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531: Financial Freedom in 9 Steps: The Money Guy’s Financial Order of Operations
BiggerPockets Money Podcast
The Case for Paying Off Your Mortgage Early for Financial Independence
Paying off your mortgage early is beneficial for achieving financial independence. Even at a 3% interest rate, it makes sense as you need more wealth than the mortgage balance to feel financially independent following the 4% rule. Financially independent individuals typically aim for a higher net worth than just covering the mortgage payments. For a mortgage with a 7% interest rate, you would need $900,000 in wealth to generate enough passive income to cover the mortgage. Even though paying off the mortgage might mean missing out on potential investment gains, the focus should be on getting wealthy and not just staying wealthy. Stats about millionaires paying off their mortgages in 10 years often refer to older individuals, so it's essential to consider the context when evaluating such information.
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