The avg. American is having a tough time, I know I am not alone. There are others in same position as me. By certain statistics: 22% of americans have no retirement savings. 64% are worried that they will not have money in latter years while 47% of adults who are not yet retired think they have to work part-time in retirement. How can I best grow the 100k I have saved seperately outside retirement access which of course had depleted over the years?
In my opinion, create a budget including income and expenses, do this with a financial advisor.Plan with a pro advsor for a successful retirement.i work with an advsor and generated over 150% In 11 mnths with guidance.
Vivian Jean Wilhelm is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
@@kevinobrien9271 Debt free from day one is better, but any plan to zero debt is wise. My kids are starting life debt-free and saving a bunch of money after (paid for) college. I didn’t have the kind of money they have saved until I was almost 40! Fortunately, I have been debt free and plowing money into my 401k and Roth IRA for decades.
I took out a 6-year auto loan from a credit union, but paid it off within 4.5 years. The car is a used 2016 Ford Focus. It's not fancy, but it's OK for local driving trips to work around the city.
I think debt helps fuel GDP but only temporarily. Once the bills come due we tend to take a nose dive. No to low debt rocks. Buy 2-3 year old, low mileage cars, keep the lifestyle in check, buy a house you can truly afford. Better to be saving than paying interest. Great advice, and excellent presentation as always Erin!
The title is unironically true in a way. Investing works for us Americans because, as she mentioned, our high consumer spending leads to market enthusiasm, which nets us investment returns. If everyone was like Erin, we would have tepid investment returns, so the best investment recommendation, using broad market index funds, wouldn't really work 😅
@Bum_Hip except debt truly is awesome. Our society would collapse without it. The rich would only get richer and the poor only poorer because no one could ever owe anyone anything.
I tried managing debt for 15 years. I managed to have a lot of stuff and averaged a NEGATIVE $15K net worth. Then I went back to school and learned how to manage debt better and averaged a positive $20k net worth for 5 yrs. Then I went the Ramsey get out of debt or bust route and paid off $191k in 3.5 yrs. Now, debt free, 3.5 yrs after that, and I just past $225k net worth and climbing fast.
I mean, that is good. But debt is a tool. If you are growing faster without using the primary tool specifically made for growing wealth... I'm going to argue that you didn't learn how to manage your debt well. Remember, Dave didn't get wealthy by avoiding debt. Dave got wealthy in spite of avoiding debt. I hate Dave. The guy is a fool who keeps far more people poor than he helps break the cycle, and he laughs at them in their face, and Christians everywhere praise this evil dispicable man for it. It's sick. However, Dave is such a phenomenal sales guy, that he built an empire of massive wealth without using debt. He didn't grow wealth by being smart, or by leaning a skill that helps society, or by being smart with money (I mean, the dude went broke... He's not good with money). He built a cult of personality that people enjoyed, and made cut-throat deals on books, merch, sponsorships, and sold himself any way possible within the bounds of the law so that he massively out-earned his spending capacity. If anyone thinks they can build wealth doing what Dave did in his own field, then he will bury them in lawsuits and underhanded deals with the people you intend to do business with. You have to do things the hard way by getting a job, saving your money, and living on less than you earn. Dave can't even find his way around a budget or modern normal expected expenses. He laughs at people, takes their money, and they thank him for it... That ain't healthy man. It's not right. Look to places like the money guy show, or any other place where people have some semblance of compassion and intelligence. Don't look to the hot head who can't follow his own advice to get where he is at for advice.
@@CaedenVNo, debt is FOR fools. Most Americans have little or no retirement savings and get angry at all of us “rich” people who were responsible, debt free and plowed money into retirement for 40 years. Way too many people live the YOLO life these days. They end up 65 years old and broke.
@@CaedenVBtw, go ask all these pro-debt people like Robert Kiyosaki how many times they have filed for bankruptcy. Dave did, too, and learned to never get in that position again. Bankruptcies hurt all of us.
You got me to click out of anger. 😊 Wife and I are both excited to get out of debt. Should be debt free in a few months. Then maxing out our 401k's and investing 60% of our remaining net outside retirement. Pushing hard for an early retirement.
Another excellent video Erin. I have not had any debt since 2000-when we paid off our mortgage-and my net worth grew exponentially over that 24 year period. I think mortgage debt is fine as long as you don’t make yourself “house poor.” Small auto loans are reasonable as long as the vehicle is an absolute necessity. You should never take out an auto loan to buy a luxury vehicle. Stay within your means. Finally, I am with you 100% on credit card debt. This is the worst thing you can do for your financial health. Carrying credit card debt prevents you from saving properly for your future. I believe in using credit cards-it gives you a record of your spending-but never as a means of supplementing your income. The key is deferred gratification. If you can’t afford to pay for something and can only obtain it by using a credit card and carrying a balance, you shouldn’t be buying the item. I wish more people would watch your videos. Your advice is spot on!
A seven-year car loan is just crazy. When I wanted a new car I always took the four-year loan option and made sure the budget would allow for two monthly payments, which had the car paid off in two years. But if I had unexpected bills I would have the room to only make one payment.
I'm with you. When I paid my last payment I took friends out for beer and burgers as a celebration. Getting it paid-off is huge and 4 years a long road to get there!
This one is packed with some really great info. Great job and a must watch for anyone interested in learning more about how credit AND interest works! Great job.
I agree with your thoughts on debt. I believe some debt can be good and necessary at times. However, debt should be kept to a minimum and paid off ASAP.
7:30 The 2-point buydown only works if you stay in the same home with the same mortgage for the full duration and don't pay the mortgage down any quicker. One has to examine the breakeven point on the buydown (often about 7 years). If you think you might move OR might refinance OR might pay off the loan in under the breakeven time, you're better off not doing it.
Thank you for this video Erin! I hate debt with a passion. I get that sometimes you’ll need to get a loan of some sort, but debt due to reckless spending is totally unnecessary.
Good morning Erin. Another excellent video with a lot of usefull info that will benefit many of your listeners. I am retired 13 years and doing very well. I got a share secured loan from one of my credit unions, 3 years ago to build a large, climate controlled, 1500 sq ft shop at my son's house. $100k, 10years at 2.20% interest and also a 1.9% auto loan with
Love your posts Erin. My folks paid 9000 dollars for their house in 1966 and when mum passed it sold for 860k. No matter what people say a home is a good investment.
How long did it take for them to pay that off? Did they ever refinance? How much was paid to interest over time? Upkeep, repairs and remodels? There's more to the cost of their home than the $9k. Wonder what that $9k would have made in the stock market over nearly 60 years.
