Paying Off Your House Early is a Mistake (According to the MATH)

[@yoursafemoneypeople]

Leave some comments below! Do you agree with me? Why or why not? 👇

[@TheBelrick]

Ive always known this. Without even watching your video yet. The $ in your pocket is the most valuable it will ever be. That is why banks encouragement fast repayments. Let inflation (the stealth tax shared among ruling... elites. cough) pay off your debt. Use your $ for your own gain not theirs. Paying off 30 year from now debt with today's money is going long on the dollar and that is stupid

[@yoursafemoneypeople]

@camwalker1186 Thank you for your comment. If everything you thought to be true turned out not to be true, when would you want to know? 1 - the asset grant deed is your in your name not the banks 2- if you choose to pay it off please do as that will help you sleep better at t night 3- always do the math because the math says you should keep it financed the choice is yours keep smiling!

[@TheBelrick]

@@yoursafemoneypeople the deed is our names but the banks are the ones that can send in the army of the interior to seize the property. Remember the banks motivations, they are not out to own property. Or earn $ They seek to seize a percentage of workers income. That is why they care not for inflation.

[@Joce123]

I will not pay off my house because I do not want that asset to be taken by the nursing home should I have to move there. I give my children cash every year in small ways...paying for children/grandchildren mini-vacations...gas cards for college aged ..

[@JulioMoscoso39]

I totally agree and I encourage to rent where you live Invest everything somewhere else where you can get 8% plus.

[@azteca6695]

I was single at the time. I managed to save 3 months of emergency funds. 2 yrs after I moved into my house. I was diagnosed with cancer. The following year as I was going back to the hospital and doctors. To check for any remaining cancer cells. New management came in, I lost my job. Fortunately I had that money saved up. I was cleared from Doctors and was able to find another job 2 months later. I cannot stress enough about having an emergency funds. And I did get a 30 yr mortgage. Made extra payments as I could. Stopped making extra payments, when I was going through this. The mortgage was paid off in 19yrs. I was told I'm losing out in investing. But paying off the mortgage gives me a peace of mind, in case something else happens.

[@yoursafemoneypeople]

Congratulations and thank you for your comment - The point of this video is to get people to understand that equity has 0% rate of return. Once you understand that, you can make a educated decision as to whether you should accelerate the paying off of your mortgage. Once you do the math on that, and understand that interest rates are relative, you will likely change the way you do it. The choice is always yours. The right or wrong way to do it, is up to you. It really is mathematical or emotional choice. In addition, everyone's situation is different. Regardless of how you choose to do it you should always have a plan. if you want to know how it applies to your situation set up a no cost no obligations strategy session here calendly.com/jjsafemoney/appointment

[@bridgettemuhammad6903]

If I’m understanding correctly, it only makes sense to do a 15 yr mortgage instead of a 30 year mortgage if you have the “strength “ to invest the difference you would be saving monthly. Most people aren’t going to invest. So, if you’re not into investing then it’s best to pay the mortgage off as fast as you can so you can have peace of mind in times of difficulty.

[@bgreg6069]

@@bridgettemuhammad6903 I agree. If you do not have the way to get your money work for you, then it's better to pay the mortgage off early.

[@ssgj1883]

God Bless you and I completely agree with you. PAY HOUSE OFF !!! Rather have a paid off house with money SAVED or INVESTED. Not sure I agree with this KZbinrs point of view on this!

[@askcleftnew]

​@@bridgettemuhammad6903a lot of people are house poor.

[@dennissandvig2148]

Cannot put any price on peace of mind! Payed my house off in 7 years and been investing in the market since the mid 1980s on top of that, if everyone could just invest some money every month we would all be better off. Debt free=way less stress! Stress causes a lot of problems in life. Math or no Math, bottom line, no monkeys on my back!

[@rosecampion4337]

And if we had sound money, we could actually save and not have to get on the hamster wheel of “investing”.

[@somethingclever1234]

Exactly! Paid off my house as a priority and extremely happy I did, no need to make the banks richer

[@bluwng]

Amen. This advice is actually dirty all he wants is to game the system with debt. You don’t own the house the bank does.

[@strategicconsensus]

I don't see any advantage to dying rich and debt free. Neither you assets nor your liabilities join you in the afterlife.

[@RetrieverTrainingAlone]

We did the same paid off our house in 10-years on a 30-year mortgage. Saved over $200,000 in interest payments and peace of mind being debt free. Plus when we retired and downsized, the revenue from selling our bigger house was tax-free.

[@JimSanford-g3d]

The issue is that either the renter or the owner must in some way pay insurance and property taxes if they want a "permanent roof" with utilities like electricity, gas and water. Because of this, many people-at least in California, where I currently reside-are living in tents. No taxes, rent, mortgages, or insurance. The number of people who tell me they live in their car that I meet amazes me. Its crazy out here!

[@RaphBeekers]

It’s getting wild by the day. The prices of homes are quite ridiculous and Mortgage prices has been skyrocketing on a roll(currently over 7%). Sometimes i wonder if to just invest my spare cash into the stock market and wait for a housing crash or just go ahead to buy a home anyways.

[@AlekNiks]

This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $400,000.

[@EmmaDavis-n6u]

Please how can I connect to your advisor? My funds are being murdered by inflation, and I'm looking for a more profitable investing strategy to put them to work.

[@AlekNiks]

Renowned for her proficiency and expertise in the financial market, Rebecca Lynne Buie, my financial advisor, holds a broad understanding of portfolio diversification and is recognized as an authority in this domain.

[@AlekNiks]

Finding financial advisors like Rebecca Lynne Buie who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.

[@glennjsoucy9052]

My wife and I retired early, and it was made easy because our house was paid off early. You can not put a price on how well you will sleep at night with a paid off house.

[@yoursafemoneypeople]

Congratulations

[@glennjsoucy9052]

@yoursafemoneypeople Thank you. I agree. Mathematically, it doesn't make sense to pay off your house. But, I have never met anyone who regretted paying one off early. 😊

[@audryk.7825]

Paying off your mortgage faster would make you save on interest that would have benefited the bank

[@yoursafemoneypeople]

@@audryk.7825 Thank you for your comment - do the math you pay either way. If you want to learn how this applies to your situation reach out and leave your check book at home calendly.com/jjsafemoney/appointment

[@nonhlanhlamkhonza4263]

​@@yoursafemoneypeople❤

[@landzw]

I’ve paid my house off last year, It’s nothing special but it’s mine at 47 and I feel so much more content and chilled, with way less stress in life.

[@yoursafemoneypeople]

Congrats! I’m simply stating the math. It’s ultimately your choice

[@randomname931]

you/we don't own anything. miss a tax payment and the town will repo your house.

[@subspace666]

@@randomname931 tax payment should not be a problem if you know what your doing or are subjected to a force majeur/very bad luck.

[@randomname931]

@@subspace666 not when the tax rate is 2% and the house value more than doubles in 10 years for someone on a fixed income.

[@subspace666]

@@randomname931 not really a problem ether if it doubled and you cant afford tax payment then just sale it. i never heard of a property increasing in value being a problem for the owner , only for the people wanting to buy one.

[@djemurda]

This is the best thing i've ever watched on KZbin. The algorithm actually helped today..👍👍

[@yoursafemoneypeople]

Thank you feel free to reach out.

[@stevethomas7036]

Great stuff. Put the least down on a house and always have a maximun mortgage. So many high yielding investments out there.

[@yoursafemoneypeople]

There are Steve. Even guaranteed ones where you can never lose money. The concept most people don’t understand is that with a mortgage you are paying on a declining balance and when you are investing you are eating on an increasing balance so in the long run you will come out ahead with the right strategy. If you want to chat at anytime feel free - calendly.com/jjsafemoney/appointment

[@Everythingisgoingtobealright]

Being debt free is fantastic, nothing beats it. Update, I’m not debt free anymore, it was nice while it lasted.

[@yoursafemoneypeople]

Nothing against that. Congrats. But using other people money to build more wealth for yourself is also satisfying

[@youaregoingtolovethis]

Sorry but you are forever in debt always to Uncle Sam like property taxes forever. it' is something you can't escape unless you go hide on some deserted island.

[@alhumphreys5784]

This sounds like another Rich Dad Poor Dad strategy!

[@brandonpetty3849]

Making extra principal payments does save you money, technically speaking, without question. The question isn't does it save you money, the question you are really asking is, "Does making extra principal payments save you MORE money than if you were to SUCCESSFULLY invest it?"

[@rogergeyer9851]

Exactly. That's an example of one of the UNSTATED ASSUMPTIONS he was making. From the comments, obviously, for MANY, peace of mind from no debt is worth a LOT. Nothing wrong with that.

[@ia6980]

There is no such thing as a "successful investment" investment in general is a gamble, you can loose it all, having property is better, than to have your 0s erased from the bank

[@RichardRietdijk]

@@ia6980 There has been no time in history, where if you have a time horizon of at least 10 years, you would have lost money investing in the total market. this includes the great depression, the world wars, and the pandemic. The Sp500 index has given an average return of 10.5% annually, so with the time horizon of a 30-year mortgage there is no universe where you get out ahead of that paying cash for your house. But it's a personal choice of course. I'm just pointing out that the statement that there is no such thing as a successful investment and it's gambling is strictly false.

[@ArloPear25]

Making extra principals payments is guaranteed to save you money in reduced interests. There is no guarantee of a returned rate of interest on the vats majority of investments and those with a guaranteed rate like CDs typically lock in your money to achieve the desired rate of return.

[@tkzsfen]

Yours is the comment that should be on top. We are speaking about probabilities. Looking at the current situation in the year 2025 I am more of a pessimist for the market, but it would have been quite different 10 years ago. Truth is, we don't know. We can only speculate what is the right decision and people who were successful must understand that it was partially due to luck.

[@anthonybro1]

So keep paying 7.25 percent interest on a 500,000 dollar mortgage and see how much money that 500,000 dollar house ends up costing you

[@drogon2988]

Exactly. This guy is an idiot.

[@sylviesko4235]

You end up paying about 125% of the original value on a 30year loan. So you buy your own house and you buy a house for the bank! Banks love guys like in the video. Investments make more sense to keep mortgages for longer, but not the principal first home.

[@richardabel2402]

But you are overlooking the time value of money, and inflation

[@daveyvane]

You are giving up the future income, by spending that income in interest payments

[@daveyvane]

You are giving up the future income, by spending that income in interest payments

[@TigersPaw04]

This is hands down the best video I’m seen this year! You make complete sense on getting control of your money and actually growing it faster. I think this is tough for the everyday person to do because it takes discipline because you’re supposed to take those additional funds and invest not go on vacation or buy luxury car, but you can get ahead in the way you are thinking about it.

[@yoursafemoneypeople]

I appreciate that! Discipline is key to making this strategy work.

