The Real Cost of 15 & 30 Year Mortgages Which Should You Choose

 In today's video, we're going to be talking about the 30-year mortgage versus the 15-year mortgage. And there's many people out there that say 15-year mortgage. You get to save money on interest, because in some cases your interest rate is cheaper. And you get to pay off your mortgage faster. And all these things, and they almost make it sound like the 15-year mortgage tot is the greatest tool. And you're a total genius if you all you do is a 15 versus 30. There's common, there's big time names out there that will literally say like that's what you should do. And we're just going to run the math and talk through 15 versus 30. And we don't really, we're not mortgage lenders, we don't really necessarily have a person in the race here. But I think by the end of this video, you'll have a better mindset operating system framework on how to make that decision. Yeah, so thanks for having me. This is an interesting topic, because it's so misunderstood. There's so much information out there that's not true around it. And we're going to look at the pure math first. And then there's also some pieces here that have to do with discipline. And that's kind of outside of that. And if we don't have discipline, then the pure math really doesn't make, you know, it doesn't make the difference. And so, but we're going to look at it from the standpoint that we're very disciplined. We understand the the cash flows and we keep the cash flows the same. And we're going to go through it in that light. And just look at where some of the misinformation comes from and whether or not it's true. Love it. All right. So let's just start here. And let's say that we had, we're going to put an illustration period of 30 years or 360 months. We're going to go all the way out there with full mortgage just to look at our illustration period all the way out. And this is one of the areas before we dig in completely that's often a place of misinformation. And what happens is the illustration period or the time frame we're looking at as a whole changes whether we have a 15 year mortgage or a 30 year mortgage and it shouldn't. Right. We have to have the same time frame for the analysis. So if we choose to look at a 30 year mortgage over a 30 year period, then we have to look at a 15 year mortgage over a 30 year period as well. We can't change that illustration period and have a valid comparison. Yeah. And so we're going to pick the longest time frame and just make it easier and we're going to go the whole 360 months. And then let's say that we had a $500,000 house that has a $400,000 mortgage, right? Because we were borrowing 80% of the value. So let's put a $400,000 mortgage. Let's put a 6% loan rate. And just for the people watching, there are houses out there for 500,000. And I know you might be watching this in California or New York. So I mean, I'm in national Tennessee and you can't buy a ton for for 500, but it's possible. So just throwing that up. And it's just it's just zeroes, right? We can always multiply up if we needed to or whatever else. So all right. And then remaining monthly payments on this one, let's put 360 months. And what we see here is a payment of $2,388. Sorry, $2,398 across this time frame each month. And then we actually have an amortization schedule that shows that balance slowly declining in the early years and then finally picking up speed at the end, right? And that's one of the areas where a lot of times people will say, well, you know, a mortgage is constructed in such a way that you pay interest first and nothing goes to the principal. But that's not really what happens. Even though that's some of the garbage around it, what happens is we just have more money borrowed. Therefore, there's a higher interest amount in relationships to the payment in the beginning than there is at the end. It's just a function of how big that mortgage is and how much interest is being driven, right? And so a lot of times because of the amount of interest that gets paid, that's what causes people to get concerned. It allows them to really make the wrong decisions. We always make the wrong decisions when we're afraid of something. People get afraid of the amount of interest that's going to get paid. And if we look at this, if we just turn on that cost summary at the top, then what we're going to see is, yep, that we're going to pay $863,000 total. That's the cumulative payments across this time frame, right? Well, we only borrowed $400,000. So that means we're going to pay $463,000 in interest. And that's what scares people. It's like, wow, I'm going to pay more in interest than what my house cost, right? That's more than double the cost of my house. And so it drives behavior that's really not an alignment with financial math. And what I mean by that is, I've seen people that are so driven by trying to tackle that interest because it's this large amount that they'll literally have maybe 18% credit card debt that they're paying minimums on while they're trying to funnel more money here, even though this is only 6% debt. And it's backwards because we get confused by that volume of interest versus the rate that we're paying on that interest or the real cost of it. Yeah, I've seen lots of videos and advice on people that say we should pay multiple, like biweekly kind of deal. And I know we're going to have a part two