The True Value Of Having A FULLY Paid Off Home
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- čas přidán 24. 07. 2024
- 00:00 Intro
00:14 My Views
02:19 Assumptions
03:15 Paid Off Home
04:13 Carrying A Mortgage
05:05 Renting
07:45 Finance Is Personal
09:01 Investing Is Still Important
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Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.
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Thanks for watching, I appreciate you!
I paid off my mortgage last week! I took a 30 year mortgage, but paid it off in 11 years for peace of mind. Feels great! 🎉
Sweet, congrats!
You would be better off to convert your real estate wealth into a stock portfolio
WAY TO GO!!!!!!!!!!!
@@kevinwelsh7490and live where?
@@jolkraeremeark6949 houses are overrated. Just have a nice stock portfolio and live in a cardboard box under a bridge.
Just turned. 56 and paid off my house last week. What a great feeling! Retirement just came a little sooner.
In today's economy our GenX generation will probably never retire 100%. I have two paid off houses in CA and FL (rental property). Their combined annual property tax burden is over $17,000 combined (excludes insurance) Wrap that around your head.
@@videogarage9221that statement doesn't make a lot of sense to me. I would think the rental property would at the very least cover that tax bill. If you have been regularly saving into retirement accounts you shouldn't have any problem retiring at a young age.
My wife and I built our house in 1982 and paid off the mortgage in 2007. We don't really consider our home/land an investment. We built it because that is the way we wanted to live. It was a great feeling once we paid off the mortgage, one less expense to worry about. But as you said there are still considerable expenses once the mortgage is paid off. Having said we don't consider it an investment it does represent value we can tap if things become desperate and something to pass on to our kids when we croak.
Exactly. A home is NOT an investment in a typical sense such as rental properties, stocks, bonds, gold, or a business. The huge difference is that a home is a NECESSITY. I NEED a home to live in, so I refuse to gamble and leverage my home...so I decided to pay it off. However, I DO NOT need any stocks. Stocks are great, but they aren't a necessity.
Really happy for you!
@@BillyO8828she now has her whole income to invest
Not being a debt slave to the bank, is the true path to freedom
You still being a slave of the IRS, state taxes, county taxes and the rest of the scam, if you want I to know who owns your house stop paying property taxes, you will find out who the owner is and it won’t be you for sure.
@@bracsimYes but with taxes come the benefit of living in a community and enjoying its services. Paying a bank serves one purpose: to make banks rich.
And how do you do that when money is precisely monetized debt?
@@bracsim boo-hoo, keep bitching boy. You can always leave the country.
@@dominicclark5342 simple. don't be a slave to your debt
Paying off the mortgage is the most liberating and rewarding thing you can do for yourself!
A paid for home gave me the freedom to leave a job that no longer suited me.
Living a debt free, mortgage free lifestyle frees your money up for investing even more money providing more freedom.
Yep. Get your necessities paid off BEFORE you invest. A home is a necessity. There is nothing more nerve racking than having BOTH a mortgage AND losing money in an investment.
@@BillyO8828 people need to invest in a roth ira as soon as they start working. Do not wait until your home is paid off.
@@BillyO8828im planning to sell one investment property to pay off my mortgage.. i have 3 investment properties and my own home. Do u think its a good idea?
It is comforting knowing that property tax, utilities and insurance are the only housing expenses we have in our retirement.
not the only, since you are responsible for inside and outside of your house maintenance, which also includes appliances, etc.
Where I live that’s a thousand bucks a month.
That's more than your mortgage amount in some states.
@@hanwagu9967 ur obviously not an adult
The true value of owning your home clear and free of debt? Priceless! No matter how bad it gets, you have a roof over your head and you can focus on basic needs like food and clothing. With clothes pretty much figured out, it really boils down to food.
Nooo... Property tax, maintenance, etc
@@kbanghartProperty tax is miniscule compared to a mortgage.
@@sgtm7 depends on the property. In Texas, they tax property fairly high so you really have to watch out.
@@kbanghart The house I owned in the states was in Texas. So my statement is based on Texas. Even though the percentage is higher than many of the high cost places that have an income tax but lower property tax, because the property is cheaper, it is still miniscule compared to a mortgage.
@@sgtm7 cool.
Also, I never said otherwise.
I paid off my house two years ago. Its truly awesome.
Congratulations man, am on my way too
In my opinion if most people didn't include their paid off home in their net worth they would have very little net worth.
This is true, because most Americans don’t have a whole Lotta net worth, and most metrics are showing real estate as a portion of your net worth but we all know that the asset portion of the house that people have is just an best. Guess you can’t say that you will know the price of your house when you sell it as well as people don’t take consideration the portions of the house overtime that’s maintenance, that counts against the true asset value of the house because of all these unknowns I also do not put my house as part of my net worth. I think that this also flies in the face of if I want to sell my house to get into the asset portion of that again I would have to sell it and I don’t want to sell it so it is an asset to me or a liability and even when I pay it off, is it a asset or liability, I think in general I agree with her and people like the money guy Show it’s what you wanna do with your money and the end of the day I can buy and sell in the market and does not affect my actual life if I sell my house that affects my house my family, my everything therefore I don’t consider a house as an asset. You live in it when it changes is if you actually are investing in real estate, such as buying a property renting it out then I would include that in my net worth statement, but not the house that I live in. What you’re saying here is an opinion that is actually fact most people have very little net worth and so maybe that’s an issue in how we think of net worth as Americans if you consider that your house is worth 150 and you go to sell it and you only get 100,000 you’re ready Have negative net worth and you didn’t ever think about it at that point because you’ve always thought the asset was 150,000 this is a problem overall this is why I do not count it unless I can arbitrarily understand what the acid value is at? Any moment in time when I do want to go sell not what I think it is or what a real estate agent considers she could get for the housenot to mention all of the cost associated with buying and selling assets does make sense. I think this is something that has American people we need to wake up understand what true net worth is it’s not the house.
I agree!
The Exception is the Few that do have a bunch of money in their 401K!
Very few have more!
Rental Houses
A Business
These are real possibilities though!
Speak for yourself
It's an asset. Why wouldn't they include it?
So what?
I'm building a small 1,200 square foot home. I took out a 30-year mortgage and was planning on paying it off in 15. I just inherited enough money to pay it off as soon as the builder is finished. I feel awesome right now.
Invest the inheritance, you’ll come out far ahead.
