How To Save More Money For Your Family – Mortgage Talk With Sam Kwak
The numbers don’t lie. And for Sam Kwak, co-owner of The Kwak Brothers, they told him that the best way to grow your wealth is to pay off your mortgage faster. In this episode, he joins Julie Houston to break down why and how it can help you save more money for your family and more! He discusses the method, providing a compelling explanation of why it is important in this current market. Sam also talks about how banking works, the right mindset you need to truly start saving and, even more, let your money work for you. Join in on this great conversation and find out the vehicle that will help you gain more control over your finances!
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How To Save More Money For Your Family – Mortgage Talk With Sam Kwak
We have a guest that I am very excited to have on the show. We’ve done a little bit through other relationships and affiliations in the past but I know since then, years ago, this guest has grown and brought an incredible amount of value to people. I am excited to announce and welcome you, Sam Quack. Welcome to the show. It’s such an honor to have you here.
Thank you, Julie, for having me.
Before we even dive in, why don’t you tell our audience a little bit about yourself, what you do, what you are focused on and how you even started this business that you do?
To encapsulate everything that I do, I am a student obsessed with figuring out how to make money work. Obviously, there are thousands of ways to make money these days like crypto stocks. You name it. Mostly concentrated in the field of real estate. There’s a quote, a stat out there that says, “Ninety percent of all millionaires became so through real estate.” It made it seem more make sense in terms of, “I want to make a lot of money quickly and retain it, grow it. Real estate is the bread and butter, if you will.” Overall, I’m obsessed with the idea of, “How do you make money. How do you play the game of making money?” That has been where my focus is. I can share a little bit about my origin story and how I got here. That’s what I do in terms of where my own energy and focus are going towards now.
I got to ask. Do you also invest in properties as well?
We have a whole division for investing. I can’t get into the whole details but we primarily invest in multi-family. We are looking at a deal. We are also looking at a self-storage unit complex here in my area. We are very active. We actively practice what we teach when it comes to real estate.
I know one of the key things that I know that is a core focus for you and many people that you have worked with is paying off their mortgages faster. Why is that one of the core focuses that I’ve seen throughout the years of working with you that many people have had success with working with you from that?
I will get to that part for sure as far as paying off your mortgage faster and why you should even want to pay off your mortgage faster. I know I get a lot of questions, and critics ask me those questions all the time but that opportunity to help people pay off their mortgages came to me. I didn’t wake up one day and say, “I want to start helping people pay off the mortgage.”Pay off your mortgage faster. Click To Tweet
It was a gift that I discovered, and it was an opportunity that met the way that I presented but giving the origin story allowed me to get to that part. As you can tell or maybe you know, I wasn’t born here in the United States. I was born in South Korea. I immigrated here when I was seven years old. It wasn’t my decision. It was my parents’ decision.
As a seven-year-old, you don’t make decisions. My parents decided to move here to the Chicago, Illinois area and they moved here because they are members of the clergy. They are church pastors. They decided they wanted to revamp a church for the Korean immigrants here in Chicago land. There are many different stories. I will keep it short and simple.
Along the way and the journey of being an immigrant, it always intrigued me the level of wealth that this country has. Even the people who are considered poor here are in the top 1% of the world. If you make more than $40,000 a year, you are considered the top 1% in the entire world. You will be shocked. I was in Korea and met people, and $5 is a lot of money for them for the day. They can live off of $5 a day. It’s crazy.
As an immigrant, I always grew up with that mentality of what makes this wealth thing work. How are people making money? Sharing a little bit more journey stories along the way, my family came here with a visa, and we thought we had some of our immigration stuff figured out but unbeknownst, we ended up becoming illegals. Our visa, which was a five-year visa from 1999 to 2004, apparently expired on us.
We were working with our attorney to get the paperwork ready so that we can be here for hopefully forever. Lo and behold, our visa got expired, and we got this letter from the government saying we were due for deportation. Imagine you build your life for five years and get this letter saying, “Game over for you. You are out of this country.” It’s a scary letter.
I was in middle school back then, so I could only understand a fraction of what was going on. My parents obviously were super shocked, alarmed, scared, frustrated, and the whole thing. I only got a small glimpse of that. In 2009 or 2010, I remember having to take days off from school so I could go to court and meet with attorneys. I was not actively involved in any of it but going to court, seeing the judge there, and he can decide whether you can stay here or not. It’s insane. Long story short, we ended up finding a good attorney, and he helped us with their case. It wasn’t our fault.
We got taken advantage of because we paid a bunch of lower fees, and they didn’t do anything for us. It was truly a divine intervention. I remember the judge said, “This is a special case, and we are going to have to look this over differently.” Long story short, we got to stick around. The judge gave us a path toward citizenship. I got my citizenship first because I ended up enlisting in the military. By the way, they were quick about giving you citizenship if you joined the Army. I got enlisted, and then three days later, they are like, “Here’s your paperwork for citizenship. Get it going.” A month later, I was naturalized. It was that quick.