That's true, unless you bought in 2007. I bought my first house then, was luck to get renters that almost paid mortgage when I had to move a few years later. Paid 125k and was finally able to offload that property for 110k last year. The only thing that house was good for was a tax write off, never made more then I spent on it most years. A home should not be treated as an investment, it is a place to live. if you make more off it thats good, but if you raise a family and create memories in it the its done its job. One of my favorite homes was an 80k manufactured house I bought on 2 acres about six years ago. It was perfect for what I needed at the time and it let me save so much money I didn't care if I made money when I sold it.
I mean... Don't do that? If that is how banks worked, then nobody would use them, and they would go out of business. Banks have access to cash, but don't want to do any real work, so they lend it to others for a fee. Im not afraid of work like the banks are, so I take their money, pay their little fees, and use that money as leverage to do more work, faster, and with higher profits than I would otherwise. In all of my interactions with banks, even with loads of credit card debt that took years to work through, I still saved or earned more money than I have paid them for access to their cash. If you aren't using the bank to wear them ragged and make them think they are in the wrong business... You probably aren't using banks correctly.
I’ve been debt free since I was 23 and paid off my credit card after a couple years of being broke. I got my first profession full time job a few months before the GFC in 2008 and vowed to live frugally from then on. Bought both my cars with cash.
Definitely personal preference! I "feel" good knowing I have enough to pay my mortgage off tomorrow. However, I don't because it's growing while my 2.25% remains fixed!
@@cbell5017, Absolutely agree, I was fortunate that timing worked out. Also, my house has doubled in value and after the recent pullback the past year plus. It turned in to a great retirement investment when we do pull the plug.
What difference does it make what your home is worth? If you are taking out large amount of debt? You are just making the banks richer.. paying interest. Later if you sell it what is the net result? After taxes, interest , upkeep and renovations? After the sale, you buy another house? More than likely that house will be more expensive with a higher amount of tax base. It’s all a win win for the government and banks.
Agreed. I put 44k down 5 years ago and sold the house last month. Equity was not more that my down payment plus interest over 5 years. The banks won. I did need a place to live though and it was still a better choice that throwing it away on renting.
Good video, but based on the title I was kinda hoping it would be a somewhat contrarian take, pointing out that taking on 'good debt' such as a mortgage would allow ramping up investment contributions and over time increase net worth.
Mortgages can be "no cost" - the cost is a slightly higher rate. But you can refinance any time the interest rates drop as little as 1/4% or even 1/8%. We converted an 8.625% mortgage to a 3.75% mortgage from 2000 to about 2007. This worked out better than if we'd paid points. Of course, in 2000 everyone said interest rates were going to go up. We had to go against conventional thinking.
Thank you for this- mature people understand the need to avoid, control, and manage debt well. I appreciate the information without a Kiyosaki or Ramsey tone... When did money management become politics?
How much would the savings in mortgage payment be worth if that was invested every month, and how much less in interest would have been paid. You are looking at the value of $6000 if invested, but not what was saved as a result of that money!
If there's an emergency need to buy a car (and not enough $ to do so) I get taking out a loan. Otherwise, the way I think of it is putting the price of a car payment away each month (e.g., in a high-yield savings account earmarked for the purpose) so I can pay cash with the accumulated savings when it's time for a car purchase. In either case I'm reducing my spendable dollars by the same amount, but by paying saved cash for the car I avoid loan interest payments so in effect the car is less expensive.
All great advice! My biggest financial hurdle right now is that my condo's HOA fee went up 25% and there is going to be an additional assessment fee in the tens of thousands for a major reconstruction project! While I would like to sell the condo before that assessment fee hits, I don't think anyone would buy knowing that it's coming, or they would require a steep discount. Any advice on selling a home or condo when an expensive upgrade is needed?
E-Bikes are becoming a better option in many cases due to the low cost compared to a used car, making it easier to afford a mode of transportation as new and used car prices and insurance continue to rise.
2 years to retirement. Mortgage will be paid off 1 Aug. cars financed at 1.9% will be paid off 6 years before retirement with 6 years of warranty left, spending extra money now getting ahead of some major home repairs/remodeling. Doing everything I can to minimize large expenses in the first 5 years of retirement SORR.
We have a 3% mortgage, which excluding home equity, is less than than 5% of our net worth. Never paying it off. Wish I could pay off property taxes and property insurance. They eclipse our little mortgage payment.
Good afternoon erin , i think you must teach your knowledge for our french goverment , our debt amounts to more than 3000 billion euros , others european countries are better than that As far as i am concerned , i'm definatly free with my apartment , end of the reimbursement 2 years ago thanks to my savings on transport , food and accommodation , i'm sure you'll be free very quickly 😊
Other parts of the world have a much less positive attitude towards debt. I think our culture is more influenced by marketing and lobbying by the lending industry.