@@MuzixMaker Yeah, unless he loses his job, or has health problems and can't work. If that happens and he can't make his payments he loses the home to the bank. Then he can watch his investment portfolio while he lives under a bridge.
@@robgrey6183 he can make the additional principal payments from the dividends and keep his inheritance, which will also grow faster than the home price over the next 15 years.
@@robgrey6183 why did you delete my response you coward
@@robgrey6183 Right. Owning a home outright gives a lot of security. "Home is your castle". I think even in case of catastrophic medical expenses, they can't take away your home, right?
You did a good job of explaining the value of a paid off home. I paid my home off early about 3 years ago and retired a year and a half ago. My home doesn't make me money, but it saves me money that I'd be spending now and in the future on a mortgage or rent. With private equity firms buying up a lot of apartments and homes to rent at exorbitant prices, I think the value of a paid-off home will be even more evident in a few years as it becomes harder for people to make payments. We are already seeing signs of it now in the increasing numbers of homeless people and those doing vanlife, for instance.
Great advice. I built my home in 1995 and had a 30 year mortgage, paid it off in 15 years to the day from moving in despite of people telling me I’d lose the tax write off. Since doing that I have been able to save millions and pay cash for everything since. I think it’s great advice and never considered the home as an investment.
Thanks for sharing this amazing story. I look forward to doing the same
It's funny but the effects of inflation over are time are very real. My parents have been in their house for over 67 years and it initially cost them $12,000. If they sold today their house would probably sell for about $1,000,000 (the average for Southern Ontario). They told me that near the end of the mortgage their water bill was more than the mortgage payment. So after paying their mortgage off (over 25 years) has allowed them to live the next 42 years mortgage free and more importantly "worry free".
When I bought my house 30 years ago it was so it would be paid off before retirement. It would cost the same to rent but in the end I’d end up with nothing. There’s no way I’d be able to afford retirement with having to pay rent. That said I don’t consider it an asset since I can’t live without it. It’s more a necessity, like clothing or food.
Great video Erin, we paid off our home 2 yrs ago and was best decision we ever made. Gave us piece of mind, lack of stress and clear path toward retirement! Keep up the great work!
We paid off our home a few years ago, and now save the equivalent amount in an account for property taxes and home improvements. It’s a great feeling to have the resources to pay for new Kitchen, new roof, yard improvements and whatever else comes up in the future.
That's great. If you are planning to sell your home, improvements are a good idea. If you are planning to stay in your home for years to come...they are still a good idea in terms of your comfort and enjoyment, but not so much in a financial sense. Of course you want to make sure everything is in working order and clean, but if you are really looking to max out your moolah long term, start investing it instead. 10k on a granite counter will never outperform 10k in a conservative mutual fund.
I will 2nd that other response. A coworker just made 100k on his house. Meanwhile, a family member of mine will never be happy with her primary residence and has spent THOUSANDS over the years to redo the same things multiple times.
Took a 15 year instead of the traditional 30. Paid it off on just under 9 years.
The value of not having the stress of coming up with that monthly nut is incalculable.
Do you have a job with variable income? Most people who own a home have a regular predictable income. If you budget properly there is no "stress" of coming up with a payment, it simply comes in for having worked.
I hear you. Unfortunately property taxes never go away and in some places can cost as much as rent. It’s insane. You never own anything. Always renting.
What state?
@@es330td It still sucks having a substantial amount coming out of your income consistently every month.
Nut?
As a retiree, when we downsized, the income from selling the home was tax free. Tax free (no capital gains) up to $500,000 for a couple filing jointly.
Yes it truly is part of networth when used to advantage
My rich great aunt and her husband are on their 3rd free $500,000. They buy homes near the beach.
A good point, but be careful depending on this in retirement. My father passed away suddenly and that deduction dropped to $250k for my mom. Life is uncertain.
@@blueblur1984 $250k for one person tax free is a rare thing.
The three things that I always dreamed of doing at some point in my life were being able to retire comfortably, being able to pay cash for a new vehicle, and being able to pay off my mortgage. I’ve done two of these things this year and I’m about to do the last very soon.
Nice job Harry Balls!
One thing people probably don't appreciate about having the house paid off is that you don't need to earn the income for mortgage or rent payments, which means you don't need to pay the payroll taxes on that income. That might be an extra ~30% of the housing expense that you don't need to deal with every year if you're in FIRE mode and in control of your income.
My last mortgage payment was this month. It was an ARM mortgage 7% and climbing 🎉🎉🎉
Congrats on getting it paid off!!
Very good episode! I'm an accountant and I evaluate my personal financial progress excluding my home from my net worth statement as well. No matter how much equity there is, it can't really be spent/consumed without bearing a cost. When I've utilized my HELOC it was only for quick opportunities in which I knew I would be refinancing the purchased property within a short duration.
When we retired 7 years ago we had a mortgage. However our 2 pensions and social security easily covered our living expenses so it was no big deal. We still had plenty of income left over to travel and do the things we wanted in retirement.
However in the last year our property taxes went up 60% and our insurance also went way up. Those two costs that get us nothing enjoyable in return are now about $25K a year. So we plan to sell, move and pay cash for a house elsewhere where property taxes are lower and wildfire risk is less. That should allow us to do all the travel and other things we want to do in retirement. Moving is stressful. We had hoped to avoid it, but our state and local governments got too greedy and are forcing us and probably many other retirees out. Time to find a state that's not so greedy.
Wow, in what state do you live?
Is there a state that you think you might move to?
Moving from Colorado to Utah.@@galens2543
I keep a spreadsheet with columns off all my asset classes and net worth with and without our home. We paid off our place but we have friends who definitely believe that it is marginally better to keep a mortgage and use the excess money to invest rather than put it against the loan. One reason is that their mortgage interest is lower than what they expect when investing and also for the tax write-off. However, I look at paying it off as just another diversified investment along with my stocks, bonds, and CDs.
Well said! Having a paid off home also gives homeowners the opportunity to invest more money.
I truly understand the school of thought about investing rather than paying off a mortgage, but investments can take losses and that mortgage still needs to get paid. I got rid of my mortgage 3 months ago and now I am free to max out my investments with the freed up money and I love not having a bank holding my note. It’s Mine! all Mine!
That is great and I too look forward to the day I can say that. Let's be honest though. If you stop paying property taxes you'll find out quick who really owns your home.
