Too late!...paid mine off at 4.25% in 2020 when I retired. I'm glad that I had done that, just one less thing to worry about.
@Loganedwards31
8 ай бұрын
Because so many people overpaid for homes during a period when interest rates were low, I believe there will be a housing crisis because these people are in debt. If housing prices continue to fall and, for whatever reason, they can no longer afford the house and it goes into foreclosure, they will have no equity because they will not make any money if they sell. I feel that many people will be affected by this, especially given the predicted mass layoffs and fast rising living costs.
@andrewlogan7737
8 ай бұрын
I recommend investing in shares to balance out your real estate assets. Even the toughest recessions can give wonderful purchasing opportunities if you are prudent. Furthermore, volatility can create wonderful short-term buy and sell opportunities. Although this is not financial advise, you should buy right now because money isn't king right now!
@danieljackson87
8 ай бұрын
You are correct. With the help of an investing coach, I was able to diversify my 450K portfolio across markets, and I was able to create a little over $830K in net profit by using high dividend yield stocks, ETFs, and bonds.
@danieljackson87
8 ай бұрын
@michaelrenner3 Her name is Stacey Laura Alviani can't divulge much. Most likely, the internet should have her basic info, you can research if you like
@mikeharry96
8 ай бұрын
@@danieljackson87 I must admit, Stacey seems to be pretty knowledgeable, so thank you for the suggestion. I completely read through her resume, educational history, and qualifications after finding her online, and I must admit, they were extremely remarkable. and it's a bit of a challenge.
@brians2706
8 ай бұрын
Hi Josh. I lived in Harrisonburg for a while. Ran the Dayton Muddler. What is VTI? I'm 60. Can I build the same liquidity in my company 401k?
@ChristopherEvans-650
8 ай бұрын
Too late. Paid off my mortgage in 2015 at age 47. It was a $325,000 loan at 4 7/8th percent interest for 30 years. Paid it off in 13 years. Home is now worth 1.2 million. Not being beholden to the banksters is such a good feeling. Having a very secure job and other cash flows lessened my worries for immediate cash.
@Gzluweez
8 ай бұрын
It would have appreciated even if you didn’t pay it off.
@robertwalker5521
8 ай бұрын
DO BOTH !!!
@TheBeagle1956
8 ай бұрын
We had a mortgage until we realized we had enough cash to pay it off and still have plenty of cash left. It was an easy decision and haven’t regretted it since. Now we own five properties with no mortgage and live off stock dividends, social security and a small pension.
@mcsmith7692
7 ай бұрын
Curious, you mention you "live off stock dividends, social security and a small pension.". What do you do with the income from the 5 properties you own ? I'm assuming you have income from them. You appear to be in a solid financial position.
@TheBeagle1956
7 ай бұрын
@@mcsmith7692We get enough income from one beach property to pay the property tax, insurance and utilities by renting it for 5-6 weeks each summer. We use that property ourselves part of the summer. We have a Florida beach condo we use in the winter. Two properties are used by each of our sons and their families. They will inherit the homes they live in. Our primary home is nearby them. So only one property has any income, but only enough to pay for itself.
@jc10907Sealy
8 ай бұрын
My grandmother used to say “you can’t eat bricks 🧱 “
@rondean2733
8 ай бұрын
Don't need cash to put food on our table, we raise our own livestock, chickens for eggs, raise our own garden and am able to can food.
@practicallandlording2787
8 ай бұрын
This is the problem is a fixed rate mortgage. Rates were so low there was no choice. If you have an arm you pay on the balance so if you pay extra you get a payment decrease on adjustment. The amortization period is fixed on an arm but with a fixed rate (actually fixed payment) you reduce the term of the loan because the amortization varies with no relief in the monthly payment rate.
@Gzluweez
8 ай бұрын
I have a low interest mortgage. I split the difference. An extra 250 a month knocks off about 8 years on the back end, when inflation has likely eaten up my income. It would take a 5-6% EVERY YEAR return in investments depending on what you think the risk premium is, and tax bracket to yield the same as 3% compounded. I don’t want my liquidity tied up in my house anymore, then need to access it at a stupid rate of 8-9% for a home equity loan. My property taxes are higher than my mortgage, so the only way to ditch this high expense is to leave the state which will also require a cash down payment on new home. Housing just feels like a trap. Damned if you do, Damned if you don’t
@williamstoker8027
8 ай бұрын
I payed my house off in 10 years. That was 40 years ago. I haven’t missed a meal. Going to retire this year and live well.
