In a CNBC article, self-made millionaire David Bach explained that: âBuying a home is the escalator to wealth in America. Homeownership can also help you retire early, that is, if you pay your mortgage off.â
Bach suggests that homebuyers should, âTake out a 30-year mortgage, but with the intention of paying it off in 25, 20 or ideally, 15 years.â
How does he suggest you do this? Hereâs the secret:
ââĤIf you were paying $1,000 a month, now youâre going to make $1,100 payments every month. Inform the bank that you are doing this and that you want the extra $100 a month to be applied to the principal (not the interest).â
What will happen to your mortgage?
Bach explains that, âIf you keep this up, youâll wind up paying off your 30-year mortgage in about 25 years. Increase your monthly payment by 20 percent, and youâll have that mortgage retired in about 22 years.â
Bottom Line
Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice â buy a home and pay off your mortgage early so that you can retire sooner with the money you will have saved!Who is David Bach?
Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, âThe Automatic Millionaire,â spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.He has been a contributor to NBCâs Today Show, appearing more than 100 times, as well as a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS. He has also been profiled in many major publications, including the New York Times, BusinessWeek, USA Today, People, Readerâs Digest, Time, Financial Times, Washington Post, the Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investorsâ Business Daily, and Forbes.
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