Do NOT Pay Off Your Mortgage

Do not pay off your mortgage. Now stick with me here because this tends to send people crazy, but I'd like to challenge your thought process a little and see if you can get a much better return on the money that you're planning to pay your mortgage off with. Now why might you pay your mortgage off? You might think, well, I'm going to save, I don't know, £1,000 a month on my repayments. Um, I, I would own my house outright. Um, I would have something for my pension and, and my future. Um, but actually, paying your mortgage off, which can take decades, um, and you might have to really scrimp and save and live a very humble life for, you know, quite a few decades in order to pay it off. And this could actually be quite a false economy, and you could have ended up costing yourself a reasonable amount of wealth thinking that you're building a pension for your future. So, um, a few years ago I said to my business partner, I'm thinking to just pay my mortgage off. I've never had a huge mortgage, but I've always kept some mortgage. I might keep it for liquidity, i.e., if I've got an offset or a drawdown mortgage, I can hedge if interest rates are high or low. And, you know, I might be able to pull some money out and if I need it to invest in a business or invest in a property. But, you know, I've always kept, you know, maybe 50% or 40% mortgage. And I just thought, well, I might as well just pay the thing off. I've got this cash money spare. And my business partner said, don't be stupid, don't pay your mortgage off, because you can probably get a much better return investing your money into other assets. Also, if you pay your mortgage down using your money, which by the way goes down in value, you're not allowing inflation to pay your mortgage off for you. So inflation is one of the best ways to pay your mortgage down. And what inflation is, is basically an increase in prices, or essentially a reduction in purchasing power. So let's say the government have, I don't know, $3 trillion of debt. Instead of actually saving billions and making cuts, they just print a load more money devalue the money in the economy by printing loads of it and essentially reducing the buying power of money and therefore reducing the cost of their debt. So if about 3 years ago, I reckon inflation was probably a good 10, 10% plus, like in reality, I mean, it could have been 15% plus when you added everything in. So imagine just 3 years at 10%, that's 30% in 3 years. So with inflation, a $100,000 mortgage would be worth relatively $70,000 in 3 years. So actually the government are doing you a favor by paying your mortgage down for you. Also, generally when you have high inflation, it pushes prices up and therefore it pushes rents up. So instead of paying your mortgage down, allow inflation and increase in prices to pay your mortgage down for you, and then you take any spare capital and you invest it into assets. So you might get a much better return investing in a, in a property because number one, um, you can leverage that money. So for example, let's say you've got $25,000 deposit Well, with a £25,000 deposit, you could get a £100,000 or £125,000 house. And a £100,000 or £125,000 house might go up to £250,000 in 10 to 15 years, £500,000 in another 10 to 15 years. Also, the rental income from that asset could pay off your mortgage payments or pay down your mortgage payments or cover much of your mortgage payments. So what you can do is you can use your property as an investing pot. It goes up in value and you remortgage it up and maybe keep it at 60 or 70% loan to value, and you take that equity and you go and buy houses with it. And what you were going to pay to pay your mortgage off you go and invest in property and you go and buy houses with it. And then you use the income from the properties to pay your mortgage payments, and essentially you could end up with relatively free living. So let's put some numbers on this, shall we? Let's say you were thinking of paying £25,000 a year off your mortgage. Instead of paying £25,000 a year off your mortgage, You could put £25,000 into a £125,000 flat, and maybe you might get 1 to 2 of them a year. So you might have £250,000 worth of 2 flats in year 1, £500,000 worth of 2 flats in year 2, etc. Um, and you could probably get 4 to 5 times your deposit in the value of your property. Um, so you might build a multi-million pound property portfolio, uh, much quicker, and the income from those properties could either pay down your mortgage for you or just at least cover your mortgage payments. I do it with cars as well. So let's say I want, um, a Lamborghini and it's £2,000 a month to pay off, um, the finance. Well, if I got 4 houses that produced £500 a month each, then 4 houses pays off my Lamborghini payments. And I don't necessarily need to produce vast amounts of capital to buy the Lamborghini, just need to cover the monthly payments. So, um, interestingly, uh, this is not something I've done really before. But I interviewed my, um, introverted business partner. So, uh, you might call him like an undercover finance expert. He doesn't like to be all over social media, keeps himself to himself. I've been with him nearly 20 years in business. We have 340 rental units, we manage 1,300+ tenants, we've got the UK's largest property training company. Some years that does £20-23 million uh, in sales and more. And in this very exclusive, rare interview, I've managed to get an hour and 20 minutes of him going deep down the rabbit hole of when he thinks the crash will be, um, how big he thinks the crash will be, how much his rents have gone up, and what's going on in the political system that might help you, um, cash in on the crash and build multiple streams of income investing in property. So if you give me a yes in the comments, give me a yes in the comments if you'd like access to this, um, interview. It's on YouTube, it's not going to cost you any money, it's free, there's nothing to sell you. Um, I just— just give me a yes in the comments if you'd like access to it, if you'd like to watch it. Um, then, um, I'll— I will share the link with you. Now John here has said, I thought there was a price correction coming in the housing market. I think there is, John, um, and I think it offers a great opportunity to buy cheaper property at higher cash flow. So, um, in recent times rents have been going up a lot, so, um, any increase in interest has kind of almost been set off by— offset by increasing rents. Now, if interest rates that keep going up force repossessions and property prices come down, you're going to be able to buy property more cheaply. Therefore, it's probably going to be more accessible for you, and you could buy, um, properties that cash flow better than they did even when interest rates were lower but rents were lower because The interest rate has an impact on the price. The rent has an impact on the price. The costs associated with running and managing the property have an impact on the price. Um, and these are all like a graphic equalizer, and it's never too late to start, but it's always too late to wait. I can see a lot of yeses in the comments. I'm just going to share the link, um, so you can do a bit of a queue jump. But yeah, um, what did we talk about? I asked him about whether he preferred Robert Kiyosaki to Grant Cardone. I asked him if he thought the banks were causing the crash, um, if he thought that, um, you know, for example, Lloyds want to be the biggest landlord in the UK, um, so what can we learn from banks like Lloyds, and how can we all cash in on the crash. Uh, I talked to him about, um, whether he thought that the property market might go down more than 2008, um, and if he thought that, um, where interest rates would go. So I grilled him a lot. We spent about an hour and 20 minutes And a lot of you have got a lot of specific questions here. Many of those might actually be answered in the interview that I did. What's best, HMO or individual rentals? Um, how much money do you think people have? Um, well, we all have different amounts of money. It's not about how much money you have, it's about how much money you can raise. Um, so maybe you'd like to learn how to raise finance. Um, what, 17 years ago, I went in business with my business partner and we bought 20 properties in the first year and 30 properties in the second year with none of my money, with his money, with his stepfather's money, with his mum's money. Um, we then raised, um, private finance within our communities from people who came on our courses and people we connected with at business and property networking meetings. I started with minus £50,000 of credit card debt, bad debt, consumer debt. So it's never too late to start, it's always too late to wait. So if you'd like to access this interview where I grill my business partner, who like I said is not really a public figure, just type yes in the comments. I'll share the link with you. But a lot of people think that paying down their mortgage and having a a house with no mortgage by the time you're 65, um, is the way to live. But actually, you might be dramatically increasing your inheritance tax liability. You may have a, um, a bad— a big cost of capital. Do you know when you take a mortgage out, you're paying mostly interest off at the start and mostly capital off at the end? So, um, the, the longer you you pay them off, often the less beneficial it is to you financially. Um, you know, you might have a repayment mortgage, but you might be better with an interest-only mortgage, for example. Um, so there's lots of nuance to this, but generally speaking, it's probably better to let inflation and the government pay your mortgage off for you as they try and print away their debt with massive inflation. Um, and then all the money you're trying to pay the mortgage off with, go and buy investments locally to you. Buy small houses, small flats, create a bit of leverage, i.e., 25-30 grand deposit might buy you 125 or 150 grand house. Whereas, you know, imagine trying to pay off your own house— there's no leverage in paying off your own house. And then what you do is you buy a few small houses and flats, and let's say they make £250 each, and let's say you've got 5 of them, that's 12. Well, that £1,250 might more than cover the mortgage for your own house. You might even have, um, spare money on top to have a bit of fun and enjoy your life. So there's many more ways to skin the cat than just work hard and graft and grind and spend 40 years trying to pay your