The Affordability Crisis

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Episode Transcript

Speaker 1 (00:00):
Boston's Bulldozer never sleeps. The Kooner Report weekend edition on
the Voice of Boston WRKO.

Speaker 2 (00:07):
Joining us now as she always does at this time,
the co founder, CEO president of Kelly Financial Services, and yes,
that is her charming name, Kelly. Kelly Kelly, how.

Speaker 3 (00:26):
Are you good morning, Jeff? I am good. For so
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(00:47):
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(01:08):
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Speaker 4 (01:23):
For you.

Speaker 3 (01:23):
To request your free copy, give us a caller email
Kelly at Kellyfinancial dot org. Jeff I'll continue this conversation
with our Kelly Advisors tomorrow morning at nine am on
Safe Money Strategies Radio. Do tune in or visit our
website for this week's radio rewind Jeff, have a wonderful weekend.

(01:45):
My best to Grace and the kiddos.

Speaker 2 (01:47):
Thank you so much, Kelly, all the best to you
and everyone at Kelly Financial. Call now get your free
copy of her guide eight eight eight eight hundred eighteen
eighty one eight eight eight eight hundred at eighteen eighty one,
or if you prefer, you can email Kelly herself directly
Kelly at Kelly Financial dot org. Kelly at Kelly Financial

(02:10):
dot org. All right, let's go right back to Vincent
Long Island. He likes the IDEA big supporter of a
fifty year mortgage. He thinks I should listen to my
wife more because Grace agrees with it as well. And
basically his point is, let the consumer or the buyer decide.
If they want to pay the mortgage off sooner they can.

(02:34):
If they want to sell the home if it builds
up equity, they can. What's the big deal, Vince that
I sum up your position accurately pretty much?

Speaker 4 (02:45):
I wanted to say that debt is a great wealth
builder if you know how to use it properly. Can
you imagine saving a million dollars to buy a house?
How long will it take you, not to mention the
inflation costs that that million dollar house you're chasing, when
you save the million dollars, it probably cost a million
and a half. So it's never a bad idea to own.
What are you going to do? Rent? Rent is completely

(03:07):
wasted money. At least when you own the interest email
you're paying interest. It's tax deductible, so you get a
tax benefits. So you probably get at least a twenty
five percent return on that deduction that you spending interest on.
And you have skin in the game, so you're growing
with the economy. Your wealth is accumulating as you grow
an income. No one's preventing you, as I said, from

(03:28):
making a fifty year mortgage into a twenty year mortgage.
You can pay as much as you want. There's no
prepayment penalties. The only thing I wanted to say is
that we can't make the mistake that George Bush did
in two thousand and one when he wanted the ownership society,
and he basically threw houses at everybody, including your llegal aliens,
with zero percent down. They had a one percent loan
that didn't adjust for three or four years, and at

(03:50):
the end of three or four years they got this
explosive payment that went from one thousand dollars to four
thousand and five thousand dollars with zero percent down on
the house. People walked away from those houses, and that
annoyed the hell out of me because it brought down
the market value of houses. So people as you, who
want no debt, had a house of say five hundred
thousand dollars, and their house dropped to three hundred thousand.

(04:12):
They lost two hundred thousand dollars. These people with zero
money and those same five hundred thousand dollars house walked
away with it without even paying a dollar. And normally
whatever the bank loses is technically supposed to be income
to you. They even waived that the Congress wave that
that so called loss to the bank was not income
to you. So these people walked away completely scott free.

(04:34):
There were people living in houses they didn't pay the taxes,
They didn't get fore clothes on for two or three years,
and the tax player basically ate all that expense, and
the person who played by the rules and had their
twenty twenty five percent down, they took the soaking. So
what I'm opposed to is not letting people walk in
with zero down. I think you need at least ten
percent or more down on a house because you have

(04:56):
to have some skin in the game. You have to
lose some money if it goes down, leaving these one
or two or three percent down stainments. They're ridiculous. And
what else did I want to say, Vince?

