Your Son Is So Wrong It's Unbelievable!

[@Dbeaves2493]

He's 40, he doesn't need his mom making money decisions for him

[@CheJoffre]

Exactly, she needs to stay in her lane. The fact that he's actually investing for his future shows he's not clueless.

[@pep590]

Maybe he's been a momma's boy his entire life and this is normal behavior for all.?

[@gonzaga45377]

Sounds as if he is doing just fine. Only a mortgage as debt. I'd say he knows what he is doing.

[@willrisher6049]

Maybe she cares for him and can’t help but to point him in the right direction.

[@fauxbro1983]

Lol. So true.

[@edhcb9359]

I’m glad my mom isn’t trying to call my financial shots.

[@sbrazenor2]

My mother doesn't make recommendations about my finances, but if she did, I would kindly tell her that as a grown man my finances are not up for discussion.

[@blackworldtraveler3711]

Glad mine did. Heck my mom and dad had me avoiding debt,saving since second grade, and investing since 10th grade.

[@vickieclark5931]

@@blackworldtraveler3711 True. If parents intervened more, at least when the kid is young, then there maybe more people living a better life than being up to their eyeballs in debt.

[@pep590]

Yes, she should realize he is too big a fool to be of help to.

[@alinatamashevich3354]

Unless your mom is Alice Walton!

[@zacharyvalenter9637]

Could you guys make another KZbin channel where Rachel just talks about her conspiracy theories? That’s what the people want!

[@alittlepieceofearth]

That sounds like a good solo project for her.

[@hollyb6885]

What conspiracy theories? I didn’t know she believed those.

[@krpinckney]

Yes. I want to hear what "Conspiracy Theories". If they are ones I believe... 'They're not theories. They're truths. 👽

[@thelogicaldanger]

Haha, pretty sure Rachel believes nonsense and it would distract from the brand to have her spouting such nonsense....but it would sure be entertaining.

[@grantguy8933]

Ramsey is the one actually talk about it.

[@lynnebucher6537]

Seems to me that reason number three is the best. Anyone I knew that had a paid off house going into the Great Recession had no problem at all. They could go get a $10 an hour job and make ends meet. The ones that were in debt up to their eyeballs were the ones going broke and dumping all their assets. And never discount the value of being able to leave a job you're miserable in.

[@KC-dr3cg]

Well said. I agree 1,000% because I have through that in 2008.

[@gcromer903]

Wisdom and logic right there.

[@mistiinseattle]

Her son is 40. It is none of her business.

[@Minte123]

You’re right, but if she cares about her son, I’d think it’d be hard to ignore something she thought was bad for him.

[@EGfocus33]

And this is the sentiment that has destroyed the fabric of Our Society. Go Along to Get Along. Mind your business, No Coaching, Counseling, or Healthy Discussion 😑

[@ginoturano6821]

It's none of her business

[@sam.lipchutz]

There are some 40 year olds dumber with money than teenagers

[@pawelwisniewski6849]

It’s her business until he says it isn’t She doesn’t want him to move back home when he’s 45 😂

[@suen5006]

Math or no math, having a paid off house feels like nothing else, so good!

[@kaylaa2466]

Why is it okay for parents to get in their children’s financial business when they’re right but not when they’re wrong? No. He’s a grown adult. If he wants to make mistakes or do things his way...LET HIM. Either way, back up. Dave needs to say that.

[@charlesg7926]

I really don’t think he’s making a mistake. If he’s putting his money into solid blue chip stocks and especially real estate, especially real estate, then he’s doing great. Inflation is occurring I like 20% a year, at least wait like five or 10 years to pay off the mortgage so that you have to spend a lot less money on it

[@colinmoseley9705]

Dave told her she wasn’t going to tell a 40 year old anything.

[@kaylaa2466]

@@charlesg7926 I agree. I was just saying even if he was blowing all of his money, her way is not his way. Yk

[@kaylaa2466]

@@colinmoseley9705 I didn’t even finish because the comments were wild

[@thefoodwench4848]

Whether she’s right or wrong she needs to stay out of her son’s business. I hope he tells her he never wants her to bring it up again.

[@forrestaustin7050]

Why so sensitive. Her son is her buisness

[@thefoodwench4848]

@@forrestaustin7050 his finances are none of her business. Not sensitive at all lol

[@JustinCase780]

The poor daughter in law must love Thanksgiving. 🙄 Mom: "Remember that time I called Dave Ramsey and George and they both agreed with me 100% as I expected??" DIL: "Please pass the wine"

[@pep590]

They agreed with the DIL too.

[@CheJoffre]

LOL, Amen, senior helicopter mom needs to take a chill pill.

[@AaBbCcDdEeF]

Lady comes across as annoying.

[@chrispajak540]

“It’s gonna be hard to convince him” LOL. Yeah, because he understands middle school math and isn’t in some nonsensical sales trance.

[@sblijheid]

Nope. It's because he's going to have his way and she should allow him. If things turn out well, fine. If they don't, do not ask mommy to move into her basement.

[@xsgtxbigboy1655]

@@sblijheidwhat exactly is he doing wrong y’all bashing him for investing y’all wild

[@zombl337og]

the son isnt wrong, he just has a different way of feeling secure with his $, and thats fine.

[@Michael-vf2mw]

Yes, a different risk profile. As personalities and personal competencies vary (example, Dave was more financially naive and incompetent than most in his youth), it follows that the correct course of action will vary between persons. Dave doesn't have all the info on this guy, so he's not really in a position to make the call. All he can do is make an educated guess where the guy is likely making a mistake. Basically the son might be wrong, but we don't have all the info to know for sure.

