Summary
In this episode, the hosts challenge the conventional wisdom that paying off a mortgage is the best financial strategy. They share their personal experiences and financial strategies, illustrating how leveraging a mortgage can lead to greater investment opportunities and cash flow. The discussion covers the benefits of refinancing, the importance of understanding good versus bad debt, and the necessity of experience in real estate investment. The hosts encourage listeners to rethink traditional beliefs about mortgages and investments to achieve financial freedom.
Chapters
00:00 Rethinking Mortgage Payoff Myths
02:18 Leveraging Personal Residence for Investment
05:49 The Power of Cash Flow and Equity
08:30 Investment Property: Mortgage vs. Mortgage-Free
15:25 Understanding Good Debt vs. Bad Debt
19:26 The Importance of Experience in Real Estate Investment
Contact Jessilyn and Brian Persson | Weekend Wealth Investments:
Transcript:
Jessilyn Persson (00:04)
In today's episode, we're flipping the script on a popular belief. The notion that paying off your mortgage is inherently better. And we're going to talk about two actual investments in our life that illustrate the difference. This episode was inspired by a notion that we keep seeing over and over again with our clients and friends. The idea of having no mortgage. Most of us were raised with the belief that you should pay off your mortgage as fast as possible. Well, we've learned differently.
and the two scenarios that we're going to detail will show the difference, which will allow you to make a more informed decision on your mortgage. So the first one we want to talk about is your personal residential mortgage.
Brian Persson (00:46)
And yeah, not just everybody else out there, but us as well. We were ⁓ told by our parents that paying off your mortgage is kind of your number one priority in your financial life. But we're going to show a little bit about why that's not entirely true. And we did go down that path when we first started ⁓ with our property. We tried very, very hard to pay it off until we discovered a different way.
Jessilyn Persson (01:11)
Yeah, we were, and I think we've shared this on multiple podcasts, we were, think, too much shy of being mortgage free before we actually decided to, instead of pay it off, we refinanced, pulled it out and bought property.
Brian Persson (01:28)
Yes. Yeah. So we want to work through some actual numbers in this podcast. So just so you can really see the financial difference that it creates by using the finances and the leverage that you have available for you in your personal residence versus actually just paying that off and then not using that leverage for any type of investment.
So as we just mentioned, we were very, close to paying off our personal mortgage and our mortgage had started at about 350K, but when we refinanced it, we were able to buy up to $2 million worth of property. So we now had $2 million worth of mortgages instead on those investment properties. But the portfolio is now cash flowing at $2,800 a month.
which was ⁓ almost or is now almost double our original mortgage payment. So we're actually paying our original mortgage and we are cash flowing and putting money in our pocket because we actually borrowed from our personal
