Do Not Pay Down Your Mortgage ⛔️

Why you should not pay down your mortgage. Many people feel that they should struggle for 25 years to pay down their mortgage to get towards the end of their life to have an unencumbered property with no loan against it so they don't have the monthly mortgage payments so they can enjoy a retirement. This unfortunately is flawed logic. It will cost you a lot more money, and there's a few reasons which I'm going to explain to you right now as well. You should not pay down your mortgage. Number 1, it's a bad use of money compared to investing in other assets. When you pay down a mortgage, for the early years in the term, most of the repayment is interest. They load it top-heavy. Because people redeem their mortgages 3 years, 5 years, 10 years, and most mortgages don't last 25 years, and the mortgage companies want to get maximum money out of you, instead of charging you equally repayment and interest per year for 25 years, what they do is they charge you nearly all interest in the first few years. Let's say 90% interest 10% repayment, uh, and then in the last few years it reverses. Let's say 90% repayment, 10% interest. So actually your mortgages are front-loaded where it is mostly interest and virtually no capital for the first few years. So you think you're paying your mortgage down, but actually you're not really unless you stay the length of the term. That's reason number 1. Reason number 2: you will get a better return if you take the money that's going to be nearly all interest for the first few years and put it into assets. For example, you take the money you would have paid down your mortgage with and you put it into buying a buy-to-let property. That buy-to-let property will produce you an income and then the income could pay down your home mortgage. Essentially, it's not free money, but essentially creating income to pay down your mortgage. That's another strategy which is better leverage than paying your mortgage down. The next thing is the power of inflation, and what most people don't realize is there is an equally balanced upside to inflation, and that is this: when you, um, have high inflation, it's essentially high price rises, and what it does is it devalues the relative value of your money, but it also devalues the relative value of your debt. Now, we all know that inflation is moving beyond 10%. Some have predicted that it will be 15, some 20, some 22.5 4% next year. So if you have a mortgage on your home and inflation is 22.4%, then relatively speaking, your mortgage will be paid down by 22.4%. Thank you, government. Thank you, inflation. I've got many good debt mortgages on, um, tens of millions of pounds worth of property. I've got tens of millions of pounds worth of mortgages And when inflation was at 6%, which feels like a little while ago now, that year, relatively speaking, uh, £3.3 million of relative value of my mortgages was wiped out by inflation, paid down by inflation. So I hope you're following this. Give me a share button, give me a share button. Yeah, give me a share button, I want a share button. Hit the share button. And let others know about this if you're following this. Now there's more, by the way. Um, with inflation and paying your mortgage down over time, ending up with no mortgage will give you a tax liability. So let's say you've got a more mortgage-free property and you're really happy, and then when you die, you'll have a big fat inheritance tax still on that. At the moment, they're not charging you tax on interest or loaned money. I don't think that they could. So for example, instead of having a £1 million house with no mortgage, um, if you had 5 houses— your £1 million house with a £700,000 mortgage, and then 4 other buy-to-lets that you'd bought with the money that otherwise you would have paid the mortgage down on you'll have less tax liability on your primary residence because they can only tax you on the £300,000 equity, not the £700,000, um, debt or loan. I'm just laughing at a comment here. Carl's just emailed me my share button which I asked you to give me. So, um, what you don't want to do is end up with a massive inheritance tax bill at the end of your life. All right, you might say it's not your problem, but it will be your next of kin's problem. So, and I'm not just saying, by the way, um, remortgage your property and go spend all the money, but every few years refinance your property, uh, as the value goes up and the relative mortgage goes down, and then take that money, which you won't pay tax on because it's remortgaged money, and go and buy another asset, buy a buy-to-let. And you know, just as an average, over 20, 25 years you could have 5 investments and your home with a 70% loan on your home, and you might not actually pay any inheritance tax because if you've got 30% equity, that might come under the threshold of allowance. And if it doesn't, you won't pay hardly any inheritance tax, and you'll have a load of these assets that will be producing you income while you're alive, not when you're dead. and then you've got assets that you can pass over. So let me do a quick summary because most people think that paying their mortgage down is good. It's not smart money management. Number 1, you get charged