Why WAITING is the REASON you're BROKE (Dave Ramsey Wrong?) 💀

The sooner you own, the sooner you're paying down the mortgage. There are simple facts here. Renting goes to nothing. Owning. Even in the first few years when you're paying lots of interest on your payment, you're still going to be paying down your mortgage on a $400,000 loan. In those first three years, you're going to be paying it down $16,239. And that principal reduction, it will increase every year because it's interest up top and just a little bit of principal. But every year it shifts and you pay more and more. Principal Magic school bus math. And don't even make me extrapolate. Oh, you do not want me to extrapolate. This math is for the new era extrapolation math for those of you out there who could benefit greatly from some new generation thinking beyond those basic old school formula designed for a different world. But it is still the biggest resource out there because no one else is out doing this kind of information and helping you try to beat the new game. It's totally different than it was in years past. See, while Dave has been telling you since 2011 to save up 20% down so you didn't get in trouble each year, the people that followed his advice could have bought with 5% down and not lost out on an obvious coming appreciating market. Because in 2011 and 2012 we've been going down forever and what goes down always goes up when it comes to real estate. So how much did Dave and these old school principles cost everybody? Shall I extrapolate? Yes. In my example I said that if you're waiting, you'd have to save $20,000 a year for three years. Actually it's $26,000 because we forgot about that whole money you lose and the rent increases. Could you be paying your rent and save $26,000 a year? What if you could only save $10,000 a year? Oh, oh, math change. Time to extrapolate. Let's go back and see where the home prices were. And the Dave Ramsey followers were looking to figure out how to buy a house. Let's say from 2015 to 2021. They didn't want to put that 5% down, they wanted to put the 20% down. So to be to be fair now, the median price back in 2015 was only $289,000. Who's pulling their hair out? Me. See, I don't have any more. Anyway, it wasn't the $400,000 it is today. So sorry, that extrapolation probably hurt your brain a little bit back then, if you're trying to buy that $289,000 house, you wouldn't have need to save the whole 78,000 bucks to go from 5% to 20% down. Back then, the 15% difference would have been about $43,000. So if you followed his method, you would have to save a little over $7,000 while paying rent over those six years. So you could get from 5% down to the full 20% down. But what are we forgetting with that two, two huge extrapolations, your rent would have increased every year. So let's just say back then your rent would go up $100 a year in this example. Not doing that math, it's going to kill you. It's going to kill your soul. So let me add it up for you. $1200 more the first year after you could have had that locked in fixed payment. But you're paying the rent to save money. 2,400 the next year, 36 after that, 4,800, then 5,000 more in the fifth year and 6,200 bucks in this last sixth year for a grand total of $23,000 extra that you would have had to pay in rent over those six years. So now the 15% difference between buying a 5% down and buying a 20% down that originally was $43,000. It's actually 43 plus 23,200. So you have to save an extra $66,200 to buy that $289,000 home. If you do it the safe, non broke Way at 20%. But now fast forward, it's 2021 and the $289,000 home that you've been saving up to buy with 20% down is now it costs $400,000 and you need more money. And I continue to extrapolate and it also shows you that if you had gone back and purchased the home for $289,000 with that smaller payment, you would have been paying just a little bit more than the rent you were already paying anyway while you were trying to save up and buy the home safely and not be broke. And in 2021 now you would have owned that $289,000 home worth $400,000 is with your fixed payment. And you would have paid off $55,000 of your loan principal while owning a home with $111,000 of equity on top of that. And that, my friends, is why when people say should I buy now or should I wait for it to go down. No, no, no. But don't just wait. Find out every way that you can buy right now. This is not like anything else that you've ever bought. This is not a TV where you're watching the price for it to drop and get a good deal. This is a moving target and you already pay a TV payment every month, so you can't buy it the same way like you're buying the TV that you want to add to your life. It's already there. In fact, you own that tv. Well, you don't own it. In fact, you're paying for a TV that your landlord gets to watch. It's one of those 98 inch bad boys with movie sound and he gets to watch it every month. But you're still gonna wait until you can buy it when the price drops. And what really sucks in my extrapolation calculation that's sweeping the nation is that it was not sweeping the nation back in 2015. Back then it was just Uncle Dave. And Dave Ramsey was telling all the people what to do to be safe