[@mudsta9828]

Seems everyone else has missed the point of this video.

[@Danny-wd3tq]

I just paid my house off recently! In the years of owning my home with debt. I was never once stress free. I am so....... HAPPY... STRESS FREE AND DEBT FREE!!! BEST DECISION I HAVE EVER MADE WAS TO PAY THE DEBT OFF!

[@yoursafemoneypeople]

Congratulations - quick question what did you do with the house payment?

[@sherirottweilersforever7772]

@@yoursafemoneypeoplemy husband would buy a fishing boat.

[@yoursafemoneypeople]

@@sherirottweilersforever7772 That's called the Parkinson law your expenses will keep up with your income.

[@Uncle-Basil]

@@yoursafemoneypeople Yup, no growth.

[@Anonyme67]

@@yoursafemoneypeopleyou are a bully. The point is the house being paid off. Now the can use that extra money as they want.

[@dclaet1135]

I paid extra every year in order to pay my house off early. This way, it was paid off before I retired. I'm so glad that I had the good sense to do this. Now, I can live within my means, have zero debt and zero financial worries.

[@yoursafemoneypeople]

Thank you for your comment the choice is always yours.

[@menesesal]

This is the typical thinking the average person has. What he is saying is explaining financially why is better to have a payment. And not use your own cash to put it o a house that will not increase in value because of it

[@vice4134]

@@menesesal But you end up paying more in interest which could end up in double of what you paid back to the bank.

[@madhupai9683]

That is precisely what I thought. But when I saw the math, seems like if you invested the funds that you would have otherwise paid to the bank, you eventually end up richer owing to the power of compounding.

[@thisweekmetaverse]

Ive done similar to what is suggested in the video. I have a 20 year mortgage but I invested ling before buying. My mortgage is $145000 usd remaining. By not paying it down and investing my investments are currently worth $200,000. I am not paying off my house, im getting about 6.35% reinvesting interest and capital on half of it and other half is in funds crypto and other asset classes. If I lose my job tomorrow, i can cover the mortgage payments and keep investing. And this is the key point. If you pay off your house, and you live in it, you have a house. If you invest, you have a house, investments, money to cover all eventualities.

[@CameronFussner]

Mortgage rates are currently at an all time high since 2000(23 years) and based on statistics on inflation, we might see that number skyrocket further, a 30-year fixed rate was only 5% this time last year, so do I just keep waiting for a housing crash before buying or redirect my focus to the equity market

[@leojack9090]

The stock market is no different, to maintain profit, you need to have some in-depth knowledge on the market.

[@yoursafemoneypeople]

@parrish8386 if you believe the only way tp make money is the market then this would be true but there fixed rates out there today at 6% and if position your funds correct for taxes your nets can be much higher in the end

[@lowcostfresh2266]

my partner’s been considering going the same route, could you share more info please on the advisor that guides you.

[@Mrslansiquot]

Where are the fixed rates at 6%? I haven’t found any

[@MC-yg7gp]

Get the loan. You can always refinance if things get better or you'll appreciate getting now if interest rates continue to rise.

[@raulsanchez4493]

Paid my house a month before everything went into lockdown with Covid. The first thing my wife & I said to each other was “no matter what happens to our jobs, at least no one can take our house.” THAT was true peace of mind.

[@yoursafemoneypeople]

And that is a fine argument. It’s the only one that makes sense. Peace of mind is a gift. But mathematically paying it off early is not the best way. Thanks for your comment

[@richmorin8133]

That is mostly true but if don't property taxes they can take the house

[@Innovationlu]

But you would have had years of money in the banks saved up to make monthly payments… there would have been no difference in terms of peace of mind

[@oldgunowner]

​@yoursafemoneypeople, you're wrong, if your payment is $1,000 a month, and $800 is interest and $200 is principal, please explain how adding 200 more to this payment doesn't effectively save you 800 dollars in interest.you are effectively making a second month's payment. You still need to make every month's payment.And if you readjust your extra payment schedule every enjoyed will effectively own your 30 year mortgage in 16 years give or take a couple of months. I know this works because I did it, and enjoyed almost 14 years of not having to pay a $1,000 payment.

[@sassylady2001]

@@richmorin8133 I live in an area where if my adjusted income is $12,000 or lower I am exempt from any property taxes.

[@angelamilliken2992]

In the middle of the Covid pandemic we sold 2 rental houses and paid off 100,000 owed on our house. We were and still are 100% debt free. Good thing too for one month later my husband lost his job of 20 years because he wouldn't take the jabs. Yes, we are glad we paid off our house but even more thankful we didn't bend. We are doing well, literally.

[@yoursafemoneypeople]

Thank you for your comment the choice is always yours.

[@Orryv]

Very good decision

[@shufflesilver]

Well done to you and husband, for all decisions you stated

[@jamesfneubauer884]

Your example about the earthquake and you owe a million and just paying interest only and your neighbor house is paid off owes nothing , both total loss, end result is the same ,insurance pays the house paid off & the house that is being paid interst only is paid off by the insurance company to the bank, that said both even. Now, write off for interst only limited by IRS deduction, house paid off no IRS deduction and did receive a benefit of how much would he have paid in rent if he rented his house VS cap on interest cap paying interest only ? The owner who paid his house off can take short forms standard deduction along with the added benefit of not paying a monthly rental fee or interest only loan. Conclusion, better off not borrowing money because that's how banks make money.😊

[@yoursafemoneypeople]

@@jamesfneubauer884 If everything you thought to be true turned out not to be true when do you want to know?

[@Larry_M6790]

It's obvious you're an intelligent man, and that's great. My conscience, and integrity tells me that if I take out a mortgage (or any bills), to pay it back on time and hopefully as quickly as possible. There is no amount of analyzing and number crunching that can make more sense to me than having no debt. Being debt free is priceless, it may not make me rich, but it allows me to sleep very well at night and have a comfortable fulfilled life.

[@yoursafemoneypeople]

Thank you for your comment. Please consider this if you have $500k in the bank and owe $500k you still have no debt anytime you want. In addition you have safety liquidity and can be making a rate of return . How you pay for your house is entirely up to you but paying it off is merely a emotional decision, not a financial one.

[@georgedreher2322]

Bingo Brother - you nailed what most people want. NO Debt & stress-free sleep!

[@Uncle-Basil]

@@yoursafemoneypeopleMaking your money work for you is not something everyone will understand, some folks just want a peace of mind being debt free. As for me, I am already practicing what you taught in this video and it allows me to maximize my money for other investments, which I would not have otherwise.

[@yoursafemoneypeople]

@@Uncle-Basil Thank you for your comment - congratulations on getting it the next step is tax free growth

[@yoursafemoneypeople]

@@drc3po Actually you would be surprised. But hers a question for you if you don't have one, when will you?

[@toby9999]

I hate debt. Debt creates stress. Stress destroys health. That's why I paid off my mortgage as soon as possible and eliminated all debt. I could have kept a second property but I hated the stress, so I sold it.

[@yoursafemoneypeople]

The beauty of this country is that the choice is YOURS! Cheers

[@SLHJR0390]

this is useful advice for dual income couples with kids because they typically have student loans to pay off too. I know so many couples that tackled the house first and the interest savings was literally the balance of their student loans. they tackled those next, and now they arent living in an interest driven world and they have excellent credit scores should they chose to use credit. The idea that throwing a hundred or more thousand dollars (depending on your home value and loan terms) out the window to interest ... its just a plan to live for someone else for the next 15 -20 years, or more.

[@yoursafemoneypeople]

@@SLHJR0390 Thank you for your comment - Congratulations you get it, feel free to reach out. calendly.com/jjsafemoney/appointment

[@frankarteaga3765]

Hating debt = heating money as money = debt. Unfortunatelly, this is the monetary system in which we all live.

[@yoursafemoneypeople]

@@frankarteaga3765 Thank you for your comment the choice is always yours.

[@magnusbestest]

Thanks James what a nice simple exlanation. I just think you should also take into consideration the higher potential risk that people keeping the money in a bank or investing have vs. having the money in the house.

[@yoursafemoneypeople]

Thank you Who said anything about a bank? I wouldn't keep $50,000 in a bank. If you you do not think there is risk in real-estate, you have not owned it for very long, I have lived through two downturns in the market.

[@magnusbestest]

@@yoursafemoneypeople Thank you... in that cases do you happen to also have a video on your recommended broker that you feel is so much safer than having money in a real estate?

[@RobertEdwards-sb6bc]

​@@magnusbestest crickets 😂😂

[@magnusbestest]

@@RobertEdwards-sb6bc hhh

[@LanaUSA212]

Paying off my house was the best thing I ever did ! When I got such with covid and could not work I was not afraid of losing my home.

[@crand20033]

I lost my job 2 months after buying my house, at age 40, retired early, rented out all my rooms and let others pay my mortgage.

[@bigal8976]

Had a friend that told me I was not smart for paying 50% extra on my mortgage & should be investing in market. My house went up 100% in 12 years and he lost $1mil in the market in the 2000 bubble. I also lost 50% in market. Unless you have a zero risk 6% return I don’t see this unless your buying real estate after crashes.

[@yoursafemoneypeople]

Thank you for your comment - there are all types of risk and the market is just one of them. If he lost million in 2000- 2002 he had several million in order to do so, and had recovered by 2008 the lost again and then 12 year run up. The whole time his house went up by the same amount as yours. The point of this video is to get people to understand that equity has 0% rate of return. Once you understand that, you can make a educated decision as to whether you should accelerate the paying off of your mortgage. Once you do the math on that, and understand that interest rates are relative, you will likely change the way you do it. The choice is always yours. The right or wrong way to do it, is up to you. It really is mathematical or emotional choice. In addition, everyone's situation is different. Regardless of how you choose to do it you should always have a plan. if you want to know how it applies to your situation set up a no cost no obligations strategy session here calendly.com/jjsafemoney/appointment

[@bigal8976]

@@yoursafemoneypeople The problem is my friend also had multiple rental properties. Hispanics moved into the neighborhood and he also took major losses on these properties. The market is a big gamble. Who can wait years hoping it will come back. IF you can buy after big market sell offs the risk is minimized. I understand your logic, but also realize the risk. Every home I have ever owned I wish I hadn’t sold. The house that doubled is now 4x. A second house I own has gone from 380k to $1mil, Bottom half has been rented to same people for 7 years. Faces ocean on Puget sound. Plan to retire there. Property managers are terrible. They build no relationship with the tenants. I manage 1500 miles away. Wish I could find small apartment 8-12 unit that cash flowed after mortgage. Everything is so inflated none of the numbers work.

[@lancephinney5538]

You don't make any money off of people's paid homes, pay your house off, A bird in your hand is worth more than two birds in the bush

[@philv2529]

Making extra payments does not pay it off any sooner than if you had put those payments in a savings account or CD and then paid it off all at once in a lump sum once you saved enough. However you would have been getting interest on the account so you would have actually paid it off sooner. Also you would have had access to that reserve of cash in an emergency. Getting your equity out of a mortgage takes time and incurs a cost.

