Everybody (in unison): WELCOME BACK NELSON
Wait, have you guys been waiting this whole time?
No time to address that creepy-ass question, because it’s time for me to blow the dust off this bad boy and tell the seven of you left reading where we stand with our mortgage, something you sick freaks care about for some reason. Is there really nothing better on Netflix?
As a reminder, we started off with a $190,000 loan owing on a $195,000 house, which was purchased in July, 2016. Yes, you can buy a house for that much in rural Alberta. It’s not even one of those shithole houses, either (OOOH, KINDA TOPICAL).
When I last updated you kids back in October, the balance on our mortgage was approximately $78,000. I continued to shovel all the money I could towards paying off the loan mostly because I didn’t see any better available uses for the cash. Markets continue to bounce up against all time highs, which has prompted me to harvest some winning positions and hide out in bonds. I’m also taking a bit of a breather from the private mortgage business because too much of my portfolio was becoming concentrated in it.
I also got an unexpected boost of cash in December when I made a big dividend payment from our company to my wife, specifically. Thanks to my GOOD PAL Justin Trudeau’s desire to stick it to business owners, we made the decision to withdraw most of the assets from the corporation. This gave us a sizable piece of cash to plunk down on the mortgage.
Where are we at, then? Great question. I won’t tease anymore. As of January 31st, 2018, our mortgage balance is…
That’s right, baby! We paid the damn thing off. And a year ahead of schedule, too.
Blog genies, insert some sort of gif of somebody who’s happy.
I need better blog genies.
Remember, this isn’t all that remarkable
There’s a certain member of the personal finance blog-o-net who leveraged his own mortgage payoff story into as much attention as he could muster. He marketed his story as something more remarkable than cats and dogs actually becoming friends. No, Cute Animal Friendships, I refuse to believe that’s natural.
In reality, our mortgage payoff story was made possible by a few smart decisions along the way.
- We bought a reasonably priced house in a small town filled with affordable real estate (seriously, half a mil here basically gets you a mansion. In Toronto it gets you a decent condo or an average house in Scarborough).
- Our lives are anything but glamorous. We pack lunches most days, read library books, and find cheap stuff to do with our friends. This helped us create a huge savings rate, which we funneled back into our mortgage.
- I invested every spare penny — and every penny I could borrow — when I was a young man. These assets are now paid off, and they spin off oodles of cash flow.
Ultimately, there’s no huge secret here. We paid off a big loan in a short period of time because we had cash flow from already invested assets and above average earning power. And that’s before my wife increases her income by becoming a full-time teacher. With years of dedication (and starting the compound interest machine early enough), I firmly believe anyone reading this could be in the same position as I am.
There’s no need for a whole book explaining our success, in other words. It’s just a matter of numbers.
So what’s next?
Now that we’ve paid off our mortgage, what’s the next move?
To be honest, damned if I know. I still think stocks are expensive and I’m nervous about putting huge amounts of cash to work in an overheated market. I’ll continue to look for opportunities in the market and I’ll probably shovel some more cash into bonds. Canada’s largest bond ETFs are yielding close to 3% these days, which is a decent payout. And bonds also offer fantastic capital protection compared to stocks.
And no, there will be no douchey mortgage burning party. Act like you’ve been there before, son.