to this. So we won't have to, I don't want you to get into it now. But if you're watching, please subscribe and follow because we are going to have another one where we address that. But the same philosophy is the same across the board when we talk about 15 versus having a 30-year mortgage and paying twice a month, everyone's looking at that 463,000 dollars of interest and saying what if that could be cut in half and that becomes like the thing that we rally behind, but we forget to factor in opportunity cost or what you could do if you choose to different scenario. That's exactly right. And so people are driven to, and that's why, as you mentioned earlier, that 15-year mortgage, right? That's a place where we can supposedly save a bunch of interest. And so let's look at that on loan two here for just a minute. So if we go over to loan two, and we put in the same mortgage amount, the 400,000, same interest rate. And yes, I know that there's some differences. Typically, the 15-year mortgage is going to be a quarter of a point less than a 30-year mortgage, but we're going to keep it all the same just for this analysis. We can adjust it at the end. Cool. But let's keep it this way for now. I just think it'll make it a little clearer. Put 180 months for the time frame. And now what we see is that dropped our cumulative payments to $607,000, which means we only paid $207,000 in interest here. And so that's less than half of what we're going to pay on the 30-year mortgage. And so this really drives a lot of behavior, seeing what people think is actually savings. Yeah. And if we pull up the payments, what's the payment on the 30-year? Yeah, let's just look at both of them. This is what people will say. It's like you have a payment of, let's say, $2,400 versus $3,000, Roundup 400. And so you look at that from a standpoint, you're like, okay, it's about $1,000 difference, but now you pay half the interest. So you can see where that's really attractive. I'll get behind that. That's amazing. Yeah. And there's so much talk around that because all anybody does is think about that interest. That big thing out there that's really haunting them at night, right? And what they're paying. So people are easy prey to some of that talk. And so we really need to dig in and look at the numbers for a minute. But let's just say for a second that that were true. That the fact that we paid more interest means we have more cost. In fact, the 15-year mortgage is less interest, therefore, our house cost less. What would be the cheapest? And cash really is the answer there, right? If we could pay cash, we'd pay no interest. So that would be the cheapest way to do it. But what we have to start thinking about is, okay, how are we going to pay cash? We would literally have to liquidate $400,000 out of our savings in order to do that. But if we do that, are we not giving up what that $400,000 was going to grow to? And so let's just look at that for just a minute. And we'd grab a calculator, a future value calculator, and look at what $400,000 would have grown to had we not pulled it out to pay off the house and take advantage of paying zero in interest on our house. We put $400,000 in there, a monthly and end of period, at that 6% rate, or 360 months just sitting there, that would actually grow to $2.4 million. Here, once we see what happens, that $400,000 would have grown, assuming it earned 6% all the way out, to $2.4 million. So that decision to get rid of what we are afraid of, $463,000 in interest cost actually took $2.4 million away from us over that time frame. Right? And so that's the part that's left out. It's like, most people would say, well, hand that'd be the best if I could just pay it off. But we have to remember what we're giving up. I have a friend that talks about interest this way. You either pay up interest, like to a lender, or you pass up interest. And it's the same thing net at the end of the day, right? At the 30 year market and making any difference here, we're just, we're giving up basically $200 or $2 million in interest earnings over that time frame, right? And for the listener or what the person watching this on YouTube, with that $2 million represent the opportunity cost factor that we need to start factoring it into the 15 versus the 30 year mortgage. Yeah. And so think about this. Though if I did this, if I made this decision to pull $400,000 out, give up that future value of 2.4 million, pay off my house, I would free up that payment. Wouldn't I? And then I could put that into a savings vehicle. So that might be an option. And so if we grab another future value calculator real quick, then what we see here is if we change it to monthly and end and we copy that payment, make sure these are on top, we paid off the house. So now we freed up the $23.98. It was going to the mortgage company. We can stick it in that same account and look at that. That number is exactly the same as the cash. So either of those two decisions, at the 30 year mark, I end up in the same place. I end up with my house paid off and either the 2.4 million on the left or the 2.4 million on the right, depending on whether I paid cash or continued to final that payment and then left my cash alone. So either of those decisions is the same. And most people, it's like, wait a second, how could that be? In one, we paid no interest on our mortgage. In the other one, we paid 463,000 dollars