Why we waste time and therefore money! … and what to do about it!

It’s hard to be logical all the time about everything. The most financially successful tax clients we serve at least attempt to force themselves to be logical, for their own benefit. For instance, our parents, as well as a subset of the economy including some popular radio show based advisors like Dave Ramsey say you should pay off your home and have a “free and clear” deed as a goal (they are wrong in most cases by the way). That kind of thinking is emotional thinking, mixed perhaps with some presumptive attitude about what the general populous is capable of. “Well, we know we can’t get people to do what would really be best for them based on pure math and logic because it’s complicated and would require that they educate themselves, so the next best thing we can get them to do is (insert substandard advice here).” If advisors did not decide in advance what people are capable of they would explain the math and the tax code and most people would be better off managing their home mortgage as an asset, and many people would also be better off never paying off a house, but instead building an equal value or even more equity outside their home.Continue reading

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