[@pedosgotovegas]

So sure he's right if nothing goes wrong . 41 people who liked this comment is dumb

[@mattsohn1402]

@@Michael-vf2mw Exactly. This is the fundamental problem with Ramsey: It assumes all people have the same risk tolerance. Depending on your personality, investing vs. paying off the mortgage should be different. This isn't something like "eat your vegetables," which is good advice no matter who you are.

[@Michael-vf2mw]

@@mattsohn1402 The fundamental problem with Ramsey is that he doesn't think critically. He has a brand and a formula and he just applies it ad nauseum.

[@KarlDag]

"My son is getting married FOR THE FIRST TIME" 😂😂😂 😳😳😳 😭😭😭

[@genxx2724]

She’s a brain trust. Better pay off the house.

[@leeluan08]

Haha….

[@rebeccamarilyn3935]

There’s also people in their 40s on their 3rd or 4th marriages 😏

[@jonathansaindon788]

If retirement is what makes him nervous, he took the right decision. Not everybody is stressed out by the idea of having a mortgage.

[@0neofthem]

I wonder what the son’s net worth is and how much he has in investments. If it’s a large amount, then mom’s advice is totally unwarranted and unnecessary.

[@ASimoneau]

If his net worth is large enough, the mortgage is also totally unwarranted and unnecessary.

[@sblijheid]

Net worth is an arbitrary number. Sometimes, you have to look at the dollar value. If he's that solvent, he wouldn't need a mortgage, although it depends on how he structured his investments. If he has investments that guarantees him a replacement income if he loses his job, he's probably fine. She didn't give any details.

[@found_treasures831]

Dave knows he's wrong on this. He's just been saying it for so long he can't switch it up now.

[@ismaelfernandez8666]

At the end the day..3-5% on a 500k home is more than 7-8% of 10k etc. it’s definitely better to pay the home off asap so your not paying 200k+ on interest

[@KC-dr3cg]

@@ismaelfernandez8666 or even interest on a lesser amount. It just feels different. He's right that your decision making is better if you are not desperate.

[@reaalitykinggs]

The math works in the sons favor IF NOTHING goes wrong….. There are however various non quantifiable benefits that may be more important than the few extra bucks..

[@lionelhuts875]

​@@ismaelfernandez8666It's clear you don't understand how interest rates works. The principal balance of a loan doesn't matter when comparing where to put excess money.

[@robloxvids2233]

The way we know he's wrong is by using his own logic that withdrawing 10% per year in retirement in perpetuity is totally safe. Lolllll

[@MichaelJanzer]

Funny how Dave compares a guy not wanting to pay off a 30 year mortgage at 2.5% over investing to his real estate experience of having to pay 1.2 million in less than 90 days. Son in 100% correct, and glad he doesn’t listen to his parents.

[@harrychu650]

Exactly, put that extra cash into Tesla stock and watch it appreciate.

[@TeslaHo]

100% with the son on this

[@strat1080]

Totally agree. Dave’s theory on this is a matter of principle for him but it’s not a mathematically tenable one. It makes no mathematical sense. I get tired of Dave pretending like there’s a one size fits all solution for everybody and every economic situation. His advice of saving up cash to buy a house is complete idiocy in today’s economic climate. Good luck saving up to buy house when homes are appreciating in value at a much higher rate than interest rates. Sure once you pay off your house you have more money available to invest but you’ve now lost many many years of investing in which that money could have been growing. It just doesn’t make mathematical sense

[@harrychu650]

@@strat1080 And Tesla stock is selling at a steep discount. Time to back the truck up.

[@grantguy8933]

Dave’s point is about spiritual and mental peace to be debt free then grow. Both sides have different focused perspectives.

[@aaronbushue499]

Really wish Dave would stop acting like 15 to 30 year fixed rate loans are the same as his 90 day balloon notes he went bankrupt on

[@jakevb141]

Right??

[@patty109109]

Lol truth.

[@M.Pvidsandshorts]

His whole you would borrow $2mil if you could always make the spread argument is also ridiculous. Obviously there are basic risk management principles. If you try and make the spread on an amount even if you lost still comfortably satisfied your short term obligations that’s different

[@SUPAassassin098]

@@M.Pvidsandshorts Yeah that argument is so dumb. In his example it was someone with a $100K house. If someone with a $100K house has a mortgage there is basically no chance they could even afford a $2 million mortgage… So yeah of course they wouldn’t take that loan, but I don’t think anyone is even thinking of doing that

[@chaoshih3860]

Finally, someone said it. i actually think Dave know it's different, but he gotta protect his book and class, so he act like he think it's the same things.

[@gibblespascack1418]

It is hard to argue with the 12% return on your investment vs paying off that 2.75% mortgage. Now if the mortgage rate was higher, then it's easier math equation. I am not an opportunity cost person, but it's a heck of difference. However, borrowing beyond your original mortgage(like a cash out refi) is just not something that I could not get behind.

[@KevinJonasx11]

the rationale used to do cash out refis is the same as the rationale to avoid paying off the original principle (there are some small differences between a fixed rate first mortgage and the typical HELOC but it’s not super significant if you’re on top of things), I don’t really see why you are making a distinction. you can have a low interest rate loan, and leverage that loan to invest. what difference does it make if you had paid it off the house before? you are still leverage one of your most important assets to invest in other assets, the whole house of cards could come crashing down all the same. I think the real idea is that having a completely paid for house is a great strategy, and advanced payments are good, but should not be at the cost of your other investments, which I think the baby steps reflect (only pay off your house early after you are already contributing 15% to other investments). what are your thoughts?

[@theraddadinvestor1000]

smartest thing to do is put the money you would put towards the MTG, put into a separate brokerage account and allow it to grow.

