This guy's mortgage interest rate is at >3%. I would happily go a Billion $ in debt at that rate if I knew I could turn around and get 5% in a savings account.
What Dave is basically saying is this, don't use the $200k to pay the government taxes by converting traditional investments to Roth IRA while you owe money on your home. Throw it at the mortgage first
Dave, I’m concerned the caller may have upcoming capital gains and depreciation recapture on the Sale of the rental as he refers to be receiving a gross amount. Id be sure to put aside funds for taxes and only throw the net amount at the house
I'm usually pro pay mortgage off but I wish they asked if they got a pension and how much...if it covered easily the mortgage I'd invest the 200k into index fund and not touch it for many many years.
If he was military he very may have health and some sort of pension. But I have always said the military is hard work but excellent benefits unlike a lot of normal employers.
As I have repeatedly said to my.wife about our money: yes, I could take this same money and maybe make a lot more of it but, paying off the rental is also not a mistake and it is very safe.
Honestly with his interest rate, and with that kind of money, and with the rate he is already paying off the house, Dave is TOTALLY wrong. He could invest that money and have double the investment, but instead he pays off a 2% mortgage?? makes no sense
The thing is, no one knows how much longer the interest rate will stay this low. It's baffling how many people make personal finance decisions on the assumption the interest rate will stay low for years (even though it is beyond their control), instead of focusing on repaying their debt as soon as possible (which is more controllable) - makes no sense.
@@uberboiz He has a fixed loan dude, he is not going to be paying more. It's baffling to me how people like you hate debt so much without realizing the full implications of paying off that debt instead of investing the money. Not to mention, inflation is about to get much, much worse. It isn't about to get better. a 2% interest rate with a 7% inflation is a joke. He should NOT pay off that house, but invest it instead.
@@WealthBuildersInvest He also said he's a retired military mate, so I assume he'd be quite old. Having a $480k mortgage (whether the interest rate is fixed or not) by the time he retires doesn't sound like an ideal circumstances. I don't necessarily hate debt, but there are people who sleep better knowing they are debt free. After all, personal finance and investing is not just about chasing the highest return, and that's where Dave is coming from. He knows first hand how it feels drowning in debt when he was young (his strategy to use leverage backfired) - he's fortunate time was on his side to claw his way back, but older/retired people don't necessarily have that luxury.
@@aaront936 Your point is valid if you are looking at it purely from an investment return point of view. But as I said in my previous response, there are more to personal finance/investing than just maximising returns. Even if the rate is fixed, your ability to make the repayment is still dependent on your income - maybe you don't have to worry about it so much if you are still in your productive years, but old people nearing retirement are in a completely different circumstance.
Years later we can see how Dave's advice is wrong. People would LOVE the 2% mortgage. Remember folks, Dave was asked if he would accept a billion dollars at 0% and he said no.
Is the 200k after having to pay out the property gains? If not, you’re losing a lot of money to property gains tax…1031 exchange the profit to avoid having to pay taxes
He could’ve invested all that money he put into that rental property into the stock market and made way more over his career. Now that he’s retiring he’s selling the home? Should’ve been sold earlier. At least he’s planning on finally paying down his mortgage with the earnings which is great.
Try to imagine not having a house payment (most likely rent in your case) at all and how much money you’d be investing every month for the next ten years. Worry free. Or stay in debt your whole adult life.
Nix the guesswork and scrolling. We’ll connect you with investment pros we trust: bit.ly/3kwqrhf
If they give the same outdated investing advice that you give on your show. no thanks.
@@aaront936 LOL, OUTDATED? It's MORE RELEVANT NOW than it has EVER been! But suit yourself.
if it were me i'd invest it in a taxable account and not pay extra on the mortgage. i wouldn't bother with an IRA conversion
This is the way.
The whole point of Dave's advise is to become debt free ASAP.
It might not be the absolute most efficient way to build wealth. But it's by far the safest.
