance home repairs property tax renting is alot better short term

[@rm5282]

@@willlyons6174 renting is better if you're only on a lease for one 12 month period. Anything longer you may as well buy.

[@armstrongchiwade3408]

The irony is that during the 5 - 7 years on saving, you are paying someone else bond.

[@cacsoccer101]

Dave: "I'm not going to call you dumb because i don't call anyone else dumb..... On the air." 😂😂

[@patienceguilfoyle8350]

Hilarious!!!!🤣🤣🤣

[@urbanlumberjack]

“100% of properties are foreclosed on Home with a mortgage.” He is forgetting about tax foreclosures.

[@az21bob666]

There are almost none, I have a 200k house paid off, I pay 2k a year in taxes, now really think how few people really lose there house because of not paying tax, I mean it take 7 years, you could wait 6 take a loan out, and it would be only 10 percent of what your house is worth, and then if have to sell it, and walk away with money. in short very few people lose house by taxes.

[@classicrocklover5615]

In Michigan it takes only being behind on property taxes 2 years before it is seized and sold

[@jcrowley1985]

Regardless it's still theft though if I never agreed to pay it

[@canadianjatti]

@@classicrocklover5615 woah thats harsh!

[@xekis]

Depends on the area. Foreclosure laws are local. Sure, if you got a 1% rate and low appreciation you'll be fine. But if you have a 3% rate and high appreciation it's very easy to get into tax trouble. When you see that your tax bill is over $10K a year now when it was $5K 7 years ago it's clear to see that the state is the landlord. When I'm ready to retire I'm moving to a state with cheap real estate and low property taxes.

[@kruzanJFD]

I can't fathom this advise for several reasons. One the mortgage rate is so low. You need the house now. The value of the house will go up. You can still pay off the loan. You can make more investing yours and other peoples money. It is the only way to get a tax break and pay less in taxes.

[@brandon-built]

I hope for this guy's sake that he didn't wait to pay cash. He would've missed a huge opportunity over those years where home prices went through the roof and he could still be chasing home prices up now.

[@aaronpcjb]

I'd be curious to know his advice for someone aiming to let. This scenario is for a couple buying a home in a residential area for themselves. What about a person currently renting, looking to buy an apartment in a busy city and renting out spare rooms to cover most if not all of the mortgage payments. In this instance, a person is actually making money from the debt and not paying rent. The risks are interest rate hikes and low occupancy rates (which would likely be a double-whammy as tenants likely dry up because rents elsewhere are cheaper - house prices are declining).

[@alberts2208]

I started out buying real estate in 1989 using 30 year mortgages. Bought in growth areas. I was 28 years old. I knew if I held on in 22 years or so I will own the asset free and clear and my tenants buy me the building. It's nothing magical. It worked. If I tried to pay cash I would have never started. So it worked out for me.

[@rm5282]

Exactly

[@khoado123]

When he started talking about the guy living in the trailer, i knew exactly who he talked about haha. That guy is a real hero.

[@yayyareaa2997]

It’s a bit unrealistic to save up 700k+ in cold cash just to buy a decent house in California lol Yeah you can save...and buy your first house at what? 45-50 years old? lol

[@KyleEvans09]

Yayy Areaa His advice isn’t for the people who want a $700k house as their first home. He’s talking to people who want to live in an area where they can pay cash for everything and become millionaires quickly. That doesn’t apply to people who have to live in a 700k house and be in debt their whole life.

[@zarzarbinks1705]

Majority of the United States housing prices are not $700,000k+ expensive. Buying a decent and safe home in California is absolutely insane - I know I live there. A 2 bedroom and 2 bathroom house in So. Cal and Northern Cali is enough to buy a big house with plenty of open space in another state. (Go to Zillow and compare the housing prices from California to other parts of the country - it is absolutely ridiculous).

[@zarzarbinks1705]

Yayy Areaa it is only realistic, IF you have a plan towards growing your money through savings and investments. Let's say for someone making $40k a year - live off of $20k a year and save the other $20k for 3-4 years and find a way to grow that $80k into a worthwhile investment. In the future, that investment can make your $40k income into $100k a year. THEN we can start talking about owning million dollar property long term. Work smarter, not harder (working hard is by default). Every person has different scenarios and circumstances; that was just an example i made up.

[@cunn1n6ham]

I’m guessing DR would say buy somewhere you can afford and save/invest and move to Cali later...I live here now, it’s crazy

[@thestrappingentrepreneur2822]

I moved from my state because it was to expensive. 9 months later my networth is up way up

[@philmarsh8185]

1. I nearly always had to move if I lost my job. 2. Rent was always much less outlay than a mortgage because I usually rented a room in a shared house.