mostly interest loaded upfront. So therefore when you pay your mortgage down over a few years, you're not actually really getting your balance down at all. Number 2, take the money you would have paid your mortgage down with and go and put it into an asset that produces income. And then you've got income instead of pay down, and you could use the income to cover the mortgage. So your mortgage for your own home could end up becoming free. The third reason is inflation. The higher inflation, the more your mortgage is being paid down, relatively speaking, by inflation. So if you pay your mortgage down you're sort of in a way doing the job of inflation, and you're not getting as good a return on your money. So you want a better return on your money by— oh, by the way, if interest rates were 10%, then paying your mortgage down would be smart, because interest rates are really high and you probably couldn't get a better return. But as interest rates are really low right now, you can get a lot better return on your money than paying your mortgage down. Inflation is paying your mortgage down for you. I know we all bitch and moan a bit about the government. But double-digit inflation means your mortgage value in relative terms is going down 10% plus a year, maybe 20% a year. And then the key thing here is the other assets that you can buy with the money you would have paid down your mortgage with that can produce you recurring and passive income. So let me know what you think about the content. I know a lot of people disagree with this, but that's just because they haven't yet got good money management. They don't understand the power of inflation. They don't understand the implication of the big inheritance tax liability that they're building up over time. 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Learn how to get your cash flow and your income up. I've got a masterclass with my tax accountant who saved me millions of pounds in Rob.team. I've got the 21 ways to monetise social media in Rob.team. I've got the 10-hour How to Invest series in Rob.team. And I'm going to do the brand new Money Saving Marathon Masterclass, a whole day of money-saving tips, all in Rob.team for the less— less than the price of a large coffee with no contract. You can cancel any time. You can get all those courses now just for joining Rob.team. So open up a new page on the internet and do it now to learn this stuff. It's really important. And type in R-O-B team. Thanks for all the kind comments. I've got a lot of people who've been listening to me a lot recently are saying nice things in the chat. Adam says Rob.team is a great investment. Daniel says he's listening and he's hooked, having— he's going to join, hooked having listened for a couple of months. I saw other Rob.team comments. And she's in, in Rob.team. So go join them, type Rob.team. Team into a new window in the internet. Open up like a web browser page and type rob.team. The stuff I teach you about money they do not teach you in school because they did not know how to do it. Many people are struggling their whole life to pay that mortgage down, like a 25-year debt burden to pay that mortgage down, and all they've built up is a big inheritance tax liability. And okay, they don't have to pay their £800 or £900 a month mortgage now, But they could have had 5 or 10 investment properties with the money they paid the mortgage down on, and each one of them could have paid them £200, £300, £400, increasing over time per month in income. So actually, a lot of people, um, they think saving money is a smart thing to do. You can't save money right now because number 1, your costs are so high, and number 2, you're getting what, 1 and 1.5% interest in the bank, whereas inflation is more than 10%. So saving money wipes out more than 10% a year of your money, but you want to use inflation to wipe your debt down. So you actually do want good debt mortgages against assets. You want investments that are leveraged by the banks, so mortgages on property for example, and you can get the big inflation paying the mortgages down, the big inflation pushing the values up, so you're going to get income capital growth and faster debt repayment or, or debt reduction. You're going to get a 3-in-1 win in high inflation. But most people don't know this, and they're scared of having debt and scared about interest and scared about repayments. So they just save their money, but they don't realize they're losing 10% of their money a year by saving it. This is the kind of stuff you learn in Rob.team. So go and join right now by opening up a new page on the internet and just type in R-O-B T-E-A-M. There's no interest cash earning in the bank. So at the, at the moment you're earning best 1%. You can get a much better return on your cash by putting it down as a deposit, getting an investment property with some gearing. By that I mean a mortgage. So you take your cash that's earning nothing in interest— oh, and by the way, being wiped out by inflation— You put it down as a deposit, you protect it from inflation, you own an asset, so that asset's going up, pushed up by inflation. You get a mortgage which is getting paid down fast, like nearly 20% at the moment, by inflation. You win 3 times, or you lose 