Three years ago, I paid off two mortgages. The main residence and the three-bedroom house my wife and I rented for $1,500 a month.
I felt like I was on the right financial track. I am officially debt free successful music blog When business coaching service — Both brought in $1 million in combined annual revenue. Before that, my family and I lived off food stamps.
But now that I’m 39, I regret paying off two mortgages. Just a year after she paid off her mortgage, my wife and I enrolled our daughters in a school an hour away from her home in Tampa, Florida.
Moving closer would have been ideal, but most of our money was already tied up in real estate. Our options were limited and I felt trapped.
However, this experience has taught me some important lessons.
I didn’t grow up learning much about money, but after getting married at 22, I knew I needed to get my finances in order.
Having watched my family and friends struggle with debt all along, I was drawn into the money advice camp advocating zero debt and even mortgage debt.
But everyone’s situation is different. Eliminating bad debt and maintaining a lot of liquidity would have provided the most financial flexibility.
After months of struggling with the bank, I was able to refinance my house and buy a new one near my daughter’s school.
After selling the old house, I put a 50% down payment on the new house and invested the remaining 50% of the new house’s value in an index fund.
Money can be a source of stress and hardship, and sometimes it’s okay to let your emotions dictate your decisions.
I thought a paid off house would relieve my stress. After all, a paid home with little access to money ruined my sleep. We needed to develop a more pragmatic approach to mortgage debt.
Investing 50% of the value of my home in an index fund was not just an attempt to build wealth. The main reason was the reassurance of having access to my own money in the event of an emergency or major change in my life.
If you’re trying to make a big financial decision, do a “sleep test.” Whatever your financial situation, ask yourself, “Which option will help me sleep better at night?”
I still believe that getting rid of mortgage debt can be a great goal, but it’s taken me a while to admit that my goals have changed.
At first, I was worried about earning enough money to support my family. Then I became interested in becoming debt free and used all my business profits to pay off my debts.
But now, with an income of $1.6 million a year, making my money easily accessible and building wealth has become a more important goal. I also strive to give more: my goal is to donate 50% of my profits to my church and causes I believe in.
Pick one goal you can focus on to make all other goals easier to achieve in the future. Is it debt repayment? How to increase your income? Do you want to open an investment account?
There are no right answers — only things that motivate you to take action.
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