Was the best investment I ever made a share on the stock market that went on to multiply my money by hundreds of percent? No, although I have enjoyed a few of those.
Was the best investment I ever made a high-interest bond with a multi-year lock-in clause? No, but I have done a few of those.
Did I invest in fine wine, art, or antiques, perhaps? No. Those areas are beyond my circle of competence.
An old-fashioned idea
The best investment I ever made for sheer life enhancing benefit and feel-good effect was one I completed around 11 years ago — I paid off my mortgage.
Well-accepted investing advice is that it is a good idea to pay down any debts we might be carrying before putting money into other investments, such as shares on the stock market. There is much less agreement on whether those debts should include the mortgage carried on our homes.
I took an old-fashioned approach to the problem and viewed personal debt — all personal debt — as undesirable. Investing my money into paying down my debts, and therefore stopping an outflow of interest at whatever percent, was as good as investing my money and earning whatever percent, I reasoned.
Investing bliss
I found that reducing my spending, debts and outgoings was even better than earning more because I then had the choice of not working so much. Perhaps that benefit is often overlooked by folks when doing their financial planning.
In a mortgage-free and rent-free world, I find the bucks I earn have much more bang than they used to. My personal fixed-cost base is set very low, so my monthly earnings quickly build to ‘profit’.
‘Not working so much’ is one salubrious possibility when we go mortgage-free. We can then hang onto that feel-good lifestyle by living below our means. That is something that becomes easier to do in a mortgage-free world, because our means are greater than they used be when saddled with hefty mortgage repayments.
Targeting mortgage freedom
I consider paying off my mortgage the best investment I ever made and it is an investment that pays ongoing life-style dividends. You can probably do it, too.
For those that own their own home, I would argue that investing regularly on paying down mortgage debt is the best work/life investment available.
One way of achieving a mortgage-free lifestyle could be to:
1) live below your means so that there is money left over at the end of every month.
2) use the leftover money to pay off any non-mortgage debt, thus further reducing outgoings,
3) when you have cleared all other debts, start paying more money than you must, to pay down your mortgage.
It might be worth talking to your mortgage provider before proceeding with accelerated mortgage repayments to make sure that there are no built-in early repayment penalties in your mortgage contract. If there are not, what are you waiting for? If there are onerous clauses, it might be time to renegotiate terms with your mortgage provider or switch to another.
