I'm 32, Should I Invest or Pay Off My House? 

Yes...agreed!

Need more 36k-50k a year calls. We can all relate to around that amount

For real

Depends where you are. My gf and I are 28 and 26 in no and combined we make 205k and she is set for promotion in July which should bump us up another 15k or so.

That's funny, I would not call it actual money until $200K+ LOL

Good point!

I think financially it's the Smartest move too, but yes your comment was great. Paying off the house will have so many psychological benefits that will allow him to do better with his money.

Paying off the mortgage is a guaranteed saving the interest that will be owed if he did not pay it off. Investing in the stock market or mutual funds is not guaranteed return and could lose value. Then there is capital gains tax if he did make something.

I agree. I would invest 100k and continue to make the payments. The interest on the investment would be much greater than the interest that’s owed on the house. He’d never catch up to investing. Example. Invest 100k for 30 years at 10% interest a year and contribute just $150 a month to it he would have 2 million. But do what Dave said and start at zero and invest 9k a year for 30 years and same 10% interest and have 1.48 million. You lose out on 500k

Right to the point. Not everyone knows how to invest or doesn’t want to get into it as it’s not their cup of tea.

Would you do the same if it was only 1300 a month

​@@Imhere12345 always

He just lives in Tennessee is all. Easy when there's hardly any property tax, no income tax, and you can get a nice house for not much more than 100k lol I'm thinking about moving there myself.

@@user-jy7yw5kw3w texas probably better bet.

@@devoywilliams3956 too hot, and property taxes too high for my taste.

Sad part about people moving in to Tennessee from other areas actually believe raising property taxes are in order. It's unreal

@@user-jy7yw5kw3w come to Arkansas. My property taxes are only $700.00/year! My nice house is paid off. It's wonderful.

Your rich!

Yo!!! I want an update. Did you pay it off bro?

Did you pay it off???

3rd person here asking, did you pay it off???

He said he's 34, while the video title says he's 32. His wife was 32 and she wasn't on the call.

As a 32 year old...yeah I thought he was over 50 based off his voice.

@@aliciahunt2608 Looks like there was a typo in the video graphics. The caller is 62.

@@costco_pizza he said he’s 34

He’s 42, the phone call adds 10 years

Lol

I mean it's easy to have that amount if you're 32 and literally never invested anything. He should have started a roth IRA and his 401k years ago and his net worth would be double. Keeping that much in savings is a rookie mistake.

@@ImTaylorGang massive mistake by have that much cash uninvested on hand

@@ImTaylorGang jealous much😂😂

@@memes4life231 no, I have more thanks to beginning my long term investments at 23 when I kicked off my career. not sure you read my comment correctly.

I was surprised at her response, I knew Mr.Ramsey would say pay off the house.

And I am 59 now. owe 70k to house, saved a little money in bank and no other investments and retirements. I wish I had advice and come across him earlier.

Great point!

Would you do just 15% or more?

30 years to invest, becomes the default justification to delay investing. But life is mortal. People die. Our goal while alive should be to get as much unearned income as possible, as fast as possible. A secondary goal is property ownership. Financial freedom is a much higher priority, than owning a residence.

@Jarod Armstrong Agreed!Renting allows flexibility to move for higher wages. When we no longer need earned income, and we want to stop traveling, then we buy.

15% for retirement, is that before tax or after tax? Sound like a lot to me

Nice, I did it at 33.. wish I did it even sooner

Wow, Two homes paid off by 31. Great job!

Damn I'm 33 and haven't 😢

People call for Advice. That's why he called.

That's because he's all about security. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.

@@seanfatzinger there is that and the fact that Dave knows he has to dumb down his program to the lowest common denominator.

@@seanfatzinger It's about managing risk. Paying off your mortgage is a GUARANTEED 3% return. There are no guarantees with the stock market. Yeah, it might go up -- but it might go down too.

It's a great *feeling* to pay off your house. But smarter people are not ruled by emotions and feelings. They know how to do math and math tells you not to forgo retirement savings in favor of a low interest home mortgage.

Only a "sense", though. Math doesn't lie.

@@superblump87 fluctuation doesn’t either

@@superblump87 Neither does risk.

Doesn’t matter. This kid can do both, sounds like. You can’t invest more than 6k/year in an IRA anyway. Pay off the house. Start investing as early as possible. Pay off the house and look for other investment avenues if you have all that extra disposable income.

@@jimroscovius there is zero risk if you invest in index fund. you could only lose your money if you invest in individual companies

Thank you!!

Wrong answer you invest the lump sum and it sets you up nicely

True that, feels so freeing.