A more interesting calculation might be in the answer to the question (when is the point where the mortgage point buydown is paid back with the resultant break even amount?) If the break even point is less that this point in time, it's probably not worth it. The average home ownership is 7 years, so comparing the savings over 30 years is unrealistic. IMO
I'm going to push back on this a bit. Debt is a tool. It's not good, it's not bad, it's just a tool that allows for flexibility and options. If you are building a shed, you have the ill advised option to push the nails in with your bare hands if you want to. It may take decades, but eventually you will get it done. Personally though... I'd rather use a hammer. It gives me an unnatural advantage to drive nails in much faster than I can with my body. Yes, there is risk. I can (and have) smash my finger with a hammer. It hurts, and made me shy away from diy projects the first few times I did it. I can (and have) whacked myself in the face with the claw of a hammer on the back swing... I'm not too smart, and not particularly coordinated... But the advantages of using a hammer, especially as you learn to use it safely and appropriately, has so many advantages that you would be a complete idiot to not use hammers and other tools in a construction project. Saying it is unsafe, or dangerous is true enough, but attempting a project without the right tools is so damn close to impossible that one wonders why you would even try without it. Now, I wouldn't give my 12 year old access to the table saw, because in his hands it would be a life altering disaster. He's a kid, and about as coordinated as I am, and I love him and want him to stick around a while, so he doesn't get to make life altering decisions with a tool he has no chance of using correctly. But I have trained him on the use of knives, multi-tools, manual saws, drivers, soldering irons, etc. By the time he grows up and leaves the house he will totally be capable of using the table saw. We build up to it, we don't start with it. Debt is 100% the same thing. Some debts are a screwdriver. Using your credit card to time when you pay vs when your paycheck hits for normal purchases is totally innocuous and safe to do, and adds a firewall between your bank account and vendors, while adding flexability on timing, and paying back rewards. Even carrying a balance for a month or two on a credit card for a large purchase or emergency expense is likely smarter and cheaper at a 24-30% apr for a few months than totally draining your savings, or taking on late fees, penalties, or other charges. Yes, you are paying interest, but likely less in interest than in fees, and some purchases can't be put off. But loading up a credit card offsetting a lifestyle you can't afford. Or putting a large multi-year unavoidable unexpected expense on a credit card and not some more appropriate debt structure.... Thats like using a screw driver as a wisk to mix something, or using it to pry something open and slipping and cutting your hamd. It's not the right tool for the job, and you are going to at least waste a lot of extra effort, or worse hurt yourself. Mortages and car loans are much the same. My first few cars were on a loan, because nobody was going to buy a car for me, and you need a car to get a job to get money so I couldn't build assets... So off to debt we go! Working at places I could walk or bike to (and that I was qualified for at the time) limited me to $25-30k/yr. Taking on a car loan let me get a $50k job. So $400/mo even at a high interest rate for a kid with no assets, to earn $1600/mo more? Yeah, totally worth doing! I would have had to work at a much lower pay for many extra years to afford the car to unlock other job options, so the interest paid on the debt sucked... But was totally worth doing. No regrets! Same with a house. Getting into a house was difficult, and even a cheap old fixer upper was a major stretch on the budget that we probably took on earlier than we should have. But saving up to pay for a house in cash... Damn... 20 years into a house and I'm pretty sure we still wouldn't be able to afford the house we live in. Paying the interest we have to move into our home 25 years early? I mean... How is that not magic? Yeah, the first 5-10 years were brutal on the finances, but it has gotten dramatically easier since then as we have refinanced to lower rates over time. But again, the house is like power tools. Move too early, or buy too large of a house, or don't take care of the house correctly... It's difficult to put yourself in a hospital with a power drill on accident, but it happens. Difficult to financially kill yourself with a home, but you can certainly make mistakes and cause yourself scars and wounds you aren't quick to forget. But for most people following basic safety guidelines, using the tool of a mortgage allows them to get into a home 20-30 years earlier than they otherwise could, and for a relatively minimal price increase compared to how much the house will increase over the time you are saving for it. And then there are leveraged assets. I took money out of my house via a heloc to buy into the market when it was waaaay down a while back. On the intro rate, totally worth doing, and had I sold off when the intro rate expired to pay off the loan, I would have waked away with a $16k asset left over. But I didn't do that. I have held because the asset is compounding over time, while the debt is a fixed size, so the longer I hold, the better on average it will be towards my advantage. Of course, what I am learning is that a heloc is the wrong tool for the job. My projection was that my heloc rate would spike to 6.5-7%...and now we are at 8.25% but hopefully falling. Moving this debt to a fixed rate would have been smarter. Doing this when I did a refi on my house at 2.5% would have been even smarter, but I wasn't ready for this at the time. So I am treading water breaking even on what the asset is earning vs what I am paying, and it sucks for the moment. I have nicked my finger with the table saw. It hurts, it bleeds a bit... But I'm not going to the finance hospital, a bandaid is appropriate for the wound, but saying it didn't hurt would totally be a lie. We learned some things, and are getting in a position to fix them. And when we try again we will use the hand saw of a traditional mortgage refi as the more appropriate tool for what I am trying to accomplish. Fixed rate, set terms, and more predictability on the cost side to allow me to hold a much larger asset much sooner in life and push my retirement plans roughly 10 years ahead of where they would be otherwise. But the point is that yes, absolutely, unequivocally, debt is awesome! When used properly, and with caution, and on appropriate goals, then debt helps you build a very nice financial home for yourself much earlier than what your paycheck will afford you on its own. There are added costs, added risks, more complicated rules to follow, and you have to measure and account for things more carefully... But all of this applies to the use of computers, cars, planes, cell phones, and any other tool in your life. We are so willing and blind to the risks we take in all of these other areas of life because we can see and feel the effects of them in real time. The results and expectations are more intuitive and obvious. The only difference is that with finances you have to learn to use a spreadsheet and a calculator to see your risks, costs, and expectations... But get through that learning curve and it's no less intuitive than most other things in life. Saying you won't use a tool to your own benefit because it's scarry to learn how to see what the tool does... I mean... Would we accept such excuses in any other slightly unintuitive areas of our lives?
Interesting comment. I only have a mortgage. This frees up tremendous amounts of free cashflow that goes directly into investments. After doing this for a while, I now have enough assets that if I decide I need a new car, I can pay cash for it, no problem. And when those little or large emergencies come along, I have the money to take care of it. I have been investing long enough that I can see that I would rather keep my money invested as opposed to paying off the mortgage and taking that money out of the market. It's nice to know that if I decide to pay off the mortgage, I could do that. But I just can't wrap my head around doing that when I have a 4.25% mortgage and I'm averaging 10% in the market (over good years and bad years). And I only use credit cards when I travel because I can use the credit card statement for my expense account and forget about keeping all those receipts, and pay the card off immediately when I get reimbursed. When I travel on personal business, I just use my debt card. So judicious use of credit is the rule. I think most debt is bad debt and I avoid it.
From a personal standpoint, no debt is just fine. From a mathematical one, minimal debt is likely optimal. Any debt that can earn more than it costs is "good debt", but it does actually have to deliver on that promise. The big debate over mortgages isn't black and white, but I will say that if you are adding minimal extra to the mortgage and only shaving off a few years on a 30 year loan, you're likely *increasing* your risk over the course of the mortgage as opposed to saving and/or investing it due to the lack of liquidity in the home equity. If you can knock it out in 5-10 years with an aggressive payout schedule, the odds get closer to even and peace of mind can easily push that over the edge in favor of paying off the mortgage. People like to stick their fingers in their ears and throw shade at anyone even thinking about doing it different than they believe is the *only* way and that mentality is no good for anyone. Personal finance is...personal.
I have no debt except for my mortgage. I can't wrap my head around paying off my 4.25% mortgage when I'm making 10% in the market. Help me understand how to make this decision
In a highly inflationary environment if you can secure a low interest loan around the annual rate of inflation the debt becomes cheaper over time because your money is worth less over time. The dollar in your pocket will never be worth more than it is today. The asset you buy with that dollar however will appreciate due to inflation.
