George and Jack, this is a good conversation. People these days need to understand how to disagree agreeably, with respect. This is a good demonstration of that in action. Bravo.
100%, both participants know their position, know why they believe it and they don't resort to personal attacks when someone disagrees. I wish more conversations played out with respect in this manner.
Exactly if his returns from savings or stocks comes closer to the 2% and theres no other investments that can gain more than 2% then pay off the mortgage. Otherwise you're losing out on so much potential profit by putting it all on the home. Your cash goes from liquid to illiquid.
Some feedback. Would be interesting to also hear from Millionaires who are “company climbers” and “saver investors”. Most the guests you have took paths of success that aren’t easily replicated, like “RU-vidr” or “aggressive entrepreneur”. Love jack but he is a “right place, right time” millionaire.
To me, most stories are of company climbers and business owners. Makes me feel like I can’t succeed unless I’m Regional Director making $125k. I wanna hear more “saver investors” like you said
Pro tip. If you want to hear that story go to the guy who only preaches a stewardship sermon once a year at your local church. He's a millionaire with a low income
Jack is right about the mortgage with the percentage he is paying it makes no sense to draw money earning more to pay off a low interest mortgage. The only reason George is pushing this is because he works for Ramsey and if he doesn't go by Ramsey solutions, he has not job.
Exactly if his returns from savings or stocks comes closer to the 2% and theres no other investments that can gain more than 2% then pay off the mortgage. Otherwise you're losing out on so much potential profit by putting it all on the home. Your cash goes from liquid to illiquid.
Being broke sucks and my biggest fear is going back to that. What makes me happy is being able to provide for my family what they need, and also what they want (they don’t get everything they want, but I like knowing that I could provide it). Other than watches now, I rarely buy anything for myself, but man do I love it when I get something for my wife that she isn’t expecting. Giving is so much better than receiving. Always remember the famous words of Kanye West… “Having money is not everything, but not having it is”.
Amazing content! Loved hearing this conversation. Perfect example of how to honorably disagree and have a thought-provoking discussion. Huge respect for both George and Jack!
I absolutely get what they are saying when they talk about the diminishing return on happiness with money. Once your needs are met and you have a comfortable fun budget, I don't see what an extra $50,000 gets you.
Loved watching you have on someone that doesn’t follow Ramsey’s foundations exactly. Hearing the different viewpoints are very enjoyable bc we are all different and are in different places in our lives. Also, I wish George and I were buds but until then I’ll just continue being a subscriber.
The value people place on money is based on what money allows them to do. If your constraints are financial in nature, you can afford to do more if you have more money. If you don't have enough money a lot of your focus will be on making more money. That's because a lack of money will severly limit what you can do. Once the financial constraint is gone you'll start saying things like "money isn't everything" and "money doesn't buy you happiness". When you have enough to cover your needs and wants, then you'll start focusing on the other constraints, like "I have all this free time but it sucks because all my friends have to keep working for a living".
High-yield savings account interest is taxed at ordinary income tax rates, especially as a high income earner. So the net earned from high yield savings hardly offsets the 2.8% interest rate from his mortgage loan. Peace of mind from being debt free is PRICELESS. Keep it up George. Thank you, Jack, for being in this video.
I'm such a huge fan of jack. In terms of the iced coffee hour, I came for graham but stayed for jack. He asks amazing questions and can communicate his message super well. He really is an inspiration and I just wished he went harder on his own YT channel. Jack is wise way beyond his years
Hate to say it: Jack shouldn't be the poster boy of success. He is a unicorn because he fell into everything - based on what he said he was waiting tables making $5k a year and shot a few emails to Graham. Good for Jack, but he is the exception, not the norm.
@@stevenporter863 I meant more in terms of his personality. His ideology, philosophy, the way he sees life, happiness, success, etc. He also seems incredibly humble and grounded in reality. Some of those traits are hard to come by😊
I've always paid cash for vehicles. I was curious recently and went into a dealership to check out a 35,000 vehicle and find out how much the monthly payment would be doing a loan. It was an 8% loan and it was over 700 a month and the car salesman was trying to tell me how great a deal it was...
What contributed most to your wealth-building: income. Finally, an honest answer. Yes, I know you can make $300k+ per year and live paycheck-to-paycheck, but it underscores that building wealth when you have a deep six-figure income is exponentially easier.
