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What Is The Best Way To Upgrade In House?

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What Is The Best Way To Upgrade In House?
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Опубликовано:

13 авг 2021

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Комментарии : 128

@veeo987 Год назад

The best saving vehicle to buy a bigger house is your current house. Paying down your mortgage is a risk free and tax free savings plan that will make you well placed to buy a future house, whatever price you sell your current house for. I'm in a similar situation and I'm currently paying off my mortgage as much as I can.

@kaohsiung99 3 года назад

Dave should have just asked about their annual income and the price of the house.

@tomm8025 3 года назад

When does he ever ask pertinent questions?

@elizabethallen4353 2 года назад

Good discussion. Dave always sides with mitigating risk/paying off debt over potential investment reward.

@EmpressoftheLibrary 3 года назад

This is our exact situation right now and Dave just confirmed what I was already thinking. Thanks!

@TheDjcarter1966 3 года назад

No you aren't in a better position! You would have to do a contingent offer on the sale of your house and right now all those offers are going straight in the trash. If in two years you have $125K cash to put down, you are in a much better position.

@gcomplex217 3 года назад

That's what I was thinking too. Plus once they sell their current home they can turn around and put those proceeds towards the new mortgage.

@cjchamp3 3 года назад

I think they should think about putting the money in a savings account so they can get a mortgage without selling their house first. It might be tough to get a contingent offer accepted.

@DudeMuscle 3 года назад

Yeah you lose money to inflation on a savings account tho.

@DudeMuscle 2 года назад

As my brilliant self said before I think we need to invest it. Not only safely but I think we should take some risk and maximize gains.

@harrys5925 3 года назад

This guy can easily have another few hundred k saved up if he keeps doing what he’s doing right now compared to just investing 15%

@Je.rone_ 3 года назад

Save an extra 50k to 70k, i don't even make that😂

@dababycar2899 3 года назад

Same bro 😂

@vonone3368 2 года назад

Not yet!

@jameshorton3692 2 года назад

I thought that too 😭😭😭

@dr.bradshaw 3 года назад

Rate of return is never a guarantee. A paid off house is.

@harrychu650 3 года назад

As is property taxes

@abrahamflores2566 3 года назад

not true unless you think 20 years from now the U.S. will collapse. in the short term you are correct, in the long term you are not

@dynamicwellness33 3 года назад

What’s guarantee is your equity in the home is making you no money this year either…

@mikezerker6925 3 года назад

Well, unless the real estate values drop again

@princesslamour1985 3 года назад

Basically yes 💯

@DoTheDomThing 3 года назад

The Financial Peace babies is a whole new generation that will benefit the most.

@reesercliff 2 года назад

"whats the best to upgrade my house?" Dave "Sell the house!!"

@ThatGuyOnYoutube2 2 года назад

Does your pension contribution count towards our 15%? So assume you contribute 7.5% to our pension, you would need to put 7.5% towards a ROTH or something. Thoughts?

@martylts 3 года назад

If you invest the money and pulled out you will owe taxes. If you put it towards your own house and buy a bigger more expensive house., NO TAXES!!!

@dynamicwellness33 3 года назад

That arguments is dumb. 50k making 8-10% per year is better than zero. That’s like someone denying a raise from a boss because the worried about more taxes…

@TheTurdballs420 3 года назад

Or you could just not be oblivious to tax laws, only pull out 80k a year and pay NO LONG TERM CAPITAL GAINS TAXES!!! 🙄

@ChrispyDude 3 года назад

Unless you have property taxes?

@TheDjcarter1966 3 года назад

He's already maxed out his tax deferred saving, so this would be after tax and since he is looking at maybe three years having $150-200K saved he only pays taxes on growth which would only be maybe $15-20K and he probably wouldn't have to touch that for the down payment.

@ChrisMFlorida 3 года назад

I'd have to question do you really need a house that expensive.. It's obviously a dream, but why? For me I'd rather have a modest but paid for house and investments to create some passive cash flow in the future.