All debt is bad debt. Its only called good debt when it allows you to make more money than it costs to pay it back. The better you are at multiplying money, the more money people will lend you to multiply.😊
Debt is what wealthy people use to accelerate the wealth and create generational wealth! So many people think all debt is bad because of financial trauma and/or information provided from someone they trust. Discipline is huge and many do not exercise it, so some advice about debt is for those without discipline. However, success leaves clues... Use debt effectively to accelerate your wealth as well! Thanks for another great video.👍
Debt has risk.. If you went into debt for a house, even if it was an investment in 2006 / 2007, you'd of been seriously underwater and wouldn't even recover to the status quo until 10 years later at minimum. It's easy to see leverage as a faster way to wealth, but in reality it only works in certain segments of time. If you enter that leverage at a bad time it's really just going to ruin yourself potentially for half a lifetime.
Actually, buisness uses debt to create wealth, rich people, not so much. Some if their primary deal is Real Estate use debt but real estate is not working out so well in this high intrest rate environment.
Credit scores are bs. "Make sure you check with all the lenders the same week or the later lenders may see a lower score". Its absolute crap that applying for a loan would lower your credit score. I missed one credit card payment like 4-5 years ago and im only just at a 741 credit score now. Pretty sure itll take another 2 years of perfection (and never applying for a loan?) To get up to 780. Such a nonsensical system.
If you have any conviction that the fed is going to cut rates within the next 6 months and that is your time horizon to buy a house, buying down the rate with points makes zero sense to me. Marry the house and date the rate
I saw the title, and thought "I agree, debt is awesome!" Debt has enabled me to more quickly build my investments to my long term advantage. My long term returns have way out gained the cost of my mortgage and auto loans. I carry no CC debt, but gain quite a few perks from rewards. Done well, debt can give a very nice boost to your early retirement plans, and many benefits along the way. You hinted at it in your video, but currency is a form of debt. Money itself represents past labor you have performed for future good and services others owe you.
By Which would be business debt that is not wiped out by your standard deduction. Most people get no tax benefit now from their interest payments due to the high standard deduction.
Then minimum wages & maximum worries? Even American Citizens suffering this pain of poverty? Answer , Neighborhood Fund Raising , & Non- interest base credit unions .
Home loans are really a scam. Think about it, on a 30 year mortgage, you will pay in total 3 times the home's value. Think about that, you will never recover the amount you put into the loan.
A couple of years ago I took out two personal loans at 8% interest to increase funding to my day trading operation. Today mortgages are 6-7%, my trading is going very well (not one losing month in the last three years) and I can’t talk myself into giving the bank their money back. 😑
@@JamesCaballero-q2r my mortgage is less than 2% lower interest rate than the personal loans. How is the mortgage just fine, but a similarly expensive personal loan is high interest and super risky?
Okay that's the second falsehood you spewed in this video, we are not in a high interest rate environment. We have just reverted to more normal interest rates. The fact that we've been in an artificially induced low interest rate environment since before 2008 is the cause of the problem, not the norm.
Yep, but if you offer me zero percent financing for something I could have paid cash for I will take it and ensure I leave the money in savings to pay it off.
I agree Portfolio lines of credit are interest only borrowing against stocks starting with as little as 2100 dollars with m1 finance the rate is 1.25% below prime rate too and its tax deductible
Don't say it increases the GDP. That's one of those things that is technically true, but also disastrously false. Just take a look at Canada to see what happens when most of your GDP actually housing. People can't afford to live anywhere, and the economy is in tatters. Escalating real estate prices based on the greater fool theory, do not help an economy in any way, they just drag people down.
I think debt helps fuel GDP but only temporarily. Once the bills come due we tend to take a nose dive. No to low debt rocks. Buy 2-3 year old, low mileage cars, keep the lifestyle in check, buy a house you can truly afford. Better to be saving than paying interest. Great advice, and excellent presentation as always Erin!
The avg. American is having a tough time, I know I am not alone. There are others in same position as me. By certain statistics: 22% of americans have no retirement savings. 64% are worried that they will not have money in latter years while 47% of adults who are not yet retired think they have to work part-time in retirement. How can I best grow the 100k I have saved seperately outside retirement access which of course had depleted over the years?
Think about actions you’re taking that might be harming you such as carrying over credit card debt each month.
I agree withyou. I also think you should think about steps you can take to start. Start somewhere. Anything is better than being frozen even.
In my opinion, create a budget including income and expenses, do this with a financial advisor.Plan with a pro advsor for a successful retirement.i work with an advsor and generated over 150% In 11 mnths with guidance.
Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
Vivian Jean Wilhelm is the licensed advisor I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
"No loan is the best loan" was my favorite quote from this video. Well said.
I’m 51 and my wife is 50 and we’ve been debt free just over 11 years now.
Awesome!
Same with my wife and I. Net worth really piles up fast with zero debt.
A friend of mine and his wife had a slogan for themselves: “Debt free by 40.” That sounds like a good plan.
@@kevinobrien9271 Debt free from day one is better, but any plan to zero debt is wise. My kids are starting life debt-free and saving a bunch of money after (paid for) college. I didn’t have the kind of money they have saved until I was almost 40! Fortunately, I have been debt free and plowing money into my 401k and Roth IRA for decades.
Debt has been the # 1 driver of innovation and expansion in the last several hundred years in America. No debt = No money.
True. But it’s a really nice feeling to not be one of the people stuck under unmanageable debt.
I took out a 6-year auto loan from a credit union, but paid it off within 4.5 years. The car is a used 2016 Ford Focus. It's not fancy, but it's OK for local driving trips to work around the city.
I think debt helps fuel GDP but only temporarily. Once the bills come due we tend to take a nose dive.
No to low debt rocks. Buy 2-3 year old, low mileage cars, keep the lifestyle in check, buy a house you can truly afford. Better to be saving than paying interest. Great advice, and excellent presentation as always Erin!
This title had me checking to see if it was April fool's day or something
haha! 😂 Andrei Jikh did a really funny April Fools video year about how many girlfriends you can afford 😂 I loved it!
The title is unironically true in a way. Investing works for us Americans because, as she mentioned, our high consumer spending leads to market enthusiasm, which nets us investment returns.
If everyone was like Erin, we would have tepid investment returns, so the best investment recommendation, using broad market index funds, wouldn't really work 😅
Nope… just clickbait(ish)
Same!
@Bum_Hip except debt truly is awesome. Our society would collapse without it. The rich would only get richer and the poor only poorer because no one could ever owe anyone anything.
We just got completely out of debt and our Moto is “if we can’t pay cash for it.. we will save up for it” no more credit cards
I tried managing debt for 15 years. I managed to have a lot of stuff and averaged a NEGATIVE $15K net worth. Then I went back to school and learned how to manage debt better and averaged a positive $20k net worth for 5 yrs. Then I went the Ramsey get out of debt or bust route and paid off $191k in 3.5 yrs. Now, debt free, 3.5 yrs after that, and I just past $225k net worth and climbing fast.
awesome dude
I mean, that is good. But debt is a tool. If you are growing faster without using the primary tool specifically made for growing wealth... I'm going to argue that you didn't learn how to manage your debt well.
