Paid off My Mortgage in 7 Years

how's it going everybody this is beat the bush today I'm gonna talk about why I paid off my mortgage in seven years [Music] now if you saw my previous videos the last couple of weeks I kind of mentioned it once or twice over here today I want to talk about it in detail and just kind of explain to you how I was able to do it some people might assume that I'm making a lot of money so much so that I can pay off my mortgage this is not the case I'm actually making a lot less and in fact I was able to pay off my mortgage before I quit my engineering job and switch over to YouTube you could say that couldn't be considered part of the catalyst at which allows me to do that switch now you might go well where did I get the money from it's basically mostly from my engineering job so without doing this whole career thing as an engineer I probably would have a much harder time paying it off now you might go okay really how did you pay it off because I do live in the Bay Area and this home oh my gosh it it costs a lot of money basically throughout my career I spent very little and at the same time I keep on getting pay raises I work very hard it's typical for me to get about 10 to 25 percent raises staying at the same job or even when I switch jobs I always look to increase my pay in one way or another during all this time where I'm saving money and not really spending all that much of it I am very aware that if I put the money into the mortgage I'm actually having it locked in once you put it in you can't actually easily take it back out so what's on my mind all this time is that yes I could put it all into the mortgage but I don't because there's an opportunity cost here if I have a lump sum of money just set aside it means that if there is some other downturn a housing downturn or anything then I can have a lump sum of cash and I can go okay let me just buy another property because I see that there's a good opportunity but what happened was no new good opportunity came up there was no downturn during this whole time so then I'm like okay now that I can pay it off and I have a little bit of buffer room left then I can go okay now I will pay it off I purchased this place sometime at the end of 2010 I finished paying it off sometime mid 2018 so this is about seven and a half years or so so that's why I say in about seven years now how I think about this is that as long as I can pay the property tax I can survive and I'll have a roof over my head so this is a huge amount of stress that's removed from my life because I always know that okay as long as I can pay the property tax because if you don't I feel like something bad is gonna happen definitely but if I do I have this minimal obligation to meet and yet I can still have a roof over my head and you know I essentially won't be homeless because of this fact so you can say you know all this stuff over here this set that you see is actually my living room I own this and it's really great to be able to say something like this now I fully realize that there are some people out there that think that I really shouldn't have pay it off it's actually really stupid to do so because I could have used that money to buy more properties and then go rent it out and then I'll have a very high positive cash flow here is my response to that is basically I enjoy simplicity I know it's costing me a certain amount in order to not do all this fancy trick you know I'll have four rental properties and then rent those a land and have some income but then having it leveraged like that kind of causes me stress and I really put a high priority on reducing my stress levels and just kind of knowing I have something paid for just kind of you know allows me to think more clearly and I put a huge premium on my state of being if that makes sense now there's yet another reason why I chose to pay off my mortgage rather than have it sit around and just pay mortgage interest so that I can take the deduction is because of the 2018 changes in taxes 2017 standard deduction for a single filer is $6,350 2018 this change to $12,000 so it's about a difference of $6,000 now if you have a home having mortgage interest deduction is a huge part of it for me personally it actually pushed me over so that I can itemize my deduction but if I wipe out this mortgage interest deduction they now have very little to deduct the idea here is that because the standard deduction is $12,000 if somehow my deduction comes underneath this that will mean that whatever amount that's underneath $12,000 this will be essentially tax-free money so let's say if I were to itemize and I only come up to $11,000 then if I go with standard deduction I would have another $1000 that is deducted off of my income which is something that I do not have to pay taxes on so if I'm in the 30% tax bracket every thousand dollars that I'm under I would save another $300 in taxes so it's a complete 180-degree turn here because I see that the standard deduction increase 2 all the way $12,000 so this means that the less deduction I have if I'm able to control this which I did the more Frida duck shion's I would have it that makes sense because I can just go and take the standard deduction but in reality if I don't have all that much deduction because I pay it off my mortgage you know I don't have any more mortgage interest then I can potentially have thousands of dollars of deductions that that's just basically written off based on the standard deduction so suffice to say this change right on 2018 it's on purpose I see that the tax changes are coming and then I'm like okay you know I could pay off my mortgage and all of a sudden I don't have to do this you know mortgage interest deduction things and I could potentially come way under twelve thousand dollars so this would be an advantage to me now I realize not all people will have this option to choose from because I just happen to get lucky okay I happen to you know in 2018 am able to pay off my mortgage I have the option to and I look at the tax code changes and if I do something like this it would be advantageous to me so I went ahead and did it on top of paying off the mortgage okay yes I do not get to deduct that mortgage interest anymore but on top of this I do not have to pay the bank that three and a half percent mortgage interest anymore so on top of this I am saving money from not having to pay the bank so there it is this is the reasoning behind me paying off and you know I have to say it feels good to - you know having a have it paid off if you watch my previous videos this is one of the main reasons why I'm able to lower my burn rate to such a low amount I basically spend about fifty dollars every single day that is my minimal burn rate and I need to earn that much in order to survive basically so thanks for watching everybody I hope this was interesting for you guys because um these are actual changes I made to my own personal finances and you know I think it's a good move you know considering the tax changes don't forget to give me a like on this video push the subscribe button and ring that Bell icon thanks for watching [Music]

Channel: BeatTheBush

Views: 139,583

Rating: 4.7945552 out of 5

Keywords: paid off mortgage, how to pay off mortgage, pay off mortgage in 7 years, pay off home loan, pay down home loan, mortgage pay off, 2018 tax changes

Id: SNDnYYBWLCE

Length: 7min 57sec (477 seconds)

Published: Mon Feb 11 2019