The whole "net worth" discussion is interesting. Yes, it is a great generic metric. But when it comes to "retirement" plans, you need to be careful. Q: Do you plan on selling your home to fund your retirement? If not, then that part of your net worth is great for the people you are leaving it to, but not for your retirement finances. If you are including your home as part of your net worth as your retirement plans, then you need to be considering other things like selling it or a reverse mortgage (which just typing that makes me nervous). Yes, they mentioned downsizing, but as we've seen there is a shortage of houses and particularly starter homes. Those smaller homes that are great for new home owners. But those are also the homes that downsizers would want. So downsizing might not be as simple as you think, especially depending on where you live. You could say you are going to sell and then rent, but you really need to watch the rental market where you want to live. Not saying it can't work, but you need to be sure...
this is why i dont pay off my 2.75% mortgage even after retiring and having money to do so. I'm 3.5 yr into retirement and now less than 3 yrs finishing the mortgage. i just got my 2024 mortgage interest tax form. principal left as of 1/1/24 was $77021. mortgage interest paid for whole 2024 was only $1881. 2.4% since the interest on the loan was amortized over 15 yrs, there's less need to retire the mortgage towards the last few yrs since interest you are saving is a small amount. my whole portfolio earned way more than that 2.4%. it returned more than the S&P but using S&Ps 24% return that 77K returned 18.5K.
I don’t include the principal payment as part of the 25% savings rate but I do have a separate brokerage account dedicated for future payoff of the house. That account I do include in the 25%. When the account value minus taxes equals the remaining balance on the mortgage then I’ll decide to use it to payoff the mortgage or let the investments ride a bit longer.
Actually i kind of like that idea, it's an extra option that lets you pull the ripcord and pay the mortgage if you are stable enough to afford your home's costs or a last ditch emergency cushion after other primary sources are used if you decide to use it
No! Equity isn't a liquid investable asset. A house is technically a liability (costs you money every month) and at best a use asset until you sell it. Then you have to plow that equity into the real estate market to buy a comperable place to live, downgrade or you are back to renting.
But you can rent. I know people think Renting is a sin financially, but it only is if your rent isn't allowing you to save/invest your money. Buying a house isn't the savings vehicle it once was. It costs too much to maintain relative to most peoples incomes, and the upfront cost alone should be forcing people to run from buying a house in this market. Unfortunately people are applying 1980's home logic to 2025, so demand is still way too high for buying a house than it should be.
@gamesnstuff657 I'm mainly being sarcastic. I already own my house and also have a rental. I did do it backwards though and paid off the house too soon. I'll probably be refinancing and doing a bunch of renovations instead of paying cash for them.
Rental properties generate income but they take a lot of work. Being a landlord is not plug and play. It sets up a whole different playing field regarding risk and variables.
Yes. I did that with our house we bought in '04; 3600 sq. ft., 4 bdrms., 3 baths, large rec. room, large yard. We lived in it 'til late '08 &, then, started renting it out. We still rent it out. It is a positive cash flowing asset. My wife & I bought a much smaller house to retire to with a 2.8%, 30 year mortgage. The big house's rent payment is twice the size of our home mortgage payment. That's 1 of our properties that help us in our retirement. She retired very early in 2015 & I retired in 2021, 7 to 10 years earlier than I'd originally planned.
Correction... We downsized in late 2010. We bought a house a flipper had renovated after he bought it in foreclosure, only, after he had lowered the price because it didn't sell at his 1st asking price. It was still a win for him and a huge win for my wife & me.
0:08 I’m thinking they meant *extra principle payments And (if so), yes ~ if you have an interest rate higher than the bond market and are nearing retirement and the math works out allowing you to have the mortgage paid off before you retire. ~ aka Brian’s Troll
Hi, I’m 25 years old and currently contributing to my 401(k) up to the employer match while also maxing out my Roth IRA. I plan to buy a home within the next few years. Considering today’s real estate interest rates of 6.5%-6.9%, should I prioritize paying off the mortgage compared to when rates were 2%-3%?
