Those of you who prefer co continue “mooing”, don’t bother buying the book. If you want to nut up and at least make up your own mind, spend a couple bucks to see what is in it.. and don’t be a moocher, buy the darn book you cheapskates!

Fan of Don Lapre
larisa@larisajoyreilly.com

Sure there is some risk invloved, but with risk comes reward.

You always have to think about the future, and paying down your home is a good way to do that. I know a lot of people who pay down their mortgage so that they can own their home, and give it to their heirs. They forget to take into consideration life in general and how that can affect the future.

Let’s say for example that a person pays off their mortgage and when they retire they need care. Which is something that is not uncommon. The cost of that care could be significant, and would sometimes require them to sell their home. That gives them the equity to pay for the care and nothing for their heirs. Sometimes, that equity may not be enough to cover the costs of all things related.

Or, what happens if the person paying down their mortgage, or subsequently pays off their home gets injured or disabled and cannot return to work. They’ll be fine, because they have all that equity right? Well not if they can’t qualify for a loan because they do not have any income.

Sure their is insurance for all of these scenarios, and it is generally a good idea to purchase them. That extra cost will eat away at the money you use to pay down that mortgage, so you can be the big guy on the block talking about all of the equity you have at the neighborhood picnic.

That equity mind you, makes 0%. That’s right, you make nothing on equity at all. So if you say “I got $450,000 worth of equity in my home, and it’s paid off completely”, what exactly are you bragging about?

Sure it’s good to live a debt free life, yet having a mortgage on your credit report combined with a perfect payment history actually helps to increase your score. Plus over time, you eventually lose the tax deduction.

Now, let’s say you take that mortgage and refinance it every 2 to 3 years, and used interest-only loans. Now don’t be shocked at interest only, it’s a good way to maximize a mortgage tax deduction, and have the lowest amount of outlay in your home. Every time you refinance your home, you take out some equity and invest it. Use the monthly savings in payment that you see fromt the interest only loan versus the standard fixed rates, and dollar cost average it into a safe and reliable investment. Now you have a portfolio that will grow and will be liquid to you under most circumstances (depending on the investment). Oh, and by the way, you have something to give to your heirs.

There is drawbacks to this approach too. You can choose the worng investment advisor or invetments in general. That is why it is always good to interview the people you decide to work with, they will be responsible for handling your money! Or, your home simply does not appreciate at all. Do the research on your area bfore you buy a home, and find where the historic gains in home values have been.

I do disagree with some of the things mentioned in the book, and just like owning a home, it doesn’t work out for everybody. The overall concept is genious though. Maximize your money, and let it work for you.

You’ll never get rich by owning your things, you’ll get rich by leveraging them.