So here I am, feeling all strong and stalwart for having paid double my mortgage over the last 18 months, halfway through my 3 year goal. And there's an article in the Bulletin saying,
"Wrong! Mortgage breath, wrong!"
Saving for retirement, they say, is more important. Paying off credit cards with higher interest rates is more important. Having savings for emergency is more important. You need mortgage to save on taxes. It is stupid to tie up money in an unliquid investment.
I'll even add a couple of arguments which I've heard but they didn't mention. The dollars I pay for my house in the future may be less than the dollars I pay now, meaning that my payments relative to income actually may decrease. Inflation is a friend to a person with a mortgage. Plus, 15 years is a long time to wait for the benefit, in this uncertain age.
O.K. I buy the arguments. But here is where I make like a real estate agent and ignore reality.
I'm still gonna do it, dammit.
If I pay double for three years, I more or less cut the mortgage to 15 years, which is exactly the time to my retirement. (Not that I'm going to retire.) That pretty much answers to tax argument. The fact that I may not enjoy the benefit since it's so far away, well maybe my wife will or my kids. I can dig that.
The not having six months earnings to fall back on in savings. Yeah, right. I've heard that from my first year of business, and it was crazy then, and almost as crazy now. I've got a bit of savings, but six months?
The credit card payments. Absolutely, but credit cards will always be with me. I've managed to keep them relatively low.
The being house poor? Hell, when haven't I been? From the time I got out of college, I've almost always paid more than half my income on housing, after my first few experiences with roommates (where have you gone, record collection? Why do you hate me so, phone company?)
The retirement? Well, I intend to make the maximum donation to my IRA each year that is allowed by taxes, but this will be my second year. No way that is going to do much for us. I've always known that inheritances, such as they are, are going to be the bulk of our retirement, plus whatever we can get from our businesses. Both types can fall through, I know, but there it is.
Finally, the fact that the money is tied up, that it isn't liquid.
Well, exactly. That's almost the point. I can almost guarantee you that if I hadn't paid the extra mortgage, that that money wouldn't be around; in savings, in IRA's, in credit card payments. It's the very fact that I can't get it out that makes it good for me.
Besides, when you've spent half of your career in the negative, and not just a small ways into the negative but way, way down, just being even is a huge improvement.
But mostly, I think a person needs to do what works for them. I know myself, and I know that this is one positive thing I can accomplish.
4 days ago