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Unless you can get a guaranteed rate of return on an investment that exceeds the amount of interest on your mortgage, paying off the mortgage is smarter than investing. When investing, you can lose money when paying off debt, you are guaranteed to save the interest that you would have paid if you didn't pay it off. Always go for the sure thing! It's scary to see that people are listening to this guy. What awful advice!
Not necessarily. A lot of properties lost their value from the ensuing crash. A property that was sold for $600k might sell for $350k now.
Why pay the mortgage on that? The house isn't worth $600k anymore! That's why the crash was so bad. No one wanted to stick around and they'd be stupid if they did.
Eat less meat, stop drinking soft drinks/drink more water, shop around for cheaper car insurance, never co-sign, max out your 401 K at work, make a budget, stay away from malls/stores, eat in more, use coupons, buy used, use your local library, brush & floss teeth daily, take care of your health, borrow dvd's from library/redbox, buy a IRA Roth every year, learn about investing at your library, google Dave Ramsey/Clark Howard, don't lend money, shop at thrift stores, buy in bulk.
Debt free is the only way to live! Having a mortgage and wasting money for a tiny tax deduction is stupid advice. You lost me as a fan Rick- BAD ADVICE
The bottom line is this in any mortgage your assets which eqyal income and investment potential, albeit illiquid equity, is locked and tied up in inaccessable vehicle called a mortage which could have been being used to create more wealth not debt security.
As a financial teacher and investor, this clown is a big joke he's insinuating that most people are stupid ( which in some sense of the word is true) and will not be able to see thru his lies all of which he offes no facts or statistics. What he dos show is he is working for the Big banks wonder what they pay him to spread this false belief?
Its so true banks now have 40yr mortgage. There are seniors I knew who paid off there homes and are living in poverty. And there are other I know off who solve that problem by pulling the equity out of there home (Reverse Mortgage) some of them and now live a very nice life in there golden years.
So look at it this way, some of the people who paid off there homes, like the mayor of a Texas home when the storm hit and later the fire broke out the news media ask him how he felt after going through the storm and now a fire which his house burn down from that fire he sad the BAD NEWS is I just paid my HOME OFF! who is happy the Mayor or the BANK!
I can't believe what I have read. If you are 40yrs old you will be 70 or even 80 before your home is paid for. think people, for every dollar you borrow from the bank for a mortgage you will be paying back 2.5 times what you borrow. That is just for a mortgage and even more on credit cards as much as 6x of what you borrow. Think EQUITY EARN NO INTEREST it does not matter if you are mortgage to the hilt or if you have no mortgage at all your property will only appreciate by 5%
I understand this video. You have to really think about it. He's talking about rich people who don't experience pain paying a mortgage. If you have a million dollars and you want to buy a half million dollar home, why pay for the house outright when you can pay $50k down and make $5k monthly payments and use the rest of your money to invest in other ventures? That way you will pay off your mortgage with the profit you earned from having the freedom to put the remaining $950,000 to other uses.
Oprah has sold out a long time ago. She sold you out too. if you don't know how, then you deserve to go on life as a cow ready to be slaughtered. even a high percentage of comments reveals the ignorance, and lack of social skills that Americans posses. Yep, you don't realize that it's not all your fault, you have blindly followed a corrupt system trusting that they will do you not wrong, but look what happens when one follows the little white lies of satan.
@trubornagain Yeah, because YouTube video comments are indicative of the US.
First off, YouTube isn't restricted to countries outside the US lol. TONS of people know English as a second language well enough to converse without you knowing that, not to mention the millions of people outside the US who use it as a first language. Lastly, I challenge anyone else reading your comment to correctly state what the hell it is you're talking about - I mean really, talk about lack of social skills.
look at the date, these people were on their final stages of looting the remaining skeptical people who put all their trust in Oprah. So blind and starstruck. I can't believe how willfully blind and ignorant these elite have made people through media, sports, entertainment. now they are so lazy to think for themselves, they need other to do it for them. they have taken Jesus out of school, and all the important programs and replaced it with garbage. and propaganda.
Interest rates are now at ALL TIME historical lows 3.9%. Even if you paid a little higher and find a good investment that returned 8%-10% a year (not hard), you'd be ahead 4-6% per year, that's HUGE! Not to mention that mortgage interest is 100% tax deductible against your income. I agree 110% with this gentleman.
@crb4059 Key word is income. They dont have that disposible income to work with anymore. He was right at the time...In the conditions of the market. The conditions have changed. It is hugh, but its also hugh when it slides in the opposite direction.
