Ramit explains why he buys houses with cash, a no-debt philosophy his mentor instilled in him. He acknowledges low-interest mortgages exist but treats cash-only purchases as a discipline tool to avoid unnecessary leverage on major expenses like homes, cars, and weddings.
Be able to pay in cash for any large purchases such as wedding, honeymoon, car, house. People are always like, what the hell are you talking about? Pay for a house in cash? The origin of this is I had a mentor when I was an intern and he told me, Ramit, we have a no debt policy in our house. No debt. I said, wow. In my head I'm thinking, must be nice. The guy lived in a very elite Bay Area city. As I got older and my business grew, I started to realize that actually takes discipline to have a no debt policy in your house. We can quibble about whether debt is good or bad, and sometimes it's leveraged and whatever. But just the idea that he had a philosophy, a point of view on debt, I really love that. One day when we buy a house, I want to make sure we have enough that if we wanted to, we would pay with cash. Will we do it if it's a 1.5% mortgage? Oh, we'll take that mortgage all day. But I'm not going to buy a house that we don't already have the available cash for.