[@Saquintes2]

Yeah…let time decide. If the market crashes, you are just still paying off your mortgage as normal. If you lose your job and haven’t finished paying off your house but have no savings because you put it in your low interest mortgage, then you’re up a creek without a paddle. If you have it in the market, you can bring it out to do what you need. If you lose your job AND the market crashes, then you are no worse off then if you started paying off your house and didn’t finish yet. That’s what the EF is for. But if instead, it grows faster than what you’re paying in interest, then you can always take it out and pay off the house and still come out ahead. But I bet you won’t want to pay the CG and will have enjoyed seeing it grow and can feel better that if you needed to, you could pay off the house in a couple of days. Maybe you even take out the remaining balance and stick in something guaranteed and insured, if it’s still a better return than

[@abrahamflores2566]

she already became a multi millionaire by leaving her mortgage be and invest instead. She can run the math backwards to see how much less wealthy she would be if she decided to pay off the mortgage decades ago.

[@Allergic2broke]

So she wants to argue about who is right

[@katiejon17]

Dave: “We all argue with Rachel about her conspiracy theories...” Me: I *LOVE* you Rachel!

[@chief5981]

no kidding. I want to hear them too

[@kj7653]

Thank you, Dave! After all these years of following you, I have never heard your specific reasons as to why one should pay off their mortgage. Emotional reasons - the wife's security, but never a list of financial reasons. Thanks I needed a better understanding of your rational.

[@Elizabeth-yg2mg]

Dave has explained that many times. You don't listen.

[@Excalibur2]

His reasons don't hold water, only for emotional payoff. Homes are a liability, and in the event of a divorce the guy could be left with nothing as the family court will side with the mother and kids, stealing whatever equity he had.

[@ColeBeasley]

The Ramsey plan sucks when it comes to this. Most of the Ramsey millionaires have half their net worth in their primary residence.. you're a millionaire on paper but you have no money. It's stupid.

[@mxerb5912]

I would say the vast majority of people have their net worth in their home.

[@JeanValjean875]

@@mxerb5912 The fact that a lot of people do something doesn't prove it's the right thing to do.

[@HOLDXSTEEL]

Hey, even if the money is in their home they still own it…. A million dollar home is a million dollar home

[@AR-tb9hq]

I think Dave comes at it from an equity perspective - yes no cash, but your working cap is high (assets over liabilities), equity or ownership doesn't always mean cash on hand.

[@smeevers]

How is it stupid to have zero payments and just be stacking cash because of that lol

[@mariaansley1519]

Unfortunately the same time you need the money to make payments (ex. job loss due to recession) is when your investments are low and you have to pull at a loss.

[@alphaandomega5612]

That’s what the emergency fund is for.

[@mariaansley1519]

@@alphaandomega5612 true I guess. One thing I noticed from the late 80's though. Most of those in their 50's that lost their jobs never really replaced them at the income they had

[@georgemendez6760]

You could also just use the dividends that you receive

[@mariaansley1519]

@@georgemendez6760 that too is true but dividends are profits and go up and down as well. I think it's a matter of risk, no? Holding a mortgage is risky.

[@sblijheid]

@@georgemendez6760 In a recession there are massive layoffs and usually companies are in the red, so no dividends. If your house is paid off, at least you can live a bit on unemployment because that huge chunk of debt is not there. The clue is to be prepared for the worst case scenario.

[@JustinCase780]

The 40 year old guy should DO BOTH - invest AND knock down some principle simultaneously. It's not a zero-sum game.

[@alinatamashevich3354]

Nope, interest IS theft!

[@robloxvids2233]

It's a positive-sum game. Whether he pays down the mortgage or invests. It's more positive if he invests, though.

[@Scarface_445]

@@alinatamashevich3354Nope. Invest at 12% pay 3%. You make the spread EVEN with risk adjustment you still make a spread. Only reason to pay it off is if you wanna reduce risk associated with wanting to quit, leave to another job, emergencies, ect.

[@rajbeekie7124]

Basic math, don't pay off the mortgage. Pay the minimum and invest the rest. Pay off the low interest mortgage is not wise.

[@Lon1001]

Nope, if you never pay off your home you will never own your home.

[@thedopplereffect00]

@@Lon1001 tell me how that works out when you stop paying property taxes

[@Laker62282]

@@Lon1001 But even paying the minimum you will own your home.

[@nickm4662]

This has become a hot topic lately with the low rates we had recently!

[@LG-mm5ie]

She said getting married for the first time like there are dozens more to come 🤣🤣

[@SovereignMoney]

the idea of investing more and not paying additional principal is that you're not prepaying the mortgage and the payments dont decrease. so if you lose your job, you have to rely on your emergency fund. building up a normal brokerage account is an additional layer for an emergency.

[@Galworld761]

A brokerage account is for retirement because a 401k does not cut it. I am not pulling my capital earning 7% to pay a 3% liability.

[@patrickchilds5486]

I disagree… compounding is so powerful. Start early and be consistent!

[@Lon1001]

compounding works on your entire net worth, debts and liabilities alike.

[@colebaker25]

@@Lon1001 Paying off a loan balance does not help with compounding. Your house is appreciating no matter the balance on the loan.

[@aaront936]

@@Lon1001 you can't eat a house. If youre not actively selling your house leave it off your net worth total.

[@Scarface_445]

Agree! I’ll take borrowing at 2-3% any day and investing at 10-12%. Even adjusted for risk of debt, that risk is NOT eating the difference. Dave is wrong on this one

[@billybeemus3929]

The problem with way too many people that say "I will continue to just pay "X" at a low rate (or my favorite - rent instead of buy) and invest my money at a higher rate." is that they never actually invest that extra money. They spend it on wants (not needs) and that extra money just disappears.

[@Excalibur2]

That's the real issue. If you're responsible enough to invest the difference, then don't pay off the mortgage. I've set up my 401k to do all the saving automatically, so it simplifies the process.

[@Duncan94]

There is no argument. Over a typical 30 year mortgage, if you just pay it off as normal and put any additional savings into an index fund you will be MUCH better off. The only debt you NEED to get rid of of HIGH INTEREST debt.