This guy, like Suzy Orman, is bought and paid for by the financial institutions. He says, "if you pay your mortgage off, you have given money to the bank that you will never see again." What rubbish. If and when you sell your house you will see that money again. Not to mention the interest saving on accellerating your mortgage payments. Simple, taxable interest on investments will never keep pace with compounding interest on your mortgage. Grandma was right - Pay off your mortgage!
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Just another great piece of advice from the media... This may be the case for the financial elite but it is not wise advice for those who have a modest balance sheet in which they make just enough to cover ends each month. If the middle/lower income households can pay down or off their mortgage imagine the amount of additional money they will have after the fact to invest in other mediums.
THE EASIEST WAY TO MAKE MONEY USING THE INTERNET 6dollarminisite.ws. Buy this website for $6 and sell it over and over again. I have tried everything, this is the only website that has ever made me any real money,and all money goes to your paypal.
How laughable is this advice? Notice the date of the video pre October 2008 to get a sense of what stupidity was being offered by the Financial Advisory and Real Estate industries.Ric Edelman has a radio program offering this kind of nonsense even today. He has been totally discredited.
The secret of the wealthy is to fund politicians so they pay less tax the richer they get. The rich use means like beating the drum of false patriotism so the poor dumb lemmings, who will always be poor simply because they are dumb, let themselves be led into wars such as those in the Mid East to support evil causes like the Zionist land-grabbing of Palestinian land. Then they cry when they find out the evil cause they supported with blood and treasure collapses. Vietnami is yet another example.
Note the date of this video. Both the housing and stock markets crashed a few months after this was made. Many of those so called "wealthy" people were only rich on paper, and I bet many of them are not in such good shape today.
Most people do not have the discipline to creatively invest money freed up by having a mortgage and will have a better lifestyle sooner by paying off the mortgage ASAP.
Dumbest advice ever!! 30 years? only dump people do that .. payoff your house and if you need the money you can get a mortgage or a secure line of credit.
anyway, if you guys aren't total retards, and interested in earning some quick X-mas cash by completing basic skills via the cpu totally no investment at all, shoot me an inbox. Or email at marcusznz1(at)gmail(dot)com Peacee ^__^
Hind sight is 20/20 but what bad advice. Here's the key you never truly have money as long as you have debt. If you owe someone money you do not have money. Pay down you debts, become debt free, live below your means, and save money by shopping smart, buying quality and avoiding wasteful habits. When you finally have a nest egg with no debt, invest in appreciating assets that produce cash flow or gain value but are fairly liquid such as rental homes or land,solid stocks that pay dividends, ect.
I would way rather pay off a home. Every dollar is like over $5 in mortgage. being OUT of debt is the best advice for anyone, a lot less stressful as well. these are different times people are learning that being a slave to the system and tax BS is not worth it. Pay it off.
also the statistics are BS. 80% of wealthy got there by using money wisely and working hard. Not by paying banks thousands of dollars a year. What a dummy.
lol this guy's an idiot. He was paid by mortgage companies to say that. If I didn't have a mortgage I would have over $800 a month coming in instead of already labeled.
my friend just bought a house at 4% interest rate, and he's going to pay 220% the current value of the house. If he decides to sell it at the top of the market, he'll hardly get his money back for it, and he got a rock bottom price for it too!
Keep in mind 4% is a government rate - one of the best deals a consumer can get. And he'll still be screwed in the long run.
Everyone who disagrees with this video are probably broke.
People develop and maintain wealth differently. He's saying the majority of wealthy individuals use leverage to become rich. Mortage is an easy way to leverage an expensive investment.
Let's say you had 500k sitting in the bank. You can buy 1 $500,000 home in cash (mortgage free) Or you can borrow and buy several $500,000 homes using $100k down, although this is risky.
I totally DISAGREE with this video. Keeping a mortgage when you have the funds to pay it off is a terrible idea. What this speaker isn't factoring in is RISK. Suppose you lose your job, get sick or injured, get fired or otherwise lose your income and can no longer pay your mortgage? Foreclosures don't happen to people with paid-for homes.
If you pay your mortgage out until the end of its term (15-20-30yrs) it will be at least double what you bought it for orginaly. if you had the money in had to pay it off it would only make sense to do so given that you had more money in the bank and coming in. Do you think Oprah hasn't paid off her houses?
"Your house is gonna grow in value whether there's a mortgage or not." Lol! Psh! Bad, bad advice. I always felt like crap around friends and family because I didn't "own" a home and they did. I don't feel so crappy today. :) Miss your property taxes and see how much you own.
Completely wrong. The interest owed on a mortgage is compounding, it's not really 6%. If you pay off your mortgage early you can hold all that extra money at a six percent automatically tax free return. Simple taxable interest will NEVER keep pace with compounding interest. Any fifth grade math student can prove this guys theory WRONG.
