How to Pay Off Your Mortgage Early - Fastest Method Explained

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1 окт 2024

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Комментарии : 295

@JakeBroe 3 года назад

Thanks for watching! Check out my entire playlist of videos on buying a home here: ru-vid.com/group/PLscTZuOqKWIz97DBmq5r-4IciwL6uKJfQ

@AliceKovska 3 года назад

the amount of value in this video is astronomical

@JakeBroe 3 года назад

Haha, I agree Alice! This is more complicated than some people want to make it, but it is the FASTEST method for sure. Cheers!

@ThaChavez 3 года назад

Absolutely agreed. I was going through depression when I accumulated what felt like insurmountable amounts of debt. I had to put my head down, and grind for almost two years to dig myself out, now I'm debt free and purchased my condo in the city with cash. My mentality and happiness is at all time high. Great video, and great advice. I watch your vids all the time.

@JakeBroe 3 года назад

Thanks for watching my videos and sharing your story Edgar! Sounds like things are looking up for you. Cheers!

@jonathanbennett1155 3 года назад

It's important to note that this is the "fastest" method (which you did). You will end up paying more interest this way than in paying extra each month, but you will indeed pay it off earlier. The reason, of course, is that you aren't lowering the remaining principal any faster than by doing nothing (because you are doing nothing until you pay it off in a lump sum). Paying extra each month lowers the remaining principal faster, and interest paid each month is a function of remaining principal.

@DavidLee-js8ew 3 года назад

You'll pay more in interest but isn't that number still smaller than the return on your investment so it cancels it out and then some?

@alainruben 3 года назад

@@DavidLee-js8ew no, it isn’t. In his examples he is taking the money out of the brokerage just when he has enough to page the remaining loan balance so nothing left out BUT as @Jonathan Bennett mentioned you are indeed paying more in interest, so even though you pay some years before the house you end up paying more money…hence this doesn’t look like a good strategy for me.

@davebowen4483 2 года назад

Agree with this comment. Did the math on my situation and although I will pay the loan off 3.5 years quicker if I invest the extra and payoff in a lump sum instead of apply to principal each month it would cost me more in the long run since the majority of early mortgage payments goes to interest. My loan is a 30 year and only about 4 months old. Difference was about $20k more in interest and that was before factoring in the capital gains taxes. To accumulate that extra money may erode the 3.5 year quicker payoff and will also increase the total out of pocket.

@ryan1993ish Год назад

@@alainruben that’s true but would you rather spend 10 bucks on a tool that makes it so you only make $100 a day or would you rather spend 20 bucks on a tool that makes it so you can make $200 a day……… Dot yeah you spent more money on the tool, but you’re able to make way more money because you spent more on something that was able to make you more

@Armando-jh8lc 3 года назад

its an option. However, the market could drop 50% a year before your mortgage is paid off and not recover for years after; defeating the entire purpose. Also, your presumed interest rate of 9.8% seems overly optimistic, its an average with declining interest rates. The market going forward will see increasing interest rated which will counteract stocks going up. You should account for a margin of safety and assume 5%. Then decide if the years gained is worth the risk of losing 50% in one year. You could rebalance using a target date fund but this will limit your gains, at the trade off of limiting your losses. In the end, its not as simple as you put it. One must understand the risk to reward and evaluate at better parameter presumptions.

@JakeBroe 3 года назад

Hey Armando! You can believe and do whatever you like. This video is just an idea.

@chrisfreeman4876 2 года назад

I agree with Armando. HUGE assumption as to forward returns, also HUGE assumption as to future capital gains rates. You might end up owing 30% or more cap gains as taxes by the time you get to that point. Lots of risks, but presented as a "risk free" idea effectively. Personally I do not pay down my main residence mortgage much because I have a 2.25% 30 year loan, so its so cheap its not worth it really, but I surely would be if it were 4% or more. That would be 4% guaranteed return versus high both of equity return and tax rates.

@TomSramekJr 3 года назад

Given the time frame, would a Roth IRA make sense to avoid the taxes if you are old enough when you first buy the house?

@JakeBroe 3 года назад

Yep! Absolutely! If you are comfortable with your 401k retirement balance, then maxing out your Roth IRA and using that money after the age of 59.5 would be a better option than using a taxable brokerage account. Brilliant idea!

