Pay off your house for cash flow. Not having to make a mortgage payment leaves cash flow for investments. I paid mine off to reduce my cash flow needs prior to retirement. A paid off house means you need less income.

I payed off my house this year. I’m 33 with a combined income of 120k. I can actually breathe now and I’ve even cut back a few hours so I have me time and time for my 2 kids. It’s the best feeling in the world!

It may not make the most financial sense to pay off your house early, but I can tell you it’s 100% worth it. As we enter a recession and possible layoffs, the peace of mind we have with no house payment is priceless.

Just a thought of having my mortgage payment in my pocket every month is enough for me to pay my house

As a soon to be 43yo in a couple years, I'll have paid off 2 mortgages by then. I think the second one being paid off will be even better than the first one and that one felt pretty awesome. The security in which you gain making that last payment on the mortgage is priceless and the stress just disappears, you made it, you did it you got to that finish line of ultimate debt free. Now picture doing it again and being able to sit on an investment that you can sell at a later date if need be and hopefully the interest paid on the lifetime of that mortgage is much less than the capital appreciation it's made of that time. Pretty freakin' sweet is what that is. Thanks Dave!

The stress that is unconsciously tied to practically any debt is tangible...and avoidable.

I paid off my home 8 1/2 years early and saved $52,000 in interest. It feels great to never have to worry about a mortgage again.

Once you own the house you'll never go broke , because regardless how bad thing can go in life , you can always sell the house, buy something more affordable and keep the cash difference

What people don't realize is that when you have a paid off house there is a huge psychological burden lifted. This one act allows you to be more aggressive in your other investments while still sleeping easy at night. At the end of the day if you can cover your annual property taxes you will have a roof over your head.

I bought a house with cash in 2021. The insurance and property taxes have doubled since then, and now costs more than I ever paid in rent in my life. I feel that I would be better off living in a studio apartment in a warehouse again and investing the money in anything else.

Your primary home should never be used as a bank. Get it paid off and never even think about borrowing against it.

Crazy how some of these people call in with a good situation like they have actual problems

I did the same thing, I moved and pulled money out of the house sale and put it into the market instead of the new house. When the S&P drops 22% you end up wishing you had put that money into the house, and God help you if you tried individual stocks in that time

Wonderful position to be in! Way to go! Enjoy your retirement!!

I struggled with the idea of paying off my house last month because of my 3.5% loan rate. I thought about and stressed about it and finally wrote a check and payed it off. Felt great for a brief moment because I just received word I will not have a job by end of the year. At least I do not have to worry about a $1,900 monthly payment until I get things figured out in regards to a job.

I'm an investor and I've done both. There is nothing worse than having cold dead cash trapped in a paid for house. Much better to use the banks money and put your capital to work than let it rot in dead home equity!

This was good, sound advice! Glad I watched

Paid off our 30 year mortgage in 13 years. The feeling of not having to pay another payment felt great. Also we don’t have any car payments. My wife and I were 50.

I've sold a property in Michigan and I’m considering investing the proceeds in stocks. With the current market optimism, I'm unsure if it's the right time to buy stocks and how long it will take for a full market recovery. I'm also puzzled by how some are making substantial gains of over $320k within months in the same market

Ramsy will never run out of work, he tells everyone the same thing...on every video... and i still watch every one of his videos.... and dont learn....

Thank you Mr. Ramsey and Mr. Coleman!

If you aren't sure what to invest in or how to invest and then sell when you shouldn't, you need to pay off the house, maybe even buy more real estate with the remaining, rather than do something you don't understand

Could put the leftover (after paying the house off and emergency fund) in T bills, they are even available directly from the treasury.

A paid-for house would feel awesome. You could truly enjoy your retirement without worrying about any debt and then steady invest. Way to go!

Nothing like not having a house payment- I bought and paid cash for mine in July 2020

Someone asked me why I don't take out home equity loans and invest it since my house was paid off. No thank you.

We owe $250k on a $550k house... and while the payment is less than 25% of our monthly take home pay... having that much debt hanging over my head is still very stressful for me and causes me to be hesitant to take any risks career wise. No way I could talk my wife into selling it and buying a $300k house with cash though... so the best I can do is throw all of our extra $$ into getting it paid of as soon as possible.