mortgage off. So if you'd like to learn a bit more creative ways to leverage property, cash in on the crash, create multiple streams of income, um, then type yes in the comments and I will give you access to my interview I did with my business partner. We spent an hour and 20 minutes talking about, um, where he thinks interest rates will go and when he thinks a good time to get into property will be and how to cash in on the crash and when the crash is coming and if the crash will be bigger or worse than the last one of 2008, which by the way was some of the best times. It probably— 2009 and '10 were two of the best years we've had in the last 15 to 20. Yeah, at the time they probably seemed like the most scary, but we were buying properties for £75,000 that are £200,000+ now. For 50 and 60 grand, they're 150 to 200. For 100 grand, they're now worth 250 plus. And of course, because inflation's been going up a lot recently, rents have been soaring. And if you're a tenant or you're seeing that rents are soaring and you don't think it's fair, well, if you own properties and the rents are going up and up and up, that means your cash flow is going up and up and up. And it can cover any increase you might have in interest payments if you come off certain fixed rates and your mortgage interest is going up. It can be covered by increase in rents, which is essentially forced up by the government. You know, I have bitched and moaned and ranted about the government all through lockdown, um, and I was pissed off at them in terms of how much tax we're paying and how they're ruining our country. Now the NHS and the police are fucked, and all of this stuff. But I reckon in the 2 or 3 years after 2020, I'm gonna stab the inflation— in reality, I'm gonna say 35% over 3 years. That's what I'm gonna say. Um, I think it's more than 10% a year for 3 years straight when you add everything in. So I had, what, £35 million plus worth of mortgages and that paid off 35%. What's that? 3.5, 7, 10.5, about £12 million out of my £35 million worth of mortgages. The government essentially paid off in 3 years by printing shitloads of money and wasting trillions of pounds and inflation soaring into double digits. So I'm massively benefited by the government running the country in the ground. I'd much rather you benefit when the government run the country in the ground than lose out when the government run the country in the ground. The banks can leverage you, or you can leverage the banks. You can take all the risk, or the banks can take all the risk. Um, so, uh, type yes if you're finding this kind of content interesting. If you'd like to know more, I'll give you access to the link with the latest episode with my business partner where we go deep down the rabbit hole of all things property investing. And we talk about our 17-year journey and, you know, when we became multimillionaires in our late 20s and early 30s and how the market has changed. Yeah, there's lots to be covered. And I'm sure when you go and watch this video as well, you know, you'll be able to find more content of mine, more books of mine. That might open your mind a little bit. You know, a lot of people are saying in the comments, oh, but what about peace of mind? But if you don't risk anything, you risk everything. And sometimes if you're too comfortable and you play too small, you actually end up costing yourself a hell of a lot of money in the long run. And don't forget, by the way, inheritance tax— they can take 40% or more of your wealth. They cannot take what is debt. Um, you'll also find on my YouTube channel, when you go and watch this interview, my interview with Robert Kiyosaki. And he's the master of, you know, using real estate. And I think he's got 16,000 houses that he owns. And he talks about, you know, gold and silver and real estate and getting your tax bill down and even running expenses and private jets, uh, offset against the property portfolio, etc. So, um, yeah, I think I can really open your mind to some more creative and what seem like high risk to the masses but are actually low risk when, um, you know, you know the numbers and, um, when you're clued up and you're savvy on finance and investing. Stuff they don't teach you in school, stuff they don't want you, you to know about money. Um, so yeah, just type yes in the comments if you'd like access to that. Um, YouTube interview. It was quite cool because, um, my business partner doesn't do many public appearances. He doesn't really like talking about his wealth. He's, you know, quite secretive and private, and he's very respectful. He's not a bragger. Um, but actually, I think you'll, you'll see we got a lot out of him. There was some great banter. Um, we have a collection of supercars between us, and they're always going wrong. And unfortunately, he seems to get the worst of it, and there's always the breakdown issues and the alarms going off for like an hour and a half. And he told a lot of funny stories about that as well. So I think you'll see a side to him and business, um, you know, that maybe you wouldn't usually see. So just type yes. I'll reply to you all. I'll share the link. I'll give you access. It's not going to cost you any money. Now, if you would like to start and scale your business, if you'd like to get better financial education and knowledge, if you'd like to make, manage, and multiply money, if you'd like 3 deep dive masterclasses on investing in property no money down on creating multiple streams of recurring income, on cashing in on the crash. If you'd like to learn all this stuff and go through some proper courses, resources, and masterclasses, and you've got specific questions on specific amounts of money you've got to invest, I recommend you join Rob.team. So Rob.team is my digital financial freedom platform to help you start and scale a business, create multiple streams of income, make, manage, and multiply money. And you can join for what, less than 22 pence a day. You can cancel any time, no ongoing contract. Um, and there's hundreds of hours of courses, resources, and masterclasses on how to get to 10K a month in the quickest possible time, or 100 grand a year clear, how to create multiple streams of income, how to get your tax bill down. How to get your income streams up, learn about money and investing, the strategies and tactics that the billionaires know that they never taught you in school. So if you go right now to rob.team, if you just type in r-o-b dot t-e-a-m into any web page, that's r-o-b dot t-e-a-m, rob.team, you can join right now. There's virtually no risk, it costs virtually nothing, 22 pence a day. You can cancel any time, there's no ongoing contract. In the last 6 weeks we've done 3 masterclasses on building multiple streams of income, on cashing in on the crash, on investing in property low and no money down, on getting your tax bill down, your income streams up, getting the right brokers, solicitors, lawyers, and accountants, getting the right advice. Better tax planning, leveraging debt better, and taking a little bit more risk but for incrementally higher rewards. How to play the banks at their own game. How to have the, the risk go on to, to the banks instead of you taking all the risk. There's so much content. I mean, I've been doing this for nearly 20 years and I've helped millions of people start and scale their business and invest in assets, and I can help you too. So if you join rob.team right now, I've got a special gift for you, and it is my 10-module, 12-hour Money Mastermind University. So if you go to rob.team, R-O-B dot T-E-A-M, rob.team, if you go and join right now, I'm going to give you this 12-hour-long mastermind masterclass, a mastermind and a masterclass, because it was recorded weekly for 10 weeks or so. Live Q&A sessions. It's ended now, but all the recordings are in, in rob.team. So if you'd like to attract more money, get better financial education and knowledge, um, if you would like to learn how to get your income streams up if you'd like to learn how to get to 5 grand a month, 10 grand a month, 20 grand a month, 50 grand a month, then, um, this Money Mastermind University is for you. How to leverage inflation, the difference between good debt and bad debt. There's lots of content in there. Um, I really wish all this stuff had been taught in schools, but it's not. So, um, rob.team is the place to go. So just type in rob.team. Team. Rob.team is tax deductible. You can get the VAT back. You can run it as a business expense. By the way, I've— I interview, um, accountants in there, and they talk about what's offsettable as a business expense. You know, you're probably, um, paying too much tax. You're probably buying too many things after tax that you could pay before tax to get your tax bill down. Um, yeah, so look, I could sit here all day and talk about all the stuff that's in there, but you know, I don't want to overcook the steak. Just go right now and type in rob.team. Rob.team. Look, do yourself a favor, invest in your education and knowledge. You are your best asset. Invest in yourself wisely, you pay yourself the best return. Um, and look, you could literally go in and gobble up 50 or 100 hours of money-making information. If you don't like it, you can cancel. And it might have cost you £6 or £12 or £18, virtually nothing. So there's no risk. Um, so quick summary: don't necessarily pay down your mortgage, try and leverage inflation paying it down for you. Um, look at using some of your equity to invest in assets that produce income, and the income from the assets could pay off, um, or cover your mortgage expenses. I use companies and property portfolios and buildings that I own to pay 6 or 7 supercars, build a watch collection, pay for my travel around the world. Um, you know, because I'm leveraging income from assets rather than spending post-tax money. Whenever I earn money, I want to turn it into an asset as quick as possible. I don't want it in fiat currency. I don't want it going down 10% I don't want the government controlling it, taxing it. As soon as I earn money, it goes into gold, it goes into silver, it goes into real estate, it goes into businesses, it goes into assets that produce income and pays off my good debt so I can buy more real estate and it sort of compounds. So thanks for tuning in. I hope you found this content useful. I'll see you in Rob.team. Type in R-O-B.T-E-A-M and I'll also share a link to the latest episode with the undercover finance expert who exposes the death of the UK, um, and the housing market crash season.