I’ve been thinking a lot lately about my work. Today, I’ll ask you about yours. First though, we have to get to last week’s question.
Should I pay off my mortgage?
Long time readers will know that I’m adamantly against paying off my mortgage. I love borrowing money at 3.25% and having the cash available for a good deal. Lately though, the .9% interest rate on my $100,000 in cash is getting me down. My solution is to pay off my mortgage and open a line of credit. That way, I’ve at least made a 3.25% return on the money. Here is what you had to say:
The most surprising response was from Done by Forty. His viewpoint is opposed to 95% of the folks who love having a paid off house:
I enjoyed having a paid off home for the few years we had it. But the longer I get to know our personalities as they relate to personal finance, the more I hate equity. It’s not that helpful. It just sits there, doing nothing & earning nothing…like cash. But unlike cash, it can’t be used for anything without going through ridiculous hoops to get a loan.
Mr. Tako thinks along the same lines:
…If you have guessed, I wouldn’t pay off the house. Cash gives you opportunity. Opportunity to capture the best return when it arises. It also gives you a certain amount of stability if you encountered job loss or some other economic misfortune.
The Green Swan will retire with a paid off mortgage:
My vision of retirement has always been with a paid off mortgage. While it may not be a high returning asset, I could tap its value in times of recession to bet on the upswing in the stock market. It would be a nice reserve of value I could flex in times I know the market will be bouncing back up soon.
I liked what Mr. SSC had to say. I’m thankful that my home has appreciated, but I don’t count on it (besides the forced appreciation I create by home improvements).
We have done zero to put anything extra toward our current mortgage. We may see our property values increase, but we don’t trust that and therefore don’t “invest” in our property.
I know I’m in the minority, but it won’t bother me in the slightest going into retirement with a mortgage. Maybe I’m biased though because I have the cash to pay it off.
Reader Daninave appreciates a paid off mortgage:
However, when you do not have to pay mortgage anymore, you feel that you really got a step forward to freedom. It is a great change, priceless.
Mr. PIE is realistic:
I wonder if patiently waiting for another 12 months and assess your options then when you have a mortgage loan option in play and perhaps a better opportunity in the housing market to strike at. The old landlady will be another year older by then…..oh come on, just stating a fact…..!!
Very true Mr. PIE, but she shows no signs of letting up! It wouldn’t surprise me if she was still going strong at 95.
What I’ll do
Elizabeth from World of Wealth had this to say:
You need to tap your home equity in any event to complete a quick cash transaction, so what’s the difference between making it a small heloc with cash or simply a larger heloc when the time comes? The total mortgage debt you end up with will be the same, if not less, and you’ll save some interest expense in the meantime.
I’m doing exactly as Elizabeth suggests. I’ll keep my cash, but open up a HELOC too. While it’s painful to have all that cash sit around collecting dust and spiderwebs, I’ll deploy it in the next two years one way or another.
Random thoughts as to where the money would go if I never buy a property:
- If Mr. Market catches a cold and has a downturn of 25%, I’d flush all those real estate dreams down the toilet and throw the money into equities.
- I may start to invest in properties through PeerStreet. If it’s good enough for the Mustache, it’s good enough for me.
- My Fundrise experiment has done well so far (10%!). Maybe I’ll throw some more money in its direction.
- I’m a big fan of Vanguard’s plain old REIT, VNQ. It’s hard to go wrong with Vanguard.
Ask the Readers: Are you Passionate about your Work?
This question was originally supposed to be called:
Are you working at your passion?
I’m going to play devil’s advocate here and say that the whole follow your passions thing just isn’t going to work for 90% of the population.
We can’t all be writers, musicians and artists, or professional video game players ?
I think Mr. FIREstarter has a really good point. There are a lot of us who are fortunate to enjoy our jobs. However, how many of us would continue to do them if a rich uncle left us $50,000,000 tomorrow?
***crickets*** ***crickets*** ***crickets*** ***crickets***
I believe that those of us that would continue working because we love our jobs so much are in the very small minority. I’ve had a great career and I’ll probably write some computer code post-retirement, but not for 40 or even 20 hours per week.
Anyway, the new question is this:
Are you passionate about your work?
I’m not ever sure what this means, so I’ll throw some other questions at you:
- Does your time at work fly by or are there spiderwebs on the clock?
- Do you feel energized after a day at work or do you want a stiff drink?
- Does you work make you a better person or give you crazy stress?
If you’ve found something that you enjoy, that is an incredible gift. Fill me in.
Join the 10s who have signed up already!
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*Only if your life is pretty bad to begin with.