With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly, which means more red ink for portfolios this second quarter of the year. How can I profit from the current volatile market? I'm still at a crossroads deciding if to liquidate my stock portfolio.
Since the market is currently volatile, I will recommend that you hire a financial adviser who can advise you on entry and exit points for the shares or ETFs you focus on
You are right! I've diversified my portfolio across various markets with the aid of a financial adviser, I have been able to generate a little bit above $450k in net profit across high dividend yield stocks, ETF and bonds.
I have been thinking about how to grow my reserve by at least 40% or more within months. I will be grateful if you can give tips or anything on how to make good market picks and how I can get my portfolio diversified and balanced in order to meet up my target.
*KAREN* *MARIE* *GENDRON* is the licensed adviser I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment.
Thanks for sharing this. I just looked her up on the web and your advisor's webpage popped up. She looks advanced and experienced. I will write her a mail shortly.
Pay off mortgage early? Hell yeah! Owed $150K mortgage in Sept 2021. Decided to put the boot in and started making additional payments toward the principal. In less than 3 years I now only owe 24K. Sweet freedom & retirement await!
@@ryebread447 No kidding! Working 2 jobs, very little eating out, no vacations, no spending. It's been hard but once the house is paid off, will mean a $3K/mo after taxes pay raise.
@@marcusantimony7535if it was easy… you wouldn’t appreciate it… and everyone would do it. You’re gonna scream, cry, maybe faint when you get that deed! CONGRATULATIONS FRIEND! I’m happy and proud of you!
Had you invested that money wisely, you would have a lot more wealth. Paying off a mortgage for some may be OK, but I'd rather be cash rich than house rich. My mortgage rate is 3% and I don't plan on paying it off early, and I retired 14 years ago. I'm making over 15% in the market and will just pay off the house with "cheap dollars" as it's due.
Fortunately, my spouse and I were able to pay off our mortgage early. While we were both still employed, we took the money we had been using to accelerate our mortgage repayment and invested it immediately. Thanks to nearly 7 years of saving what would have been our mortgage payment and to maxing out our 401K/403B plans, we were able to retire early. Fortunately, both of our parents instilled in us the need of living within our means.
Thank you for your advice. I know it will help people. we are interested in investments that could set me up for retirement , I mean I've heard of people that netted hundreds of thousands during these crash, I listened to someone on a podcast who earned over $650K in less than a year, what's the strategy behind such returns?
I paid off my 15 year mortgage in 9 years using the snowball method. Since the rest of my debt was gone I threw every extra dollar I could at it. I started ubering to put more money towards it. My main job was waitressing and at the end of the night I would take the last few guest that walked through the door since none of my coworkers wanted them. They always assumed incorrectly that the tips at the end of the night were never as good as the tips in the beginning. Most nights it was like getting a 30% pay raise. By the way, Erin I love your channel. Sending love from, The City of Detroit.
The "secret" to paying off a mortgage early is just to put additional money toward the loan principal. How you do that is up to you and your budget. Too many people say that they just can't afford to pay more. But look at it this way. How many people spend $20 per week eating fast food, buying coffee, buying beer, whatever. If they just took that $20 per week, or $80 per month, and applied it to their mortgage principal each month, they could pay off a $400k, 7% interest 30-year mortgage in just over 27 years while saving $60,000 in interest.
Great video Erin. We took out a 30-year mortgage in 1988. This was our second home purchase. We put 25% down as a down payment. I set it up to make bi-weekly payments. We were paying $650 every two weeks. In addition, my wife sent in an average of $150 extra towards the principal. We even made a form transmittal letter indicating that the extra payment was to be applied to the principal only penalty free, citing the relevant paragraph in the mortgage giving us this option. We paid off our 30 year mortgage in 2000, in approximately 12 years. It was a great feeling to be completely debt free. The best thing I did after this was I kept making the bi-weekly mortgage payment, only now it was going into my Fidelity S&P 500 Index Fund. I never allowed myself to get use to having this extra money. You are absolutely correct when you indicate that small extra amounts can save you $1,000’s in interest costs. Thanks for the video.