[@davidmason777]

The great thing about financial success is no one person is right or wrong. What works for one person might not work for another. Take what you can from each person and do what’s best for you.

[@lauvonfr9222]

Very well said, money is personal for everyone.

[@mashruralam5795]

If you make your sample size large enough then you can make some general rules for people to follow. These rules are what Dave is preaching. They work for vast majority of people vast majority of the time. I’m sure there are individuals that have no negative response to their health from eating fast food. But if you scale up to all of America then it is a very good rule to say “people should not eat fast food”.

[@Lon1001]

It's a double edged sword though, for too many people don't actually succeed.

[@briankowald6465]

Thanks Dave and George for patiently explaining this again.

[@kevinmccann2228]

I have a 2.75% 30 year mortgage. As high as Dave thinks of mutual funds I just don't get it. I know he says he used to be a math nerd saying it is on paper better. I will never pay off a 2.75% mortgage though.

[@Candisa]

Totally agree, I'm paying off my mortgage faster now because I have a variable interest rate that shot up to 5.35% last year. Up until last year it was consistently well below 3%, the thought of paying a dime more than I had to never crossed my mind, and if the interests would drop below 3.5ish% before it's paid off I will definitely be going back to paying the minimum amount and prioritize other goals again.

[@marcusjohn6654]

IF you have a low fixed interest rate on a 30 year mortgage, put the extra money into a S&P 500 low cost index mutual fund. The math doesn't lie. Dave is right on 85-90% of what he says. Always remember no one man knows it all. Math is math.

[@janelleg597]

Lady...this is just drama

[@ivanvargas2425]

It looks good on paper and if done right it is better. You just got to be disciplined. All these millionaires were previously millionaires before they paid off there house.

[@stevenporter863]

Dave, nobody said they enjoy debt. What they are doing is leveraging the money they would use to pay off the low interest debt at for the prospect of making much more. Agreed that someone shouldn't do that if they can't afford to rub two nickles together.

[@joedeschamps5247]

Much needed wisdom at the end thank you

[@pey7777]

Dave doesn't understand causation vs correlation. Just because most millionaires have a paid-off house doesn't mean they became millionaires by paying off their house. I'd like to see the data showing at which step of their wealth building journey did these millionaires pay off their house. Was it after they already became millionaires from investing or other sources? Did they prioritize paying down their home versus investing more? These are important questions that he never answers

[@Neddie2k]

If all your wealth is in your house, you are still broke.

[@donaldlyons17]

Dave does not mention it b/c it is obvious that running a cash generating business (legal or otherwise) is how the majority of millionaires got there. The lowest income people who make low wages through life and those making below average income with few exceptions are not even becoming millionaires.

[@alinatamashevich3354]

You seriously thing Dave with a $250M net worth does not understand basic finance? He has a degree in it!

[@pey7777]

@@alinatamashevich3354 causation vs correlation is not basic finance. I'm 100% sure he understands basic finance, but he clearly doesn't understand that just because most millionaires have a paid-for house, doesn't mean they became millionaires by prioritizing paying down their house over other ways to grow their net worth

[@alinatamashevich3354]

@@pey7777 The study says otherwise. Your beliefs do not back the facts.

[@Joseph565112]

If youve got to pay somebody several hundred dollars, if not more, per month then you don’t own the house. It’s a lot easier to come up with taxes once per year than a mortgage every month if something goes wrong in your life

[@ellencox8415]

Jeez this mother is a nightmare. I'm sure her "advice" is littered with criticism and guilt trips. The future wife needed to have sided with the husband and the mother needed to say her peace calmly and then let it go. This woman is a "right fighter" and makes the people around her miserable until she gets her way.

[@paulkersey7458]

Just getting married at 40 too. He had a lot of mommy issues to work through must be.

[@ellencox8415]

@@paulkersey7458 I 100% could see that.

[@midwifeohyeah22]

He doesn't have other debt. Mom probably needs to stay out of it q

[@robloxvids2233]

She was probably in debt up to her eyeballs at 40, like every other financially-stunted Boomer was.

[@robloxvids2233]

She was probably in debt up to her eyeballs at 40, like a lot of Boomers were.

[@Jumpman67]

If you want to avoid as much risk as possible, pay it off. If you want to earn more money invest early and carry the mortgage. One thing most people don't bring up is that with inflation your house payment doesn't change with a fixed mortgage. Over the years the dollar is losing buying power which makes paying the mortgage cheaper over time. If you also think about compounding interest on your investments, the earlier you invest the more money you make over time.

[@blackworldtraveler3711]

I started saving/investing in 10th grade before buying my home years later. Bought my home and still continued saving/investing. Paid off 30yr mortgage in nine years in my 30s. Only debt I ever had. Most didn't figure that the earlier you save and invest was better until after they got into debt before buying a home. They messed up so they really have no choice but to pay the banks over $1k interest each month for a decade or more. They got in a lot of debt spending money they don't have for years....then think about things like losing "buying power" too late. Also most people don't bring up costs of marriage,kids,divorce,child support,etc. over the years and added costs that goes with it.

[@donaldlyons17]

@@blackworldtraveler3711 well you needed buying power and unless that came from investments how can most be in trouble for the aforementioned reasons? Many have a buying power problem not an investment too late issue!!!

[@thedopplereffect00]

Wrong. If you want less risk ibonds and CDs which pay MORE than the mortgage rate

[@blackworldtraveler3711]

@@donaldlyons17 I don’t have buying power issues because I planned.,saved,invested, etc. early. Just another day.

[@donaldlyons17]

@@blackworldtraveler3711 no you have an income and it likely pays more than your expenses cost on average. Even for me math just matters not to take anything away from you!!!

[@Larrydastooge]

Husband and son are right!!! I regret paying my house off and not investing that extra thrown to the mortgage!!