I had a lot of up and down and roller coasters. I almost got kicked out of this country to join the military and then come back from the military. I do what everyone is “supposed” to do. I ended up going to college and going to school. It wasn’t until when I was nineteen that I discovered the word entrepreneurship. No one in my life has told me that there’s this path you can take to becoming your own boss and starting your own thing.Entrepreneurship is this path you can take to become your own boss and start your own thing. Click To Tweet
Up to that point, all I knew was, “I got to get a job, go to college. Get as much qualification as possible so that hopefully, one day, someone is going to pay me to do work and all that.” That was the world I lived in. When you are an immigrant, you hang out with other immigrants. That’s all you know. Get a job, and hopefully, someone will hire you and gets things going. It wasn’t until at nineteen that I picked up this book called Rich Dad Poor Dad. I read it.
I read that book in nineteen too.
I read it super early, and I’m like, “This is amazing.” None of my teachers, my parents or none of the individuals I looked up to told me about this. I was half angry and half frustrated at the world but, at the same time, half excited knowing that, like, “I’m still nineteen, so I got a long way to go. There’s still hope for me.” I remember when I was 19 or 20 years old, that’s when I decided I wanted to embark on this journey where I wanted to master this game, the science of achievement, as Tony Robbins would say.
I want to figure this out because part of me was also trying to figure out this game before I got married, had kids, and all that. I got excited about it. I was 22 or 20 years old. That’s when we embarked on the journey to get into real estate. I always knew I had this entrepreneurial DNA in me. I was always a go-getter. I was a high-level autonomy to go and get things done.
My brother was 20, and I was 22. That’s when we officially embarked on the journey of wanting to get into real estate. It wasn’t until 2017, when I was 25, I believe that we saw our first real estate deal. Between when we decided we wanted to get into real estate and three years later when we got our first real estate deal. I can, of course, break down what factors played into that.
I remember 2017 was our breakout year. We went from having 0 to over 75 rental doors in 1 year through raising money and seller financing and all that. Along the way, I discovered this strategy, which at first was very confusing to understand but I had a huge light bulb moment. That was a strategy of paying off your mortgage in as early as 5 to 7 years and saving up to 70% on the interest.
When I heard about this, I was super confused. I was like, “What do you do? You take a line of credit like a HELOC. Tell me. How does this work?” It wasn’t until I put the math on the spreadsheet. By the way, I’m not a good spreadsheet guy but I’ve wanted to work to figure this out. When I finally figured it out, I took it upon myself. I went on YouTube, and I made a little YouTube video. I didn’t have any plans or intentionality behind it. I didn’t expect it to go viral or anything. I recorded a video because I love sharing. My heart’s always when I find something cool on you. I need to share it. I want to have people discover this because it’s cool.
I put it on YouTube and thought nothing of it. A couple of days go by. I remember getting these email notifications from YouTube saying, “You have a new comment.” I’m like, “What’s going on?” I checked my YouTube account, and I had 200,000 views on this video and I’m like, “What is going on here?” That 200,000 views became 400,000, 600,000. A year later, I had a million views on that video. What ended up happening was people were emailing me, calling me, saying, “Sam, I know you explained how this thing works of paying off your mortgage faster. I have more questions. Can you teach me? Can you show me how it works?”
Honestly, again, I didn’t wake up one day thinking to myself, “I’m going to go teach a bunch of people how to pay off their mortgage faster, save money, and all that.” I feel the way that the one comment that was fairly consistent and I was getting over and over again is that people would say, “I’ve seen other videos like this but yours stuck out the most because you articulated this so well for me to understand it.”
That’s what I knew. I clearly have this gift of explaining things easier to understand. Looking back, it was again another divine intervention. It was a calling. I started getting a little more serious about it, teaching more about it and sharing more. It became its own program and product, and service. Now we are actively helping 55 new homeowners every month and paying off their mortgages faster, saving money and all that. The grand theme that I live into now is anything that could uplift American homeowners and their finances and truly liberate them, giving them hope and financial redemption. I’m all for it. Sign me up for that. That’s the mission and the purpose I live for now. That’s the journey that I’m on.
Also, to help more people along the way. This is helping people in a financial situation during a recession that need financial assistance more than ever or means and ways to save as much as possible in the long run as well. When you first created this video and figured out this amazing program that works and is understandable, how old were you?
That was in 2016, so I was 24.
Are HELOCs dangerous if someone wants to do that method?
Yes. Let me get to what that method is because people are like, “Sam, what is this method?” Before I get to that, I know I promise different things here and there but it’s all a coy about getting you to stick around. Let’s go back to that original question of, “Why should you want to pay off your mortgage faster?” You mentioned HELOCs, and I will help you connect the dots, and you will have this epiphany.
