The true lesson here Mike, is that should you manage to clear all your debts within 11 years. You will then have >$500 per month available to invest in indexes and probably an additional 'disposable' $500 to find the next nvidia from 2029 onwards. At which time you own your house so when the inevitable market correction/down turn happens you can weather 24 months of decline without panic selling.
I like your way of thinking. The future after the mortgage will also allow for solid returns with extra free capital. Seems like where you focus on the timeline determines whether your decision was a "good" or "right" move. Looked into the interest savings on paying early and its 75K which is nothing to snarf at.
It really just depends on your mortgage rate. I have a 3% fixed rate 15 year mortgage, and if you factor in that real estate typically appreciates at 3-4% I'm nearly breaking even on my payments. I will bet on investing with the expectation that I will get closer to the historical average of 10% over the long term.
That math doesn’t include risk, taxes, peace of mind benefit or the month cash flow benefit once it’s gone. We are about 2-3 years from having a paid for $700k house at 33y/o
Doug, I respect the arbitrage viewpoint. It's just not for me. Not realizing the appreciation in value makes me still think the savings on interest over the life of the mortgage is worth it. But if you can live with the debt then more power to ya. You will probably be further along than I will be and I'm ok with that, we all have our own paths.
@@tayross97 That's just a simplified rundown of my situation to not drag on or type too much for a TH-cam comment, but I promise I've ran the math and it should more often than not be better to do things the way I'm currently doing them for me at least. Everyone has their own risk tolerance and value on things like peace of mind, for me I'm single without dependants so I just do what will most likely give me the highest net worth within a 10-15+ year time horizon.
@@tayross97 Also I already cash flow upwards of half my income for investing since I plan to reach FIRE around or before 40 and I keep a 6 month emergency fund for risk offset.
Investing… property market has not been great… you could have got a better rate of return investing it (and then used the investment returns to pay the mortgage). You would still have had the upfront capital too… 😅
Hindsight is definitely 20/20. Next 6 years will look a little different, but I also won't have a mortgage by then so that's nice. It would have been great to have made a decent bet and it pay off, I guess I live and learn.
In my country fixed rate is 5.05% and I also wanted to do this but still there is so much uncertenties like what if I lose job or everything get more expensive and I need money quicker than it get to 10% over long term. Than I will lose and also need to pay taxes which would be 20% so I would lose a lot. Also there are predictions we are going in recession so I would rather have house than some stock I cant use. Edit: nice video 👍
It's always a guessing game. At a minimum being conscious of decisions and how they impact you is gonna put you ahead of many of the other people out there. Keep grinding brother!
The true lesson here Mike, is that should you manage to clear all your debts within 11 years. You will then have >$500 per month available to invest in indexes and probably an additional 'disposable' $500 to find the next nvidia from 2029 onwards. At which time you own your house so when the inevitable market correction/down turn happens you can weather 24 months of decline without panic selling.
I like your way of thinking. The future after the mortgage will also allow for solid returns with extra free capital. Seems like where you focus on the timeline determines whether your decision was a "good" or "right" move. Looked into the interest savings on paying early and its 75K which is nothing to snarf at.
It really just depends on your mortgage rate. I have a 3% fixed rate 15 year mortgage, and if you factor in that real estate typically appreciates at 3-4% I'm nearly breaking even on my payments. I will bet on investing with the expectation that I will get closer to the historical average of 10% over the long term.
That math doesn’t include risk, taxes, peace of mind benefit or the month cash flow benefit once it’s gone. We are about 2-3 years from having a paid for $700k house at 33y/o
Doug, I respect the arbitrage viewpoint. It's just not for me. Not realizing the appreciation in value makes me still think the savings on interest over the life of the mortgage is worth it. But if you can live with the debt then more power to ya. You will probably be further along than I will be and I'm ok with that, we all have our own paths.
@@tayross97 That's just a simplified rundown of my situation to not drag on or type too much for a TH-cam comment, but I promise I've ran the math and it should more often than not be better to do things the way I'm currently doing them for me at least. Everyone has their own risk tolerance and value on things like peace of mind, for me I'm single without dependants so I just do what will most likely give me the highest net worth within a 10-15+ year time horizon.
@@tayross97 Also I already cash flow upwards of half my income for investing since I plan to reach FIRE around or before 40 and I keep a 6 month emergency fund for risk offset.
I’ve never met anyone that missed their mortgage payment once it’s gone! Banks want you to stay in debt because they benefit from it…
I've heard that once or twice. Very good viewpoint even if "what could of been, if only I..." scenarios are everywhere.
Investing… property market has not been great… you could have got a better rate of return investing it (and then used the investment returns to pay the mortgage).
You would still have had the upfront capital too… 😅
Hindsight is definitely 20/20. Next 6 years will look a little different, but I also won't have a mortgage by then so that's nice. It would have been great to have made a decent bet and it pay off, I guess I live and learn.
$$$
Dolla Dolla Bill yall!
In my country fixed rate is 5.05% and I also wanted to do this but still there is so much uncertenties like what if I lose job or everything get more expensive and I need money quicker than it get to 10% over long term. Than I will lose and also need to pay taxes which would be 20% so I would lose a lot. Also there are predictions we are going in recession so I would rather have house than some stock I cant use.
Edit: nice video 👍
It's always a guessing game. At a minimum being conscious of decisions and how they impact you is gonna put you ahead of many of the other people out there. Keep grinding brother!