Should I Really Pay Cash For A House? 

14 year old: Dave, I really like this girl in school.....how do I ask her out? Dave: What's your household income?

Took me 5 years to saved $220,000... I told my parents what my main goal is and they let me stay at their house for free including groceries. In my mind, I treated my job like I was still in school. When u go to school, they don’t pay you. Bought my house in 2015 for $180k and paid it off in cash.

If I had a dime for every time Dave brings up the study of 10,167 millionaires he’d have 10,168 millionaires to study

More than anything, imagine absolutely zero debt, house paid off, your mind is clear, no stress, no worries. You have all the freedom to invest wherever you want and live the way you want. The feeling is priceless.

I built my family a house with cash, we saved in every aspect building ourselves. Absolutely life changing. No mortgage, living the dream.

“Why you take financial advice from broke people” lol savage

How about buy that house for cash and take whatever your mortgage payment would be and invest that every month.

I paid off my house in six years. This is so true. Thank you Dave.

Buying a house in cash is like putting the cash in a savings account. When you want to withdraw your money, just sell your house. You do not lose your money when you buy in cash. you still have that money but its just in a form of a house. So buy cash if you can.

It would be nice to eventually be in a position to have to make a decision like this.

After my second divorce and my third start over in the USA, I moved to a poor Latin country where I could not borrow money to buy a house, so I paid cash for a 20 year abandoned six unit building. As I worked my way in I slowly remodeled other units and rented them to other expats. As my rents grew, I bought other units and now have 18 paid for units worth a little over 1 Million dollars. Not being able to borrow money put me on the path to success. Money can be made, even in third world countries. The sun is shining and the birds are singing in this paradise that I am happy in.

The majority of people live beyond their means. Just by keeping up with Dave, it’s helped me tremendously!

Shoutout to everyone who wants to pay for their first house 100% outright! Thank you Dave for getting me focused on the right things!

I had zero down payment on my house, had just gone through financial peace, and I can tell you buying our house was one of the best financial decisions I’ve ever made. I didn’t buy more than I could afford. Now, my income is up 30% and still have that same easy house payment. Mortgage is ok if you’re thinking long term and won’t move. If I had cash I would have put it on the house.

I bought my house outright 7 years ago. Best decision I've ever made !

I was thinking the same thing, why would I get a mortgage, the amount of stress and heart ache that comes with it is unbelievable, I want to actually enjoy having a home.

Caller: Dave: USE CASH

Graduated high school during the recession of the Carter adm. started my dairy farm at the age of nineteen while working full time at the local sawmill where I was employed since the age of 14. The late 70’s -late 80’s were tough yrs for many. But not knowing any different, that seemed to be just the way it was. Worked without electricity for a while because the power had been cut off at the mill. Which taught me how to live without electricity in my own home while cutting back to imported my dairy facilities. Eventually sold out, built a house with cash and paid cash for an education while going to night school after landing a job with the gov. Now I’m retired with no debt whatsoever ....for decades, and am very thankful for those years that taught me how to live like no one else! Thanks for your service. Love your show!!!,

If you can't pay cash for a house just be smart and buy something that's well in your range. If two are working buy a home that just one person could pay.

I pay cash for everything it gives you so much Leverage. If it's a car, home, or anything, if you don't like the price walk away. Also anyone that selling anything like to see cash less hassle.

Paid cash for my house when I was 28. It does feel amazing! If i can do it anyone can.

Just bought my first house with cash I didn’t want to deal with mortgages banks etc I heard what Dave said about not going into debt to invest that was good advice not to do that I don’t have a car payment now I’ll have no rent or mortgage payment so I can invest more

investing requires good experience and knowledge to carry out a good and successful trade, I have lost a lot trying to trade all by myself May I ask which investments are good??>>>>>>.

Some people don't have enough cash in the bank to buy a house outright, so the next best thing is to get a low interest mortgage and pay it off over time. Time and Pressure. It's a geological concept. And it's in the Shawshank Redemption.

Sometimes I really wish I knew a lot of this stuff before and that I could start again with a clean slate.

Dave Ramsey, I read that book Everyday Millionaire. It was good, it open my eyes and show me everything about Investing perspective as well. I advice everyone to buy it, it's good, very uplifting to get your goals and dream in order.👍🏽🙌👏🏼

I would end up renting for the rest of my life if I had to buy a house in cash. Good homes in DC area are at least 250k. Kudos to those who can do it.