in mortgage, but yet the cost to of them, once we add the element of time is exactly the same. Either of those two decisions. And this is going to be a hard thing for a lot of people to get their head around. Really is. Yeah, no, I appreciate you breaking this down. And again, there's a lot of half-truths out there. This is what I end up getting caught into in my book The End Asset is one of those things where it's like, yeah, you can look at math and you can have a half-truth, but you have to factor in opportunity cost, which essentially means whether you pay cash or the you do a 30-year mortgage at the 6% interest rate being the same over 30 years. If you're assuming that the person that pays cash is going to take their mortgage payment, put it into an account earn 6% never less, never more. It's identical. And obviously like math, that's important to know the math, but then it's also important to take that fact and ask the question, knowing where math stands, what gives me more control, what's more likely to happen. There's other factors that we can talk about, but I appreciate you breaking this down. And I feel like there's such, there's a lot of miscommunication when it comes to this. Yeah. And like I said, we'll talk about just the math right now, but when we get back to the end of it, let's just we'll bring in the discipline and some other pieces that are around it. But yeah, so here these two are the same. Well, what about the 180-month mortgage? And I know that's a question out there because a lot of people say, yeah, but we're only paying that for 180 months. So it's got to be less and we saw it. It had less interest. But we also saw cash had zero interest, right? And it's still close to the same. But let's go through the exercise with the 180-month mortgage just so everybody understands how that works as well. So let's grab another future value calculator. And then monthly and on this one, we're going to have that larger payment rather than just 2398-20 per month, we're actually going to be putting in a little over $3,300 a month in order to get it paid off in that 180-month time frame. That's what cut our interest way back, right? Because we were accelerating that payoff. And at the end of 180 months, what we see is, well, we've only got $981,000 of cost to you. But right there in that analysis, we're not showing the whole truth. We're using two different illustration periods. And that's what we started with the beginning is talking about how in order to have a valid comparison, our time frame we're looking at has to be the same. So even though the houses paid off at the end of 180 months, we need to continue that out for the next 180 months without a payment and see what that looks like. So we're going to take this $981,000 of money at the end of 180 months and then do that from month 181 out to month 360 so that we have the full time frame. And we see it's the same $2.4 million. And this is really tough. And it doesn't matter. As long as the interest rates are the same, it doesn't matter how long the mortgage is. The cost is going to be exactly the same across the board. And the fact that we paid wildly different amounts of interest is really irrelevant. It didn't have anything to do with it. 0% interest, or sorry, 0 cumulative interest, $463,000 cumulative interest, $200,000 cumulative interest, it's all over the board and yet the cost is exactly the same if the interest rates are the same. Right. I really appreciate you breaking this down. And I think we could stop here if we wanted and just say like drop the microphone. But I think there's I think if we take out a step further knowing this and start talking about like what you should be thinking when you start making a decision because at the end of the day what someone could conclude from this is whether you pay cash, whether you do a 30 year mortgage or whether you do a 15 year mortgage, it's all the same. And number one, someone playing Devils advocate could say well 15 year mortgage the rate is lower. And if you just use that logic you could talk yourself into doing a 15 year mortgage. But then some other people could say well let's factor in risk, let's factor in the unknowns, let's factor in you know a lot of different areas of like would you rather have a paid off house and no money or potentially cash and a side account with with the ability to choose more options. And so let's let's flesh that out more from a standpoint of like how you being a numbers guy think about 30 year 15 or paying cash for a home. Yeah. So all of those things are in the equation. And when it comes to risk that is one of the driving forces for people wanting to accelerate that payoff a lot of times. It's like I'm afraid I'm going to lose my job for a period of time. I'm afraid I might get a disability for a period of time and I don't want to lose my house. And in their decision their fear causes them to make a decision of accelerating that payment to the bank which is exactly what the bank wants right. They would love for you to have more equity because that puts the bank in a less risky situation. In other words if you have problems making the payments and you've got a bunch of equity there they could sell that house an auction and cover what's remaining on the note right. And so they're going to encourage us to go that direction but think about it from our standpoint as the consumer. The more money