@@mrniceguy423 Death and taxes. Two things you cannot avoid.
Well it’s yours and the governments.
@@mrniceguy423isn’t that incredible? Continuing to pay tax on an asset you’ve already paid in full…
I'd say maxing out a Roth IRA, if at all possible, is also one of the best things you can do. And you can put those funds into something safe, like an S&P 500 fund, which is probably at least as safe as the value of a house over the long term.
Mortgage rates have a single digit as percentage like 7% , but do not get confused because this is compounded interest (not simple interest)....unless you pay it faster if you just do the minimum you will have provided the Mortgage company 2 Times the amount of your home purchase in interest...It is an advantage to pay off your home as fast as you can possible do it ...Things like yearly tax refund applied towards the principal or sending additional $$$ to the principal will allow you to pay your home early...other things that help are job increases if you get $1.00 more per hour you can contribute $40 dollars more per week or $160 more per month....You finished paying your car off after 60 months now use the same $$$ amount and send it towards the principal every month...you will pay off your home faster! And enjoy life when you are older in life!!!!
Good thoughts. A paid for home provides imputed income, and this is why it does make sense to include it in your net worth. This is what you spelled out in the video.
I agree with much of what you’re saying. I have a network spreadsheet with investments only, but throw in my 2 homes for the cherry-on-top! I’m also debt free and will retire from a gov’t job next spring. I also retired from the Air Force 22 years ago, I think I’m set. I shouldn’t have to touch my investments for normal living expenses! Oh, and for paying off your house before retirement…….WHAT A GREAT FEELING!!! That feeling is PRICELESS!!!
I was prior service Navy....and Army (because I apparently didn't learn my lesson), plus, I retired as an LMS 0346-13/07 at the end of '19. Free advice: do NOT file for SSN in the same year you retire. I'll bet you can guess how I know. Retired 31-Dec-19, filed for SS to start 02-Jan-20. In '21, SS sent me mail - lots and lots of mail, but among that mail, they said "you made $16,000.00 too much for 2020." The reason is, as it turns out, is that I took a buy-out in 2019. Guess when the paycheck hit the old bank? If you said "January of 2020," you would be correct.
So, the IRS took 30% of my buyout, SS took 30% of the gross, and with the rest, I funded my 2020 Tundra....just before the 2 weeks to flatten the curve.
Stay safe. I appreciate your service.
Good advice about the SS. I can’t take it until the following year so I should be fine. I’ll retire this spring as a GS-0856-13/07…. Thanks!
On point. I am retired and fully own my house. You are absolutely correct in regards to having multiple streams of income vs just relying on home ownership 😉. Life is good for this old retiree 😊❤....
Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them.
So true Rod, I'll one better ya. Financial education starts at home long before school. I'm pushing 70 and was raised by parents who emphasized early the value of a dollar and the importance of saving and investing for the future. As kids we never went without but were never spoiled by the extras unless we earned them. Parents don't realize the problems they cause early in life when toddlers are pre conditioned to get what they want when they want it. Sounds silly, but allowing a child to take home a toy of their choice every time they go shopping vs giving them an allowance and purchasing a toy with their own money is a simple but educational lesson. My wife and her siblings were all spoiled as kids. Got almost anything they wanted and never took care of anything. All of them grew up as adults who lived paycheck to paycheck and were never out of debt. Two will work til the day they die, up to their eyeballs in debt. All the nieces and nephews, ditto. Fortunately I was able to convert my wife away from this instant gratification lifestyle and over time she has become savvyier than me at living debt free and making educated financial decisions. Both of us retired in our late 50s, haven't had a mortgage or any debt in 20 years. Pay cash or CC off immediately. Review our investments once a year and trust in our advisors long term strategies. Wealth accumulation is a slow life long process. Anyone who tells you differently is full of it or likely has an ulterior motive.
My parents married in 1932, poor as church mice. I inherited my basic money management techniques from them, as well as the example of my mom's stepmother, who could pinch pennies until they screamed (and was the nicest person in the world). And don't believe that legendary nonsense about "The Roaring Twenties;" although there were some rich people, for most the 1920's were plenty rough.
Buy when others are fearful!
I'm happy we went with a 10-year fixed refi mortgage when rates were below 2% during the Covid. House will be paid off in my mid 40's. I think a paid-off house also takes away a lot of stress, if you lost your higher-paying job you could get by with a very basic income. We will still need to put away $500 a month to cover property tax and insurance when it's paid for.
I think if the goal is to reach and secure the chances of maintaining financial independence as much as possible and not just to maximize making money then paying off your home makes sense.
I actually agree with her, because yes, it is technically part of your net worth, but it's only made available to you as cash to use if you sell it, or borrow against it-which would be dumb. If you sell it, cool, you've got a big pile of cash, but where are you gonna sleep?
I paid off my home years ago, but I still have a 36-year mortgage. In perpetuity. Every 36 years, the county tax assessor takes 100% of my (and every) home's value. If I move to a lower property tax state, that "mortgage" can be as long as 180 years. As I near retirement, I MUST move in order to help preserve my limited retirement income.
Definitely a very interesting aspect of FI planning for sure. Having a paid-off house is the right call for the vast majority of people entering retirement, especially those with low enough mortgage balances to not be able to take advantage of the mortgage interest deduction. Although, that could be changing. The standard deduction could be getting chopped in half in 2026, which would open up that deduction for a lot more families to take.
Either way, income taxes, ACA subsidies, SS tax and Medicare IRMAA penalties, Roth conversion strategies, etc. all have to be taken into account before making the call to keep the mortgage in retirement or not. Definitely not a trivial issue or easy calculation.
Personally, I’m planning to keep mine as long as I’m working due to being in a high tax bracket and getting the mortgage interest deduction. The high mortgage interest also pushes SALT taxes into deductibility. The net cost savings is much better than the mortgage interest savings from paying the mortgage down early.
However, I’ll definitely have a plan to be mortgage free for my primary residence when entering retirement, or shortly thereafter, since those tax benefits will no longer make sense.
We paid off our house early two years ago. There is only one word to describe the feeling of a mortgage free home. Priceless!
It's not priceless. It cost you😅
But having the feeling of no longer paying a mortgage is priceless
Freedom
The feeling is priceless DUH@@LRF49
You still have to pay property tax or you loss it.