Read the book and it is so true because after I paid off my house several years ago all the former payment $$ went into investing.

Just paid for a small 1 bedroom in cash at 25. Took a few years of struggling. Rice and beans. Tuna. Having a bunch of roomates or paying motivated friends who need a temporary boost in extra income to sleep on their couch for a few weeks. Living out of a garbage bag and a backpack with all my "possessions" lol. Now all my bills are under $500 a month. That's everything. Few thousand dollars a year for survival the rest straight into investing. Future looks good :)

"No student loan that's been around as long you think it's a pet" LOVE IT :)

I did it. Although the house was only 22 K.

About to put 50k toward our mortgage by the end of this month! Thanks Dave!

Why do I hear a lot of people say (including rich people), that if you have a paid off house and get in the hospita where insurance doesnt cover all, you lose the house.

If I had $300k lying around, and if it's a house I knew I wanted to live in for a while (not just investment property) you better believe I'd pay cash.

If you pay cash for everything, you will never have the desire to file for bankruptcy....

Thank you!!! I really needed that sanity check. I've been having shower and driving thoughts about 'why should I just put a 15% down payment and pay an additional x% over the life of the loan just in interest?' Although it will take a very long time to afford a 2 million dollar home in cash, I should at least put more down and take a smaller loan. Side note: a house is never fully paid off, there will always be property taxes. Fun.

Yes - I did in 2013 and it's now worth 4x what I paid. Never had a mortgage payment and never will!

I am making about $800 in interest savings per month having my house paid off.

I just went to a funeral this past weekend for a 80 year old family member, the in laws were talking about selling the house so when I asked how much was owed on the house, I found out her husband had paid cash for it 5 years or so. He had passed away shortly after buying it but he went to his grave knowing his wife wouldn't have a mortgage along with plenty of money to live life in the form of Roth IRAs and IRAs .... I asked what George did for a living and found out he was an old school accountant that didn't live above his means. All 5 sons will be receiving quite a bit of money each year from the IRAs and the sale of the house. First thing I was think Dave Ramsey plan.

Dave always references this study of 10,000 millionaires. Has anyone considered that being on the high end up the income band simply leads to paying off your debts faster and investing higher % of income, rather than the other way around?

My motto is "If you can't pay for it in full you can't afford it." Even a house!

We are refinancing our 30-year fixed FHA loan to a 10-year fixed, and hope to have it paid off in 4-5 years! Then save up for another 2-3 years and pay cash for a $375-$400k home. I'm so excited about becoming 100% debt free. The principles Dave Ramsey talks about really work!

That’s very true I’ve been using this method of saving for just a short time and seeing big gains I really appreciate you and the service you provide for your audience good job.

I guess I'm on the right track then, I ended up buying a home through foreclosure for a ludicrously low price, had to buy in cash and it only cost me $10,000 to fix up, grand total $47,000 1800sqft with 5 acres. I beat my parents to owning a home, but it's a big thank you for them for teaching me to live under my means and to buckle down and save.

Paying for my house in cash this month! Thanks Dave.

Also , by the time you save up your cash , the house may cost you double or more.

Me: Dave Ramsey: Pay cash for it !!! Me: Dave Ramsey: Sell your car !!!

Buy my house cash was by far the best choice I've ever made.

I paid mine off in 6 years.. Honestly if I had not done that (and put the extra money each month in my stock index funds) I would have more money today (our NW is just over $3M BTW and started with minus $140k 22 years ago). The problem is you don't know that at the time and pink slips at work were being handed out like confetti, so paying off the house was the least risky thing to do in my case.

Hahahah! Try this in Australia. Houses in my area start at $2m. By the time you can save $2m, those houses would be worth $6m.

great advice Dave. not going to say to much but exactly the advice I give to any body who whats to know how its done.

Thanks dave for the advice I will retire when I am 106.

If would take most people a lifetime to save up enough to pay cash for a house 😂

Leverage if done right is the most powerful tool to increase wealth ten fold. This idea of people buying their fist home with cash is preposterous - I’m a millionaire x 5 - when I bought my first home I didn’t have all cash, nobody does. Maybe if you buy a home in the boondocks of Mississippi for $12000 it is possible, but hundreds of thousands of dollars ? Heck no. Once I made money I doubled and tripled my principal payments. Dave Ramsey actually hurts people with these unrealistic ideas

It's really simple... if your income comes crashing down, those minor investments will not support your monthly cost of living until you get straight... not having housing costs will minimize your risk of debt to survive.