we put into the house and yes our equity goes up but we have to get permission to get it and the only way we can get it is if we can show we can pay it back right. And it's up to the bank to decide. So if we have one of those issues of losing a job or having a temporary disability the bank not going to let us tap into that equity but if we had this money outside. So in other words if we took that longer mortgage and funneled the difference in the payments into a side account when one of those emergencies came up we'd have a source of funds to be able to make that payment and maybe keep the house. Also the bank's probably going to be in a more likely to negotiate with us if they're upside down on that mortgage right. They don't want that real estate on the books and so it really puts us in the driver's sheet but it comes down to discipline and that's a big piece. If we're not disciplined enough to put that difference in there and we're just blowing it then we're really not going to be any better off in the long run and we're not going to have that that safety net and we're going to say wow I wish I'd paid this off in a hundred eighty months I'd be done with this thing by now. Thanks for discipline. If we're willing to pay thirty three hundred dollars from the hundred eighty-month mortgage we should be willing to pay thirty three hundred dollars in a different strategy that we could accomplish the same method. You know a good friend in our business Michael Isom he says you know there's a difference between objective and method and sometimes those get confused. So if you're objective is to pay the house off in fifteen years that's fine but maybe the method you're using of accelerating the payment isn't the best way to get there right. Maybe using the different method to get to the same objective with some certainty around it because we're in a position of cash in an emergency. Let me let me say back to you what I'm hearing and you let me know if I'm on the same page. So in a fifteen year mortgage a lot of times they will even give you a lower interest rate and it's not because the bank is wanting to patch you on the back saying hey great job you're being a responsible human their their banks are in the process of making money and if you think about it like a loan is an asset to the bank and they're taking risk and if you're paying them back more money and paying off that loan faster from a risk position they have more equity in the home which puts them in more control which means that they're just as profitable charging you less of an interest rate hence why they're incentivizing you to literally take that deal why because if an unknown thing happens in the future they're in the driver's seat and if you're on the consumer side you're paying off your home you're paying off your home you're paying off your home best case scenario you you know we look at the math here you pay off your home in fifteen years and then you're able to invest all the money that you were paying and maybe at the end of thirty years it's the same scenario but if something happens get a disability lose a job there's a lot of unknowns maybe you want to put you know change your jobs or or maybe take extra risk you have your money in your home and and someone once told me that banks love to lend money to people that don't need it hate to lend money to people that need it and so if something does happen to you there's either you need to sell the home well you know right like this is a perfect example with high interest rates it might be hard to sell home so you might end up losing money trying to sell a home or you go back to a bank and say hey can I refinance well if you're disabled if you don't have a job you got let go like the banks aren't gonna necessarily give you favorable terms and even say yes and so what I would even say maybe this is me pushing my agenda in the video but it's like some people get into fifteen year mortgages because they like the safety of having a paid off home but it's one of the most like I would sleep less well at night on that route knowing that if like in the next 15 years I have a lot less options than a 30 year based on what I just shared with you I'm not even looking at the math of like over 30 years it almost equally the same or the 15 year mortgage if we just use the same 6% opportunity cost would actually be farther ahead we use less interest but factor in a 6% rate of return like in a bubble over 30 years you would you'd be ahead in the quote-unquote 15 year mortgage but like the amount of risk and uncertainty that you'd be taking on wouldn't be wouldn't be ideal on the flip side if you have no discipline if you have no discipline then then it's one of those things where you know discipline does matter and and that's if you're not willing to save the difference then the whole thing goes out the window. Exactly and so you know there's the difference between the math and the real world right if in your real world you don't have the discipline then maybe taking that shorter mortgages a better option but it really does expose you to more risk and instead of what most people think and it's just the opposite right most people think they're reducing risk but the closer you get to having it 100% paid off without having it 100% paid off the more risk you have the more equity is on the line that you could just lose very quickly if something changed