Why the Dave Ramsey ‘Pay Off the Mortgage’ Rule Is Costing High-Income Households $400,000 Over a 25-Year Retirement Quick Read – A 5.25% mortgage paired with 7% market returns costs a $400,000-income household roughly $400,000 in retirement spending power by prioritizing…
epayment over investing. – This strategy works for households drowning in high-interest debt, but backfires for high earners with fixed-rate mortgages below their expected portfolio return. – The analyst who called NVIDIA in 2010 just named his top 10 stocks and SPDR S&P 500 ETF wasn’t one of them. Get them here FREE
Dave Ramsey delivers his core message on mortgage debt with characteristic bluntness: “Your most powerful wealth-building tool is your income. Don’t surrender it to debt. Debt is acid that eats your wealth.” Inside the Ramsey framework, that means Baby Step 6: throw every spare dollar at the mortgage before any optional investing.
For a 55-year-old couple earning $400,000, sitting on $1.8 million in retirement accounts and $400,000 in a brokerage, with a $480,000 mortgage at 5.25% on a $900,000 home, that rule costs roughly $400,000 of retirement spending power over a 25-year retirement. The analyst who called NVIDIA in 2010 just named his top 10 stocks and SPDR S&P 500 ETF wasn’t one of them. Get them here FREE.