scrabbler1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Nov 20, 2009
- Messages
- 6,716
Congrats to paying off your mortgage!
I have always had an aversion to debt and have been eager to pay it off quickly or avoid it altogether. I have bought cars 3 times and paid cash each time, including the first time in 1986 when I had about $20 to my name after I bought the first one. At the time, I was living with my parents and got a paycheck from work 2 days later so it wasn't like I was "broke" or anything. Six months later, I had gotten my bank balance back to where it was before I bought the car.
I paid off my student loans in 18 months including just over half of it within the 6-month grace period after college graduation in which no interest accrued nor any payments were due. I happened to have a small blob of money in an old bank account I had forgotten about so I just used that. Nice find, huh?
I took on the mortgage in 1989 when I bought my co-op apartment. Interest rates, especially on co-op loans, were high, even for adjustable rate mortgages (ARMs). I was paying nearly 11% for a 5-year ARM so when interest rates crashed in the early 1990s, I refinanced the loan into a 1-year ARM at 6%, saving me $200 per month.
That, along with a fast-rising salary, enabled me to save and invest a lot in the booming 1990s markets. The ARM rose, too, in the next few years, nearing 8% by 1997. I used some of the market gains to pay down the mortgage. But when I saw in my mortgage paydown spreadsheet that the tax increase and investment earning reduction from losing the interest deduction was less than the savings from paying the interest itself, I paid off the loan. A key element of that was noticing that I would hit the standard deduction on my state income tax return, so there was no state income tax increase by paying the loan off.
I paid off the mortgage just around my 35th birthday in April of 1998. This was a key step in putting ER onto my radar. With my monthly expenses greatly reduced, I saw that I would not need to generate a lot of income to cover them. With my wage earnings in their peak years of the late 1990s, I was basically living on one paycheck now and saving/investing the rest of it, boosting my savings rate to over 50%.
By 2001, I would reduce my weekly hours worked (i.e. semi-retirement) and work part-time for the next 7 years, still more than covering my reduced expenses (due to paying off the mortgage, of course) and able to save any surplus anyway.
My ER plan was born and began to grow in the early 2000s thanks to paying off the mortgage. By 2008 the ER plan was ready to fly and I ERed at the end of October that year.
I have always had an aversion to debt and have been eager to pay it off quickly or avoid it altogether. I have bought cars 3 times and paid cash each time, including the first time in 1986 when I had about $20 to my name after I bought the first one. At the time, I was living with my parents and got a paycheck from work 2 days later so it wasn't like I was "broke" or anything. Six months later, I had gotten my bank balance back to where it was before I bought the car.
I paid off my student loans in 18 months including just over half of it within the 6-month grace period after college graduation in which no interest accrued nor any payments were due. I happened to have a small blob of money in an old bank account I had forgotten about so I just used that. Nice find, huh?
I took on the mortgage in 1989 when I bought my co-op apartment. Interest rates, especially on co-op loans, were high, even for adjustable rate mortgages (ARMs). I was paying nearly 11% for a 5-year ARM so when interest rates crashed in the early 1990s, I refinanced the loan into a 1-year ARM at 6%, saving me $200 per month.
That, along with a fast-rising salary, enabled me to save and invest a lot in the booming 1990s markets. The ARM rose, too, in the next few years, nearing 8% by 1997. I used some of the market gains to pay down the mortgage. But when I saw in my mortgage paydown spreadsheet that the tax increase and investment earning reduction from losing the interest deduction was less than the savings from paying the interest itself, I paid off the loan. A key element of that was noticing that I would hit the standard deduction on my state income tax return, so there was no state income tax increase by paying the loan off.
I paid off the mortgage just around my 35th birthday in April of 1998. This was a key step in putting ER onto my radar. With my monthly expenses greatly reduced, I saw that I would not need to generate a lot of income to cover them. With my wage earnings in their peak years of the late 1990s, I was basically living on one paycheck now and saving/investing the rest of it, boosting my savings rate to over 50%.
By 2001, I would reduce my weekly hours worked (i.e. semi-retirement) and work part-time for the next 7 years, still more than covering my reduced expenses (due to paying off the mortgage, of course) and able to save any surplus anyway.
My ER plan was born and began to grow in the early 2000s thanks to paying off the mortgage. By 2008 the ER plan was ready to fly and I ERed at the end of October that year.