Yes, pay off the mortgage as soon as you can but ensure you have enough for yourself as well. That was my strategy. I bought my first home at 21. Just pay an extra amount toward principal each month. Whatever you can afford that doesn't hurt. If you get a raise, put a percentage more toward the payment of principal going forward, give yourself a little extra for fun and expenses, and the rest that didn't go toward 401k goes into additional investments. Just my strategy, take it or leave it. I'm retiring well before most.
No, don't pay off your mortgage. You could still be foreclosed on if you pay off 90% of it in a worse case scenario. Keep investing, you're so young, compound interest will make you a bundle of money. Wait and re-fi when rates go down.
Brian say's when you get in your 40's. You should try to pay down your mortgage. But yet he does the opposite. Because he have a low interest rate. That is hypocrisy. If you have a low rate, you shouldn't pay it off as fast as you can.
@@emoney1231 You have to search for it. I can't post links in here. Here's just one video of him saying it. Search for; Should I Pause Investing to Pay Off My Home by 40.
@@emoney1231 the money guys suggest paying down your mortgage after 45 to de-risk your life. Brian wanted to be debt free at 50, but locked in a ridiculously low interest rate and decided that the money was better served being invested than paying down a 2% mortgage. Bo states what's cooler than a paid off mortgage is the ability to pay off the mortgage if needed. As with everything, personal finances are personal. If you need strict rules to live by, you're in the wrong place. Brian isn't a hypocrite for not paying off his while recommending people de-risk their lives in the mid to late 40's and beyond
I really like your videos! My wife and I fit the bill for your Midwestern Millionaire. Nearly 1 million in retirement savings, and my wife will have a $70k+ year pension starting at 55 in 8 years. We got the professional services of a CFP notably Katherine Ann McGrath and she aligned our long term financial goals. We are totally on autopilot now and doing far better in the past 4 years with her. Really appreciate your videos focusing on people with pensions.
I don’t think it’s a coincidence that I have as well come across Katherine Ann McGrath, she’s an exceptional person and great in her field of financial services.
What’s the difference between my $500k IRA going up 10% in value and my $500k home going up 10% in value? I can’t eat either one. Both are locked up unless I borrow from them.
You really don’t need a 25% savings rate unless you’re starting with nothing at age 40 and retire in your mid 60s. I started at age 27, save 15% minimum (ends up being 30-40% total in cash, real estate, and non-retirement accounts just out of habit), and with the 15% alone, I’ll retire before 60 (ignoring SS)… If you start saving 25% in your 30s or younger, you’ll have more income in retirement than your working life, which I consider to be a MASSIVE opportunity cost.
They leave the flexibility to slow down investments later. They just worry about people who assume they'll be fine because they're ahead while young and then health conditions or other other major life events hurt those savers later
@@rayzerot Interesting, sounds like coast FIRE. However, I do feel like that’s what the emergency fund and covering deductibles step is for. Preparing for the unknown can be futile and the best you can do is commit to x number of months of expenses and cross your fingers.
@@stocksxbondage Yeah, and you are right. Because it is hard for younger people to do, they are fine if younger people aren't at 25% yet. If they can get there, that is awesome; but at least they should aspire to get there as soon as they can.. ;-) I'm actually retiring in a few months, so almost all of their vids are of the "I wish I had this information 30 years ago" area for me. ;-) That said, I know I wouldn't have been able to do 25% when I was younger. Maybe in my really late 30's...
I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.
Don't put all your eggs in one basket; instead, diversify into different asset classes to mitigate risk. If you lack extensive knowledge, consult a financial advisor.
Accurate asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
Thanks for the info. I searched for her full name and found her website right away. I reviewed her credentials and did my research before reaching out to her.
I'm a plumber making over $100k a year, and I've never invested before but do have a substantial cash saving. I'm thinking about starting a Solo 401(k), but I'm stuck on what to invest in. I've watched a lot of beginner videos, but I still don't know the best way to start. Any real-life advice or tips would be really helpful.
I believe every Investor should start with ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.
A healthy portfolio has 3 things, at the bare minimum: Exposure to ETFs for increased diversification, Exposure to assets that generate cash flow like dividend stocks, Exposure to market-leading tech.
