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Money Guy Show
"Should We Liquidate to Buy a Home?"
Aug 26, 2024
Can liquidating assets for a cash home purchase lead to financial freedom? The hosts discuss the implications of owning a paid-off home and its relationship to smart financial rules. They also tackle retirement savings concerns and encourage proactive planning. A fascinating look at house hacking reveals how renting out parts of your property can ease mortgage costs. Finally, the balancing act between paying off mortgages and investing in retirement offers insights into informed decision-making for long-term wealth.
24:59
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Quick takeaways
- Liquidating assets to buy a home in cash may limit future liquidity and hinder long-term wealth growth through investments.
- Taking on a low-interest mortgage instead can provide financial flexibility, allowing for ongoing savings and better wealth-building opportunities.
Deep dives
Evaluating Cash Purchase vs. Mortgage for First Home
Considering whether to buy a home in cash or take on a mortgage is crucial for young homeowners. Liquidating assets to purchase a $300,000 house would leave the couple with only $40,000 in remaining funds, essentially stripping them of liquidity and possible investment growth. Instead of paying cash and becoming debt-free, it might be more prudent to take on a mortgage with a low interest rate, thus allowing the couple to keep their liquid assets working for them. Maintaining that liquidity can enable them to properly build wealth over time rather than starting over financially.
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Discover
highlights
Listen to the best highlights from the podcasts you love and dive into the full episode