You know, last year, a study found that 73% of American homeowners said they regret buying their homes. And for Gen Z and millennials, that's even higher. But then why does everyone think that homeownership is the ultimate sign of success? Isn't owning the land you live on supposed to be the smartest financial move you could make? Well, the truth is… not always.
In fact, for most people, the entire system is designed to trap them in an endless cycle of debt. And your bank really doesn't want you to know about this because they make billions from it. Today we're exposing the biggest scam in personal finance — the mortgage system.
We'll break down why buying a home isn't always a smart move, how banks profit off of your debt, and of course, how you can beat the system. Welcome to Cash Wisdom, the place where future billionaires come to get inspired.
The Illusion of the American Dream
Alright, so let me just introduce you to a young couple who think they're about to make the smartest financial decision of their lives.
They've been saving up for years, cutting back on nice meals, skipping vacations, and taking extra shifts just to save up. They've done everything right, and today is the day they finally make the down payment on their first home. For their whole lives, they've been told that this is the best decision they'll ever make — that this home will be the foundation for all of their dreams.
So they walk into the bank, nervous and excited, and that's when they meet their banker. At first, he's all smiles. He shakes their hands, congratulates them and reassures them that this is a big step forward.
Before they know it, they'll own a little piece of the world and call it home. So he slides them a contract across the table. It's a 30-year mortgage.
The Trap Begins
When they start to read it, the interest rate seems… fine. Their monthly payments seem manageable and who knows, the home is in a half-decent neighborhood — it might even be worth a small fortune one day. Either way, they're just focused on one thing right now: owning a home.
So the banker tells them, you guys don't have to worry about a thing, just make your payments and this house will be the smartest investment of your lives. And besides, just think about all the memories you'll make.
So they sign and just like that, they're homeowners. The banker shakes their hands again and walks them to the door with a confident smile. Once they're through, he calls in another couple and does the exact same thing.
A Decade Later…
Fast forward 10 years and that banker seems to have run out of smiles.
All he cares about now is that their payments keep coming in. And manageable as they once seemed, life has a funny way of complicating things.
First of all, raising kids isn't cheap and they sure do like getting into trouble.
Last year, Sally gave the walls a new coat of paint. Bobby used the windows for baseball practice. Next time, they'll probably find a way to tear the roof down.
Meanwhile, property taxes have only gotten steeper and everything from groceries to gas and healthcare has gotten way more expensive.
There've been a few raises along the way, sure, but the fact remains — their expenses have grown much more than their income.
Now our couple here needs a change of pace, stat, and that's when the perfect storm hits. A new kid on the way and an exciting job offer in a city halfway across the country.
It's nerve-wracking, but hey, they want to go for it. So they put the house up on the market, expecting a nice payout and start planning for their brand new lives.
The Realization Hits Hard
There's just one problem though — when that sale is done and they crunch the numbers…
The numbers crunch back.
Between repairs, agent commissions, inspections, and the fact that technically the bank still owns pretty much the entire property, they walk away with nothing. Not a dime.
But the nightmare has just begun.
You see, the couple can't afford to buy another house and rent prices in their new city are insane.
So they're forced to move into a tiny apartment with two kids and a newborn, sharing one bathroom because it's all they can afford. The kids used to have a backyard to play in. Now they're crammed together in a concrete box, hearing their parents stressed, always arguing and just trying to figure out how to make things work.
And meanwhile, the banker in their hometown? Well, he got his commissions, he got his interest, he's doing just fine and he's still sitting behind his desk, still shaking hands with young couples, still selling them the exact same dream.
The Mortgage System Exposed
Unfortunately, this isn't just their story — this is what home ownership looks like for millions of people. You see, owning a home is touted as one of those pillars of financial security.
I mean, it's the American dream, right?
But more than 70% of all Americans say they actually regret buying their home. For millennials and Gen Z, that's more like 90%.
All of these people feel like the system is failing them — and it is.
Because the hard truth is that for the average person, mortgages are designed from the ground up to trap them in an endless cycle of debt.
