Dear Dave,

Do you have a guideline ratio for mortgage debt to income?†

ó Levon

Dear Levon,

When it comes to buying a home, I always tell people to get a 15-year, fixed rate mortgage, with monthly payments that are no more than 25 percent of their take home pay. This type of mortgage is the only debt I donít beat up people for having. Still, I urge folks to pay off these loans in less than 15 years.

The average person following my plan pays off this type of loan in about seven or eight years. Thatís a pretty big deal in terms of your financial security. And paying extra on your mortgage doesnít have to be a strain. You can start by simply rounding up your payments. If the payment is $770, make it $800 instead, and apply the extra to the principal balance. If you want to get more intense, you could make an extra house payment each quarter, or go the route of bi-weekly payments. To do this, simply make half a monthly payment every two weeks. By the end of the year youíll have made 13 payments instead of 12. This will knock years off the length of your loan.††

Remember, your income is your largest wealth building tool. Itís so much easier to save, invest, and give when all your money isnít flying out the door to make payments!

óDave

No commodities

Dear Dave,

Do you recommend having gold and silver as part of your investment portfolio?

ó Don

Dear Don,

No, I do not. I also donít recommend oil or corn futures. All of these are examples of commodities, and the commodities market is extremely volatile. In addition to the market being wildly volatile, the prices on commodities isnít based on actual production. Itís based largely on a supply and demand curve. If thereís a shortage on one of them, the price shoots up.

For example, when youíre talking about gold and silver, thereís more demand than supply when the economy is bad. In this kind of scenario, people are fearful and lots of them run to buy gold. This drives up the price to unrealistically high levels.†††††

Again, the price on a commodity isnít based on anything other than fear or greed, and a supply and demand curve. The prices arenít based on an actual production of income, like it is with stocks or real estate. I donít buy commodities at all, especially gold and silver. I donít recommend you buy them, either.

óDave

ó Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 13 million listeners each week on 585 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.