I was advised to diversify my portfolio among several assets such as stocks and bonds since this can protect my inherited portfolio of about $2.5m. I’m used to just buying and holding assets which doesn’t seem applicable to the current rollercoaster market plus inflation is catching up with my portfolio. I’m really worried about survival after retirement.

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

I follow and love your videos. sadly, it's been a while since i visited it has been a very rough year... i am experiencing one of the most challenging phases of my life... Lost a fortune lnvesting in emerging companies. Hopeful, for a turnaround.

I paid off my house 20 years ago, have no debt and ample cash. I can sleep easy and retire early whenever I want to. I still have a sizeable retirement account.

With my mortgage at 1.9%, I earn money with that 10% inflation Nevertheless, a point that should be highlighted in this video is the financial freedom. As long as you have debt, you are accountable towards banks and might loose everything if things turned out badly. In the meantime, if you pay your debt earlier, you may earn less money than if you didn't, but you'd acquire financial freedom and you'd whatever you'd like with your income afterwards. Also, investing first only works out if your debt has a lower interest rate than your investments.

Scholars who study the stock market’s historical performance estimate that over time, the payment (and reinvestment, and compounding) of dividends have contributed anywhere from 30% to 90% of the S&P 500’s total returns. I want to spread across $400k into profit yielding dividend equities but unsure of which to get into.

Great video but I will say…nothing made me feel more in control of my finances then paying off all my debt. I make good money but having no debt makes me feel like I have doubled my income which means I can invest much more

Concerns about a potential recession and the Fed's talk of interest rate hikes have left me uneasy. I'm unsure about my $440K portfolio strategy, considering the uncertainty of a recession and the possibility that interest rates may not rise significantly

The math is unquestionable but the math only works from a practical stand point if you invest the remaining amount. If you are going to spend that amount on consumer goods, better pay off the debt and stay out of debt.

I'm doing both... investing $25 weekly and paying an additional $100 monthly on our mortgage. We're also building our emergency fund by $25 weekly. We have well over $1,000 in the fund.

I am about 3-4 years into my investing journey if you asked me in my first 3 years I would have chosen to invest. Now I am 100% sure i would pay off debt.

There's nothing like having no debt... a lot less stress, and a lot more money in my pocket.

According to Elon Musk", Since I’ve been asked a lot: I will always advise, we buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.

An advisor in the 80s once told i and my colleagues at work that the only way never to go broke was to buy good companies. Miss Anita, of blessed memory then asked him how can one know good companies? This question is still lingering on mind. Great Video BTW!

A fellow co-worker asked me the same question years ago....especially during the rocking 90's.... My answer: Do both. At this point however, I am not in debt....so what I do now is save in a money market (for emergencies) AND invest....EACH paycheck. First though - you WILL NEED to establish an emergency fund. Get that done first.... Years later when I got laid off - I had paid my house off MANY, MANY years earlier. I sailed through the layoff without an issue. Others weren't so lucky... Do both...

Yes the financial formula is obvious. The problem is we are not robots and do not follow any formula to the T. Also the psychological benefit of having your house paid is unmeasurable. The weight you feel lifted off your shoulders when your house if paid off is incredible. Do what you feel is best but do not ignore the psychology of money and debt. And for most the best path is to simply be debt free.

Depends on your risk tolerance. Debt is a guaranteed liability. Investment is only the possibility of a return. If interest is significantly less than inflation it makes it more tempting to service it minimally and try to make money in the market.

I know this is aimed at a US facing audience and I believe there is some significant differences across the world, but depending how you invest (and where) there are also tax implications where nowhere do you get taxed on paying off debt.