@Glitch852 3 года назад

Awesome advice! I'm still amazed at how fast you pump these videos out with such high-quality information! You're a financial knowledge MACHINE!

@JakeBroe 3 года назад

Haha, thanks Eugene! My goal is one video every 48 hours, but sometimes I just have to give myself a day off. Two videos a week is still good I tell myself!

@michaelmoreton5042 3 года назад

I have had 4 Mortgages in my life the first 3 were at 7.5 -8.5% I worked hard to pay them off early. Now I have a mortgage at 1.89% Why would I want to pay it off early???

@thenewfire 3 года назад

You don't. Pay it off as slowly as possible. Contribute to your retirement bucket ladder instead. Max 401k, roth, hsa, mega back door, etc etc etc. People have this very backwards now. Peace of mind is not a higher house payment for 15 years, having less retirement, less tax breaks, less disposable income. In case of emergency you have to break into equity because you're strapped... Peace of mind is taking care of your future, actually having more money, paying less overall on the house, not needing to tap equity in case of emergency... If your interest rate is around 3%, invest instead. Pay it off as slowly as possible.

@reewazkhanal 3 года назад

Aaaand, this is how you EARN a subscriber rather than keep on begging to subscribe to your channel every 2 minutes! BRAVO! Thanks for the video. Appreciate all the effort that went into making these videos.

@JakeBroe 3 года назад

Welcome to the channel Reeewaj! Glad to have you with us!

@shijoabraham1730 3 года назад

Wheres a "really like" button when you need one?

@JakeBroe 3 года назад

Haha, RU-vid is going to have to make one! Thanks Shijo!

@rustyheyman214 Год назад

Came for the Ukraine 🇺🇦 coverage, stayed for the financial advice.

@rachaelv1140 3 года назад

This is a great plan! Doing this to buy a car currently. Acting like I have a car payment and paying that amount to my brokerage account each month. Watching it grow and looking forward to buying a car in cash.

@MarcyJ2F 2 года назад

So based on your projection, putting $100 more a month onto your principle would save you $19,000 and 3 years on the mortgage. The other option would be to invest the the $100 and in 26 years you will have $144,000 I think you said. The question is what would you have paid in interest to the bank for your mortgage in those 26 years on a $300,000 house, $155,000? How is that better?

@beachn200 3 года назад

Great video as always. Congratulations on almost 20K subscribers!

@JakeBroe 3 года назад

Thanks beachn! I should hit 20K subs next week! I am so grateful!

@AndriyBaranskyy 4 месяца назад

Great video! Would be cool to have an update when interest rates are way above 3%. Does the strategy still make sense when your mortgage interest is above 6%? Also, thank you for donating your birthday to Ukraine and your support in general!

@TheMuljo 2 года назад

My comment is a bit late, but I think I can add to the "big brain idea" by suggesting putting your money into a robo advisor which performs tax loss harvesting. That way you wouldn't even have to worry about capital gains as much, if at all (in theory).

@ageisonlyanumber8334 3 года назад

The one potential factor you did not mention is the likelihood that the long term capital gains tax rate will be increased. With the federal deficit at 3.007 trillion dollars as of 9/30/2020 tax rates ARE going up in the future. The SECURE Act will cover a portion of this deficit by speeding up the income received from inherited qualified accounts (IRAs, 401ks, etc,), but I doubt long term capital gains will be spared. There has been much talk in the past about raising this tax rate to at least 20%, so 15 or more years from now, the rate will probably no longer be at 15% meaning you will need additional time and growth in the account to cover the higher taxes.

@JakeBroe 3 года назад

I agree, long term capital gains might be going up. Ideally they need to change that 0% bracket to something higher. Then maybe none of the rest of them have to change.

@oeloe 3 года назад

following that reasoning shouldn't you pay off your mortgage at all? at the point of paying off, your growth on your investments alone should cover most of your mortgage...

@user-oo9cv7lb8w 29 дней назад

WOW you know this when it comes to paying off CCs or other debt but i had not thought on doing this for the mortgage, Just Of course this makes sense

@zs8850 2 года назад

This video was very informative. I’ve been thinking a lot about this lately…whether to pay off the mortgage with extra payments or invest it and drop a lump sum later. Thank you for the research and calculations. Great video.

