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Wednesday, December 27, 2006

Baby Step 6 - Pay off your home ... early!

For most people, the mortgage on their house is their single largest debt. Wouldn't it be nice to be able to walk in your back yard knowing that your house is paid for? The grass just feels greener knowing that you own your home and not the bank.

In this step, you will still be doing your 15% investments and savings for your kids college, but you can also begin to pay off your home early! Everything else that you have left over should go towards your house. Some people say, "Why pay off the when you get a tax break for the interest you pay on the mortage?" Let's answer this question with a question. Why would you pay $5000 dollars in interest each year to get back $1500 back at the end of the year? If you wish to do that, you can give me $5000 dollars a year, and I'll gladly give you $1500 dollars back.

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