The wisest thing that should be on every wise individual's list is to invest in different stream of income and don't depend on the government to bring in money especially now the pandemic is hitting the economy

I found a mixed strategy worked best for me. When the mortgage was “new” the additional $$$ paid on the mortgage reduced the term significantly with each additional payment, typically several months. However, after executing this strategy for quite some time, the reduction in the mortgage term with an additional principal payment was not much (determined by your actual circumstances). I then switched to investing the additional money, which enabled me to fully pay off the mortgage balance on retirement, allowing me to enter retirement debt free (which was a major financial goal). This strategy was made more complex by the fact that at the start of the mortgage term, my disposable income (and thus the amount available to use to execute the strategy) was much less than at the end of my career, which is typical (I assume). However, the mixed strategy paid off significantly for me.

The thing is mostly people are better off paying off their debt because they don't have the self discipline to invest the difference. They'll just blow it all. That's why they're in debt!

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Pay off debt now that interest rates are increased and then invest to keep those expenses from becoming debts. Only thing is businesses do not do this. They leverage debts and invest their profits.

I believe I could benefit from additional help in navigating the market; it is utterly daunting. I've liquidated $120,000 of my assets and would appreciate some suggestions on where to invest my money.

One of the variables no one talks about when paying down mortgage vs. investing is personal freedom and time. Without a mortgage you have no 'pressing' bills with the exception of property taxes so you can work less, take bigger risks, change careers or start a business. The possibilities are nearly endless. I quite frankly find that retiring/slowing down at 63, 67, 69 is insane. The gives you a max of 20 years pending your health of actually doing things and that is no time at all. Giving up that 800 - 1,000,000 is well worth the time and freedom you can by getting an extra decade or maybe even two. This obviously a very personal question and people have to decide whats best for them. I still think you should invest 15-20% but I think anything you can manage after should go into your mortgage principle.

Compounding is a key too! If you only invest once, that’s just not enough to do the trick!

Lately I've been considering setting up an investment account for retirement, I have set asides $240k but somewhere along the line, I get cold feet maybe because I'm a rookie and have no idea what I'm doing, please I could really use some guidelines.

I understand the math. However the equation doesn’t assume enough risk and the overall emotional benefit of living in a paid for home. I’d rather live with a paid for house with zero risk than a little more in my portfolio that is still subject to market volatility.

Save investment in s&p is fine for people who want the 9-5, live frugally, and retire when they're 65 with a couple mil in the bank. But for anyone wanting to live a little more lavishly or do more things before retirement age, exploding your income via businesses, side hustle etc rather than dumping it in s&p is the logical move.

It all depends on the interest rates. When interest rates are high like now, is better if you pay off your debt. If you had credit cards sitting in 20-30% interest, better to pay those off.

We used debt as a leverage and now own a rental and just hit $1 million dollar in our net worth. If we spent years paying off our first home’s mortgage, we would never purchase a second house and gain equity in both homes.

The real secret....Pay such a huge amount down so when you take out your loan for your house, it's only $500 a month or less. That's what I and my wife did. IF YOU CAN'T DO THAT - then you have NO damn business buying a house unless you enjoy financial slavery.... We knew I could get a job at Burger King .....and STILL MANAGE to keep the house IF I got laid off. And yes, I did get laid off....but it was many, many years AFTER I had paid the house OFF. And yes, we sailed through the layoff without an issue. Having no debt is FREEDOM. While we were paying off our house - we invested the WHOLE way along too......DO both. By the way - 2nd secret - Never, EVER, BUY NEW cars....buy USED cars.....WITH cash (emergency savings - see how that works? ABS - Always Be Saving)

I chose to invest first...a couple of my investments popped, and I was able to use that to pay off all of my debt

Buy a good cross section of an economy and you should do well over the long term. The market will be high in 10 to 20 years, and significant higher in 30. It’s almost impossible for a company with no debt to go bankrupt. The U.S is about 50% of the global market place, pay yourself first. It’s time the market. Not timing the market. Last year I invested 200 grand in the S&P 500/ an allocation fund (with the help of my advisor Mary Margaret Carter of course) and made 670k, but guess what? I put it back and traded with her again and now I’m rounding up close to a million.