Well think of that whatever you are paying mortgage for the house find out how much interest you are paying per month .. so if you invest that money to somewhere else and get back with out risk then make sense but in many case it’s not so wise is pay the house as quick as you can and save up for investment good luck you all..

I really like Dave’s Fozzie Bear impression at 5:42

It must be taken into account that home prices have dramatically increased in recent years, it’s one thing for a 60yr old millionaire to pay off their house in 2008 when it was $200k, when that same house is 1mil today it would seem different. That money could make you millions in the amount of time it would take to pay off that mortgage. It really just depends on your particular financial situation/age/interest rates. It’s not a one size fits all issue.

I like the no debt mindset.

The problem with this is how you get to the amount of savings to buy a house. An affordable home in area with reasonable pricing is 150-250k. Assuming you are investing in ROTH IRA and 401K it would take forever to save up for a house.

I don't know ... I have worked as a Drilling Engineer offshore for several years - I made good money and did not spend much (also I studied in Europe almost for "free" (aka paid by taxpayers)) - when I switched to an office job I bought a nice house in cash. Looking back I don't think it was a good financial decision -> Yes I have saved rent, but there is still a lot of costs ... and yes the value probably has risen somewhat, but I cannot really cash it in when and how I want ... since then I have bought small rental properties with long term fixed interest rate and about 10 - 20% down payment ... each single investment was better than my home -> at least as far as all relevant numbers are concerned ... had I invested the money I spent on the house, I would be much further ahead on the way to financial independence.

Just bought a house in cash. Saved for 6 years, at least 40% of my every paycheck. As soon as I did that, I started saving a little more money every month (Paid 3Y of HOA and 1Y of Insurance) because of no rental expenses. Next goal is to buy another house in cash as an investment property, double down from there till I am 45 and retire then enjoy my personal & real-estate investments. Hopefully it works out.

When the banks went to criminal (low) interest rate levels, I paid the fixed mortgage off since it was a better ROI than leaving it in the bank

I'm pretty dead set on not getting a mortgage, I'm saving about 1100 a month right now towards buying land and building my own small house and I think I'm going to achieve it (just hit 37k) I'm looking for land for about 20k then I'll start on the house. I don't make a lot of money so having no debt will make my lower middle-class income feel like middle-class or better. Its kinda hard to do but I know it will pay off in 5 or 10 years, those car commercials with 299 payments for a 400hp sports car is mighty tempting! But I shall resist and in 7 or 8 years from now I'll just pay cash for that too!

I’m looking at buying a house cash in about six months !!!!!! Can’t wait

How is it possible he can offer financial advise without even knowing the mortgage rate.Didn’t even ask his income.What if the guy was only paying 2.5% mortgage rate and could have it paid in 15 years.I think he means well because he understands the average person spending behaviours but to suggest that its a no brainer is foolish.Some people are very savvy with money and just need a push in the right direction.Don’t even get me started on mutual funds.

"Hey Dave, what are you having for lunch?" "We did the largest study of millionaires..""

I heard the greatest advice in my works break rooms while I was working for decades for the same company! If I heard these people’s advice I knew to avoid it almost every time! It served me well! On that note I did seek out older people I respected which was 3 over the years and picked there brains! I still do it 30 some years later with my Pastor friend! I’ve been helped along financially by these 3 opinions thru my life!

99% of Americans can’t buy the house they want cash

I'm 28 and have just begun my journey to do exactly this. I wish I had financially matured at an earlier age to start much sooner, but it's never too late

Here's the problem with this logic: Dave is claiming that paying off your house early somehow *causes* you to become wealthy, but not discounting the reverse option: that becoming wealthy enables you to pay your house off early. That seems much more likely to me. Also, I've noticed that he has modified his claim about inheritance from "90% of millionaires are first-generation wealthy" to "90% of millionaires didn't inherit their wealth," which has very different implications for the politics of wealth inequality. Technically I didn't inherit much (if you don't include having college paid for) but my grandparents gave me enough for a down-payment on a house which has skyrocketed in value, and all I had to do to become a millionaire is follow the well-trodden path that my parents and grandparents followed. Generational wealth is about a lot more than handing someone a giant pile of cash (though I'm likely to get that some day too).

