I have set a very simple goal.
Like many, I’ve been locked in at home for over 100 days. Amongst other activities, I’ve been thinking about finances. I have streamlined and simplified a few things but most importantly – solidified a plan.
I am saving the money to pay off my mortgage
It’s not just maths: Mortgage freedom = personal freedom:
As discussed with a good mate of mine last week; the downside of being a relatively successful micro-business is that there’s very little time (and attention resource) available to think about ways to scale and do attractive things like build a passive income from it. I’m driving my golden taxi around, picking up some decent fares and generally having a nice enough time, saving money, and enjoying the autonomy and flexibility associated with being my own boss. HOWEVER – the human urge for one or more of improvement, mastery, achievement, meaning, and challenge is lurking.
What’s that got to do with a mortgage?
I’m interested to note and report this urge, and having no mortgage will smooth the path for me to a) be comfortable working less today to invest the time, and b) having no debt and small overheads relieves me of a reason not to take a few (calculated) risks.
So, what’s the story?
I’m edging towards the financial milestone of having the money to pay off my mortgage. I know the maths and rationale of the ‘mortgage payoff vs invest’ argument and I’m not going to get into that. I’m not even going near the territory; it’s one thing to decide whether or not to use the capital to invest or to pay off the mortgage, and another to quite simply not have the money to do either. I’ve been accruing money outside of a pension wrapper and the figure is creeping towards the same figure as the mortgage outstanding. This is a lovely feeling and I don’t care whether it’s rational or not, it’s giving a growing sense of freedom, relief, confidence and assurance. In a small number of months I am very likely to have the money to be completely mortgage debt (and any other type of debt) free. I probably won’t chuck it all at the mortgage, but I definitely won’t be spending it on ‘lifestyle’.
The difference here is that all surplus is being put into this bucket, and there’ll be no more pension or other investment until the mortgage outstanding figure is matched by the mortgage bucket. I had been pursuing a ‘bit of both’ plan, which was all good but the absolute clarity of counting down towards a zero on the sum of ‘mortgage bucket minus mortgage’ is as clear as it gets and motivating as a result.
I shall pop a cork on the day that mortgage minus mortgage bucket = zero, and then get to work on the next target.
I think there’s a lesson here (for me) – which is to focus on granular goals. Saving money is a great goal of course, but like the younger me when I finally sorted out my graduate finance mess, focusing on one factor at a time brings a sense of clarity, direction and therefore urgency.
I am a terrible blogger!
Now I know why there are fewer popular / successful FI-seeking bloggers than there are FI-achieved bloggers. As usual, my time has been consumed by earning money (alongside being a family man and taking the occasional rest).
I do enjoy writing these notes and will not give up the blog.
Who knows, once the mortgage minus mortgage bucket is at zero maybe I’ll be PROLIFIC!