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No more mortgage!
Old 11-14-2019, 05:12 PM   #1
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No more mortgage!

This was an unusual year for us for income due to a merger and change in control clauses (RSU's vesting, bonuses early). We managed to save enough to pay off our mortgage, but let it sit in a MM for a couple of months while we examined our options. After much analysis and then a bit of emotion, we wired $572,838.49 to our mortgage bank today and I just verified with them that it hit the account and our mortgage balance is zero. The PI payment will go into our taxable account and our 60/40 AA.

This is very surreal for us as 6 years ago we we had a net worth of zero and were spending way more than we made. Then we read The Millionaire Next Door and fixed our spending. Now we have $1M in retirement savings and a paid off house. And a good shot at retiring in 2 years @ 56.

Life is good!

Tom
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Old 11-14-2019, 05:14 PM   #2
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I am speechless that you have been able to save that amount in such a short time. You must have a very large income. Congratulations!
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Old 11-14-2019, 05:19 PM   #3
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I am speechless that you have been able to save that amount in such a short time. You must have a very large income. Congratulations!
We do have a very large income. But somehow we managed to accumulate $160k of consumer debt, a $500k mortgage and we were spending $3k more a month than we made. That was on $350k of income.

Now we make twice that (this year we made 4x that) and our expenses are $120k / year plus whatever we decide to blow that dough on (which was quite large this year).
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Old 11-14-2019, 05:21 PM   #4
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Congrats!!! Many people here will disagree, but I think being mortgage free is one of the tenants of being financially independent! And it sure feels good, too...eh?
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Old 11-14-2019, 05:28 PM   #5
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Congratulations on your change of priorities. And a paid for home is often important in order to ER.

We bought a 3900 square foot house a month ago and paid cash. Unfortunately, it's going to take me 2-3 months to get the old 5200 square foot house ready to sell because of the luxury of having 4 car garages--and too much good stuff to wade through.

ER comes down to living on far less and saving far more than normal people on a percentage basis. Living below one's means.
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Old 11-14-2019, 06:29 PM   #6
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Congrats on sobering up (financially)! And paying off the mortgage monster.

We are actually going to incur a modest mortgage in retirement. But for specific reasons. We are moving from the frying pan into the fire (that's for another post). Anyhoo, we know we are buying our last home and want to upgrade accordingly. One of our pensions is small, non-cola (uncola? ) and 100% joint survivable. Ergo, our plan is to obtain a loan that this pension will cover. The loan, and the proceeds from selling our current digs will be our means to an end. In all likely hood, we'll both assume room temps while that mortgage is still in amortization. Our equity should more that settle that "affair." If not, tuff sh!t, we're busy being dead.
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Old 11-14-2019, 07:47 PM   #7
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Congratulations! That’s really impressive!

My mortgage (a measly 29k) will be paid off in 10 months then we retire in 12 months.

You have really turned your financial life around I bet it feels awesome!
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Old 11-14-2019, 07:52 PM   #8
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Well done, Tom. It is a great feeling to be mortgage free, isn't it?
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Old 11-14-2019, 08:00 PM   #9
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Quote:
Originally Posted by corn18 View Post

This is very surreal for us as 6 years ago we we had a net worth of zero and were spending way more than we made. Then we read The Millionaire Next Door and fixed our spending. Now we have $1M in retirement savings and a paid off house. And a good shot at retiring in 2 years @ 56.

Life is good!

Tom
Quote:
Originally Posted by corn18 View Post
We do have a very large income. But somehow we managed to accumulate $160k of consumer debt, a $500k mortgage and we were spending $3k more a month than we made. That was on $350k of income.

Now we make twice that (this year we made 4x that) and our expenses are $120k / year plus whatever we decide to blow that dough on (which was quite large this year).
Congrats on paying off the house.

Now, retiring in 2 years may be more of a challenge. To support your now reduced spending of $120k, most here would say you need $3million. Can you save that in 2 years? Sounds like your income is very high, so maybe you can. But then, the $120k needs to be real, including all taxes and "blow that dough" expenses.

Not trying to be a Debbie Downer, but just a realist.
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Old 11-14-2019, 08:08 PM   #10
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Congrats Tom! (I really felt a sense of accomplishment when those mortgage payments were gone.)
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Old 11-14-2019, 08:27 PM   #11
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Congrats on paying off the house.

Now, retiring in 2 years may be more of a challenge. To support your now reduced spending of $120k, most here would say you need $3million. Can you save that in 2 years? Sounds like your income is very high, so maybe you can. But then, the $120k needs to be real, including all taxes and "blow that dough" expenses.

Not trying to be a Debbie Downer, but just a realist.
I have a $48k/year COLA military pension, $60k SS @ 70, free retiree medical until 65 and that turns into a Medicare supplement. So I really just need to survive until 70 and then most of our expenses are covered.

Firecalc 99% says I need $1.8M to retire at 56 with a $25k travel budget. We're on track for that.

Best laid plans...
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Old 11-14-2019, 08:35 PM   #12
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I have a $48k/year COLA military pension, $60k SS @ 70, free retiree medical until 65 and that turns into a Medicare supplement. So I really just need to survive until 70 and then most of our expenses are covered.

Firecalc 99% says I need $1.8M to retire at 56 with a $25k travel budget. We're on track for that.

Best laid plans...
Then, it sounds like you have a plan. Not many could/would change the lifestyle that much from such a high income. Good luck in getting there in a few years (if it takes 3-4 instead of 2 you are still way ahead)
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Old 11-14-2019, 08:43 PM   #13
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This is the chart that guides us. Would be nice to get laid off in 2021 with a package.

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Old 11-14-2019, 11:57 PM   #14
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Quote:
Originally Posted by corn18 View Post
This was an unusual year for us for income due to a merger and change in control clauses (RSU's vesting, bonuses early). We managed to save enough to pay off our mortgage, but let it sit in a MM for a couple of months while we examined our options. After much analysis and then a bit of emotion, we wired $572,838.49 to our mortgage bank today and I just verified with them that it hit the account and our mortgage balance is zero. The PI payment will go into our taxable account and our 60/40 AA.

This is very surreal for us as 6 years ago we we had a net worth of zero and were spending way more than we made. Then we read The Millionaire Next Door and fixed our spending. Now we have $1M in retirement savings and a paid off house. And a good shot at retiring in 2 years @ 56.

Life is good!

Tom
congratulations and well done!
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Old 11-15-2019, 12:50 AM   #15
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CONGRATULATIONS!!! What a happy day.
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Old 11-15-2019, 01:08 AM   #16
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Congratulations!
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Old 11-15-2019, 03:45 AM   #17
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Congrats. Very impressive.
We reduced our expenses 60% over 4 years before retiring, but it wasn't specifically to retire.
Also had a high income, but was saving since 21 y.o., but not to the level % wise of most folks here.
Nevertheless, we all get there in the end somehow.
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Old 11-15-2019, 07:11 AM   #18
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Congrats!!! Many people here will disagree, but I think being mortgage free is one of the tenants of being financially independent! And it sure feels good, too...eh?
+1 We have been Mortgage Free since 1995, a major contributor to our ER life.
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Old 11-15-2019, 07:32 AM   #19
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Congratulations on your amazing progress. I felt such relief when we paid off our mortgage and our family did a happy dance.
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Old 11-15-2019, 07:45 AM   #20
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Congrats!!! Many people here will disagree, but I think being mortgage free is one of the tenants of being financially independent! And it sure feels good, too...eh?
I don't care how it penned out financially (made more sense to pay a low % mortgage), My soul was settled when my mortgage was finally paid off 5 years ago...never going back !
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