@pabloriquelme7739 3 года назад

Definitely the best recommendation RU-vid has given me to learn. I am new and I want to learn, I don't know a lot of English but it seems great that there is this type of content, thank you for your time that you invest in teaching what you know.

@JakeBroe 3 года назад

Thanks for watching my videos pablo! Best of luck to you!

@markplymale 3 года назад

Good video! My current investment strategy that resets every year: 1. Max out HSA ($7,100 married) as fast as possible. Should take about 2-3 months hopefully done before April 2. Once HSA is done 50% of take home pay goes to brokerage to invest House payment is $825 right now and we will be staying here for about 5 more years. Mortgage was 170K and we put $34K down (20%) In 5 years we would like to cash out refinance but leave 20% in current home and keep it as a rental. We would take the excess funds from the refi plus a portion of our savings as a down payment for our next house (the forever home) Definitely will push to paying off the forever home ASAP but this one we’re good making the regular full payments. I like the Finance vids! You’re good at credit cards too but these are helpful

@JakeBroe 3 года назад

Thanks for sharing your strategy Mark! I would definitely consider putting money in a Roth IRA, but you are still doing well. Cheers!

@Joeylikecoffee 3 года назад

This broke my brain, but in a good way. Oooh, it “broe-k” my brain...Jake Broe...get it? Okay no more coffee today.

@JakeBroe 3 года назад

Hahaha, thanks Joe! I think you are doing just fine with your coffee.

@mozs6429 3 года назад

Thanks, Jake, for this video. What do you think of opening a Schwab intelligent portfolio just for setting aside extra cash for paying off the mortgage? Can you think of any downside of it?

@jonb3189 3 года назад

Quick correction. Please google phrase "What Is the Average Annual Return for the S&P 500?" It is from Investopedia (I am uncertain if I can give a link or not). It states, and I am quoting here: "According to historical records, the average annual return since its inception in 1926 through 2018 is approximately 10%-11%.[cite] The average annual return since adopting 500 stocks into the index in 1957 through 2018 is roughly 8%." Therefore, more accurate is to state the S&P 500 averages 8%, and not 10%. Personally, I have a few houses. All rented out. I am using the overflow of rents (after mortgage, insurance, taxes, etc.) to pay off only one other mortgage. Then after than is paid, I pay off mortgage two, mortgage three, etc. Here it snowballs. While the idea of putting cash in the S&P is a nice idea, I personally will just put it direct in my mortgages. My investment money is different. At present however, your way, considering what is going on in the world nowadays (pandemic, mentally unstable president who is attempting a coup, zombies supporting him, etc), I will just pay it off straight. Besides, now it takes just a year to pay off each mortgage in full, so why mess with it.

@JakeBroe 3 года назад

Hey Jon. Starting the index at 1957 wipes out all the gains made by companies in the post world war 2 boom... more years equals more data, I'd rather use the average since 1926 which gets us closer to 100 years. If we look at just the years since 2010 it is over 13%. The government TSP C Fund (S&P 500 index) goes back to 1988 and averages 10.5%. Lots of way to slice it. I am going with the 100 year average.

@darrellsellers 3 года назад

solid information Capt! this also goes to say ,. use the market as a high interest bank account

@JakeBroe 3 года назад

Thanks D! I appreciate the comment and support!

@roderick5429 3 года назад

Great video! I’d never even considered that strategy.

@JakeBroe 3 года назад

Glad you learned about this method Roderick! Cheers!

@shawnstanley4784 3 года назад

Jake, I’d like to bounce an idea off of ya...What if by about year 16 or so, the earned interest on the brokerage account is used to pay the annual mortgage payments. That way at the end of the term, you’ll still have about $150k or so at the end of the mortgage rather than zeroing it to zero the mortgage’ s balance. Thoughts???

@jordonwang6971 3 года назад

Another great video Jake! This makes sense if we keep with the full 30 yr period, because of the differential interest rate compounded over 30yrs. I wonder would your recommendation change if we sold the house in 5yrs, 10yrs?

@RevitalP 3 года назад

Wow, that was just the information I needed as I am looking into refinancing. This makes so much sense. I'll let you know in 20 years if I was able to shave time off my mortgage payment. I don't want to still be paying it when I retire (got a 30 year loan at age 47) This strategy should give me some peace of mind. Thanks!