Hello if you pay your house off and its worth 1 million and next year its worth 800.000 thousand you just lost 200k its not that hard to understand also equity does not have any rate of return why pay off the house hellooooo
What a stupid argument. The interest rate for 30 years means that you pay double to triple the original loan amount on your mortgage. Paying the bank interest to keep a tax deduction is also stupid. Pay the house off ASAP and keep more of your money for yourself.
Say wha? This guy sounds like a mouthpiece for the banks. Gamble your money in the stock market instead of taking control of your income by paying off debt.
Flawed. If he was to ask the most depressed and broken people what makes you so? they would have also cited a mortgage. He's just interviewed people without cross referencing and without triangulation to come up with his hypothesis. What an obsurd and corrup bank sponsored individual.
Some will get rich, many will suffer, will the rich be happy for their fellow brothers in humanity to suffer under the hands of such a system? we need an interest-free based economy
He's right, though. Why would the rich pay off a mortgage on a property that isn't worth as much any more?
They'd sell the place, pocket the change, let their credit score take a dive and reinvest the funds.
All that defaulting means is that they can't take out loans. If they've got millions to invest, then they're going to use that immediately instead of trying to dick around with their credit score for some measly leverage.
said in 2008: "your house is going to increase in value, whether you pay off your mortgage or not" In 2009: "i know you had to default on your mortgage and lose the house because the housing bubble burst, but um...the #2 secret is still true!"
Look at all these "serious listeners" while they tilt their head, purse their lips in introspection, hearts and minds synchronous to this guy's message. He's a book author and seller. Nothing more.
This implies that you have to earn at least 5-6% in this economy after taxes. The historical average of the stock market is only 8% pre-tax. That's a pretty big gamble and must people don't like to gamble on a mortgage.
the reason you dont want to pay off your mortgage to early is because it is a tax deduction you can claim. if your kids are all grown up and the house is paid off then what kind of deductions do you have?
Financial advisor are people that get paid telling successful people what to do with their money. If you can't do,teach.Don't take advice from someone who isn't successful on their own.
@jxsilicon9 really? he owns a huge investment firm and is rated the number one independent financial advisor by barons. not sure you can lump him into the pile of not successful
this is the most contradictory video on youtube. The first minute is about how the wealthy carry a mortgage, the second, about how useless it is to have a mortgage and how its really just giving up money to the banks. rubbish
@guitaristavista i don't see how you're having trouble comprehending what he is saying. its very simple, with mortgage rates so low its more profitable to not pay off your house but instead invest that money you would have used and make more money.
@guitaristavista The first minute is about why people believe they should pay off their mortgage ASAP, and the second refutes this and says that it would be better to invest that money because the return on the investment would be greater than money owed on the interest for the mortgage. Where's the contradiction?
@guitaristavista you make a good point on the surface. i believe his point is if u will carry a mortgage make sure u have enough enough extra $ to invest in other things with more immediate returns. the mortgage $ u pay out is really an expense that u will NEVER again see. its gone forever.
@reg12269 appreciate your feedback. Again, he didn't get to the core of what ensures wealth; or rather, he didn't describe the precise ways in which mortgage owners utilise their mortgages to create wealth. It's too vague for my liking. But hey, please correct me if Ive missed something. My background is in medicine not economics.
@guitaristavista ASSUME HE MEANT the mortgage deduction. bigger ur mortgage bigger ur deduction. many have huge mortgages because of it. best to not take so much on and barely have extra money for other things
Bull...that isn't the number one secret to be wealthy. The number one "secret" to be wealthy is leverage. You need to leverage your time and money to become wealthy.
This man is a PAID SHILL. As many years as he's been in the financial investment game, he has to clearly know that this is BAD advice. He was probably a pitch man or lead generator for a mortgage refinance group at the time of this interview.
It's possible I'm not understanding you correctly jboost so correct me if I'm not. The concept this guy is talking about is that equity has 0% rate of return. You get the appreciation of your home whether it's completely mortgaged or fully paid up. The amount of equity does not matter.
And if you never get back the money you put in a house.. so don't pay it off as he says. (WRONG). What about the interest amount that is the same as what the house costs. So if you keep the mortgage you pay 200,000 for the home and approx 150-180K in interest you don't get back 350-380K. If you pay it off early and save 100K in interest you don't get back 250-280K. Even with his dumb logic paying it off early makes more sense.