Continuing to pay the make the payment after the mortgage was paid is brilliant. You won't miss the money and can really ramp up your investment portfolio. This is way better than keeping the extra money in the bank and earning a low interest rate.
The continued payments is the truly genius part of this. So easy to take that extra money and blow it, but honestly never thought to keep the payment going into an investment. Thank you for sharing your experience.
My husband and I were fortunate enough to be able to pay off our mortgage early. We were both still working, and took the payment amount that we had been using to pay off our mortgage faster and we put it straight into investments. We were able to retire early because of almost 7 years of putting away what would have been our mortgage payment as well as maxing out our 401K/403B plans. Thankfully we were taught by both of our parents the value of living within our means. Thank you for your advice. I know it will help people. we are interested in investments that could set me up for retirement , I mean I've heard of people that netted hundreds of thousands during these crash, I listened to someone on a podcast who earned over $650K in less than a year, what's the strategy behind such returns?
Even with the right strategies and appropriate assets, investment returns can differ among investors. Recognizing the vital role of experience in investment success is crucial. Personally, I understood this significance and sought guidance from a market analyst, significantly growing my account to nearly a million. Strategically withdrawing profits just before the market correction, I'm now seizing buying opportunities once again.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances.
Dang, all these other comments are by robot/scammers. Anyway....this is the right way to do it. Invest the extra money, then when the investments are more than the remaining mortgage balance decide if you really want to cash in the investments and pay off the mortgage. When we got to that position, my wife said "Are you nuts?? Keep investing!"
I paid off my 15 year loan in 11 years by starting off paying an extra $400 per month. I stopped that after about 5 years, but it made a big difference doing that at the beginning to get the principal found ASAP.
Great topic. We paid off our 30 year mortgage in about 11 years. Because the initial rate was high at 11%, we made sure we bought less house than we could afford. After a year we had increased our salaries and applied large chunks of the increase to paying off the mortgage by making increased payment amounts. This resulted in no change in our lifestyle, but had a dramatic effect on the life of the loan since 100% of the overpayment went to reduce the principal. We kept doing this with most of our raises and job changes over the next few years. Also in about year 5, we were able to refi the loan down to the 8% range. All in all, the process was relatively painless since we had never adapted our lifestyles completely to our increasing salaries.
@Erin Talks Money Yes, mortgage and debt free is the best place to be heading into retirement. For most people, debt is not good for Retirement. Paying off early is also a good thing. "Money Doesn't Grow on Fees"
Refinanced 3 yrs ago @2.7%. I’ve paid off $90,000 in 3 yrs. 3 more yrs I’m done and retiring. It hurts to pay as much as I pay but it’s paying off big time.
There is a lot of math that shows making extra payments on such a low rate is not the most lucrative thing to do with the extra money. The extra payments directed to an investment account have a strong potential to out earn the 2.7%.
This is inspiring. I’m trying to do the same as you. I think when retirement hits we won’t regret paying off our homes, we will never be homeless as no one can take this away from us.
Even for those of us who can come up with that much extra every month, why is she phrasing it as 10% every week as opposed to 40% every month. It's like she's hiding how much extra you're really gonna have to pay to get something paid off that soon
@@UTBanjo -- Yes, but that only works for lenders who will allow people to make weekly payments. Many of them won't even allow biweekly payments. So you would end up paying an extra 1200 per month with all of these methods, but monthly wouldn't work as fast as the weekly or biweekly payments, because daily interest would be accruing in between .
I like looking at my extra principal payments and seeing how many months they shave off. Not all loans allow for biweekly payments, for example. So I make my regular payment and see my remaining loan term drop a month. And then make my additional to bring it to the next whole one thousandth number (because I’m psycho like that and like seeing zeros). And in doing that, I usually see my remaining loan term drop another month, sometimes two. So, we’ve had our mortgage 19mos now and by making an additional $500-700/mo we have shaved 35 months plus the 19 months. By the end of this year (2yrs on loan) we will have paid down 5yrs. I view paying down my mortgage as a savings account. In a way. lol treating my 30 like it’s a 15, but wiggle room in case shit ever hits the fan. We can always ask to skip a month.
