When I talk about mortgages, the first thing I want you to remember is that you need to hate debt. The debtor is a slave of the creditor. I don’t want him to borrow for any reason. I want to present you with a quite different idea about mortgages. I want you to consider buying your house in cash – 100% in cash.
Converted into a small apartment
“There, Andrés, please! That is not the real world we live in today, get off that cloud.”
I know of a 23-year-old boy who, as a child, his grandfather told him, “If you borrow, I kill you.” And that’s how he grew up, listening to his grandfather’s advice. At 23 he had a very good job.
He married a teacher and with her they went to live in a garage, converted into a small apartment, in a lady’s house. He cut the grass and kept the property clean and the lady charged him little rent per month. They did this for 4 years. At the age of 27, he bought a house in cash. Imagine a 27 year old person with no house payment.
Do you think you can be rich?
Let’s say the opposite happens and he takes out a mortgage for $ 150,000 and keeps the house payment throughout his working life. A mortgage for $ 150,000 at 15 years, at 6%, the payment would be $ 1,265.79.
If he invested this mortgage payment from 27 to 67 years old, if he paid himself that mortgage payment and invested in a mutual fund account, as I taught, he would end up with a little less than 15 million.
They lived in that garage for 4 years?
Do you think people made fun of him when they lived in that garage for 4 years? He tells that the mother-in-law was telling her that she was abusing her daughter. And now what? Mother in law.
How did this happen? Because his grandfather told him, “If you borrow, I kill you.” He changed his mind. That is different, we tell that, live like no other and then live like no other.