I don't think he's discounting the fact that you pay interest on the mortgage. What he's saying (and what the wealthy understand) is that you can find safe investments out there that will beat whatever that net mortgage interest cost is. If you're money is growing faster somewhere outside of your home than the interest you owe, you're winning. It's that simple. Plus you have more control over your money than if you lock it up in your home.
I do not agree with this man. Pay extra on a house monthly once you get a 6 month emergency fund or whatever you're comfortable with. Doing so will mean thousands saved on interest and years sooner you can start saving what you put into the house payment. Keeping a mortgage for tax incentives is dumb too. Why pay thousands a year in interest to get hundreds back from taxes? Just $50 a month even makes a difference in the length of mortgage and interest saved by paying it off early.
Money you pay toward your mortgage is "money you will never see again" and it's "gone forever"???? Did Ric smoke some crack before he took the stage with Oprah?? Certainly you will never see the interest again, but why wouldn't I ever see the principal once I sold the house?
Because there is no guarantee you will profit. And what if you get sick? If you had the extra money available for the emergency, you might be ok. If it was tied up in the house, what good did it do you?
At the 1:12 mark he says that your house is going to grow in value whether you own a mortgage or not. But then he says I would never see my money again when I put it into the house. Houses have shown to be good long term investments, the last few years notwithstanding. I don't disagree with him about owning a mortgage, but I disagree about the money being gone forever if I had a paid for house. Also, my crack smoking comment was a cheap shot. I enjoy listening to Ric's radio show when I can.
strandedinidaho, read hargitai70's post again. If you get disabled or laid off and are without an income, you'll probably have a need for money. However if all your extra money is in your home, it's next to impossible to get a home equity loan or line of credit without an income. You would be forced to sell the home at whatever price you could get. In this situation it would be very easy to lose your principal. Ric has made an excellent point here.
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crushed1231 1 day ago
Unless you can get a guaranteed rate of return on an investment that exceeds the amount of interest on your mortgage, paying off the mortgage is smarter than investing. When investing, you can lose money when paying off debt, you are guaranteed to save the interest that you would have paid if you didn't pay it off. Always go for the sure thing! It's scary to see that people are listening to this guy. What awful advice!
ComputerTrainer101 3 days ago
@ComputerTrainer101
Not necessarily. A lot of properties lost their value from the ensuing crash. A property that was sold for $600k might sell for $350k now.
Why pay the mortgage on that? The house isn't worth $600k anymore! That's why the crash was so bad. No one wanted to stick around and they'd be stupid if they did.
manictiger 1 hour ago
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crushed1231 1 week ago
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Eat less meat, stop drinking soft drinks/drink more water, shop around for cheaper car insurance, never co-sign, max out your 401 K at work, make a budget, stay away from malls/stores, eat in more, use coupons, buy used, use your local library, brush & floss teeth daily, take care of your health, borrow dvd's from library/redbox, buy a IRA Roth every year, learn about investing at your library, google Dave Ramsey/Clark Howard, don't lend money, shop at thrift stores, buy in bulk.
dontgetmarried999 1 week ago
Debt free is the only way to live! Having a mortgage and wasting money for a tiny tax deduction is stupid advice. You lost me as a fan Rick- BAD ADVICE
brejniak2008 1 week ago
The bottom line is this in any mortgage your assets which eqyal income and investment potential, albeit illiquid equity, is locked and tied up in inaccessable vehicle called a mortage which could have been being used to create more wealth not debt security.
some1caresforu 2 weeks ago
As a financial teacher and investor, this clown is a big joke he's insinuating that most people are stupid ( which in some sense of the word is true) and will not be able to see thru his lies all of which he offes no facts or statistics. What he dos show is he is working for the Big banks wonder what they pay him to spread this false belief?
some1caresforu 2 weeks ago
Hey dude, dont pay your house in full and get rich. So that's the secret. WOWzy
Bloodsport1 2 weeks ago
Hahahahahahahahhahahahhahalhahahhaa WOW! Well I guess if you watch youtube long enough you will see it all.
sysopkc 2 weeks ago
Its so true banks now have 40yr mortgage. There are seniors I knew who paid off there homes and are living in poverty. And there are other I know off who solve that problem by pulling the equity out of there home (Reverse Mortgage) some of them and now live a very nice life in there golden years.
jaeson63 2 weeks ago
So look at it this way, some of the people who paid off there homes, like the mayor of a Texas home when the storm hit and later the fire broke out the news media ask him how he felt after going through the storm and now a fire which his house burn down from that fire he sad the BAD NEWS is I just paid my HOME OFF! who is happy the Mayor or the BANK!