[@yoursafemoneypeople]

@@lancephinney5538 Actually not but the choice is always yours

[@insomnia9999]

Most people don’t live in 500k homes and have 500k in their bank account I have experienced not having a place to live and I refuse to experience that ever again. My mortgage will be paid off as soon as possible.

[@yoursafemoneypeople]

Thank you for your comment. If you watch the video again all the way through you will find out that paying off your house as fast as possible is the point, just don't pay it to the bank.

[@mjs28s]

Seriously? Tell me you didn't pay any attention to the video without saying that you didn't pay any attention to the video.

[@masoncnc]

I do

[@Gamesso1slOo0l]

@@mjs28s the video is a sales pitch.

[@travismartinson1813]

You could be down to your last year before paying it off and if something happened to where you couldn't make the payments you would lose it. If you invested the money, you could sell some investments every month or take a loan against them and make your house payment. To me it's much safer to not pay the house off early unless I could pay it off all at once, but even then that's a huge opportunity cost because I could have the money invested making me more money instead of being tied up in my home.

[@wzjc4]

Thank you for your sharing. I know some people disagree on your opinion, but it does provide a new perspective on how I think about mortgage

[@MarekThatGuy]

I will point out one serious mistake in the video: Negative taxable rental income. If you have that, you pay for mortgage interest out of your pocket. Let's say the interest rate is 7%. If you make a mortgage prepayment, that's guaranteed 7% return on the money because it's the interest you won't have to pay every year. In order to make the same return in the stock market, you would have to make 10% capital gains return before taxes, which is 7% after taxes here. So making the mortgage prepayment gives you annual return that's equivalent to 10% capital gains in the stock market. Once the mortgage is prepaid enough that the taxable rental income changes from negative to positive, it's no longer profitable to prepay the mortgage further because the interest payments are fully deducted from taxes here.

[@JohnathanMiles101]

Exactly!

[@MyraO-e6i]

my interest is 2.9%

[@juanvaldez714]

It makes sense as long as you can get an investment vehicle that gives you the desired rate of return, but if the mortgage rate is at 6% you will need to invest in a stock, ETF, own a business etc.. those are subject to market volatility and are not FDIC insured, so you may end up losing all or a portion of your investment money. What is the recommendation, you give us to have that rate of return?

[@faronray5765]

Debt free is the way to go. Nothing is for sure in the stock market. Just when you need to retire, you could take a huge hit. Better to pay off the house for peace of mind and for better sleep. My house is paid off and so thankful that I chose that path. Never been more happy with the peace of mind instead of looking at my stock account going up, then down, then up, then down big, then up, then down big again. I just have a self directed IRA (small balance) and don't worry anymore.

[@yoursafemoneypeople]

Thank you for your comment - Congratulations the next step is tax free and guaranteeing your life time income. Want to learn more start here calendly.com/jjsafemoney/appointment

[@loganmedia1142]

Definitely. You don't want to still be paying off your house later on, because you could lose it at any time.

[@gbretriever]

This is an important mathematical equation that we all should understand which is a bit counterintuitive. I know I don’t have the discipline of saving so it’s really theory versus application.

[@yoursafemoneypeople]

@@gbretriever In deed I can't fix that but you can. The choice is always yours.

[@user-uo9eb2tu2x]

Thank you for this awesome explanation! My question is where is the safe place to now invest that money so I can get a return that will allow me to pay it off if I have an emergency?? That’s where the fear takes over.😢

[@yoursafemoneypeople]

There are safe ways to accomplish this! Happy to chat anytime calendly.com/jjsafemoney/appointment

[@mr.rodriguez3908]

If you don't own that house you do not own the asset. The bank does. All you own is the amount of equity you have into the house. You cannot sell that house without the bank getting their percentage of ownership off the top. You cannot borrow against that house beyond the equity you have into it. Thus, a 500k house under a mortgage is not a 500k asset that YOU own. You are only borrowing it from the bank until it's paid off.

[@yoursafemoneypeople]

Thank you for your comment the choice is always yours. It is not necessary to risk your money to make money. Feel free to reach out.

[@rogergeyer9851]

@@yoursafemoneypeople: ALL investments have risk. Short term cash (like treasury money market accounts) have essentially nor risk, BUT over time, after inflation and taxes, tend to return a BIG FAT ZERO. Investments, like the stock market or real estate, over time can make meaningful money -- BUT those come with risks. Volatility risk. Earnings uncertainty. Inflation impact. Variance of dividends. And on and on. When you make a flat statement like that, I find it VERY suspect. I've been very into investing for the 40+ years of my adult life now, due to my upbringing from two depression era parents.

[@shirleyrpaytonanderson7644]

Thank you for the info, where were you 20yrs a😢go

[@shirleyrpaytonanderson7644]

I needed this info, before refinancing my home,for 15 yrs again and now I finally paying it off 😫.

[@naam92]

@mr.rodriguez3908: I agree with this. His whole point is based on this basis, which is unfounded. Unless I missed something. On a 500k dollar home, if one has 500k in cash and has paid enough of the mortgage, such as they have about 80k in equity so far, then if the property needs to be sold and it did not appreciate (500k), one is only getting back the portion of equity, the rest is needed to finish paying the mortgage. So, the total cash after the sale is the initial 500k + 80k of new equity saved up in the meantime, which would have been the same as paying the house cash directly and saving up the same amount (80k) instead of paying a mortgage. It would be saved faster since the payment does not go to P+I but only to P. Even starting from 0 vs. 500k does not make a difference in this example: starting from $0, +3k/mo at 6% over 30 years gives $2,846,094 vs starting at 500k, +0/mo (the 3k/mo go into the mortgage) at 6% over 30 years gives $2,846,094 There are undeniable facts, though, about having cash flow vs. not having it, opportunity cost, insurance, disasters, etc., regarding owning vs. financing.

[@kbikerider8474]

Paying off your home early is ALWAYS a good idea. Forget the debt cycle proponents. No payments= happy life. If you want to mortgage up, get some income property and let the tenants pay the bills.

[@stacy9497]

It is not ALWAYS a good idea. He just explained in the video why paying off your mortgage is mathematically not in your best interest. If it helps you to sleep better at night then it might be better for you. I prefer letting my 2.75 percent mortgage go to full maturity without paying one cent in extra payments. In thirty years, my $1,500 payment will seem like pocket change after inflation.

[@yoursafemoneypeople]

@@stacy9497 Exactly! and if you put the extra principal payments in a side fund growing tax free you will know it out of the park.

[@GTOberfest]

​@@stacy9497Yup.

[@Gamesso1slOo0l]

@@stacy9497 the first part of the mortgage you arent paying off any principle, its all interest, paying more and paying it off early allows you to tackle principle which then eliminates interest payments.

[@Gamesso1slOo0l]

@@yoursafemoneypeople and you just happen to sell these side funds right?? good god Im so glad I left the financial advice game many moons ago.

[@alanbuckingham8788]

The UK used to have endowment mortgages. This was where the mortgage itself would be interest only and you would make payments equivalent to a normal repayment mortgage instead into a managed stocks and shares fund. When the fund was big enough you'd pay off the mortgage after, say, 25 years and have lots of money left over. Endowment mortgages no longer exist because at the end of 25 years people found that their investment had not made enough to pay off their interest only mortgage. This is a practical example covering millions of people, showing why your plan often doesn't work.

[@MrSham61]

Soo true! People are suckers for free money.

[@TheLinkedList]

Exactly, this guy is making big assumptions about investments always being greater in returns than interest rates on houses. The two are not always linked, as the markets fluctuate far more due to a lot of unpredictable factors. Housing tends to be based on supply and demand

[@daeseanboyd]

​@TheLinkedList this comment basically destroys this video... thank you... yes indeed there is no price on having a roof over your head versus trusting in a volatile system...

[@4711Express]

Correct, these were my thoughts too. Very popular but not possible anymore.

[@liquidh5226]

This video is so underrated. I have subscribed, and thanks for the potentially life-saving tip!

[@alg190]

Your plan may work for those that have discipline and knowledge. For the average person payoff asap is the best way.

[@mjs28s]

Of all the people that I have had this same discussion with, you are about the only one that ever agreed with my thinking. You are also the ONLY one that used some of the same added-risks of tying money up on a home (job loss, opportunity costs, etc). Like wow. I no longer stand alone!

[@yoursafemoneypeople]

Thank you for your comments - I have found that most people live in a box when it comes to financial planning, and they keep asking the the people that are in the same box with them, how to get out. Yet the directions are on the outside. This frequently includes CPA's Attorneys, doctors and financial planners. Most people take the least route of resistance it is just easier then doing the math and changing your paradigm. Feel free to reach out at anytime calendly.com/jjsafemoney/appointment

[@lhale528]

The best advice I was given when I purchased my home 25 years ago was that my husband and I should purchase our home based off of one persons income. Two years ago I broke my leg and we are now surviving off of one income. Thank God we took the advice. Having only five years left on our home loan, we would’ve had a mortgage payment that we might not of been able to afford and possibly would have been facing foreclosure! Thanks you for this video!!! We plan to purchase again soon! Awesome information

[@yoursafemoneypeople]

Thank you for your comment - Congratulations you get it, feel free to reach out.

[@kevinglennon7176]

You broke a leg two years ago and can’t work?

[@yoursafemoneypeople]

@@kevinglennon7176 There are many ways to answer your statement. The main answer is it depends on assets you have , Income needs, and can you do something that does require your leg.

[@agronoxdt]

This video just saved my life! I'm going to be a homeowner August 14th and I had planned to pay off the mortgage as fast as possible.. but now I'm putting every extra penny I have into growth investments instead.

[@yoursafemoneypeople]

Feel free to set up a time to talk about the best choices for that calendly.com/jjsafemoney/appointment

[@russg4703]

Wrong

[@ia6980]

Listen to Dave Ramsey. He gives better advice

[@Rew123]

Ramsey is great for getting out of debt, not so much for building wealth... ​@@ia6980

[@atrain132]

Anytime you can eliminate a monthly payment, and debt is a positive in any scenario. As far as the paying cash for the house scenario, if you paid cash you don't have a expensive monthly mortgage. So you could take what would normally be your mortgage and turn that into investment money while having a house that is paid off.

[@marinaspalate]

Exactly my thoughts. Take that 3-4k you’d be paying monthly and invest it, without paying hundreds of thousands in interest to the bank.