[@alinatamashevich3354]

A fool and his money....

[@mikeshaw4610]

Personally I was close to your husband. We had investments (non 401k/IRA) that if something happened we could still pay off our mortgage but I did not care to. My wife kept saying it’s our last debt let’s pay it off. I finally agreed and have never regretted the decision. The bigger I have noticed now is when any expense comes up it’s not a big deal because we now have margin in our budget. That piece of mind has been worth much more than the one time capital gains taxes we have to pay.

[@randocrypto1678]

I hope her son doesn’t fall for her beliefs. Paying off your house early costs you a LOT of money. Hundreds of thousands if not millions of dollars.

[@joeyf6103]

If you don’t invest the money?

[@itztwoupbuzzi8618]

Anyone can agree to disagree on that. You know what it definitely DOESN’T cost you … is peace of mind. Knowing your house is paid off, is a peace of mind nothing else will give you.

[@randocrypto1678]

@@itztwoupbuzzi8618 If peace of mind is worth several hundred thousand dollars to you, there’s absolutely nothing wrong with that. But personally, I don’t make enough to leave that kind of money on the table.

[@colebaker25]

@@randocrypto1678 Having enough income in retirement is a bigger priority than paying off your mortgage.

[@greggpurviance7252]

Lots of money, maybe. If everything goes just right. It usually doesn't

[@1stLtDavis]

Personal decision I guess. I like to own my own house, and if you have a mortgage you do not own a home. The bank owns the place so. I just didn’t feel very mature until I paid off and actually owned my place but that’s just me

[@davescheidt4533]

And if you don’t pay taxes the county will take it!!!!

[@lindab2323]

Legally incorrect. You own the house, the bank has a lien.

[@Joseph565112]

Yeah, if you have to pay somebody every month to stay in the house. You don’t own that house yet. It’s a lot easier to come up with taxes once per year than a monthly payment which could be up to $1000 or more every month

[@toober4013]

@@lindab2323 the bank can always call in the mortgage.

[@lindab2323]

@@toober4013 The bank cannot "call" the mortgage unless you are in default. If you owe someone money, they can sue to collect it. That's what a foreclosure is in the case of a house. But that is a completely different premise than ownership. Simple legal fact - you OWN your house. The bank has a LIEN.

[@barbieblue3336]

I think this is "pick on Debbie" day lol

[@oliviafox6745]

If the Deb's husband wouldn't listen to her why should her son? Besides if he's 40 years old, he can make his own decisions.

[@alext3892]

This is my favorite Dave Ramsey segment of all time, and I watch a lot of these. Very well said with good common sense principles. It isn't just math, it's the emotional intelligence of knowing how it's going to benefit you spiritually to not have the pressure of debt in your life. Edit: Wow, a shocking amount of arrogance in the comment section below. A bunch of broke people who are going to lose it all if we have another recession lol.

[@mandypdx]

I hope you’re educated and rich (I am)

[@alexm260]

Arrogance is thinking that your preference is the one right way.

[@B_22_5]

Lol this comments edit is the epitome of arrogance. You played yourself my guy.

[@teeduck]

Wrong. I’m a millionaire with a mortgage. Dave is wrong here.

[@aaront936]

Math wins out over feelings in the end.

[@jude1245]

They are missing the fact that they do in fact believe in investing 15% of your take home pay in your retirement plan. So if the money the son is talking about is that 15% then they would not recommend him to pay that towards the mortgage instead of the 401k or IRA. If you just focus on paying off the house and never put any money away you will be in trouble. And time in the market matters so investing more money at 55 does not equal investing less money at 40.

[@joshmoyer815]

You can only invest so much a year for retirement. I max both my 401k and my Roth and I still have a mortgage. Which is my only debt.

[@Wetam99]

You can invest as much as you want. Open an IRA.

[@andrewsandstrom7694]

He’s 40 why are you calling a radio show about your sons finances

[@chaoshih3860]

i wonder how many people realize that looking at your mortgage amortization form, you've already paid majority of the interests in first 20 years (30 years loan). if you are 5-10 years into your mortgage, pay it off may save your some interests, but if you are 20-25 years in your mortgage, just dont bother pay it off right away because there's so little interest left to be saved, most of your mortgage payment are principal anyway.

[@jtsnow24]

Really good point ☝️

[@abrahamflores2566]

Doesn't matter if it's a 30, 20,or 15 year mortgage. The interest you pay per month is dependent on the outstanding balance. But a shorter loan term forces you to pay additional principal each month so you pay less and less interest as time goes. Just don't be overleveged and invest as much as possible and you will do far better than the person aggressively paying of their mortgage

[@Candisa]

​@@abrahamflores2566 It does matter, the interest you pay per month is dependent on the outstanding balance over the outstanding time, that's why you don't pay double on a 15yr mortgage vs a 30yr one at the same interest rate, it's compounding just the same as an investment, just the other way around with a set beginning and end point. Two ways to decrease the amount of interest left to pay is either reducing the balance, or reducing the time left, which is why banks charge fees to do either one. For keeping a mortgage to make economical sense, you have to invest more than the monthly mortgage fees ànd know you'll be investing at that rate or more for as many years as you paid on the mortgage. The first you can try, but unless you bought a house at 18 and plan to work until 78, or you can consistently invest even more, you just shouldn't keep a 30yr mortgage. I don't agree on Daves rent until you can put 20% down and get a 15 year mortgage schpiel, most people would never own a home that way, he's waaaay out of touch and out of time with that one... I also don't agree on the fixation of paying back the mortgage aggressively, even his own babysteps tell you to do this intentionally, not intensively. I do agree, if you have everything you need including a well-maintained emergency fund, are on track to have sufficient college funds for the kids, and are consistently saving/investing 15% of your income on top of that, you should throw as much as you can at the mortgage and use it towards shortening the remaining time.