Dave Ramsey, I would like to speak in behalf of everyone in California, We love you!

I think that a majority of people buy more house than they can actually afford, that is way they don't have money left over for an emergency fund and when something comes up, they have to take out a home equity loan, which gives them a negative net worth and puts them further in debt.

“Why you take financial advice from broke people” Uncle Dave be roasting LOL

30 year mortgages especially at rates less than 2.5% may b good debt, provided of course u r living in a house within ur means.

"When you've had your student loan so long you start to think it's your pet" 🤣😂😅

I paid cash for two houses, and in some ways I regret it. The first house was okay. I paid $229K for it, put about another $40K in improvements in it, sold it 9 years later for $320K, netting me about a $32K profit after commissions. Okay, but not great for 9 years. It did feel good to have the house paid off. I would have made significantly more money than if I'd invested the money, but fine. It gave me peace of mind to start a business and not worry about a mortgage. The second house was much more expensive, I had a huge amount of money tied up in it for 14 years and net net I probably lost about $300K on it (the house did not appreciate one iota in 14 years, and I had to sink $200K in repairs due to expansive soil damage), which is horrible to think how much money I could have made if I'd stayed in the first house and invested the difference in the stock market. Millions of dollars in difference. And then I can't even deduct that loss on my taxes, which is a real double whammy. I wish I'd never bought the house and I certainly wish I hadn't had that much dead money sitting in an illiquid asset for 14 years. It was a beautiful house, but the financial damage from it leaves a bitter taste in my mouth. So part of this debate i think is to buy an ordinary, normal tract home for a normal price like $250-300K. Paying cash for a house like that is fine I guess if you have the money. Second is to work a normal job with steady income instead of trying to be an entrepreneur. There's a big difference in financial planning and strategies for a salaried employee with steadily increasing income, vs. an entrpreneur with erratic income. Third, is to have two working incomes with you and your spouse and then you can really build some wealth. Here's an idea I have which you'll hate. Theoretically this is better than paying cash for a home, but only if both partners are very, very disciplined and in agreement on everything in life related to finances. Here goes. You buy the $300K normal average tract home. Instead of paying cash for it, you open up a separate brokerage account and you deposit $300K of after-tax net worth into the account. You don't use that account for anything other than paying the mortgage. Every month, you sell a little bit of stock and pay the mortgage with that money. If you get a market correction, you don't freak out and just keep doing it. The market will come back over time. So it's like you've paid cash for your house, but you've earmarked a special amount of funds specifically for the house, and you're back stopping this whole plan with your two incomes in case something goes really wrong. You can not tap into that money under any circumstances. And there you go. Over time you should make a signficant spread off a 3% mortgage and what you make in the stock market. I know you don't agree with that, and for the majority of your listeners, they probably don't have enough financial discipline to make it work, but if you do it right I think this can be a significant factor in building net worth. I'm currently renting. When I get ready to buy my next home, this is what I'm considering doing. I think the reason why no millionaires you survey suggest this is because most millionaires are older and come from a generation where we didn't have 3% mortgage rates. Even a generation ago, typical mortgages were 7-8% or so, and it's going to be hard to arbitrage that agains the stock market.

My son and daughter in law paid cash for their house, I’m so happy for them.

Now this is the type of financial advice that people really need. Statistics and facts that will help one increase their chances of becoming wealthy. After all, it’s a game of odds and It’s one’s responsibility to increase them. Thanks Dave

my house has increased in value by almost $70,000 in the three years since I agreed to buy it. I took out a mortgage that I'll have paid back in about 10 years. Had I waited till I had the cash I'd be even further behind now while paying $1500-$2000 month in rent instead of toward a home I"ll own one day. It's not always best to pay cash.

living frugally and being debt free is obviously the best course for most people, but its just a fact that you can leverage debt and make way better returns than paying cash for a rental property for example. using debt is higher risk, and more stress, but if done properly it has the biggest returns. Dave knows this, but he got burned using debt in the past, so thats why he has the complete opposite philosophy now. using debt you can start your real estate empire with much less money. you can put down $20k on a $100k home rather than waiting the extra time to save up $100k to pay cash. you can get a mortgage for under 3.5% and quite easily make more than enough to pay the loan and profit while of course building equity in the home also.