[@sheadoolittle]

@@marinaspalatehis math checks out if you already have the money for the house in full in the bank and you are risk neutral to that concept. Which, most people in the comments seem to be more risk adverse. Also most people do not have that much cash already on hand. Although, the concept does still work it requires a lot more risk tolerance and does not give any value to piece of mind and assumes you have no other assets or insurance to help in those nightmare scenarios. It gets much more compelling to me as you pay down the mortgage and build up more assets. Also if you have a mortgage with a low interest rate say 2-3 percent then investing any extra money also becomes more enticing. If you have a much higher interest rate than it’s significantly less compelling. As you are guaranteed a rate of return on any money paid extra on your mortgage of exactly your interest rate for the remaining term, which is a significant amount of money in the early years of a 30 year mortgage. I get 6.6 percent return locked in for 29 years right now. I don’t have that much faith in the market to trust I will beat that in the market regularly and repeatedly. Ask me again in a few years when I can refinance into a lower rate and have paid down the principal a bit more and don’t see a few thousand dollars go up in smoke to a banker each month. I just am a bit more risk adverse than that. I believe as you bank accounts amount increases your risk tolerance would increase as well and imagining a scenario like he gives I might do something similar. Although mortgage insurance also throws another wrench in to consider as well

[@diamondkutz54]

Always pay off your house as soon as you can. You never know what the future brings and if you are indebted to an institution and you loose your job you will loose your house. The longer you pay interest on anything be it a house or a car the less return you will realize when you do sell.

[@yoursafemoneypeople]

Thank you for your comment - you missed the point. You should indeed pay off you house as soon as possible. So as long as you have the money in hand too pay off your house anytime you want you are always safe from problems.

[@diamondkutz54]

I don't think I missed the point. We just come from different schools of thought on economic policies. Paying interest on a loan is in nobodies favor other than the banks.Even with interest being deductible on your primary residence it still greatly limits what you could be banking and putting toward the purchase of another asset. @@yoursafemoneypeople

[@TheFirstRealChewy]

We've gone through medical issues, emergency repairs, job losses, family emergencies, leaves, etc. What I've found is that keeping the expenses low is great. However, its only great if you have the money to pay it. So having the money to pay whatever expenses come up matters more. Its the reason that you should have an emergency fund before focusing on paying off your debt. Having a larger emergency fund in the form of investments is even better because eventually your investments should grow to the point that it pays for your lifestyle. Also, don't forget that at some point you'll pay off the house. Its only a matter of time unless you keep refinancing or trading up.

[@SoloLLC]

It’s apparent you need to watch the video again. This mindset is what holds you back….Make your money work for you period.

[@diamondkutz54]

@@SoloLLC You know nothing about my financial situation and it will stay that way. The problem with you guys advising people to leverage any position be it a house or an equity portfolio could be the reason they lose everything in this impending economic downturn. All financial planning should be based on age, economic conditions and an astute understanding of how equity markets are rigged. Any real estate or any other major purchase .leveraging your assets could prove to be a grave error in judgement at this point in time.

[@waynemiller6070]

I've been well over a million in debt and I've been debt free. I'll take debt free. I sleep a whole lot better and I have no financial worries. It's amazing how fast your cash stacks up when you're not servicing debts. My advice would be, don't take advice from this guy.

[@rnarzu]

Sounds like you're right -😅

[@yoursafemoneypeople]

I Don't recall giving any advise. I'm simply showing the numbers what you do is your decision. But be clear you finance everything you buy - you either use your money to finance it or someone else's so you finance everything you buy. But thank you for your response.

[@waynemiller6070]

fair enough @@yoursafemoneypeople

[@APHILIP-p8o]

It seems like the above statement was made by some one who made a bad million dollar investment and then is still chicken little quoting !!! lol. you cant fix stupid!@@yoursafemoneypeople

[@yoursafemoneypeople]

@@APHILIP-p8o I have learned not call it stupid. Education is the key. Unfortunately there is not a lot of good education around when it comes to this, most education is linguistic marketing. Unfortunate but true. Remember when you are green you grow, when you are ripe you rot. Never rule out the alternative, as many times it is the only choice despite our believes.

[@gatornaught8984]

I imagine there are some safeguards in a house as an asset instead of cash/investments. If you get sued or incur a huge hospital bill, they might not be able to go after your primary home. The bank may have stipulations for a mortgage that you don't like - steady job, proof of income, credit score, required insurance at certain levels, who can reside there, farm animals?, ect. I guess for some having 500k in cash-like assets might lead them to overspend and buy useless stuff. Finally, the structure of your assets might make a difference in a divorce, but I'm not sure which way is beneficial in that case.

[@yoursafemoneypeople]

Thank you for your comment - The point of this video is to get people to understand that equity has 0% rate of return. Once you understand that, you can make a educated decision as to whether you should accelerate the paying off of your mortgage. Once you do the math on that, and understand that interest rates are relative, you will likely change the way you do it. The choice is always yours. The right or wrong way to do it, is up to you. It really is mathematical or emotional choice. In addition, everyone's situation is different. Regardless of how you choose to do it you should always have a plan. if you want to know how it applies to your situation set up a no cost no obligations strategy session here calendly.com/jjsafemoney/appointment

[@stuartmalin661]

Math is impartial and unemotional. Thank you for the excellent presentation. Your introduction of planning for unexpected situations (loss of job, natural disasters) is atypically addressed and yet crucial to consider.

[@yoursafemoneypeople]

Thank you

[@jdsheleg8332]

Yes, but math is just a concept, not real life. I call BS in anyone, who given the chance, will not like to have a clear title with zero debt.

[@stuartmalin661]

@@jdsheleg8332 You have missed the point entirely. Clear title with zero debt does not provide security - your house can be taken for many reasons. Plentiful liquid assets and the freedom to respond to emergencies are more important.

[@yoursafemoneypeople]

@@jdsheleg8332 Thank you for your comment - you may have missed the point if you have $500k and you owe $500k you are debt free. Either either way the title to your house is in your name.

[@irockhard2538]

​@@stuartmalin661when your home paid off there is alot more money to save. Emergencies are not the same as when there is a mortgage. Emergency fund is in place without a problem.

[@SeboltLawnLandscape]

I’ve always wondered why folks don’t take the money they would pay towards paying off their home and invest it into dividend aristocrat stocks, or dividend ETF’s. A solid investment in a dividend paying stock or fund could really give you a steady stream of cash for the rest of your life. Use that money to pay the mortgage and you essentially have no risk. I understand the peace of mind thing, but there is definitely other options. Id rather not tie all my money up in paying off a home. The value grows whether it’s paid off or not. I do not hold any consumer debt or debt on depreciating assets, but homes are a different story.

[@yoursafemoneypeople]

Thank you for your comment. What people struggle with is the way they have been taught to pay their mortgage, either directly or indirectly. The truth lies in the math . But some people will always be better off paying off their house as they will never take the time to understand the math and will simply follow the old way of thinking blindly not knowing really knowing why. And that is okay.

[@daryljackson3704]

you are assuming your "investments" will always be there. You cannot guess what they will be in 6 months.......":one in the hand is worth 2 in the bush" It appears you have alot of bushs in your life, no thanks.

[@yoursafemoneypeople]

@@daryljackson3704 Thank you for your comment - You actually can if you design them correctly risk is not always a necessity.

[@travismartinson1813]

I would have a lot more peace of mind with enough dividends coming in to pay my house payment every month. Especially during the time that I was working to pay the house off early knowing that if something happened and I couldn't make the payment I would lose my house. Dividend payments compound and appreciate but your payment stays the same on your house. He didn't even factor the dividends compounding and appreciating into the math. Through some covered calls into the mix and your really coming out ahead.

[@TheFirstRealChewy]

​@@daryljackson3704 I also don't know if money invested for retirement will be there, but I'm still going to invest.

[@HouseRavensong]

I was really skeptical, but you won me over.

[@yoursafemoneypeople]

Love to hear that! Thanks for watching. I used to think the other way until I really understood the math

[@arnaldogloria1749]

Wow! Idea out of the box. Thank you Sir and have to watch again to chew and possibly apply to our current situation. God Bless!

[@yoursafemoneypeople]

Thank you for your comment. I will be happy to explain this to you and how it applies to yourself Reach out calendly.com/jjsafemoney/appointment

[@bassdeff8819]

I think that the main thing to consider is what level of risk you are comfortable with. Sure, you can accumulate more wealth if you invest the money instead paying off the house but you take on more risk by doing so. Not everybody is comfortable with that. Personally, I would rather have my house paid off than have all my money in investments that I may or may not have access to if the economy went to shit. Physical assets in hand > than promises.

[@Utsusemi]

so what do we invest in

[@mEAngurrrrl]

OH, best believe there are lucrative opportunities in these markets

[@yoursafemoneypeople]

Thank you for your comment - The answer is it depends, first you need a overall plan. There is more to life then securities. Feel free to reach out - calendly.com/jjsafemoney/appointment

[@yoursafemoneypeople]

@@mEAngurrrrl There is more to life then securities.

[@yoursafemoneypeople]

@@philcrowley007 There is more to life then securities.

[@edvargas3105]

One of the things that you neglect to mention in 30 vs 15 year loans is that with a 15 year loan you save substantial amount of money in INTEREST. In many cases a home purchased with a 30 year loan, at the end, the cost of the home almost doubles the amount due to INTEREST.

[@jacobmarley2417]

He isnt interested in logic. He needs a pitcher , a glass , water and gullible viewers to sell the snake oil he is selling

[@mangoman9290]

But over 30 years your invested money has also compounded to the same extent. Put it this way, if you had a 30 year home loan at 3% interest and you could get a 30 year government bond paying 6%, would you buy the bond or pay off the home loan? The smart money buys the bond.

[@mdel310]

​@@mangoman9290yup not to mention inflation will also reduce the initial cost of the loan so the only scenario in which it doesn't make sense to invest anything above the minimum payment is if the interest rate is 7% or higher. Good old S&P can usually average that as a return but it starts getting dicey any higher.

[@kimatong1166]

You are not listening to his story.

[@danielschegh9695]

Conversely, if the mortgage is 6% and the bond, or other investments, are less than 6%, you are better off paying down the mortgage as quickly as possible. The point is that in the video here he ignored the negative ROI of the house payments. He only looked at the house payment ROI in terms of home equity value. He also ignored the many risks such as decreasing value or inability to make payments.

[@Franz120156]

Your video impressed me and helped me to make a more objective decision about how to do the refinancing of my mortgage. More, I was pretty surprised about below comments relating to the emotional and psychological positions on this subject.