[@johnnyhoang4444]

They answer this all the time, some people agree. Some people don’t.

[@alinatamashevich3354]

Some people are broke too!

[@vanesslifeygo]

I mean, is he trying to buy the still bleeding-away Gamestop as opposed to buying the house, or is he buying instruments that grow more consistently?

[@DaddyMaverik]

Dave is so wrong in this one it’s unbelievable. The Ramsey plan is AMAZING for getting basic fundamentals of finance down and for getting out of debt. Anything past that and it’s just a huge miss and very elementary.

[@eatpigsnot]

what part is wrong?

[@mph5896]

His evidence is the everyday millionaire study they performed. If you don't like it, don't follow it.

[@DaddyMaverik]

@@mph5896 As I said in my comment, his plan is amazing for basics, just not so much past that. If you don’t like my comment, feel free to scroll on past. You can use that logic on so many things, that doesn’t mean it’s valid.

[@pey7777]

@@mph5896 His evidence showed that most millionaires have a paid for house. They never specify when they paid off their house (if they were already millionaires when they did so) or if they prioritized paying down a home versus investing more. It's a faulty argument. I can become a millionaire with investments then pay off my house in my 50s and wow I am now a statistic Dave will use to tell 20 or 30 year olds to pay off a 2% interest mortgage. Makes no sense

[@Lon1001]

I disagree, I think mortgages are just as bad as other debts. Leveraging your home to borrow money to invest is risky and if you lose the ability to maintain the payments then you will realize in a very harsh way that you never actually owned the home.

[@jerede7731]

This argument directly contradicts Dave’s thinking that it’s a good idea to have an 8% withdrawal rate during retirement (because you are earning 12% on your retirement accounts. He brings up risk only when it fits his argument. The son is right here.

[@christareich4149]

One of your smartvester pros told us to keep our mortgage with low interest rate and to invest that money instead. 😞

[@nmccw3245]

Paying off my low interest mortgage eliminated all fixed liabilities apart from property taxes from my life. This allowed me to retire early on the variable earnings of my investments because my expenses are also variable. Unsurprisingly, I choose to live frugally and reinvest most of my income.

[@jonathansaindon788]

It feels like she thinks her way of doing things is the only right way.

[@cristianm6706]

Trust me if I can find a loan @ 2.5 interest rate and I knew that I can flip it earning 10% annual return I leverage it as much as I can

[@fiedler230]

Son is right.

[@kamizerox]

I'm glad Dave is discussing a lot about risk these days. I feel sad though that a lot of comments here missed the mark all about risk. On Jan 18, 2022, I commented "The reason why Dave's plan works mathematically and people don't understand nor be able to put numbers into his plan is because people are not calculating nor taking into account risk. Dave's method mathematically tries to cut down risk as fast as it can rather than mathematically save you the most money." To go further into that, Finance has two important indicators of financial risk: Debt-to-income ratio and Debt-to-equity ratio. That's why Dave boils it down as debt = risk. If you are savvy enough, you would know not only optimal debt-to-equity ratio that would keep you safe (usually in the form of cash / liquidity so you can cover yourself and not end up quickly in bankruptcy when you can't cover your obligations) but also have the knowledge that mortgages are usually the highest monthly obligation to affect debt-to-income ratio. The biggest case this needs to be taken into account is what could potentially happen in a downturn and for many, it could usually end up losing that source of monthly income from their job. Dave always ties this to his experience when he lost his highly levered real estate portfolio when the bank called on his notes during the 1980s recession and he has always said this experience. Now he is saying the math and finance behind his plan.

[@colebaker25]

Dave is completely correct when talking about the need to minimize risk. He fails to account for the much riskier and more devastating risk of not having enough income in retirement. There's no bankruptcy for not having enough money to retire: it's either work or starve.

[@sblijheid]

@@colebaker25 That's not what he says. He says pay off your mortgage as fast as you can. What's the point of having a great retirement account but you lose your house because at age 58 you lost your job and you don't own your home free and clear. Rent or mortgage are usually the highest costs. Once you knock them out, even living on SSI becomes bearable.

[@aaront936]

@@sblijheid and by doing that you're giving up valuable years that your money could have been compounding making you more money.

[@joejohn.]

@@sblijheid "pay off your mortgage as fast as you can" meaning forego retirement accounts entirely? Put every saved dollar towards extra mortgage payments? Surely that can't be the optimal allocation when you consider the tax advantages of 401k/IRA/HSA and the compounding effect of multiple-decade investing timeline.

[@alinatamashevich3354]

Word salad, you are way over-thinking it

[@keric3730]

Some people just own too much house. Lots of people around the world find they can live in smaller places,- they figure out what's important and get rid of the clutter of the rest Minimalism KZbin videos can help with that

[@joeriveracomedy]

I'm almost 40. My silicon valley realtor bro suggests I should invest in property. I say no every time. No one can convince me otherwise.

[@dgar2970]

Isnt paying off your home, investing in your self and your security. If you have your home payed off and you have equity you always have a way to cash in the event of an emergency.

[@Lon1001]

Both George and Dave forgot their own rule: "no more than 25% of your monthly take-home pay on a 15-year fixed-rate mortgage" People are house poor (thus give most of their income over their lifetime of earnings over to the bank and never have financial peace) because they borrow based on how much the bank tells them they are approved for not what they can actually afford. The real advice here shouldn't be whether to focus on paying the mortgage off first or not, rather the son should not buy a home he can't afford to pay off soon if he had to.

[@mrfitness4724]

100 % correct. I believe that the buyer behavior is present because the home prices aren’t reflecting the salary of American workers and thus unless you’ve really made it career wise your left with no choice for homeowner ship.