Opting for an inves-tment advisr is currently the optimal approach for investing especially for a begginer. I've been consulting with a coach for a while, and my portfolio has surged by 85% since 2023
Lauren Christine Campbell is the CFA I work with and im just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
Same, I met Elizabeth stark last year for the first time at a conference in Wilshire, after then my Life has changed for good.God bless Elizabeth stark
There's one thing I'd disagree with you on... Paying off low interest debt. The interesting thing about this that everyone gets wrong. Is.. you can not compare interest paid with interest earned and determine if paying off early is better or worse. You actually have to do a break, even analysis. Your interest earned could be 99% and your interest paid could be 1% and its still entirely possible that paying off that low interest loan would earn you more money in the long run. One of the differentiating aspects is exactly how aggressive you are. Ramsey gets this right. If your super aggressive about paying it off. You have a lot more years to invest high dollars and if often makes up the difference. The other thing is that interest is paid in reverse order. You have to do the math. Part of the reason why is because if the time to payoff is very short relative to loan length. The volatility in the market over a short period doesn't give you a lot of gains. If the payment is a large enough percentage of your future investment dollars. You can out pace the growth you "missed out on" that wasn't real anyway. Do a break even analysis. If you just casually throw money at the house then yes. It can be more advantageous to invest. But if you go after that house with intensity. The break even analysis can change.
Unfortunately, you are just incorrect. The math never works out that way. Sure, it gives you more years of investing high dollars. But it cuts off years on the front end, which is where compounding works its magic. It’s personal though. If you want to do that, go for it. But don’t claim the math makes sense, because it doesn’t. They’ve literally run scenarios of this exact situation before to show how it would work out.
Just because you can create a scenario where paying off the house comes out ahead, doesn't mean that is the norm. Investing will typically give you a higher terminal portfolio value, which is why they recommend it.
Not everything is always about sheer mathematical calculations. Some people prioritize the freedom and peace of mind that come from having a paid-for house, such as having options to do a career change or start a business, etc. that they maybe otherwise wouldn't be able to afford while having a mortgage payment.
@@pdxmusl1510 prioritizing paying off a low interest mortgage will still take years. that means refraining from investing a larger amount for years. ramsey always then says you can invest more after getting the house paid off. the opportunity cost of not investing for yrs is already lost and could not be recouped. furthermore most people are near retirement by the time they could finish paying off their mortgage. what is this investing more aggresively thing? at most they will put the extra money towards more conservative investments i.e hysa, mmf which will not grow much.
The whole "net worth" discussion is interesting. Yes, it is a great generic metric.
But when it comes to "retirement" plans, you need to be careful.
Q: Do you plan on selling your home to fund your retirement? If not, then that part of your net worth is great for the people you are leaving it to, but not for your retirement finances.
If you are including your home as part of your net worth as your retirement plans, then you need to be considering other things like selling it or a reverse mortgage (which just typing that makes me nervous).
Yes, they mentioned downsizing, but as we've seen there is a shortage of houses and particularly starter homes. Those smaller homes that are great for new home owners. But those are also the homes that downsizers would want. So downsizing might not be as simple as you think, especially depending on where you live.
You could say you are going to sell and then rent, but you really need to watch the rental market where you want to live.
Not saying it can't work, but you need to be sure...
this is why i dont pay off my 2.75% mortgage even after retiring and having money to do so. I'm 3.5 yr into retirement and now less than 3 yrs finishing the mortgage. i just got my 2024 mortgage interest tax form. principal left as of 1/1/24 was $77021. mortgage interest paid for whole 2024 was only $1881. 2.4% since the interest on the loan was amortized over 15 yrs, there's less need to retire the mortgage towards the last few yrs since interest you are saving is a small amount.
my whole portfolio earned way more than that 2.4%. it returned more than the S&P but using S&Ps 24% return that 77K returned 18.5K.
I don’t include the principal payment as part of the 25% savings rate but I do have a separate brokerage account dedicated for future payoff of the house. That account I do include in the 25%. When the account value minus taxes equals the remaining balance on the mortgage then I’ll decide to use it to payoff the mortgage or let the investments ride a bit longer.