[@yoursafemoneypeople]

Thank you for your comment. I'm often shocked at how little attention they paid before commenting. The choice is always theirs but the math is pretty clear. I hope it help you and feel free to reach out to learn how to improve your overall financial position going forward - so much more to learn. Keep Smiling calendly.com/jjsafemoney/appointment

[@joseCalderon1976]

I look at things differently. If I have debt, then I have RISK. I want to get rid of the RISK (my mortgage) as soon as I can. Now that's just me and MY personal situation. My base pay is $72k per year, I'm 47 married with two kids. We have a modest home that we got a mortgage for in 2012. We got $100k left at 3.5%. And I guess I'll contradict myself, because I'm only putting an extra $120 per month towards my mortgage ($1200 per month total). I pay $645 twice per month to save on interest. With those two things, I'll be done in about 10 years. The extra money I have, I'm investing it into my retire accounts (about 12% of my yearly salary). And yes I need to increase that. So yea, don't want all my eggs to b in one basket (my home equity). So it depends on YOUR personal situation and what you are comfortable with. My life insurance would cover my house if there worse were to happen to me.

[@yoursafemoneypeople]

would it surprise you to know that if you side funded that money you would have enough to pay off your house faster and if something happened you would access to those as opposed to being wrapped up in your house. if you want to learn how this applies to your situation reach out and leave your check book at home calendly.com/jjsafemoney/appointment

[@joseCalderon1976]

@@yoursafemoneypeople Yeah, like I said, I'm only putting like an extra $120 per month towards my house and I'm investing and saving the rest 👍

[@yoursafemoneypeople]

@@joseCalderon1976 Good job but the money that going in the house is losing everyday.

[@yoursafemoneypeople]

Thank you for your comment - Congratulations you get it, feel free to reach out.

[@cmcordoYT]

I don't regret paying off my house when I was in my 40s. Due to some serious, genetic diseases, I lost my job, and I am now on disability. Not having a house or car payment helps me live within my Social Security, disability benefits, and my Medicare. I can even afford the Secondary Insurance to cover almost all my medical costs. No regrets at all. Years ago, I also put the same house in a trust so that when I die, the house goes directly to my children. Since they are still young enough, they can sell the house and split it three ways, and still invest it how they would like.

[@yoursafemoneypeople]

Sorry to hear about your disability. Congrats on paying off your house.

[@cmcordoYT]

@@yoursafemoneypeople Thank you.

[@nickgrnr]

Emotions move markets. Don't let the "math" hold you back from making a great decision either way.

[@yoursafemoneypeople]

@@nickgrnr Thank you for your comment - Congratulations you get it, feel free to reach out.

[@barkhabhatia7546]

Loved it, very simple to follow and very informative thanks a lot for your time that you took !

[@yoursafemoneypeople]

Glad it was helpful! Thanks for watching

[@1st-qt9ce]

3-4 years back had this same discussion with someone. They chose a 15 year refi and I chose a 30 year. That person lost their job this year. I choose a 30 year for a lower monthly mortgage payment. Which for me provided “peace” of mind. Knowing that I could make additional payments to pay off the loan in 15 years if I choose to. Instead of having an “oversized” monthly mortgage payment obligation.

[@yoursafemoneypeople]

Good job - now instead of making the extra principal payment to the bank - make it to the bank you. You will pay your house much faster while maintaining safety, liquidity, and rate of return.

[@Anonyme67]

Good strategy. Mine is 30 years but will paid it off in 2024.

[@nysteelhorse]

​@@yoursafemoneypeopleSo what happens if your investments don't consistently earn at a higher percentage interest rate than your mortgage? A fixed rate you know to the end. You have an amortization schedule. Investments are subject to the wind of the markets. Professional investors would kill for an even, consistent and reliable 6% annual return!

[@terrybusch5088]

Bingo you win, isn't it strange how many people can't see this.

[@yoursafemoneypeople]

@@terrybusch5088 I was one of them once so I get it. But is sad how they attack rather then consider. feel free to reach out

[@trumpshare]

You never actually own your house. Property taxes, HOA and insurance if you choose to buy it can strip you of your property at their will. Don't forget cost of utilities as no matter if own or rent will also be a factor.

[@irockhard2538]

Look up the price of rent 20 years ago. Look at the price of homes 20 years ago. I never met someone who had been in their home that long and that mortgage was higher than average rent today. Mt first apartment in 2001 was $525 a month. 700 Sq ft 1 bedroom 1 bath. Fast forward 2023 24:28 same unit $1500. $500 more than what my mortgage was. Always look ahead and not just the present. If you don't plan on living long yolo all your money away

[@yoursafemoneypeople]

Thank you - most people never look past today and this is the main problem they don' t plan to fail they fail to plan and if they only knew there is so much they would change. feel free to reach out calendly.com/jjsafemoney/appointment

[@Anonyme67]

None sense. You don’t pay same amount of properties taxes as senior and you don’t have to buy a house in a HOA area…

[@eileenwatt8283]

Those are expenses. A paid off house has equity. Your salary should be able to pay the house expenses.

[@eileenwatt8283]

​@@yoursafemoneypeople A paid off us frees up income to invest. See my story on comments.

[@annas3808]

I agree with James 100%. My friend is a financial advisor and she told me always keep the mortgage and not pay off the house. If there is a disaster and the house gets damaged by the disaster the insurance companies pay off the houses that have mortgages. The paid off house owner will be chasing the insurance companies to get compensated.

[@にこ-i4x6m]

Wow, really?😮 That is very good to know! But then will the insurance pay to rebuild the house after they pay off the mortgage?

[@ravindrapersaud7608]

​@@にこ-i4x6m don't be fooled lol. You think a paid off home vs unpaid home will stop the insurance company from not doing what they are supposed to do. They will absolutely try their best not to pay for anything regardless.

[@mandrews1245]

This is garbage. Insurance companies will or won't pay for house damages depending upon your policy and the reputation of the insurance company. If you have a mortgage, the insurance company is chosen by the mortgage holder (usually more expensive). When your mortage is paid off, you the owner, can shop around and chose your own house insurance company for coverage.

[@Tempe401]

What are the chances of your home getting damaged by a disaster?

[@allanbanezify]

Hello James, thank u that i found u here. You are exactly the same as my boss, he told me to invest my money instead of paying my house quickly. But you explained it better, i will me more liquid and ur right. If i lose my job right now, i have a lot of cash that i can still have time to look for a job. I always put evrything in a spreadsheet and i know when i can match the amount on my mortgage. Other ppl think that paying off mortgage is the right idea. I better earn 8% or more rather than 3% on my mortgage. Aside from that, i get tax write off coz of the interest.

[@yoursafemoneypeople]

Correct set up a time here to discuss your situation calendly.com/jjsafemoney/appointment

[@LiveToFly-Br]

Golden rule: Do not bring debts into your retirement.

[@yoursafemoneypeople]

Platinum rule - there is such a thing as good debt. Don't invest where is is not liquid, not safe, and does not have a rate of return.

[@Russellviews]

@@yoursafemoneypeople I don't think he meant investment debt.

[@troymyers5181]

Golden rule: proof read your posts for spelling/grammar mistakes - they make you look uneducated.

[@Russellviews]

@@troymyers5181 lol..your golden rule is worrying what people think?...lol

[@LiveToFly-Br]

@@troymyers5181Golden Rule. If you don't have anything relevant to say (on the topic), just keep yourself shut.

[@ssho7481]

You cannot put a price on peace of mind. Until you have paid off your mortgage on your main residence it belongs to the bank, and not you. That means trusting the bank, which is not something I am prepared to do. Stress exacts a high price on health. One serious illness or accident means dropping out of the workforce, and after that most people can find themselves homeless in a surprisingly short period of time. Once your house is paid off you can save to live your life without needing to worry. True freedom from debt slavery with no monkey on your back is wonderful. Mortgage rates are always higher than bank savings interest rates. If you pay off your mortgage in full early? You can take time out of the workforce without concern to homeschool, travel, care for elders, or just because you want to stave off burnout. You still have the option of borrowing % equity whenever it suits you to leverage any investments as it suits you. The point is that the choice is totally yours.

[@yoursafemoneypeople]

Great comment thank you - everything you said is true it is your choice. Only one thing they do not have to give you loan on your house and home equity lines can be shut down at anytime.

[@mike867]

I don't know anyone with a $500,000 mortgage and $500,000 just sitting in a bank. Everyone I know with a mortgage has maybe a 6-month emergency fund sitting in the bank(that's for emergencies only) and they pay the mortgage off as quickly as they can as money comes in over time (decades). Give me the peace of mind of a paid off mortgage ... every single time.

[@yoursafemoneypeople]

Thank you for your comment the choice is always yours. But think about this if you owed $100,000 on your house right now and you had $100,000 in a side fund growing tax free getting the gains of the market not participating in the losses. Would you use it all to pay off your house today? Really think about it.

[@PhoenixTide69]

​@@yoursafemoneypeopleyour math is wrong though. What about the additional loan fees when you take money out against your home? The numbers aren't the same unless I pretend that the additional fees don't exist.

[@loganmedia1142]

@@yoursafemoneypeople Investments attract tax too.

[@apm6997]

interesting..but very confusing. in the end, the interest paid is way too much to not pay it off earlier...isn't it?

[@yoursafemoneypeople]

Not if you understand opportunity cost and OPM.

[@scottwilly86]

From my personal experience you want to get the most money in to investments as early as you can to give compounding a chance to work it's magic. Opportunity cost is very real. But I also believe people have different personalities and just need that peace of mind.

[@yoursafemoneypeople]

Everybody is a individual and many will choose to never understand this, and that is okay. But it is best to understand it so you can make educated decisions. How you choose to pay for your house is you business and I would never fault you for it. But after understanding the math many people change their approach. By the way I was one of those people making bi-monthly payments on a 15 year loan and throwing extra principal payments at it regularly. Then I finally came to grips with what I was being taught and the rest is history.

[@yetivanmarshall1473]

My friends have been refinancing their entire lives. We are now in our 60's, they still have mortgages. Mine's been paid off since 2004 allowing my wife and I to save a bunch of money and can retire very comfortable any day we decide to. We had 2 young children at the time and didn't want to upend their lives if we lost our jobs.

[@yoursafemoneypeople]

Thank you for your comment the choice is always yours

[@vinhhuynh1774]

I agree the math said 'No"' but that only apply to people that are can manage $; and understand the balance that works for them. Just because you can manage $; it doesn't mean your spouse, kids, etc have the same perspective; and having extra $ on the side, tell your spouse that he/she can't spent $ with a big investment account; it doesn't work.

[@HowHingPau]

I agree. This concept sounds good at first impression, but I kept having a feeling in the back of my mind that this assumes one has a really good income or already has a large chunk of cash on hand to afford to be "thinking out of the box" like this.

[@pakviroti3616]

@@HowHingPau Figures don't lie, but liars figure. He omits a few real considerations. Even if you have a low interest rate, you are STILL paying interest. And for some people retirement income can fluctuate. Having a paid for place to live is better than carrying debt. Just have a look at an amortization schedule sometime to understand the true cost of a mortgage.

