Status & Progress – January 2021

‘Mortgage Free’  – and who shot JR?

In the June 2020 post I declared that I had set the simple and important goal of saving enough money in non-pension accounts to pay off my mortgage. I am happy to report that this goal has been met.

What that means is that if I chose to, I could send some money to the financial institution that holds my mortgage and I wouldn’t owe them anything at all. I would be mortgage free.

This post is going to be a reflection on the progress made since opening the blog.  This is an important thing to do, because humans are not very good at paying attention to what we have done; we are much better at remembering what we haven’t done.

The journey to financial freedom is a long term goal for most of us, and while goals motivate, the problem with the longer term nature of a financial freedom goal is that it’s an ‘open loop’ – ie an unfinished task.  And psychology tells us that open loops and unfinished tasks pull on our mental resources more than finished ones do.  

The  ‘Zeigarnik effect’ tells us that people remember unfinished or interrupted tasks more effectively than they remember completed tasks.  For example, waiters are really good at remembering what table 3 are waiting for, and terrible at remembering what table 5 have just paid for.  Table 3’s order is unfinished, and therefore an open loop while the waiter’s work with table 5 is done, the loop closed and the information more readily forgotten.  This is good for the waiter, but it’s important in other walks of life too:

Who shot JR?

This – for a certain generation is a defining and memorable TV reference. The question of who shot JR? (in 80s hit show Dallas) pre-occupied a TV viewing generation; it’s a simple use of the Zeigarnik effect.  The writers opened a loop by leaving us with an unanswered question and it became a cultural reference that lasted decades. Every week there are versions of open loops on TV.  Who’ll be voted off strictly?  How will today’s Eastenders story end?  

Open loops grab and pull on our attention.

In work and productivity, open loops are stressful.  An unfinished task is a source of stress because of the mental resources it pulls upon.  We are invited by Dave Allen in his brilliant book to close open loops as much as we can.  The book is excellent – link in Amazon here (and I will not be paid any fee for your click!)

The pursuit of financial freedom is an ‘open loop’.

The social science of open loops and the Zeigarnik effect tells is that it is good practice to occasionally remind ourselves of how far we have come.  How far we have to go tends to dominate, and can be a source of stress.  

So if you don’t mind – that is what I shall do now.  If you are like me (human) and tend to reflect on how far you have to go, then this is a highly recommended task.


Holy Moly – the blue line got big!


The first graph was the first progress update from November 2017 and the second graph is today’s status.

The red line (the gap between net worth and the ‘relax line’) has completely disappeared.  This means a couple of things

  1. According to a principle set at the end of 2017 – I can relax now.
  2. Net worth has grown significantly in just over 3 years (and I’m over half way there).

Let’s examine each of those in turn:

‘I can relax now’

I must report that I am more chilled about financial matters than I used to be. The raw fact is that I have some money.  I am rich.  Not as rich as some people, but by any reasonable standard, yes – I am rich.  The kind of problem or surprise that comes with a price tag is simply less of a cause for stress than it used to be.  

I used to be (am) envious of the richer people I know for whom life offers less financial jeopardy.  I am grateful that my life own life and that of my family brings less financial jeopardy than it did.  

I am grateful.  This small review has truly brought that home to me.

‘Net worth has grown significantly in just over 3 years.’

The blue line has grown from around 16% of target net worth to over 50% in just over 3 years.  This is incredible.  It’s a great example of why we must reflect on how far we have come as well as how far we have to go.   I track progress often (too often), and yet I always focus on how far I have to go, which brings focus but is at times hard because the number ‘to go’ is still dauntingly high.

To know that I have made this much progress in 3 years brings confidence and pride.  It tells me that I’m on a good path and fighting a good fight.  It puts a spring on my step to continuing working outwards the goal, because it’s a string hint that the goal is attainable.  

So what’s next?

I have to set a new mini-goal.  The previous post, and basic psychology tell us that simple, stretching-but-attainable goals along the way to a bigger goal are motivating and interesting.  

I have been thinking about this and then next one will be related to one of pension contributions for the next financial year, or building the out-of-pension treasure chest.  It actually doesn’t matter – the important thing is to save.

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