This doesn't take into account market crashes while you have to service debt, do you want to be debt free in a crash where you may have reduced income or even lose your job? A lot of people lost their house in 2008 because they couldn't pay their mortgage. When you are debt free in a market crash you can still invest all your excess income instead of worrying about making payments.

If you want to maximize your wealth, you have to take risks. There are people who are more on the more conservative frugal side who would overpay the mortgage, conversely those with a higher risk appetite will gamble more on higher returns leveragung mortgage debt in the stock market. The latter mindset is similar to that of entrepeneurs where we can see the rewards are very high for success.

Just follow Ramsey's baby steps, simple process to understand.

Making the first 100k has been a marathon, I am 26 and at 75k mark, No useless spending, no vacations, just work, save and most importantly invest in options trading, thanks to my fiduciary Mr Arlto Eric, I am blessed and I believe I will keep been blessed

I’ve done both and it served me well…now debt free except the house and working on that next. But following Dave Ramsey and the Money Guy- I came up with my own plan hybrid, stuck with it and was able to do both at the same time.

I consider debt like cancer...do you want to be cancer free totally or have a little bit of cancer? In this scenario there's no mention of net worth assets minus liabilities. Plus the guy forgot to add the house value to the 1.09 Million which in 15 more years after house is paid off will have increased in value too. Once all debt is paid off , stress is significantly reduced...and then you can really invest aggressively and best part not worry about losing your house cause it's yours!

I think its important to invest, save and also get rid of debt. I know for some its harder than others but if you can work towards that goal and accomplish it....thats a good feeling.

You can do both. Take 25% of your pay, put 15% into investments and 10% into paying down mortgage. That is a form of diversification as well.

the bank can't call and pull the rug from under your feet when you have paid off your house and car(s).

My mortgage is 2% 15 yr. The extra I can put towards it is pretty minimal right now, so I just invest it. I figured even in a bad market, I should do better than 2% over that time.

If you're still unsure, do half of both! This has the added benefit of limiting the psychological downside, as whatever would have been the right choice for, you got at least 50% right

I’d like to see the numbers of a both/and scenario = $500 extra to mortgage & $500 invested. Just from the money perspective, I’d wholeheartedly support investing the extra, but having the ability, and having paid off my home early, the psychological freedom this provides me is immense! If I lose my job we could survive on thrift and a McDonalds salary, which is an amazing feeling! My wonder, using your math (I’ve done spreadsheets and spreadsheets of my own for my own situation), is how a middle of the road strategy would fare..

Paying off your house feels so good. About to pay off the 1st rental due to it's and higher interest rate then dump all extra cash into the 2nd rental to pay off. This gives me all of the rental incomes and no house notes. Life gets easier faster soon... with hardly any expenses as I never remarried...

At the end of the day, i think the point is still the same. People like to juggle both thinking like they are winning but at some point u need to pay off the debt. And at some point u need to invest if u want to live a financially free life.

7:23 , I'd rather be debt free and having 1mil invested in 15 years-leaving me with the next 15 years to invest more without debt. Than to have debt for a total of 30 years investing towards 1.9mil. I feel like I'm missing something?

What you left out is how much taxes will put a dent to those profits. In reality, even with all those numbers your 800k difference could shrink to as little as 100k depending on where you are from and your tax system. All that risk for 100k over 30 years may or may not be worth it for some

I think doing both makes sense. 15% to invest and a chuck to the principal of the loan. No one has been evicted when the mortgage is paid for

The best advice i ever heard is if you had a paid off house (the house you live in) would you re-finance it to invest into the S&P 500, i think MOST people (95%??) would answer that as "HELL NO". THERFORE I couldn't care less if therotical (and remember you get ZERO guarantees) returns on S&P 500 would make more cash, investing is a mild gamble and thats fine to do WHEN (& ONLY when) you have your basics of life in place. If things dont always go my way, i have a roof over my head and emergency cash to fall back on. Please pay off your mortgage ASAP then invest all you like.

