Paying off your mortgage early - Answering Your Questions / Ask The Money Nerds

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DISCLAIMER CONT'D: Garrett Gunderson is not a licensed financial advisor. He is an Entrepreneur, Wealth Strategist, and Author of the New York Times and #1 Wall Street Journal bestselling personal finance book - Killing Sacred Cows: Overcoming the Financial Myths That Are Destroying Your Prosperity. He is not providing you with financial advice in these videos. This video, the topics discussed, and ideas presented are Garrett's opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.

[Rachels]

I paid off my mortgage 35 years ago when i was young, and at the height of my earning years. All the years i have lived in my house i never worried if i got sick, never worried about getting fired or quitting my job. Think about all the unnecessary insurance i saved, Think about all the interest i saved. Think about when i sell i get 100% of the sale. Pay off your house, it pays.

[jeffhudson]

The biggest upside of the paid off mortgage is the security and opportunity to do other things with your income.

[helenachase]

I have 8 houses and paid them off by about age 45... I know it was not the greatest financial decision possible but having 8 houses no matter what is a huge hassle and not sure it's been worth it. The mortgages were a burden on my psyche.
Chasing wealth is a drag...

[edwardlopez]

Nothing beats a paid off house. Peace of mind, largest expense GONE, no longer in debt so you now have cash, etc...

[TexasEmperor]

Peace off mind...if one gets that by paying it off early, good for them, but don't risk emergency fund. Good video!

[txelmore]

“The borrower is slave to the lender”. I am paying off my mortgage even though I have a 2.25%loan, because I don’t want even 2.25% of me to be slave to anyone. That’s just me however.

[Jonnynava]

I paid off my home cash I don’t regret it, I just worry about property taxes at the end of the year . I have enough liquid capital to buy more properties cash but my next step is getting loans thru my corporation to leverage my money and buy real estate properties. The sense of feeling I don’t have to pay a 2-3k in payments is wonderful .

[mpjhockey]

Completely agree Garrett. Not a one size fits all plan for everyone. My situation and cost of money is on line with your path, but for others they might take the Ramsey approach and is right for them. Get educated and find what works for you!

[Mike-hzcp]

I paid my mortgage off early. I love the peace of mind and I am more willing to invest in other assets. However, rent where you live and buy homes to rent to others.

[_JohnJohn_]

Our home will be paid off by end of this year...$300+ added to our net worth after 5 years of owning home. Now we will either invest in other real estate vehicles or with no fear of what if because we will always have a home.

[TimErwin]

Love you, Garrett! I've been learning so much from your videos. Other financial gurus advocate paying off debt as opposed to investing, so your take on this is pretty fresh. I guess they advocate this because proper investing is harder to explain to the average person compared to just telling them to pay off debt.

[joshuawdandridge]

I love that you address listeners questions

[thomasm]

How you go about it is the key. I had a 30 year mortgage. At year 13 I decided I wanted it gone in 2 at retirement. built cash and sold a piece of property. Made a balloon payment and got out. That's a $1000 monthly annuity with 100 % guarantee. A bit more peace of mind. Sure glad I made that decision March 2020 24 % loss in a day on my investments.. 6 months for my portfolio to recover. Lived on cash during that time. I think you are giving great advice.

[martinbayha]

To 34:45 min question.
I bet he is in Australia. We do have so called offset accounts. Which are savibgs accounts connected to you mortgage account while still owned by you. The amount in the offset acc‘s is deducted of the principal owing therefore, especially in the first few year extremely cuts down on interest portion of the „repayment“ amount..

We got great results with this and 100% offset our interest payment for almost 1/2 year, dropping the owing principal and therefore amortised interest for the remainder of the loan down significantly.

All the rent payments we recieve get pooled in the offset account as well and therefore while in there (interest being calculated on a daily base on outstanding principal) makes a hughe difference for the rest of repayment sum total.

However, I agree. As soon as another RE can be financed it is way better to allocate funds to extrapolate earings instead of limited savings.

Greetings from Perth, Western Australia

[bluecollarbullionballer]

It just a personal choice the price of peace of mind is infinite return for us.Yes we invest the payment, cashflow bank, stocks,and precious metals.

[drrush]

He made a very important point @12:40-13:00 which she cut off. If you negotiate a lower interest rate, do something productive with the savings, even if it’s just an emergency fund

[izzyp]

Having a small monthly payment and no savings does not mean you will not be affected job wise during the next crash. Most people have credit cards and student loans as well. The best way to make your money work for you is to pay off the loan and then use the cash to invest. I’m 5 years out on my loan so much like you I can pay for my next investment in cash.

[DavesShop]

5 years to retirement paid mine off and now adding the payment to my IRA and roth accounts

[bkittle]

Great video Garrett! One thing that may help some visual learners would be to show a side by side difference of the compounding. Bust out the spreadsheets. (YouTube audience)

[thepassiveincomepros]

We are always paying a cost of money and everyone has a different situation. Inform yourself and make the best choices you can and be kind to others along the way.