[@yoursafemoneypeople]

@@pakviroti3616 Thank you for your comment - I find it interesting that people will go so far as to call someone a liar but will not post the math refutes the situation. The fact is you can't because the math is correct. You may want to consider doing the same thing you have always done, after all you know what Einstein said

[@TSidez]

Manage money? You can get a financial planner or even on a simple basis use a robo advisor to manage and tax harvest. You can achieve a return near or above your mortgage interest rate by simply investing in index funds. Set and forget.

[@yoursafemoneypeople]

@@TSidez And much more if you want to learn how this applies to your situation reach out and leave your check book at home calendly.com/jjsafemoney/appointment

[@cristianbalate]

Amazing info mate, thanks for this. I will follow you from now on. 🙏

[@yoursafemoneypeople]

Thank you sir 🤙

[@Josephtimothyq5]

My life changed too when I started doing this and putting money in stocks. The first few years it as really great, but this year I haven't felt like my portfolio is doing well. I have lost more than $40,000 from my portfolio the past four months, and it's now very worrisome.

[@SarahStuff-p5u]

If you were 50/50 in VTI and BIL, you would have made a bunch of money this year.

[@heatingman2206]

Assuming you're diversified over the whole market, that means you need to buy more now, not sell. The stocks are on sale compared to your previous buy in positions. Dollar cost averaging is the rule of passive investing. The next up cycle and you will make up your paper losses, plus gain dividend income from having more shares purchased at the lower buy in value to re-invest. Just keep buying, and you will come out the other end way better off. Stocks do not go up forever continuously, but in the long term average, they do.

[@SarahStuff-p5u]

@@heatingman2206 Agreed, personally I ha ve shifted to 100% in and a tad of leverage, but these trading strategies can require time as a factor and hold risk I can withstand.

[@gi4dtv230]

I'm looking forward to paying off my house in a few months. I considered waiting, but what happens if I lose my job? Then I realized how much money I'd have to pay the bank in interest, which changed my mind.

[@joethecomputerguy1]

Nothing felt better than paying off my mortgage at 42 and retiring at 52 regardless of what your trying to sell. And that's what matters. The bank can't take what they don't covet.

[@yoursafemoneypeople]

Congratulations on paying off your house. Have you taken the next step? Getting to tax free

[@joethecomputerguy1]

@@yoursafemoneypeople yep. Tax free or almost (less than $100/year) for 7 years now

[@TheFirstRealChewy]

You were going to be able to do that regardless. If you invested more earlier, you'd just finish paying off the house by 52 and likely end up with more money invested. That said, you'll never know until you run the math, but no one does after the fact because they are already happy with the outcome.

[@antpoo]

I’m Australia our mortgages are huge and rates high, Take me for example, was $850k and interest rate now 9%. Lucky I have paid it down to $480k now because my repayments have doubled to $5000 per month. No way most ppl can earn that kind of cashflow long term, to what invest in a volatile stock market? No thanks. If a recession comes as they say is coming, a lot of us here are done for.

[@yoursafemoneypeople]

@@antpoo the choice is always yours

[@phantomcollective901]

13:10 I agree with the oppinion, but this conclusion makes as you would say "zero sense" The mortgage payment would be higher than the profit from your investment. To think about this another way, if you had an infinity year loan, the mortgage interest would equal the investment profits indefinately. So if you are paying interest as well as payments towards the balance, those payments towards your balance are coming out of your investments, and after 30 years both methods come out even, despite this very strange... true but deceptively unrelated calculation showed on screen.

[@yoursafemoneypeople]

If everything you thought to be true turned out not to be true when do you want to know?

[@captoshuragnarok7444]

Interesting video. The math in the video is good for comparing the mortgage interest to invested compounded interest over 30 years but it didn't account for that paying a mortgage off early grants the monthly payment saved in that shorter timespan as an available investment. In the example if the house was paid off completely then the mortgage monthly payment of 2,998 would be available to reinvest every month for 30 years. The invested monthly payment plus the saved mortgage interest would add up to more than just investing the 500k.

[@yoursafemoneypeople]

Thank you for your comment the choice is always yours.

[@SliferRedRay]

He quite literally explained that in the video around the 15:00 mark…

[@captoshuragnarok7444]

@@SliferRedRay Almost. He explained investing the left over amount of a 15 year mortgage (4219.28) minus the 30 year mortgage (2997.75) which was the 1221.53 but not just the paid off early 30 mortgage amount of 2997.75. Consistent monthly investing, using calculators, sky rockets the returns more than just a large sum earning interest overtime. Starting from 0 and Investing just the extra 4219.28 from a paid off 15 year mortgage for 30 years out performs starting with 500k and investing 1200 per month for 30 years at the 30 year mark with 6% interest.

[@DiscoFang]

Actually it adds up to exactly the same. Investing $2,998 monthly for 30 years with interest of %6pa calculated monthly results in $3,011.536.10.

[@DiscoFang]

Ah I see what you mean. If you invest $500K 30 years but also subtract from that the interest you paid on the mortgage over the 30 years ($579,191) you're left with $2,432, 097. That's $600K less than investing the monthly mortgage payment for 30 years.

[@thisandthatfloridausa6112]

Good informative video, thank you. God bless you.✌️🙂👍

[@yoursafemoneypeople]

Thank you for your comment - Congratulations you get it, feel free to reach out. calendly.com/jjsafemoney/appointment

[@HabitsAndHobbies]

Thanks for sharing, James. What I observed from the video is that your “calculation” shows a rational argument for maximizing cash reserves 30 years from now. Reading your audience comments I can see there’s a reasonable vs. rational split when it comes to decision making. People are imperfect and often make decisions with more heart than mind.

[@yoursafemoneypeople]

Thank you for your comment - So true. The sad part is they will likely never get it as they will not get past the emotions to understand the math. The choice is always yours on how you do it. It has no effect on me one way or another. The good part is you get there is so much more to learn. Reach out.

[@godfreyuzonwanne3110]

Awesome guy, very simplified approach to teaching the time value of money, absolutely intuitive

[@georgedreher2322]

Purchased my last house, 2400 sq ft w/pool, back in 1997 and paid cash. As you all know, homes were much less expensive back then. It's a great house in an established nice neighborhood. For me, I preferred the glorious LESS STRESS path of NO Mortgage to worry about. Now looking at relocating to somewhere in the mountains of Northern GA, TN, or SC when housing prices in those areas crash back to reality. Different strokes for many folks.

[@yoursafemoneypeople]

Thank you for your comment it is different tor everyone one is a emotional decision the other is mathematical decision. When you understand the math it will frequently change your emotions. What if the housing market does not crash back as you propose or it take years to do it? you could likely do both and not wait.

[@sosaix3545]

Thing is, they're not coming down. Demand remains high vs. supply, as no one is letting their 2-4% mortgages go yet people are still buying houses, and when interest rates come down by 2Q24, as the Fed starts loosening the money supply again to orchestrate that "soft landing" we keep hearing about, mortgage interest rates will go down from the 8% rate today to around 6%, maybe 5%, and that will further stimulate housing demand in an already tight market.

[@Anonyme67]

@@sosaix3545yep! It will take 2 to 3 years for the price to come down. Once I pay off our current home, I get a construction loan for a new house and sell to current house to paid off the mortgage.

[@yoursafemoneypeople]

@@sosaix3545 The best time to buy a house is yes as long as you plan on holding for 8 years or longer. Interest rates are relative. If you believe you can time the market good luck many have been wrong on this approach many of times.

[@christianworthington7904]

The decline of the housing in those areas has already begun. Some are already reduced by 40% great plan! Similar to myself. Cheers!!

[@mikeramnarine9931]

I believe there is an error in the MATH at 12:57 in this video. * In the case where no loan is taken you will have the ability to put the equivalent of the monthly payment each month into a savings account. * The interest on that savings account at the same rate will equal the $2m difference mentioned. = So either approach will result in the same end result (if at the same rates, and adding in incremental savings interest) => In the end there is a risk vs security difference (which is the real opportunity cost) If you take more risk with the stock market you will likely see a higher rate of return (but no guarantee) If you use a safe savings account you will probably have a lower interest rate than the loan interest rate.

[@yoursafemoneypeople]

I assure the math is spot on. The main point of the video is to get you to understand that equity has a zero percent rate of return. Once the month is in the house it is not safe liquid and it is losing money on two fronts. You do not have to risk your money to make tax free growth I will be happy to explain this to you and how it applies to yourself Reach out calendly.com/jjsafemoney/appointment

[@drd4059]

The math model does not quantitatively include risk. The equity market risk is very different from real estate risk. There is an implicit assumption of a regular income. Its unlikely many wage employees will have the same income or job for 15 years, let alone 30 due to technological change. The assumed marginal tax rate is far too low. As a base case try 42% in the US and 56% in Canada. Every case is different. There is no one size fits all solution. I am a renter with zero real estate exposure, but run an actively managed tech company: that is I am using my scientific expertise to earn a higher rate of return than passive investments in real estate or stocks would provide. Its also noteworthy that ownership of real estate is a decisive factor for determining tax residency. It makes no sense to buy real estate at the cost of paying 56% income tax when the alternative in European tech havens is 10%-15%.

[@yoursafemoneypeople]

Thank you for your comment.

[@syandamu]

Great educational video! I won’t do that mistake again as I’m about to buy-build $2m+ 🏠 and will follow ur advise to go 30yr mortgage even though I’m 58yrs old!

[@yoursafemoneypeople]

Glad it was helpful! Happy to chat anytime calendly.com/jjsafemoney/appointment

[@Bobafe77a]

Never go into debt. That's what worked for me. I'm retired at 53.

[@yoursafemoneypeople]

Thank you for your comment the choice is always yours.

[@rogergeyer9851]

Never is pretty unreasonable. It would be VERY HARD to own a house without ever having a mortgage for a vast majority of people in the modern world. OTOH, minimizing debt is generally a GREAT principle, if you don't live beyond your means and save regularly. Because you have choices, and generally interest rates aside from homes are extortionate for consumer purchases. So I was the same way, and retired comfortably but not wildly wealthy, at age 48. But the point is -- that doesn't work for everyone. I had no kids and was used to living like a literal poor man through college, so I didn't mind living frugally and saving a TON of my income through my career, and investing all my savings, and then reinvesting everything from my investments. Few people live like that.

[@ramses2505ify]

Or pay your debt as soon you can...

[@Boli4161]

Sir, I wish young people could understand the importance of your teachings. I made that mistake once and paid cash for a house, what a waste of money and opportunities! Now I know better. People talk about peace of mind... I have peace of mind when my money is making ME money and not the banks. Great job, sir.

[@yoursafemoneypeople]

Thank you for your comment - It is nice to see when people actually get this. The sad part is it will take a generation to change the thinking as so many are dug in so tight to their believes. Very unfortunate for them. Feel free to reach out anytime and I will show you how to make your whole situation even better.