@sk1657 Год назад

I wish if you could do these financial videos more.

@rdbeaz 2 года назад

Why Roth if i live in a high income tax state if I will move to a no income tax state when I retire?

@charlesbradley181 3 года назад

Thank you for the video. Really great way of looking at paying off the mortgage early. Is this strategy as effective for a 15 year mortgage loan?

@JakeBroe 3 года назад

Hey Charles! It would not since the 15 year requires more money to go to the principle. Check out my 15 vs 30 year video. ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-lZnwu2NwwtQ.html

@louisnaidu9140 Год назад

Thanks Jake for that financial advice.

@rjbalaji 3 года назад

Great analysis and it's enlightening. Thank you, Jake!

@JakeBroe 3 года назад

Thanks for watching RJ! Cheers!

@AsadAli-eg9lw 3 года назад

Very informative breakdown! I do wonder what Uncle Dave's reaction to leveraging debt would be 😅

@JakeBroe 3 года назад

Thanks Asad! Pretty sure Dave is taking me off his Christmas Card mailing list once he sees this video, lol

@richard1113 3 года назад

Another great video Jake! I don't know if I would count on a consistent return rate from the stock market but the basis for this idea is solid. In general, if you can make more money investing than the rate on your debt, why not do it?

@JakeBroe 3 года назад

Pretty much! People can plug in their own numbers. Anything greater than 3% and this strategy is viable.

@venchenzo4493 3 года назад

A 9.8 percent rate long-term, say 15 plus years is completely doable.

@tiffanybusscher8799 2 года назад

Great info. I’ve been contemplating this lately as a means to pay off our 4% secondary loan (and our interest rate is so low on the primary loan that we’re not planning on paying that off early).

@JakeBroe 2 года назад

Glad you found the video Tiffany! Cheers!

@DunkatronPrime Год назад

Anyone else lured here by the promise of the fastest meth?

@JacksonWelch 3 года назад

Jake you should make a video about the national debt. Approaching $30T and another stimulus check on the way, the value of the USD is dropping fast.

@JakeBroe 3 года назад

Haha, I would love to get political, but that is going to have to wait until I get out of the military.

@ryan1993ish Год назад

My goal is to get my 30 year mortgage paid off in three years I’m a year in and it’s down to 70,000 from 114,000………… Should I have not paid extra and have put it into the S&P 500 instead because all your examples are over a decade long?

@ryan1993ish Год назад

My rate is 3.25% by the way.

@toothybj 3 года назад

That’s great advice - thanks! We’ve owned out house for about 2 years and pay a little extra towards it every month, but I love the idea of putting that extra $ into one of those ETFs, like VOO & leveraging that at a later date to pay down/off the mortgage.

@user-tz5uq2bt1s 9 месяцев назад

With today's rates, you need a lot more than 3%

@FiscalForward 3 года назад

I hadn’t considered this. I going to play with combining two of my spreadsheets and use a very conservative return to see where I am with the payoff date. Thank you so much.

@JakeBroe 3 года назад

You are very welcome FF! Playing with the numbers is fun for sure!

@j6077xxd 2 года назад

Awesome

@JakeBroe 2 года назад

Cheers J B!

@Bscott00789 3 года назад

What's up Jake, good info.

@JakeBroe 3 года назад

Thanks PN! Good to hear from you!

@saraw112 3 года назад

Hi Jake, what do you think of investing in an s&p roth over the years with the intention to paying off the mortgage in 11 years. )So I pay the tax up front). I’m aggressively trying to pay my mortgage off in 11 years by the time I’m 70. (Prepaying $800-1200 extra a month to mortgage) thanks for the advice.

@JakeBroe 3 года назад

Yeah! If you are going to be over the age of 60, then there is no penalty for taking money out of your Roth IRA. You are free to invest in there and then take out the money when you are ready to pay off your home. Solid plan!

@poolking25 2 года назад

Great video! I was about to pay an extra $100 on my mortgage today. Will put in VOO

@JakeBroe 2 года назад

Thanks poolking! Cheers!

@MayrahC7 3 года назад

Hi Jake! Great video. If I am currently paying an extra 1,400 into principal, and according to their amortization schedule I should be done in 16 years (330k, 2.75 VA loan, refinanced). Doing it via a brokerage as you mention, about how long will it take for me to pay it off? Also, do you recommend just putting this money every month on just one S&P ETF or multiple?

