I Was Advised Not To Pay Off My House, What Should I Do?

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[@Winnie-Kay]

To clarify: keep thirty thousand dollars in an emergency fund, pay one hundred forty thousand dollars on the mortgage. With a four hundred thousand dollar annual income, the remaining thirty-six thousand dollars can be paid off within three months.

[@seekwrage]

They might be able to make that 400k stretch a bit to make it happen.

[@LifeHackMEDIATV]

when he said "WHEN YOU HAVE DEBT AND YOU GOT SAVINGS ALL YOU DOING IS HOLDING THE BANKS MONEY FOR THEM" "IT'S NOT YOUR MONEY" I FELT THAT TO MY CORE. Being DEBT FREE IS life Changing.

[@HappyPenguin75034]

And making 5% interest on cash vs 3% mortgage. Mortgage interest can push you over salt cap. Yes I get taxed on interest now. Still. But put in CD getting 5% and take interest in lower income years. Bingo.

[@richsamuel2922]

​@@HappyPenguin75034 I believe they addressed this math you're talking about. Yes, technically you can make a few thousand dollars a year by holding the bank's money for them. If your investments are paying an interest rate higher than your mortgage. BUT when life happens are you sure you WON'T touch that money? If you do you're essentially borrowing from the bank again.

[@thenewwayhome]

There are lots of advantages if he's going to pay off his house. And if he's got the means to pay it off, why not? It actually feels good to have one of our monthly expenses crash out from the list of our worries in this current situation. Keep moving forward!

[@jasonbroom7147]

When you get advice from someone who makes a living based on "assets under management", you can bet YOUR bottom dollar (because it certainly isn't their money at risk!) that they will "advise" you to put more of your assets under their management! It's like asking a house painter how much of your house you should pay him to paint...just the parts that need it or the whole house. Always be skeptical of someone advising you to stay in debt, when doing so is to THEIR benefit, financially.

[@theplaintiff5450]

I haven’t had a house payment for 10 years. I don’t care about the spread on investments I could have gotten. I don’t have a house payment, outside of tax. Best decision I ever made

[@johndone8045]

thats such a mind set for a middle class, good luck

[@rayjgold]

Don't forget I insurance and a higher income tax bill, if you still work. If you break these down monthly....it will not be that much lower than your mortgage was.....if you make above average income.

[@jimroscovius]

​@@johndone8045 Freedom and peace are more important. Money will be made later.

[@Hotnik0813]

@@johndone8045 such a mind set for those winning at life.

[@reese85]

@@Hotnik0813 we all have diff definitions of winning!

[@Chromewarrior]

The feeling of not owing a penny on your home is priceless 👍

[@jerrodlopes186]

...until time to pay your property tax rolls around again and you realize once more that you really don't own it at all.

[@Chromewarrior]

@@jerrodlopes186 that’s another story :) but no mortgage payment is very nice.

[@wernermueller9004]

@@jerrodlopes186 Yup...and the homeowner's insurance.

[@aolvaar8792]

@@jerrodlopes186 I live in a $500K home with no City property tax, $100/yr 911 service, $600/yr public school, $100/yr State roads + $900/yr home insurance. That's ~$1700/yr

[@erickla7796]

@@aolvaar8792 teach me

[@flutgos]

"I make $5 million a year and I still owe $5k on my car. What do?"

[@Mansini77]

That was this call in a nutshell

[@teenyverse7707]

lol... ugh.. consolidate.😄

[@viram1831]

U sell the car & purchase a 3k car so u have 2k to invest 💁‍♂️🤔

[@joyaustin6581]

Exactly

[@ginoturano6821]

Go get a side hustle and deliver pizza

[@karenjensen2345]

When my husband retired and moved to Florida we decided to ONLY buy a house we could pay cash for. Yes we have a smaller home but it is plenty for us! Less to clean. And we have never ever regretted it. We are free!!!!!

[@blackworldtraveler3711]

Indeed. Also less wasted space to heat and cool. Many with unnecessarily big homes will understand soon. You don’t need to finance $50k for solar panels to save $50/mo. on energy bills.