jaeson63 2 weeks ago
I can't believe what I have read. If you are 40yrs old you will be 70 or even 80 before your home is paid for. think people, for every dollar you borrow from the bank for a mortgage you will be paying back 2.5 times what you borrow. That is just for a mortgage and even more on credit cards as much as 6x of what you borrow. Think EQUITY EARN NO INTEREST it does not matter if you are mortgage to the hilt or if you have no mortgage at all your property will only appreciate by 5%
jaeson63 2 weeks ago
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eggflipper777 2 weeks ago
I understand this video. You have to really think about it. He's talking about rich people who don't experience pain paying a mortgage. If you have a million dollars and you want to buy a half million dollar home, why pay for the house outright when you can pay $50k down and make $5k monthly payments and use the rest of your money to invest in other ventures? That way you will pay off your mortgage with the profit you earned from having the freedom to put the remaining $950,000 to other uses.
artsylovelylady 3 weeks ago
Oprah has sold out a long time ago. She sold you out too. if you don't know how, then you deserve to go on life as a cow ready to be slaughtered. even a high percentage of comments reveals the ignorance, and lack of social skills that Americans posses. Yep, you don't realize that it's not all your fault, you have blindly followed a corrupt system trusting that they will do you not wrong, but look what happens when one follows the little white lies of satan.
trubornagain 1 month ago
@trubornagain Yeah, because YouTube video comments are indicative of the US.
First off, YouTube isn't restricted to countries outside the US lol. TONS of people know English as a second language well enough to converse without you knowing that, not to mention the millions of people outside the US who use it as a first language. Lastly, I challenge anyone else reading your comment to correctly state what the hell it is you're talking about - I mean really, talk about lack of social skills.
JackSprattDaBat 2 weeks ago
look at the date, these people were on their final stages of looting the remaining skeptical people who put all their trust in Oprah. So blind and starstruck. I can't believe how willfully blind and ignorant these elite have made people through media, sports, entertainment. now they are so lazy to think for themselves, they need other to do it for them. they have taken Jesus out of school, and all the important programs and replaced it with garbage. and propaganda.
trubornagain 1 month ago
1:11 LOL
DanielOnGuitar 1 month ago
Interest rates are now at ALL TIME historical lows 3.9%. Even if you paid a little higher and find a good investment that returned 8%-10% a year (not hard), you'd be ahead 4-6% per year, that's HUGE! Not to mention that mortgage interest is 100% tax deductible against your income. I agree 110% with this gentleman.
crb4059 1 month ago
@crb4059 Key word is income. They dont have that disposible income to work with anymore. He was right at the time...In the conditions of the market. The conditions have changed. It is hugh, but its also hugh when it slides in the opposite direction.
sysopkc 2 weeks ago
@crb4059 There is inflation being generated in the system.
sysopkc 2 weeks ago
This guy, like Suzy Orman, is bought and paid for by the financial institutions. He says, "if you pay your mortgage off, you have given money to the bank that you will never see again." What rubbish. If and when you sell your house you will see that money again. Not to mention the interest saving on accellerating your mortgage payments. Simple, taxable interest on investments will never keep pace with compounding interest on your mortgage. Grandma was right - Pay off your mortgage!
secretgecko 1 month ago
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Blaine700 1 month ago
Just another great piece of advice from the media... This may be the case for the financial elite but it is not wise advice for those who have a modest balance sheet in which they make just enough to cover ends each month. If the middle/lower income households can pay down or off their mortgage imagine the amount of additional money they will have after the fact to invest in other mediums.
MarcusCurtisHomes 1 month ago
LOL watching this after the GFC makes my brain hurt... well done morons
jacekicksass 1 month ago
I believed it was lobbying.
MenwithHill 1 month ago
financial advised = steals money from the stupid
elwuudz 1 month ago
awful, horrible advice
FinalStandProject 1 month ago
Idiot.
jcarterlove20 1 month ago
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THE EASIEST WAY TO MAKE MONEY USING THE INTERNET 6dollarminisite.ws. Buy this website for $6 and sell it over and over again. I have tried everything, this is the only website that has ever made me any real money,and all money goes to your paypal.
Blaine700 1 month ago
FYI 7% interest x 30 years = 239% the original loan.
tcorourke2007 1 month ago
Wow. Remember when you could expect over 7% annually on your investments? Welcome to 2012, YouTube...
tcorourke2007 1 month ago
How laughable is this advice? Notice the date of the video pre October 2008 to get a sense of what stupidity was being offered by the Financial Advisory and Real Estate industries.Ric Edelman has a radio program offering this kind of nonsense even today. He has been totally discredited.
jackmartinable 1 month ago
The value of your house will always go up. Yeah, right.
