Maybe you can relate?
“I need to keep going until the mortgage is paid off.”
Those were the words of an admin I worked with a few years ago. I remember her as a delightful person and a talented graphical designer to boot. (We still use her material in presentations years later.)
When she said this, she and her husband were making double payments on the mortgage.
She also had a chronic cough that would have put too much out of pocket to get fixed for good. That didn't noticeably dampen her spirits but I'm sure it weighed on her efforts to knock that mortgage down.
Many recent retirees still have a mortgage
AARP cites a study by American Financing saying that 44% of Americans between the ages of 60 and 70 have a mortgage when they retire.
Now, it may be true that some of these people are doing it by choice. Until very recently, 30-year fixed mortgages were in the 3% range for people with excellent credit, and savings accounts pay more than that now. (A low fixed-rate mortgage is an asset of sorts because the interest-rate risk is borne by the lender, not the mortgage holder.)
I'm sure, though, that many respondents don't have the choice of paying their mortgage off or not. A sixth of the survey respondents said that they may never pay off their mortgage.
My own mortgage timeline calculations
I started as a govvie in August 2000. If I make it to August 2030, I can retire without a reduction in benefits.
August 2030 is 6 1/2 years away. (Please wait a second while I let that sink in, ugh)
I have a mortgage. If I continue with my current payment (near the minimum payment), it will take almost 12 1/2 years to pay off.
Continuing this course I can either carry a mortgage into retirement (ugh) or postpone retirement for six years (double ugh).
Double the mortgage payment does what?
What if I took a play out of my lovely former colleague's book and doubled my mortgage payment?
I used an amortization tool to get what my mortgage balance would be in a year if I kept my current payment. Then I doubled the payment.
The payoff time then was 61 months or a little over five years. Since I started this accelerated payment a year from now, that would pay things off in six years — which is before I'm eligible to retire.
Stated another way: If I give myself a year to make an extra mortgage payment in profit, and start paying it down, then I can retire on time without a mortgage.
That's something to work towards.
Increasing income vs. cutting expenses
Nothing's cheap anymore, it seems.
Salaries aren't keeping up with inflation. And there's only but so much fat to cut out of the monthly budget.
To keep up, and get ahead, of inflation, it's all but necessary to increase income vice cutting expenses.
Increasing income can happen with a promotion, a favorable job change, or more hours.
Or through building a business, as I'm doing.
Career orientation is a double-edged sword.
My dad was a company man and did very well for himself, and us.
I followed nearly an identical path through graduate school to get the job I've had for the past twenty-three-plus years.
It's brought me and my family financial stability this far. That's a good thing.
The other side of the sword is that there's only so much room to grow where I am now. I could get one more promotion, but that's about it.
Simply thinking in those terms is evidence of a career mindset. And the longer the mindset is there, the more ingrained the habits and thought patterns are.
Thinking in business or entrepreneurial terms is tougher, and having the energy to push through the hard parts is tougher still.
Employees in a reasonable work setting can just hang it up when their day's done. There's a predictability with employment that's hard to escape from. Starting a business comes with no guarantees like that.
Not either-or, but both-and
A good career is a good cushion for launching something different.
That “something different” needn't take every waking hour outside of work. It probably shouldn't.
I spend 10-15 hours a week doing what I do to build an online presence. That includes producing content, maintaining websites and systems, and learning new skills. (I have no doubt I'd make progress faster if I weren't doing so many different things, but that's another thing to tackle for another time.)
Over the years, I've made lots of valuable mistakes that I can articulate to others.
I used to think getting a website up and running was easy. It's easier than it used to be but getting started on Medium is dead simple. It took me a long time to even so much as post here, and I'm already kicking myself that I didn't start writing here earlier.
Use your career as a stepping stool to build something different for your financial peace of mind.
Did this speak to you? I love to encourage career-oriented people like you gain peace of mind by sharing what they know online. >>> https://johnwedding.com/online-presence/
(cover photo by Towfiqu barbhuiya on Unsplash)
