You're Going To Be So Weird

Jonathan is 29 with no debt but the house and two children. He's about to receive a substantial bonus from work that will cover the mortgage. Is it a good idea to go ahead and pay it off?

QUESTION: Jonathan in St. Louis is 29 with no debt but the house and two children. He’s about to receive a substantial bonus from work that will cover the mortgage. Is it a good idea to go ahead and pay it off? Dave tells him to pay the house off.

ANSWER: That’s Baby Step 6. You have 15% of your income going into retirement, which is Baby Step 4. Putting money into your kids’ college is Baby Step 5. Baby Step 6 is all the extra money you get thrown at the house until the house is paid off. I’m staying right with that plan. I’m going to write a check and pay off your house, dude. Twenty-nine years old and you’re debt-free! This is awesome! You’re 30 years old and almost a millionaire.

Pay it off, man. You’re going to be debt-free. You’re going to be so weird. Let me give you a prediction. You’re going to make more sales. The reason is that when you don’t have any payments, you are winning so much that it relaxes you and allows you to play right in the zone, because you’re not worried about things. You’re not tensed up. Salespeople who are broke smell bad. You can smell the desperation on them. In your case, you’re just going to be able to love on your customers and serve them well. You’re going to get more and more and more of these checks, and part of that will be the peace that you get from having become completely debt-free. Pay off your house, Jonathan! You are a rock star! That’s incredible. I’m so proud for you.