MX3516 1 month ago
How about you pay off your house in 7 years and invest that 2000 dollar a month house payment?
jthunderbass 1 month ago
The secret of the wealthy is to fund politicians so they pay less tax the richer they get. The rich use means like beating the drum of false patriotism so the poor dumb lemmings, who will always be poor simply because they are dumb, let themselves be led into wars such as those in the Mid East to support evil causes like the Zionist land-grabbing of Palestinian land. Then they cry when they find out the evil cause they supported with blood and treasure collapses. Vietnami is yet another example.
directorcj75 2 months ago
Note the date of this video. Both the housing and stock markets crashed a few months after this was made. Many of those so called "wealthy" people were only rich on paper, and I bet many of them are not in such good shape today.
scoobydo 2 months ago
This is true... ONLY if the extra money u invest makes u more.
mamacacanana 2 months ago
@mamacacanana Which would have been great in the 80's and 90's alot tougher today
rednick155 2 months ago
Most people do not have the discipline to creatively invest money freed up by having a mortgage and will have a better lifestyle sooner by paying off the mortgage ASAP.
Gregarious3 2 months ago
Dumbest advice ever!! 30 years? only dump people do that .. payoff your house and if you need the money you can get a mortgage or a secure line of credit.
irdon 2 months ago
I disagree
Tepoz7 2 months ago
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wow...lol
anyway, if you guys aren't total retards, and interested in earning some quick X-mas cash by completing basic skills via the cpu totally no investment at all, shoot me an inbox. Or email at marcusznz1(at)gmail(dot)com Peacee ^__^
ilovefutbol88 2 months ago
Has he never heard of the housing bubble? This is broke thinking. I has owed and I have owned. Being debt free is the only way!
genesagservice 2 months ago
it makes a lot of sense.. They have the money to pay off their house but instead use that money to invest and make more money
BldStones 2 months ago
Dave Ramsey has forgotten more than these two idiots know combined.
bigdv519 3 months ago
this guy said this on national TV, and then the sub prime meltdown happened. WOW
JayhawkBenja 3 months ago
how much damage has this show donw to the american economy
Zarinaofhope 3 months ago
Hind sight is 20/20 but what bad advice. Here's the key you never truly have money as long as you have debt. If you owe someone money you do not have money. Pay down you debts, become debt free, live below your means, and save money by shopping smart, buying quality and avoiding wasteful habits. When you finally have a nest egg with no debt, invest in appreciating assets that produce cash flow or gain value but are fairly liquid such as rental homes or land,solid stocks that pay dividends, ect.
goldsilverandiamonds 3 months ago
I would way rather pay off a home. Every dollar is like over $5 in mortgage. being OUT of debt is the best advice for anyone, a lot less stressful as well. these are different times people are learning that being a slave to the system and tax BS is not worth it. Pay it off.
djkenny 4 months ago
dumbest advice
K3RR0N120 4 months ago
also the statistics are BS. 80% of wealthy got there by using money wisely and working hard. Not by paying banks thousands of dollars a year. What a dummy.
robot313 4 months ago
lol this guy's an idiot. He was paid by mortgage companies to say that. If I didn't have a mortgage I would have over $800 a month coming in instead of already labeled.
robot313 4 months ago
that was true then but it might not be now since interest rates are so low for savings
swendsenwiley 4 months ago
Also, this guy sounds like a spokesperson for the banks. I had to watch it twice just to ensure I was hearing him correctly!!!
FutureFrogman7 4 months ago
This is the worst advice ever!!!!
my friend just bought a house at 4% interest rate, and he's going to pay 220% the current value of the house. If he decides to sell it at the top of the market, he'll hardly get his money back for it, and he got a rock bottom price for it too!
Keep in mind 4% is a government rate - one of the best deals a consumer can get. And he'll still be screwed in the long run.
4% x 30 = 120%
plus 100% = 220% over 30 years.
It's simple math people...
FutureFrogman7 4 months ago
Everyone who disagrees with this video are probably broke.
People develop and maintain wealth differently. He's saying the majority of wealthy individuals use leverage to become rich. Mortage is an easy way to leverage an expensive investment.
Let's say you had 500k sitting in the bank. You can buy 1 $500,000 home in cash (mortgage free) Or you can borrow and buy several $500,000 homes using $100k down, although this is risky.
joeeznutz 4 months ago
I totally DISAGREE with this video. Keeping a mortgage when you have the funds to pay it off is a terrible idea. What this speaker isn't factoring in is RISK. Suppose you lose your job, get sick or injured, get fired or otherwise lose your income and can no longer pay your mortgage? Foreclosures don't happen to people with paid-for homes.
wwh0302 5 months ago
Comment removed
wwh0302 5 months ago
Maybe the worst advice i've ever heard. But then im an idiot with a Paid for house
easterlake 5 months ago
I love Ric Edelman but this video is outdated.
citizencain8877 5 months ago
how to be wealthy:
disregard females, aquire currency.