Paid mg car off a couple if months ago. Feels nice to not have that payment anymore! 💯

I just buy cars cash because they depreciate and it's not worth spending much of my net worth on a car.

And when you learn how to fix it on your own car and house it’s X1000 better!

@@cecilleflowerfarm 100%!

This guy should not invest, simply because he doesn't know what he's doing. Having 100k in a bank account is a big red flag to me and tells me they need a financial advisor before investing any of that money. He's better off paying off the house and then investing IMO, he's going to be behind what he could have if he invested it all, but he has less of a chance of destroying his finances by poor investing decisions.

You down here in the comments of all the videos I watch.

@@SchroederSport Well he does have his own page to promote

Only death will free up the mind, theres never peace, theres only temporary treatment, no cure

@@johndone8045 creep

Mathematically, Dave's snowball method isn't best. It is only for psychology.

The Money Guy?

@@harisadu8998 Dave acknowledges how the math works out. But he believes the psychology matters because it will encourage you and you will be more likely to succeed. He advocates a plan that is easy for many people to follow, but not mathematically ideal in a risk neutral scenario.

Dave if you can't stay out of debt. The money guy if you can.

MONEY GUY SHOW IS THE BEST 🦾🦾🦾🦾

Thanks for putting it that way. I needed to see this comment. All my friends are investing and it’s tempting to do the same. But I want to be the only one who doesn’t owe anybody while risking money.

Math ; you may also have less money if you invest it. Not every stock investment pays off. Only on youtube it appears nobody losses anything while investing.

@@Alwaysbeclosing1774 that’s if you do some single stocks or sell early. If you invest for the long term in something like a S&P 500 index fund as long as you hold it for the long term you can lose.

@@Alwaysbeclosing1774 Yes, you could lose money. Its what stops many people from investing. Yet somehow many business take out loans everyday to expand their business and make more money. Yes there is a risk, but there is also a reward. You have to decide whether you are comfortable with the risk. Those who end up succeeding are the ones you see on RU-vid saying they did what everyone else didn't do. You could lose a lot, but you could also gain a lot. I'm currently taking risks right now. I've watched my investments lose money since the start of the year. However, I haven't had to sell any of them so I technically haven't lost anything as yet. I'm also still investing despite the losses.

Math : think of a number Emotional : Sleep at night in your own home

You are so right!

Yep he should have contacted me $80k earlier, lol. What a waste of potential.

Also should capture a low rate through refinance if he hasn't already.

407k mortgage at 2.82%. Invest or pay off the house?

@@lukem5962 invest.

@@kartboarder22g17 invest in what though.

I was shocked by her response. The guy has 100k and owes 80k. And the guy and his wife are working. Pay the house off and invest every dime going forward. You don't need to be a financial "expert" to figure this one out.

@@Scott-nj9gq 100% agree with you. I was highly surprised with her advice. That just shows that you don’t always act or think the way you were raised. But I do remember her saying she has a spender type of personality. The baby steps clearly say to get out of debt before investing. The house is debt haha.

@@Scott-nj9gq I know baby step 2 says “except the house”, but in this man’s case, he can afford it and still have 20k left over. He should definitely get out of his debt because he’d still be well off, not dirt poor again.

He said that's good advice but let me tell you what you should do.....lololol

Her advice is better : the longer the money is in the market, it will beat any interest in mortgage. Its sad that he gives such advice that is really shortsighted

It's not. Our country is pretty much falling apart, but thank you for the well wishes! You stay healthy over there.

@@trailrunnah8886 Once you turn off the news, things aren’t so bad

Things will start to get much better on January 20th! Thanks for the well wishes.

Times are tough on both sides of the pond, but I think our countries have been through worse. Wishing you well in the UK!

@@johnrandom3903 Our economy doesn't get better because you close your eyes. You're what's wrong with America.

as long as the caller doesn't consume the money, investing or paying down debt will result in more wealth for him.

Black vito!! Millennial money! Hope all is well bud

Yea or a year or so holding the right cryptocurrencies. Then moving it to something with lower risk like mutual funds.

Agree. To me it’s a no brainer, why put 15% towards retirement and kick the can (mortgage) down the road for 5 more years, when you can pay it off today and invest 30%+++ in retirement starting next paycheck! No brainer

Well compounding growth in your early 30s would create more wealth in the long run by using that 80k, however from a peace perspective a paid for home is amazing.

@@alexr3950 exactly I agree with her more than dave, its more upfront but longterm you're losing out

Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.