Nah, Jack, as someone that paid off multiple mortgages now I'd say definitely listen to George and getting rid of that house loan. It's a smart bet, you don't know if your interest rate could at some point go to high two figures, you don't know of an impending housing crash and recession. Getting rid of thst mortgage is total piece of mind. Get rid of the mortgage as bankers are nothing but middlemen to building your wealth. Like you I had stock options, and a load of cash sitting on. The last loan I totally used up quite a bit of cash reserves and left a large emergency fund. Then cashed a sizable part of my investments to eliminate the house loan. Your net worth will increase that day and usually every year after as you've eliminated on of the largest liabilities. My two cents
I like George, but 16:12, the math does work. I think George is confusing the entire mortgage principle to the amount of early payment. Purely math wise, keeping the $$ would net a ~2.5% difference on just that amount. If you take it to the extreme, if you have $100k left on the mortgage at 2.5%, and have $100k in a HYSA that has a rate of 5%, you would be positive $2,500 a year. Again, that's just pure math, but each should do what they feel best.
100% you have to live through being stupid to actually learn and not do it later, I heard of SO many people getting cocky and holdinf too long, but it didnt save me from doing the same thing
Paying off that mortgage is dumb. It's called opportunity cost on your next dollar. By paying off the mortgage, you're assigning a 2.75% simple rate of return to those dollars. Even a 2.75% compounding return would be better in the long run
I agree with Jack, I think he should keep the mortgage but only if the interest rate remains at 2.84 and doesn't increase. For me, it isn't so much about the abritrage thing getting the 5 percent from CIT bank but having that extra money serves as your emergency fund. You don't want to be caught in an emergency needing money only to have realized you used it to pay your mortgage off and now having to take a loan out for 20 percent. I also have student loan debt at 1.8 percent and I'm paying it off as slow as they allow me too. Like Jack, I am confident I have no problem whatsoever paying the debt and is on autopay. That money I saved from not paying out the student loan full have made me feel safe knowing I have a safety net, not to mention how nicely it has compounded invest over a decade in the S&P. That gain alone can pay off the student loan 20x over.
Jack when talking about losing money with call options: “Everyone thinks that when it happens to them they won’t react in the stereotypical way which is exactly what happened to me. I’m like you know what, I’m making all this money, I’m a genius, I know what I’m doing…I got cocky and I got burned.” Jack, ten minutes later when trying to defend not paying his house off: “I know who I am. I know where I’m disciplined and where I’m not disciplined. I know when I can make gutsy decisions and when I can’t” I’ve never heard of Jack but just hearing this and a phrase he used a couple times in this video, “that’s good for the average person, but I…” shows he might need to take a lesson in humility. But what do I know? I’m probably just an “average” person.
He has to parrot whatever old fashioned advice Dave preaches. That’s why this company won’t succeed after Dave retires. You know you’re not getting an honest opinion from these personalities…you’re getting what they have to say to keep their job
I’m sorry I disagree. When you don’t have a mortgage payment, you can invest that money into a good growth stock mutual fund. And if you keep investing, you can become a net-worth millionaire. You can also be outrageously generous.
Amazing how you want to keep a mortgage, give that money tot he bank, and with that money you are throwing away is affecting your said retirement. And don't give me that garbage about the tax deduction, the standard deduction these days is enough to cover any kind of foolish tax breaks like this.
@@anhbarker It isn't an equivalent amount to the full mortgage payoff so that 5% isn't on the same amount as the 2%. However he said he'd have to sell stock to pay the mortgage off fully and the stock is probably at least 7%. What he's doing is fine. But if he has a short fixed term on his mortgage like many people these days then he may want to pay it off sooner rather than later because his mortgage rate could go up.