dramatically in your life right yeah and just to prove that because I don't think we did that with the 30 year mortgage what you would do is you would look at the difference between the 15 year mortgage and the 30 year you would subtract and then you would assume that you're earning 6% over 360 months and you would get 2.4 million the same exact number even though we didn't do that on the calculator that's the that's the assumption well not the 2.4 million so so let's let's talk about what you're what you're saying right there so here's what a lot of people will think and we hear this from mortgage brokers sometimes it's like not only do you pay less interest on the shorter mortgage but in 15 years that house is going to be paid off and now you can start saving that $3,300 a month yeah right make sense and so if we look at this future value calculator on the lower left where we have 3,300 for 180 months and it grows to 981,000 so think about this if we had paid that and had the house paid off and now for month 181 out to month 360 we could save that $3,300 we would end up with that $981,000 at the end of that time frame right right but we've got two totally different amounts of cash flow now that we're talking about we're talking about spend in 3375 43 a month for 360 months and a lot of people will say what no we're only doing it for 180 no you're doing it for 360 the first 180 months went to the mortgage and then the next 180 months went to the savings and so we can't compare 3375 a month over 360 months to 2398 unless we take the difference in that from day one right and start saving it right off the bat so let's do that and see what we end up with so if we get another future value calculator and are intent on saving that difference between those two payments all the way out so if you right click on the monthly payment copy the difference with all the decimal places just so we can see and at six percent those are $977.23 difference between those two payments at six percent for 360 months we end up with the same 981,637 dollars there's no difference if the interest rates are the same so the time frame doesn't matter if we understand that you know paying interest is the opposite of getting interest or getting interest is the opposite of paying interest I mean they're they're still the same same thing in the big picture in other words let's add at six percent debt and I pay more towards that it's the same as earning six percent right even though we have a hard time seeing that I would encourage the viewer to rewatch this video if you're at all like confused because this is like therapy I can tell that this is like you you build calculators for your therapy sessions talk because this is like very very beautiful this all makes sense and it it it's really helped me when I understand some of this because it's I don't just watch a tick-tock video and like oh there's this magic loophole it's it's like no like if you understand these basic math you have a lot more common sense than a higher investor IQ because you're understanding both sides and so question for you is if someone says well I can get a cheaper rate on a 15 year mortgage I gave you my two cents like the philosophy how would you answer that if someone said well I could I could do a 15 year mortgage but it would be a you know quarter percent yeah perfect that's where we need to go I just want to initially get everybody to understand how from a gross cost standpoint they all cost the same if the interest rates are the same and now we'll mix that up a little bit and go to to more reality so let's let's go back to our calculator so we need to minimize all those okay so here let's look at our if we look at our cost summary as we can see here 863 thousand dollars on the left 607 on the right again that's just cumulative right now so we need to add our 6% savings right to this so that it'll show up and now we'll see the the 2 million 2.4 million that we saw earlier with our future value calculator so they're exactly the same here but as you pointed out that 15 year mortgage probably gonna have a quarter of a point less than interest rate why that's a carrot you mentioned it earlier the bank throws out there because they want us to do that that faster mortgage right they don't want those dollars getting diluted by inflation and other things they want them back as quick as possible so that they can turn them back out in another but if we reduce that to 5.75 what we see is that is a little bit cheaper it's about 39,000 about 40,000 dollars cheaper over that whole time frame but there's another piece that's getting left out of the equation and what we have right here and that other piece is the deduction that we get at least in the US on making this decision now I would still do this if this was all that was available just to me that's pretty inexpensive insurance to make sure I have money aside to pay and who knows I might have a great opportunity that comes along this way better than 6% right I was just about to say that it was it it's like we're we're just looking at the what's you know a fact from a standpoint alone right but we're assuming a 6% and if you're entrepreneurial at all what are the opportunity of over the next 30 years you might be able to make a move or a decision that results in more than 6% and in one scenario you have a lot more gunpowder to take advantage of that versus the other