[@genxx2724]

$400K income? Just save and invest for college.

[@klhecox]

John starts the call writing with his left hand, but switches to his right hand… Just a funny observation.

[@wackzingo]

What exactly is the cost of peace in this situation over say a 30 year period? About $2.5 million in his situation so if having $170k invest isn't enough peace then sure pay the house off but $2.5 million is a lot of money to pay for a little bit of peace now.

[@achievement84]

6:2 That moment when Rachel realized she muted herself by accident.😂😂😂 Priceless. But she shook it off super well.

[@Eagleknight815]

Dr John with a Happy Gilmore reference. Just tap that mortgage in. A little tap tap tap. 😂🤣😂

[@andrewgeorgelang]

Just realized, watching two left handers at work. Thanks for sharing

[@texdevildog9174]

We followed Dave's plan and paid off the house in 2016. We have never missed the monthly mortgage payment. The amount of money that piles up, even after maxing out our retirement accounts, is ridiculous.

[@ToOpen6seven]

Yep.

[@NWforager]

the mortgage will be Super Easy to pay off with Future wages .

[@cosmomontanaro5759]

There is no way his accountant insisted he not pay off his mortgage, unless the interest was for some odd reason fixed well below CD rates.

[@anthonyschneider8835]

Don't listen to any of them. Instead invest all of it into Gamestop Call options.

[@atdepaulis]

Morgan Stanley is offering 3.1% on their savings accounts… I put my emergency fund there! You can get it out whenever you want to and still making something while it sits there

[@lordjael]

Buddy, college scholarships exists for excelled academic performance. They can earn one. If not, send them to college her in Germany. It’s free. No big deal. Pay the house off. 🎉

[@jiangpkpful]

But now is also a great time to invest in mutual funds (for college savings, which is actually one baby step before paying off mortgage). They should front load some 529 now, maybe 50k or 30k especially for their younger children who still have a lot of time before college. Then they can apply the rest to the mortgage, and continue to save and pay it off quickly.

[@charlescron1454]

Well stated. I find this show demands strict adherence to the baby steps from its listeners, but then ignores those same baby steps whenever it suits its own purposes. At his income the caller could always pay off his mortgage in the near future, so it wouldn’t hurt to “plant some seeds” in his kids’ college funds now and “watch them grow.”

[@Dreamer-by4nk]

Someone questioning paying off mortgage with an income like that?🤔🙄

[@dianecelento4974]

Love these two together.

[@CarC369]

Paying off low interest debt in a high inflationary environment is completely idiotic. 2.8% is a great rate. Keep that cash liquid and invest while paying down debt with cheaper dollars in the future.

[@gsyarber]

So correct. This show gives horrible advice!!!

[@joelfenner9179]

Or you pay off the mortgage and have a peace of mind that if you lose your job or some other financial catastrophe occurs, you don't have debt hanging over your head. It's not idiotic, just some people cannot handle the stress of taking higher risks. If you can handle dealing with that kind of stress, then don't pay off the house and go invest. But many people (including myself) value "peace of mind" more than money lost on investing.

[@richard77231]

In a high inflation environment, that savings is going to be worth less and less over time.

[@handheldgarage3297]

wrong show for that advice

[@David.D3]

Paying off the house guarantees the balance goes to zero. Also the house is his home, not an investment.

[@BobbyMucka]

Rates the way that they are, paying off that house is a mathematically horrific decision. He could have even invested that money in Treasury or municipal bonds and made double the money that he would have saved in interest. Treasury bonds are considered risk free too so its the closest thing to a guarantee you can get.

[@amireallythatgrumpy6508]

Get rid of the mortgage at all costs.

[@TheDougSpot]

@@amireallythatgrumpy6508 I’m sorry, but you’re an idiot if you think it’s a good idea for him to pay off a 2% mortgage🤦🏾‍♂️

[@Hammid]

That Happy Gilmore reference got me good!! 😂🤣

[@scarpfish]

The problem with this question (and the one size fits all Ramsey answer to it) is that the benefit to whether to pay off your mortgage and how to go about doing it is very situational, esspecially in a time when mortgage rates have spiked considerably.