[@jordanallison7105]

He talks like all houses are $18,000 in Tennessee though... Specify the question for California and suddenly it's very different.

[@cashboy7406]

True, California 500k for a house in the ghetto

[@brent3589]

Cash Boy the homes in the ghetto in the bay go for $800k plus

[@judymckee5992]

Jordan Allison, In 2008 in Orange County $480K went to $200k.

[@cristinaca4417]

Move!!! To another state!

[@minimalistgecko4867]

Having moved grown up in the Midwest, I can say that I struggle with the attestation of the housing prices here. I would like to see a resurgence of the reality that people cannot afford to live in their dream place at times, and in order to buy, own, and live better quality of life, they may need to relocate. There are people who make great money out here (I have lived around LA for 11 years) but when I think of buying a home, seeing the prices back home has me feeling winter may not be so bad.

[@chrisstevens3567]

Commercial private equity says otherwise about debt. Levered cashflow increases returns.

[@chrisvazquez7138]

I’d like to consider myself as a financially responsible person. I budget, I save, etc. It truly baffles me that people can just save 250k in cash for a house. HOW? It would take my wife and I soooooo long to do that and we both make decent salaries. Do these people all still live in their parents basements or something?

[@wallacethomas6441]

Sort of. In his class, Dave talks about living like no one else now so you can live (and give) like no one else later. My wife and I live in the basement of a friend of ours' home for a fraction of the rent we'd be paying in our own place. We're also paying off debt faster than we'd ever imagined we could. It takes sacrifice, but it's possible.

[@chrisvazquez7138]

Wallace T. that makes a lot of sense. I can get behind what you and your wife are doing. I just wanted to make sure this is the norm, not that these people are straight up saving 250k with every day normal expenses (Mortgage/cars/utilities/insurances/etc.). Good for you guys!

[@NicE-jq3wv]

Chris Vazquez they’re not normal. They’re weird! Be weird! If you have car payments you are normal and normal sucks because you will never build wealth. That’s why you can’t save cash for a house. You’re too normal.

[@elizabethwolf4049]

My husband and I are in the process of paying off our house that cost more than 250k we should be done in the next two years or less. Giving us only 4 years total on paying this house off. We are a one income family with 2 kids. It can be done you just have to think weird. Figure out where your money is going. Think of it as you are hemorrhaging money and if you don't find out where the bleed is coming from you are going to die. It puts it in perspective. Hope this helps.

[@akastenas]

Dave Ramsey is right. During Corona times, when RE is about to bust again buying a house with no mortgage makes you a true owner with no liabilities. Most of the people cannot afford to buy in Cash or they hesitate to buy it because they want something more expensive. Debt free life is frugal and is not everyone. It is for all those who play against the system. If you have an income, and if you own a house or apartment, you can literally invest everything that comes on top. You can also take a break from work anytime you want. Because a bank won't come to take everything away. The problem is that right now I can save only about 700EUR a month. But my goal is a house or apartment fully paid in cash. One more year and I am done. From that onwards I will focus on my career further and business/job.

[@arleneaugustahair8393]

🤷🏾‍♀️ We got a 30 year mortgage. We pay extra on the principal every month. My goal is to pay it off in less than 10 years. It’s doable if you’re disciplined!

[@lowmax4431]

In Central PA sometimes buying a house is cheaper than renting on a monthly basis. I bought a $65,000 two story house and the payments are $575/month. That leaves me plenty of income left over to max out my IRA.

[@robertgray320]

I wouldn't get a mortgage cause anything can happen in 15 years from a loss of job, illness, accident, etc. Nothing in life is guaranteed, I would either save up and buy a house or invest the money into real estate properties or rentals.

[@jtg2525]

Robert Gray yeah but in this case it sounds like he could pay off the mortgage in 4 years and have a substantial down payment as wel

[@miguelfaria758]

If you're renting than, it is exactly as if you are in debt anyway. If you fail to pay your mortgage you end up on the street, just in the same way as if you fail to pay your rent. In this case, the cost of renting for 4 years while saving would be significantly higher than the total amount of interest payed on a mortgage given the low interest rates and given the fact that you can pay of your mortgage early.

[@fep265]

It's not about what you make, it's about what you keep after the government done with you lol.

[@Annis-co7vu]

Thanks for the info . Found her website and it really impressive

[@mdooms76]

Majority of people have to borrow money for a house. Nothing wrong with that or a 30 year mortgage. Who has $100k+ sitting around for a house. Easy for Dave to say he doesn't borrow because he isn't a person working a regular 9 to 5. He's rich. He is not relatable to these callers.