Originally had a 30 yr mortgage that we refinanced once and then made extra payments. Paid it off in Feb 2024 (took 9.5 years total to payoff). We prioritized saving for retirement 1st, then used extra for the mortgage. Could we have received a better return on our $ by investing? Probably. However the debt-free piece of mind is really something special.
My favorite method: Print an amortization schedule. In month 1, pay for month 1 principle and interest, plus month 2 principle. (It isn’t much.) In month 3, pay for month 3 principle and interest, plus month 4 principle. Your payments get slightly larger each month, but you are (hopefully) getting little raises each year too. And you’ll finish a 30 year mortgage in 15 years.
The idea of gradually increasing the payment is a good concept. Every little bit helps, and to do it incrementally makes it less impactful on your budget.
@@tonycrabtree3416 If you can afford $500 extra in the first month - and $5,941 extra in the first year - then you should have put more of a down payment and/or gotten a shorter loan term.
Very inspiring. I’m trying to do this now and it is so difficult to juggle financially. I want to be free (just like you). That security of never being homeless or reliant on anyone else is priceless.
Always hated that tax argument for keeping a mortgage. So you would rather pay $10,000 to a bank so you can get back $2,000 from the government? And the argument to invest the money in the market to make more than you are paying in mortgage interest only works if you actually invest that amount of money, but most people don't. It will get spent, often against even higher interest rate credit cards. Pay it off, be debt free.
Yes! My mom was making that same interest tax argument when she only had $36k on her home to pay off. I said why keep paying interest just to claim it on taxes? It’s so dumb! She thought about it and was decided to pay it off.
Thanks, Erin. To me, there is an argument for paying off your mortgage early that, realistically, no one should even try to argue against: Going into your retirement debt free as humanly possible. If you have 20 years of your mortgage left, but plan on retiring in 12 years, sit down with an online amortization calculator and figure out how much extra you should pay each monthly or yearly payment to enter retirement mortgage free
Or I could pay the minimum on my 2.65% rate mortgage and contribute more to investments that grow at 3-4 times that rate
3 месяца назад
I would argue against that. If you wait until retirement you can pay off the remaining mortgage with the retirement money. This leaves more money to invest in more risky investments while you’re young and uses the retirement money into something safe, i.e. paying off the mortgage.
You covered this very well. I closed on my first home in 2022 and decided to make extra payments towards my 30 year fixed mortgage. The fixed interest rate is only 3%, but I have the extra cash, after maxing out my retirement accounts and putting aside a good chunk of money into my brokerage accounts... I pay around $600 extra towards the principal each month and I also make a payment of $2,000 every year towards the principal. I like the $5.00 idea and plan to add an extra $5.00 payment each month towards the principal, moving forward. :)
I mean, there kind of is? If you’re in a state with veterans benefits and you both served and meet the requirements. I can’t wait to own our house and be truly indebted to no one but me.
Some loan servicer dont allow biweekly payments like ours. So what i did was take our monthly mortgage amount. Divided that by 12 then add that to our monthly mortgage payment towards principal 😀
I was one of those keeping the mortgage for the tax write off. After Trump's tax plan increased the Std deduction, I wasn't breaking that threshold, so paid it off. It FEELS great.
Paid off mortgage by age 52, 15 yr in 8 yrs. Moved overseas as a Fed and kept/rented house, used extra cash to pay off big chunks of principle so that I could pay off home the month we got back from overseas. Am now almost 56, been real nice peace of mind not having a mortgage past 3 yrs. Debt free living is way to go!
A critical piece of knowledge that some people lack, is the understanding of the difference between amortized interest and simple interest. That understanding propelled my choice of paying off the mortgages that I used to have.
@@raiden031 Simple interest loans are those that are accepted at a certain interest percentage which is calculated over the life of the amount owed. Amortization is used when there is a set period of time in which the loan will be paid which allows for specifically calculated periodic payments
@@johnjeanette4317 but in amortized loans the interest is calculated using simple interest. It's either calculated daily or monthly based on the balance at the time. If you pay extra to principal the interest paid is reduced
You must have come over from some yoyo pushing Velocity Banking. There is no such thing as "amortized interest". Mortgages are simple interest. Monthly interest is Principal balance times interest rate/12.