[@jadiecakes3241]

this, my parents have now paid off their house BUT they only owed about 6k on it for YEARS because the older you get, the harder it is to borrow (where i live anyway). So being able to use a mortgage as redraw was just like having a back up plan (idk if redraw is a thing in the US, but its really common here, it works like an offset account). When dad retired, they paid it off as he got a redundancy worth over 200k haha.

[@Yooyangs]

Paying off the house, good advice. Paying for your kids secondary education… I believe they have to put skin into that game and most of it.

[@g.b.5125]

Why does everyone feel they have to pay for their kids college? My parents did not pay for my siblings college and they all graduated from college in earn in the top 3% or earners.

[@eatpigsnot]

asking a lender if you should keep a loan is like asking a cattle rancher if you should go vegan

[@BeefEnt]

No debt king here lol Thanks for the video 📹

[@djpuplex]

Ramsey math still works in California. Also Ramsey we don't play that math game.🤷‍♂️

[@donjohnson1416]

Your DRAMA is what doesnt work. Get over yourself drama queen

[@hulenbryant5637]

Yeah, that one kind of got my attention, because they do play math games. They may have a different philosophy, but it's still math

[@ViralRivers]

Ridiculous to give this blanket advice. If you are interested in owning multiple Properties at any point in the future, how does throwing away a 3 % interest rate to borrow money at a 7% help anyone. With rising interest rates, throwing away cheap debt for expensive debt is foolish

[@NYNC88]

John's advice is worse than worthless. This has absolutely nothing to do with Broadway.

[@ecole146]

I love this channel, but getting sick of hearing problems from people who are in the 98th percentile in household income that are really not relevant to the vast majority of the show's listeners. This guy has a take-home income of over $9000/month. He has a mortgage payment on a pretty expensive house, but it's still only about 30% of his net take home pay - well within acceptable limits. Regardless of whether he pays this house off or not, he is going to be fine.

[@amireallythatgrumpy6508]

The acceptable limit is 25 percent, it's not within that.

[@ecole146]

@@amireallythatgrumpy6508 The acceptable limit is 25 percent of your GROSS income - $9000/mo is his net income after taxes so yes, it is still well within acceptable limits.

[@amireallythatgrumpy6508]

@@ecole146 No it isn't. The acceptable limit is 25 percent of his NET income.

[@joejohn.]

You think he only takes home $108k/yr on a $400k/yr gross income?

[@Snacks1991]

Pay that house off and start a college fund today

[@oldhag2881]

If he pays it off, he can cash flow college. But none of his kids are close to college. He has time. If he waits, and the bank goes belly up, he still has a mortgage.

[@xyzxyz4575]

just borrow yourself money to pay your mortgage off, you owe youself money! you paying youself back and thats it!

[@ericvisser113]

Risk is in the math game... Calculate free cashflow, debt to net worth, current ratio, ect

[@alinatamashevich3354]

The risk IS debt, nothing more.

[@michaelvan6675]

I regret not paying my house off.

[@jasonk8793]

If your house was paid off would you give back your deed to borrow money against it and put that money in an investment? If not, that shows you that you really do value the paid off house more than the money.

[@leemp337]

For a 2% rate, I would do it all day, everyday.

[@johnSmith-uz8nl]

Forget everything.... HE makes $400k and has NOTHING but a paid off house????? Something does not make any sense at all.

[@thefrugallifehacker1225]

I don't care what kind of money you make If you are using your money to pay off your house then you should pay it offffff as soon as possible. Your financial planner or account should know this.

[@dennisshea9540]

At the end of the day both answers are not wrong. Yes you have risk with a mortgage but if you invest into a Index fund as it grows your true risk level decreases. Just like having an emergency fund decreases your risk. At big stockpile of money always decreases risk. The advantage of no mortgage is you can supercharge your investing since you can throw more money into investing without a house payment.

[@AdrianMcDaid]

Paid mine off. In my mid 40's now I have F*CK you money. It's great.