[@robertburns9596]

What about the math in renting for 4 yrs,interest rates 4yrs in the future, home prices 4yrs in the future. I say buy now set up extra payments and pay the house off in 10 yrs.

[@realmadera]

Go 15 years and pay it off in 2 to 3 years

[@jhogeluceno7961]

you can do that? a 15 year contract being paid off within 2 to 3 years ? can you explain

[@stupidsmartperson]

Jhoge Luceno in the US you can by making extra payments to the principle. You don’t “prepay” it, you pay your principle down. That way you pay less interest overall.

[@realmadera]

As long there's no pre payment penalty. You can pay off as soon as you can.

[@jinjielin4741]

waf4545 if you could pay it off in 2-3 years why bother to borrow lol

[@realmadera]

@@jinjielin4741 You're right... But depending on the market sometimes the longer you wait the more you pay. When I purchased my house I paid 40k more than my neighbors who had theirs built a year before mine. But 3 years later my house was appraised for 70k more than what I paid for it. Pretty much I'd have to save an extra 70k in order to avoid a mortgage...

[@TheDeVsh]

You need to compare apples to apples, take the same type of property in the area you wish to live, estimate the mortgage cost (or get quote) and see if interest part of your mortgage < potential rent, as you have more and more of the initial downpayment saved up then eventually the relationship of mortgage interest vs. rent will change in favour of the mortgage, although depending on your country/state I'd expect it to happen around the 50% downpaid in cash mark . Also factor in that selling a house can take 12 to 24 months if you do not wish to lose money, so for a mortgage you need 12 to 24 months-worth of easily withdrawable cash ( without loss; so stocks, or investment funds don't count) in case you need to sell the house for whatever reason (illness, job change, etc.)

[@aerohk]

Does Dave realize (1) Rent is money he would never get back, (2) Interest rate is in historical low, (3) Property price increases over time? In SolCal, a decent and safe-to-live house costs $750k minimum in 2018. I have less than 1/10 of that amount saved, and likely will never catch up with the appreciation. I don't believe it is wise to keep paying rent and saving the rest in hope that one day, I will have $750k+compounded appreciation saved.

[@MillBullard]

wait till the market drops and then buy its happening soon, who cares about the interest rate it will allways fluctuate. and when it does refi to a shorter loan with a lower rate.

[@NicE-jq3wv]

You’re ignorant...I live in SoCal. I live in a very nice, safe town, with top rated schools (Thousand Oaks). I have a very nice 2,100 square foot home with 4 bedrooms. I can walk to hiking trails, upscale shopping and first rate schools within minutes. My house would sell for mid $600,000s right now. I wish I could get $700,000s.

[@trophyclub7884]

@@NicE-jq3wv I live in Orange County and Ventura is what OC used to be like. Unfortunately for the average person like myself growing up it's not a very fertile place to plant roots. Trying to leave ASAP. Hope it works out for you. I almost went to CSUCI out there

[@bryan_witha_whyy]

Yep, rent is money you can't get back. So is money for a major repair or maintenance item. It all washes out unless you are just in a ridiculous market.

[@AussieZeKieL]

If the interest is close to the cost of rent then buy it, you’re also locking in the purchase price of the house

[@teeduck]

Dave's assuming they never have kids. That's an income killer

[@jasonjosephlee]

Buy a small multifamily property and have some of the tenants offset the mortgage while you also live in the property. Do not pay cash for a property, use that cash as down payments for more small multifamily properties.

[@SavageBunny1]

In San Diego houses are 450k+, idk how I’m going to save that much or do a 15yr mortgage when I’m only making 75k a year.

[@koichinishi9075]

Move! To Tijuana or Phoenix :-)

[@danhall5761]

Mortgage culture is so different in the USA, in the UK everyone borrows as much as possible Over 35 years.

[@YoCousinQ]

Say this guy is paying 2K a month in rent in Los Angeles with Dave’s logic he would save over the next 48months (4years) so he can buy the house cash but then he also spent around 90K in rent that could of went towards the house 🤔...I’m not sure I agree with that.

[@karldc83]

This is good question. He's 27 and family income $190k pre tax. He would not have $10m at aged 40. Assumimg he didn’t spend anything and wasn't taxed anything in 13 years he'd have $2.47m. If he's income doubled tomorrow it still would be under $5m. Renting vs buying both have sunk cost. If you can live in a comfortable house and its more to rent than the interest and owners additional expenses you're better off buying with a mortgage (if you can handle the principle payment too and pay it off as quickly as possible). Depends in part to what equity/savings you already have.