Whoa, whoa, whoa, whoa, whoa!
You trying to pay off your house?
Slow down.
Hold them horses.
Pull that in, ring that in.
Listen, I get it.
You've probably been taught like I was our whole life.
"Get out of debt, pay off your house."
Today, I want to share with you the 3 top reasons why people tell us to pay off our
house.
And today, we're going to work.
Because I'm going to share with you 3 very different reasons that could financially screw
you if you do.
I get it.
Some of you are like, "Dude, Kris.
I liked you up until that moment.
Now, I hate you because you're trying to tell me.
You're like breaking my goals, breaking my dreams.
Tell me not to pay off my house."
Actually, hear me out friend.
I'm not telling you to not pay off your house.
I'm going to mess with the order in what you do things.
Because when you agree that we're trying to achieve a higher level of financial freedom.
Wouldn't you agree that we're trying to create more cash flow so that you can achieve more
goals and dreams?
Paying off your house is about security.
But once you have everything paid off, you can't live on that.
Sometimes, things get done in the wrong order.
In my experience is is society has taught us bass awkwards.
So, here's the deal.
Number 1 reason to not pay off your house early, is that what you're going to do is
you're going to trap equity.
When you try to get that house paid off sooner, what you're really doing is taking one of
your best asset and you're saying, "Grow with the relative inflation."
Well, with inflation against you.
But whatever the market is doing.
And that's my investment.
No.
This is your home.
This money?
You trap that equity and all your working towards is not having a payment.
And I'll show you at the end of the video what the real math looks like because it's
going to freak you out.
So, if you trap that equity and you need money, you can't chisel bricks off of the wall and
try to eat that or make an investment with that.
You've trapped it.
And now, you can't get it out.
And if you've trapped it pre-maturely...
So now, you're house is paid off but you don't have residual income?
And I've seen people do that all the time.
And the story doesn't end well.
You know what happens with them?
They got reverse mortgage this thing, the security they thought they had, they're going
to have to get rid of it.
Because they're missing the money that they need to live life today.
Which kind of leads in the reason number 2.
Which is "I got to hurry and get my house paid off.
So I can peace of mind."
You're going to be getting peace of mind in the moment.
You're going to have peace of mind as long as your house is paid off.
But the moment you get in the financial precarious situation and your best asset is left in your
house, then what you're going to have to do?
You're going to have rip it out.
And guess what happened to your peace of mind?
It's gone.
If you base your financial happiness, you happiness in life and your peace of mind.Whether
your assets are paid off or not, I'm going to call that a super weak sauce mental state.
Because basically, when good things financially happen, you're prone to be happy.
But guess what?
When everytime you get knocked behind the proverbial 8-ball, financially speaking, guess
what happens?
Then you're in a bad place.
You do not want to allow money to have so much control over your emotions.
And the last reason why people want to pay off their house is because they believe they
want to debt.
Wrong again!
You want to have as much debt as possibly can.
I'm in-love with debt.
Not consumer debt.
Same word, 2 meanings, right?
1 is a consumer debt.
It's stupid.
I buy a car.
I buy other things that I can't afford.
And then I have the service that didn't have to pay it.
But you give me a business debt that makes me money.
And my goal is to create as much business debt as I can.
Every month, I go millions of dollars of business debt.
More than I was a month before.
And my goal is to be hundreds and hundreds and hundreds and hundreds and millions of
dollars in debt.
Because it's also making me millions and millions and millions and millions and millions of
dollars.
Do you understand the difference?
So, I totally get this concept of pay off the house.
Let's talk about timing of when you actually do it.
Let's just say right now that you had an option of having a very simple house paid off.
Let's just say for all intents and purposes.
This is a $200,000 house.
And we're going to kind of split the universe and say, "We're going to play it out in this
universe.
We're going to play it out in that universe."
This universe, option A is it's paid off.
And what you're enjoying is the lack of $1200 payment a month.
So you're like, "Yes!
I don't have this.
That is big."
And you know what?
That's a good win.
But scenario B looks different.
Scenario B, you say, you know what?
We're going to actually mortgage this back up to 150 k.
And now, I'm going to pick up a $900 mortgage.