@@seanfatzinger The way a mortgage is amortized makes it a terrible deal for the borrower, regardless of the low interest rate. I'd payoff the house immediately if I were in this caller's position.

What is your Net Worth Subzero?

If you took that same amount and invested in amazon in 2016..... Kidding. Good job!

@@randymorrison1761 exactly. but your know 90% of American people are focused on paying debt off

@@narutovskiba88 seems to me a good half of America doesn’t seem to care about debt at all.

I always like to think of it as, what is my price of freedom(from debt or anything else)!

Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.

Dave advises people to pay off the mortgage because of the emotional peace it gives people, not because it’s the best investment strategy. There’s a huge difference if this guy invests 100k now compared to only 20k (if he pays off his mortgage), and that will likely be several hundred thousand dollars difference in 30yrs when he retires.

Putting that money into maxing 401ks and IRAs also gives a lot of room to invest.... I'd lean towards maxing out the retirement post-tax (absolute max of paycheck allowed going into 401k) and drawing living expenses from the savings, maxing both Roth IRAs from the savings, if you are close to end of the year doing that again at the beginning of that year, then taking anything lwft above 15k or so and putting it towards the house. Then do 15% into retirement while paying off the house ASAP, but I'd get as much of that money into retirement as quick as possible. Had they done that originally instead of 100k in the bank they would have 15k in the bank and 150-200k in retirement (if it was invested of coursel. Then again, if it was invested instead of in the bank they'd have about the same outside the IRA. Listed kids, saving is good to a point, but INVESTING is what will let you retire or become rich. Its difficult to save your way into wealth. Not impossible, but difficult. Its easy to invest your way to wealth, especially if you start in your early 20s. Even $400 a year turns into 200k or so by age 70. Strive for an absolute minimum of 1-2k a year with 5k a year being better. Donthat from age 21-35 and your retirement will be great (so long as you dont do something dumb like pull it out or keep it all in "safe" funds the whole time).

@@seanfatzinger Agree totally with your point.

Do you ever second guess it?

Great ideas don't even trade without investing with an experience expert or.. Signing up for mentorship

You're right sir trading without an expert or mentorship blow your entire account off

How old are you

We bought because we wanted a place of our own and also because of yearly rent increases. We should have bought sooner.

He's probably lived a lifetime with 2 kids already.

@@TraumaER There was a typo in the title. The caller is 62.

@@costco_pizza 【ツ】

He’s just that advanced financially!

I thought the same.

Depends. I wasn’t told my college was going to be paid (through a 529) for until I’d already looked and applied to colleges so I still picked a smart major and school that wasn’t extremely expensive.

Unfortunately, starting back in the 1980's, we were all fed the idea that if you didn't get a college degree you were doomed to be a loser. At least that's what they were pushing in my High School.

You can make the choice whether you want to save for your kids college that’s up to you. But here’s why a 529 is good. If they go to college you get growth money tax free and can use it. Even if they don’t go to college all it is is you have to pay some taxes on it just like other stuff or you can not withdraw and let them have it for their kids or somebody else in your family

He has talked about it in past videos.

He would make more investing the 100k

I think that if you stick to the same strategy when times change you are bound to become different. If i stick to a car that drives on gas while everyone drives an electric vehicle i'l be Unique too. If i stick with a landline while everyone uses a smartphone il set myself apart from the rest of the bunch. Just a different way of saying that his advice is about 30 years outdated.

Only if the numbers work out. It's a case by case basis. This caller will probably benefit with paying off the remaining balance of the mortgage and have enough to invest in his 401k / ROTH IRA and still live comfortably. If some has no debt, but makes $25K a year, has a wife and 3 kids, no other savings except $10K in the bank, putting the $10K towards paying off the mortgage today would be unwise, especially with no emergency fund and no savings of 3-6 months of expenses. He would have to work on the baby steps, and possibly get to where he is putting extra towards the mortgage loan principal amount. Again, it's a case by case basis.

Great spot to be in here

Depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early.

@@seanfatzinger you already said that this video

You would also end up a lot worse off in the end than if you did the reverse. The feeling of being mortgage free is a perk, but all things being equal you will be worse off financially in the end. Not a debatable fact.

@@mastermind6767 Not debatable from a financial perspective. But again, everyone has different goals and desires. For some, security is paramount to everything.

Agree! It irks me when I hear Dave throw out bloated numbers. Yes Dave, you will be “half wrong”!!!!

Dave has always based his calculations on 12% growth, and his 15% guideline calls for 15% of the gross before taxes not take home.

