Kevin O’Leary Reveals the Best Age to Pay off Your Mortgage
As the Federal Reserve Bank of New York detail in a February report, Americans currently have about $8.8 trillion of mortgage debt. Notably, the figure represents the biggest household debt in the country.
Speaking about the matter, Kevin O’Leary, a personal finance author and host of ABC’s “Shark Tank”, shared that it is best for the millions of people with mortgages to clear their debts before retirement. O’Leary mentioned that those seeking to achieve a true state of financial freedom need to retire all their debt, including the mortgage.
Speaking further on the matter, O’Leary said that the aim is to pay off everything, from student loans to credit card debts by age 45. He added that he purposefully selected age 45 because most people in their 40s are well focused on their careers.
Given the fact that most careers start in the early 20s and end in the mid-60s, age 45 makes perfect sense for one to do away with debts. Once that is done, one can then focus the remainder period of their work years accruing capital.
A 2018 study conducted by the American Economic Association of Papers and Proceedings, shows that the odds of Americans retiring with debt have increased through the years. Estimates in 2010 showed that about 70 percent f American aged 56-61 were already in debt. Remarkably, the figure has shot up from 64 percent recorded in 1992.
Experts believe that unlike other forms of debt like big credit card bills, taking out mortgages on homes is a smarter decision because property almost always appreciates in value. Speaking to reporters, O’Leary explained that mortgages are more of a gray area when compared to credit card debt because real estate is actually an investment. Despite this fact, he cautioned those in the market to really weigh their options before taking on a mortgage.
O’Leary believes that caution needs to be taken because it’s not always a good investment because homes nowadays don’t rapidly gain as much value as they once did. He further added that people in their 20’s and 30’s need not concern themselves with accruing that kind of debt.
His words seem to have some truth to them because interest rates have recently been on the rise, making borrowing money more expensive. Stats released by Freddie Mac show that on the week of June 7, the 30-year mortgage rate was at an incredible 4.54 percent.
O’Leary believes that those who decide to take on the mortgage debt need to formulate ways to clear out the debt as fast as they possibly can. His stance is that those who have mortgages should prioritize making those payments before thinking about investing in bonds and stocks with extra cash.
O’Leary mentioned that because of life’s unpredictability, it is never a great incentive to stay in debt. This is because there’s always the odd chance of one being laid off or unexpected expenditures coming into the mix.
Suze Orman, a personal finance expert too, agreed with O’Leary’s take on the matter. Orman mentioned that those planning to stay at their homes through their golden years need to ensure that their mortgage is paid off before they retire.
Through her article in Money, Orman shared that those with mortgages need to grab every opportunity that presents itself to eliminated possible known risks to their retirement plans. She noted that paying off the mortgage in time would then become a fantastic way to build security after one retires.
More in Real Estate
What Was Princess Diana’s Childhood Like? You Now Have a Chance to Find Out!
Do the lives of the royals family seem fascinating to you? If you’re nodding your head, don’t worry because you’re not alone. The British royal...July 1, 2020
Tom Brady Sparks Retirement Rumors After Putting His Brooklyn Mansion for Sale
At 42, the Patriots’ star quarterback Tom Brady is still a force to reckon with. Considered by most fans, pundits, and...June 30, 2020
Ready for College? Here’s Are a Few Ways to Seamlessly Pay for Your Education
It’s that time of the year again when parents are faced with the monumentous task of paying their kids’ college tuition. Regardless of whether...June 30, 2020
Airbnb Taking off in Travel Industry with Its Secret Plan!
Airbnb has been working on something big and the secret has recently been revealed by CEO and co-founder Brian Chesky who...June 30, 2020
After Being Named the Richest Female Music Artist, Is Rihanna Contemplating Retirement?
For Rihanna, 2019 was the year she has been looking forward to all her life. How many times has the singer...June 28, 2020
Uber and Starbucks Strike a New Partnership That Will Have One Major Focus
Finally, after months of speculation regarding the much-anticipated partnership between Uber’s delivery division Uber eats, and one of the largest coffee...June 28, 2020
Real Estate Market Unscathed after Recent Economic Dips
In the last decade, Pakistan’s realty market has undergone considerable maturity. At present, their housing economy has developed the ability to withstand...June 27, 2020
Kim and Kanye Flew in a Special European Crew to Install the Floors in Their Hidden Hills Mansion
Each time we’ve had a glimpse of the home Kim Kardashian shares with her husband Kanye West, there has always been...June 25, 2020
Arctic Ice Shrinking at Alarming Rate as Scientists Reveal Shocking Figures
The ice caps and glaciers around the world are melting at an alarming rate, making scientists extremely worried about global warming...June 22, 2020