So many variables to consider. Decided to move during covid due to job loss for not taking the injection. Gain from previous house didn’t quite cover the cost of new place. I have a small mortgage that I just lucked into a 2.25% 30 year . It’s $600 a month. Makes no sense to me to pay that off ever. Yes I have enough to pay it off if needed.
u still paying half in interest regardless, i have a 2.5 an still gonna pay off early. look at ur amortization schedule u still giving away plenty money
I paid off my condo and my hoa is 2568 a year, school taxes 1285.60 a year town taxes 801.09, property taxes 458.31 a year. For a total of $5113.00 a year or $426.08 a month. So owning a home is much cheaper than renting for me.
How much for homeowner's insurance?
The insurance is included in the hoa.@@AndrewJones-th3vi
@joshlowell3075 Yes! In the long run, homeownership usually pays off compared to renting. Especially once the mortgage is paid as you described in your situation.
I was always told NOT include a home in your net worth but never understood why growing up. The way you explained this makes it so simple and easy to understand. Excellent points!
Glad it was helpful!
Survived company layoffs in 2007. The fear of “am I next?” changed the way we see money. We worked very hard and paid off our 30 year mortgage in 13 years, then began investing that freed up cash (plus we saved $$$$ in interest). Being debt free is a freedom very few of us ever get to experience and it’s incredibly liberating.
I think this is bad advice. Inflation erodes the value of the debt of the mortgage. Also, the opportunity cost is too high. If the individual is disciplined in investing that money, they will have a far greater return then they will on their house.
Can't invest when you're in fear of being laid off and losing your home. We could have chosen to invest, but our home was something we weren't willing to lose. Been free of all debt for ten years now. We're in our late 40's and are looking to retire comfortably at 55. We're happy with our choices.@@tito4018
Bought my first home (1000 square feet) when I was 23. Used the equity for a down payment on my second home (1500 square feet) when I was 33. Added a 500 square foot addition myself. Paid off at 48. Looking at early retirement now.
Dear Finance is Personal, LLC
I think your message is spot on as usual.
Make sure you are investing beyond your mortgage.
We never included our home in our net worth, but I assume that’s for two big reasons.
1. We we’re saving aggressively beyond our mortgage.
2. We like you grew up in the midwest with affordable housing.
If you are not or able saving aggressively you are probably counting your home in your net worth.
We paid off our house at age 45, but the watch out was how much our house still cost us as you said.
Our house now makes up 5% of our net worth.
Thanks Erin for your advice and input.
Tony
One can turn home ownership into an income generating asset by acquiring a multifamily home - then ever Erin could include its equity into her net worth calculation. Mortgage payment stays fixed, but the rent you can charge increases over time. Over the last 15 years, one of the units in our 3 family home now gets more than 250% rent than it did when we bought it 15 years ago, and we are likely charging below what the market would support.
Owning them outright, we can charge a little below what the market will support for our units too. When prospective tenants ask us "what's the catch?" we say that what we want in turn for a little lower rent, is to never be late with it. We also don't want to get early am calls for simple fixes like light bulbs or if your kid put a hole in the wall. If you damaged it, you fix it promptly. Call us for the big stuff.
I'm speaking from the U.K. At nearly 64 I'm thinking semi / full retirement. Have paid off the mortgage in full so own the house we live in outright. Ideally I wouldn't wish for a mortgage through retirement. The house fully paid for is an asset that if needs be in future could generate some ready cash if I was to downsize later in life in retirement.
Five years ago my old asset manager said I should consider a material mortgage on the house and place the spare money on the investment market i.e. stock exchange effectively. Low loan interest rates and overall good high investment returns - i.e. make the lender work for you effectively. I said no - I'm too old to gamble the house on the stock exchange effectively. Boy did I make the right decision as roll the clock 5 years forward and as now loan / mortgage interest rates are far far higher and investment returns have suffered.
Erin, One of your best videos! I was strongly on the "home is not an investment" club for several years. I am thankful for my investments and the peace of mind they provide. What I failed to consider previously was that a home while not an investment it would be an asset and would lock in many living costs. Houses and rents have doubled in my area over the last 8 years. Had I purchased a home I would have had a better place to live and would have locked in some of my housing expenses. Thankfully people can have setbacks, make some mistakes, and still win the money game if you stay the course.
Great video. Could not agree more. I don't include home value in my net worth statement and also deduct my mortgage. This could be overly conservative, but as Erin says, the home is not an income producing asset and I will eventually have to pay off the mortgage. True financial value of home ownership is accumulating equity to minimize housing costs in retirement.
I had a difficult time picking between paying off my mortgage and investing. I’m glad I did the later. I’ve been watching clips on youtube for months now and with professional help, I’m making outstanding progress.
I’ve put investing into consideration also. What do you think is the best approach for someone who is just starting out?
Herman Jonas is the brain behind my success. I've gotten into a plethora of assets with $13k spread across stocks (options and futures) for the short term and Roth IRA, index funds, and ETFs, for the long term. Now I sit back, and just reinvest at intervals while I handle my other businesses.
Do not forget that when it comes to the stock market, prices can be erratic, rising and declining quickly, often in relation to companies' policies, which individual investors do not influence.
How can I reach him, please? I've seen good recommendations of his work elsewhere. I need help with investing in stocks. I'm ready to pay for his services.
Hermanw jonas (a Gma!L comm
Is he taking commissions for his services? Yes, I’m I still making money in the process? Hell yes!
I took a 35 yr home financing 7 years ago. I am planning to fully settled it next year, after which I will be concentrating in building savings for the kids educations as well as for my retirement.
I believed in consistency and high level of discipline when planning for retirement. Whether or not you plan to settle your mortgage early is irrelevant.
I agree with the don’t include the home for financial planning. If you are trying to get a loan, then you use the net worth statement that includes the house. But if you are trying to create a spending plan, don’t use it. It’s pretty simple. Maybe the term should be Usable Net Worth
My home is paid off, but you still have taxes, insurance, and upkeep my mortgage payment was 1680 per month now that it's paid for I still have to save 900 per month just to pay taxes and insurance. That said I agree if possible you should have your mortgage paid off going into retirement. A paid-for home really gives you choices. Thanks for continuing to educate people about their finances and encouraging them to save for retirement.
900 hundred means u live in a high cost state and big house lol
I go back and forth about paying off my 3.25% (8 year loan). While it'd be great to get that off the table, it also increases my cash & investment liquidity by maintaining the mortgage.