@JakeBroe 3 года назад

Hey Mayrah! I don't have the number for your specific scenario, but $1,400 a month is a lot! If I were you, I absolutely would be investing in index funds first and making the minimum payment on the house. Then pay off the house once you have enough in a taxable brokerage account. I guarantee you could do it sooner than 16 years. Check out my playlist on Fidelity if you don't already have a ordinary brokerage account! ru-vid.com/group/PLscTZuOqKWIxSG8kRA7uxvJZQkz0q9Hko

@Lasaro7499 3 года назад

What about just do principal only payments?

@JakeBroe 3 года назад

Not sure I understand what you mean? You always have to be making the minimum payment each month.

@oazizpharmd2993 3 года назад

Jake, great video for those who plan on holding the house for many years. In our circumstance, we paid off a 30 year mortgage in a little over 6 years. I do not believe this particular strategy would have worked for us, but thank you for thinking outside the box.

@limabean7235 9 месяцев назад

How did you go that in 6 year? How many months extra year did you have to pay?

@CuzYoureStupid 3 года назад

Holy cannoli! I love this approach of investing extra payments. Your videos are very helpful, thanks for taking the time!

@JakeBroe 3 года назад

Awesome! Glad you found my video and appreciate this approach to investing. Cheers!

@cwichinski 3 года назад

That’s slick!!! Great info I’m sharing the bleep out of this. Btw GO ARMY next week!! ⚔️⚔️⚔️⚔️

@JakeBroe 3 года назад

Thanks for sharing my content Christian! I appreciate that!

@tulio3571 2 года назад

Hi there , would it matter if you are into lets say 8 to 10 years into the mortgage ? since in a mortgage you pay a lot more in interest in the first years ? thank you.

@JakeBroe 2 года назад

Nope! Doesn't change the math at all. Any money you would have saved putting toward your mortgage, you can make more if you just invest it over the long run instead.

@sballard5840 3 года назад

Great video. I have to wonder though how mortgage tax deductions could play into whether this is the best thing to do.

@JakeBroe 3 года назад

Interesting idea! I'd have to run the math.

@helenmeza8681 3 года назад

Excellent Video! Great, clear, to the point. Examples and calculators helped greatly. Appreciate your time and effort.

@JakeBroe 3 года назад

Thanks for watching Helen! Cheers!

@racewiththefalcons1 3 года назад

How does the math work out if you put $100 a month into your brokerage AND pay an extra $100 on the mortgage? Would that be quicker than putting $200 into a brokerage?

@JakeBroe 3 года назад

No, that would not be quicker. The mortgage is costing you 3% and you are earning 10% in the market. It is always faster to just pay the 3% to earn the 10%.

@racewiththefalcons1 3 года назад

@@JakeBroe, ah, I see. Would it be _cheaper,_ though, in the long run to do half market/half mortgage?

@marklonganilla6077 3 года назад

Love it. Straightforward and makes sense.

@JakeBroe 3 года назад

Thanks Mark! Cheers!

@Thedoctorjosh 3 года назад

Hi Jake. Do you recommend a similar strategy with student loans? Federal loans have a fairly small percentage on interest and could would out the same. Only asking since the federal loan interest freeze is due to expire the end of December. Thanks!

@JakeBroe 3 года назад

Hey Josh! No, I wouldn't recommend this for student loans. Your house is an asset that should be gaining value over time and saving you money by NOT renting. It is a true financial asset and mortgage interest is fixed for decades. Student loans is just debt. Does nothing to help you. I would completely pay those off before getting aggressive about investing in anything other than a 401K matching from your employer (always take that).

@Geocon04 3 года назад

I was able to double the principal when I could on my payments every month, and the house went way up in value after fixing it up. When I got the check a few years later after selling it did give me money to reinvest while waiting to buy a new house after this assignment.

@JakeBroe 3 года назад

That's awesome Geocon! Sound like you made a great amount on the sale!

@MrsCine 3 года назад

Wow thank you so much! This is very educational. Glad I found your channel.

@JakeBroe 3 года назад

I am glad you found my channel as well! Cheers!

@20TOP20 3 года назад

Awesome content! So glad I found this channel!