[@Lon1001]

@@mrfitness4724 I agree the house prices aren't reflecting salaries and that's all the more reason to not be leveraging these HUGE mortgages to try to make a small margin on the spread

[@katiejon17]

Recently I had a dialogue with a person where they didn’t agree that foreclosures are going to increase. My opinion is that people are buying homes they cannot afford. The specific example I gave was that a total household income of $65k/year has no business purchasing a home that’s $185k because at best they would be “house poor”. But the person argued that it was “completely reasonable”. I have to doubt that person has ever owned a home.

[@jeromehenry4484]

@@katiejon17 Do $185K houses even exist in more populated areas that still have decent job opportunities? Foreclosures have already increased YOY. It's easy to be house-poor, I was able to make my mortgage payments, but maintenance costs, increases in property taxes/homeowners insurance were the factors that pushed me into being house-poor. As soon as I sold that house, I was able to fully fund retirement accounts & sizable emergency fund, a huge relief.

[@abrahamflores2566]

I agree people shouldnt be overleveged and buying house out of their budget.... but a 15 year mortgage at no more than 25% of take home pay is ridiculous. A $100k household would barely be able to take out a $150k mortgage so if homes in the area are going for $300k good luck saving $150k downpayment over the next decade.

[@StasTalksStocks]

Her son is smart lol paying off a mortgage thats 2.75-4% is literally asinine.

[@natebrome3089]

if his interest rate is below 5%, its honestly smarter to invest getting 8-10%. literally losing money if you dont invest and pay normally

[@beckypetersen2680]

I guess at 40, no matter what side you are on, it seems like mom shouldn't be in her son's business. He and his wife are a family unit (or will be when they get married), and mom and dad are now on the outside - he doesn't really need to talk about his finances with them. And what is mom's level of risk tolerance might be different from her son's. One thing - The Money Guy does point out that you will make more investing, but most people, at about age 45, due to all the uncertainties of life, might want to consider going ahead and paying it off just to have it off your plate. I think that's pretty sound advice. That said, I'm actually on mom's side as to peace of mind without a mortgage. Love having a paid off house.

[@J3llyBean423]

SRB I have to get this cased done/ .... with sitpulation they sepcifed // and I don't have concerttration

[@dwaynemauk566]

My number one asset that is at risk of damaging me more than any other asset is my home with a mortgage against it. (True, could lose it due to unpaid taxes or fire). But I want to get the entity/bank off my deed as quickly as possible so that if an economic downturn occurs, I have less of a chance of them taking it, then me gambling that i have a 3.275% loan and can earn supposedly 12% (which by the way, those who study the stock market show that the average growth is really between 6 - 8% not the 12% that some propound), and then the market crashes, I'm out of a job, and lose my house. I don't want to be a slave to the lender any more than absolute is necessary, so when I retire, house to be paid off along with all the other debt, and now my retirement budget doesn't have to be sky high to cover the continuance of a mortgage.

[@lafrugalistefutee6221]

It really depends on your risk tolerance. If you sleep well at night, investing would be the logical choice. But you have to accept that if things go south, you will end up losing. 2022 is one of those rare year where paying the mortgage would have been a better choice.

[@Fred2-123]

@lafrugalistefutee6221 That's what the 3-6 month emergency fund is for. So that you DON"T lose your house when things go south.

[@Velocentric]

This type of arbitrage is a simple math problem. If you can earn 10% on money you rented for 2.5% percent then by all means do it. BUT you have to really invest that money and not spend it. The appreciation on most homes will more than make up the difference than if you just invested your own money. You also have to be confident in your ability to make payments over the loan period.

[@lionmangolf]

I would say look at how much you're paying total for the house

[@jonahpeacock2561]

while this discussion is interesting it is basically arranging deck chairs, It makes more sense to take higher risks while young vs when old which is a big deal here.

[@6663000]

7:00 the "M" in Ramsey makes it looks like Dave has two little devil horns on his head... not a great camera angle.

[@sprint7412]

Gerg's argument is a strawman. Of course no one would say they miss their mortgage but that's not addressing the son's point. Son is saying with a low interest mortgage, he doesn't want to put extra money into paying it off because it would make more money if invested. It's not like his plan is to keep borrowing on the house so he always has a mortgage. How long has he even had this house? Could have bought it years ago and the house value has gone up so much that the interest he will pay is lower than the added value.

[@Scarface_445]

So when Dave says “No millionaire ever said I borrowed on my house to invest and became a millionaire” is always true then no millionaire has ever said “I paid off my mortgage and that’s how I became a millionaire.” Neither is true and neither is false. No one says these things. You know what they say, EXACTLY what DAVE says I invested, steadily, and did not jumó off the roller coaster. Aka. Everything Dave says about paying off the home TO become a millionaire is untrue. It just happens.

[@jeffleonard343]

You guys know Dave still says to invest at least 15% of income before working on paying off house. Think you guys need to look at the Baby Steps plan and not just watch bite sized clips of the show. You can justify the math for anything but it’s called Financial Peace for a reason.

[@Lon1001]

Yep, their plan is "Financial Peace" not "become as rich as possible at all cost"

[@aaront936]

@@Lon1001 financial peace comes from having assets that can replace your w2 income. not from having all of your money tied up in a house and retirement account.

[@jeffmueller9557]

It looks good on paper because it is right

[@triciah8598]

It is none of her business unless sonny is asking for $$. Still when you live in a high tax state like California and you have everything else paid off and your rate is at 2% it’s hard not to want to invest. But there is a lot of risk. So do what makes sense.

[@robloxvids2233]

I want just 1 person to ask Dave the straightforward question: why is investing in retirement prioritized over paying off the home early in the baby steps. I'll hang up and listen.