Speaker 2 (05:07):
Before you reload. By the way, you're making some excellent points.
I have to say, you're really on fire. Vince. I
said something a little bit earlier. You may disagree. It's
fine that I think a lot of this comes down
to personal temperament. And you know, it's funny because what
you just said, maybe about two minutes ago, is what
Grace tells me all the time. And that's what I

(05:31):
meant when I said she's more comfortable with debt than
I am. Grace makes a very similar argument to what
you make, which is, look, if you really want to
have wealth, you need to have debt in order to
use as leverage to get to wealth. And she makes
your analogy. Often she says, look, how long is it
going to take for you to you know, you'll say
you want a million dollar home. How long is it

(05:52):
going to take for you to save up for that?
I mean, yeah, in theory, it's great to say, don't
live in debt. But she goes, if you really want
to advance, if you want to be upwardly mobile, you've
got to take on debt to get more equity, because
then you can take on even more debt to take
on even greater equity. And her point is, as long
as you're constantly financially rising, and your financial portfolio is growing,

(06:18):
and your wealth is growing, you know, in other words,
you know your debt ratio. Yeah, you don't want to
have too much debt, obviously nobody does, but it's equity
to debt ratio. And so her point is, I don't
want to sound like a banker here, but her point
is that you need debt to make money. So debt

(06:38):
in and of itself is not a bad thing. Now, look, Vince,
I intellectually I get I grasp it. There's no question.
I'm just telling you my personality. I hate debt. I
get a bill I got to pay it right away.
Like how do I say this? If I could pay
a car today, I would pay a car today. Like

(07:01):
I'm a fanatic when it comes to that. I'm a
worry wart. I worry about the future. I always think
something bad could potentially be around the corner. So I'm
the kind of guy. You know, I'm always a bird
in the hand, not two in the bush. Is that
also part of the difference in this that whether you

(07:22):
like a fifty year mortgage or not comes down in
a sense to your outlook on life? Or Am I wrong?

Speaker 4 (07:30):
All right? I mean, look at Donald Trump. You build
an entire wealth establishment at a debt. How could he
afford to build those buildings by not having that debt?
And of course those buildings doubled in value. The idea
is how you use it. I mean, if you go
out and spend money on vacations or Taylor's Swift tickets,
which I was reading some of these idiots are putting
Taylor Swift tickets at two thousand dollars on their credit card.

(07:52):
They can't even afford it, but they're putting under credit
card that kind of debt you don't want. But you know,
if you need a car and stuff like that, It's
all right to go for a car loan because in
accounting there's a thing called the matching principle. The car's
going to serve you many years of use, so you
should offset it against many years of revenue that it's
coming in the future. It's not a one time expense.
I got and buy a fifty thousand dollar car. Well,

(08:13):
that's my expense for the month. It's really a six
or seven year expense. You should spread it in that way.
That's how you balance a budget.

Speaker 2 (08:21):
Interesting. Interesting, Vince, If I could make you Trump's top
economic advisor for a day, he says, listen, Vince, houses
are way too expensive. Rents are way too expensive. These
Democrats are now. I mean, it's Biden's problem. Obviously he
created this, but now they're feasting. I got Mamdani in

(08:42):
New York. I've got Spanberger in Virginia. I've got Mikey
Cheryl in New Jersey. The Democrats are making this an
affordability issue, and they're pinning US Republicans as being out
of touch. I've got to get the affordability issue under control.
I need to bring the cost of housing and rent
down what would you tell them.

Speaker 4 (09:03):
Well, one of the things is, as as it has
been said, illegal aliens are basically overflowing into our system
and we can't absorb them, and that drives up the
cost of housing as well. So once you get all
those people out, you have to also free up all
these environmental regulations to allow people to build more housing
and all that stuff. And you know, all these all

(09:24):
these environmentalists are stopping you from even putting a deck
on your on your backyard. It's it's ridiculous. So it's environmental,
it's an illegal invasion. And there's no reason why we
can't build another million or two million houses a year.

Speaker 2 (09:36):
We've got twet and Vince, I guess, Vince correct me.
I don't want to put words in your mouth, but
and get rid of Vege your own Powell, right. I mean,
let's get a new feed chair, and let's get these
interest rates down, bang bang bang, and then we're rolling again. Vince,
thank you very much for that call. As always, I
appreciate it. Six one seven two six six six sixty

(10:00):
eight is the number? Mike, how much time left? Thirty
five seconds? Boy, Mike cheese. Okay, let's let me ask
all of you. Trump's people are listening. They want to
hear do you like the idea of a fifty year mortgage?
Do you not like the idea of a fifty year mortgage?

(10:22):
And should this now be made available to first time
home buyers? All of your Would you take a fifty
year mortgage? I hear Vince, I hear my wife. I'm
telling you I would never take I'm sorry, I would
never take a fifty year mortgage. Call me crazy.

Speaker 1 (10:40):
Jeff doesn't get a day off. This request came from
his wife. The Kooner Report weekend edition on the Boys
of Boston WRKO