Dave Ramsey says it best. "The paid-off home mortgage has taken the place of the BMW as the status symbol of choice."
Dave Ramsey is for stupid people who can’t do math! While he does teach some good principles on doing a budget and paying off consumer debt; his “steps” are a good way to screw yourself out of at least seven figures by the time you reach retirement.
Regarding retirement, you should be putting away 10% or more of your money the second you have a retirement plan. To not take advantage of an employer match on your 401k and to lose out on the time value of compounding interest is absolutely ridiculous. To actually advise people not to prioritize this is borderline criminal! Dave’s advise could literally reduce your retirement nest egg by half.
To answer the question, I’ll have this place paid for in about four years. Well, what about security you ask? My investments and retirement are worth 4X the value of the property. I can simply pay the entire thing off if I wish, but my mortgage rate is 2-5/8 but my ROR on my investments is 45% ytd. Why would anyone take away money making 45% in order to pay off money costing a net of only about 2% after deductions? Inflation is higher than the cost to borrowers. Avoid Ramsey retirement planning at all costs!