Remember, Dave didn't get wealthy by avoiding debt. Dave got wealthy in spite of avoiding debt. I hate Dave. The guy is a fool who keeps far more people poor than he helps break the cycle, and he laughs at them in their face, and Christians everywhere praise this evil dispicable man for it. It's sick.
However, Dave is such a phenomenal sales guy, that he built an empire of massive wealth without using debt. He didn't grow wealth by being smart, or by leaning a skill that helps society, or by being smart with money (I mean, the dude went broke... He's not good with money). He built a cult of personality that people enjoyed, and made cut-throat deals on books, merch, sponsorships, and sold himself any way possible within the bounds of the law so that he massively out-earned his spending capacity. If anyone thinks they can build wealth doing what Dave did in his own field, then he will bury them in lawsuits and underhanded deals with the people you intend to do business with. You have to do things the hard way by getting a job, saving your money, and living on less than you earn. Dave can't even find his way around a budget or modern normal expected expenses. He laughs at people, takes their money, and they thank him for it... That ain't healthy man. It's not right. Look to places like the money guy show, or any other place where people have some semblance of compassion and intelligence. Don't look to the hot head who can't follow his own advice to get where he is at for advice.
@@CaedenVNo, debt is FOR fools. Most Americans have little or no retirement savings and get angry at all of us “rich” people who were responsible, debt free and plowed money into retirement for 40 years. Way too many people live the YOLO life these days. They end up 65 years old and broke.
@@CaedenVBtw, go ask all these pro-debt people like Robert Kiyosaki how many times they have filed for bankruptcy. Dave did, too, and learned to never get in that position again. Bankruptcies hurt all of us.
Debt is totally useful in the right hands.
You got me to click out of anger. 😊
Wife and I are both excited to get out of debt. Should be debt free in a few months.
Then maxing out our 401k's and investing 60% of our remaining net outside retirement. Pushing hard for an early retirement.
Another excellent video Erin. I have not had any debt since 2000-when we paid off our mortgage-and my net worth grew exponentially over that 24 year period. I think mortgage debt is fine as long as you don’t make yourself “house poor.” Small auto loans are reasonable as long as the vehicle is an absolute necessity. You should never take out an auto loan to buy a luxury vehicle. Stay within your means. Finally, I am with you 100% on credit card debt. This is the worst thing you can do for your financial health. Carrying credit card debt prevents you from saving properly for your future. I believe in using credit cards-it gives you a record of your spending-but never as a means of supplementing your income. The key is deferred gratification. If you can’t afford to pay for something and can only obtain it by using a credit card and carrying a balance, you shouldn’t be buying the item. I wish more people would watch your videos. Your advice is spot on!
Debt Free and loving it !!!!!!!!
Recently found this channel, been binge watching your videos. Great video
thank you! Welcome to the channel 😊
A seven-year car loan is just crazy. When I wanted a new car I always took the four-year loan option and made sure the budget would allow for two monthly payments, which had the car paid off in two years. But if I had unexpected bills I would have the room to only make one payment.
I'm with you. When I paid my last payment I took friends out for beer and burgers as a celebration. Getting it paid-off is huge and 4 years a long road to get there!
This one is packed with some really great info. Great job and a must watch for anyone interested in learning more about how credit AND interest works! Great job.
I agree with your thoughts on debt. I believe some debt can be good and necessary at times. However, debt should be kept to a minimum and paid off ASAP.
7:30 The 2-point buydown only works if you stay in the same home with the same mortgage for the full duration and don't pay the mortgage down any quicker. One has to examine the breakeven point on the buydown (often about 7 years). If you think you might move OR might refinance OR might pay off the loan in under the breakeven time, you're better off not doing it.
Debt put me way ahead in life.Just learn where to apply it.
With a shorter mortgage, you usually get a 1/2 point savings in the interest rate too
Thank you for this video Erin! I hate debt with a passion. I get that sometimes you’ll need to get a loan of some sort, but debt due to reckless spending is totally unnecessary.
Good morning Erin. Another excellent video with a lot of usefull info that will benefit many of your listeners. I am retired 13 years and doing very well. I got a share secured loan from one of my credit unions, 3 years ago to build a large, climate controlled, 1500 sq ft shop at my son's house. $100k, 10years at 2.20% interest and also a 1.9% auto loan with
I could have purchased my car with cash 5 years ago, but I made a 20% down payment and put the rest in the stock market
That can work. That's why we don't pay off the house.
Love your posts Erin. My folks paid 9000 dollars for their house in 1966 and when mum passed it sold for 860k. No matter what people say a home is a good investment.
How long did it take for them to pay that off? Did they ever refinance? How much was paid to interest over time? Upkeep, repairs and remodels? There's more to the cost of their home than the $9k. Wonder what that $9k would have made in the stock market over nearly 60 years.
My parents paid 8,900 for their house and I still live in it ,with a few upgrades, I would not sell it ,but keep it in the family
That's true, unless you bought in 2007. I bought my first house then, was luck to get renters that almost paid mortgage when I had to move a few years later. Paid 125k and was finally able to offload that property for 110k last year. The only thing that house was good for was a tax write off, never made more then I spent on it most years. A home should not be treated as an investment, it is a place to live. if you make more off it thats good, but if you raise a family and create memories in it the its done its job. One of my favorite homes was an 80k manufactured house I bought on 2 acres about six years ago. It was perfect for what I needed at the time and it let me save so much money I didn't care if I made money when I sold it.
Stealing money from my future self while paying some bank a massive amount for the privilege? What could go wrong? Sign me up!
I mean... Don't do that? If that is how banks worked, then nobody would use them, and they would go out of business.
Banks have access to cash, but don't want to do any real work, so they lend it to others for a fee.
Im not afraid of work like the banks are, so I take their money, pay their little fees, and use that money as leverage to do more work, faster, and with higher profits than I would otherwise.
In all of my interactions with banks, even with loads of credit card debt that took years to work through, I still saved or earned more money than I have paid them for access to their cash.
If you aren't using the bank to wear them ragged and make them think they are in the wrong business... You probably aren't using banks correctly.
The ad under this video for me is a Carvana ad that says "Sell your car". I can hear Dave Ramsey saying "sell the car!"
They will only pay me $150 so I'll keep driving it.
Debt is a necessary evil for most people. But it can get out of hand very fast.
I’ve been debt free since I was 23 and paid off my credit card after a couple years of being broke. I got my first profession full time job a few months before the GFC in 2008 and vowed to live frugally from then on. Bought both my cars with cash.