I do the same. Don’t be house poor.
6:01 So after 11 years you would have paid around $310,154 to rent and have no equity to show for it. I've hear it said that if you plan to live somewhere for more than 5 years, it almost always pays to buy (obviously this would not apply to all market areas).
I think the chart right near the end @ @9:30 makes a strong case for calculating net worth without counting home equity, at least to see what that looks like. With crazy home prices today, you could have a million net worth but only have a few hundred thousand dollars in income-producing assets. I've done the numbers myself with and without my house and each version paints a different picture. Also, a friend of mine had a house worth just shy of $1 million about a year ago and now, on paper, it's worth less than 700k. That's a huge swing.
Great video! House being paid off is huge. Like anything else, it depends on personal circumstances and preferences.
I will vote for adding the value of your home to your networth, my reason being if you didn't have that home, you will be renting somewhere else which will have an effect on your networth.
Don't kid yourself. Unless you're a multimillionaire, we are all one medical crisis away from financial ruin.
Yeah and for some it means a multi-millionaire!!
Keep in mind, we could all die tomorrow. That doesn’t mean you shouldn’t plan on living past then.
Depends which country you retire in but for the US, I definitely agree with you
You could find good insurance and start a health savings account to prevent this
I bought my first home at the age of thirty, and ten years later, we bought my current home. My wife convinced me to keep our first home as a rental, and what a great idea, rental income paid off that property 7 years later, and it helped us pay off my current home this month at the age of 62. Also, in that time frame, both properties have tripled in value. I’m going to retire at 65 with no debt and we’ll either keep the rental property for income or sell it for more financial independence. Owning property gives me a great sense of security and freedom to do whatever we want in retirement. Also, for US residents, check with your county. In my county, property taxes increase’s are frozen for folks 65 and older. Excellent video Erin, I enjoy, & learn a lot listening to your videos.
This a very good video, maintaining proper context is over looked, the value of our primary is not liquid. Great job illustrating this concept and most important how that relates to retiree’s
One of the great ironies today is that in some areas people with a typical 3 br. home are paying taxes of about $12000 or so. That means that after paying off the home, they are now renting the dirt under it from the state for what had been mortgage or rent payments.
Yep. Basically you'll never really have a home paid off completely because property tax and house insurance will always be there. It's such BS.
@@Westcoastguy Renters are also paying property tax and building insurance but just indirectly through their rent payment. I paid my house off 12 years ago and the cost of property tax and insurance is about $500 per month. Houses in my neighborhood similar to mine are renting for $3000 per month. Property maintenance isn't costing me the $2500 per month difference.
I'm 67, with a mortgage, and I have no idea when (or if) it's going to be paid off. Frankly, Scarlett, I don't care.
Here's the thing: I refinanced in 2015; about 6 months before my wife passed. Now, even though she was an annuitant, her income wouldn't pay for an apartment in a small town.
I've always believed, and I've preached it, that couples should never buy more house than one of their incomes could support. Most people don't listen to me, but I listened to me, and my mortgage costs just under $1,100.00 a month. The house across the street - admittedly a bigger house (mine is 1100 sq. ft.), just rented for $2,200.00 a month.
With the mortgage, utilities, and everything (except eating out), it costs me right around $24,000.00 a year to live. I gross $60,000.00 in retirement.
So nope, don't care about paying off my mortgage.
If I made $60K per year and had $1100 payments in retirement income, that would leave me about $2800 net per month after paying mortgage. That's reasonably comfortable for me, and in your situation, I probably wouldn't pay off the mortgage either.
However, in many other situations, I think paying off the mortgage makes tons of sense.
It's like you're saying, 'Hey, let's focus on assets that work for us, not just what society tells us to count.' - definitely got me reevaluating my financial game plan.
When I see and listen to someone who is as young as you appear, and they are on top of the game - I have renewed faith that our country will be okay. 😉 March, 1994 - the date our mortgage was completed.. Since then our property tax has quadrupled though 😮💨
Living in Sydney Australia, the housing market has been out of control since the mid 80's. With a city that has 4 immigrants for every Australian born birth, there has been massive growth. My 2 million dollar house has doubled in price in 8 years & since I live in it, its capital gains tax free.
So are you saying that the immigrants are bad or good ?
@@bradbriggs5347 Bad. People can't afford families, because housing takes a working couple 30 years to pay off. One wage can't support a family of 5 to 7 children, like 100 years ago. The system is rigged. You replace what families once did, with government services. One of these services, replacing reproduction, with immigration. Other services like welfare dependency, has replaced what families used to do. Families used to be your pension in old age. Big government & high taxation is out of control. Remember income tax didn't even exist in the USA, Great Britain & Australia before the 1920's.
@@bradbriggs5347 I don't think anything was said about that one way or the other. Sydney has been growing like mad for decades now is the point. A colleague of mine at work came to the US from Sydney partly because home prices/values were so crazy he felt he was being priced out of the market and couldn't afford to live there any longer. This despite making what many would consider a really good income.
@paulfly3121 I felt it was a fair question, I live in a northside beach side Brisbane suburb and we have had a landslide of immigrants from nsw, I was wondering if it was a ultimately a good thing or a bad thing, sorry if you thought it was racist but that says more about you than it does me
@@bradbriggs5347 What's better, having your own family & a legacy. Or making housing unaffordable, so you can't afford a legacy.
Low birthrates are a government policy. Immigration is a government policy.
No such thing as low birthrates, before woman got the vote.
When you have a section of society that overwhelmingly vote for provision & security, this is ultimately the result. Total & absolute demographic replacement.
Next video: retire with money is better than retire poor.
I've watched a bunch of retirement and pension videos and it all comes down to that.
I’m new here, but you have the best personal finance channel I’ve seen so far.
Thanks 🙏 so much! Welcome to the channel!
Paid mine off ten years early literally just before the hike in interest rates. Best decision I ever made. Wasn’t easy but absolutely worthwhile. I’m in England.
Love the hair! Long time. Better, brighter future? If you have a roof over your head, and running water AND a toilet in your house, you are living the dream compared to the rest of the world. If you don't have to go outside to use the bathroom and fear a snake biting your butt, you already have a blessed existence on this planet! Love the simple things in life and having your needs met and you will be much closer to being happy.