so that's but let's continue like I'm glad you pointed that out but let's assume that's not the case but if you're an entrepreneur hopefully you get that logic that both Todd and I just mentioned so let's do this let's put a 24% tax bracket on both of them and what we see is on that longer mortgage that's supposed to have all the cost it actually has a higher tax deduction because we pay more interest we actually get more tax deduction and in the end even though we're paying paying a quarter of a point less on the 180 month mortgage it actually costs us 130 thousand dollars more because of less deduction now wait a second why do we get less deduction on the shorter mortgage and the reason is because it's happening that shorter time frame we're eating up the the interest and therefore we're eating up the tax deduction and so from a gross standpoint if they cost the same and we get more of a tax deduction on the longer one the net cost at the end of the day is actually less on the one that's supposed to be the most expensive and think about this what's the cost of the cash decision it's the full 2.4 million dollars so we get no deduction on that one that's right it's good it's actually completely backwards what's that I said I'm just agreeing with you I really appreciate you laying this out is there any point anything else you want to say because I have another question for you no let's say the opportunity cost of what you could earn is 8% every year let's just say that does the math still is it's one decision is not necessarily better than the other how would that affect scenario a 30 year mortgage versus scenario beef assuming you could earn 8% but the loan rate was 6% across the board great question actually the higher is going to favor the longer mortgage time frame so let's put 8 in both of those and think about it like this this is kind of what's going on while those numbers are being put in we're literally investing 6% to get 8% now when that flips the other way that could be a different that could be a different picture if we can't earn that higher amount it could it could be a problem so here if we could earn 8 on both of these wow now then the one on the left hand side is almost a half million dollars cheaper that longer mortgage almost a half million dollars cheaper than the 30 year mortgage because of that higher rate of return as our opportunity on the other side for that difference in payments yeah the one on the left the the 360 month mortgage is actually less expensive than the one on the right the 180 month mortgage by almost a half million dollars when we increase that interest rate just by a couple of points up to 8% and so one of the things that we talked about earlier the idea behind method and objective let's say we really wanted it paid off in 15 years right well if we scroll down to the 15 year mark what we see is that we're going to oh so the end of the 180 month more 180th month or the beginning of the 181st month there's 284 thousand dollars worth of or 285 thousand dollars almost that we owe at that point time right now we see from our tax deduction we'd have about 150 thousand dollars but what about the difference in that payment right and so if we go back to our future value calculator and think about if we have that discipline to save that differential and if we could do that do you want to do that at your 8% number or the 6? yeah do that at the 8% number please okay if we did that at the 8 and just go out 180 minds there's 338 thousand there's more than enough in that to pay it off not even counting the difference in the advantage of the tax deduction right so just purely in those dollars we could then at that point time say you know what does it make sense for me to clear the mortgage completely because then I own it right then I don't have to answer to the bank and so I can see some you know where some people would feel empowered by that being in that position and they might say yeah you know what I just want it paid off okay we got it paid off in the 15 years or we might get out there and say 338 thousand dollars I could start a business that would pay me and make my mortgage payment maybe I just want to keep doing that right but it puts us in a position of options versus locking us in to really the banks plan that's that that's right and I appreciate you breaking this down because you would even say that if you want to pay it off in 15 years you don't have to necessarily lock yourself into a 15 year mortgage even at the lower interest rate you have more options and who knows what's going to most people don't know what they're going to do next week let alone five years from now and let alone 15 years from now for me I would love more options we don't know what the next 15 years are going to look like which position puts you in more flexibility which position gives you options and there's a value for options now in this case there's actually more money but even if the interest rate was let's say 4% the 15 year mortgage correct me if I'm wrong Todd would win mathematically if the opportunity cost was 4% and again like that's assuming over the next 30 years you only make 4% but I would even choose in that scenario that with the with optionality with with potential upside even though it's not factored in because of just my desire for control yep I agree with you 100% and I mean we can look at that put 4% on this and