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March 15th, 2013 at 06:40 am

We have crossed over. Woohoo!

More cash and mutual funds than DEBT!!!

*Most* our our savings is in retirement funds, so obviously not planning to cash that all out to pay the mortgage. But I am very pleased to be here. What might not be that exciting of a milestone to some is extra huge to us because of the high cost of living here. I don't think we would be in this financial position without or low-cost move.

This is a very tenuous goal, as these things seem to be. So, the next goal is just to KEEP it this way. To get so far on the other side that we will stay there. That might take one year or five years. I don't know. (Historically I find these kind of goals take about 5 years to stick, but that's with the economy in the crapper and everything).

There is nothing spectacular we have done over the years. Save a little every year. Don't borrow any money against home. That's really it. Time does the rest. I share because it's so important just to save what you can. To consistently save and to stay the course. I am sure I would have found these numbers overwhelming or impossible when I Was younger.

Being very debt adverse, the mortgage still has never bothered me much. (Though obviously no plans to keep it forever!!). Why not? Because if we wanted to be 100% debt-free tomorrow, we sell the house. The End. Debt Free. There is certainly a lot of bad mortgage debt out there, but we have avoided putting ourselves in that type situation.

So why is this such an exciting milestone? For the first time I can envision paying off the mortgage and being 100% debt-free, *while keeping the house.* That feels AMAZING!! That means, keeping a roof over our head and not having to pay rent or a mortgage. & to me, this is a level of financial security we have never achieved before. Woohoo!!

I totally understand it's a little premature to get too excited about it. But then again, it only took about 4 years to turn $100k to $200k. Our savings level is back to where it was last we both worked - trying to save about $30k per year. At some point it becomes an obvious choice to save and invest rather than to be "debt free, today."

At current, I still envision paying off the home age 45 or 50. I am 36 today. If we have another good stock market run in the interim, I'd consider cashing out at a peak and being debt free. It just depends on all factors. With these low interest rates I lean towards investing in mortgage payoff (4%) versus bonds and more cash. If interest rates were higher I'd maybe keep more conservative investments in cash or bonds, earning more than our mortgage rate. I am a risk-adverse type, so will not be putting 100% of our money in the stock market. & it seems silly to settle for less than 4% with the more conservative portions of our investments (above and beyond more immediate cash needs). This is something we just evaluate constantly as economic factors change. What I am doing this year might look totally different next year. It wasn't that long ago I had a 6% CD at the bank. Big Grin So, will see.

In other news, real estate is HOT here. Our house might be worth $350k today and will easily hit $400k this summer. Homes are selling in minutes and going up in $25k increments. Bubble 2.0 is here. (I call it Bubble 2.0 because no one is putting down any money on these homes, nothing seems to have been learned in the first Bubble. I don't feel like we ever got anywhere near true rock bottom with all the investor speculation keeping home values artificially inflated. The market is spiking as real families are actually starting to buy these homes, to live in).

10 Responses to “FREEDOM!!”

  1. creditcardfree Says:

    Congratulations! It feels good doesn't it? It's been amazing to watch the compounding of retirement assets once they reach $100K. I'm really curious to see how fast things move from $200K to $400K!!

  2. Petunia 100 Says:

    That's awesome, congrats. Smile

  3. ceejay74 Says:

    That is amazing! I don't know how ours nets out, but I think if you took away the value of our two homes, we'd be way in the red.

    EDIT: Yep, I just checked. As of our February net worth calculation, we owe about $97K more than we have in cash & investments. Although, after this month of paying $7K of debt and probably with the stock market tizzy, make that less than $90K. Smile I'll find out next week when I do our March calcuation.

  4. Beawealthywarrior Says:

    Just reading your post made me excited, congrats!!

  5. JulieAlbright Says:

    Turning red to black is always a huge milestone. Congrats!

  6. snafu Says:

    Good on you! Regular retirement contributions combined with the magic of compounding can give you freedom from financial woes as a senior. As part of Net Worth calculations I was printing figures for total annual payment, total principle and total annual interest When I looked at how mortgage amortization tables worked, I was horrified at how much interest would be paid in the early years. Since you get a tax deduction for interest on mortgage, would you consider using that sum as a payment to reduce principle? ...just a thought

  7. FrugalTexan75 Says:

    What a sweet spot!

  8. rob62521 Says:


  9. LuckyRobin Says:

    Oh, that's a wonderful milestone.

  10. LivingAlmostLarge Says:

    Congrats! We owe about $400k on our house and our retirement savings is almost that much. Plus we have another $100k+ in taxable accounts with our cash EF. So I think we are solidly in the positive finally.

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