Family Investment Center Says Ditch the Conventional Belief of Paying off Mortgages Early in Favor of the “Money-Maker” Philosophy

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Dan Danford, Founder/CEO of Family Investment Center Explains How an Unconventional View of Mortgages Could Impact Lenders and Investors in a “Big Way”

Family Investment Center

I encourage people to consider their mortgage in terms of what it costs you and what you stand to gain.

For investors thinking of paying off a mortgage early or making extra payments, Family Investment Center says “ditch the conventional advice.” Instead, Dan Danford, founder/CEO of Family Investment Center and a nationally-quoted source for investment knowledge, says in a recent podcast that taking the “money-maker” approach – although somewhat unconventional -- can make a huge difference on how an investor enjoys their retirement and reaches financial freedom.

Danford recently launched the “Money is Freedom” podcast series to address the common myths and misperceptions, like paying off mortgages early, that can keep families “stuck” in the middle class or farther away from their goals. The misperceptions of paying off mortgages early by sending extra money each month to the lender is an approach that Danford says could cost investors tens of thousands in potential earnings.

“Buying a house has long been a money-maker for Americans. Our parents and grandparents used the easy process – they bought a house with savings as a down payment. They borrowed the balance. They made payments each month and over time, the amount they owed on the home lessened while their equity in the home rose,” says Danford. “This conventional wisdom, however, doesn’t create a ‘making money’ philosophy in comparison to other mortgage approaches.”

Danford explains that from a conventional mortgage model takes a significant amount of time. However, in contrast, many other types of investments tend to grow at a faster rate than mortgages cost.

“I encourage people to consider their mortgage in terms of what it costs you and what you stand to gain. A typical mortgage might cost you 4 percent in interest each year. But a stock portfolio, even in a conservative period, could grow at a rate of 7 to 10 percent in a year. Over the long haul, odds are in your favor that the investments will outpace your mortgage cost,” Danford says.

Rather than send an extra principal payment or a larger payment to a mortgage lender each month, Danford suggests investing that same money in an investment fund. Over time, the return could mean earning an extra $44,000, for example, rather than saving $22,000 over the long-term or ending up with fewer mortgage payments.

“Even if a portfolio earns just 6 percent over time, the gain could reach $30,000. If the portfolio earns 10 percent, the investor’s earnings could reach $86,000. In this scenario, the potential portfolio gains beat the money saved from extra payments by $60,000,” he says.

Danford adds that this “money-maker” mortgage philosophy is flexible and adjustable. While consistent mortgage payments are made on a regular basis, the leftover can be applied to an investment account and this becomes a reserve account that grows on its own. When the reserve account is large enough, an investor can withdraw it, pay off the home completely and likely still enjoy the leftover money. Investors will also have this reserve account in the case of a job loss.

Bringing decades of investment experience in a commission-free setting, Danford utilizes the podcasting medium to regularly weigh in on topics that help educate listeners on investment strategies. One of Danford’s additional podcasts is titled “Free Advice is Poor Advice.” It addresses how too many investors take advice from friends, relatives and colleagues, which turns out to be poor advice because everybody’s situation differs; what works for one person isn’t a sure thing for someone else.

“Friends, relatives and colleagues only tell you half the investment story,” Danford said in the podcast. “They tell you the good half. They have little knowledge about your financial situation. Sometimes you have to be willing to go against that conventional knowledge to see some real change happen.”

Dan Danford’s free podcast is available at:
Money is Freedom


About Dan Danford and Family Investment Center
Dan Danford serves as Founder/CEO of Family Investment Center, a full-service, commission-free investment advisory firm. Based in St. Joseph, MO, Family Investment Center also serves clients in the Kansas City Northland area and across the country.

Danford holds both an MBA and a Master’s Degree in Personal Finance. In 2012, he was featured in the book “America’s Top Financial Advisors.” A 2009 Wall Street Journal article outlined Danford’s unique birthday messages to clients, complete with a $2 bill inside the envelope. In 2009, Danford was also quoted on “ABC News” for his insight into how parents can protect funds for their children’s college education. He was listed as one of the 150 Best Financial Advisors for Doctors in 2008 and 2009 by Medical Economics magazine. A 2006 article in The New York Times quoted Danford’s insights on working with a financial advisor. In 2014, Danford was featured in an article exploring solutions to math anxiety in the Voices section of the Wall Street Journal.

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Amy Vaughan
Family Investment Center
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