@@SonnyBubba Dave’s numbers are wrong here even with a 12% return which is high it would e less than $5 million

That's why ur not a millionaire.. lol

The problem I have with him investing, is that he obviously has no idea what he's doing with money. He has 100k sitting in a bank account, that money should have already been invested.

@@matttzzz2 stock market

🏡

​@@matttzzz2 Total market / SP500 ETFs.

Well said!

Very true, but its a bit different if you choose to invest. You could lose you invested money, but you could also make money. I feel like when people talk about investing they equate it to throwing away money when it really isn't. If you invest and get a higher rate, you can still sell your investment and pay off your mortgage at any point.

Who did he make mad, other than perhaps his co-host which he disagreed with.

you’re right. but this guy has no idea about investing, so for low financial intelligence people it may be the better move. and that’s most of his callers.

Wow, you must have had a lot of capital. I made a 24% return on stocks this year but nowhere near enough starting capital to change too much

Yes but many don't want that. He already has a job and likely doesn't care if he makes the absolute most possible.

@@ianrobinson4200 not a ton of capital but my cost basis on tsla is about 70 dollars per share😀

Not everyone is good at investing. I’ve seen a couple of people try doing investments, who didn’t know what they were doing and actually lost all their savings and put themselves into further debt.

Looking for a comment such as yours. Thank you!

Imagine though you were paying more each month to the mortgage and then got laid off before the house was fully paid off what do you do then. Another reason why it’s better to invest

She will guide you on your trading or invest with her ...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..) Do well to tell her i referred you. She's my expert....

RU-vid search "Dave Ramsey why pay off debt if i can invest at a higher rate" and really LISTEN to those clips

@45 HDS No doubt, im just thinking about the optimal course of action in this scenario. This dude is already miles ahead and will be fine regardless.

Although I lean towards the invest option, I would confess it's like trying to pick between two right answers.

I would rather do a utma account instead of a college fund. As you say, the kids may not want to go to college.

Same. Definitely invest.

We 100 thousand, I’ll buy 2 properties of 500 thousand each and rent them and get passive income. When the girls are ready for college, sell the property and make $100,000 on each property

@@anadeibyV sounds risky. What kind of properties? Multi-plex apartments? I'm asking because I also have $100k that I'm still contemplating what to do with.

Go broke quickly doing that.

She will guide you on your trading or invest with her ...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..) Do well to tell her i referred you. She's my expert.

She will guide you on your trading or invest with her ...(...3...1...0...)...5...1...3...4...8...4...1..(.. +.. 1..) Do well to tell her i referred you. She's my expert.. ..

Doing a custodial account for my kids

Claxton when my daughter was in kindergarten I put $200 a month into a 529 and had my then wife do the same. Also threw some extra into it now and then. So 16 years later have over $100,000 saved for her. Have not had to touch it fortunately because she goes to local branch of a major 4 year school. So lives at home (which she hates LOL!). So no room and board and gets $2000 per semester for being in an honors program. But she is hoping to get into med school (applying in april) if short of that, grad school. So that money will get spent and then some. If for some reason does neither (but not likely) I would have to pay tax on gains. But isn't much cause only earns like 4%. They keep those pretty conservative. You get your principle back. But a guy I work with told me he had trust funds for his kids and when they turned 18 turned them over so they could pay the tax or no tax or very little tax cause of their tax bracket. Perhaps you could do better then the 4%. Didn't think about this back then. Disappointed in people that don't believe in their kids when born thinking they aren't going to amount to anything so why bother. Even if you can only save a little they might be inclined to go if they know their is something their for them. I only went to a community college but still ended up a millionaire but got lucky and fell into IT before it even called IT. Like 42 years ago. Ouch. Oh well. Kudos to you thinking about this. And to vent a little, interest forgiveness on student loans for STEM I can go along with. French fabric technology in medieval times. No. And what do you tell this upcoming freshman class. Where is their break? But reality is feds make huge money off of the interest so not likely to ever happen.

Even if the kid doesn't go to school, it's still not a disaster. 529 accounts are transferable to other individuals, such as siblings, grandkids, or even yourself. Worst case scenario, pay the 10% penalty and pull it out. After all, it's additional money that you never figured on using in the first place, and most parents of college-aged kids would still have time to re-invest the money and get hefty returns before retirement.

Why give the bank money when you can invest it instead.

@@jimroscovius Your not giving the bank anything, you are ending the loan and the interest on the property.

@@jimroscovius you give the bank money when you pay interest...

@@superblump87 Right - that's why I pay off the house. I don't want to give the bank money.

@@jimroscovius ah, got it. The way you worded your comment made it seem like the opposite.

Love comments like these over the usual “he just called in to brag” comments!