How the Mortgage Really Works
Once you see how the system really works, you can't unsee it. And most people never realize just how broken the system is until it's too late.
So how does this happen? How do so many people buy homes, make their payments, and still walk away with nothing?
Well, to answer that, we have to understand how mortgages actually work and why they're even a thing in the first place.
A Brief History of the Mortgage
Once upon a time, if you wanted to buy a home, you had to make one single massive payment for it. No loans, no financing, nothing.
But let’s be honest — most people don’t have that kind of cash laying around, so banks came up with a solution: The Mortgage.
Instead of having to pay hundreds of thousands of dollars all at once, a mortgage lets you spread out that cost over decades, making homeownership seem more accessible and affordable.
The Problem: Amortization
You see, most people assume that when they get a mortgage, they're just borrowing money to buy a house and paying it back with a little interest. But that’s not really how it works.
A mortgage is not a normal loan. It’s a sophisticated financial contract designed to benefit the bank, not you.
Take this simple example:
Imagine you buy a house for $100,000 with a 10% interest rate on a 30-year mortgage.
You might think, "10%? That means I’ll pay back $110,000, right?"
Nope.
30 years later, you’ll have paid over $300,000 — 3x the original price of the home.
How Banks Win Every Time
Here’s how it happens: Amortization.
The mortgage payment you make every month is two payments rolled into one:
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Principal – reduces what you owe and increases your equity.
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Interest – bank’s profit, does not reduce your debt.
And at the start, almost all of your payment goes to interest.
Let’s say you pay $1,000/month. In year one, only $100 might go to your house; $900 goes to the bank. By the end of the first year, you’ve paid $10,000 in interest — and you still owe $98,800 on the house.
Now apply 10% interest on that new balance. See the trap?
Most People Never Escape the Cycle
Mortgages last 30 years.
But the average person moves in just over 13 years.
And by that time? You’ve mostly just paid interest. You’ve barely built equity. So when you sell, the bank gets almost everything.
Then what do most people do? Take out a new mortgage on a new home — and the cycle begins again.
That’s what banks want.
Selling a Home: Hidden Costs
Even selling your home can become a financial disaster.
Say you bought for $100,000. After 13 years and 150 payments, you still owe $86,000.
You sell it for the same price. Great, right?
Not really. After realtor fees, repairs, closing costs, and taxes, you’re left with… maybe nothing. If the market dips and you only get $85,000? You’re in debt.
And remember, most houses don’t cost $100,000 anymore — the risks are way higher.
So Is Homeownership a Scam?
We don’t want you to leave this blog thinking homeownership is a scam — because that would be an exaggeration.
Mortgages aren’t evil, they’re just misunderstood. And if you know how to use them right, they can be an amazing tool.
5 Simple Rules to Beat the Mortgage Trap
Here are five things to keep in mind if you’re planning to buy a home:
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Avoid 30-Year Mortgages
If possible, go for 10- or 15-year terms. You’ll save thousands in interest. -
Never Buy With Zero Down
Start with at least a 20% down payment to avoid paying just interest for years. -
Budget for Total Living Costs
Don’t just look at your mortgage payment — include taxes, insurance, maintenance, repairs. -
Don’t Bet on Appreciation
Buy a home because it fits your life, not because you think it’ll make you rich. -
Stay Put for at Least 10-15 Years
If you plan to move often, renting might be a better option.
The Financial Education You Never Got
The reason people make devastating mortgage mistakes is because they were never taught about money.
School didn’t teach you how to invest, negotiate, or build wealth — and that’s why we created the Cash Wisdom App.
It’s your personalized roadmap to financial freedom.
Take a quiz. Get your financial growth path. Follow step-by-step milestones, gain money insights, and access real-world education.
Join thousands already mastering their finances. Scan the QR code and get 25% off the annual membership.
Whatever your goals are, we want to help you get there. But it’s up to you to take the first step.
Alright Cash Wisdom, that’s all from us today. We’ll see you back here next time.
Until then, take care, my friend.