I came to KZfaq to learn how to trade after listening to a guy on radio talk about the importance of investing and how he made $460,000 in 4 months from $160k. Somehow this video has helped shed light on some things, but I'm confused, I'm a newbie and I'm open to ideas.

Do both, but a bulk of your money goes towards debt while 10% in investments.

I absolutely 100% disagree with you on your comparison because in your scenario that you compared the difference of paying an extra 1000.00 on your mortgage versus investing over 30 years you did not equate for the appreciating asset of the house! How much is that house worth after appreciating for 15.7 years, and you have to consider that because that's the entire reason of why you're paying the extra 1000.00 towards the mortgage. This is where I have a serious problem with people like yourself Chris, you are spouting off this concept without really telling the whole story. How much does that house appreciated over 14.7 years that you spent paying off your mortgage early. It didn't stay at $350,000 for 30 years as you assume. What is the ROI of the property values in the area of where your home is at in your example? Even if you do pay off your house you're also still not accounting for the property taxes over those 15.3 years, so, this picture is incomplete. It's things like this that lead people down the path of not paying off debt. The biggest tool for building wealth is your income, period. Having no payments and being debt-free is absolutely the best outcome even if the math says otherwise. Secondly, You made very little mention of the market going down but there's also risks included like mutual funds within the investment that are not doing good and having to change those and who's managing the investment. The potential of losing a job, I'd rather have a paid off house that's appreciating in value have no payments. Finally, MONEY is not WEALTH, money is a tool used to build wealth, so at the end of the day, you have over a million, +350,000 that you left out of an appreciating asset and no risk, yeah, I'll take the paid off house any day of the week. You, can continue to be a slave to the lender.

Man please. I'm paying off debt. Then I have more money to invest.

I needed this video .I only make 27k and able to max out my Roth but I have 8k in student loans .I’m doing both actions from each paycheck .hopefully it’s paid off with this method

If you knew you could afford $2700/month for 30 years, then you should have taken out a 15-year mortgage at 2.8%.

Paying off debt is important as is investing, but you cannot buy things with a paid for house. At the end of the day we all need actual money not just a lack of debt. Bottom line do both but investing for retirement is ultimately more important.

I think it all depends on one's risk tolerance. Those who can take higher risk, they will invest first and pay the exact monthly mortgage payment with the hope that the ROI of their investment will rise much more than their mortgage interest. Those who cannot afford risk, they will always say paying off debt is better as they cannot afford to lose their capital at all. For me, I am investing every extra penny and pay only exact monthly mortgage payment. My investment return is almost guaranteed to be much higher than mortgage interest. It's quite pointless to invest at age 45 or 50 when your time is running out. You might not even have chance to invest at that age due to various diseases. Invest at age 25-30 makes a hell lots of difference because you have time and you can afford to lose. So for me, invest first if you are young and pay off debt first if you are old.

Idk i see alot of people say invest instead of pay off debt but investing is a risk 100% of the time while paying off a debt is guaranteed. My moms mortgage is 2500 If paid off her monthly cost would drop to 650 property tax. Guaranteed 22,200 a year in fewer expenses. If she invested the cost of her mortgage instead of paying it off she would need to 10%+ on the markets every single year for it to be worth it. Investing is only better in theory and would assume that you would never be forced to sell during down years. This is what decimated people in 2008 stock market crashes and people cant afford mortgages or anything so people are forced to sell stocks at pennies on the dollar. Ended up losing all of their investments and their homes, cars etc (that they could have paid off instead) thousands of people ended their own lives because of that crash and losing everything. I get that in theory investing is far more lucrative in theory but the reality is that most people are not beating the markets about 6% of investors do and most of those are already wealthy. It would take 15-20 PERFECT years for you to really see the benefit start to outweigh the risks vs mortgage pay off which would be immediate relief.