and not be broke. And instead he cost them hundreds of thousands of dollars. He sidelined thousands and thousands of potential homeowners and strap them into a rent cycle when they could have been earning equity, costing them hundreds of thousands of dollars in their financial portfolio. So I love him, love him for helping people get out of debt. But I am super bummed and super don't like everything that I just talked about. I do not agree with his prehistoric old school principles. So to all you that are thinking that buying a home is risky, all those who are listening to Uncle Dave and thinking that right now you just need to hold off. I just extrapolated and did all the math and data for you. The safe conservative guru Dave says that the market's not going to go down for five years. Even he says the best time to buy is in the next now because it's going to be going up for the next five to 10 years. But Dave won't like to hear this, but Jesus, Mary and Joseph, let's give these people looking for answers. The whole picture, the entire picture. If you're going to tell them now's the time to buy, give them every option. The how. I've been saying it since 2011. I'm no genius. I used to do selling houses in an area where it's freaking expensive. I had to research the how for young Gen X's and millennials and now I'm trying to do it for the Gen Zs. I had to find a way to help people fight the rising rent and still be safe. I've been advising people to buy with a 3 1/2% down or 5% down, one of those loan programs. I've been advising people to use it for decades. And hell, for some of my super scaredy cats who had 20%, I even them maybe they should look at a 5% down and put the extra 15% into a money market account. What's the worst thing that can happen? You can always pay down your principal anytime you want to. You've got the money right there and it's liquid. So we know the when and now. You know the how. And you're aware that you've missed the huge explosion of equity. I'm sorry, so you're not going to get the gaudy numbers, but this is still the right plan. And you're still going to lose if you wait for a crash. If you buy today or as soon as you can with 3 1/2 or 5% down going into a slower appreciating market, you still win. I did the math. Fight me. I only tell you this so you see what you can do, what you can take advantage and what you shouldn't do, which is wait. Look, I understand not everybody out there can buy a home. Dave, you know, for many of you out there, he might be your best play to get your finances together. That's his jam. I'm down with that. Mine is to help people buy their first home. I'm not selling you a credit cleanup or a sure thing seminar on how to buy a house. If you struggle to make your rent, if you've had to move into a cheaper place because you couldn't afford rent, or if you've ever been evicted, well then you're not likely to be able to just pick up and buy a home immediately. So maybe you need some of that over the top discipline. Maybe you need Dave and his plans and his change in lifestyle until things change for you, until your career or your income changes. And straight up, see, some of you are bad with money. And you know what? I can say that because I know it's not totally your fault. It's not your fault in a lot of ways because the resources suck. The reality is if you don't have a lot of money, you can't pay a lot of money. So there aren't a lot of quality services out there for you to help you because you can't pay a lot for the service. Yay capitalism. So for many people, Uncle Dave and His strict disciplines are necessary. It's something you need to use to relearn or learn for the first time these adulting techniques. But for many of you, homeownership is closer than you think, and it's still safe. If you've got a regular life plan, you have a little bit of savings and you have some decent job going or some good career opportunities, if you've never had to worry about missing a rent payment, you've never been close to being evicted. If you know that you have a decent career ahead of you, you might not be in the current job that you're in forever, but you starting to build enough of a resume that you know that you're going to be able to work for the rest of your lifetime. And then if you know that your rents are pissing you off, but they're not going to threaten to make you homeless with all that, maybe you're looking at to explore a better way, something else that's better for you, then it's time to get a more organized financial plan that takes into account this new economy. Debt's bad and I get it. But lumping this whole home, this mortgage debt, into something that you can't afford, that is holding people back big time. This is not that new computer that you need to buy, but you decide to buy on credit anyway, that's bad debt that's going to keep you broke. This is something that you already pay for every month. And it's shelter. It's a need, not a want that you're buying way out of your budget. Time to work as planned. Time to get smart. Time to get out from under your landlord. This is their time to make out like bandits. And they are. How about you don't stuff their pockets anymore? We got the when. Now let's focus on the how.