@abrahamflores2566 3 года назад

but do you need a modest house? why dont live in your car and eat ramen to save up more money? joking aside its all on the individuals case as long as they buy within their means.

@stevenporter863 3 года назад

Chris V - I agree with you but it is their money and house.

@HarmlessOSRS 3 года назад

@@abrahamflores2566 its whatever your mental health can take. Living in a car you struggle with hygiene and social relationships, what is that worth to you?

@abrahamflores2566 3 года назад

@@HarmlessOSRS I was making fun of the original comment.

@richardramfire3971 3 года назад

@@abrahamflores2566 well made pointb

@tomdrummy4984 3 года назад

Pay off the house !! 😃

@a55tech 21 день назад

dave's math is no good terrible return to have paid off a 2.x% mortgage since this video aired. Lost out on a ton of growth. Even the market hadn't taken off, would've still been an awesome opportunity to buy low.

@Cbv1914 2 года назад

Isn’t there some tax benefit to using the profits of the sale of the house to purchase a new home?

@benzmane7564 2 года назад

Yeah, the irs uses the $ value of the sale of your home vs the price of which you purchased the home, and would tax you on the difference (the profit) unless you put all of the $ amount of that home into your next home

@Cbv1914 2 года назад

@@benzmane7564 that’s what I thought. I’m surprised Dave didn’t say that to them. I saw an interview after this episode of an real estate inventor and he just rolls all his money from house to house so he doesn’t have to pay taxes

@benzmane7564 2 года назад

@@Cbv1914 he basically did. Dave basically told them to pay off their existing house, then sell it to then buy a bigger house

@D.E.. 3 года назад

Oh dear, I sure hope he gets in that "prized" neighborhood! 🤣

@melissab0515 Год назад

Do you think it’s Celebration?

@danielalonzo7445 2 года назад

Its called FOMO - Fear Of Missing Out

@MikeMarshall1411 3 года назад

Upgrading homes sounds great if its paid off... until you realize now you owe the county several hundred per month in property taxes.

@daltonbrasier5491 3 года назад

Thats why you should move to a state with out property taxes.

@MikeMarshall1411 3 года назад

@@daltonbrasier5491 No such state.

@daltonbrasier5491 3 года назад

@@MikeMarshall1411 Not for them. But in 13 states(i think) there is no PT for senior citizens.

@aolvaar8792 3 года назад

@@MikeMarshall1411 I live in the largest American City (500K) without Property Tax. The City gets money from Utilities: Gas, Electricity, Trash, Water, Wastewater, Recycle, ...... My utility bill is ~$800/mo

@wheresmary 3 года назад

Her eyes are gorgeous😍

@thomask8298 2 года назад

I disagree. She has a very harsh face

@jonh2387 2 года назад

If you find a new home in less than a year you will lose money when you pull your investments out. Taxes will kill you.

@dababycar2899 3 года назад

2:25 that’s when you didn’t do math Dave😂

@dynamicwellness33 3 года назад

Yep, Dave was wrong about that. An extra 50k put down on the principle of the home makes nothing. Could easily be making 8-10% per year if invested.

@dianecelento4974 3 года назад

That's what I thought. Thanks for confirming

@dababycar2899 3 года назад

@@dianecelento4974 ? Ok

@everss02 3 года назад

Pay off the current house and buy a boat, far more enjoyment if living there.

@martinfarrow2825 Год назад

What happened to her ?

@shuhelhussain7421 2 года назад

We need a UK version of the baby steps

@benrichardson9526 2 года назад

They transfer across anyway... the main differences are cost of housing vs wages ratio is different. The steps still work

@bettysmith4527 2 года назад

Most annoying call of the year thus far!