Actually i kind of like that idea, it's an extra option that lets you pull the ripcord and pay the mortgage if you are stable enough to afford your home's costs or a last ditch emergency cushion after other primary sources are used if you decide to use it
You know what an appreciated house gets you? An appreciated tax and insurance bill.
Yes! Parents refinanced in 2021 which lowered their monthly mortgage payment by $500 and it is about to catch up again.
Yes! My property taxes have gone up every year since we bought our house in ‘22.
No! Equity isn't a liquid investable asset. A house is technically a liability (costs you money every month) and at best a use asset until you sell it. Then you have to plow that equity into the real estate market to buy a comperable place to live, downgrade or you are back to renting.
I agree. It is not a money generating asset. I think paying it down fast is for people who detest any risk and have no idea about investing.
You also can't live under a cheeseburger.
But you can rent. I know people think Renting is a sin financially, but it only is if your rent isn't allowing you to save/invest your money. Buying a house isn't the savings vehicle it once was. It costs too much to maintain relative to most peoples incomes, and the upfront cost alone should be forcing people to run from buying a house in this market. Unfortunately people are applying 1980's home logic to 2025, so demand is still way too high for buying a house than it should be.
You wouldn’t download a car…
@gamesnstuff657 I'm mainly being sarcastic. I already own my house and also have a rental. I did do it backwards though and paid off the house too soon. I'll probably be refinancing and doing a bunch of renovations instead of paying cash for them.
Love the conversation around, "Make, Maintain, Multiply" in wealth. 👏
3:07 he mentioned 1) more debt or 2) selling. If you rent out a use asset (hour home) does it become an investment asset?
Rental properties generate income but they take a lot of work. Being a landlord is not plug and play. It sets up a whole different playing field regarding risk and variables.
Yes. I did that with our house we bought in '04; 3600 sq. ft., 4 bdrms., 3 baths, large rec. room, large yard. We lived in it 'til late '08 &, then, started renting it out. We still rent it out. It is a positive cash flowing asset. My wife & I bought a much smaller house to retire to with a 2.8%, 30 year mortgage. The big house's rent payment is twice the size of our home mortgage payment. That's 1 of our properties that help us in our retirement. She retired very early in 2015 & I retired in 2021, 7 to 10 years earlier than I'd originally planned.
Correction... We downsized in late 2010. We bought a house a flipper had renovated after he bought it in foreclosure, only, after he had lowered the price because it didn't sell at his 1st asking price. It was still a win for him and a huge win for my wife & me.
@@michaelhernandez2868 nice!
I have 25 years let on my 2.25% mortgage. I'm not paying that off early and I'm planning tor retire in the next few years.
0:08 I’m thinking they meant *extra principle payments
And (if so), yes ~ if you have an interest rate higher than the bond market and are nearing retirement and the math works out allowing you to have the mortgage paid off before you retire.
~ aka Brian’s Troll
Can’t eat it but you can eat a lot when it’s paid off
Bo went all over the place. Lol
What about paying off investment properties? Where does that fall in the FOO?
Oh shoot this was my question! FOO pa copied me! Haha. Thanks for the answer!
Hi, I’m 25 years old and currently contributing to my 401(k) up to the employer match while also maxing out my Roth IRA. I plan to buy a home within the next few years. Considering today’s real estate interest rates of 6.5%-6.9%, should I prioritize paying off the mortgage compared to when rates were 2%-3%?
Yes, pay off the mortgage as soon as you can but ensure you have enough for yourself as well. That was my strategy. I bought my first home at 21. Just pay an extra amount toward principal each month. Whatever you can afford that doesn't hurt. If you get a raise, put a percentage more toward the payment of principal going forward, give yourself a little extra for fun and expenses, and the rest that didn't go toward 401k goes into additional investments. Just my strategy, take it or leave it. I'm retiring well before most.
@@garagehobbies thanks for the advice!
I'd buy the house first then go from there. It also on what she you purchase the property and what step you're on as well.
No, don't pay off your mortgage. You could still be foreclosed on if you pay off 90% of it in a worse case scenario.
Keep investing, you're so young, compound interest will make you a bundle of money.
Wait and re-fi when rates go down.