Definitely personal preference! I "feel" good knowing I have enough to pay my mortgage off tomorrow. However, I don't because it's growing while my 2.25% remains fixed!
You are one of the lucky ones with this kind off interest rate. Definitely one of the best times in history to buy a home.
@@cbell5017 The timing worked out for me the best it could have. I definitely know how fortunate I am.
@@cbell5017, Absolutely agree, I was fortunate that timing worked out. Also, my house has doubled in value and after the recent pullback the past year plus. It turned in to a great retirement investment when we do pull the plug.
What difference does it make what your home is worth? If you are taking out large amount of debt? You are just making the banks richer.. paying interest. Later if you sell it what is the net result? After taxes, interest , upkeep and renovations? After the sale, you buy another house? More than likely that house will be more expensive with a higher amount of tax base. It’s all a win win for the government and banks.
Agreed. I put 44k down 5 years ago and sold the house last month. Equity was not more that my down payment plus interest over 5 years. The banks won. I did need a place to live though and it was still a better choice that throwing it away on renting.
Good video, but based on the title I was kinda hoping it would be a somewhat contrarian take, pointing out that taking on 'good debt' such as a mortgage would allow ramping up investment contributions and over time increase net worth.
as a millionaire, i cry a thousand silent cries when i hear people talk about having credit card debt.
Another thing that makes debt awesome is that inflation over time makes owing money less expensive.
Also less money to pay it off as more dollars go to other inflationary spending.
Always informative! Thanks!!
Hi Erin, it’s been a while, hope all is well. Great video as always. For me carrying debt is all about opportunity cost (assuming one has the option).
Hey Clayton! It’s so great to see a comment from you. I hope you are having an amazing summer!! 😊
Excellent video, Erin! Thank you!
Glad you enjoyed it!
Mortgages can be "no cost" - the cost is a slightly higher rate. But you can refinance any time the interest rates drop as little as 1/4% or even 1/8%. We converted an 8.625% mortgage to a 3.75% mortgage from 2000 to about 2007. This worked out better than if we'd paid points. Of course, in 2000 everyone said interest rates were going to go up. We had to go against conventional thinking.
Agree no debt is my way of life ❤
Thank you for this- mature people understand the need to avoid, control, and manage debt well. I appreciate the information without a Kiyosaki or Ramsey tone... When did money management become politics?
Wait did I miss something? What part was politics?
That $6,000 you spent on points to reduce your interest rate would be $120,000 at the end of your mortgage if you invested it.
Why do most financial advisors pretend this fact is not a thing?
Because reducing debt is guaranteed payback. Investing can produce negative returns.
How much would the savings in mortgage payment be worth if that was invested every month, and how much less in interest would have been paid. You are looking at the value of $6000 if invested, but not what was saved as a result of that money!
To have a $120,000 at the end of the loan, you would have to sustain a 10.5% annual return over 30 years.
@@SwanQtrTom that's probably what the SP500 returned.
Debt is king
Your title is going to trigger Dave Ramsey.
😂
If there's an emergency need to buy a car (and not enough $ to do so) I get taking out a loan. Otherwise, the way I think of it is putting the price of a car payment away each month (e.g., in a high-yield savings account earmarked for the purpose) so I can pay cash with the accumulated savings when it's time for a car purchase. In either case I'm reducing my spendable dollars by the same amount, but by paying saved cash for the car I avoid loan interest payments so in effect the car is less expensive.
All great advice! My biggest financial hurdle right now is that my condo's HOA fee went up 25% and there is going to be an additional assessment fee in the tens of thousands for a major reconstruction project! While I would like to sell the condo before that assessment fee hits, I don't think anyone would buy knowing that it's coming, or they would require a steep discount. Any advice on selling a home or condo when an expensive upgrade is needed?
E-Bikes are becoming a better option in many cases due to the low cost compared to a used car, making it easier to afford a mode of transportation as new and used car prices and insurance continue to rise.
Until it rains, snows, becomes hot as hell or cold as space
Debt is awesome... to buy so that I get the interest payment ;)
2 years to retirement. Mortgage will be paid off 1 Aug. cars financed at 1.9% will be paid off 6 years before retirement with 6 years of warranty left, spending extra money now getting ahead of some major home repairs/remodeling. Doing everything I can to minimize large expenses in the first 5 years of retirement SORR.
We have a 3% mortgage, which excluding home equity, is less than than 5% of our net worth. Never paying it off. Wish I could pay off property taxes and property insurance. They eclipse our little mortgage payment.
Good afternoon erin , i think you must teach your knowledge for our french goverment , our debt amounts to more than 3000 billion euros , others european countries are better than that
As far as i am concerned , i'm definatly free with my apartment , end of the reimbursement 2 years ago thanks to my savings on transport , food and accommodation , i'm sure you'll be free very quickly 😊
Other parts of the world have a much less positive attitude towards debt. I think our culture is more influenced by marketing and lobbying by the lending industry.
So true! In the US we are way more accepting of debt in so many ways!
A more interesting calculation might be in the answer to the question (when is the point where the mortgage point buydown is paid back with the resultant break even amount?) If the break even point is less that this point in time, it's probably not worth it. The average home ownership is 7 years, so comparing the savings over 30 years is unrealistic. IMO
I went to buy my lease early on sat but the taxes were ridiculous. But...my credit score jumped 44 points. Forget debt.
The simple strategy would be to pay off the high interest loans first.
I'm going to push back on this a bit.
Debt is a tool. It's not good, it's not bad, it's just a tool that allows for flexibility and options.
If you are building a shed, you have the ill advised option to push the nails in with your bare hands if you want to. It may take decades, but eventually you will get it done. Personally though... I'd rather use a hammer. It gives me an unnatural advantage to drive nails in much faster than I can with my body. Yes, there is risk. I can (and have) smash my finger with a hammer. It hurts, and made me shy away from diy projects the first few times I did it. I can (and have) whacked myself in the face with the claw of a hammer on the back swing... I'm not too smart, and not particularly coordinated... But the advantages of using a hammer, especially as you learn to use it safely and appropriately, has so many advantages that you would be a complete idiot to not use hammers and other tools in a construction project. Saying it is unsafe, or dangerous is true enough, but attempting a project without the right tools is so damn close to impossible that one wonders why you would even try without it.
Now, I wouldn't give my 12 year old access to the table saw, because in his hands it would be a life altering disaster. He's a kid, and about as coordinated as I am, and I love him and want him to stick around a while, so he doesn't get to make life altering decisions with a tool he has no chance of using correctly. But I have trained him on the use of knives, multi-tools, manual saws, drivers, soldering irons, etc. By the time he grows up and leaves the house he will totally be capable of using the table saw. We build up to it, we don't start with it.
