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Pay off my mortgage early?
Dave Ramsey says to do it
Several years ago, my husband and I were deeply in debt. This was partly due to medical bills — I’d had cancer.
We were struggling to pay off our debt when a neighbor turned us on to Dave Ramsey. We attended “Financial Peace University” and read his book.
Most of what he counseled was common sense, stuff I’d done when I was single. My husband, with an MBA in finance, had a different viewpoint. The main benefit to doing the class together was that we started to honestly talk about our budget and work together.
We paid off our debt, using many of Ramsey’s strategies.
However, we did not always agree with him. As intelligent people with critical thinking skills, we asked questions and tried to understand things rather than blindly following someone else’s advice, even that of someone as successful and popular as Dave Ramsey.
Don’t get me wrong — this is not to knock Ramsey. He’s helped a lot of people get out of debt, which is a great thing.
Where I disagree with Dave Ramsey
However, his advice is not always right, in my opinion. A prime example is his advice to pay your mortgage off early.
If you are paying exorbitant interest rates on your mortgage or have a hard time being disciplined with money, then sure, pay off your mortgage early. Otherwise, you are better off putting the extra money into an index fund.
I realize that for those who idolize Mr. Ramsey, the above sounds blasphemous. However, before you come at me with torches and pitchforks, consider the following.
Ramsey didn’t get rich by following his own advice
Ramsey himself did not become wealthy by following his advice! He became wealthy by becoming a popular financial guru with a radio show, several books, and “Financial Peace University” (FPU). We paid $99 to attend this 9 week course. As far as I know, Ramsey gets all of the proceeds from FPU. It is usually taught by volunteers at churches so there are no expenses aside from the materials sold by Ramsey’s company.