[@meljordan220]

Don't the banks make a lot of money on your mortgage interest? So the bank does make money. It's much easier to lose a house if you have a mortgage then if you don't. My husband lost his job when we lived in Texas and we lost our home because we had a mortgage. We had to sell a short sell and right off the rest. So having a mortgage is not secure at all. Maybe if it's not your only home? But if it's the only home that you have to live in I think it's dangerous to keep a mortgage any longer than you have to.

[@davebruno6819]

Warren Buffet talks about this, too. Specifically how banks make money off your money. Buffet & Charlie Munger, RIP, are great, common sense investors and worth watching, IMO.

[@yoursafemoneypeople]

@@meljordan220 Thank you for your comment - The point of this video is to get people to understand that equity has 0% rate of return. Once you understand that, you can make a educated decision as to whether you should accelerate the paying off of your mortgage. Once you do the math on that, and understand that interest rates are relative, you will likely change the way you do it. The choice is always yours. The right or wrong way to do it, is up to you. It really is mathematical or emotional choice. In addition, everyone's situation is different. Regardless of how you choose to do it you should always have a plan. if you want to know how it applies to your situation set up a no cost

[@meljordan220]

@@yoursafemoneypeople but equity does grow even if it's not by a percentage. So if you're only talking percentage then you are correct however if you look at increasing value you are incorrect. That is the only point I'm trying to make. And the fact that you will get a higher percentage by investing cash then you would if you have a mortgage and have to spend instead. If a mortgage is $1,300 and about half of that or more goes to interest wouldn't it be better to pay the mortgage off early and invest at $1,300 so that you get a positive rate of return and set up a negative one having a mortgage? That's the part I don't see being addressed. As long as you have a mortgage, you have a negative rate of return by paying interest. That's the only reason I'm saying what I'm saying. With a mortgage you have a negative rate of return plus you cannot invest the mortgage payment in somewhere else to gain a positive interest.

[@ResponseDigitalMedia]

Very interesting… Wish I saw this video 20 years ago. So please do a video for those of us that have already paid off our houses - and how to leverage the equity for investments or rental properties.

[@yoursafemoneypeople]

Thank you feel free to reach out - calendly.com/jjsafemoney/appointment

[@marcopolodarts]

That's a nice way to lose your house. My opinion on leveraging a paid off house in order to invest in rentals or otherwise investing would be to downsize said property. Sell it for a moderate home and buy a rental property cash. You'll also have cash for investing in the market.

[@yoursafemoneypeople]

@@marcopolodarts Thank you for your comment - The point of this video is to get people to understand that equity has 0% rate of return. Once you understand that, you can make a educated decision as to whether you should accelerate the paying off of your mortgage. Once you do the math on that, and understand that interest rates are relative, you will likely change the way you do it. The choice is always yours. The right or wrong way to do it, is up to you. It really is mathematical or emotional choice. In addition, everyone's situation is different. Regardless of how you choose to do it you should always have a plan. if you want to know how it applies to your situation set up a no cost no obligations strategy session here calendly.com/jjsafemoney/appointment

[@CelestialSci]

I bought my first cash 2009 and bought my second house mortgage in 2020. Having a mortgage is lame, so I wanna sell the first house and pay off my second house and fire the bank. I could rent the first house but I don’t wanna babysit some renter. I’d rather put all my mortgage payments in the stock market in cash covered puts and house hack on air bnb when I need a little adventure. I can also rent a condo if I wanna live downtown periodically. Your thoughts are a welcome addition.

[@jerryschippasr3147]

That’s exactly right, If …… we lived in a math problem.

[@stacy9497]

We do live in a math problem. It's called money printing, i.e. inflation.

[@yoursafemoneypeople]

@@stacy9497 Yes and life is a math problem inflation is a small part of it. there is so much more to learn here.

[@AllproCarpetAndUpholstery]

Reason you wanna pay off your house is to live a stress-free life.

[@yoursafemoneypeople]

That’s the only argument I’ll accept. But the math says otherwise. Some people care more about maximizing dollars and investments 🤙

[@MyraO-e6i]

how is it stress free? - you still have taxes, insurance, up-keep, etc. My taxes went up 33% two years ago, and last year it cost me 8k for the new AC.

[@nathaniellarson8]

​@@MyraO-e6i because you don't have a mortgage payment in addition to the other expenses(that you should be preparing for just the same).

[@oliviaHill-w4e]

I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!

[@LesterHess-t1x]

One strategy for protecting against a recession is to buy equities. Investors, especially during a recession, need to know where and how to put money in order to make money while avoiding inflation.

[@wmwoods-l4f]

It has never been easier to understand how to build your money than it is right now, when you may study and experience a completely varieated market passively by employing a successful portfolio-advisor. The impacts of the U.S. dollar's gain or fall on investtments, in my opinion, are complex.

[@speak2Gary]

Do you mind sharing info on the adviser who assisted you? I would love to grow my stock portfolio and plan my retirement

[@wmwoods-l4f]

Her name is Annette Marie Holt can't divulge much. Most likely, the internet should have her basic info, you can research if you like

[@speak2Gary]

Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.

[@Tanagra180]

6% is a very reasonable number, but that's BEFORE taxes. My marginal tax rate is 49% in Quebec, and I can't deduct mortgage payments here. Did I miss something? Or is the logic thag the compounding still interest make it interesting to invest the 6% even if I pay 49% (or higher) taxes? (I need to do the calculations to game this out...)

[@Tanagra180]

Also, by your logic, if you want to have liquid funds to pay your house in the case of hard times, you would need to have the money somewhere you can get the funds AND get 6%. I have NEVER seen that kind of product. 6% means stock market or some other blocked situation where your funds are not liquid either...

[@yoursafemoneypeople]

You can get 6% tax free with the right strategy 🤙

[@yoursafemoneypeople]

In a max funded and properly structured IUL policy you can achieve 6% RoR average all in a tax free environment. You can borrow against your policy any time and keep your money working for you. It’s like a tax free bank account. Many people use this strategy but it takes a long term plan and discipline to execute and structure it properly. This is NOT whole life, it requires someone who knows how to max fund the policy for the purpose of maximizing gains/ cash accumulation with no downside risk. I’ve seen these policies earn well over 6% too but 6 is a safe number

[@criticalcrossroads498]

Very interesting presentation. However, what would happen if a person paid the $500k mortgage and then invested the "would be" monthly payments ($2,998) and earned 6% for 30 years?

[@yoursafemoneypeople]

I will be happy to show you, this the answer is you would still be better off with the mortgage but at least you are thinking. You set up a time to talk anytime here calendly.com/jjsafemoney/appointment

[@tbros0331liffy]

It's the same outcome. He covered that

[@criticalcrossroads498]

@@tbros0331liffy It's not the same outcome...difference of $500k

[@doyleelad1113]

It's the same result a house plus 3million dollars approx. But you have the benefit of owning the home without the potential of the bank taking it. Paying 500k cash is the better answer safer option.

[@criticalcrossroads498]

@@doyleelad1113 Its actually not the same result. You're much better off paying the mortgage. You'll own the property AND have more cash in the bank.

[@Boris5Z]

I want to add my life example. In 2011, i divorced and we had a fully mortgaged house. Wife did not want it because an 800 dollar payment seemed too high. So i kept it, and it quadrupled in value by now. If the house was payed off back then, she would probably insisted on selling it and splitting the equity

[@yoursafemoneypeople]

Great comment - I experienced the same thing, and this is just one example of why it is better to have a mortgage.

[@Boris5Z]

@@yoursafemoneypeople and unlike some catastrophic events, divorce happens to about half of marriages. So, if you are a single or main income earner think twice about paying off the house which is likely to stay with your better half if things go sour.

[@yoursafemoneypeople]

@@Boris5Z Unfortunate but true - yet this is just one of many reasons why you should hang on to your cash and let the bank carry the liability.

[@bailey-k6b]

However, you forgot to mention one thing: If the house was paid off, you'd have potentially put $2-300,000 into... if you had invested that same amount, she would have been entitled to half of it (adding all your assets together and dividing in half).

[@bailey-k6b]

@@yoursafemoneypeople So your ex was entitled to half of your savings then, correct?

[@kingsizediamondOG]

The mortgage is balanced on the books using liabilities. If you have a house you owe 500k on, its not an asset. Its more accurately a liability because at 6.5% interest rate, a 500k loan will require you to pay 32.5k a year to the bank, not even off your principal.

[@yoursafemoneypeople]

Thank you for your comments - check your balance sheet.

[@jvapr27]

You need to take into account the liabilities. You need to use debt the right way. 1 million dollars in assets minus 500k in liabilities will end up with 500k in net worth. In the end your net worth is the same. 500k, not 1 million. If you have the house at 500k and the liability, and you have 500k in the bank, plus you decide to invest the 500k and make more money than your interest rate, then yes you can make more money off your money. But if you do not invest it to make more money than your mortgage interest rate, then you will lose money. The house equity will adjust with inflation but your cash in the bank will not.

[@yoursafemoneypeople]

@@jvapr27 If everything you thought to be true turned out not to be true when do you want to know? The bottom line is you finance everything you buy, either you use you money or the banks money but you financed it either way, and either way there is a cost. The choice is always yours.

[@fritzpouyot9672]

This assumes 6% return on other investments. But what if the stock market was going like in Japan after it exploded, with decades of losses. What if the bond market goes bust... To many assumptions that could go the other way

[@yoursafemoneypeople]

Thank you for your comment - The point of this video is to get people to understand that equity has 0% rate of return. Once you understand that, you can make a educated decision as to whether you should accelerate the paying off of your mortgage. Once you do the math on that, and understand that interest rates are relative, you will likely change the way you do it. The choice is always yours. The right or wrong way to do it, is up to you. It really is mathematical or emotional choice. In addition, everyone's situation is different. Regardless of how you choose to do it you should always have a plan. if you want to know how it applies to your situation set up a no cost no obligations strategy session here calendly.com/jjsafemoney/appointment

[@jakewhitehead1]

One aspect to consider is how much of all your capital is tied up in the house? If you only have one house and a large proportion of your assets are tied up in the house, it’s much more risky than if you have many houses regardless of if they were paid for in cash.

[@yoursafemoneypeople]

This is very true and as you buy more and more rentals the dynamics change although the math remains the same the bank just wont let you over extend

[@bugatti314159]

I'm currently making minimum payments on my 30 year refi I locked in at 2.3%. Dropped my payments several hundred a month. The difference goes straight into investments in my Roth where I make 2 to 3 times more. And that money is completely tax free. Definitely worth doing.

[@kimatong1166]

I would have done the same.

