Reply to Do you follow Dave Ramsay?

Forum Index » Money and Finances

Reply to "Do you follow Dave Ramsay?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous]I don't know that I "follow" DR, but I have listened to him quite a bit. He doesn't always go straight by the numbers. For example when paying off debt he says to pay the [b]smallest one first[/b] (so that you can have small wins to keep your momentum going), even though starting with the highest interest rate might be better mathematically.

His stance on debt is that it is inherently risky. So owning your house free and clear is less risky than even a low rate mortgage. So his argument is not about the math but the risk. [/quote]

I agree with this one, no matter the interest rate.  [b]In terms of paying off a mortage, my concern is that you are putting too much money into one asset.  Who stays in a house for 30 years anyway?[/b][/quote]

You don't have to plan to live in a house forever to want to be rid of pointless debt. We paid off the mortgage on our rental this month, and we've been renting in another state for three years (our rent is half the income we get from our rental).

Bogelheads agree about waiting until you have sufficient liquidity to pay off the mortgage. They say your home should not be more than 33% of your net worth. So until you have saved two times the value of your house, keep saving and wait to pay off the mortgage.
[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics