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Something I have been struggling with over the past couple of months is whether or not to go back into debt. As most of you know, my wife and I paid off our mortgage shortly after we got married in 2012. It’s been an amazing run of not making a monthly mortgage payment.
We’ve been able to super-size our retirement over these last five years, which has put us on a path to retire early. Most of you also know that I am a huge nerd. I have been tracking my finances for years. My financial spreadsheet at the end of 2007 shows that I had $32,500 saved up for retirement at that point.
Needless to say, compound interest has been our friend. Our retirement has ballooned well beyond $32,500. For that matter, since 2012, our retirement account has increased by five times. If that doesn’t convince you to pay off your mortgage, I’m not sure what would. Clearly saving for retirement without a mortgage, plus a bull stock market, can really accelerate things.
Striving for Early Retirement
When I was younger, I was doing everything I could in order to retire as quickly as possible. However, the push to retire early isn’t nearly as strong as it once was, now that children are involved.
Before, early retirement meant the freedom and ability to travel the world and be carefree. Well, parenthood slapped me in the face, as that is no longer realistic.
Realities of Early Retirement
Early retirement, at this point, would most likely include changing dirty diapers and rocking little ones to sleep. While people told us that babies are moldable and travel easily, we just haven’t had that as our personal experience.
Of course, I know and would appreciate being at home with the kids if I was to retire early. But they would be in school most of the day anyways, so it’s hard to envision life like that. I could also pick up another hobby, but I just don’t know what that would be at the moment. My wife also doesn’t love the thought of me just hanging out around the house all day. Being a bum is very unattractive to her 🙂
While I haven’t quite figured out a hobby, I do enjoy blogging and hope I am able to continue writing and interacting with readers.
Growing Our Family
Something we didn’t realize before having kids is that my wife loves being a mother and even being pregnant. While she has some rough days when she isn’t quite feeling right, for the most part she tries to enjoy every second of both pregnancy and motherhood.
So based on that (and that children are gifts), we may continue to have more kids in the future. This means that we probably would not be able to do the amount of travel that I’d like. Sure, we could ask grandma and grandpa to watch our kids, so we could travel alone. But I’m not sure they’d want to be responsible for more than 2 kids at a time! I guess we’ll have to figure that out when we get there.
Needing More Space
We have been heavily considering moving out west so that we can get a more spacious house without breaking the bank. Although houses out there are more affordable, they still definitely aren’t cheap. So most likely, we would have to take out a mortgage at that point.
Recently, we have been trying to zero in on neighborhoods that we like, in hopes of finding a home where we could mimic resort-style living. For instance, we had found a home online that appeared magnificent. It had an indoor pool, along with a movie theater, and some other luxurious amenities. We just visited it in person this past weekend. The home was a train-wreck. It probably needed $200,000 worth of improvements, at least. The floor upstairs seemed slightly sloped in certain areas, and we were pretty sure that wasn’t an intentional feature. I wish I had brought a marble to verify. Needless to say, the place needed a lot of TLC, and I was very disappointed!
Anyways, the main reason why my heart is still set on a pool and resort-style living is because I’m not sure when we will ever be able to travel to the Caribbean due to Zika. So I’m hoping to bring some of the Caribbean to us.
A while back, I had written about my dream to have a home with a pool. I received some excellent feedback from many of you saying N-O to my pool dream. BUT… The allure of an indoor pool that could be used year-round is awfully appealing to me. Plus, having a hot tub to soak my sore body after completing a rigorous exercise routine sounds amazing.
So with all that said, in order to afford our dream home, we would have to take on a mortgage that would probably push back FIRE by at least five years, or even ten years depending on the market’s behavior.
I know some of you may be thinking… Why not wait five years, reach FIRE, then move somewhere much cheaper such that a mortgage would not be necessary?
Married to the Area
That’s a great idea. Except, ALL of my family lives in the area. My parents live 10 minutes east of me, my sister lives 10 minutes north of me, and BOTH my grandmas live 20 minutes south. My in-laws all live within 20 minutes of us as well, and nobody on either side is looking to move anytime soon.
So while we would love to move to a cheaper area, we love the ability to stay close to our family and have our kids interact with his grand and great-grandparents more than a couple times a year.
Since we feel drawn to stay in our area, most likely we will have to take on a mortgage in order to bridge the financial gap between what we can currently afford with cash and what it would take to buy a potential forever home.
Temporary vs. Forever Home
One of the discussions that my wife and I recently had was if we should look for a house that we could live in for the rest of our lives or if we should find something that allows us flexibility in the future.
My wife is currently pushing to find a house that offers the flexibility. While it may not be the perfect house (maybe slightly outdated and not terribly big), it would allow us flexibility to move in the future if our dream home became available.
Her thinking is as long as we have a certain number of beds/baths, a nice backyard, and a decent kitchen, that she can look past some other aspects for a few years. At this point, she doesn’t care nearly as much about aesthetics, but more about functionality (including level floors).
Pushing for a Forever Home
My counterpoint to her is that moving is such a headache. I also didn’t think I’d live in the house that we live in today for much beyond five years, and here I am going on thirteen years in the same house.
With my track record, the chances of us moving again soon after we move are very slim. So that’s why I am pushing for us to seek out our forever home. If retirement is delayed as a result, I figure at least I can come home from work and enjoy it. Plus, I absolutely dread the thought of moving.
So while obtaining a mortgage is not ideal, we are mentally preparing for it in the near future.