The reason why I encourage people to pay off their mortgage faster, especially in the context of their own home residence, and this is so true now than ever because back in the ‘60s and ‘70s, you look back into the history, this whole idea of a 30-year amortization loan is fairly new. Prior to that, everyone was buying their homes using a 5 or 10-year amortization at max. People were, “Fifteen years? That’s a long time.” That’s how it was perceived back then. If you look at the social and economical changes that we are experiencing, you absolutely need to pay off your mortgage faster.
If you take a look at any 30-year amortized loan, especially now with the rates the way it is, the first 10 to 15 years on a 30-year mortgage, your payments are mostly interest payments. If you don’t believe me, you can fact-check me. This is for the audience. Look at any amortization chart. You will notice that if you have a $2,000 monthly payment, $1,600 of that is interest, which is nuts. That’s happening the first 10 to 15 years on your mortgage. Now with the 7% mortgage, it’s going to be even longer.
With the higher interest rates, I can’t even imagine.
In fact, the math is that if you have a $100,000 mortgage on a 5% interest, 30-year amortization, you are likely going to pay about $98,000 of interest. What you will end up paying back is going to be close to $198,000 in total. You bought a bank and another house along the way.
It’s a lot. Most people don’t even sit down and calculate that out. They are like, “I got the payment, and I can afford the payment.” They got the house. They are like, “I’m good.” They don’t realize what they have been paying for over 30 years.
It’s a good old financing trick. Car sales guys do it. They get you to pay attention to the payment instead of what you are paying for the car price. Here’s the problem with that 30-year setup. According to the US Census Bureau, this is the 2010s number. The average adult here in the United States moves 11.7 times in their lifetime. If you extrapolate that data to, let’s say, you live to be about 80 years old, and we spread that around equally, you are likely to move every 6 to 8 years.
There might be myriad reasons why you move. You might move because you are downsizing or need a bigger house because you have more kids, family, and job opportunities. Maybe you are in California, and you are like, “Screw this. I’m not dealing with this anymore,” and you decide to move out of California. There are several reasons. What ends up happening? If you marry the two facts together, with the way that 30-year amortization is set up and the way that socioeconomic changes have happened, moving forward, people are going to be more mobile. Meaning we are going to move more frequently than ever before. We are going to be nomads.
Put it this way. You get a 30-year mortgage and 6 to 8 years into it. You have been making interest payments, not a whole lot of principal reduction, which is the actual balance of the loan. You choose to move and go get another house, buy a brand new home, get a brand new mortgage, and guess what happened? You’ve gone back to point zero, where you are going to have to spend the next 10 or 15 years again making more interest payments.
The trap is you are in this perpetual cycle of never-ending interest payments that still have 25 years left to go. They have very little equity, less than 20%, 30% equity, because they have been in that trap for the last 30 years. This is why I know a lot of financial experts to say, “Mortgage interest rates are historically low, why would you ever pay it off? Go invest it somewhere else, put it in crypto, ETF or bonds,” or whatever the other argument is, “Let inflation take care of it.”
That’s true if you were issuing how to bond. With humans, how much people, the social and economic changes, being more mobile doesn’t help us out. It’s a counter-financial thing. If you think about it that way, there’s definitely a motivation as to why you absolutely need to pay off your mortgage despite what the other so-called financial experts are saying. That’s the issue and the problem that I need to get. I’m trying to bring awareness as much as possible to the general public.
That is incredible feedback, very well explained, and self-explanatory in that respect. Typically, when you focus on this and working with people to reduce the amount of interest they are paying with the amortized setup, are there any special key factors or 1 or 2 things you could share that would be critical to that piece of the process for our readers?
Let me frame your question a little bit differently. With amortization, it’s built for one purpose and one direction. Fun little joke. It’s not funny if you look into it. The word mort and gage, think about where that comes from. It’s all root words from old English and French words. Mort, we use that word for mortality. It means death. Gage means promise or pledge. This is why we use the words engage.
If you put the words together, it’s literally a death pledge. It’s a death promise. Although, a more accurate definition of this is that you are slowly killing the balance of the mortgage. Hence why, it’s called the mortgage fund. The true definition or the urban dictionary definition, is that you have a mortgage until you die. That’s the little fun way I would put it.
Nobody wants it. It’s real freedom not having those things.
Here’s the solution, and this is how I want people to start thinking about banking in general. Everything the way that banking products or banking works are designed to create profit for the banks. What bank wants less profit? I like to say this too. What government wants to have its citizens pay less taxes? Literally, the whole entire banking and government system is designed so that it could get more out of the citizens and its customers, not the other way around.