@JakeBroe 3 года назад

Glad you found the channel Paul! Glad to have you with us! Cheers!

@careyray1827 2 года назад

Would you ever take out money from 401K to pay off mortgage.

@JakeBroe 2 года назад

Hey Carey! No, I wouldn't. The reason why is that your 401k on average should be earning you 10% a year if you are just holding S&P 500 index funds. It doesn't make sense to remove money that is earning you 10% to pay off a debt that is costing you 3-4%. You are net losing 7% on your money by doing this.

@amandanance9136 3 года назад

We have 12 years left 8/2033 mortgage would be paid off. We have $45,272 left on the mortgage and want to pay it off by March 2027. Just started putting extra $50 a month to principle. Then plan to put my bonus $1500 in march 2022 and $2000 tax return to the principle payment or would it be better to invest that money?

@reversiontothemean6129 3 года назад

Another way to look at this. The average mortgage payment is around 1200 dollars a month. If you go into retirement without a mortgage, you're gaining positive cash flow for your mortgage amount without worrying about the stock market, at all. Well, for that portion at least. To each their own. We prefer having a pension, a ROTH 401k, 2 ROTH IRA's, AND a paid off mortgage as we retire.

@jasonnysacleomedes5084 3 года назад

What if you take your example and pay just 10% and invest the $30,000 while paying the PMI? What would the following three scenarios look like? 10% down, $30,000, some PMI payments, no contribution vs. 10% down, $30,000 and $100 monthly contribution vs. $60,000 down and $100 monthly contribution.

@zybon777 3 года назад

IMO it makes no sense to pay off your mortgage early. If your interest rate is

@ivanelias3909 3 года назад

Really enjoyed your video I have a question my situation is I want to pay off my mortgage early I a balance of 280,000. 15 years at a 2.7 how can pay off my mortgage early.

@is20206 9 месяцев назад

Wow you are so smart!

@Frank020 2 года назад

Hi, what would you give more weight to for older man still working on list after #4? With a lower int mortgage, small mortgage payment, but growing property taxes factor in CA. House pay off, brokerage, or 401k. I'm thinking brokerage, because of taxes on 401k, and less years for it to grow.

@michaelmoreton5042 3 года назад

I shudder a little at the word. Mortgage essentially means “pledge till death.” The English word mortgage is derived from the Old French : mort, meaning dead (from Vulgar Latin *mortus ) + gage, pledge, of Germanic origin

@tombrownrigg8794 3 года назад

That’s a great idea, thank you

@JakeBroe 3 года назад

You are very welcome Tom! Cheers!

@lolwtnick4362 3 года назад

Lol this is what i say. Do Both! pay the debt and invest. so many are debt focused or investment focused. your greatest enemy is time, which you'll never get back.

@Sonny0276 2 года назад

Great Video. Thank you for posting.

@JakeBroe 2 года назад

Thanks for watching and leaving a nice comment Sonny! Cheers!

@hyunryu9174 3 года назад

I’m trying to set up my TSP contribution for next year. My goal is Maxing out TSP contribution (Roth IRA: Max + Traditional: Remaining). My math is this (assume you are paid biweekly), for ROTH IRA: 230 (Biweekly contribution)*26 = 5,980 (because 6,000/26 does not give a natural number) & for Traditional: 520 (Biweekly contribution)*26 = 13,520. Sum of these two would be 5,980+13,520 = 19,500. But another concern arises from this, I heard that if you hit the Max limit you would not get employer’s 5% match, is this means I will not get the employer’s 5% match if I use this method? What do you guys think? Any feedback would be appreciated.

@futureluckk5341 3 года назад

I would only put in what they match , the rest you can put into s&p500 that you can control, all this after you at least have 10 grand in a high interest saving account. Make your money work for you.

@hyunryu9174 3 года назад

@@futureluckk5341 Thanks for your feedback, I would 100% agree if I was not where I am. I'm right at the threshold of two tax brackets. I also love the concept of setting up and forget it and all my contributions are going to S&P 500 (I just not control them) so it doesn't make that much difference I believe. Lastly, I'm recently got into investing using my saving and I don't want to take more risk than what I'm currently taking. Once I figure out this investment thing-e I will definitely take your advice. Again, thanks for your advice.