@@luisjordan347 “From 2000-2022, the median home price increased 170%, from $123,086 to $332,826, while the median annual household income increased 77.6%, from $41,990 to $74,580.”
Personally, I separated out my insurances and taxes and pay them myself instead of the bank. I save up for both in a high-yield savings account with a 4.4% interest rate. I pay my homeowner’s insurance in full in September of each year and they give me a cash-pay-in-full discount, too. I pay my property taxes in full (one payment) in November of each year.
We bought a 1,300 square foot house as newlyweds and it was perfect for our lifestyle. It was literally the smallest in our HOA. We had to move and upgraded to a nicer 2,200 square foot house. Now that both kids are in college, we really don't even need 1/3 of our house (2 beds and 2 baths). Guess in summary, buy a house that serves your purpose and can truly afford and pay off quickly.
Something no one mentions when it comes to the "mortgage tax deduction" is that most people don't get a mortgage tax deduction. Most people do not itemize their taxes, and you don't get to claim mortgage interest as a result. I have never once been able to claim mortgage interest on my taxes.
A strategy I've used is taking the interest earned from my emergency fund and putting that towards the principle every month. If you have a 12 month emergency, the amount going towards the principle could be significant.
@@brandon8531 good point, but it depends on the interest rate. Even the high yield savings accounts at 5%, but if your mortgage is 7%, you have to crush that mortgage as quick as you're able.
Yes flexing here haha. But I paid off my mortgage 25 years before I am even eligible to retire. Peace of mind is a big thing. Financially smart? Definitely not! I could've easily made more by just socking the money to treasury and still make money after taxes, but like most things in life, the decision is not logical or rational. 😂
I actually refinanced my home loan from one company to another because they weren't applying a bi-weekly payment bi-weekly. They were just holding they money until the next bi-weekly payment came in, then making one monthly payment...
All standard FNMA mortgages are like that. The payment is applied at the end of the month, regardless of when you send a check. It's right there in the mortgage loan documents. (Which almost nobody bothers to read.)
My wife and I paid off our 15 year mortgage after 7 years at age 33 back in 2010. Totally debt free since then. Amazing how we haven't paid ANYONE interest and kept every earned penny for the past ~14 years to invest.
@@lenaprice6239 As a young 25 year old signing that 15 year mortgage and getting the paperwork that shows the breakdown of how much each payment go towards interest and principle.....I clearly remember it was an eye opener low little went towards the principle...LOL.
When my wife and I bought our house in 1991 interest rates were in the low 8% range. I made extra principal payments each month in the amount of the next months principal according to our ammortization schedule. My reasoning was that each extra payment I made shortened the loan by 1 month. We eventually refinanced for 7 yrs at 5% and then paid it off in 2013.
22 years? $100 extra on a 30 year 8% 300k loan would shave off 4.5 years. 150 would be 6 years 1 month. I mean, the principal in the early months in my example is $200 in month 1. You shouldn’t have needed to refinance in 2007. Did you skip adding extra?
I have a 30 yr. mortgage at 2.25% interest. I'm currently making over 5% interest with 6 month t-bills. In 2 years, I could payoff my mortgage, BUT, why would I? If I sell the house, a 2.25% interest rate on an assumable loan could be attractive to a potential buyer. What do you think?
Nice video ty. I do something similar I have monthly payments but I can make up to $110K in prepayment payments, I typically pay an extra $30-$40K a year on top of my mortgage payments. I have managed to pay off $240K in 5 years. I still have $495K to go, but just chipping away at it slowly. I am single, no dependents anymore, so I have more disposable cash to throw at the mortgage. I don't eat out or feel a need to take vacations, I can just focus on my main goal which is to retire without a mortgage. I am hoping to pay it off in 5-10 years from now to be mortgage free if I am able to keep my health and job. I am in the camp of paying off a mortgage for peace of mind, money isn't everything, I don't feel the need to invest every dollar and I still put 15% into my retirement account.