SRStrollisSRS 5 months ago
If you pay your mortgage out until the end of its term (15-20-30yrs) it will be at least double what you bought it for orginaly. if you had the money in had to pay it off it would only make sense to do so given that you had more money in the bank and coming in. Do you think Oprah hasn't paid off her houses?
1jks 5 months ago
"Your house is gonna grow in value whether there's a mortgage or not." Lol! Psh! Bad, bad advice. I always felt like crap around friends and family because I didn't "own" a home and they did. I don't feel so crappy today. :) Miss your property taxes and see how much you own.
Naviti7 6 months ago
THIS IS STUPITIY!!!!!!!
TheNationalProject 6 months ago
@TheNationalProject no your spelling is stupidity, stupid.
dcantuy 5 months ago
Completely wrong. The interest owed on a mortgage is compounding, it's not really 6%. If you pay off your mortgage early you can hold all that extra money at a six percent automatically tax free return. Simple taxable interest will NEVER keep pace with compounding interest. Any fifth grade math student can prove this guys theory WRONG.
secretgecko 6 months ago
completley wrong. pay off your danm house. listen to Dave Ramsey talk about this.
alexwclark 6 months ago 2
Hello if you pay your house off and its worth 1 million and next year its worth 800.000 thousand you just lost 200k its not that hard to understand also equity does not have any rate of return why pay off the house hellooooo
kbaggetto 8 months ago
What a stupid argument. The interest rate for 30 years means that you pay double to triple the original loan amount on your mortgage. Paying the bank interest to keep a tax deduction is also stupid. Pay the house off ASAP and keep more of your money for yourself.
felix1177 8 months ago
Say wha? This guy sounds like a mouthpiece for the banks. Gamble your money in the stock market instead of taking control of your income by paying off debt.
Vernonu9 10 months ago
Flawed. If he was to ask the most depressed and broken people what makes you so? they would have also cited a mortgage. He's just interviewed people without cross referencing and without triangulation to come up with his hypothesis. What an obsurd and corrup bank sponsored individual.
Some will get rich, many will suffer, will the rich be happy for their fellow brothers in humanity to suffer under the hands of such a system? we need an interest-free based economy
dxvxvx 1 year ago 8
@dxvxvx
He's right, though. Why would the rich pay off a mortgage on a property that isn't worth as much any more?
They'd sell the place, pocket the change, let their credit score take a dive and reinvest the funds.
All that defaulting means is that they can't take out loans. If they've got millions to invest, then they're going to use that immediately instead of trying to dick around with their credit score for some measly leverage.
manictiger 1 hour ago
@manictiger
So yeah, if you buy the house in full, up front, you're an idiot.
Look up, "time value of money".
Debt is good if handled properly. Debt is bad if all you do is recklessly purchase liabilities. (Houses are usually liabilities, don't kid yourself.)
manictiger 1 hour ago
said in 2008: "your house is going to increase in value, whether you pay off your mortgage or not" In 2009: "i know you had to default on your mortgage and lose the house because the housing bubble burst, but um...the #2 secret is still true!"
shyt37 1 year ago
Look at all these "serious listeners" while they tilt their head, purse their lips in introspection, hearts and minds synchronous to this guy's message. He's a book author and seller. Nothing more.
Microglia1 1 year ago
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people who dont understand this will always be losers
lyle603 1 year ago
yeah well of course it is possible. for you that is
BlerVision8 1 year ago
This implies that you have to earn at least 5-6% in this economy after taxes. The historical average of the stock market is only 8% pre-tax. That's a pretty big gamble and must people don't like to gamble on a mortgage.
BosPercussion 1 year ago
the reason you dont want to pay off your mortgage to early is because it is a tax deduction you can claim. if your kids are all grown up and the house is paid off then what kind of deductions do you have?
ppereda23 1 year ago
Financial advisor are people that get paid telling successful people what to do with their money. If you can't do,teach.Don't take advice from someone who isn't successful on their own.
jxsilicon9 1 year ago
@jxsilicon9 really? he owns a huge investment firm and is rated the number one independent financial advisor by barons. not sure you can lump him into the pile of not successful
cubs85 1 year ago
what a waste of 2 minutes!
MolossianZagori 1 year ago
He just happens to Be one of the top 10% of all financial advisors in the country?