I don't have any high interest debt. I plan to keep it that way. A car loan, a mortgage, those are low interest loans which you leverage to have more money in your investments over time

Excellent video -- it fairly explains the pros and cons of each option, but does not choose one. There are many, many factors that affect the outcome, and different investors can have different values.

You forgot to include one important consideration: tax. Imagine you're paying 50% tax off your income. Is it better to pay off your 6% interest debt or is it better to invest that money at a 10% ROI? Assuming your investments are taxed and your debt isn't tax deductible, it's better to repay your debt. A dollar saved is worth more than a dollar earned, where tax is involved.

This is by far one of the best videos on KZfaq. Thank you for all efforts and for sharing. Please keep all the good work up.

Love the videos, but am I missing something with the $2671 mortgage/investing cash stream breakdown? There’s no need at the end to subtract the interest paid; you already paid it! In each scenario you pay the same amount per month ($2671) and have (after 30yrs) a house with no debt. In scenario A you have 1.2M in investment assets, whereas scenario B has 2.17M in investment assets. Certainly scenario B was more leveraged (hence more interest) and carried more risk (as other people have mentioned), but after the 30 years you care what your investment balance is; you don’t care how much interest was paid on the way there…

Most people think... investing in crypto is all about buying coin and leaving it to rise,😂common it takes much analysis to be a successful crypto trader

Let's say you are the bank and you have the option of either lending a single person $500K for 30 years at a low interest rate, or putting $500K in an index fund that tracks the S&P 500. Which would you rather do? Seems like an easy decision, right? So if you are the person that got the $500K, would you prefer to quickly pay it back, or invest rhe extra payments in an index fund that tracks the S&P 500? At long as you can make the minimum payments for the life of the loan, investing the extra will work out in your favor. Also factor in inflation. When you take out a 30 year mortgage, you pay the same amount each year for 30 years. However, due to inflation, the value of the dollars you paid in year 1 is worth more than the value of the dollars you paid in year 30. So even though the total dollar amount over 30 years seem high, when you determine how much it is in today's dollars, you realize that you didn't actually pay double the cost of the house. In fact, it's a lot less. So should you rush to pay back a low interest loan with the dollars that have a high value?

Before watching video and I will. Never regretted once over past 5 years that paying off debt slowly and over time was a bad idea.

As the economy crisis keeps rising, one needs to have different streams of income that doesn't depend on the Govt. A well detailed diversified investment in the Crypto market is needed to survive, as well as secure a profitable investment future.

Maybe the question should be how much stress you want in your live.

It's quite complicated, especially taking the current state of Fiat and supply chain issues where inflation and food supply are threats.....just do the best you can, just do something and improve as you go along and as results unfold. It is currently the 5ime to be nimble and pivot according to need.

Debt comes with interest so a 10% growth means nothing until its invested for 10 years. Its always better to get out of debt besides your home and then start to invest

I think Dave Ramsey may have a different opinion on how to handle the situation!

The problem with investment in stocks is that you can sell it and then spend it. That not the case if you pay down your mortgage.

It depends on the size of the debt. 5% interest on a home loan you lose more money than you'd make with 15% profit on investments. Put extra money on the home loan to pay it off quicker will be better.