Debt is 100% the same thing. Some debts are a screwdriver. Using your credit card to time when you pay vs when your paycheck hits for normal purchases is totally innocuous and safe to do, and adds a firewall between your bank account and vendors, while adding flexability on timing, and paying back rewards. Even carrying a balance for a month or two on a credit card for a large purchase or emergency expense is likely smarter and cheaper at a 24-30% apr for a few months than totally draining your savings, or taking on late fees, penalties, or other charges. Yes, you are paying interest, but likely less in interest than in fees, and some purchases can't be put off.
But loading up a credit card offsetting a lifestyle you can't afford. Or putting a large multi-year unavoidable unexpected expense on a credit card and not some more appropriate debt structure.... Thats like using a screw driver as a wisk to mix something, or using it to pry something open and slipping and cutting your hamd. It's not the right tool for the job, and you are going to at least waste a lot of extra effort, or worse hurt yourself.
Mortages and car loans are much the same.
My first few cars were on a loan, because nobody was going to buy a car for me, and you need a car to get a job to get money so I couldn't build assets... So off to debt we go! Working at places I could walk or bike to (and that I was qualified for at the time) limited me to $25-30k/yr. Taking on a car loan let me get a $50k job. So $400/mo even at a high interest rate for a kid with no assets, to earn $1600/mo more? Yeah, totally worth doing! I would have had to work at a much lower pay for many extra years to afford the car to unlock other job options, so the interest paid on the debt sucked... But was totally worth doing. No regrets!
Same with a house. Getting into a house was difficult, and even a cheap old fixer upper was a major stretch on the budget that we probably took on earlier than we should have. But saving up to pay for a house in cash... Damn... 20 years into a house and I'm pretty sure we still wouldn't be able to afford the house we live in. Paying the interest we have to move into our home 25 years early? I mean... How is that not magic? Yeah, the first 5-10 years were brutal on the finances, but it has gotten dramatically easier since then as we have refinanced to lower rates over time.
But again, the house is like power tools. Move too early, or buy too large of a house, or don't take care of the house correctly... It's difficult to put yourself in a hospital with a power drill on accident, but it happens. Difficult to financially kill yourself with a home, but you can certainly make mistakes and cause yourself scars and wounds you aren't quick to forget. But for most people following basic safety guidelines, using the tool of a mortgage allows them to get into a home 20-30 years earlier than they otherwise could, and for a relatively minimal price increase compared to how much the house will increase over the time you are saving for it.
And then there are leveraged assets. I took money out of my house via a heloc to buy into the market when it was waaaay down a while back. On the intro rate, totally worth doing, and had I sold off when the intro rate expired to pay off the loan, I would have waked away with a $16k asset left over. But I didn't do that. I have held because the asset is compounding over time, while the debt is a fixed size, so the longer I hold, the better on average it will be towards my advantage.
Of course, what I am learning is that a heloc is the wrong tool for the job. My projection was that my heloc rate would spike to 6.5-7%...and now we are at 8.25% but hopefully falling. Moving this debt to a fixed rate would have been smarter. Doing this when I did a refi on my house at 2.5% would have been even smarter, but I wasn't ready for this at the time. So I am treading water breaking even on what the asset is earning vs what I am paying, and it sucks for the moment. I have nicked my finger with the table saw. It hurts, it bleeds a bit... But I'm not going to the finance hospital, a bandaid is appropriate for the wound, but saying it didn't hurt would totally be a lie. We learned some things, and are getting in a position to fix them. And when we try again we will use the hand saw of a traditional mortgage refi as the more appropriate tool for what I am trying to accomplish. Fixed rate, set terms, and more predictability on the cost side to allow me to hold a much larger asset much sooner in life and push my retirement plans roughly 10 years ahead of where they would be otherwise.
But the point is that yes, absolutely, unequivocally, debt is awesome! When used properly, and with caution, and on appropriate goals, then debt helps you build a very nice financial home for yourself much earlier than what your paycheck will afford you on its own. There are added costs, added risks, more complicated rules to follow, and you have to measure and account for things more carefully... But all of this applies to the use of computers, cars, planes, cell phones, and any other tool in your life. We are so willing and blind to the risks we take in all of these other areas of life because we can see and feel the effects of them in real time. The results and expectations are more intuitive and obvious. The only difference is that with finances you have to learn to use a spreadsheet and a calculator to see your risks, costs, and expectations... But get through that learning curve and it's no less intuitive than most other things in life. Saying you won't use a tool to your own benefit because it's scarry to learn how to see what the tool does... I mean... Would we accept such excuses in any other slightly unintuitive areas of our lives?
Interesting comment. I only have a mortgage. This frees up tremendous amounts of free cashflow that goes directly into investments. After doing this for a while, I now have enough assets that if I decide I need a new car, I can pay cash for it, no problem. And when those little or large emergencies come along, I have the money to take care of it. I have been investing long enough that I can see that I would rather keep my money invested as opposed to paying off the mortgage and taking that money out of the market. It's nice to know that if I decide to pay off the mortgage, I could do that. But I just can't wrap my head around doing that when I have a 4.25% mortgage and I'm averaging 10% in the market (over good years and bad years). And I only use credit cards when I travel because I can use the credit card statement for my expense account and forget about keeping all those receipts, and pay the card off immediately when I get reimbursed. When I travel on personal business, I just use my debt card. So judicious use of credit is the rule. I think most debt is bad debt and I avoid it.
I put 20% down on my last vehicle but a 5 yr loan at 1.9% , works great when my cash is earning 5.1% sitting in a MMF.
No debt = Happy retirement
From a personal standpoint, no debt is just fine.
From a mathematical one, minimal debt is likely optimal. Any debt that can earn more than it costs is "good debt", but it does actually have to deliver on that promise.
The big debate over mortgages isn't black and white, but I will say that if you are adding minimal extra to the mortgage and only shaving off a few years on a 30 year loan, you're likely *increasing* your risk over the course of the mortgage as opposed to saving and/or investing it due to the lack of liquidity in the home equity. If you can knock it out in 5-10 years with an aggressive payout schedule, the odds get closer to even and peace of mind can easily push that over the edge in favor of paying off the mortgage. People like to stick their fingers in their ears and throw shade at anyone even thinking about doing it different than they believe is the *only* way and that mentality is no good for anyone. Personal finance is...personal.
What’s the difference between credit card debt and personal?
