Pay Off the Mortgage or Invest? Think Both! (w/ Brennan Schlagbaum)

to provide you with another perspective and potentially to provide me with some support uh per se I've invited Brennan schlagbaum on the show today Brennan is a husband a young father and a CPA that just quit his nine to five job at Deloitte and paid off his house before 30 years old he's also the financial educator behind budget dog a financial empowerment platform with nearly 100 000 followers when Brennan isn't motivating people to get out of debt he enjoys spending time with his family traveling and working out welcome to the show Brennan thanks Andy thanks for having me absolutely well Brandon Let's Help Let's Help Kevin here with his question how can Kevin find some motivation to keep paying off his mortgage when there's all these other investment opportunities there's the stock market there's whatever crypto There's real estate how does how does he keep that Focus how does he find that motivation it's such a good question because it comes up so often right and I think the number one thing is you have to understand your why behind everything and so if you understand your why that's going to drive a lot of decision making it's going to be a lot easier that way um so what we did personally when we paid off our mortgage we we mapped out that plan it allowed us to reach our goals and you know take that fomo feeling a way of crypto and real estate and all these zero percent down offers everywhere that you look and turn and then you hear social media never pay off your mortgage keep the longest possible mortgage and so I think if you understand that why it kind of wraps you back into ignoring the outside noise and focusing on what's important to you I think what will ultimately make your heart most content and I think that's really what it comes down to so for you guys you you alluded to and I talked about at the top of the show you guys did this as well what was your why what what got you fired up to keep paying off your mortgage when there were all these other investment opportunities yeah so I think the number one thing was as I was building my business I wanted to reduce the stress as I took that leap and so the confidence to leave the nine to five was a big deal to me so and my wife as well and so we looked at it as that as we reduce our expenses we also had a daughter on the way so to the ability to stay home with her full-time we would avoid daycare cost um we would bring down the housing costs there would be less stress on us right and on top of that we realized you know eventually we wanted to get to the point where this is a family business it's not just my business we wanted to bring her into it too So eventually that's kind of the goal down the road so we've gotten to this point and now we have another step I love that so there are you know there are motivations outside of math is what you're saying then uh well like I mean I guess there's still a math decision in what you made there with less with fewer expenses in your life you guys could make some decisions that were better for your family absolutely because one of my actually My slogan for Budget dog is it's bigger than math and it hits it right on the on the head with it because we did the calculations we understood hey if we would have and I did a look back analysis and figured out hey how much do we actually lose per se right it was forty two thousand dollars so we could have increased our net worth by forty two thousand dollars but what value would that have brought to us at this point in time zero and so I looked at that and we kind of made the educated decision on that is saying that's great we could be forty two thousand dollars richer on paper but our lifestyle would be the same so the way to pay off the house was you know or to be free was to pay off the house now let's say you had different goals like Kevin let's let's let's put ourselves in Kevin's shoes if Kevin wants to get into real estate investing would paying off the mortgage on us on a very low interest rate mortgage makes sense if he wants to build wealth down the road and let's say he wants to own 10 properties and live off of that what would you have done the same thing then it's a good question um you know I might be looking at things a little differently I do think personal residence is a lot different than rentals so being able to pay off your personal residence and have no mortgage payment is fine but if you have a mortgage on a rental property somebody else is paying that so you can look it a little differently I would agree with you I think I would if I go down this when if and when I ever do any rental properties for for now it doesn't make sense in our lives we got we got little kids and it just seems like another job to me but in the future uh I I think I would be happy taking out a mortgage as just a cost of doing business for rental property so for Kevin I don't know I mean I I guess it's a decision he has to make but for me if you're so close to the finish line of thirty thousand nine hundred dollars I don't know there's something mentally uh satisfying about just saying that you're done with something would you agree absolutely I think it's it's so exciting to knock that bucket list item off of the the list I mean just that that feeling the next month in September was our first month that we paid off the mortgage and not to have that mortgage come through was so gratifying and we were able to take that and invest it so it was like such a win-win um and I don't regret anything we've done now talk to talk to me about what investing means to you because there's others we like to talk about it in the fire Community there's those three areas right you could stock market invest you could real estate investor you could build a business like you are now when you talk about investing what does that mean to you I think Financial Freedom comes to mind when I hear the word investing so investing for your future I think everyone says investing they think Market stock market real estate and stuff like that I just look at is putting my future in the Forefront and making sure that I'm prepared for the future and if I can do that through real estate crypto whatever it may be there's so many different things out there I'm going to do that and take that step yeah is real estate a part of your plan real estate investing in the future so my friends fi couple that I know you've had on here before yeah great guys they've flirted with the idea with me about it and I've considered it um and it's definitely something I've been thinking but as you said you have little kids and I just had my my daughter she's five weeks old so right now I'm just trying to stay alive so the last thing I want to do is add a whole real estate portfolio to the mix um I don't think I slept last night so yeah I hear you I we we have a little snoo so it registers how long she's down she was not down much last night oh man yeah I've heard some good things about how AI is helping young parents uh make sleeping a little easier very cool yeah I think that's a good point so I mean depending on where you are and what season or stage of life you're in investing in rental properties investing in real estate may make a lot of sense for you for me as a young father where I've got some different interests allocating my time to that right now doesn't seem to to fit well and it sounds like that's the case for you look let's talk about mortgage Freedom we talked about it a little bit for for you and your family was your mortgage Freedom did that allow you to leave your job was building your business the the impetus for leaving your job how did that all go yeah that's a good question so I think really it changed our entire Outlook so when we were thinking about that