@venchenzo4493 3 года назад

Your 401k contribution limit has nothing to do with a personal IRA, roth or otherwise limit. Those 2 are separate. 19500 and 6000.

@JakeBroe 3 года назад

Hey Hyun! If you have a Roth IRA, then that has to be with a private bank (like Fidelity, Vanguard, Schwab). You can put $6,000 a year in to that and you control how it is invested. Between your Roth TSP and traditional TSP, combined you can put in $19,500. If you max that out before your December paycheck, then yes, you can't contribute for December and just for the month of December you would lose the employer match. So you want to be careful not to Max out your TSP early. Good luck!

@berlinb3673 3 года назад

Great content! Do you do any 1-on-1 stuff? Or exclusive content for followers who want more?

@JakeBroe 3 года назад

Hey Berlin! At this time I do not. I am full time on active duty in the military and I just do this channel for fun on the side. Maybe at some point in the future I will!

@berlinb3673 3 года назад

@@JakeBroe Thanks for the fast response Jake. I'm wondering, do you have a video where you do an in depth explanation of how you pick stocks and how to ultimately decide whether you should buy or not? If so, I'm sorry if I missed it. I saw the one where you use Sherman Williams stock as a potential good buy (about 3 months ago), but I still feel like I'm in the dark when it comes to picking individual stocks. Thanks

@drej1785 3 года назад

Hypothetically: If i’m married filing jointly, say about $120k on the mortgage, did this investment strategy and have enough money to pay it off. Could i take out just below the max of the 0% tax bracket, wait a year then take out the reminder of the money to pay off the mortgage to avoid paying capital gains?

@conureron3792 3 года назад

Are these the “Broe’s Baby Steps”? Or, maybe “Jake’s Gems”? Are you deviating from Ramsay by putting the matched 401k 1st?

@JakeBroe 3 года назад

Hey Ron! Yeah, Dave wants all debt paid off and a 3-6 emergency fund in place before going for an employer match on a 401K, but I think that is madness. The employer match is an instant 100% return on investment. Worth way more money in the long run that what any debt might be costing. Cheers!

@Flyingsangwich 3 года назад

@@JakeBroe Mathematically low-interest debt on anything can be leveraged and make you a profit, but Dave Ramsey has religious/personal beliefs that view debt as being worse than making yourself a little extra profit...

@leet0809 3 года назад

I am torn between buying a home with cash, therefore no debt and great peace of mind, and putting only minimum down payment and use the remaining cash to work on the Stock market returning 7-8% a year.

@ZacharyStrebeck 2 года назад

Any good spreadsheets out there for calculating this, so I can check different payoff amounts and where the equilibrium happens?

@k.s.2392 3 года назад

Ramen diet 🤣

@thenewfire 3 года назад

Now you should do a video on why paying off a mortgage early is actually a bad idea, costs money, and is less peace of mind. This video basically doesn't apply today.

@francescordova5173 2 года назад

Jake what about cash out refinancing at some point and putting that freed up cash into the investment account? Would love to see the math on that!

@minni1094 3 года назад

So I like this example except you don't explain the cost of the mortgage.

@Raymondjohn2 10 месяцев назад

I paid up all my mortgages in 2yrs while working with a Financial Adviser. I’m 50 and my husband 54 we are both retired with over $3 million in net worth and no debts. We got to realize that the secret to financial freedom is making better investments.

@bob.weaver72 10 месяцев назад

That is so amazing, I’m trying to get onto the investing ladder at 40. I wish at 55 I will be testifying to similar success..

@martingiavarini 10 месяцев назад

How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings

@bob.weaver72 10 месяцев назад

Natalie Lynn Fisk is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..

@martingiavarini 10 месяцев назад

I am on her site doing my due diligence. She seems proficient. I wrote her an email and scheduled a phone call. Thanks for sharing

@tauaitualatamalelagi7833 3 года назад

Wow really helpful for those looking to buy a house 🏡 ty👍

@JakeBroe 3 года назад

Thanks for watching tauai! Cheers!

@raulurquiza2211 3 года назад

Big fan ! This was the video that made me subscribe.

@JakeBroe 3 года назад

Awesome! Welcome to the channel Raul! Glad to have you with us!

@ciblll1 3 года назад

That was really good information. Best Regards

@JakeBroe 3 года назад

Thanks Bora! Cheers!

