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Peace Of Mind!

Discussion in 'Snippets of Life (Non-Fiction)' started by nuss, Jun 28, 2022.

  1. nuss

    nuss Finest Post Winner

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    Today, we made the final payment on our house. We paid off our mortgage ahead of time. We were advised against paying off the mortgage early because it doesn't make sense mathematically to pay off a loan that has only 3% interest. Our financial advisor said many times that we'll make more money investing but sometimes heart (or mind) wins over math! Especially for people like us who have job security, paying off the mortgage is not usually recommended but to each their own!

    A paid-off house in the early 40s was our dream that came true! We put most of our extra money towards the mortgage without sacrificing family fun, 529s, or emergency savings. It was a conscious decision we made as a family to allow us to live our life to the fullest! A simple life with no pressure of paying the debt. A life where we can enjoy our little family and travel to be with extended family without having to worry about expenses. Our dreams have never been to own a Ferrari or a mansion for our friends to drool over. We are simple, practical people, maybe even what some would call boring.

    Even though I wasn't always financially astute, I have learned to manage our finances and we both agree on one thing (most things we don't agree on :)), that we wanted to be debt-free before kids head to college. But it happened much sooner, thanks to our overload months of salaries for the last 5 years that helped make larger payments. While most financial advisors would say that the mortgage is good debt and you should invest the money instead but they won't tell the amount you would save by paying it off early. In the first 10 years, the mortgage payment is mostly interest and a little principal amount. With the recession and the market hitting its lowest, I am sure we will still be ahead on savings. Even if not, the peace of mind is worth it.

    Paying off our mortgage doesn't mean we are tied to the house. We are still open to better opportunities and if something comes up professionally that we like, we will be open to moving and starting another mortgage journey. Even if we move, this will be our home. We love the city and surrounding areas and will happily rent out our house if we move. This experience has made us aware that our needs and wants are simple.

    Writing this with the hope that if you are on the fence about paying off debt early, go for it and truly own the house!
     
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  2. HariLakhera

    HariLakhera Platinum IL'ite

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    Yes, it is blissful to be free of all debts. Reminds me of those times, when there were no credit cards, nothing available in installments and we had to save and buy essential household things like fridges or tv, and loans were available to only Government employees at a high rate of interest. Thus we were always free from debts but longed for some comforts.
    Today one can buy a house, a car, and whatever as long as income can take care of EMIs, within one year of reasonably stable employment. Now they have all the comforts but entrapped in debts.
    Which one is better. Have your own guess.
     
  3. Viswamitra

    Viswamitra Finest Post Winner

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    Congratulations @nuss for going for peace of mind as opposed to savvy ROI-based investment decision. There is nothing that could replace the peace of mind. Your target to close debts before the children in the college is a wise decision and I am glad you were able to accomplish it much earlier. I am sure a lot of sacrifices were made by leading a simple life with focus on savings for the future. Simplicity and contentment result in extraordinary benefits in life.

    We also lead a simple life with no fanfare to attract attention from the friends and neighbors. In my case, I was lucky to buy the house mortgage free in 1998 but 5 years ago, I ended up taking home equity loan to renovate the house and I am paying back the loan in monthly payment. When I get the first available opportunity, I will definitely pay back the home equity. At my age, any debt bothers me a lot but fortunately, I have two whole-life policies that are self funding at this point and a decent 401(k) fund available. Last when I checked my home equity is only 1/6th of the total market value of the house. I am still looking to pay back this home equity loan as soon as possible.

    My son has invested nearly $60,000/- in two patents. Some of these are through borrowals and these debts bother me as well. I need to find a way to teach him to live life debt free over a period of time or at least make decisions keeping debt/equity proportion in mind. May be he sees a great long-term value in the investment in the patents that I am yet to see in short-term.
     
    Last edited: Jun 28, 2022
  4. Rihana

    Rihana Moderator Staff Member IL Hall of Fame

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    Congratulations, nuss. Felt so darned good to read your update on a hot Monday afternoon. You have shown once again what discipline, dedication and some planning can achieve.
     
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  5. Thyagarajan

    Thyagarajan Finest Post Winner

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    :hello:A fresh breath of air or breeze. Simple living high thinking was motto of previous gens. Modern life style yielded to high living thanks to credit cards and simple thinking.
    Kudos.

    Planning well itself restores or adds to peace of mind; and to robust mental and physical health.
    I trust your tenure stands today too.
    Thanks & regards.
     
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  6. nvathsala

    nvathsala Silver IL'ite

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    When we bought the car by paying the full amount without getting the bank loan the dealer was surprised and asked to take bank loan. But we didn't accept it and came out with pride.
     
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  7. Thyagarajan

    Thyagarajan Finest Post Winner

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    That is a good idea for peace of mind. Many companies do hire or rent a car for the heir executives instead of owning it . It saves them driver, maintenance and other allied jobs and paper work.
    A banker to doctor friend had arranged to acquire a new Mercedes Benz. The banker told him bank will be too glad to provide him instant loan toward its acquisition. Doctor said the debt will bother and affect his efficiency while performing surgery and said no loan. He paid in one cheque for entire cost.
     
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  8. nandinimithun

    nandinimithun IL Hall of Fame

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    Congratulations my ubuntu girl, big hugs to you. May the new house bring loads of good vibes, good thoughts, good health and peace of mind always to you and your family.
     
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  9. DDream

    DDream Finest Post Winner

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    Great post @nuss ,
    We are also close to paying off mortgage. No other debt. Yes.its good to have debt free comfortable life and enjoy happiness of small things. Anyway, its personal choice.

    Recently, I noticed decline in investments like 529 even though its managed by bank. Its reflected in other investments like 401k too evenif we go for conservative options. In such case what is a good strategy, any ideas? Is there any good high interest saving accounts/ banks.
     
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  10. nuss

    nuss Finest Post Winner

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    I grew up in a family where everything was bought in cash. My parents would say that we need to save money to buy things, not take on loans. This has always been my philosophy and the reason I got out of credit card debt quickly that I'd accumulated in my first year in the USA.

    We can trap ourselves in all sorts of financial entanglements and tell ourselves that everyone is doing the same but the peace of not owing anyone a penny is priceless!
     
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