[@damondiehl5637]

Mortgage debt generally has the lowest interest rate, compared to student loans and unsecured credit, and you need a place to live, so he says to pay off all debt except the house. I've personally heard him say that over and over on the radio. Get rid of the silly debt and then get on track by investing 15% of gross for retirement, as time in the market is more important than timing the market. Once you have the dumb debt eliminated and the retirement savings train up and running, then you can focus with what is left of your paycheck on the mortgage.

[@jimt6151]

I'd pay off the house first, with no consideration of interest rates on house or retirement. The security of owning a paid-for (and insured) home is my primary goal. I've had a lot of jobs in life. I've owned a couple of homes in life. When life deals you a SHTF event, which it will from time to time, it's a lot easier to get another job than it is to start over from zero getting another house. If I had to work instead of retire, I could do that, but I don't want to do it while struggling to keep a roof over my head.

[@Fred2-123]

It does not make sense to pay off a 2.5% mortgage early. Just make sure you have enough cash to pay the mortgage if you hit a pothole. Invest the extra money, over the long term it will grow much more than 2.5%. Dave's outlook is skewed because most of the people who call him are in deep financial trouble. People like this 40 year old man are not in that category.

[@jimt6151]

@@Fred2-123 If you had the cash on hand to pay the mortgage, it would be foolish to borrow the money in the first place. If you're accumulating the pay-off cash at the same time you're paying the mortgage, and the money is in deed available as cash (no withdrawal penalties from an investment account), then you've got cash sitting around doing practically nothing for you. If you would have to pay a penalty for withdrawing the "cash" from an investment account, you're gambling with it. You might win...or you might lose most of the interest gained, and still have paid the interest on the mortgage. I was debt-free, including my home and acreage, etc. in my 40s, too, in case you were wondering.

[@Fred2-123]

@@jimt6151 What I meant was "enough cash to pay the mortgage monthly payment". All life is a gamble. Every day when you drive off to work you are gambling that you don't get killed in a car accident. Stupid people get in trouble with their mortgages. That doesn't mean that everybody with a mortgage is doing those stupid things. Financially smart people keep their 2.5% 30 year FRM mortgage, have enough assets to easily make the monthly payment, and put the money that would otherwise be buried in the house into the stock market where it earns variable 8%-10%. Yes, highly variable in the short term but averages to 8%-11% over a 30 year period. The only risk is if you cannot make the monthly payment. That's it. As long as you have that covered you are safe.

[@Fred2-123]

@@jimt6151 People like Ramsey who say "would you do a cash-out mortgage to pull money from your paid-for house to invest in stocks?" are being disingenuous. There's a big difference between taking/keeping a purchase money mortgage and doing a cash-out mortgage. Dave Ramsey knows this, he is just treating savvy people as if they are the poor jamokes who are in financial trouble--and who are his primary audience.

[@coscarov]

Day one of mortgage you pay interest on the entire sum, investment starts from a low amount of money and grows. I did not thoroughly calculate it but it may not even be mathematically advantageous, plus risk...

[@michealtorres8773]

Hope when im 40 Dave isn't using me as an example of what not to do! 😅😱

[@cannonball134]

There really is not a right or wrong answer here; it’s all personal preference. Most people who can choose between saving more than 15% vs. paying off their mortgage early will be fine either way

[@aromero385]

Clear explanation the relationships between the spread of lower rate of mortgage and investment gains; high and lower risk.

[@aaront936]

Her son is right and she needs to mind her own business. There is no reason to pay off a low interest mortgage.

[@thethoughtthatcountspodcas1581]

This call is so frustrating lol

[@thethoughtthatcountspodcas1581]

The older you are, the more detrimental it is to your financial plan to pause investing for the sake of paying off a mortgage. 40+ MUST be putting money away for retirement. 50-60+ you are killing yourself if you’re not putting money into retirement funds

[@goofygirl1311]

If you are putting your money towards getting the house paid off instead of contributing to your employer's 401K with match then you are leaving free money on the table which is never a good idea. You would also be missing out on the benefit of time which would be a mistake. It is possible to invest AND pay off your house. Why do one when you can do both?

[@damondiehl5637]

Invest for retirement: Step 4 Pay off your mortgage: Step 6 Baby Step 1 - Save $1,000 for your starter emergency fund. Baby Step 2 - Pay off all debt (except the house) using the debt snowball. Baby Step 3 - Save 3-6 months of expenses in a fully funded emergency fund Baby Step 4 - Invest 15% of your household income in retirement. Baby Step 5 - Save for your children’s college fund. Baby Step 6 - Pay off your home early. Baby Step 7 - Build wealth and give.

[@redwallz4624]

What good is making money on 10% when still in debt with a mortgage

[@kdilli6426]

Curious what Dave Ramsey thinks about the bible verse that says, "it is easier for a camel to walk through the eye of a needle, than it is for a rich person to get into heaven"

[@amethyst4444]

Dave has talked about this many times. Just look it up

[@insideoutsideupsidedown2218]

@WheresPaul#1981 people use that passage all the time to vilify rich people.

[@kdilli6426]

@@amethyst4444 link please

[@dianabinkowski3927]

I need to ask why they keep talking about investing after getting out of debt. Investment companies I wouldn't trust with a single dime of my money. Can anyone remember Ponzi, Madoff and several others if you ever saw the program "American Greed"?

[@Fishouta]

That's only the math. The other part of the equation is carrying risk by keeping a mortgage.

[@aolvaar8792]

What's the risk? Call the mortgage holder and ask for the pay off. So, instead you take the $250K making 12% and pay off a 2.75% loan.

[@Fishouta]

@@aolvaar8792 I guess one of the risks is unemployment or disability to where you suddenly cant make your payment.

[@aolvaar8792]

@@Fishouta ???? Call the mortgage holder and ask for the pay off. Then pay it off. My example said that you have the money to pay off.

[@KNMK259]

The cub needs to learn from the Lion and Lioness. Parents are not stupid enough to advice.