@@NicE-jq3wv 100k in your mid 30s isn't much to brag about, especially when you don't know how to invest lol.

@@Lolatyou332 Depends where you live.

@@Lolatyou332 it is a lot to brag about he's in a better position than MOST Americans

​@@ClaxtonBay123 This isn't most Americans though, this is the Dave Ramsey show where most people are more financially savvy. Paid off 100-200k house in mid 30s isn't a big deal when you don't have any investments. 500k by mid 30s or 1 mill by 40s is impressive and brag-worthy.

It's not a new thing. Sometimes he doesn't agree.

She is smarter than Dave at least when it comes to this answer.

@@jeffmorse5599 disagree completely. He can literally pay off his house today and invest 30-40% into retirement starting next paycheck. Why kick the mortgage down the road when you can X3 or X4 you’re retirement on your next paycheck.

He constantly has to give a better answer than Rachel. I can’t stand when she is on

@@TheMopar97 Because a mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early. Same reason he encourages paying 20% down to avoid PMI. If you have the money to put 20% down, you are far better off investing that money. The PMI typically falls off for people after 5-10 years. Worst case scenario, it has to fall off after 15 years. That invested money will have DRASTICALLY outgrown the piddly PMI amount you will have paid during that same time period.

Sort of what we did...like 8+ years ago we invested Strong and around 2 years ago pulled out money to pay off house.

@@markg999 Exactly. I’m only 26 and I just bought my first house. I’m working on aggressively paying off student loans, investing, and then I will get around to my mortgage once the student loans are eliminated.

So your in debt giving advice to someone who is debt free and has cash to invest? Sorry, not listening to you. Find another channel

I like Dave’s advice since this guy has the money to pay off the house, but if you can’t pay it off in full then I think doing both is a good solution. It doesn’t have to be all or nothing.

@@rachaelv1140 You don't understand how it steals your wealth. Debt does that ,even when you sleep

That’s a Pittsburgh number but Dave’s in Tennessee.

There are multiple reasons. Caller is obviously not an experienced investor. There is a high chance he will loose money if he tries to invest 100k. Therefore it's very good advice to payoff early and then learn to invest.

Exactly

Yup, he needs to invest that money now.

Great point. Save the long term interest cost is sort of a third option.

I very much agree with you on paying down your mortgage in the early years. But it all depends on your goals. A mortgage loan is the cheapest money you'll ever borrow, and with an average return of 10% in the stock market, you are better off investing. It's not a money thing for Dave, its about security. There is tremendous security in not having a mortgage, which is why Dave always says to pay it off early. Same reason he encourages paying 20% down to avoid PMI. If you have the money to put 20% down, you are far better off investing that money. The PMI typically falls off for people after 5-10 years. Worst case scenario, it has to fall off after 15 years. That invested money will have DRASTICALLY outgrown the piddly PMI amount you will have paid during that same time period.

Right, PMI is nothing to be afraid of. But lots of people think it's the devil lol. The other factor to consider is that the $16k interest savings isn't realized until when the house is paid off... Maybe 12-15 years later.. so it's worth way less

The pandemic takes two years so he has two years credit.

He said the wife is 32.

@@FFAs too bad the wife isn't the one who called in

@@davidmitchellmusic Marketing dept rejects your reality and replaces it with their own

Well David, you've made a difference in the world correcting something that's utterly irrelevant. Thanks

You are crunching numbers. Dave is talking about a mindset. Accidents happen. You lose your job. Just like his advice about not borrowing from family. That turkey tastes a lot better when you are not sitting in your father-in-law's house, eating off his china and owing him money.

what?

Haha

Yup. Knowing his mindset I knew he’ll interject right away.

A HELOC Loan can be called in at anytime by the bank, then what?

@@tjones2550 that’s not 100% true. They can prevent you from withdrawing from that account. You did sign a contract for at least five years. And it doesn’t mean that they expect you to pay 100% of the outstanding balance. At the end of your term, they would either sign up for a new contract or have a repayment schedule I suppose if they did not want to renew. But they can’t make you come up with the balance whenever they choose.

@@WoodUCreate You can Google if a HELOC is a callable loan or check out a past video by Dave Ramsey. There is no limit and the bank can change the terms at anytime. By the way, though we're disagreeing, I hope that we're learning from each other and it's not arguing. Ok

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agree

In 2010, houses in my subdivision sold for ~$40K. ~$10K down, $175/mo It was a true Shark feeding frenzy. 5 people bought 30+ homes My home will sell this year for +$300K. I will go to Rural USA and buy a $100K home.