[@IgoOutlateAtnight]

Brag call. $400k income how do these questions even come up? Answer. Brag call.

[@jimmymcgill6778]

How much he makes in not the point.

[@IgoOutlateAtnight]

@@jimmymcgill6778 you must not be a math fan. This call is completely different if he only makes $10k a year. $400k income any issue he brought up on this call will be done in a year...assuming he brings home $200k...

[@donjohnson1416]

@@jimmymcgill6778 It is the point when yer full of DRAMA like Ryan is. lol

[@blackworldtraveler3711]

@@IgoOutlateAtnight Call would be completely differently for anyone if he only makes $10k/yr. Even for my 16 year old niece who makes more than $30k/yr. Income growth is not directly proportional to being a math and financial genius for many. Just more financial wiggle room for screwups.

[@jimmymcgill6778]

@@IgoOutlateAtnight Income is not the point.

[@fsm12385]

Pay it off

[@PhuongTran-iy4gd]

I would be curious about his retirement.

[@JeffAlpha1]

I agree with everything here except.The children are so young. Who's to say they will even choose to pursue college or at least a worthwhile degree that would truly suit them later in life. What gender are the kids? If they are girls wouldn't it be better suited to make sure they have a good role model to teach them how to be good wives to high value men that will take care of them vs. pushing them into a career that fosters a masculine frame in which she will sacrifice her best years becoming the man in which she hopes to attract? It sounds like the parents have a respectable professional career with the mentioned household income. If the children are boys and choose to follow in the professional path of the parents it would be a waste if the boy did not go to college for anything other than medical or stem related fields and I highly doubt that the girl would choose those fields.

[@ecole146]

There's so much wrong in this comment I don't even know where to begin........

[@kckuc310]

You should not , you make 5 percent in saving on your money. Your college for kids comes last

[@neilsmith9066]

The calls where people are making over 200k a year are really driving this show down. These people are so dumb I guess they just stumbled on a career position where they make half a mil a year..... ridiculous

[@godfathaofyo]

or perhaps just realize what the cost of living is in certain parts of this country. I wish i lived somewhere where a house cots me $50-$100k....and a 15 year mortgage is reasonable. Many middle class suburbs around me. $500-$600k fixer uppers....

[@donjohnson1416]

Yeah, Yer just soooooo much smarter than everyone. Feel better now shaming someone else?

[@blackworldtraveler3711]

Most are hired for their knowledge and skills not balancing their personal check book.

[@jml9550]

@@blackworldtraveler3711 exactly.

[@reese85]

It’s household income ppl! That’s means more than one income

[@terrywix6844]

I have a difficult time looking into the eyes of someone whose eyes are so far apart. My eyes move into motion like a tennis match to see someone with to much space between their eyes. . . _

[@jmseva]

Make any business from that savings

[@fsm12385]

0 percent works better Dude pay it off

[@masterg004]

recast your loan

[@Chesu360]

Why is this hard to convince a rich person?

[@kevinkidneyy]

brag!!!!

[@danicha1464]

Pay the house

[@doihavetohaveachannel8289]

You are speaking over or cutting off Rachel. Not very respectful. Let her finish her ideas.

[@kevinkidneyy]

stop posting these videos . "HI i have 500k and I make 150K can I pay my 25k house off" like why

[@jerrodlopes186]

Somebody will take it from you eventually.

[@freedomring3022]

pay off the house. how much is peace of mind to you?

[@Earstolisten]

Stopped watching at $400k income

[@MisteRRYouTuby]

Short answer: Ignore them and keep paying off the house. Depending on hire close you are, you may have it paid off.

[@rayjgold]

These guys don't understand.....when you make a high income, once you pay off your mortgage, your AGI increases which makes your income tax payment increase. It Is not that beneficial to pay off your mortgage early for people with high incomes......your monthly payment doesn't decrease that much. That being said....I would still pay off a mortgage if I had double the payoff in the bank.

[@eli-bt4he]

In every situation, the money saved by not having to pay the interest at all is way more than the tax savings. I'm suspicious that you don't understand how the mortgage interest deduction actually works. Even at the highest tax bracket, you would have a 63% savings by not paying the interest.