The advice to wait until 45+ to pay off a mortgage makes sense mathematically, but what about the emotional benefits of a debt-free life?
Brian say's when you get in your 40's. You should try to pay down your mortgage.
But yet he does the opposite. Because he have a low interest rate.
That is hypocrisy.
If you have a low rate, you shouldn't pay it off as fast as you can.
I don't ever remember a blanket statement that you SHOULD pay down your mortgage in your 40s.
@@emoney1231 De did say it.
@@saulgoodman2018 Ok... When?
@@emoney1231 You have to search for it. I can't post links in here.
Here's just one video of him saying it. Search for; Should I Pause Investing to Pay Off My Home by 40.
@@emoney1231 the money guys suggest paying down your mortgage after 45 to de-risk your life. Brian wanted to be debt free at 50, but locked in a ridiculously low interest rate and decided that the money was better served being invested than paying down a 2% mortgage.
Bo states what's cooler than a paid off mortgage is the ability to pay off the mortgage if needed.
As with everything, personal finances are personal. If you need strict rules to live by, you're in the wrong place.
Brian isn't a hypocrite for not paying off his while recommending people de-risk their lives in the mid to late 40's and beyond
Was this guy's username just an attempt to get them to say FUPA?
I really like your videos! My wife and I fit the bill for your Midwestern Millionaire. Nearly 1 million in retirement savings, and my wife will have a $70k+ year pension starting at 55 in 8 years. We got the professional services of a CFP notably Katherine Ann McGrath and she aligned our long term financial goals. We are totally on autopilot now and doing far better in the past 4 years with her. Really appreciate your videos focusing on people with pensions.
I don’t think it’s a coincidence that I have as well come across Katherine Ann McGrath, she’s an exceptional person and great in her field of financial services.
Just another similar commendation on her expertise, I saw the interview and immediately I knew she was financially intellectual as said.
What do you think the odds are that they don't know what a foopa is? Maybe they do and just thought it was funny.
What’s the difference between my $500k IRA going up 10% in value and my $500k home going up 10% in value?
I can’t eat either one. Both are locked up unless I borrow from them.
But the IRA will eventually be liquid and no lifestyle change while the house would have to be a huge lifestyle downgrade or loan against the house.
You realize the IRA is eventually unlocked right?
You really don’t need a 25% savings rate unless you’re starting with nothing at age 40 and retire in your mid 60s. I started at age 27, save 15% minimum (ends up being 30-40% total in cash, real estate, and non-retirement accounts just out of habit), and with the 15% alone, I’ll retire before 60 (ignoring SS)…
If you start saving 25% in your 30s or younger, you’ll have more income in retirement than your working life, which I consider to be a MASSIVE opportunity cost.
Yeah, they frequently say in their videos that for younger people, the 25% is aspirational.
They leave the flexibility to slow down investments later. They just worry about people who assume they'll be fine because they're ahead while young and then health conditions or other other major life events hurt those savers later
@@desiv1170 oh that’s what they mean by “aspirational”. I thought they meant “it’s hard for younger people to do”
@@rayzerot Interesting, sounds like coast FIRE. However, I do feel like that’s what the emergency fund and covering deductibles step is for. Preparing for the unknown can be futile and the best you can do is commit to x number of months of expenses and cross your fingers.
@@stocksxbondage Yeah, and you are right. Because it is hard for younger people to do, they are fine if younger people aren't at 25% yet. If they can get there, that is awesome; but at least they should aspire to get there as soon as they can.. ;-)
I'm actually retiring in a few months, so almost all of their vids are of the "I wish I had this information 30 years ago" area for me. ;-)
That said, I know I wouldn't have been able to do 25% when I was younger. Maybe in my really late 30's...
I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.
Don't put all your eggs in one basket; instead, diversify into different asset classes to mitigate risk. If you lack extensive knowledge, consult a financial advisor.
Accurate asset allocation is crucial with an Experts guidance. I have 850k in equity, 300K cash earning 5.25 interest, 685k in 401k, 250k cash account, 120k in car assets ( paid off cars) Gold and silver bars. age is 48. My advisor helped me realign my portfolio to my risk tolerance and it boomed overtime.
