Forget luxury cars and designer handbags—according to Dave Ramsey, the real status symbol today is owning your home outright. In a recent tweet, Ramsey declared, “The paid-off home mortgage has taken the place of the BMW as the status symbol of choice.”
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Ramsey, known for his direct financial advice, has long been an advocate for paying off debt as quickly as possible. In fact, one of his strongest opinions is to avoid 30-year mortgages.
His take is that if you can't afford a 15-year mortgage, you can't afford the home. According to Ramsey, homeowners who take out 30-year loans end up in debt for far too long and incur far higher interest rates. He points out that the average millionaire in America pays off their mortgage in just over 10 years, proving that financial success often comes from living debt-free.
But is Ramsey’s advice realistic for everyone? With the median U.S. home price at $402,000 in 2024, and mortgage rates at 7.705% for 30-year loans and 6.909% for 15-year loans, the numbers are tough. A 30-year mortgage requires an annual income of around $91,760 to keep payments under 30% of your income, while a 15-year mortgage demands nearly $115,000 annually. Compare that to the average U.S. household income of $74,755, and it's clear many families are already struggling to afford a home, let alone pay it off quickly.
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The peace of mind from paying off your home faster with a 15-year mortgage or the breathing room and opportunities that come with a 30-year loan? Each offers advantages, and the one that best suits your particular circumstance is the best choice.
Ramsey's stance isn’t new as back in 2018, he warned, “Stop trying to keep up with the Joneses. They’re BROKE.” Today, that warning feels even more relevant. U.S. households owe an average of $175,075 in debt, with mortgages making up $230,918 on average, plus auto loans, credit cards, and student loans adding to the financial strain.
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Ramsey's advice encourages smart money habits, but some people say it doesn't match the reality for many Americans who deal with higher prices and low wages. Still, his point remains: living within your means and paying off debt is a path to real financial freedom.
So, is a paid-off mortgage really the new status symbol? For Ramsey, the answer is obvious. But for many Americans, the dream of owning a home debt-free feels further out of reach than ever.
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