[@jml9550]

@@eli-bt4he exactly. You can only deduct a certain amount if interest and taxes now. And at his income, he saves more on not paying mortgage interest than tax.

[@stuartclubb4302]

When you make a high income, your deductions get phased out anyway. SALT limit and the increase in the standard deduction removed many people from seeing a benefit of itemizing their mortgage interest at the lower end.

[@jml9550]

@@stuartclubb4302 exactly.

[@rayjgold]

You are all wrong. Thanks

[@Hellblaue210]

Absolutely TERRIBLE advice from the Ramsey crew. This guy should be investing this money. This isn't some barely graduated high school and in debt. This is a guy that makes 400k, has a family and is well educated. This is the only thing i hate about the Ramsey show is the hosts have no level of higher level thinking. They just spew the most basic info and people think they are geniuses...

[@amireallythatgrumpy6508]

He is in debt though....

[@Hellblaue210]

@@amireallythatgrumpy6508 Sarcasm right?

[@amireallythatgrumpy6508]

@@Hellblaue210 Absolutely not. No matter how much more money you would make from investing, it's worth sacrificing every cent of it to be out of debt. Debt is disgusting.

[@alinatamashevich3354]

@@slmunney7760 And you would be wrong. Debt robs your future....today! learn that simple fact, own the world.

[@alinatamashevich3354]

@@Hellblaue210 Wealthy collect interest , poor people PAY it. The wealthy understand this concept, the poor never do.

[@armchaireconomist8648]

Ramsey is giving poor advice.

[@donjohnson1416]

And you dont know ENGLISH. Its giving poor adviCe.

[@armchaireconomist8648]

@@donjohnson1416 I stand corrected.

[@LAZERZ-OP]

This is a brag call. This guy makes 400k a year. Gimme a break

[@donjohnson1416]

Give us a break from your hater DRAMA

[@soonermagic24]

Horrible advice… 2% rate is nothing. He could put 170k in the stock market, and make 11% average return. 11-2 is 9% better rate of return. Add the fact we have inflation going crazy, he’s going to wish he just listened to those professionals.. Rachael said it herself. It’s a math game. Math wins over emotions

[@calebdoner]

Your math equation doesn't calculate for risk...stock market risk, health risk, or employment risk.

[@soonermagic24]

@@calebdoner that’s true

[@mungstrosity]

@@calebdoneror taxes….

[@fhuber7507]

I paid cash for a house... best decision ever. 16 years of no house payment. Any investment advisor who says not to pay off the house just wants your money in their program so they can get commissions.

[@Force5_Eye_Dev]

Never heard a good argument for not paying off a house. Only either bad info / ignorance or trying to sell you something.

[@Excalibur2]

@@Force5_Eye_Dev it's real simple: in a low interest environment, it financially makes sense to invest the money instead of paying it off. This, of course, only makes sense if you are responsible enough to actually invest the difference and not just blow it on junk.

[@Force5_Eye_Dev]

😂 like I said. No good reason. Not having a mortgage / rent each month to live is worth about a 75% return. So show me that and I’ll keep the mortgage and put the money into that vehicle. You people are all the same. Just do the math. Pay it each month be good with your money. You’re still under the great stress of HAVING to make a mortgage payment each month. . The best thing I ever did was get my mortgage payment ahead by 12 months (as in next payment due was next year) then paid the payment to keep it moving forward and put everything else on the principle. I own 10 properties. So not just a joe blow hoping to retire on social security.

[@G_Money_]

Exactly!

[@03c5z]

@@Force5_Eye_Dev that isnt a fair statement. There are plenty of valid arguments. Take the investment advisor out of the equation. Use a T Bill for example, regarded as the safest investment. If the rate is above your home interest, you have an investment that is virtuallt zero risk that is making you more money. And guess what, no comissions for someone that has an reason to sway your decision. Paying off your house is right in some cases. Its simply not the answer for everyone, especially if you are a more sophisticated investor that knows how to manage risk.