My original 30 yr home loan in 1999 was 7%, refinanced 4 years later for a 15 yr 4.8%. Paid that one off two years early by just applying bonuses or other surprise money to the principal when I could. Was done in 2016 before my son graduated high school, so I could apply my mortgage payment to college payments. He ended up going to a cheap state school so it was less than half of my mortgage payment, even for the year he lived in the dorm.
Not only that, but simply investing in sp500 gets you 12% compound and mortgage is around 3,4,5,6 % you’d be killing it with investing money and always be mortgaged up as high as possible. Plus mortgage doesn’t compound .
I am lucky enough to have a low interest rate on my mortgage ~3% so it just did not make sense to pay off early. I could get better returns on the money in other places. Now as I get close to retirement, I am thinking about paying off a bit early just for piece of mind. What I think I am going to do in the coming years is take my "extra" $ and put it in a reasonably conservative investment account banking up the ability to pay off the mortgage if I wanted to, but playing it out if I don't. I think doing it this way I will be able to pay off about 8 yrs early with the account if I want to, but might keep paying the mortgage if it is not cutting into spending in other areas once retired.
I had 4.25% and was aggressively paying it down for 2 yrs, then I refi during covid to 2.75% and still paid extras until I got it down to 50% bc I know most of the interest is paid at the front end. With regular payments & a small lump at the end, I should be able to knock it out in another 5 yrs, making total payoff time 10 years.
She’s right about today’s rates. I’m guessing most people have about a 3% rate at a time where inflation is at 5%. I don’t see me being in a bi hurry to pay my house off in this environment. But you do you!
I get paid weekly and my bank doesn’t allow partial payments so every four weeks I make a full payment. This way I make an extra payment every year. I may try the 10% or $1 idea to accelerate my payoff, since I’m retiring in 15 years and would like to have my house paid off by then.
What im doing is putting my extra payments into an investment. My expected payoff in in 10-15 years. Which is a long enough time investing in an index fund. It should be safe. Im also putting my escrow in there instead of putting it in the loan. On down years ill pay escrow out of pocket. On up years ill pull escrow out of the fund. Which should just be capital gains based on when i withdrawal. Ill end up paying more interest. But... ill pay off my house 5 years earlier or more. Original time from was 15-20. Putting the escrow in there doesn't add a lot.. but.. after 10 years i should have 3x the escrow i need and continue to grow. By the time i retire that escrow fund will be self funded. Meaning i should be able to withdraw 2-4% and it be enough to pay escrow even approoximating future inflation. Allowing escrow to never be a factor for the remainder of my life. So far so good.
My Ex and I were 7 years away from having a paid off mortgage when she filed for divorce. I bought her out at that time (15 years ago) but refinanced later when rates were 3%, making my loan payment less than taxes and insurance, about 2 years before I retired. It worked out better for my retirement cash flow with a much-reduced loan payment and kept my retirement accounts earning more. YMMV, but I like the idea of investing the escrow payments instead of letting the bank have it for 'free' for the convenience of having them pay the tax bill.
I've been adding $100 extra a month, but since my mortgage rate is 3.5% I've been investing most of my savings rather than putting more of it into my mortgage. I figured if I could shave off a few years it'd be nice.
Hi Erin! We have three long-term debts (mortgage, home improvement loan, car loan), all less than 3%. With our rates so low, and cash earning more, we aren’t putting anything extra down, but plan to snowball our debt payments into the next when they get paid off. Car loan first, then home improvement loan, and finally mortgage. This will take 7 years.
Just remember that you are paying taxes on the interest on your cash, so the gap may not be as much as you think. And be careful you don’t suddenly find an excuse not to pay off those loans early. Debt free has significant benefits. My $0.02.
Hmm, the only problem is people can’t barely afford the payment yet alone pay down $300 more per week. The lenders also hold the extra payment until the next due date rather than applying to the principal when paid, effectively taking away some of the interest savings by paying weekly! Think this should be against the law!
I actually just did these calculations for myself yesterday. I’m currently 3 years into a 15yr fixed mortgage at 2.25%. I’ve been paying monthly the whole time. If I to start right now making half payments bi-weekly, it would shave off 14 months of payment and save me about $3000 in interest. However if I were instead to put the extra payment each year into an S&P index fund at 8% annual growth, it would generate $20,000 of interest income, $15,000 after the 24% income tax. So the opportunity cost is far greater to payoff my mortgage sooner. I would be losing $12,000 of potential earnings. Low interest rates really are a miracle.