[@Brandon-ky9qu]

You pay mostly interest the first 7 years they love to refinance and start that clock over again. If you've paid most of the interest they love to restart and collect more

[@tbone1961-g1e]

Your money is trapped in prison until your ready to retire you have no control over other than contributing more I would never do that I would and do invest that money in more real estate and make more money with it and pay less tax as well but you sound conservative and if that’s good for you keep it up you’ll pay the tax when you start your use it

[@bugatti314159]

@@tbone1961-g1e Do you know what a Roth IRA is? ZERO taxes will be paid on this money. Ever. And I can withdraw funds (within the rules) or change investments at any time. If money is tied up in your house, the only way to use it is to take out a loan, which defeats the purpose of paying off your mortgage in the first place, or sell your house.

[@yoursafemoneypeople]

@@tbone1961-g1e Thank you for your comment - Congratulations you get it, feel free to reach out.

[@TimGeorge-dp7wb]

the purchase price of the asset(house) is very important. otherwise paying off by retirement is still key. While the math technically works- one will get another "house" level payment in health insurance coming- I can't imagine wanting to have a house payment and health insurance payment at the same time in retirement.

[@yoursafemoneypeople]

Thank you for your comment - over time with inflation the mortgage payment will be minor, and most people have both mortgage and health insurance payment today yet the mortgage payment stays static for the whole 30 years therefore it take less money to make the payment the future years, based on the time value of money.

[@oliverpolden]

That’s why instead of paying off your mortgage in 15 years, you get two houses and two mortgages over 30 years (greatly simplifying here by the way) then in thirty years you sell the second house to pay off the first. As I said, it’s very simplistic, it won’t quite work like that but hopefully you get the point that the money you can otherwise invest can more than pay off everything.

[@yoursafemoneypeople]

@@oliverpolden Thank you for your comment - Congratulations you get it, feel free to reach out.

[@TimGeorge-dp7wb]

@@oliverpolden this isn't a prescription for most people. I don't deny it can't work but most people don't want the many ways one has to care for 2 houses. beyond that it's and investment like all the other options- some succeed - others fail

[@oliverpolden]

@@TimGeorge-dp7wbreplace house 2 with any other or multiple investments. I’m personally using money I could use to pay off my mortgage to get a 30% return.

[@Unicorn-Black]

I agree with the concept 100% I have mortgages of 3% and not planning to pay them sooner, faster at all.Im just saying I run your numbers in mortgage and compound calculators and in Excel and the numbers are different a bit smaller

[@yoursafemoneypeople]

I assure you the numbers are spot on they are all run with sophisticated software regardless the fact still remain.

[@Unicorn-Black]

@@yoursafemoneypeople i agree with the facts

[@livingdangerously3226]

On a banks balance sheet, loans are assets and deposits are liabilities. Banks want to keep you in debt and will always prefer you take the longest loan with the least amount of risk to them. If your claim that a bank would prefer you to take a 15 yr loan out instead of a 30 yr is true, that means they would be striving for lower assets and in turn a lower net worth.

[@yoursafemoneypeople]

Yes but if that was true then why are there not 50 60 70 years loans? Thank you for your comment

[@AudioLomtik]

@@yoursafemoneypeople Because the federal government won't allow greater than 40. Why? Because they know it is already highway robbery to do more than 30, and they know that the low payments will lure the unwilling into buying more than they can afford, leading to another mortgage crisis (which hurts the US economy).

[@yoursafemoneypeople]

Thank you for comment - this one made me chuckle, how nice would it be to have a 100 year mortgage at 3- 5% the payment would be stupid low and certainly less then you could rent for. Mortgage crisis was 100% the doing of the banks loaning to anyone who could fog a mirror and borrowing to consume.

[@AudioLomtik]

@@yoursafemoneypeople Just imagine how much fun the PMI companies could have with 100 year mortgages. The sleight of hand banks and finance organizations never ceases to amaze.

[@yoursafemoneypeople]

PMI only applies to low loan to value accounts and can be removed over time in most cases. but you are right.

[@DavidMNewbold]

Unfortunately, this only works if the cash assets retained are used to accumulate additional wealth. Having a huge mortgage and then using the cash assets on things that lose value is what so many people will do. Then, they have material things losing value AND along with a very leveraged house via mortgage debt. The math is correct but without discipline the cash assets will be squandered and that seems to happen more often than not. That said, where this is working for me today, is that I continue to pay the minimum on my 3.25% mortgage while putting large amounts of money into my retirement funds that have rates of returns better than 3.25%. Mathematically, I am making more money by not paying down the mortgage but instead investing that money into other assets with positive returns. It's as if I borrowed money at 3.25% to reinvest into assets that return on average >= 8%.

[@yoursafemoneypeople]

Thank you for your comment - Congratulations you get it. You are right most people will never do it the right way, as most people don't plan to fail they fail to plan, and they are quick to blame everyone else for it. Have you started the next step, getting it into a tax free environment?

[@allanbriggs9007]

Don't you pay tax on investments in the US???

[@yoursafemoneypeople]

@@allanbriggs9007 depends on the investment

[@tchan131]

That’s absolutely the way to go. Paying off a mortgage that has a lower interest rate rather than investing with a higher return is a money losing strategy in exchange for a peace of mind. That said, it’s probably a good strategy for folks who are really concerned about stock market volatility. Discipline in investing is the key here.

[@stuarttaylor69]

agree completely. for me, the house mortgage for my own home is the cheapest debt available. While I have paid off the house a long time ago, I have kept the leverage to invest in income producing assets. Can get rid of the mortgage whenever i want, but why would I when the income producing assets pay for both the debt cost and my lifestyle? Over time the passive income pays down the debt as well as the interest and I end up with the assets debt free as well as my house, all paid for by income I didn't earn (passive income). Doesn't work without a little bit of discipline, need to be able to keep the hands out of the magic cookie jar and let it compound. Those who understand it earn it, those who don't (or can't resist) pay it. good luck I wish I knew this when I was much younger.

[@yoursafemoneypeople]

Thank you for your comment - Congratulations you get it, feel free to reach out. calendly.com/jjsafemoney/appointment

[@mandrews1245]

Yes, I did that for a number of years, until the job market collapsed and people couldn't pay the rent. Then I had a tenant's ex-boyfriend tear up my income producing asset, and it cost me $75k in repairs. Then the fence needed to be rebuilt. Then 2008/09 financial crises happened and house prices sank.... Then gov't policy (C-19) where tenants didn't have to pay rent to the owner for many months. After more than a decade I still had not recouped my costs.

[@NedkaRokonokova]

WOW! I am a first-time home-owner, late in life, so I went into this knowing I have a very small window of error. I thought I had learned what I needed to know to at least get started on the right foot. I've been learning from the people I thought had my best interest (ha!) at heart which turns out to be untrue. So I just got my check from the sale of my previous residence, a trailer, so there was no land, I had no mortgage, no learning experience in it. I was going to put all that money toward my mortgage with the idea that knocking down my payments is a good thing. Now I see I might have just averted a huge mistake. I have always been open to advice, not too proud, so let me ask you something, please. My current mortgage is at 7.75%. What can I do with my lump payment to invest in something with little to no risk (I'm retired, no hope of anything better than my fixed retirement income) and still make at least even? I haven't seen anything better than 3% on saving accounts. I'm very happy I found your video.

[@yoursafemoneypeople]

set up a time here to talk calendly.com/jjsafemoney/appointment

[@gbinman]

I bought my house cash, 18 years ago. I also have been retired and debt free for that length of time. Absolutely no regrets at all and would do the same again. I trade the markets, one can look at the S&P and truthfully say it keeps going up but averages over time can hide the rollercoaster moves that happen in shorter timeframes. I was surprised that you didn't mention one advantage of debt. As the dollar continues to lose value, one repays debt with dollars that are worth less than when they were borrowed.

[@yoursafemoneypeople]

Thank you for comment - Some people complained how long the video was. I could talk for another 3 hours just on this subject and not get it all out. Besides for some, this is enough of a paradigm shift without all the facts. But you are correct, you are paying tomorrows debt with todays dollars which over time becomes less and less and you are paying on a declining balance and compounding on a increasing balance. There fore you do not need a equal rate of return to come out a head over time. Congrats on your position in life. Never forget good better best, never let it rest until good gets better and better gets best. If you ever want to learn how to make it better reach out calendly.com/jjsafemoney/appointment

[@oliverpolden]

Agree, and not only that, you will probably be earning more.

[@gbinman]

Even as a retiree, that is true. I do have a great defined benefit pension. It is capped to 3% per year with a COLA bank. I receive far more than when I retired 19 years ago. About 50% more. Of course in actual buying power that is less.

[@TheDuke792]

This brings up the question. Pay off mortgage or invest in the stock market

[@OwenFlex]

Pay off the mortgage! Owning my home outright gives me peace of mind.

[@yoursafemoneypeople]

@@OwenFlex If you have a equal amount of $ in the bank or another investment your house is paid off anytime you want.

[@JasonAmir-qo4uo]

I think it depends on your priorities. If financial security and owning your home outright is most important to you, paying off your mortgage might be the way to go. But if you're willing to take on some risk and prioritize long-term growth, investing in the stock market could be a better option.

[@GibsonJames-gr3on]

@JasonAmir-qo4uo Or, you could consider a balanced approach, where you split your resources between paying off your mortgage and investing.

[@John-ww2fv]

My financial advisor actually recommended a hybrid approach, making extra payments on my mortgage while also investing in a tax-advantaged retirement account. This way, I'm tackling my debt while still building wealth for the future. It's been working out well so far, and I feel more confident in my financial plan.

[@mEAngurrrrl]

I’m 32 with a little over 430K, Once I pay off my mortgage, it jumps to 700K. I invest 27% of my pay. Can’t wait!

[@So.ladylike]

That’s legit

[@mEAngurrrrl]

Thank you! Actually have seen my nest egg increase nearly each year, and I feel confident and secure about my financial future knowing I’m well invested in global equities… ^_^

[@yoursafemoneypeople]

Thank you for your comment - If everything you thought to be true turned out not o be true when do you want to know? The point of this video is to get people to understand that equity has 0% rate of return. Once you understand that, you can make a educated decision as to whether you should accelerate the paying off of your mortgage. Once you do the math on that, and understand that interest rates are relative, you will likely change the way you do it. The choice is always yours. The right or wrong way to do it, is up to you. It really is mathematical or emotional choice. In addition, everyone's situation is different. Regardless of how you choose to do it you should always have a plan. if you want to know how it applies to your situation set up a no cost no obligations strategy session here calendly.com/jjsafemoney/appointment

[@julesworld2696]

Wow that was brilliant I didn’t know that all infos until I watched your video big thanks.Also applied buying car in cash or installments.

[@yoursafemoneypeople]

🙏🏼

[@loueckert4970]

This plan is BS. I feel MUCH better off with a paid-for home.

[@yoursafemoneypeople]

Congratulations the choice is yours

[@rogergeyer9851]

He's just talking the dollars. Nothing wrong with that, EXCEPT he's making a lot of unstated assumptions.

[@DEEZEEMTB]

Feelings…..