@russellfoster8133
8 ай бұрын
As George Jefferson said, "Banks don't loan money to people who need it"
@jayholiday256
8 ай бұрын
Brilliant
@ws775
8 ай бұрын
Movin on up to the east side….
@robertbass974
8 ай бұрын
We paid our last home off in 8 years,and then paid ourselves the regular mortgage payment every month and invested it in several mutual funds for the next 12 years when we sold it in 2016 for almost double what we paid for it. We paid cash for our retirement dream home and still had over 500,000 invested for retirement out of what would have been mortgage payments!
@scottrichardson3961
8 ай бұрын
I'm in NO hurry to pay off my mortgage of
@anniealexander9616
8 ай бұрын
I paid off my mortgage in 2019. I have a heloc for opportunity reasons. Not having a mortgage means you can invest more. This week, I put 100% of my bring home pay into my after tax brokerage account. I have an emergency fund in a high yield savings account. I've completely paid for 3 single family homes and looking to buy a 4th.
@ordinaryhuman5645
8 ай бұрын
I paid off my mortgage very aggressively (15 year loan knocked out in 3.5 years). In hindsight, it was a bad move. Safe, but far from optimal. If I hadn't paid it off so fast, I'd have refinanced in 2021-ish at close to 3%. And I'd have been buying stocks instead (I was looking at Tesla, but waited until the mortgage was done to buy). Even just S&P 500 would have outperformed the mortgage payoff quite a lot.
@johnnyadams1755
8 ай бұрын
Early in your mortgage, it makes sense to pay extra if you have an emergency fund. I think it matters more if you are young and in a stable job. It's a personal decision based on individual situations. 👍
@mikeh5034
8 ай бұрын
Save 3 yrs in cash.. vmfxx is paying 5%.. zero risk. Then back to paying that mortgage off. On a 200K loan fixed at 3% for 30yrs your paying $450 a month in interest... thats alot to burden in retirement. Obviously the more frugal you are the better off you are. Becareful on this " down sizing" thought process down the road. That 250 K smaller house in your neighborhood today will be 350-400 in 10 yrs. Its tricky to maintain your comfort level and get another house 200 k cheaper.
@anthonyjames4319
8 ай бұрын
Mortgage at 2.5% while HYSA accounts are offering 5%. It’s a no brainer.
@Mitzi73
8 ай бұрын
2.5% mortgage but when you add rising property tax and rising home insurance, that 5% HY account doesn’t look so attractive.
@MuzixMaker
8 ай бұрын
@@Mitzi73you can’t pay down tax and insurance, which is why you need cash flow vs equity.
@Mitzi73
8 ай бұрын
@@MuzixMaker But getting rid of that mortgage is one less bill.
@MuzixMaker
8 ай бұрын
@@Mitzi73 By "bill" you mean a piece of paper? Actually if you're carrying a mortgage the taxes and insurance are escrowed by the loan servicer, so you get one "bill" per month. If you owe nothing, you will get annual/semi-annual bills for the insurance, and probably multiple bills from different tax agencies.
@Phillytesla1902
8 ай бұрын
Most people pay that 2.5% mortgage with after tax $, that tax cost 12-24%, paying off mortgage was the absolute best move in my life.
@Mitzi73
8 ай бұрын
At one time I would have agreed either you but I believe the mortgage needs to be knocked out asap. The way property taxes are rising especially in Florida, the mortgage is more of a danger than ever. The best case scenario is get a 15-year mortgage and pay it off like your life is on fire.
@charlesbyrneShowComments4all
8 ай бұрын
Last year we paid an extra $400 per month on our mortgage. So we were paying our 20 mortgage like a 15 year mortgage. Had we known what we know now we would have started with a 15 year mortgage. I think the compromise would be to pay the 15 year mortgage and build up the cash reserve then do a ratio putting additional towards the mortgage and using some for cash, additional retirement and other goals.