I fecked up.... only saw the thumbnail. Maxed everything out then watched video
😂😂😂😂
That title gave me anxiety 😂 I was like. Oh no no no. NO debt is Awesome! ❤ No debt and being healthy so you can enjoy it!
Haha - 😂
I have no debt except for my mortgage. I can't wrap my head around paying off my 4.25% mortgage when I'm making 10% in the market. Help me understand how to make this decision
It is easy to understand when your 10% gain this year turns into a 20% loss next year.
But the S&P 500, which as you point out goes up and down, averages 10% return over decades@@breehartley1627
@@breehartley1627 And then turns into a 30% gain the following year. The S&P 500 has increased on average 10% over decades. I have lived through it.
*Dave Ramsey has left the chat*
In a highly inflationary environment if you can secure a low interest loan around the annual rate of inflation the debt becomes cheaper over time because your money is worth less over time. The dollar in your pocket will never be worth more than it is today. The asset you buy with that dollar however will appreciate due to inflation.
Why is it even LEGAL to charge 20%+ interest on ANY loan? Just doesn't seem right for a civilized society.
Great video
You are Gem 💎
No debt or less debt is my rule as well.
All debt is bad debt. Its only called good debt when it allows you to make more money than it costs to pay it back. The better you are at multiplying money, the more money people will lend you to multiply.😊
Debt is what wealthy people use to accelerate the wealth and create generational wealth! So many people think all debt is bad because of financial trauma and/or information provided from someone they trust. Discipline is huge and many do not exercise it, so some advice about debt is for those without discipline. However, success leaves clues... Use debt effectively to accelerate your wealth as well! Thanks for another great video.👍
great point!
Debt has risk.. If you went into debt for a house, even if it was an investment in 2006 / 2007, you'd of been seriously underwater and wouldn't even recover to the status quo until 10 years later at minimum.
It's easy to see leverage as a faster way to wealth, but in reality it only works in certain segments of time. If you enter that leverage at a bad time it's really just going to ruin yourself potentially for half a lifetime.
Actually, buisness uses debt to create wealth, rich people, not so much. Some if their primary deal is Real Estate use debt but real estate is not working out so well in this high intrest rate environment.
Credit scores are bs. "Make sure you check with all the lenders the same week or the later lenders may see a lower score". Its absolute crap that applying for a loan would lower your credit score. I missed one credit card payment like 4-5 years ago and im only just at a 741 credit score now. Pretty sure itll take another 2 years of perfection (and never applying for a loan?) To get up to 780. Such a nonsensical system.
I am looking to buy an used car for up to 5000€ and my monthly pay is 850€ is that a good idea? I will do it by getting a loan of 5000€ for 24 months
208 a month just to pay the principal back
If you have any conviction that the fed is going to cut rates within the next 6 months and that is your time horizon to buy a house, buying down the rate with points makes zero sense to me. Marry the house and date the rate
I saw the title, and thought "I agree, debt is awesome!" Debt has enabled me to more quickly build my investments to my long term advantage. My long term returns have way out gained the cost of my mortgage and auto loans. I carry no CC debt, but gain quite a few perks from rewards. Done well, debt can give a very nice boost to your early retirement plans, and many benefits along the way.
You hinted at it in your video, but currency is a form of debt. Money itself represents past labor you have performed for future good and services others owe you.
Its only debt if you keep paying on it.
The only "good" thing about debt is that you can write it off on your income tax.
By Which would be business debt that is not wiped out by your standard deduction. Most people get no tax benefit now from their interest payments due to the high standard deduction.
@@SwanQtrTomA mortgage can be used on your income tax
Then minimum wages & maximum worries? Even American Citizens suffering this pain of poverty? Answer , Neighborhood Fund Raising , & Non- interest base credit unions .
Home loans are really a scam. Think about it, on a 30 year mortgage, you will pay in total 3 times the home's value. Think about that, you will never recover the amount you put into the loan.
We paid our mortgage off in 15 years by making extra payments towards the principal.
Debt is not awesome!
A couple of years ago I took out two personal loans at 8% interest to increase funding to my day trading operation. Today mortgages are 6-7%, my trading is going very well (not one losing month in the last three years) and I can’t talk myself into giving the bank their money back. 😑
Debt = risk. Low interest rate on a mortgage = low risk. High interest rate on a day trading strategy = VERY HIGH risk. Good luck!
@@JamesCaballero-q2r my mortgage is less than 2% lower interest rate than the personal loans. How is the mortgage just fine, but a similarly expensive personal loan is high interest and super risky?
All debt means finacial risk.
Hey, do you need any help regarding your video editing or thumbnails, if so we can help
Okay that's the second falsehood you spewed in this video, we are not in a high interest rate environment. We have just reverted to more normal interest rates. The fact that we've been in an artificially induced low interest rate environment since before 2008 is the cause of the problem, not the norm.
You could use some work on your delivery
It is simple, if you can’t pay cash, you can’t buy.
Yep, but if you offer me zero percent financing for something I could have paid cash for I will take it and ensure I leave the money in savings to pay it off.
did a 20 years loan in 2020 for the current family home. higher payment yes but ill have the home paid off before i retire.
Stoopid phone companies now have 36 month phone payment plans
Everything feels small compared to the 500,000 I owe Mayor Clawsworth. Like, stub my toe? Whatever... I'm still a broke bloke.
Up to 1976 life was easy in America?
The Great Depression was 10x worse than todays small setback
I agree Portfolio lines of credit are interest only borrowing against stocks starting with as little as 2100 dollars with m1 finance the rate is 1.25% below prime rate too and its tax deductible
Debt is bad. Don't do it.
you are super duper
Erin, the title of the video gave me anxiety!
Ha ha! I actually ran the title past a family member before I published the video, the immediate response was “no it’s not!” 😂
pay debt off ASAP
Don't say it increases the GDP. That's one of those things that is technically true, but also disastrously false. Just take a look at Canada to see what happens when most of your GDP actually housing. People can't afford to live anywhere, and the economy is in tatters. Escalating real estate prices based on the greater fool theory, do not help an economy in any way, they just drag people down.
Very helpful!
Reading something??
When you buy a house based on mortgage, you really buying a debt.
Basically buying a house for the bank
She hasn't said anything a normal IQ person should know
It’s NOT DEBT if the ASSET(house) is worth MORE than the MORTGAGE BALANCE! You’re a LIAR!!!
I think debt helps fuel GDP but only temporarily. Once the bills come due we tend to take a nose dive.
No to low debt rocks. Buy 2-3 year old, low mileage cars, keep the lifestyle in check, buy a house you can truly afford. Better to be saving than paying interest. Great advice, and excellent presentation as always Erin!