This is one of those "Yes, but..." scenarios. The historical average return may be 8%, but what happens if you hit a year that has a loss of 20%, 30% or higher? The 2008 loss was 37%. If that repeated, it would take you almost 5 years of average returns just to get back to 0% gain. It is best to be diversified and understand all risks involved.
@@chiplangowski3298 One year does not matter. You need to look at the long-term average. The mortgage is 20-30 years, so you need to look at the 20-30 year returns in the market. Which average to about 10.5% annual.
Hahaha That means you’re paying an additional $1200 a month. Why not just get a 15 year mortgage at a lower rate. That’s because 90% of Americans couldn’t afford it and that’s why they got the 30 year. Great advice for .01% of your viewers
Yep but people like her need to make content so they do things like this. Also I think companies like heads up when doing stuff like paying extra or paying less....
Great video! The real key to paying off your mortgage early is when you make the decision to buy a house. Take whatever figure the bank qualifies you for, multiply it by 40%, and then make that your cap if reasonable. You can then take a 15 or 20 yr mortgage and pay it off in 10 yrs. Also when comparing opportunity cost of otherwise investing, one needs to take into account likely taxes. Most people cannot deduct tax on mortgage interest but they will likely be taxed ~15 to 20% if they get a return on investing, which isn’t guaranteed so the potential 9% returns may really be 7% after taxes. Hedge your bets and make sure you are investing some in low cost index funds before paying off mortgage early.
I've read that if you're interest rate is less than the inflation rate, don't pay down extra. That's probably the situation many people who refinanced after covid find themselves in
Pay that thing off early. Stop debating. You can't quantify peace. I hustled and paid ours off in 5 years at 38 years old. Got laughed at by my buddies. Now, with zero debt and a net worth over $500k, we have perfect credit scores (me 872 and wife 896)...banks are willing to give us zero down mortgages for rental properties as defaults foreclosures start to roll in... Just picked one up two weeks ago. Barely puts a blip on our DTI. Who's laughing now?
I just bought a home in this very bad expensive market. I haven’t made the first payment yet but I am so excited to knock this mortgage out of the park! I am pumped! I am ready! I got the mortgage under my name with just my income but my bf is helping with the payments too. I am getting a raise and he is also getting a very large raise so we are ready! Our goal is 5-10 years. My aunt said she will be mortgage free after just 4 years as a single lady and that makes me feel like if she can do it in 4 years by herself then we definitely could do it at least in 5 years.
In 1999 interest rates were around 7%. We bought a house with a 30 year mortgage at 7.25%. Not a problem as we didn't bite at the much larger home loan that we qualified for, and 3 years later we were able to refinance at 4%.
When someone buys a house, it's important to not necessarily be tempted to buy more house than you need. A bank may pre-approve you for a maximum amount, but that doesn't mean you need to borrow that much. Settling on a smaller home typically means smaller mortgage payments which in turn increases the likelihood of paying off a mortgage early.
Another comprehensive video. I like being exposed to differrent ways of thinking and approaches to personal finance topics. Thanks, Erin. Have a great weekend. I hope you are enjoying motherhood.
LOSS OF TAX DEDUCTION!!!!!!!!!! Avoid this, pay off your mortgage, then take the standard federal deduction... with the money you are saving & then some.. max max out your tax deferred contributions to your 401K and HSA (yes, use that HSA as a retirement savings investment vehicle, cut up the card, do not spend it). Did this, and now pay LESS in taxes, and my savings is growing rapidly.
Hi Erin, great info as always. What I do is round my mortgage payment up to the nearest $100. So if my mortgage is $2216 a month, I pay $2300. And applying the overage to my principle. Having said that, we have a 15 year 1.99% fixed rate. It is hard to justify paying the whole mortgage off when I can get ~5% on CDs. But it would be nice not to have any debt sooner rather than later. Thanks for all your great videos! Mike I
Please listen to the part where she said the additional payments, all examples, should be paid on “principal only.” That matters. Otherwise none of this will help you. Any extra money we had we paid on the principal only. We paid off in 14 years. Our first int rate was 8.625 in the late 90s. When rates dropped we did refi which helped a lot.