@martywilliard
8 ай бұрын
PROPERTY TAXES are rising significantly. YES ! They are approaching a cost that equals the mortgage. Scary, actually.
@cjmuniz12
8 ай бұрын
Don’t forget the insurance, if you can get it, which becomes optional if you don’t have a mortgage. Options are good.
@JJJ5.7
8 ай бұрын
More than one problem or consideration @josh. 1) If a person has refinanced recently into a 3+ percent interest rate, why not hang on to the mortgage and invest cash in a 5% money market? 2) Interest on mortgages is front loaded. Payments in early years are mostly interest. Payments in later years are mostly principal. So for older mortgages there isn't a financial insensitive to pay it off early. Instead put the money in a MM. Obviously peace of mind is another consideration.
@darwinjina
8 ай бұрын
Thats what we did. Mortgage loan at 2.5%. We stopped paying 'extra' and putting that in 5%+ money markets. Also, good that inflation eats away at the loan balance buying power as well.
@Fred2-123
8 ай бұрын
Amen!! I have been telling people this for years. There is no such thing as a "low balance mortgage". There is only a mortgage or no mortgage. i once saw somebody get foreclosed when they had only a $5000 balance.
@MichaelBorland-i1w
8 ай бұрын
I still have a mortgage at 3.125%. I am not paying it down, instead saved up during my working years. I feel no pressure at all.
@martywilliard
8 ай бұрын
A good argument. However, I am still an advocate of DEBT FREE living. The freedom one feels - is priceless.
@jefffaulkner5704
8 ай бұрын
100%. I paid off my home a few years ago. Vacillate between relief and regret. If I ever sell my home, I’ll be happy to have the cash. I do have a HELOC that I can tap into should I ever need cash, but then I’ll be paying the bank again, to use my own money.
@lindseypyron189
8 ай бұрын
Retirement is all about cash flow. If I have $2000/mo less in expenses, I need less $ saved to retire. Of course, you should have an emergency fund first.
@brucesmith9144
8 ай бұрын
Think a similar thing can be said about 401k/IRAs. Get your matching contribution then fund liquid savings post-tax. Comes in handy later, especially if you get dumped from a job before age 59 1/2. Digging into those funds earlier than planned is painful.
@krissantos4897
8 ай бұрын
When I was young and dumb at 26 bought first house in San Diego for 50k at 10.5% interest rate in 1986, I paid it off in 7 years. My grown sons still live in that house free and clear, I think property tax on it is like 1k yearly give or take, not sure what they pay for insurance.
@CvonEssen
8 ай бұрын
Less than $50k remaining, done by the end of 2025 (at the latest)
@chrisszymanski5225
8 ай бұрын
3.5 years out from retirement, thanks for validating my same thought process
@brycegardner6171
8 ай бұрын
Extremely good point. I found that dollar cost averaging what I was originally paying towards my mortgage did two things. First, I had a backup emergency fund it I lost my job and second, I learned a lot about investing in a fairly painless way (not a lot of $$ invested slowly with dollar cost averaging).
@ZCAR355
8 ай бұрын
Josh, Pay your house off. If you don’t like the feeling, then you can refinance!
@daralynx2
8 ай бұрын
We paid ours off when savings rates were .5% . I agree not to pay off when savings rates are higher than mortgage rates👍
@RetirementTalk43
8 ай бұрын
Don't look at "savings" rates. Look at a return from a diversified portfolio.
@angelalove9681
8 ай бұрын
Payed off mortgage. Kept a home equity line of credit. 😊
@agates9383
8 ай бұрын
The banks can and will freeze those - had an untapped line in 07' - frozen when the gfc hit - had no issue paying it but the bank froze it anyway.
@robertwalker5521
8 ай бұрын
HELOC are almost always FLEXIBLE RATE.....That would have been TRIPLE the past couple of years.
@coastalhillbilly3419
8 ай бұрын
Josh, I made this mistake but different liabilities, overpriced SoCal home almost free and clear and still got plenty of after tax funds for surprises and a few years to keep income taxes anemic before turning 59 1/2 with plenty of 401k $$ but it’s all pre-tax 😭
@dluff
8 ай бұрын
Would it be better to invest the extra payment into a low cost ETF reflecting the S&P500? Once the balance meets your loan value you have the choice to can pay off the house.