His advice is for people who aren’t disciplined and educated in investments, it’s not terrible advice but paying off a 2.5% mortgage when interest rate in a savings account averages over 4% is stupid.

To me its balance - Yes you can in theory make more money investing. BUT in the back of my head - what if I lose my job or have to take a step back in pay. If I paid down my house enough - I can always refi and lower the monthly. Keeping a roof over my head is always my top focus.

For all the people that have 2-3.5% interest fixed mortgages, if you kept the money in a savings account(5% interest now), after taxes you are still up, why would you get rid of your flexibility and liquidity for no gain? If the money is in your bank account you can always pay the mortgage.

Better than I deserve I love that phrase from Dave

People who are not disciplined then paying off the house is the best. If you discipline then just do S&P 500. Numbers are simple, but people do not know this. Average S&P 500 life return 7% her house is at 2.7%. Math

I was finally able to do this: first by refinancing from a 30 to a 12-year mortgage. Then by biting the bullet and paying off the last $5K. While I was only able to pay it off 5 months ago, having it off my back has freed up $800/month that goes to savings. Finally. The improved cash flow eases things in so many ways. In fact, I’m still getting accustomed to it. That’s something that’s pretty obvious, but it’s still jarring. Needed repairs wait in the wings, but I’m so grateful to have managed this. It’s energising and a huge weight off my shoulders. The savings from both steps was $28K in interest.

Bad advice Dave. CDs are now at 5.55% and her mortgage is 2.5%. I also love how your advice always rules out the market going down OR staying the same for many years. It has for over a decade in the 1960s and 1970s.

If you do the math, its smart if you want to be debt free style, but, inflation and housing market increase, make minimum payment on your home and invest in more homes. Rent them out. Whe. You retire and have someone else paying your mortage, after home is paid off, u have that monthly income , way more than your work 401k will pay you monthly

Because it is awesome. When you know others that live around you are making $3500-$4000 per month payments and you are cutting a check only once a year for that amount in taxes and insurance.

I keep coming back to this question over and over again. Each time I decided to keep the mortgage and invest, which has honestly paid off quite well. Still, it bothers me to have a mortgage. If I pay it off right now, I can have a $1mil paid for home and $250k in the bank, with no other debt at 37. That sounds pretty tempting. But if I keep the money invested I should mathematically net more.

I understand the risk of losing money however why would one pay-off 2.5% mortgage when s/he can get 4-5% in savings accounts or T-Bills or CDs without any risk of losing money. If these interest rates drop then you can always move money to pay-off mortgage. This caller will comfortably get monthly $2K in interest if she move all her money in safe deposits like SA, CD, T-Bill.

Thank you for posting this! Any thoughts on I bonds from treasury direct?

Thanks Dave

If you got a paid for home and car you don't need to worry about job pay offs as much either.. you can live on a lower income

3-6 month emergency fund is no longer good. Times have changed. One needs 7-10 months at least.

This is a very simplistic view, and for most people, that is all they can understand. If you do it right and you had a 3% or less mortgage, it makes little sense to focus on the mortgage. There are tax benefits to having a mortgage and if done correctly, over time you can earn way more in the market. Dollar cost averaging is the way to go. If you aren’t averaging 10% or better, you need to make changes. Don’t try to time the market either. Even if you pay your house off you never really own it. You will always be paying rent to the government in the form of property taxes. I’m very seen many “paid off” houses sold at tax sales.

My brilliant husband sold our home in CA and with the equity we bought a home in NV for CASH !! We are retired debt free !!!! Life is good !

I don’t know about this one. I guess it would make sense if they have no other debt to worry about. She says she wants to retire and if that time is sooner than later then hopefully they will have a good income to live on during retirement.

I don’t like listing your house as part of net worth because you have to live somewhere.. granted, you could sell, and then downsize (assuming that will give you additional cash)…

I don't understand how people don't understand the concept of paying your house off!!!!

When I was 20 years old, I bought my first house. I paid it off by the time I was 25. I wasn’t financially savvy and no clue about investing. It felt good to have a paid off property under my belt. Don’t have to worry about rent or mortgage repayments.