1. Emotions don't count. Good feelings don't make money. Good feelings don't make you look for that better job. 2. Math. Which looks better 3. Security. What if it goes wrong 4. When I say investment it doesn't mean stocks, and it doesn't have to. The world seems to be stupid about this because for some reason, investments means to own stocks for 99 percent of the people I meet and YT videos. Money in the house is dead it makes nothing. The value of the house is not static, it can fluctuate and is not an income producing asset, it's an appreciating liability. it can increase in value and you have to spend money to maintain it. Roof, driveway, furnace, plumbing, taxes, insurance. A mortgage is the cheapest loan you will get if you own your house or not. If you can beat the cost of a mortgage by using money that is secured so you HAVE to get your money back, I'll do it. You can extract enough money from a paid house to cover operating costs and pay it back, especially since 2010, without lifting a finger. The income could have been used to invest, go on trips, pay for a car etc. The money has gone nowhere, it's in an investment. I had an expensive repair on my car, actually a few of them. I save money monthly. I borrowed some money to put in an investment and put some cash in as well, used the old car for a downpayment and got another car (not new). I made enough money to be deposited to make the car payments, used some money from my saving habit to pay off the loan. It's been 4.5 years. I have paid off the money I borrowed, the investment had a deferred component, so when I cashed out to another I had more money to invest and the amounts paid to me went up. I put that investment in a tax free account. It compounds monthly and I'm getting 40 percent more than I was before and not paying taxes. Now I have half a year left on the car, a tax free monthly income, no loan debt, and a car. When the car is paid off it will be worth a fair amount and I can sell it and buy a newer version and the payments and insurance is covered by the original seed amount, but it's my choice. In reality, I will probably run it until its worth around $5k and sell it. By then, I should have 2.5X what I started out with in terms of money that I used to invest for the car specifically. I already had an emergency fund. I already have a retirement plan. I already have investments outside my retirement plan. It doesn't make sense for me to buy the car cash when I can drive it and have an investment provide a huge assist while I make money. The investments with higher returns usually have a higher cost to get in, so $12500 might give 7%, $25000 might give 8%, $50000 might give 10%, so spending the money on the car cash, can cost 3% or more. Soon, I will have to find a place to invest the car payments I no longer make. If the car dies, right back at it again. Every really wealthy person I know has everything on payments because they make so much with the capital and also utilize write offs. I should be no different.

Stay out of interest debt that is above the rate of inflation. Having debt below or at the rate of inflation isnt a bad idea provided the funds gained are used in a manner that will get you more value than you gave up. Additionally mortgage interest is tax deductible. That may not be a big deal at the lower end, but at the higher end it is a big deal in that it will move your upper end tax bracket significantly.

You make more money by placing the money in what grants higher return. An investment with a 8% return is better than paying down a mortgage a 3% - or viceversa, of course. And yet, the debt must be payed regularly and WILL be there until it is repayed, while the investment usually can wait, and can also do not give the expected returns. So, if you invest instead of paying your debts more quickly, make sure that you can at least still cover your basic payment for the debt. There, 10mins saved.

Why is borrowing money at a mortgage interest rate of 5% close to the rate of inflation, why is it borrowing for nothing?

I'm doing a hybrid. Paying of my house, saving for another and renting out this one.

I’m debt free in December then I can max out all my investment accounts and then pay cash for a brand new car take expensive vacations and be a millionaire no one takes home equity loans and invests it in the market it’s dumb

Only works if you are American citizen. As an European you pay double tax. captial gain in USA market and additional 38% in Norway where I am (plus fees and currency exchange). At the end of the day the average 10% return on S&P500 gets reduced to 5% witch is basically mortgage interest rate + inflation (on average). while being exposed to risk for market not growing actually as fast as historically...

I pay myself first. Retirement accounts take time for compounding to occur. Of course, my mortgage is at 4 percent… I still think I’d put in regularly to a retirement account even if my rate was higher, just wouldn’t max it out.

Good video. Best suggestion overall is to minimize the requirement for debt in the first place. The less debt you incur, the better off you will be in the long run. Minimizing how much you take in student loans, the size of your mortgage, etc, can have massive benefits in the long run and allow you to increase your investment far earlier in your career.

Paying extra payments on your mortgage has never made sense to me. Money is worth more in the moment than it is in the future. Inflation naturally makes your debt less over time. Invest or enjoy that extra money now it money is always worth more today than it will be worth tomorrow

Key word is: ASSUME 1. ASSUME you as investor have no emotions and will act 100% rationatly 2. ASSUME not too many ,,black swans" comes to economy (covid+war strait within 3 years..for example) 3. ASSUME you can keep your work and enough salary for next 30 years 4. ASSUME you will not be terminally or just very ill in near future and not become homeless ECC.....unfortunatly life is not just pure mathematics.