[@tristan2332]

I don't regret paying off house early....I have no car payment or mortgage...makes it easy to live well below means.

[@oski632]

i think people need to look beyond the math and the price of not having a mortgage makes life just so much easier

[@jimroscovius]

I paid off my house a few years ago and it's awesome!!

[@alinatamashevich3354]

Ditto

[@om617yota8]

"Do you stand to benefit from giving us this advice" is fantastic! Well done, Dr. D. When I was first doing research about buying my house, I had a mortgage broker advise me to get the most house I could, and don't haggle on price. Wait a second there, you're a mortgage broker, of course you want me to get the biggest loan possible, because that's a bigger commission for you. I bought half the house I qualified for, very thankful.

[@PInk77W1]

I paid cash for my home. No debt at all. So happy

[@jawsgreatwhite9966]

Having my house paid off and both my cars gives me incredible peace of mind. It’s the greatest feeling to not worry about how much food or gas will cost due to rising inflation.

[@reese85]

@@wordsalad01 regardless if your in debt or not! If you don’t have the income, your feeling it

[@jml9550]

@@wordsalad01 exactly. With no mortgage and any other debt, it is peaceful.

[@reese85]

@@wordsalad01 lol come on now lets be real! Let’s say you make 40k right! Debt or no debt, your goin to feel a pinch as prices continue to go up, so save me with that other bs you said! Cuz I never said if I was or wasn’t in debt and you don’t kno how much I make or don’t make

[@reese85]

@@jml9550 Everyone doesn’t have a mortgage but with little income and no debt and prices goin up! It’s goin to effect you, lol y’all crazy

[@reese85]

@@wordsalad01 ain’t nobody arguing! Having a simple convo just like everyone else

[@RobotMowerTricks]

Oof.... depending on how old that guy is, paying off the house is a million dollar mistake by age 80

[@bassandswitch6367]

He makes enough money that as long as he is responsible, he really can't go wrong investing, paying off home

[@mathematician1234]

Mr. Ramsey might ask you to reverse engineer this situation: Ask yourself, if you had no mortgage and $0 in the bank, and $400K income and no other debts, would you go out and borrow $170K using a mortgage, and put the $170K in the bank, and then have to pay $2,600 a month? If the answer is no, then kick this mortgage to the curb.

[@bishikon]

What happens when you do the math?🙃

[@mathematician1234]

Which math? I don't think it is a math question.

[@erikrohr4396]

I can't afford to avoid the math game like these folks do.

[@ryanmoores7726]

Imagine somone telling you to not pay something off....

[@Lon1001]

It already is paid off because the cash is there to cover it, so right now the risk side of borrowing is null and it's borrowing cash at a cheaper rate than you can get a guaranteed ROI.

[@TheDougSpot]

Imagine telling someone to pay off a 2% loan instead of investing with a 8-10% return. Paying his house off would be the absolute dumbest decision to make.

[@WeBeatMedicare6969]

@@TheDougSpot false lol….maybe…maybe not…you say 8-10% like it’s a given…you haven’t accounted for risk

[@TheDougSpot]

@@WeBeatMedicare6969 I’m quoting Dave Ramsey’s numbers. You just pointed out how idiotic his teachings are and didn’t even realize it😂😂😂

[@cavemanlook]

I played the 30 year game at 8%. I am so glad i am free an clear now .

[@TheDougSpot]

Absolute horrible advice. It astounds me how stupid it would be for him to pay his house off with a 2% interest rate🤦🏾‍♂️ Do you realize how much money you’re throwing away by doing that instead of investing???

[@amireallythatgrumpy6508]

Investing is stupid.

[@TheDougSpot]

@@amireallythatgrumpy6508 If you believe that, then why are you watching these videos🤔

[@amireallythatgrumpy6508]

@@TheDougSpot Because the most important financial step is to have a paid off house.

[@TheDougSpot]

@@amireallythatgrumpy6508 Yea, that’s the BS that he’s got you believing 😂😂😂

[@karenjensen2345]

Has anyone anywhere ever regretted paying off their house?