I bought my first home at 22. Paid it off in 6 years. Fast forward 30 years, we now own our own home freehold plus 4 fully paid off rentals. We are now able to retire early on our rental income, and can sell off rentals in the future for additional cash if we want. Looking forward to enjoying the rewards of our hard work.
Good for you and your family.
Paid my house off at 45. Retired at 51. Taxes have increased about 50% faster than budgeted. Have repair insurance ($500 a year). The ACA made it happen. I've done some gig jobs since. Barely retired before layoffs at my company. Was set to tell them I was retiring on Jan1st, they laid us off the prior august with an effective date of December 31st.
The value of a paid off house is nearly incalculable. My friends rents have more than doubled. And they built up no equity. Renting is great if you move frequently.
The home is an important asset, be it good or bad. We are on our 4th home and this home certainly has been our best experience. Two of the four homes we broke even, one home we made perhaps 10%, our fourth home will make a good 40% return. Since we are later in life it makes sense to carry our home loan as our mortgage was around 2.3%, well below what our portfolio was making. All in all, owning a home has been good for us. In our out years we may consider renting, this is not the best financial decision but more of a quality of life. Renting means we don’t need to worry about home maintenance
I live in southern Missouri and paid slightly less than $25,000 for my home, which is on an acre of land. I paid cash for my house. Having my home paid off in full is a feeling of security. I can't imagine the stress of having to come up with money every month for rent or a mortgage payment. I know millions of people do it and don't give it a second thought until something happens. The main breadwinner could die or suffer a catastrophic illness or injury. The country could go into a depression like what happened in 1929. Any number of things could happen to destroy a person's financial security. I could have used my $25,000 as a down payment on something newer but I am glad that I got a house I could pay for in full. I am especially grateful that I did this because I have had times over the years where my financial situation has really taken a hit. With rent or a mortgage, it would have been very stressful. I am 100% debt free. No mortgage or rent, car loan, credit card debt, or any other kind of debt. I don't want to ever be in debt again.
Just having property taxes and insurance a great spot to be in.
We are completely debt free as well! Feels great Have a great day 😊
My wife and I have very comparable circumstances. She is a great partner in this. Slightlty sad is it took us until our early 50s to get there. Sooner would have been better.
@@De-Centralized Better late than never. My late wife left us in debt via a couple of credit cards and some other stuff. It could have been much worse, however. I started that debt-free journey late in life (2010), and I was still at almost a half million by the time I retired at the end of 2019. Took a hit in 2020, but I'm still in good shape. Sooner WOULD have been better, but it is what it is.
@@billfunk3168 property taxes, utilities, groceries, and an unlimited bus pass...
Rent can go up, so can property taxes for owners.
Having a paid off home can help lower the emergency fund requirements since the equity can be leveraged to help.
Having a plan to pay off the loan before retirement is direction I took. I plan on retiring in 20 years, and all my debts should be paid off by then. That said, I do plan on having enough invested to cover all current costs. If I were to stop working right now, I have about 20% of the income (dividend, interest, rent, etc.) needed; meaning I would have to sell shares to cover the additional expenses or drastically cut costs.
Owning a home gives options in the long run, and to me that's what wealth does - gives options.
In my opinion taking out a home equity line of credit is a bad idea but some people might disagree with that.
@@josephkelleher8820 I did that for home improvements, except I borrowed against my 401K. Even though there was interest, I was paying myself back from borrowing my own money.
@@josephkelleher8820those people would be wrong and broke.
I'm very proud that my wife and I paid off our home when I was 40 and she was 36. I'm 58 now and have put the money I would have used for the mortgage first to help my kids through college and now paying off a second home which will bring income stream through rent when I finally retire.
We bought our house 18 years ago and paid it off 10 years ago. We saved so much in interest. Even paying a little extra each month saves $thousands and years as long as your mortgage is set up so overpayments go toward the principal.
Engagement for Erin. Keep up the great educational content!
Much appreciated!
Including home equity is technically correct when calculating net worth as it is part of the official definition. Practically speaking, it is useless and just inflates the numbers, or even misleads people into thinking they are in a far better position than they are in. If I included my house in my net worth, then I am worth at least 7 figures but I am struggling everyday lol.
So when doing the calculations if you are not including your home equity do you also not count the amount you still owe in the liabilities column?
@@bigshoe84 those are included
@@bigshoe84 if you aren't including the asset then you should also not include the asset's liability either. What we are really talking about here is investable assets, not net worth.
@@hanwagu9967 That was my thought also
Wow my thoughts exactly. This is why I just bought one house and never got caught up with race of keeping up with the Jones’s and continually upgrading the houses. 250-450-850-1M nothing wrong with that. I instead paid of mine and upgraded it to have kitchens and baths better than 2m homes and at 53 have several millions saved. Okay I don’t have a 1M home and that most of my piers have but at age 50 they are staring at a mortgage of 20 plus years and virtually no savings and to add to that cars on notes for several years and college loans etc etc. I have paid off house worth 500k but like you said not counting it as my net worth 4 cars that are all paid off and plenty in retirement savings. Everyone kept saying house is an asset it will appreciate sure it will and paying 4 mortgages over the life span and moving some equity into the next unless you downsize and even if you do you probably will need most of it to get into a downsized house. So buy once stay put pay it off and invest the heck on the savings on mortgage while you make money
Erin, as always, well done! All so,important. We are fortunate and are debt-free, retired, and living off investments. Soon we will draw SSI which will reduce our dependency on investment yet we will still have that. We were able to purchase multiple residential rentals over the years, and we DO include the rental inventory in our net worth, not our primary residence even though we understand this truly is part of our net worth. Thank you!
I paid mine off 5 years ago @ 53 & I set myself up to retire @ 56 it was the best decision i ever made, I been retired 28 months now
That's awesome. Since I was 25 I planned to be able to retire at 55 if I want to. I'll probably stick around until 60 because I still love what I do and it pays very well. It just means more retirement funds and maybe a few more toys to enjoy when I don't have to go to work everyday.
I bought my home with the intention of being able to pay it off early, by 55 so I wouldn't carry a mortgage into retirement. I made that goal early by 2.5 years, so that's another $120k+ in large mortgage payments that I don't have to make for those next two years. Then another 5 years of extra income, while being rent free that I'll be able to save and invest.
