Current Home Value: $300,000
Original Mortgage Balance (June 2003): $225,000
Current Mortgage Balance (Jan 2017): $126,000
Monthly Principal Reduction Via Mortgage: $1000
Current Money Market Savings Account Balance (Ear-Marked For Mortgage Pay-Off): $119,000
Current Retirement Savings (401K, IRAs, etc.): $475,000
Approximate Net Worth: $800,000
Current Monthly Savings Rate: 60%
FIRE Date: Who knows?? Maybe never. But our options are pretty much unlimited.
Hello everyone. Great to see so many people like us who are searching for the peace of mind that comes with being 100% debt-free, including their mortgage. As many of you have noted this is not the path financial planners (and most people on this forum) would suggest but it's the path we are choosing on our road to FIRE. I'm typically just a voyeur on the MMM forum but have decided to join this thread because it helps to have support when sticking to a principle that many consider way too conservative. I just wish I had stumbled upon it sooner because we are nearing the end of our journey...
Two years ago my wife and I decided we wanted to pay off our mortgage early (we are in our mid-40s). We had already been saving for a number of years to our retirement accounts and felt it was time to knock out the mortgage. As is my nature I researched the topic thoroughly and the plan that seemed to make the most sense for us was to use the money-market savings account (MMSA) option. With this option, instead of paying down the mortgage principal every month (like it appears most in here are doing) we put our funds into the MMSA earning 1%. This has allowed us to remain very liquid in case of emergency. We understood this was a very conservative path which is why we placed a high priority on doing it quickly. This meant really focusing on our savings rate. Today we are right at a 60% savings rate (with a family of 3). In two years we've gone from $0 to $119,000 in our MMSA. We could pay off the mortgage in a couple of months but we are planning to wait until the end of summer. This way, after the large lump sum mortgage payment, we will have enough additional funds set aside to buy 2 newer (used) cars in case ours break down beyond repair (mine is a 12 yr old Honda Civic with 182K miles and my wife's is a 9 yr old Toyota Camry with 162K miles).
As you can imagine, we are counting the days. The thought of being 100% debt-free is mind-bottling. You know, where you mind gets all trapped up in a bottle? Anyone catch that Blades of Glory reference? Anyway, I'm hoping our story adds some resolve and commitment to your own individual plan - especially on days like today when the market is hitting all time highs. As MMM often puts it, this site is more about finding efficient happiness than it is about personal finance. We belong to a more conservative group of Mustachians that put being debt-free as one of our highest priorities. It's a simplistic approach with little downside. Kudos to us for focusing on this crazy principle instead of a $5 latte!!