In aÂ CNBCÂ article, self-made millionaire David Bach explained that:Â â€œThe biggest mistake millennials are making is not buying their first home.â€? He goes on to say that, â€œIf you want to build real financial security, real wealth for your lifetime, then you need to buy a home.â€?
Bach went on to explain:
â€œHomeowners are worth 40 times more than renters. Now, that first home doesnâ€™t need to be a dream home, it can be a very small home. You might literally have to buy a small studio apartment, but thatâ€™s how you get started.â€?Â
Then he explains the secret in order to buy that home!
â€œDonâ€™t do a 30-year mortgage. You want to take that 30-year mortgage and instead pay it off early, do a 15-year mortgage. What happens if you do a 15-year mortgage? Well, one, you pay the mortgage off 15-years sooner, that means youâ€™ll be able to retire in your fifties. Number two, youâ€™ll save a fortune (on potentially hundreds of thousands of dollars in interest payments).â€?
What will it cost to pay your mortgage in fifteen years? He explains further:
â€œFor fifteen years, you got to brownbag your lunch. Think about that! Brownbag your lunch literally for fifteen years. You can retire ten years sooner than your friends. Youâ€™ll have real wealth, because you bought a home â€“ youâ€™re not a renter. And youâ€™ll be financially secure for life.â€?
Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice â€“ if you donâ€™t yet live in your own home, go buy one.
Who is David Bach?
Bach is a self-made millionaire who has written nine consecutiveÂ New York TimesÂ bestsellers. His book,Â â€œThe Automatic Millionaire,â€?Â spent 31 weeks on theÂ New York TimesÂ bestseller list. He is one of the only business authors in history to have four books simultaneously on theÂ New York Times, Wall Street Journal, BusinessWeekÂ andÂ USA TodayÂ bestseller lists.
He has been a contributor toÂ NBCâ€™sÂ Today Show,Â appearing more than 100 times, as well as a regular onÂ ABC, CBS, Fox, CNBC, CNN, Yahoo, The View,Â andÂ PBS. He has also been profiled in many major publications, includingÂ theÂ New York Times, BusinessWeek, USA Today, People, Readerâ€™s Digest, Time, Financial Times,Â Washington Post,Â theÂ Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investorsâ€™ Business Daily,Â andÂ Forbes.
Source: Keeping Current Matters