Last year, my wife and I set a goal to pay off our mortgage in 5 years. We have been at it for almost a year and a half and the amount we’ve been able to pay down has been extraordinary. Our mortgage is now 68% of what it was in May 2011. If we keep up this fast and furious pace, we may even be able to get it done sooner. We don’t make much more than the average couple. So it has been a sacrifice. I’d like to get it done before my 40th birthday in December of 2015. When people ask me how we can do it, my usual response is that we really just don’t have that many expenses. We don’t have debt, we don’t have expensive hobbies. We just have kids.
But the best laid plans of mice and men always go awry. So for now this is the plan, until something changes.
Have you ever had a plan, where you question yourself as to why you are doing it and if its the right thing to do? Especially long term goals where you don’t see any payoff from one week to another. Thoughts come to your head like:
What should I be doing with this money instead of paying down the mortgage?
Am I missing out on something? Rates are low, house prices are low. Shouldn’t I be buying an investment home?
What will I wish I would have done 5 years from now that I’m not doing today?
These doubts creep into my head every day. That’s one reason I write this blog. Its a form of weekly affirmation that I’m on the right track. I remember slogging away through college seeing all these other people who didn’t go to college making lots more money than me. I kept wondering if I should have changed course.
What am I missing?
But if you go to college and get 3 years done out of 4 years, what do you have to show for yourself? You won’t have a degree to add to your resume, but you will have learned something… Hopefully… at least a little. The point is I don’t think this accelerated payoff plan is going to get the expected “payoff” until its actually all paid off. Half way, or 3/4s done is so much less rewarding than the whole thing. Finishing 3/4 of a marathon is nowhere near as cool as doing the whole thing.
I remember graduating and feeling like: Yeah, I worked at this for a long time and it finally happened. There’s a good feeling that comes when you reflect on some of the long term goals you have achieved and I think its healthy that we keep setting goals. Many long term goals were realized for me in my early 20s and I expect its similar for many people. Graduation, marriage, home ownership, and children all happened in that decade so it was quite memorable. I’m very fortunate to have been able to do all those things. But what long term goals do people try to fulfill in their 30s? Usually they are goals of a longer nature: Get the kids through college, Save for retirement, Pay off your home… Those things are difficult to do in one decade. (Especially the getting your kids through college part) but the home one can really work. For other people it may be they’d like to start a business and cast off the shackles of the corporate world. They are lucky and I hope to join the lovers, the dreamers, and you someday too. But for now, I’m sticking with the plan.
In fact, my first mantra for the last 2 years has been: “Stick with the Plan“. This helps when doubt creeps in and I think I should try financing another mortgage for an investment property. So far this has made sense for me. If something wildly exciting falls into my lap the plan can change. But right now, we are sticking with the plan. In each case I focus on the end game: What will it be like in 4 years? I could either have my mortgage paid off, or have two homes that I’m paying a mortgage on with the additional hassle of renters and the joys that come with being a land lord.
My second mantra is: “Simplification”. With 4 young children, extra responsibilities is not my thing. In fact, if anything I’m trying to dump all the responsibilities I have and simplify. So I don’t want an extra mortgage nor extra side business. I’m lazy and I want to spend my free time with my kids and family. That’s the enjoyment part.
Children are a huge part of my equation to stay put as well. There are a lot of things that do not bring me joy when I realize I have a responsibility to my children. For example, going to Paris with them doesn’t sound that much fun until about 4 years from now. Going on an airplane ride for 8 hours with kids? No thank you. Few things stress me more than airplane rides with young children. Done that too many times. No thank you. In fact, before the 5 year plan, we took our 2 young kids to Cozumel, Mexico. After the horror of traveling with them to the resort destination, all I could think of was the horror of doing that trip again going home. And I was right: It was horrible! Also, once there, I couldn’t go explore the ruins. Who wants to take a 4 and 2 year old on a 10 hour bus ride? All that money spent on so little joy. Its not my thing anymore.
Buying a new car sucks too because you’re always worried about your kids puking all over it and leaving their melting crayons on the seats. Similarly, who wants to remodel or buy new furniture if your kids are going to scratch it all up? Who wants to go out to a restaurant when you have to bounce a baby the entire time instead of sitting down and eating?
Anyway, as you can see, having young children is one of the best motivators for me to stick with the plan. All those other things just aren’t fun right now. So why not focus on something that does give me satisfaction?
One last story. Last night, I sat down with my daughter to practice piano. She hates it. She tells me she hates it. She doesn’t want to do it. Nobody else at her school has to do it. (She thinks). So why does she? Well its a rule I made. I don’t expect her to become an amazing piano player. I just know learning music helps with brain development. I’m also a mean parent. A tiger dad. But things got heated last night and there was a lot of yelling and crying (on her part, I’m pretty stable by now). But we stuck to our guns. When she finally came around and practiced like we told her, I was amazed at how well she can do when she tries. I have to fight her all the time. And I’ll continue the fight. Even though its a pain for all of us. We don’t see the results immediately. We probably won’t see them for years. But now and then, we get little glances. And those give us enough hope to carry on. I have lots of experiences that show that results come after many baby steps. Even now as we look how far she’s come in 2 short years, it becomes a cycle of reinforcement. Its been the same way for my 6 year old boy. (Even though he doesn’t hate piano as much).
So, we’re sticking with our long boring plans because we know these things pay off over time. And when you look at what can come from big goals being accomplished then the things you might be missing instead really just don’t matter. In fact, most of the time you might forget what those distractions even were.