You will still be paying property taxes (in certain places it’s as high as 1000/month) insurance, and maintenance even if you’ve paid off the house... but in the end I suppose it’s still better. You need someplace to live and call home and it might as well not have a mortgage.

Is there any information on how many millionaires rented a place until they had enough to buy a house with $cash$?

Thanks Ramsay… I needed that… buying mine soon

I love Dave but sometimes i wonder.... When are we actually going to start ENJOYING these millions? When we are 60? I am 36. Buying a house within 4 years (age 40). Paid off in 10 years like he said is ideal (if I work very hard). Then I will be 50 with no debt. Now time to "build my millions". By 60 maybe i will be rich. I mean, i think its great to leave wealth for my kid but how do you guys enjoy the process ?? To those of you starting in yours 20s, you are smart!! Good luck to everyone!

To pay cash for a house you need to have significant savings or investments that you can cash in to pay for the house. The question is, how do you get that money? For most people, even the well educated, this would take years. So where do you live until you have the money saved up? Pay rent, which provides 0 return or make payments on a mortgage on a house that likely will appreciate? Sometimes you have no choice but to put yourself in some sort of debt to get the ball rolling and you will need a credit history to successfully secure a mortgage.

Dave, you need to stop with the voices. I almost crashed my car driving home from work. 5:40. 😂😂😂😂😂

Just a side note here: look at Dave’s hands when he answered this question. Body language experts claim that when a speaker touches his fingers together they feel 100% confident with what they are saying. It’s innate. It is sooo true and correct what Dave is saying: the less debt you have the faster you start building your wealth! Love this guy! I’m a long time listener !

I don’t understand this logic... it’s the wrong way of thinking about it. All that matters is return on investment for the money you have. All analysis should be done that way. It’s all about the opportunity cost, which means if you put your money one place, then it can’t be somewhere else. So put your money in the right place. That means don’t buy a home until it makes sense for your particular situation. But if you want to buy a $3,000,000 home, get a loan on it if you can beat the interest rate on that loan somewhere else. That is the spread ! Understand this and you will truly be wealthy. My videos talk more about this.

80% that’s almost all of them! Nice summarizing a number

when my children get old enough i will not charge them to stay with me and tell them to save all their money and buy a house

Great sense of humor and sound advice. Got to love Dave.

So when I save up $700k I’ll be ready to buy a house in California. There is one problem... people die.

I can't believe this is a question. I just can't. And nowadays it's a competition of who has the most credit. What? When I was growing up ..it was cool to have cash and be able to buy what you want. Now it's cool to have a certain credit score. Crazy.

If you can pay cash for a $200k house, you should put a $40k down payment down and buy 4 rental houses. Pour all rental income back into the houses and you build $800k of assets in 20-30 years for free. That doesn’t count inflation. Housing inflation is roughly 2.3% annually, so in 20 years those assets you got someone else to pay for will be worth $1.2 million. If you can minimize risk and are comfortable with a low level of risk, leveraged investments are you friend. If all you’re going for is peace of mind, then pay cash for a house.

3:45 - I had a financial advisor suggest I do just that. I hung up and never spoke to them again.

I recently discovered Nassim Nicholas Taleb, a former Wall Street options trader turned author. He's one of the people who predicted the 2008 market crash by examining data about what a bad position Freddie Mac was in, and was able to profit from it. The question this guy asked is straight out of Harvard Business School and the other places whose sophisticated math contributed to the 2008 crisis by ignoring risks and only looking at the math. Common sense says keep some cash, sophisticated academics say that's not proper maximization of assets ... but that thinking ignores risk. Taleb says a lot of the same things as Dave, but in more technical and philosophical language. He'd be an interesting guest on the show. Debt increases "fragility", according to Taleb, especially when a "Black Swan" event strikes (an unexpected, difficult to predict crisis). If you're got debt you're at much higher risk under these conditions, Taleb says. But if you've got no debt and lots of cash, in addition to any other investments, Taleb proposes market fluctuations don't matter as much because it limits your exposure to the Black Swans.

At 37 years old my husband and I built our house in cash - it took five years total and I can’t even tell you how amazing it is. Imagine living life with no financial risk, there is zero stress.

Answer: YES

Same thing with me. Im unsure whether to pay my house off or use it for another house investment but i just look round me at the wealth and they all own their properties and assets that earn cash.