3 times if you don't know how to do this. And this is the kind of stuff you're going to learn in rob.team. So get yourself along, just go open up a new page on the internet, type r-o-b-dot team into a new window right now. Rob.team. If you're worried about interest rates going up in the long term by buying assets, then fix them. Look, you've been spoiled with interest rates at just over 0% for just over a decade. The long-term average interest rates are probably 5 to 6%. You can still get cash flow on property with interest rates at 5%. It still works at 5%. And if you're worried about, you know, those, um, mortgage repayments going up, then fix the mortgage for 5 years, something like that. So, um, thanks a lot for all your kind comments. Do not pay your mortgage down. It is not the best use of your money. You're not leveraging inflation. Um, you're— it's not a good use of your money. You can get a better return on your money you're building up a massive tax liability and you're mostly paying interest. So quick summary, and yes, do share this. Don't give me a share button, hit the share button. So here are the reasons you shouldn't pay your mortgage off. Number 1, when you're paying your mortgage off for the first few years, you're paying off nearly all interest, virtually no repayment. So it's actually mostly interest money, therefore dead money. Reason number 2 is there's a better use of your money than paying your mortgage down. That is to invest in other assets that produce passive and recurring income and give you capital growth. Number 3 is inflation is paying your mortgage down anyway, and the higher inflation goes, the higher it wipes out cash, which I'm saying to you, you put into assets, but the higher it wipes out debt. So your mortgage is being paid down 10%, 15%, 20% anyway by inflation at the moment. So let it do its job. And you don't want a massive inheritance liability when you've got all these unencumbered properties. You should have more assets with good debt against them producing income. Deborah said here, what happens when the property prices start to tumble? Well, the price isn't really relevant. What's relevant is does it cash flow or not? Prices will correct, but, um, they double every 10 to 15 years. They have for more than 1,000 years. Um, go back to 1088, all land and value, all land and property total value in the UK was about £1 million. Now a house is £1 million. So property has proven through a century, um, to go up. Well, no, 1,000 years. It's proven over a millennium to go up about— doubled every 10 to 15 years. That's gonna happen. But it's not going to happen in a straight linear fashion, and it's going to have its booms and busts and, and cycles. But when the value goes down, as long as the cash flow is there, it doesn't matter. You can ride it out. You're not going to sell it when the prices go down. At least you're not going to be dumb like a lot of people do and do that. In fact, you're going to buy more when the prices come down. So I hope this content has been useful for you. Please do share it because a lot of people don't understand this. And here's the other thing as well. If you got any spare money and you're paying your mortgage off, you're basically wiping out all your disposable income for the next 25 years. It's a massive slog for virtually no reward. Oh, and by the way, you might end up bloody dying before you paid the fucking thing off anyway. So there's a load of reasons that you shouldn't be doing this if you want smart money management. And if you really want ongoing smart money management, go join Rob team, where you can learn, earn, and invest, start and scale a business, and get multiple streams of recurring income from hundreds of hours of online courses and masterminds and meetups and mentoring Sunday sessions I do every Sunday, live masterclasses that I do probably every 10 days to help you learn, earn, and invest, create multiple streams of recurring income, build digital and physical assets, and make, manage, and master money. So to join, just open up a new page on the internet and do it now because I've got to get out here, by the way. So do it now. Just type in rob.team. I'll see you in rob.team with the many thousands of other members. You even get access to a WhatsApp group with me. We are making shit happen. We are movers, shakers, and changemakers. And I'll see you there because you must learn to manage and master your own money. The government don't care about you. Tax is wildly high. Inflation and cost of living is wildly high. Energy is wildly high. There's a lot of shit going on in the world right now, and I can help you. Go join rob.team. I'll see you there. Just type rob.team into a new window right now in the internet. Just before I go, Sheila has said, I paid off 2 mortgages. And now saving to buy my third one. Um, 100% equity on both, no regrets. Look, good on you, Sheila, that's good work. Here's the thing though, probably took you 20 years, maybe longer. You could have had 10 buy-to-let investments, and you need to be careful because you're going to have a massive inheritance tax bill waiting there. So I would get some advice on that. Thanks for tuning in, and remember, if you don't risk anything, you risk everything.