we're going to see that we're not going to have quite enough to pay it off probably the combination of that and the tax deduction we would but there's 240 and what do we owe yeah 280 the 284 yeah I mean we're close right there and the difference you know we've got an extra 60,000 in tax deductions and if we applied those in the process we'd still have enough to pay off yeah right yeah so the which is the yeah gone I just say it's just pretty phenomenal how how how far off base yeah we've been told that this is right yeah no I I agree and I think the one thing that we need to factor in is discipline and if people are listening to let's say day bramsey with no a coach specialist advisor person that's holding their hand the discipline to stay consistent and save the difference invest the difference you can see where most people just the data like most people aren't doing that so you can see where if you just force people into a 15 year or even if you say you need cash before buying something it does two things I'm giving the benefit out it allows people to not over consume so if you pay cash for a home instead of buying a 900,000 home you might buy a 300,000 home that's not apples apples but you could make the argument that you shouldn't a piece of debt enabled you to buy a house you shouldn't afford and then the second thing is if you're not disciplined it just automatically makes you play a smaller game which in that that case gets you out of trouble because it's limiting your consumption so I am like there's math and then there's the people that watch this are always thinking opportunity costs what they can do but if you look at the real world and human behavior I do understand I'm very empathetic why you know there's people out there that challenge people to pay off as fast as possible because they're not saving or investing the difference or spending the difference and as a result they're hosed from the big get go right and you know that that that same idea is true for you know savings vehicles you think about qualified plan vehicles the 401k you know some people will literally say I put it in there because I know I can't touch it because I don't have discipline okay well in that case that's probably a good thing for you but man having access to those funds in the right way with the right discipline you could make a way bigger potentially than what you can you know accumulate inside of that that confined space right where it's locked down and and maybe end up with something by having it in there that you would have otherwise blown so I don't know it comes down to people yeah and I literally interviewed Ted Benna who founded the 401k and I asked him what he liked most about the 401k and he literally said it restricts people from accessing their money I was like well yes it does well the pros are first of all it helped convert the spenders into savers yeah but making that the first priority and many employees including me you know would have never accumulated what they did without you know that being possible and that's hilarious how some people some of my friends say that that's the worst thing and why they don't like it and and there's others that say it's the best thing because it it eliminates people from making worse decisions by taking out that money and spend and I think the point that we're trying to make is in this video we're not telling you what you should or should not do but I really hope that you watch this video send this to your friends maybe send this to the person you're working with because if you can understand what Todd and I are talking about there's there's it's empowering it's empowering as you make decisions and we're going to do part two here in a second you're going to see a lot of tick-tock videos and people saying like there's an amazing secret don't do the 15 year mortgage don't do the 30 year mortgage pick a mortgage and pay twice a month and voila like that's some magical thing because now you're not just saving on interest but you're reducing principle which saves on interest and there's like this magical equation and newsflash math is math and we're going to we're going to talk about that in a second but I just I think that this is empowering to know and the last thing that I want to say is if you want to learn more about this from like just a how how does this make sense Kim your wife Todd wrote an amazing book called Busting the Interstraight Lies where she breaks down all this and more and in a way it could be a lot easier for people to follow and so if this is something that is it is like you want to learn more please check out the Amazon link down below and again we're just hoping to continue to elevate the financial IQ is there anything else you want to say Todd as we wrap this up no I think you know there this the mortgage is probably one of the most emotional decisions that people make and and it's really hard to to separate yourself from that but you really do to make a good decision you need to separate from that and the decision might be you know what I see the math and I don't trust myself so I want to accelerate the mortgage that that could be an option but but do it from a standpoint of education where you're making good decisions and you know why you're making those decisions versus some of the rhetoric that's out there in the marketplace is not true right I love it all right subscribe for more videos