leap it was a it's a scary thing to be an entrepreneur I went to college I always thought hey I'm going to work at Deloitte and a big and I'm going to work my way up to partner that was my goal and all of a sudden this budget dog thing came about and I was like this is really what I like so I was being pulled away from that from Deloitte but the problem was it was still scary to leave that 9-5 paycheck that's been consistent my whole life I went to school for I got my CPA and all that kind of stuff so it was it was scary so I think being able to bring down that mortgage and eliminating that entirely gave me that confidence to take that leap and just say you know what we can do this on her salary alone why not take this chance at this point in my life yeah that's great you know I think whether it's starting a business or doing something different or maybe going down to part-time if you're a parent that wants to spend more time mortgage Freedom can allow you to do those things when Nicole wanted to go full-time stay-at-home mom our mortgage Freedom around 2017 allowed for that to happen because we weren't making a 2 000 plus dollar payment each month anymore and we put a lot more towards the principal each month too so it was like a big raise but then the deduction from the reduction of income but the whole point is to align it to your values and it sounds like that's what you guys have been able to do so outside of uh paying off your mortgage and then figuring out how to build income through your business were there other things that you did to prepare for the leap that made you feel even more comfortable yes absolutely so first off with the business I wanted consistent income above the nine to five for 12 months at least which we did um we discussed exit plans together so that was really we wanted to be clear with each other when that leap was going to come and we reduced expenses by obviously paying off the home and every other debt there so what we our expenses are low and so we have zero debt on top of that but another thing is we wanted to get our health our investments to a healthy level to get to that Coast fi level so that we know anything on top of that's technically gravy for retirement and then anything additional would be early retirement at that point so we wanted to make sure all of those things were in place to be in a good spot awesome talk to me about Coast fi what does that mean to you and how is that allowing or how did you get there let's talk about that how did you get there uh investing early and often is the goal and getting that money there early you know at the age of 21 22 years old or if you can do it earlier great do it my daughter's five weeks old with uh way better net worth than I had at five weeks so she's in a good situation and so the earlier you can get that money in the more it has time to grow and the less you have to actually you know contribute yourself but once you get to that point where your money is going to grow and grow and grow by itself without any additional contributions you've reached that Coast fi level and that's what we're at right now I love it yeah there's very few pension around or the ones that that are still around you know good for all those folks that that have those but for a lot of America we have to create our own pension and and having a costify plan where you can do that early on often can help you um help you prepare for that so tell me a little bit about how you're Investing For Your five-year five-week-old daughter this is super interesting you know what I I feel like she's a little too spoiled already so so we have three three accounts for we have a taxable brokerage account our name that we're gonna eventually gift her but it's earmarked for her I think that's the biggest count the 529 on top of that for college expenses um and then we have the Roth IRA so she got her second modeling gig this morning and offered so any money that she makes is gonna go into the Roth IRA which is earned income obviously a lot of parents don't have the option with a baby at five weeks but she luckily um was able to do that through my business and then an additional offer because she's on the internet everywhere and uh so we've been we've been contributing to that as well I love that yeah talk about investing for three very important moments in your life so you got retirement through the Roth IRA you've got College through the 529 and then the utma or kids brokerage or whatever you're going to do that is uh has has many options I guess as they get older so many options yeah so very cool awesome well so there's somebody listening right now and they're trying to make this decision they're trying to figure out should I pay off my more mortgage or should I invest more of my money in stocks real estate my small business what would you say to them how could they make this decision so remember it's a personal decision don't let anyone on the Internet or anybody anywhere shame you for doing either because they're both good decisions right they're ultimately good decisions um you're helping your future self so it doesn't have to always be one or the other either like we can do a hybrid and that's what we did so we mapped out our goals and think of it this way if you have an extra thousand dollars and you don't know what to do with it get out two tools and these two tools have helped me so many times along the decision making process and amortization schedule in a compound interest calculator plug and play variations of that available money and just figure out what works for you and figure out what makes your heart content so maybe this maybe it's 700 investing and 300 to the mortgage and that allows you to reach both your goals but maybe it doesn't and so you want to plug and play those numbers until that situation makes sense um but yeah I mean the biggest thing is during that mortgage payoff I do think investing 15 percent of your gross income is important so I do think that having that amount of money saved away even when you're paying off that low interest mortgage makes a lot of sense but anything over that with that extra thousand dollars like the example I explained that's where you guys got to think and just kind of plug and play those numbers I love that advice and yes everybody we talk about this on the show often it doesn't have to be an or these these can be and decisions and if you're able to start as early as five weeks you're gonna have a lot of money by the time you're at your 60s so you start early for investing and and Tackle these things Brandon thank you so much for your time today if people want to connect with you follow you where's the best place to go all major socialists um Instagram Facebook and YouTube budget dog and then Tick Tock and Twitter budget dog underscore awesome Brennan thank you so much for your time today hey everybody if you're looking for somebody who's not going to shame you for your decisions on the internet and have some fun and help you to reach those family goals check out Brennan follow him I've had a lot of fun following him on Instagram and Twitter and uh Brandon thank you so much for your time today thank you so much Andy for having me [Music]

Channel: Marriage Kids and Money

Views: 10,763

Keywords: pay off mortgage, pay off mortgage early, paying off mortgage early, how to pay off mortgage early, pay off mortgage in 5 years, mortgage free, mortgage freedom, mortgage free living, mortgage free life, finding motivation, motivation to pay off debt, pay off debt, paying off debt, how to pay off your house, how to pay off your home, pay off mortgage debt, Brenan Schlagbaum, pay off mortgage faster, pay off mortgage fast, Pay off debt motivation, Budget Dog

Id: -mkW8Mwt0ro

Length: 13min 32sec (812 seconds)

Published: Wed Dec 21 2022