The whole point of Dave's advice is to sell his classes and his smart vestor pros.
Except he Never did any of those steps. He started a business.
@@liammcleod159 if you got 40 years of your life to waste.
This guy's mortgage interest rate is at >3%. I would happily go a Billion $ in debt at that rate if I knew I could turn around and get 5% in a savings account.
Dropped my phone on my face while watching this video, yall be careful out there
I’m glad their are people out there willing to give good and honest financial advice. Lord knows we need it!
What Dave is basically saying is this, don't use the $200k to pay the government taxes by converting traditional investments to Roth IRA while you owe money on your home. Throw it at the mortgage first
Which is a terrible idea
Always follow the baby steps, it’s not rocket science people. It’s a tried and true program, if you follow something that works, you’ll make money. 👍🏼
2:02The way the caller paused & said "ok" 😂😂😂😂😂😂
When Dave is there I'll watch/listen. The others I turn off.
Dave: “throw it at the house”
Caller: “Walks up to the front door and pitches a handful of cash into it at 80mph”
😂
Batter up! ⚾️
a lot of investments could be done with $200,000, you just have to relax and focus on the right one.
a lot? tell me about that.
If you have a mortgage you are not debt free.
If its a low fixed rate you would be better off investing instead of paying down the mortgage.
The silence tells you what that guy is really gonna do…he’s got the percentages calculated like a pro. 😆
@Joshua Johnson yet he calls…
Pay off high interest debt and then invest the rest.
Dave, I’m concerned the caller may have upcoming capital gains and depreciation recapture on the Sale of the rental as he refers to be receiving a gross amount. Id be sure to put aside funds for taxes and only throw the net amount at the house
Only if only over 250K. They'll receive 200K.
They will have to pay capital gains because it is a 2nd home.
@@Omonike88 they will have a capital gains tax because it's not their primary residence. I'm surprised Dave didn't bring that up.
@@nuleafonlyfe04 Thanks for telling me.👍🏿💥
Oh my gosh Dave had me cracking up at the end! 😂
I'm usually pro pay mortgage off but I wish they asked if they got a pension and how much...if it covered easily the mortgage I'd invest the 200k into index fund and not touch it for many many years.
If he was military he very may have health and some sort of pension. But I have always said the military is hard work but excellent benefits unlike a lot of normal employers.
As I have repeatedly said to my.wife about our money: yes, I could take this same money and maybe make a lot more of it but, paying off the rental is also not a mistake and it is very safe.
Right now Credit Unions are paying 5% for 6 to 12 months certificate
2% though.....goodness. i wouldn't pay any extra on that. Invest that 200k in oil stocks, double it in a year, and then pay off the house in full
Double in a year? 😆😆
I need that kind of problem now..🤣
Honestly with his interest rate, and with that kind of money, and with the rate he is already paying off the house, Dave is TOTALLY wrong. He could invest that money and have double the investment, but instead he pays off a 2% mortgage?? makes no sense
The thing is, no one knows how much longer the interest rate will stay this low.
It's baffling how many people make personal finance decisions on the assumption the interest rate will stay low for years (even though it is beyond their control), instead of focusing on repaying their debt as soon as possible (which is more controllable) - makes no sense.
@@uberboiz He has a fixed loan dude, he is not going to be paying more. It's baffling to me how people like you hate debt so much without realizing the full implications of paying off that debt instead of investing the money. Not to mention, inflation is about to get much, much worse. It isn't about to get better. a 2% interest rate with a 7% inflation is a joke. He should NOT pay off that house, but invest it instead.
@@WealthBuildersInvest He also said he's a retired military mate, so I assume he'd be quite old. Having a $480k mortgage (whether the interest rate is fixed or not) by the time he retires doesn't sound like an ideal circumstances. I don't necessarily hate debt, but there are people who sleep better knowing they are debt free. After all, personal finance and investing is not just about chasing the highest return, and that's where Dave is coming from. He knows first hand how it feels drowning in debt when he was young (his strategy to use leverage backfired) - he's fortunate time was on his side to claw his way back, but older/retired people don't necessarily have that luxury.
