Importance Of A Mortgage

I was listening to this on from Ed Conarchy.  A lot of the information he states is from Ric Edelman who is the top Financial Advisor in the country.  Here are the steps you need to follow:

  • Max out your retirement
  • Hang off the bad debts.  Take care of high interest credit cards.
  • Have 12 months of reserves, cash, when buying a home. Rainy day fund for emergencies.    
  • Invest for the future.  Not just stocks and bonds, they have too much risk.  Invest into stock funds and bond funds for diversification, real estate, commodities, etc. 
    • Invest for the long term.  Not buying and selling. 

If you have 60% of your equity in your home you are not diversified. This isn’t debt elimination it’s wealth creation.  Susie Orman talks about being debt free but isn’t a homeless person debt free?  Yes they are but they haven’t created wealth.