This is Mark Warner with www.propertiesandoptions.com and I’m here to comment about Dave Ramsey and how he’s misleading his followers. In my previous video about this, there was a tremendous amount of responses to the video about the mistake it is to pay off your mortgage. Lots of people are drinking that Dave Ramsey is feeding them based on paying their mortgage off before saving for retirement.
Start Investing Before Your House Is Paid Off
I agree with Dave in terms of paying off bad debt like credit card payments and credit card interest because there is not after tax benefit to credit card debt. With the high interest rates that you’re paying, it makes it extremely expensive to have that kind of debt, but mortgage debt is good debt. Dave Ramsey won’t respond to this message because he knows I’m right and the numbers don’t lie. Dave Ramsey’s followers are being misled to say that they should pay off their mortgage before they get substantially engaged in raising money or putting money away for their retirement in whatever form whether it’s a Roth IRA, a regular IRA or their 401K with their employer.
The mistake is if these people have the discipline to pay off their credit card debt and save and put their emergency fund together as he explains, which are good and wise things to do, the mistake is to pay your mortgage off or to shorten the life of your mortgage. If you have the discipline to pay off your credit card, you have the discipline to do a long-term mortgage, especially at today’s after tax interest rates on mortgage debt and put away a bunch of money with the discipline. It’s a $200,000 mistake if you don’t do it that way. Dave Ramsey’s folks are being misled and it’s all about discipline.
This is Mark Warner with propertiesandoptions.com.