Should I spend ~1/2 of my retirement fund to pay cash for a house --- or should I continue paying someone else's mortgage (aka: rent)? I am 68 years old, retired, in good health, have no debts and will still have an annual pension income ~$60k.

Paying the home off is safe and sensible. Theres allot of factors to consider here, age of the women she mentioned she wants to retire, then very little outgoings is extreamly wise. If she was young and wanting to work for 20 more years she could leave it and keep investing.

How does having your house paid off feel? “I feel like retiring” Sometimes we as humans need motivation to work.

LOVE IT! 💙

It's wrong approach. Mortgage rate 2-3%. Investmentment retun 8-10% +. Throw it at the heaviest return, IE Investments. . Make your $$ work harder for you. It's not rocket science

I’d rather invest the extra money instead of paying off the mortgage.

Depends on the interest rates

I’m 30 and I was able to pay off my house at 28. Freed up cash flow for me to be able to renovate my house .

Park in short term treasuries. Nice yields now with inverted yield curve.

I'm hoping to pay off my last 73k mortgage at 2.75% within a month or two, the stress of the recession/uncertainty just isn't worth it! Can't wait to be totally free!

It's simple you shouldn't. I have a 2.5% 30 year fixed I'd have to be financially illiterate to pay extra instead of investing.

Near zero % loans are a smart investment if you live in a state where property is hot & not stuck (in your head) to home town feelings ! I only live where I can make a couple hundred k & leave in a few years. What else is making that kind of money in your pocket ? Mind set is key.

This is such a simple one to understand if you take the time to look at both angles..... Yes, you can make more investing than you save against a typical mortgage interest rate, so for all those who would rather invest than pay of a mortgage, look at this other angle which is in theory identical. Once you have a house paid off, would you take out the equity to reinvest it? 95% will say no, because its unnecessary risk, which is why you shouldn't invest over paying off the mortgage in the first place. If you are however that way inclined that you would always release equity to invest, then yes do it, as you just enjoy the risk. For most of us however, the right answer is to get debt paid off

Not true for everyone. Some need mortgage to avoid paying higher taxes. If mortgage is your only debt don't pay off the house and then lose cash is prices plunge.

I'm investing all my money in Snuggies cause Dave said too

Can’t wait to have a paid off house! OWN your home and you’re so much safer in my opinion

I was happy to see the number that came up when I googled how many millionaires there are. That being said, the 10,000 millionaires study Dave did needs to be updated. 10,000 is just not a large enough sample size

I don’t understand why anyone wouldn’t WANT to get rid of what is usually the largest monthly payment. Once that is paid off your flexibility is greatly increased. Your stress goes way down. Risk is mitigated. I know this because I paid off two homes and now in a good position. Once your huge payment is freed up you can throw a ton into investments. Or you can juggle 27 balls and wonder why you’re stressed out.

How does it feel to have your car title in hand now imagine that’s a house deed :)

Wait, Common Sense in financial management? Say it isn’t so! 😂 Good stuff.

Bad advice. Never pay off a mortgage with your retirement fund. When your older you need that money working for you.

If your retired do you need a 3 month emergency fund?

Oh dear lord, how can they have that much money and be so clueless as to what to do with it. She should just pay off her house, clearly she does not know how to invest it.

Snuggies are a gift to humanity idc what Dave says 😂

Cant wait to read all the news watcher comments in here freaking out about the inflation etc.

Always be buying!

If all your money is tied up in your house it’s a lot trickier to get the money then if your money is tied up in stocks. Plus what if you have your big emergency while you are actively paying off your house? Then you still have a house payment AND you don’t have as much liquid cash. Paying off your house early is risky too.

What will Dave Ramsey say to people paying 6 percent interest in mortgage 😢

Try taking advantage of the Governments Home Mortgage forgiveness program.

No one can exactly time the top or bottom

But if you are towards the end of your note should you pay it off you have already paid all the interest

Most of everything is on sale on, which mean time to buy not sell!

It is your largest monthly expense.