@@uberboiz fixed rates are fixed. Paying off a fixed low rate loan early is a poor use of money.
@@aaront936 Your point is valid if you are looking at it purely from an investment return point of view. But as I said in my previous response, there are more to personal finance/investing than just maximising returns. Even if the rate is fixed, your ability to make the repayment is still dependent on your income - maybe you don't have to worry about it so much if you are still in your productive years, but old people nearing retirement are in a completely different circumstance.
2%?? Inflation is higher than that! Keep the loan and invest the 200k, you can make over 10% investing in safe mutual funds
At least max out the Roth first before throwing money at the mortgage.
Nah bro I'm buying the 14 karat gold lego c3p0
Years later we can see how Dave's advice is wrong. People would LOVE the 2% mortgage. Remember folks, Dave was asked if he would accept a billion dollars at 0% and he said no.
lol
Go to the roulette wheel put it on green thank me later
It worked I’m rich 💰
Is the 200k after having to pay out the property gains? If not, you’re losing a lot of money to property gains tax…1031 exchange the profit to avoid having to pay taxes
1031 only defers the tax
He could’ve invested all that money he put into that rental property into the stock market and made way more over his career. Now that he’s retiring he’s selling the home? Should’ve been sold earlier. At least he’s planning on finally paying down his mortgage with the earnings which is great.
Why would he be "creating taxes" by contributing the house proceeds to his IRA?
Isnt there limitations on how much you can put into a roth annually. This is prceeds from a sale of a house
Good Idea alot of my private money lenders uses that Roth IRA to create wealth for their family by investing. I love Real Estate
Thank you for your service Jonathan
$480k house $120k in a 401k wow nice house 💩 401k.
Construction Workers and landscapers get this money.
From Mr Thomas Schmutter per year.
Invest it!
Good advice, why would you take tax money to pay your mortgage .. that's gold
I just stumbled on this guys advice and its not the worst but its pretty bad sheesh.
Buy a magic carpet.
I never really hear advice.. did you guys hang up on him lol
Just Give me $50,000 out of it, thank you.
That 200k in 20 years at 10 percent, is 1.3 million.
In 30 years, 3.5.
And that's without putting in anything extra.
Try to imagine not having a house payment (most likely rent in your case) at all and how much money you’d be investing every month for the next ten years. Worry free. Or stay in debt your whole adult life.
@@ponolovefarms3926 It still will not come close.
And I said without putting anything in.
@@saulgoodman2018 good luck dude.
Buy Bitcoin .
A small crypto position is great, can’t imagine anyone betting the farm on it!
@@linkbelt111 I would take out 6 month living expenses and put the rest into bitcoin.
Agreed lol Pick up some Etherium and Cardano too.
Invest index funds.
You're making like 8 percent or more than the in terest on your house.
Invest it in Bitcoin and Ethereum it will double in 3-6 months
haha this comment didn't age well
Lol 😂! Bankrupt!!
人人人人人人人人人人人人人人人人人➕𝟭𝟴𝟲𝟰𝟮𝟬𝟳𝟭𝟲𝟰𝟰人人人人人人人人人
人人人人人人人人人෴copy it this way, TH-cam is frustrating 😤
Amc 🚀
Spend it on cigars and women.
And invest heavily in bitcoin...
SELL THE HUSBAND!
$200K and you live in Texas? Go get yourself a new $85K pickup. That F250 King Ranch is pretty sweet! YOLO no FOMO!
I don’t have money I want to give me 100,000 do business
Please, I need help with the money I don’t have money to eat i’m Gambia
Give it to me
Spend it alllllll
He stills has a big mortgage in Texas.
Instructions unclear, all in $SHIB.
Casey the Spammer!
Casey the Spammer strikes again trying to likes and subs!
Amc 🚀