People kick themselves when they realize they could have paid off their house in 8 years instead
of 10 years. In this episode, I'm going to address the question "How to pay off a house in 10 years."
But hello? I'm going to show you with the same money how you could pay it off 2 years faster.
So my name is Doug Andrew. I've been a financial strategist and retirement planning specialist
for more than 4 and a half decades. In fact, I've been very blessed in my life to have authored
11 books so far. One was the New York Times, Wall Street Journal number one bestseller
the books are here on this coffee table. And I'm going to show you at the end of this
episode how you can get a free copy of my most recent best-selling book. But years ago,
with my very first book which I self-published. And then bingo,
I was going through about 5,000 copies a month and it got the attention of Time Warner,
Warner Business Books. And long story short, they commissioned me to write another book and then
they gave me a million-dollar advance. And that book became a new york times Wall Street Journal
number 1, bestseller. They commissioned my 2 sons uh to co-author a book with me, Millionaire By 30.
Because using the strategies I'm going to share in this episode, my 2 sons were able to
have net worths of 1.6 million each by the time they were 26 and 28 years old. And I never gave
them one dime. They started from scratch. Do you know most college graduates 10 years after
graduating at that point in time in 2008 when we released that book only had a net worth of 15,000?
My heavens, your money should be earning more than you do by age 32. But people don't know
what they don't know. Because you can't be aware of something you're not aware of.
So, in my very first book, I was talking about the 50,000-dollar mistake that people make, all these
americans make. It was actually back at the very first printing a twenty 25,000-dollar mistake.
Do you know that back at the turn of the century when I released my first book, the average
mortgage was about 150,000. Then in a few years, 7 to 10 years, real estate goes up doubles.
And the average mortgage was 300,000. Now, at the recording of this episode, the average
American has a mortgage of about 5 to 6 hundred thousand dollars. It would be a hundred thousand
dollar mistake if you sent extra principal payments to the mortgage company. In that book,
I said, "Any method, way, shape or form of sending extra principal payments to the
mortgage company is not the fastest smartest way to get out of debt." And I can prove it
to you mathematically. So, I'm going to share with you a story. So, before I share the story,
if you know anybody who has a goal to get their house paid off and they're sending
extra principal payments to the mortgage company, have them watch this episode. Subscribe, share.
I want you to understand something here that a lot of Americans don't stop to think about.
Years ago, I met with three finance professors at a major university. And they said, "Mr. Andrew,
we teach all of our advanced students here in the 400 classes that when they go out and buy their
first house why they should take out a 15-year amortized mortgage if they can afford the payment
instead of a 30-year amortized mortgage payment." I looked at them and I said, "Why do you do that?"
And they went, "Well, duh?" Maybe they meant "Doug", I don't know. They said,
"If you just bite the bullet and you send a higher mortgage payment, a 15-year mortgage,
you're going to save a grendel of interest. You'll have the house paid off in 15 years." When you
take what you used to make in house payments and you put it over here in a yax-deferred IRA or
401K. And you'll end up with this much money." I said, "Gentlemen, your finance professors.
Haven't you ever taken the differential between a 15-year amortized mortgage payment of this
and a 30-year amortized mortgage payment which is less? Take that difference plus the tax savings.
You will achieve during the first 15 years of a 30-year mortgage. And don't spend it.
Have a system to set it aside over here in this right-hand pocket." -"What's that?" -"Well,
it's compounding tax-free." -"What's tax-free?" So, I had to tell them about my favorite vehicle
called the Laser Fund which i'll share with you. -"This is compounding. Gentlemen,
do you understand compound interest?" -"Yes." -"Oh, really?" Okay? I did a little exercise with
them and they were ashamed, they didn't understand compound interest. I said, we put it over here
compounding tax-free. And I've been earning you know 8-10 percent. So, let's say it's 9. 9%,
I earned 9.6% for over 30 years average. Here I am earning let's round it down
9% over here compounding tax-free. Let's look at the mortgage over here in this pocket. This is my
mortgage liability in this pocket. This mortgage maybe is at 4.5% interest but it's tax-deductible.
It's only a net cost of 3. Even if i had a 6% interest mortgage, it's a net cost of 4
because i get to write off the interest. Let's say 3% on a million-dollar mortgage. Let's just do
simple math. I'm paying a net of 30,000 a year but I'm making 90,000. How much more is 90 than 30?
300%. Would you hire an employee for 30 grand that made you an extra 90 grand?
I'll do that all day long. That's a 300% return on employment cost. They went, "Wow,
we've never done that math." So, I took out an HP 12c calculator and I crushed in the numbers.
And these finance professors were flabbergasted. There was enough money in this right-hand pocket
to totally pay off the 30-year mortgage in 12.5 years with the same money they were telling
their students to pay off the 15-year mortgage. Or another way to look at it, at the end of 15 years,
I had a $100,000 leftover that you didn't have if you gave it to the mortgage company. Because every
time you give extra principal to the mortgage company, it's like saying, "Here, Mr. Banker,
here's an extra 500 bucks this month. There's an extra thousand bucks. Don't don't pay me any
interest on that. If I want it back, I'll borrow it back on your terms and prove there's a need
why I should have it." Sounds sort of stupid when I say it that way, right? If I put it over here,
it's compounding. I'll have enough money here to pay it off. So, the answer to the question
in this episode. People say, "How can I pay off my house in 10 years?" They think it's by sending
extra principal. How much extra should I send? That's an equation you can put in a calculator.
Well, if you put in that you want to pay it off in 10 years, it'll tell you how much extra you should
pay in principal. Just take that amount plus the tax savings. You will achieve by not giving it
to the mortgage company and killing your partner, Uncle Sam. Put it over here compounding even at 6%
tax-free and you'll have enough money over here to pay off that mortgage, not in 10 years. In 8
years. But you'll have liquidity. If you get into trouble, you can dip into the money here. If you
give it to the mortgage company and you lose your job and real estate goes down, you're trapped.
It's a lot better to have access to that money and not need it than need it when it's trapped
in the house and not be able to get it. It's a lot better to have and not need than need to not have.
Are you getting it? So, when I educated those 3 finance professors, I had not authored this book
at that point in time. But I had my first book. It was called Missed Fortune. Because of the fortunes
people miss out on because they simply don't know what they don't know. If you can't tell,
I'm passionate about empowering people, educating you. If this has intrigued you, thank you
for watching. But if you want to learn more, this is my 11th book. It's also a bestseller.
These are my other books and I want to gift you a copy of this 300-page book because it's actually
2 books in one. This side is comprised of about 200 pages, 14 chapters with all kinds of charts
and graphs if you're into logic. If you're into stories, you learn by examples and metaphors,
you flip the book over and read this one. This direction is about 100 pages, 12 chapters with 62
chicken soup for the financial soul stories. Okay? If you want to use your whole brain, right and
left brain, read the whole book. The point is I want to gift you a copy. Here's how you can claim
your free copy. Go to Laserfund... LASERfund.com. You contribute a nominal amount towards the
shipping and handling. I'll cover the rest of that cost and I will pay for the book and I'll fire it
out to you. And you can begin to learn and gain insight. Subscribe to this channel. There's tons
of videos that will help you understand concepts like this. I can get you out of debt 2-2 and
a half years faster than any method of sending extra principal payments to the mortgage company.