@trackguy4038 3 года назад

If you go to a 15 year loan, you usually get a better interest rate than a 30 year year loan. That is what I did

@sheilam-s3205 3 года назад

Brokerage account? Can you explain this and the process to get one?

@KB-dn9xu 3 года назад

Excellant advice and great content. You are awesome!

@JakeBroe 3 года назад

Thanks KB! Cheers!

@salocin911 2 года назад

I love the point that you stressed to be "Disciplined".

@oakwoodbrown4548 3 года назад

Firstly, my understanding is that the earlier you start paying extra toward the principle on your loan the less interest you would pay on the long run. Secondly, can I open a second investment account and put the extra payment in there then use the profit to pay more on my mortgage yearly?

@michoacan1157 3 года назад

The only issue I see If you want to pay it off under 10 years it's not long enough for growth in the brokage acct.

@JakeBroe 3 года назад

The time period doesn't matter. If you want to pay it off in under 10 years, it is still percent costing you vs percent earned in the market. The difference is the same.

@michoacan1157 3 года назад

@@JakeBroe the 9% in short term isn't guarantee specially with everything going on. Then gotta deal with the gains tax. I will try it in my new house and will do extra large lump payments in my older home. Good information. Thanks for the info this is way safer than that velocity banking.

@michaelcurtis106 3 года назад

I agree with you. The time period for making extra payments matters. If you're able to pay off in less than 10 years or even less than 5 years, then adding the extra money to the principal makes more sense. Going the investment route only makes sense if the payoff is more than 10 years away since the growth will be closer to historical averages. In the short-term, growth is not guaranteed but reduction of principal (and interest) is guaranteed.

@stephenmarra3120 3 года назад

Your out of the box thinking is excellent! Keep the videos coming!

@DylanMeek7 3 года назад

not making more than minimum payments and investing into funds is ASSUMING the future and that you will "make" over $100,000. when in reality, people making minimum payments will spend that extra money on stupid things, or they will refinance their loan twice and spend longer than 30 years paying off their mortgage, and sit there owing a bank money for 40+ years.

@JakeBroe 3 года назад

This statement is not untrue, haha

@austindrury856 3 года назад

Hi Jake, what are some financial benefits of paying off a mortgage early other than peace-of-mind and the potential for a new mortgage? In one of your examples, you considered a 30 year loan with 3% APR, and contributing $100/month into a taxable brokerage account at 9.8%. In this example, you have enough to pay off the remaining loan after 23 years (the calculator I'm using says $93,763.76 instead of $102,009, I'm not sure why but I'll go with mine for the example since its what I have). However, if you instead continued investing just the $100/month and see the loan through for the remaining 7 years, if my math is correct, you would have $191,721, which, after accounting for taxes, is $132,362. I can't directly compare this number to yours to show the loss of potential since the calculators didn't match perfectly, but it seems to me that continuing for the remaining 7 years would be the better financial decision. So, to bring the question full circle, what reasons would a person have to cash out the investment and pay off the loan, aside from peace-of-mind?

@JakeBroe 3 года назад

Hey Austin! I believe there is none. If you just look at the math, it is better to keep your money invested and only pay the minimum on your mortgage. But this isn't how ordinary people think. At some point, people would rather earn/save less and just be debt free. I think you understand!

@rrubio3608 3 года назад

The example you gave of paying 300 extra a month would be applied to the principle right? Because that actually reduces the 30yr term by 12 yrs and not 8 like you said on this video.

@JakeBroe 3 года назад

Did I make a math mistake? Possible... I just used a website's calculator.

@RG-1045 3 года назад

Jake THE MEN😎

@JakeBroe 3 года назад

Thanks RG! Cheers!

@carolinacarnivore6776 3 года назад

Would it be best to max out a Roth 401K to $19,500 annually by putting your extra "mortgage" payment here instead of opening an individual brokerage account to avoid capital gain taxes annually? Or no, because you would pay higher taxes at withdrawal and maybe a penalty for early withdrawal by using it to pay off a mortgage?

@JakeBroe 3 года назад

Hey Krysta! No, you got the right idea. I would rather max out your Roth 401k and keep the money in there until you turn 59.5. Once you can take the money out penalty free, then you can pay off your mortgage. This would yield you way more money, but you have to wait until 59.5 to officially pay off your house.