Stevek117 1 year ago
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Wow - look at the mess the US is in since this has been on
DeanoWD6 2 years ago
this is the most contradictory video on youtube. The first minute is about how the wealthy carry a mortgage, the second, about how useless it is to have a mortgage and how its really just giving up money to the banks. rubbish
guitaristavista 2 years ago 16
@guitaristavista i don't see how you're having trouble comprehending what he is saying. its very simple, with mortgage rates so low its more profitable to not pay off your house but instead invest that money you would have used and make more money.
cubs85 1 year ago
@guitaristavista The first minute is about why people believe they should pay off their mortgage ASAP, and the second refutes this and says that it would be better to invest that money because the return on the investment would be greater than money owed on the interest for the mortgage. Where's the contradiction?
paintedbishop 1 year ago
@guitaristavista you make a good point on the surface. i believe his point is if u will carry a mortgage make sure u have enough enough extra $ to invest in other things with more immediate returns. the mortgage $ u pay out is really an expense that u will NEVER again see. its gone forever.
reg12269 7 months ago
@reg12269 appreciate your feedback. Again, he didn't get to the core of what ensures wealth; or rather, he didn't describe the precise ways in which mortgage owners utilise their mortgages to create wealth. It's too vague for my liking. But hey, please correct me if Ive missed something. My background is in medicine not economics.
guitaristavista 7 months ago
@guitaristavista ASSUME HE MEANT the mortgage deduction. bigger ur mortgage bigger ur deduction. many have huge mortgages because of it. best to not take so much on and barely have extra money for other things
reg12269 7 months ago
Bull...that isn't the number one secret to be wealthy. The number one "secret" to be wealthy is leverage. You need to leverage your time and money to become wealthy.
DWorkoutMix 2 years ago
This man is a PAID SHILL. As many years as he's been in the financial investment game, he has to clearly know that this is BAD advice. He was probably a pitch man or lead generator for a mortgage refinance group at the time of this interview.
Visionary0001 2 years ago
It's possible I'm not understanding you correctly jboost so correct me if I'm not. The concept this guy is talking about is that equity has 0% rate of return. You get the appreciation of your home whether it's completely mortgaged or fully paid up. The amount of equity does not matter.
thatpsychostud 2 years ago
And if you never get back the money you put in a house.. so don't pay it off as he says. (WRONG). What about the interest amount that is the same as what the house costs. So if you keep the mortgage you pay 200,000 for the home and approx 150-180K in interest you don't get back 350-380K. If you pay it off early and save 100K in interest you don't get back 250-280K. Even with his dumb logic paying it off early makes more sense.
cessna421ace 2 years ago
I don't think he's discounting the fact that you pay interest on the mortgage. What he's saying (and what the wealthy understand) is that you can find safe investments out there that will beat whatever that net mortgage interest cost is. If you're money is growing faster somewhere outside of your home than the interest you owe, you're winning. It's that simple. Plus you have more control over your money than if you lock it up in your home.
thatpsychostud 2 years ago 2
I do not agree with this man. Pay extra on a house monthly once you get a 6 month emergency fund or whatever you're comfortable with. Doing so will mean thousands saved on interest and years sooner you can start saving what you put into the house payment. Keeping a mortgage for tax incentives is dumb too. Why pay thousands a year in interest to get hundreds back from taxes? Just $50 a month even makes a difference in the length of mortgage and interest saved by paying it off early.
cessna421ace 2 years ago
Love oprah! great topic on wealth building.
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LifeCoachSpeaker 3 years ago
Money you pay toward your mortgage is "money you will never see again" and it's "gone forever"???? Did Ric smoke some crack before he took the stage with Oprah?? Certainly you will never see the interest again, but why wouldn't I ever see the principal once I sold the house?
strandedinidaho 3 years ago
Because there is no guarantee you will profit. And what if you get sick? If you had the extra money available for the emergency, you might be ok. If it was tied up in the house, what good did it do you?
hargitai70 2 years ago
At the 1:12 mark he says that your house is going to grow in value whether you own a mortgage or not. But then he says I would never see my money again when I put it into the house. Houses have shown to be good long term investments, the last few years notwithstanding. I don't disagree with him about owning a mortgage, but I disagree about the money being gone forever if I had a paid for house. Also, my crack smoking comment was a cheap shot. I enjoy listening to Ric's radio show when I can.
strandedinidaho 2 years ago
strandedinidaho, read hargitai70's post again. If you get disabled or laid off and are without an income, you'll probably have a need for money. However if all your extra money is in your home, it's next to impossible to get a home equity loan or line of credit without an income. You would be forced to sell the home at whatever price you could get. In this situation it would be very easy to lose your principal. Ric has made an excellent point here.
thatpsychostud 2 years ago