I think most of us would agree that money gives us security. With enough money, you don’t have to fret about the little things, and you can freely make spending decisions. However, more specifically, I believe that being debt-free gives me a heightened sense of security.
Buying a Home
Shortly after I graduated from college, I felt ready to buy a house. I was earning a decent paycheck, I planned stay in the area for the foreseeable future, and I had quite a few friends who were eager to move out of their parents’ basements who could be potential housemates.
So in 2004, a little over a year after I graduated from college, I bought my first home at the age of 23. What could go wrong? I thought I knew everything there was to know about finance. After all, I had graduated with a finance degree in college. In reality, I had no idea what I was doing. I took out what seemed to be a huge, but reasonable, mortgage. Trying to be aggressive, I selected a 15-year mortgage in order to lower the interest rate to 3.5%.
At the time, the real estate market was on fire. I figured that if I didn’t jump in then, I might never be able to afford a house. Looking back now, 2004 was close to the peak of the market. Had I needed to sell the property in 2010, I would have done terribly. Fortunately for me, I didn’t need to sell the house and still live here 13 years later.
We haven’t had a single day of regret from paying off our house in 2014. Beings 100% debt free gives us a lot of options and freedom, and helps us sleep better at night.
Brad – Financial Life Planning recently posted…Why You Need To Understand How Mortgages Work
I’m right there with you. I use to think about ways to pay down the mortgage faster at night before I slept. Now that it’s paid off…I sleep like a baby 🙂
Wow! I wonder how you must have felt during the downtown in the market circa 2009/2010. This is a very interesting read!
Enoch@SavvyNewCanadians recently posted…Book Review: The Four Pillars of Investing by William J. Bernstein
It felt great knowing that I was locking a positive rate of return. I was still pushing money into the market but I felt like I was atleast somewhat diversified 🙂
I don’t care if you can theoretically get a better return, I will never accuse anyone who pays their mortgage off of making a bad decision. There is value besides the money aspect that need to be recognized. The peace of mind, the security, and the freedom in life (and cash flow) that this presents have to be assigned value, and the thing is, that value is different for each person.
Way to go.
Money Beagle recently posted…How We Level Out Monthly Expenses
Thanks Money Beagle!!! I am really happy with the decision that we made. While I could be further along. I am perfectly content where we are 🙂