[@blackworldtraveler3711]

I must have asked hundreds of people this since high school and I’m 51 now. Zero regrets.

[@webfreakz]

as Dave would say: "You can always go back into debt"

[@soni05131]

pay off mortgage

[@craighendricks2994]

Another caller that just called to brag. 400k income and you don’t know what to do with the house or college fund? Give me a break dude.

[@kayrenallen7369]

Pay it off! Save and pay cash for college!

[@screwdriver_bandit]

Good for you man. But as a middle class blue-collar midwestern worker it blows my mind to hear how much money some people make. The vast majority of people do not and never will have ANYTHING close to that kind of income. I got into the wrong line of work.

[@HappyPenguin75034]

There is a lot of money - and you are wrong cast majority won’t. They do!

[@coreyscott5655]

Earning 400k a year do you even notice that 2k mortgage coming out!

[@azteca6695]

They didn't ask if they had a retirement plan?

[@mattmasteringer4399]

This guy is just flexing on how much he has in savings, how low his interest rate is and how much he makes. 💪

[@SherryEllesson]

I'm a retired accountant, and I would have told this guy the same thing you guys did. Not all accountants/financial planners are idiots!

[@jml9550]

Yep. That job or life could change. Pay that mortgage off and spend modestly and keep saving.

[@sblijheid]

They're not idiots, they just have an agenda that's not in their client's best interest.

[@SherryEllesson]

@@sblijheid That's the difference between an accountant/advisor who feels a fiduciary responsibility and one who doesn't.

[@SherryEllesson]

The agenda should be educating and protecting the client. Full stop.

[@Nick-gk6hj]

And your situation is 100% of the time different 15 or 30 years from the day you signed that mortgage agreement. That's a guarantee.

[@annkrull9894]

Freedom always come with a price....this advice is not great for every situation. If you have no steady replaceable income this advice is terrible.

[@JLa7257]

Pay it off! We did and it's great to have no mortgage. ♡

[@MrBraceface216]

I think the coolest thing is that he’s even thinking about paying for college for his kids

[@DanielGarcia-zz9eg]

You make 400k Have 170k in savings Pay that home off. As for your kids, let them find a way to pay college. When they finish college, you can decide to help pay thier loan off. Not b4 , after. Kids u never know where they going in life. Make them work for it. So many opportunities today to make money at any age

[@reese85]

There’s nothing wrong with them wanting to give their kids better advantages in life!

[@michaelristow2775]

Makes 400 K a year and only has 170 something thousand in the bank. Geez this guy needs to live below his means more and sharpen his pencil.

[@teeduck]

Tell your kids to pay for their own college. Problem solved

[@martyhen]

Have to believe in math or Dave; cannot pick both. Freedom is having more money imho, not less.

[@xfhnhhgjbvcfg]

How is the math better not following Dave? I'm down 20% on my investments lol.

[@amireallythatgrumpy6508]

Did you mean 'and' instead of 'or'?

[@martyhen]

@@amireallythatgrumpy6508 No. Can only pick one, math or Dave. As they mention in the video "we are not following the math and making a decision based on feelings"

[@amireallythatgrumpy6508]

@@martyhen No. Your sentence should be "Hard to believe in math AND Dave." Meaning it's hard to believe both. "Hard to believe in math or Dave" means you cannot believe either one.

[@SnakeHandler-g7u]

Right, her argument is emotion based because it feels good to have no mortgage. The "math games" aren't games, they're just math!

[@oski632]

either way he will be ok, i have 45k left on mortgage at 4.25 percent and i am considering paying it off but would be left with like 20k liquid dunno if i want to go so low on cash

[@tomw485]

This guy is trying to save for his kid’s college, only has a 2% interest rate mortgage and they’re advising he pay it off now?! He can get double that return on T-Bills! People should do whatever they feel is best for their personal situation but this is lunacy to me.

[@tomw485]

@@slmunney7760 Unfortunately it sounded like he was searching for a reason to pay it off now. My guess is he went ahead and wrote that 170k check and now feels warm and cozy inside totally oblivious to the opportunity cost of his actions.