Readers, what I want you to know is that it’s your responsibility. It’s not Joe Biden’s fault. It’s not the government’s fault. It’s not JP Morgan’s fault. It is your responsibility, your sole choice, to whether you want to pursue a path where you control the money, your cashflow or you pretty much leave it to the eight ball of chance and hopefully, it works out, maybe.
Trust me, guys, you don’t want to be one of my clients. It’s a weird thing to say but a lot of my clients, unfortunately, they’ve come through this realization like, “I’m 55, 50 years old, and I’m running out of time. My 401(k) is like 101(k). It’s not looking good.” I want you not to be my clients. Listen to me. Listen well. Go figure this out because it’s not going to get any better.
Here’s what you need to think about. One of the things that I want you to start changing in your mindset is to stop putting your money in a savings account. I know there’s a radio host down in Tennessee that’s going to say otherwise but think about it this way. What is your savings account paying you? It’s a joke. You are not getting anything out of it. The real beneficiary of that plan is the banks. They take your deposit and go to the Fed and get more money for it and lend it back out.
Instead of putting your money in a savings account, why not let the money do the work for you? Meaning, what if there was a vehicle where you could take any access cash that you have, money that is considered rainy day and pay down your mortgage faster, at least reduce the balance in the mortgage? Therefore, you end up paying less interest, whether it be 5%, 6% or 7%. At the same time, you have the ability to access your equity whenever you want to, whether it’s a case of an emergency, you need it for an investment opportunity or whatever you have.
That vehicle does exist. Finally, full circle, we get to utilize something called a Home Equity Line of Credit, a HELOC. That’s one of the tools that we use to be able to accomplish what we want to do. I know there are a lot of questions, and maybe you have some pushbacks like, “Sam, aren’t HELOCs dangerous because they are at higher rates, and they could be callable or variable rates?” Yeah, I’ve heard it all.
One of the controversial things people and I like to say, and I’m blaspheming when I say this but in the context of our strategy, interest rates do not matter a lot. The reason being is that if you focus on lowering the average daily balance on the HELOC, interest goes down on its own. Time and balance are the enemies, not the rate. The banks want you to play the game of rates. That’s their lever. Don’t play the game by the bank’s rules. Start creating your own rules. You will gain more control over your finances. You do not want to let go of that control, for sure.
This has all been incredible. For our readers that are interested in learning more about what Sam and I have been discussing, you can get more information at UndergroundWealthSecrets.net/saveonyourmortgage. There’s going to be all the details and information there, so don’t forget to check out that link. Before we close out, Sam, if you had any advice or suggestions that you would share in closing for any business owner or entrepreneur, what would that be?
I will frame it this way. This applies to about any entrepreneur or business owner, homeowners that want to be business owners and entrepreneurs because this fits in all those spectrums. Out of the decade that I have been running businesses, buying and selling, and doing all kinds of different investments, no matter how much planning you do, there’s some degree where you control growing yourself. There’s a level where opportunities will come to you more than when you seek them.
It’s this weird thing. I have a faith background and believe in God, and I practice my faith quite a bit but it’s something I absolutely believe in. There’s a level of preparation, planning, looking ahead, casting visions, and all that but at the same time, what’s more, powerful are discovered opportunities. These are opportunities that come to you out of divine intervention.Discovered opportunities are more powerful. Click To Tweet
Could anybody use this?
Yeah. When I was eighteen, I never fathomed any of this would happen. I never fathomed that I would have a YouTube channel. I never fathomed that I have a business with the size that we have. All that came to me. There was a part that I did play, and that is I had good habits. I was reading. I was learning, growing, actively, networking, meeting with people and instilling good habits and practicing good stewarding, I always say, with my resources, with my health and the relationships that I had. There’s a level of responsibility that I did play in that.
When it comes to opportunities, I discovered that opportunities are more powerful. You will discover opportunities. I don’t think you would have to work. If you are an entrepreneur or business owner that’s getting started, don’t fret about like, “When is the next opportunity going to come?” It will show up. You will get a tap on your shoulder. The part that you do need to absolutely be best at is owning up to your growth and taking a knee or sacrificing the things like instant gratification for the hope of long-term gratification. That’s all I would like to share. There’s wisdom in that, for sure.
Sam, I want to thank you so much for being on our show. For our readers, if you are interested in seeing or reviewing any of the information that Sam and I reviewed, you can do that at UndergroundWealthSecrets.net/saveonyourmortgage. Thank you so much again, Sam. It was such a pleasure having you on.
Thank you for having me. I had a lot of fun, and I’m looking forward to helping more individuals wherever I could.
Take care, Julie.
About Sam Kwak
Since 2019, The Kwak Brothers have built successful real estate investment companies, educational courses, coaching programs, and software to help emerging real estate professionals grow their own real estate investing businesses. Today, the Kwak Brothers are a mission to help every family achieve financial peace of mind.