@JazzyMarineVet
8 ай бұрын
I have always wondered if it makes more sense to pay down, or save- invest UP.
@genxx2724
8 ай бұрын
I prefer to invest rather than paying off my 2.75% percent mortgage.
@StephanDavisson
8 ай бұрын
Maybe increase emergency fund to 12 month expenses and then start again paying extra on the house? I don’t know. I’m 57 worked for myself for 30 years. If something happened to my business I’m not sure I’m employable at this point. On the plus side, the last couple of years have been very good and I have no personal or businesses debt other than 120k left on the mortgage at 2.875. House worth about 300k. Have 6 month emergency fund. I’ll have to give this some more thought.
@agates9383
8 ай бұрын
I wouldnt pay it off early - time value of $ says pay it off later with cheaper dollars -
@vernshird711
8 ай бұрын
I echo the sentiments - pay off your mortgage so you can invest more. We paid ours off prior to COVID and I started maxing out my retirement contributions afterwards. I'm maxing the 457b and scaling back on the 401k so I can build up some cash prior to retirement at the end of 2025. The foundation to a successful retirement is to become debt-free.
@rickb5275
8 ай бұрын
Once you pay off a mortgage you still have taxes insurance HOA (in some cases) and upkeep. Eliminating P&I isn’t getting ready of a monthly, annually and periodical need of cash to live in your home. You just need less cash on a monthly basis by paying off a mortgage which is a good thing in conjunction with the large sums in saved interest one would have otherwise paid. My only question in this video is to its author is once your mortgage is paid off are you going to take out another mortgage for a cash reserve for the T,I,H,M? Having an emergency fund is important. Having other liquidity other than an emergency is good. So is a paid off mortgage. So is other monthly cash flowing investments. And the most important thing in my opinion id understanding the likely risks of one’s personal situation. Outside of those considerations I don’t agree with the premise in this video. Always love the content. Appreciate your viewpoints.
@JBoy340a
8 ай бұрын
We paid off our mortgage after 12 years. It is a great feeling knowing you own your home. Could we have invested the extra money instead of paying off the mortgage? Sure. But making the principal only extra payments returned to us 4-5% from the interest we did not pay. Also, after completing the payoff 12+ years ago, it forced us to look for a home for the extra money which bought more shares of high performing companies like MSFT, APPL, etc. with no reduction in lifestyle.
@5metoo
8 ай бұрын
Sure, but the choice was between that and "forcing" yourself to look for a home for the extra money you didn't dump into the mortgage and bought more shares of high performing companies, which would have been compounding for the last 12+ years. That would haven been a butt ton of money.
@Pje3ski
8 ай бұрын
I’m still paying mine off next year. If my home goes down in value most likely the homes in the area we want to retire in go down as well. Plus it’s going to help me gauge my expenses when I retire.
@rustymorey3044
8 ай бұрын
This video is silly. You went from paying extra on principle then say u loose your job. Save 3 to 6 months of expenses first, in cash. Then begin to apply some extra principle while still saving for the short term and long term. Paying off your house gives u financial freedom when done and yes will impact cash flow while paying it off. Investing in the market is risk plan and smiple.
@ws775
8 ай бұрын
So don’t pay it down unless you are comfortable with your level of cash reserves.
@larrywall9565
8 ай бұрын
How about an equity line of credit as part of your emergency fund? My credit union gave me one and left it intact even after paying off the mortgage. Worked out good for me..
@agates9383
8 ай бұрын
As I said above that was exactly why I had a HELOC in place but unused in 07' - BofA froze all the helocs - regardless of ability to pay - if it gets bad enough that option will go away
@Mitzi73
8 ай бұрын
Never. Terrible idea.
@kckuc310
8 ай бұрын
I did and paid off a decade ago, all that went into savings and investments for over a decade. I’m stress free and not letting stress get to me. It’s my home and not the bank. It’s not about equity and cash it’s about freedom and making my decisions the way I want.
@5metoo
8 ай бұрын
I'm stress free with a mortgage. It's very subjective.