It's not an either or. You can put 50% toward debt and invest the 50%. Your age also makes a difference. Anyone over 50 should focus more on paying off debt, especially a mortgage, as market returns are not guaranteed over any specific time. Other factors are inflation, which is certain to increase in the next 10 years beyond the previous 30 due to fed printing policies. As for paying off a mortgage, if you still owe $1000/mo property taxes, you need to make plans to move to a low tax state, especially after age 50-55. It also allows you to tap the net worth of your home.

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Not sure why you would subtract the interest when the money calculated is earned in spite of the interest paid. You still end with the money you don’t pay the $2xx,xxx twice

One thing to keep in mind, if you pay off your house you may be able to retire after it's paid off in 14 years instead of 30, that $1,600 bucks may be the difference between working a job and staying home. And not many people would pay $1,000 plus what they are paying on the house to invest in the stock market after all their debt is paid off LOL. It's not about dying with the most amount of money in the stock market for most people, I'd say most want to retire early. Pay off the house, the cars, the credit cards and your expenses will be minimal in most cases. Then you could have a few high dividend ETFs like QYLD to pay the bills! 💪

I did it the wtong way. I put 100k in stocks and roth then paid my credit cards and loans off. Now i wish i paid debt then invested bevause i would have bought stocks at a cheaper price. Now with no debt, no car payment. Im no longer investing and paying extra to pay my home off.

I think you should live lower than you make. See if you can even make more money and still keep living 3x under what you make. Pay personal debt off quicker

With today's Interest rates, this shouldn't be a question at all, gains aren't guaranteed.

Not considered here, likely because is it complicated and situation specific, is how taxes play into the picture. In my high tax state, that investment return could easily be reduces over 33% marginal rate, and I might be able to write off mortgage interest to save 33% instead. Your mileage may vary. (Note that the tax rate on investment income will typically be lower, but conventional IRA/401K returns get taxed at the full ordinary income rate). PMI, which has no benefit for the mortgage holder, was also not accounted for. Mortgage rates will always be higher than inflation at the time the loan is made. They will only be the same as inflation if inflation has risen since the loan was originated. If you anticipate higher inflation, though, a not paying off fixed rate mortgage early definitely makes sense. In fact, some people who bought houses just before the high inflation years in the 70s ended up paying less than the purchase price once inflation was taken into account. That is, the total of the principal and interest over the life of the mortgage was, after inflation, less than the purchase price of the home. Disclaimer: I am not a professional so don't construe this as advice. I don't expect to see that kind of brutal inflation again.

If you are going to keep debt you have to factor in risk. What are the chances that you could loose a job in the span of 30 years? If you are over 35 there is a decent chance that you could have to face a disability that makes you leave the work force in the next 30 years. The biggest thing that happens if you have no debt is that it gives you space to dream and allows you to start a business debt free. Imagine if your return was 30% instead of 10%. I know of a guy who did this and his income jumped to $400,000+ in 2 years. You could move to part time on your current job and start your dream company. What could you accomplish with the extra time?

wayyyy ahead of ya, i havent been paying my student debt for YEARS now lololol

THIS IS VERY BAD ADVICE......clear all debt ASAP and don’t pay banks or anyone else interest, if you can’t afford it don’t buy it, live within your means!

Great video! I don't think this was mentioned, but I think another good question to ask yourself about what to do with your extra cash would be" do I want to spend the rest of my life in this house, or will I probably need a bigger or smaller house someday?" If you don't plan to spend the rest of your life in your current house, it would make more sense to make the minimum payments and invest your extra cash

If you pay off all debt youll be less stressed ans have more money to invest once its paid off.... its that simple where as if you invest and it tanks your out alot of money and stuck with debt