Please how can I reach this expert, I need someone to help me manage my portfolio
I've stuck with ‘’Zareen Grace Church” and her performance has been consistently impressive. She’s quite known in her field, look her up.
Thanks for the info. I searched for her full name and found her website right away. I reviewed her credentials and did my research before reaching out to her.
I'm a plumber making over $100k a year, and I've never invested before but do have a substantial cash saving. I'm thinking about starting a Solo 401(k), but I'm stuck on what to invest in. I've watched a lot of beginner videos, but I still don't know the best way to start. Any real-life advice or tips would be really helpful.
I believe every Investor should start with ETFs for a solid foundation, then diversify across asset classes and maintain disciplined, regular investing to minimize risks and maximize growth.
A healthy portfolio has 3 things, at the bare minimum: Exposure to ETFs for increased diversification, Exposure to assets that generate cash flow like dividend stocks, Exposure to market-leading tech.
Opting for an inves-tment advisr is currently the optimal approach for investing especially for a begginer. I've been consulting with a coach for a while, and my portfolio has surged by 85% since 2023
This is very insightful. Hope you don't mind me asking you to recommend your advisor?
Lauren Christine Campbell is the CFA I work with and im just putting this out here because you asked. You can Just search the name. You’d find necessary details to work with to set up an appointment.
Where's Rebie?
Maternity leave 😊
Thank you Lord Jesus for the gift of life and blessings to me and my family $14,120.47 weekly profit Our lord Jesus have lifted up my Life!!!🙏❤️❤️
I'm 37 and have been looking for ways to be successful, please how??
Sure, the investment-advisor that guides me is..
Elizabeth stark
Same, I met Elizabeth stark last year for the first time at a conference in Wilshire, after then my Life has changed for good.God bless Elizabeth stark
Her services is the best, I got a brand new Lambo last week and paid off my mortgage loan thanks to her wonderful services!
Shes an angel
There's one thing I'd disagree with you on... Paying off low interest debt.
The interesting thing about this that everyone gets wrong. Is.. you can not compare interest paid with interest earned and determine if paying off early is better or worse. You actually have to do a break, even analysis. Your interest earned could be 99% and your interest paid could be 1% and its still entirely possible that paying off that low interest loan would earn you more money in the long run.
One of the differentiating aspects is exactly how aggressive you are. Ramsey gets this right. If your super aggressive about paying it off. You have a lot more years to invest high dollars and if often makes up the difference. The other thing is that interest is paid in reverse order. You have to do the math.
Part of the reason why is because if the time to payoff is very short relative to loan length. The volatility in the market over a short period doesn't give you a lot of gains. If the payment is a large enough percentage of your future investment dollars. You can out pace the growth you "missed out on" that wasn't real anyway. Do a break even analysis. If you just casually throw money at the house then yes. It can be more advantageous to invest. But if you go after that house with intensity. The break even analysis can change.
Unfortunately, you are just incorrect. The math never works out that way.
Sure, it gives you more years of investing high dollars. But it cuts off years on the front end, which is where compounding works its magic.
It’s personal though. If you want to do that, go for it. But don’t claim the math makes sense, because it doesn’t. They’ve literally run scenarios of this exact situation before to show how it would work out.
Just because you can create a scenario where paying off the house comes out ahead, doesn't mean that is the norm. Investing will typically give you a higher terminal portfolio value, which is why they recommend it.
Not everything is always about sheer mathematical calculations. Some people prioritize the freedom and peace of mind that come from having a paid-for house, such as having options to do a career change or start a business, etc. that they maybe otherwise wouldn't be able to afford while having a mortgage payment.
@@pdxmusl1510 prioritizing paying off a low interest mortgage will still take years. that means refraining from investing a larger amount for years. ramsey always then says you can invest more after getting the house paid off. the opportunity cost of not investing for yrs is already lost and could not be recouped. furthermore most people are near retirement by the time they could finish paying off their mortgage. what is this investing more aggresively thing? at most they will put the extra money towards more conservative investments i.e hysa, mmf which will not grow much.
@@chrislawley581 A pile of money is also good for freedom