[@SasiKutti]

Won't the tax on the income from the T-Bills plus the inflation almost wipe out the difference? Would investing in an S&P 500 index fund which has an average return of 10% might be better? Asking because I am in a similar quandary.

[@tomw485]

@@SasiKuttiI was mostly just pointing out the savings interest rate as an example as to why paying off a low interest mortgage early makes no financial sense but you should probably also be investing in broad market index funds. It really depends on your income and location as well. But before I get into it I first have a to say that inflation is completely irrelevant in this scenario. Yes the purchasing power of the dollars and cents of your returns do get lower with inflation. However the value the of money owed on the loan is also weakening by the same rate. Inflation is your friend when it comes to owing money with a fixed rate loan. And the longer the payment terms the better. Would you rather owe 100k now or 100k 20 years in the future when that 100k is closer to 60-70k in today’s dollars? Point is it’s a wash in this comparison. But let’s the do math. Let’s say you have a 250k mortgage at 2.5%, your household income is 100k and you live in a no income tax state like Texas. 2.5% is $6,250 interest owed on the loan per year but you can expect to reasonably get a 5% return with T-bills and some high interest savings accounts which equals $12,500 cash flow. Using a tax calculator your additional tax bill on that $12,500 is $2,460. So doing the math take $12,500-$2,460 tax -$6,250 mortgage interest = $3,790 net. If you’d rather be $3,790 wealthier don’t pay off your mortgage. Now let’s say you make $500,000 in San Francisco and have a 1 million dollar mortgage. Your mortgage interest at 2.5% is $25,000. The interest earned at 5% of a million is $50,000. The additional taxes owed on that additional 50k interest income in CA would be $18,675. Doing the same calculation that’s $50,000 interest income - $18,675 tax - $25,000 mortgage interest = $6,325 net. So even a high salaried person in a high tax area still makes money by not paying off their mortgage at 2.5% interest. Now would investing in the S&P500 be a better return over many years? Yes very likely. However experts are projecting closer to a 8% average annual return (some as low as 6%) in the S&P moving forward and the market is near all time highs currently after a historically good 15 year bull run. There’s a chance that if you were to take that full chunk of cash and put it all in the market right now you might yield well below 8% or even negative returns for the next couple of years (not guaranteed of course…. No one knows what the market will do in the short term. In the next year it could jump 20%, lose 20% or move sideways for all we know). The most prudent way to enter the market is to dollar cost average by contributing that money into a fund in small chunks over even intervals. So let’s say you have 250k cash. One strategy could be to put 5k a month in an S&P index fund over the next 4 years until it’s fully invested (or maybe until you 3-6 months living expenses left in savings). However before contributing any money to the market I’d first put it all in a high yield savings account so you’re already earning 5% on your cash from the get go. Then start your monthly contribution into an S&P index fund. This is actually very similar to my current investment strategy. The specific amounts, intervals and timelines aren’t set in stone and you should set that based on your own financial situation and future plans. Your age plays a big factor too. The older you are you want less risk and volatility so maybe you want to keep a larger portion in high yield savings and have less market exposure. I know I wrote a lot but hopefully this gives you some ideas as you decide how to best deploy your cash. But if you haven’t done it already at least park your cash in a high yield savings account getting you at least 4-5% interest as you decide on your specific strategy. That part is a no brainer. It will be FDIC insured and you’ll be free to withdraw it any time while enjoying pretty healthy returns. And don’t be in too much of a hurry to put your cash in the market or any other investment vehicle. Take at few months and devise a well thought strategy. Bounce your plan off a financial advisor and really weigh out your options. Educate yourself and really become as financially literate as possible. And don’t make any rash or emotional decisions with your cash. Don’t blow it on a car or boat or some other luxury purchase either. Then you’re literally leveraging your home equity to buy expensive toys that will depreciate in value. The whole point of not paying off the low interest mortgage is because you want to optimize your wealth generation.

[@SasiKutti]

@@tomw485 Thank you so much for such a detailed, informative answer. I'll use all these tips to put together a good investment strategy and invest my savings wisely.