Paid off our mortgage a couple of years ago at age 38, it took us about 8-9 years. BUT So glad that we did as did allow us to max out retirement accounts, 0 debt of any kind and allowed us to build up 2 years worth of emergency fund as well. But the best part is that it gives me no anxiety for losing my job anymore and sleep well at night with peace of mind and feel kind of semi retired. Especially during this turbulent times with stock market volatility and high inflation.
Nice. I wish I bought in early 2010's... I got mine in 2018... if I stuck to my goal than it would be paid off next spring. But I'm about 3 years behind schedule. It is hard to stick to the plan for 8 years in a row. Hopefully I stay working for the next couple years, strap down and stick to the plan
Use that exact amount to invest for your future and sudden unexpected home repairs. Congratulations.
We paid off our 30 year mortgage in 17 years. We sold our home at the top of the market last year and moved to a different state and paid cash for a bigger home with more land that costs less. The insurance on my new home is now half of what it was in Texas ( high prices due to hurricanes, flooding). Florida and Texas have high home insurance prices as well as car insurance especially in the large cities. We got tired of the traffic and weather too.
Haha, here in New Zealand, if you live in a weather prone area “everyone’s” insurance goes up to pay for it!
The North Island has been hit really hard in the last year or do, with cyclones, flooding etc, yet all our home insurance premium payments went up because of it, and I live in the lower half of the South Island where the weather’s more stable!
Which state did you & your family move to that had lower property taxes? I’m in Florida and want to explore other states for better options in homeownership
One other option to consider is that in retirement selling your home and investing it can generate passive income to pay for a good portion of your rent. Also, when you get older, maintaining your home gets more expensive because you become dependent on paying people to maintain and fix things that in your younger years you used to do yourself. Thirdly, the longer you stay in the house the more likely you'll have to replace expensive things in the house, like roof, furnace, AC, siding, or a sagging garage that may need replacing. All these things add up. Fourthly, subtracting property taxes, home insurance, and extra cost of heating and cooling a home compared to an apartment which is much less. So when you subtract those extras or forthcoming costs of staying in a house and moving into an apartment, the actual cost of renting may be paid off via the interest you made in investing it into the market. Just a thought to consider for those older folks. If you're younger with a paid off house, this would be very different.
I paid my mortgage off 2 years ago and I’m 32 years old it’s been a life changing thing no stress no worries I hope everyone can experience this life!
Wow, that is AWESOME beyond words. I didn't even buy my home until I was 38 years old. Enjoy the peace of mind and much lower levels of stress this brings you.
Another plus for ownership vs renting is that the ownership neighborhoods are typically a different lifestyle or quality of life than what you get with renting. During college we rented and didn't really care about this factor. If the garbage bins were overflowing or people were changing their oil in their cars in the parking lot, we could care less. Our first home was a townhouse, it started out great but after about 5 years the turnover seemed to accelerate and the community went downhill with many units becoming rentals. We then moved on to a single family neighborhood of 130 homes in the late 90's with an average cost of $350k-450k, which I considered high at the time. Today those homes now go for 1.2M - 1.6M. As you can guess nobody is paying that kind of money to turn the house into a rental. Renting may offer more flexibility, which is a positive, but that is also what makes it more transient and less like a neighborhood which for some is a negative.
nobody? Seems to me my tenants for the past three years must not be the nobodys you mention, because that is exactly what they do. Given all the applicants we had wanting to rent our house and going into a rent bidding war, I'd say your assessment about nobody is wrong. Plus, people spend ridiculous amounts on rent all the time, even multi-million dollar homes and paying $20k/mo.
@@hanwagu9967 The word 'nobody' obviously was a poor choice of words as it is an absolute. Better said, would be that, typically people on average don't buy a 1.6M house and rent it out, but I'm sure that it does happen.
Great video and well positioned. We paid off our home in 18 years so had zero payments for the past 5 years. Decided to buy a new waterfront home about a year ago and the prior home paid for all but $100K so we owe less than 10% of the properties current value. Both of us are still working so payments are minuscule but we can also sell an investment property to fully pay it off should we like. We agree that a paid off home gives one great comfort.
1000% agree with you on this one! I never count my house as part of my net worth, even though it's already been paid off since 2014. Now, you might be able to include this if you have an investment home. I would rather have a 1.5 million in 401k, cash, brokerage etc than a 500k of the same and a primary home worth 1 million. To me a primary home is not an investment because I live in it and you pay property tax, insurance and $$$ maintenance. Think about it, high property value=more property taxes! Unless you downgrade to a smaller home, then it make sense adding the profit back into the net worth.
cash is a dpreciating asset
@mra95662 - So are houses and guess what, rich people can deduct their investment home as a depreciating asset therefore reducing their taxes and you pay rent to help them pay their mortgage! You can only realize your gains on your home (If you're not underwater) by selling it and its not as liquid as cash and you still have to find a place to live. How do you buy food? Cash or credit card. You work for a paycheck that you can easily withdraw from your bank right? Many got into trouble thinking the government will take care of them with social security but I got news for you, DON'T be fooled. Average SS benefits $1,700. How much is rent these days on average. Think of ways to get ahead to make more money, we will always have inflation so one of the ways to get ahead is make more $, save and invest. The rich get richer cause of their friends in the white house, not us. Ever thought of why a company stock price goes up celebrating after a layoff, let that sink in. Can you eat your house. No.
You dont include your principal residence as apart of your net worth? Net worth is assets minus liabilities.. your house should be included in that
@raze5346 That's their definition. Not mine. You believe inflation is at 4%? Up to you. The government changed the definition of recession when we had 2 quarters of consecutive negative GDP. The way I see it, anything which does not generate money and isn't liquid, I won't add it. Unless you do a reverse mortgage "selling" your house to the bank and get monthly payments which im not interested in. Other than that, homes are meant to be lived in especially a primary home. It takes time to sell and make your profit but you still have to live somewhere. Even if you are mortgage free, property taxes, insurance and maintenance still apply.
@@richlandzee8686Good point!
I think owning a home greatly increases your networth because it reduces your expenses which is actually better than an income stream of the same amount because savings are not taxed.
networth isn't correlated to reduction of expenses or income stream. Plus, your home may appreciate 4.5% over time, but that is reduced by inflation over time and you have no flexiblity with home equity.
@@hanwagu9967 I disagree net worth is totally coordinated with reduction in expenses or increases in income
Except property taxes.