I'm not worried about my little 3% mortgage. Property taxes and property insurance are four times as much ($800/mo. mortgage and $3200/mo. taxes and insurance) and you can never pay those off and they increase every year. And they say Taxes, oops, Texas has no taxes.
Another great video! One other option I've heard about is to include the next month principle during the first few years of the mortgage. This is where most of the interest is generated. you may not be able to do it all the time, but It helps.
Great video and a simple way to put this is just like investing in your Roth IRA if you can max it out at the beginning of the year you will make more over time. If you pay as much as you can as fast as you can you will pay of your mortgage in the fastest way possible.
Hi Erin, I love many of your videos, but I don't like this one as all. I HATE home equity, as all investors should. If I'm borrowing money at 2.85% for my mortgage (my 4th refinance), I'm writing off 1/3 on my taxes which means my actual interest rate is 2%. So if I invest my money at a rate of better than 2% (after taxes) then I'm making more money than I'm paying in interest. In 2003, I refinanced my condo and withdrew $107,500 in equity. I've invested that money at a compounded rated of 7.4% and I've calculated the amount of equity that the $107K is now $430,000. In 2018, I refinanced another $68K and that money is now worth $105K in my portfolio. The combined amounts is equal to about $535K and if I invested that money at a mere 5%, I'd be earning $26K per year which would easily pay for my monthly mortgage of $1070 per month. I see that you briefly mention these benefits at the end of your video, but I would be strongly recommending that home equity is literally putting money "under the mattress" and lost present value in perpetuity. I'd love to hear your thoughts (TedU@IntegrityComputing.com). Cheers, Ted
Thank you Erin for the information. What I am currently doing right now is bi-weekly and plus I add $30 per payment on the top of the extra payments I paid. So basically, I am paying $1200+30/per bi-weekly. Our home is 30 ys with 6.25% interest when we purchased it for $300k. How many yrs did we shorten our payments? Thank you for your feedback.
we will pay ours off in a few more months..... just because.... just about 5yrs into a 15yr.... we just want it done, but doing it where it doesn't impact our lives so much and not draining the accounts either. we manage our finances by buying only necessities and NO loans for ANYTHING..... that is the only way. once you start that borrowing and then try to showoff by looking rich that is when you get into trouble. live within your means....... buckle your boots up, put the big girl panties on and get to maken monies.... if you spend more than you intake..... you WILL have problems. PERIOD.... economics 101.... STOP listening to media, and our indoctrinational systems that want you spending and in debt.....
Living paycheck to paycheck is stressful. My mortgage is at 1.9% and i have been rounding up to 1500.00 (1453). I like the idea of splitting in have but due to a previous divorce (had to get out-and just took a lot of charges to be free!) I am stuck with a lot of other debt. Not sure how to make that happen. Trying all the little steps to make to better. Thank you for the information.
You take 10% of a monthly payment and pay that weekly? That's wack. That's 42%. Why not just say add 42% to your monthly payment. 😂 of course that doesn't sound as appealing.
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Great video as always. I made amortization tables and ran scenarios for different extra payments etc. I am doing a little towards curtailment and my current plan if possible is just do one extra payment to principal a year per my family’s advice - one aunt who worked in real estate and one who is a CPA.
If you are disciplined enough and you invest that money every month, in 15 years you will have much more than the balance on your mortgage. People don't realize that the compounding on your money grows faster. You are also paying off your house with cheaper dollars every year. Paying off a home is NOT the best way to have your money work for you.
I don't understand, and no one talks about the role taxes and insurance has in making principal payments. Even after the home is paid off, you will still have to pay taxes and insurance. I currently am already paying my insurance myself. So what role do taxes and insurance have in figuring out how much you have to pay in principal payments to reach a particular goal? Or am I overthinking this?
instead of making biweekly payments and paying 13 monthly payments why wouldn't you make a full month payment to your principal instead.? wouldn't that get it paid faster since only a little is going to go towards the principal in that extra payment instead of all of it.