She should DCA 20k a month for a year or two…

My goal right now is to have my condo paid off in one year. When I looked at how much I owe versus the interest I owe ( the interest I owe is over 20 grand ). I have a cheap HOA fee. My HOA is 200 a month ( I know others who HOA is 800-1200. So i feel 200 a month that covers siding , roof , lawn maintenance, water . Yup. Water. So I would say that’s not bad and my condo is in a very nice neighborhood . I know I would have property tax but just not having a mortgage and thinking of that over 20 grand of interest that can be going toward something else. I also have Roth IRAs and traditional IRAs that never lost in this recession. I am currently a rad tech that takes contracts across the US. I’m making double of what I would make as a staff tech. Right now I’m paying something to publish a book series ( that I believe will make me some money as well long term ). Right now I hate my career and it is stressful traveling so much but I know when I meet my goal of paying off my mortgage ( that I’m hoping will happen within one year ) then I know I can change careers or go part time bc I will not have that mortgage to pay. The only things that I do factor in is surprise things that might happen like a sudden health issue or a sudden pets health issue or car issues or emergency repair on my home. Some things we can’t control so I try my best to always have that emergency stash fund that I don’t touch except for things like that. I am cooking at home , packing my work lunches and I dropped cable. I have just one streaming channel ( HuLu. ). I hope I reach my goal

Snuggies and shake weights is where I put my money.

Hi Dave, hope you could answer my question. I have a mortgage with 2% interest rate taken 2 years back. I have 13 more years left. I have emergency funds, 401k and 529 in place. Should I payoff mortgage with the extra cashflow or invest in mutual funds (average rate 8%) . I am 40yrs old. Please advise

You don't need to pay a broker to manage a fund? just invest in the S&P 500 and dollar cost average long term.

You shouldn’t. It doesn’t make mathematical sense to give up compound interest 15-20% annually to pay off a 2.5% mortgage.

Yes! I cant wait to pay off my condo...it will free up $15k-$16k a year I will be able to live on half on my take home and invest it in a roth ira...

Hey Dave, how do you tell your landlord you won’t be able to pay rent for a couple of months. It’s either food, or rent.

Anyone know the name of the mutual fund dave is referring to?

Keeping what invested? The house???

The problem with paying off your house is that it is easier for the government to take it from you if you were to fall behind on paying property taxes. They could never take it so easily from a bank. I recently heard of this poor lady who paid off her $300k house but owed about $3500 in property tax. The county put a tax lien on the house, sold her house to recoup the taxes owed and kept the rest of the profit while the new owners evicted her and made her homeless. And this is happening in many places around the USA. we are caught up in a never ending cycle of debt and an unaffordable way of living. The best is to be as frugal as possible, own nothing, autopay all your bills and live within your means while paying cash for everything.

The weight being lifted off your shoulders when you become mortgage free is a real thing...but so is a large sum of cash in your bank account knowing you can pay off that mortgage with a click of a button, when youre ready.

Why not put the cash in a CD for 4.10 percent annual growth (US Bank Jumbo CD promo). That's a guaranteed paycheck. Do not pay the house off. Your interest rate is too low to pay the house off. It's just math. Drop your money mkt account into the CD for no risk and do not pay the house off. I've asked myself this question. Pay the house off or make the cash work harder than my interest rate?!!!! Wrong answer MR. Ramsey! Love you and you're nearly always right! Get debt free people other than your house because it's a tax shelter and you can make that money work harder for you elsewhere.

The math says invest instead of paying off your house..... However math does not account for a sense of security and for the variables of life.

What 80yr fund is Dave referring to?

2.5% is all she'd have to beat to make more money by investing that money instead of paying off her house. That's what a robot could do anyway, IDK about a human. On mutual funds: WATCH FEES. The fund has to beat "the index" by more than its fees, including the hidden ones. For that matter, that's the same with a financial advisor

Not today - Invest in a high yield CD 5.35% and keep your low Interest mortgage 2.25 % your upside is monthly $600 bucks

Paid off my mortgage. I have the confidence to DCA into $TSLA with every paycheck.

Another round of terrible advice. While no one can time the market, but forfeiting a once-in-a-lifetime low mortgage rate at 2.5% is a stupid idea. Sure you can aggressively pay it down, but don’t throw your entire savings at it. The money market would be yielding close to 6% today with zero risk more than double the mortgage rate.