TommyBryson's video: Why it s a GOOD IDEA to pay down your mortgage early

So theirs this idea that paying a mortgage early is a bad idea. That because of inflation, low-interest rates, and opportunity cost, it's virtually not necessary. 💲1 on 1 Talk + My Budget + Stock Investments💲 https://www.patreon.com/tommybryson 💰MY M1 FINANCE PORTFOLIO💰 PLUS $10 Link: https://m1.finance/fQsrul1PZcHM 1. Nowhere is the common example of why having a mortgage long term is a good idea - Let's say you buy a house for $300,000 dollars on a 15-year mortgage to pay it off early and the rate is 4%: your monthly payment would be = $2,219 - On the 30-year mortgage it would be = $1,432 - Now that’s a difference of $787 Now let's say you invested that difference: - On a 30-year mortgage you get to invest that $787 monthly at a 10% return which makes you around = 1.7M - With the 15-year mortgage you finish the house early in 15 years, and then you can invest that $2,219 over 15 years and have = $930k - Now the average person sees this and says, wow so I ended up paying a lot more and I still don’t have more money But the truth is: - This is example is deceiving - Because it doesn’t involve you investing while you're paying down the home early - Both with Dave Ramsey Plan and my plan, we both recommend you pay the mortgage early but also invest at the same time 2. Here is the truth ( a real example, that’s not bias ) - When you buy a house you want to make sure it doesn’t cost more than 33% of your monthly take-home pay, including, Mortgage, insurance, taxes, maintenance, and even HOA fee - Meaning you should still have an extra 20-25% more money for investing - On top of that you shouldn’t buy a home until you have an emergency account, so this way you can quickly rebound when things go wrong with damaging your plan The full example is this: - If the 15-year mortgage is $2,219 it means that your required income needs to be $6724 - This means I should also be investing 20% if I'm single or 25% if I have kids (an extra 5% for 529 accounts for kids ) - This gives us $1,344 for investing each month which is 20% - And we should through an extra 15% towards the mortgage $1,008.60 - This leaves us with 32% take care of normal expenses since the house is already included DO you want to know the real results - You actually finish in 10 years with the mortgage by throwing in an extra 15% - Your investments in 30 years = 2.9M ( investing 20%) - And the cool thing is, that in 10 years you have no mortgage and you’ve still been investing 3. Overall here is the point people miss with real estate and this strategy - The problem is people buying houses they can afford ( use the 33% rule ) - The problem is people waiting until they are done to invest ( use the 20-25% rule ) - The Problem is people not being ready for the worst ( have an emergency account ) Tip: if you follow these rules, you will be a lot better off. Imagine yourself in 10 years with your own house, money investment, and a career you love. * PRO TIP* INFORMATION IS EVERYTHING 👕Merch👕 https://teespring.com/stores/tommybryson ✅2 FREE AUDIOBOOKS✅ https://amzn.to/2Enayo8¬¬¬ 💰M1 FINANCE $10💰 Link: https://m1.finance/fQsrul1PZcHM 🎁ACORN FREE $5🎁 Link: https://acorns.com/invite/38EYSU ⚡FREE KINDLE UNLIMITED⚡ (traditional reading) Link: https://amzn.to/2VGbxt9 👨🏽‍💻DISCORD PRIVATE GROUP👨🏽‍💻 https://discord.gg/EcZEHpA My Camera Gear: https://www.amazon.com/shop/tommybryson ✔ Help Us Reach 500,000 Subscribers: https://goo.gl/0wvm6w 😎All My Social Media😎 Link: https://linktr.ee/tommybryson *Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.