But what I'm going to do is I'm going to use the money that I pulled out of it.
The 150,000.
And I'm going to buy 3 properties.
And these 3 properties will pay your 900 plus there will be left overs.
And in 5 years, guess what happens to these 3 homes.
They become 6.
Now, let's just assume that you're following me and my system.
Maybe you're even my partner and you're investing with me and we've doubled that asset.
Now in 5 years, what could you do?
You can repay off the house and have 150,000 to invest with that you didn't have before.
Or you could take 6 properties and turn them into 12.
Or you could take 12 properties and turn them into 24.
Frankly my friend, you can keep on growing.
Because I get this question asked.
"Kris, I got student loan debt.
I want to pay off my house.
If I have all the money today, pay it off.
Should i?"
And my advise is, if you do, you'll have lost your nest egg, you'll have consume your principle
and you will have a reduced monthly expense.
But now you won't have any money to play the opportunity cost game with.
Which is what could your money be earning?
And this is a game that it comes down to.
You house probably has a 5 to 6% rate.
And I'm going to teach you.
This is the big thing that I want you to get out of this video.
When I teach you a complicated word called arbitrage.
Just try it out for a minute and just say it.
Arbitrage.
Strange word.
Here's what's going down.
Let's just say that you're mortgage interest rate in your house is 6%.
But let's say that in the meantime, it could be sitting in investment properties earning
20%.
What is the difference between 6 and 20?
It's 14%.
That's the delta, that's the arbitrage.
Borrow at 6, earn at 20, net 14.
I'll say it one more time.
Borrow at 6, earn at 20 and what you're going to net is the difference.
And that's the positive arbitrage of 14%.
That positive arbitrage gives me the ability to basically pay for the house nearly 3 times.
Think about that for a moment.
French economist J.B Shae in the 1800's said that creating wealth is just the function
of moving your money from low yields to high yields.
In our society, we're taught to take our money and hurry and eliminate the debt because this
is bad.
We haven't been taught to invest.
And because we haven't been taught to invest, dude, right now, we're sitting knee high in
do and don'ts.
Soon it's going to be waist highs, soon it's going to be neck high.
Soon is it'll be going down our throat.
"Dude, that is disgusting analogy, Kris.
Never use that one again."
But seriously, this is the problem that we have is that we get things backwards.
When do you pay off your crap?
Let me answer it.
When you pay it all off.
When you're...
When you have enough money in your investments producing residual income that pays all your
expenses.
Now, go pay off your crap.
You see why?
You can either have paid off, no debt and nothing else.
Or you can have no debt and thousands of extra dollars every month that you can use to travel,
go out to restaurants, birthday shop for your kids.
Do whatever you want.
The difference is what kind of security do you want in retirement?
Do you want baseline security of no debt?
Or do you want a higher level of security of residual income far greater than whatever
your debts are.
Final thought for you.
Right now, I either give you a million dollars.
I'll write you a million dollar check right now or $10,000 every month for the rest of
your life.
Growing at 10% every year and then you get the big Qivuit to your children when you're
gone?
What is choose?
What would you do?
This mindset, "Get out of debt"?
It's usually ridden by fear and scarcity.
It's not a bad thing.
But you got to be looking further.
The real security comes from knowing that after there's no debt, that there's all this
money to support you.
I would rather be up to my eyeballs in debt the rest of my life with a massive residual
income that surfaces it and has a whole lot left over.
Friends do the math.
That's really what today's conversation comes down to.
Anyway, those are 3 reasons to not pay off your house this moment, invest the difference
and pay off your house later when you have lots of left over so you can be living life
on your terms the way that you want.
Hopefully that made sense.Thank you for watching today,Make sure you subscribe.
And finally, if you want to maximum help to create the financial future of your dreams,
here's what I would do.
If you liked this video or if it's confusing or if you're pissed at it and you need to
know more, get my book for free.
All you got to do is click the link.
And 2 things are going to happen: 1, I'm going to give you my book for free.
Number 2, you got a free consultation with a member of my team to step into your shoes
and help make more sense of any of the drama or confusion I've created today.
Or if you got it, they'll be revealing the options of how you can be living life at a
higher level.
Take care.
Good luck my friends, see you later.