I always wanted to have a paid-off house. I mean how long have you wanted to have a paid-off house? Oh well, honestly I didn’t know that we could. I don’t know if I knew that you could either. But I always wanted to if it was possible.
I wanted to and I didn’t want to wait till 65 to do it. Somewhere along the lines. You know since we’ve been married, we began to believe that it was possible. Yeah which I kind of think is a first step in the first key. Don’t you think? Yeah, because not only it is actually possible.
I mean, I think your old neighbors, I think they paid off their house. I remember your family talking about it, like yeah, it’s a big deal. Where I come from is it’s a huge deal and so I knew that there was like this. Oh yeah, there’s just some of those people who like either lived there for a really long time or whatever and they have a paid-off house. So really smart with their money.
Yeah, Yeah, I don’t know but then we started realizing, wait for a second, not only is it possible like financially but then with God’s grace.
Yeah, it’s actually kind of like the wind at your back. It’s like it’s not nearly as difficult. Or impossibility. So much of it is believing it’s possible. So because once you believe that it’s possible then you start thinking. All right, what do I need to do to make that happen?
So you begin making different decisions. Whereas if you just think it’s an impossibility and you never even think about it you’re not gonna try and therefore it kind of isn’t a possibility. Right?
You know that’s just really the first step and in our case, I think the absolute biggest factor at all in helping us accomplish this is God’s grace.
Like there’s just no way we can talk about this without saying that like there’s just no way because there were just so many factors and that caused us to get this thing paid off.
It shouldn’t have worked. Yeah, it just shouldn’t have happened. Like it mathematically, it shouldn’t have happened but we saw that as we started going after this goal and doing what we could do in our strengths. God came through and just as you said like the wind at our back just like pushed us forward propelled us forward so much faster through this process.
Then we could have imagined right, yeah and I mean I don’t know if this is the list or not but one of the things we did was we started giving towards like giving to the Lord with that goal in mind and no doubt.
I feel like this doesn’t make sense. It doesn’t make sense you’re trying to pay down this massive debt. So let’s give more money. Doesn’t make sense in the law of the kingdom which is that when you sow. You reap. When you plant seeds something comes up. Yeah like we learned that all in what preschool kindergarten where you plant the grass seeds and then you watch it grow but it just it seemed to work that way for us. Right?
Put 20% Down To Help Lower the Cost
Yeah on a really practical note one thing that we did was we put down 20%. When we bought our house. No that was a challenge in and of itself coming up with that kind of down payment and that had its own series of miracles in it to allow us to do that but if you can put down 20%, it does a couple of things for you.
You Will Only Have 80 Percent left on the mortgage
So the first one is that you know you now only have 80 percent left to pay on your house. It’s like you know you just chopped off a big chunk of what you would have to pay just by putting down 20% down payment.
Private Mortgage insurance will not be charged
That’s kind of obvious, but the other factor here is private mortgage insurance and so if you don’t put down 20% almost every lender is going to charge you PMI or private mortgage insurance because you’re more likely to default if you don’t put down 20%.
So that fee you know whatever that’s gonna cost as you know sometimes might be a hundred dollars a month that you have to pay extra every single month for this insurance.
Put Extra Payments on your mortgage.
Because the lender thinks you might not end up paying your bills and so by avoiding that you now have an extra hundred dollars a month.
You can put towards your mortgage and that hundred dollars a month like goes a long way. That’ll shave years off a 30-year mortgage. Just by paying that consistently. That’s crazy, so being able to do 20% like was definitely part of this equation.
The idea goal is that you are constantly trying to free up margin. Put Extra Payments on your mortgage and you have more cash so you can put towards your mortgage.
It’s the same idea as a debt snowball. Each debt you get paid off you know you now have more cash than you put towards the next one. The goal here is how can you continue to expand that gap?
Increase that distance between your expenses and your earnings, so that you have more and more and more to put towards the mortgage. Just by focusing on that and continuing to work towards increasing that gap widening that gap, just puts you in a really good position to really make progress on your mortgage super fast.
Like it did for us, so you would just do that by making more money. Yeah, that’s the thing though it’s easier now than it’s ever been like there are so many side hustles and ways to make some extra cash on the side like it’s insane.
We have a whole bunch of videos about that too okay? So that or reducing expenses you have two sides of the equation. That’s like either increasing or you decrease it, but both of them are going to expand that gap. So you have more money to put down towards your mortgage, okay?
And can we just remind them like the incentive for this would be to pay off your freaking house, yeah it is so good. Like one of the best feelings of my life I think when we get that mortgage paid off.
Oh my gosh, yes this is pretty awesome, yeah, like and don’t get me wrong, like I know that there are mathematical benefits to having a mortgage.
You know and their people will argue that and that’s completely fine. I’m not disputing that. I’m just saying the peace that comes from owning your house outright. It’s a goal worth chasing for.
I think you don’t know what it’s gonna feel like until you get there. Really, yeah cuz, yeah I think it just doesn’t compute a lot of times like what it feels like to be completely debt-free. Yeah, Yeah, I think when we paid off that first car, no you feel lighter yeah we paid off our first car like that was amazing. To remember that bronze Mazda 626 whatever color it was.
We first got that paid off like that was thrilling. I remember now the bank didn’t want us to have the title. I just remember its amazing. I own this car. They can’t take it from me. It just felt really really good and then the house is just like a whole nother level.
So it’s good if you’re going to be reducing your expenses… Cutting back on what you’re spending. Cutting making sacrifices. It’s a worthwhile temporary, worthwhile sacrifice to make. Yeah so don’t get like discouraged. I’m gonna have to just not do not have Starbucks every single morning or four times a day or whatever you know.
Don’t get caught up in that and look at the goal of like what is it gonna feel like with a paid-off house and how much more money will I have like honestly there’s more money get 12 Starbucks a day.
I always said like before we had it paid off it was just the idea of knowing that the biggest bill that I have each month is like my electric bill like the biggest monthly expenditure.
You know, I mean now it’s definitely groceries, but you know you get the point. This is really, really nice knowing that I can go get a job at Starbucks in like provide enough income for our family because we have the mortgage. It just the two of us at that time. I don’t know, I can’t remember if Alden was around. I don’t either. Once Alden came around the grocery bill went from as they’ve pretty much doubled.
Once Alden started eating, no joke that kid can eat and the last one on our list for us was starting a business and I used to have a mentor who he told me that the fastest way to build wealth or to increase your earning potential is to start a business.
I always thought, hmm, I mean, if some people have jobs to make really good money and I think there’s some truth to that but, I became a business owner.
I quickly realized that it’s a whole different ballgame. As a business owner, I know I’ve had years where our revenues doubled from one year to the next. As an employee, like my best year as an employee if I got like a promotion or something it might have been like a 15 maybe 20 percent increase in earnings.
Most years were just like maybe a three to five percent raise if that. So it’s just a very different thing in terms of earning potential. When you’re running your own business, now obviously there’s plenty of risks and this isn’t for everybody.
It’s absolutely not for everybody, like right? There are some people who shouldn’t be doing this. I happen to be somebody who’s wired for it but find out and then decided if you should do it.
Point is that there’s no doubt that that helped speed up the process. So we could get our house paid off and do it in 3 years. The business was a big part of that just because our earning potential was so much different than my old job.
We would have paid off her house early in my old job but it was definitely amplified by the business. So, definitely, some benefits to it if you and not to mention like you had control of the finances of the business.
So it’s like it’s not just crazy business expenses and money just flying out the window. On stuff that’s not completely necessary, but other people might think that it’s necessary. I mean it just makes a lot of sense like you just have a lot more control.