@nic_ccc3366 3 года назад

Not sure why this guy called up Dave Ramsey for a plan on how to take more risk to upscale his lifestyle. Dave is about building wealth slowly and living within your means. This guy seems to want to live in a neighbourhood he can *just* afford. Dave's never going to encourage that lol.

@tomm8025 3 года назад

Guy (or his wife) knows and understands money better than Dave. 2.625% mortgage and she correctly views investing that money is better. If you understand the effects of compounding, you will KNOW why DRs constant insistence on people hurry up and paying off low rate mortgages is NOT smart or wise. You're going for a short term accomplishment at the cost of shooting your future in the foot. The younger you are the more substantial the damage of his poor advice will be.

@chukah9484 2 года назад

Goofy that they ignore all multimillionaire youtubers that would say invest that money if you can handle the risk of the house upgrade being delayed for the chance to get it sooner. Not all of them are some poor blogger in a moms basement.

@ruxp12 3 года назад

Not gunna lie, i still dont understand what to do from this session. Is dave saying he should ultimately pay off the house entirely before putting in an offer in the other neighborhood?

@AtomicQuotient 3 года назад

He is saying put 15% in your retirement, throw everything extra at their current mortgage. When they find a house they like in the new neighborhood, sell the current house and use the money towards the new house. He is advocating paying off the current mortgage as fast as possible

@ruxp12 3 года назад

@@AtomicQuotient got it but if they find a house they love in the other neighborhood, don’t they then have to bank on a quick sale of their current house? In that scenario, Isn’t that a risk that they end up double dipping by putting an offer in on their dream house while not securing a buyer for their existing home

@daltonbrasier5491 3 года назад

@@ruxp12 exactly.

@Kaktus965 2 года назад

@@ruxp12 That would only be true if they bought prematurely. Really what they should do is pay off the current house, then save up for a minimum down payment on the next house, and ONLY THEN buy. Then they can sell the current house with less time stress, and roll the proceeds from the sale into the new mortgage.

@ruxp12 2 года назад

@@Kaktus965 agree

@SeanBaker 3 года назад

The best way to do it is to not do it.

@herbiehusker1889 3 года назад

If you can afford it, why not?

@clarifyingquestions 3 года назад

@@herbiehusker1889 exactly. it is all about percentages of one s total net worth - personal choice varies. I am sure DR didn't need a house upgrade but he can afford it. He paid cash!

@davidmilhouscarter8198 3 года назад

I'm growing my hair out. I will not be taking Dave's advice on that. But I will take his advice on building wealth.

@minjang5695 2 года назад

Ottohrt

@djpuplex 3 года назад

Wife and I wonder who's idea this is 🤔

@AdrianO. 3 года назад

What is home prices come down or maybe a housing crash? Then he potentially may be losing a lot of money in his home.

@conureron3792 3 года назад

And, the target home price in the neighborhood they covet also drops.

@daltonbrasier5491 3 года назад

@@conureron3792 But dude, if you sink 200k into a mortgage and then your house is only worth 120k, you just lost 80k. If you put it into a savings account, you dont lose that money.

@conureron3792 3 года назад

@@daltonbrasier5491 - true, but they weren’t talking about a savings account- their premise was to invest the money presumably in a higher yielding, but riskier product. So, they likely lose their funds….and now, they are underwater when it comes to their housing/mortgage: house’s value is below what they still owe.

@benzmane7564 2 года назад

Lol "we owe over 200k on our current house, now how do we upgrade to an even more expensive house??" Lol, I think you pay off the first one as it already appears that you have over-upgraded already

@alumsey4013 2 года назад

It makes zero sense to prioritize paying off a house that you plan to sell within a few years.

@jamespowe8114 2 года назад

I’m in the same boat as this guy and I’ve had this same question. I’m in BS2. It seems confusing which to do. But I feel like it’s be a good mental boost to pay off a cheaper house before buying a larger house so at least you know how it feels. So maybe you don’t keep yourself in debt longer or whatever