George isn’t right about Jack needing to have the full 500K to make the arbitrage work.. if he has $250K making 5%, he’s still making a 2% spread on that $250K as opposed to if he put it on the mortgage
Its funny how debt is looked at, if you get a credit card and the first thing you think of is how many shoes and jewelry you can purchase then obviously debt isn't for you. Debt is a tool to build passive income. Not something to gain more liabilities.
hoping to reach atleast an additional 100K in liquid assets this year 2024 (currently at around 200k net worth at 29). only major debt is my house so paying that off would make me feel great.
a few hundred dollars a month for entertainment??... it cost me $70 to take my kid and wife to a movie last week. We went to dinner afterwards at Buffalo Wild Wings and that was 60. so we can go out 1.5 times a month for $200.00
No George, it does not matter if you have the full amount. If you have one extra dollar, it can either earn you 5 cents in an HYSA or save you 3 cents on your mortgage. 5>3
If you have a $1,000 mortgage at 3% and $100 in a bank account making 5%, but the remaining $900 is in stocks, which could be making 0% or less, the math no longer works. I think that's what George was saying. You can't say "I'm making 5% on my money in a bank account" if only a small percentage is in the bank and most of the money is in a more risky investment.
@@tiffanymackey2382 I guess that's fair if George is saying just cash in the stocks to pay off the mortgage and not use the existing cash. This would reduce risk (likely, but not certainly, at the expense of poorer returns).
No offense, Jack seems like a nice guy, but I’m not really sure what he has to offer from the personal finance perspective other than he has a large income because got lucky Graham brought him up. Other than that, he seems like a standard millennial, YOLO, vanilla type of guy.
@@FATmenDRIVEtrucksAnd if Applebees didn’t exist, he might be working on a farm. What’s your point? That could apply to anything. “If X didn’t exist, then he would be doing Y.”
DON'T pay of the house, it's DUMB. Jack will make more money in stocks and even a high yield savings account instead of paying off his house. He has a 2.8% rate! It's a cheap loan. If he can make more than 2.8% with his money, then he should.
7:06 I'm not most people. If I had the money I'd be doing a lot more travel and getting a lot more experiences. So a few hundred dollars isn't going to cut it.
I like how George easily dismantled Jacks argument when he doesnt have the money sitting in high yield to make up the difference. Another part he is missing is these high yields are variable as well so he might be better off paying down the mortgage. Also his income is in a very niche field. If grahams channels no longer bring in views hes gonna be screwed. I like jack but hes a bit naive still
It's a loophole for those who earn more than the income limit. They contribute to a traditional IRA and then do a conversion, hence going in through the back door
You've got this! The TSP is a great retirement account. Spend well within your means, invest automatically, and your wealth growth should be steady and inevitable.
Sorry George. You are wrong about the mortgage. It is stupid to pay off a mortgage to have dead money sitting in equity doing NOTHING for you. Your decision is based solely on your peace of mind. That may work for you, but mathematically it is dumb. Especially if you have the money to pay off the house tomorrow. Jack has investments that can pay off the house if the .01% chance happens and they call his loan. But that doesn’t happen. I even question DR’s story. But with a 2.something% interest rate, IF you are investing the difference, paying off the mortgage is dumb. My parents followed DR baby steps and pushed so hard to pay off their house. Now it’s paid off and they have very little in investments to live on. The $400k in equity in their home does NOTHING for them. However if that money were in a Roth they could be living on it.
Jack is literally the only person in existence that I know of that actually pays attention to his finances and has a budget. Too many guys (people in general, but I date guys) just spend spend spend
No one will ever convince me that money doesn't buy happiness. Money makes everything better. If money doesn't make you happy, please send it to me so I can do a Brewster's millions in real life.
@@arh1234 I'm sure there are people that feel that way. And I'm sure it makes them feel good to say that. But in reality those same people will gladly take a sponsorship from FTX, Noble gold, Irish land deeds, or whatever the next scam is. It is human nature to want more.
great content! Hey Jack, I'm open up to consulting for my channel whenever you are avaialble hahaha...if there's any chance for you to coach me from another side of the World, I'm willing to do anything be coach by you!
Encouraging someone to pay off a 2.75% fixed rate mortgage early when FDIC insured high yield savings accounts are paying 5% interest is one of the stupidest things I’ve heard in a long time. This “all debt is bad debt” attitude the Ramsey people have is asinine and it’s costing some people a LOT of money over the long term who follow their principles. The terms of the loan and interest rates are huge factors. Sure I guess some people are not sophisticated enough to understand the nuances and should try to avoid any debt at all costs. But I have to think the majority of people are at least smart enough to do some basic math and appropriately weigh their options.
Jack = start dating only women you are sun sign compatible with......I'm a Cappy and my best compatible signs are women who are either Virgo or Scorpio! You'll find your true love VERY quickly!