@@dariogomez8721 In many jurisdictions, some people are exempt from property tax. Senior citizens and military veterans of certain tax brackets are exempt. Also, if you do pay property taxes, it's usually less less than the increased worth of your home year over year in the long run. Now, maintenance cost will definitely decrease your networth. Writing a $20k check for a new roof or major repairs will put some dents in the networth
@@hanwagu9967homes and people's situations are all unique. You can't just say home ownership is a bad investment. I put 0% down, my home has appreciated 50% in 3 years. And I can rent it out currently for ~140% of my mortgage. It's an investment that will pay for itself. As long as I put the extra rent into an account to pay for expenses on the house, I will never have to pay out of pocket for it while renting.
I am 4 years and 3 months away from paying off my Condo. 7 months ago I had the money to pay it off. My interest rate is in the high 3's. What I did is divided my pay off money into thirds and staggered 3 CDs that paid a slightly higher rate than my mortgage interest rate. My plan is to keep on paying my monthly payment.
Then when the day comes when my place is paid off, I will have those 3 CDs. Kind of like a saving plan/emergency fund for my Condo all in one. When that day comes I am already thinking of taking that Cash and throwing into my place doing some remodeling for my Bathroom and Kitchen. The remodel does come back to you mostly from what I have been reading.
We paid off our house years ago. Sometimes I forget the benefit that provides for us. I am grateful to have had the chance to do so. (Think, hard work & sacrifice).
Great video. You're one of a small number of financial CZcamsrs who actually get the fact that financial security is all about cash flow. btw - At age 60, life expectancy is 82 and 85 for men and women respectively. The fact that some folks die super early (from accidents or violence) brings the average down several years. But if you make it to 60 you have to plan for 20 to 25 more years.
I never thought to look up life expectancy at age 60, but it's very relevant, thank you! (since life expectancy at birth is much less). BTW I found a CDC life expectancy table and it gives very complete data. www.cdc.gov/nchs/data/nvsr/nvsr71/nvsr71-01.pdf
No mortgage, rent, credit card or car payments here. We only pay monthly utilities and groceries. Many people won't know the peace of mind and freedom. Life is good.
You bring up some good points. Just from my short financial education journey that basically started in 2018, I think if your young enough, paying off your home wouldn't benefit as much as if you're in retirement age. This seems to be a big subject and can be subjected to a degree as I've heard some different angles. I've even heard some say your home is not an asset. Terms like cash is trash and cash is king. They never taught financials for real life in HS. I hated to hear this but, they want us to just be slaves to the system. I think the number one problem with any mathematics here is the word "variables". If you wanted to use statistics that could help. Here is one scenario as example as it reminds me of the movie "Happy Gilmore" You own your paid off home, but you never paid your property taxes, the IRS comes to take your paid off home from you.
As an old fashioned sort of guy, the happiest day was paying off that mortgage. Nine years. I know that's not a long time, but it was longer than I wanted. I value my freedom and the money I saved on interest. My wife was shocked but first thing I did was hang an American eagle above the front door. Love being free and clear and every penny we earn is ours.
My house has been paid off for a decade and it feels good. Foreclosures rarely happen with a paid off home, it’s the mortgage that gets people in trouble. It’s a huge risk factor people don’t account for. People with mortgages don’t view it as a risk until it’s to late.
Actually some are going to be taxed out of their homes soon and without any extra income without working hours or worse
@rockystaatz521 What's the percentage of people that get taxed out of their houses? I would say 99 percent less than those still have a mortgage.
There’s a person on my street that has a paid off home, however, over the years taxes have risen so much that the person is now paying more in taxes than the mortgage
@@auomi8762 so they have both, I’m saying if you have taxes only it’s better then a mortgage on top of it.
@@rossta3949 you are probably correct except for some fixed income , still have a mortgage because my money makes more than my mortgage but taxes have raised the payment to an unexpected amount with utilities going up at the same time. When the taxes quadruple in just 3 years that’s not something you can plan to cover in almost every range
I've been fully retired for about three years now and whether or not to include my home in the net worth doesn't mean much. I can't use the home as an income stream unless I give up some ownership, which is not ideal. Including the home in net worth may make one feel better about their financial situation but may also give a false sense of security about retirement readiness. That being said, I usually included the home in my net worth if someone asked because it's technically correct to do so.
Why is it a false sense of security? If at retirement, they need money they can always sell
@@CZcamsrkt True, but not ideal if one has to start renting when the house was payed off.
@@mcarlo52 they would have been doing that regardless if they didn’t own that home. This is only a problem if the house didnt appreciate much and/or the alternate opportunity cost of that investment was high
@@CZcamsrkt I meant it this way: if one owns their home with no mortgage and it’s worth, say, $200k and they have $50k in saving their net worth is $250k. If they need $10k additional to live on, they may think they could last 25 years. Even if they sell the house, they can’t go that long because they’ll have to use some of that for rent. That’s what I meant by a false sense of security.
thanks -- interesting as always even if this speaks to current or near-retirees. We did pay off our home. oh, 6-7 years ago and it gave us a lot of flexibility in finances. Now, it's both good and bad -- some big repairs were due, wanted to move but real estate was super crazy the past two years (and only modestly better now) so we'll likely stay put. Home ownership was tax favored for so long, but less so now that I not only don't recommend home purchase to my kids but I try to steer them from it.
I think it is a lot of people dreams to have a paid for house. Just imagine how much you will be saving each month with no rent or mortgage. Now I see my big brother has a paid for house that he'd bought years ago for around $250k. He is not just now don't have to worry about paying for mortgage, his house now worth almost $900k the last time I'd check. It's crazy.
About the same time we paid off our mortgage, we also started renting a room in our house to a trusted tenant. We plan to expand to two rooms, which will essentially reverse our mortgage: we'll be receiving as much income from the rooms as we were paying for the mortgage. There are social benefits to having more people around in retirement too. I would say that the empty homes of retired people can become significant income generators for those willing to try.
I have an entire second floor I could rent out. 3 bedrooms and a full bath. I just can't bring myself to do it. Having strangers coming and going... there's no kitchen up there so they would have to eat out or have deliveries all the time which results in more trash, etc. Glad I don't need the income. If I had the income, I would probably use it to buy a rental house.
Back in the day, my Mum would rent to a friend ( usually temporary). Some people called them boarders. It helped both parties out.
I think you're going to see a lot of that in next generation's retired folks, but it's going to be out of financial necessity rather than social benefits.