@kckuc310
8 ай бұрын
@@5metoo not for me , I sleep good knowing I just owe taxes and saving without a mortgage, that in itself outweighs the issues with paying a bank every month and the fear of loosing my job,
@5metoo
8 ай бұрын
@@kckuc310 That's the point. It is subjective. Confidence that my investment strategy is the right one for me is what allows me to sleep, not 0 debt.
@saleen367
8 ай бұрын
I'm in a similar situation but on a single income. Retired in April and rehired (same employer) in Oct at the same pay (+ my pension), so I've chosen to back off the mortgage pay down and go all hands on deck into the new 401K. Company matches 8% which is great. If I were to downsize, the market is still overpriced and I can't justify the move just for the sake of less space and slightly less prop tax. I personally think we see a major change in the financial system within the next year or two. What we have currently is unsustainable.
@Uplift3704
8 ай бұрын
Agree, was going to pay down our mortgage, but the rate is 3.4%. Josh do you keep an emergency fund?
@BrettOssman
8 ай бұрын
I would be scared to death to not have an adequate, or a little more, emergency fund, paying down a mortgage instead. After a BIG hit on the fund, the more in it, the merrier.
@agates9383
8 ай бұрын
Bingo - I actually took a 10yr interest only at UBS against a paid off house at 3% for that very reason, currently sitting in a govt money mkt at 5+% - pocketing the spread...obviously doesnt make sense now but then it did. (the loan was a perk of having a UBS retirement dude running some of my $)
@Drew-l3r
8 ай бұрын
Yeah that’s to risky for a 2% gain.😅
@agates9383
8 ай бұрын
@@Drew-l3r That wasnt why I freed up the capital, it just happens that rates are where they are at for the moment. There is such a thing as having too much capital tied up in one asset class - that was my reasoning - dry powder.
@MuzixMaker
8 ай бұрын
A paid off mortgage is a psychological decision, not a financial one, even in retirement if you have the cash flow to service the loan and enough savings to carry you through a rough time. Liquidity is King.
@MuzixMaker
8 ай бұрын
@@penelope5500 I don't know where he got the information that they were all paid for, but it's probably not true.
@jayholiday256
8 ай бұрын
I had a 15 year mortgage, and prepaid a bit, but paid it off lump sum of $80k . I recommend lump sum because it’s safer
@TalonID
8 ай бұрын
Only pay more on your mortgage if your finance rate is higher than your ROR on your investments. Plus, your mortgage interest offers a right off.
@bigblue3568
8 ай бұрын
Send me the equivalent of what you paid in mortgage interest last year and I'll send you a check for the tax savings equivalent and keep the balance... see how that works.
@TalonID
8 ай бұрын
You missed the RETURN on the investment. It far outweighs the Interest paid. I pay $10K/y in Interest of which I get $3K in tax credit, netting a cost of $ of $7K/yr. I make $32K/yr on the Investment. I'll easily pay you $7K on Wednesday for a $32K check on Saturday. Too many people don't get this.@@bigblue3568
@douglasunruh256
8 ай бұрын
You must have a lot of itemized deductions. Standard deduction is so high right now, mortgage interest isn't even used as a deduction.
@TalonID
8 ай бұрын
I claim No itemized deductions. @@douglasunruh256
@karenbenning2166
8 ай бұрын
Very interesting view point as usual. There are always two sides of a coin. The value of a house can go down as we all know from 2008. The stock market could also take a deep dive and not go back up for yrs and yrs because of some type of major global meltdown. So one has to make a choice to pay off the mortgage early or not. Like you, I made extra principal payments each month and mortgage was paid off early about 20 yrs ago. At the time I had a very secure job(now retired) and did not have other commitments like children that I would be sending to college. Major expensive. In your particular case I agree totally with your logic. Different topic- I was wondering what you thought about DeSantas dropping out of the race and if you think Haley will do the same after NH primary on Tuesday?
@rickp5679
8 ай бұрын
Do Both!!
@s99614
8 ай бұрын
Josh, at your age you shouldn't have a mortgage.
@bigblue3568
8 ай бұрын
Scary right and he's giving financial advise.. or the very least he should only have roughly 4 yrs left on his mortgage if he did a 15 yr... Purchased in 2013 for $589,900
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