29 August 2019
Two and a half years ago, I shared with you our plan for paying off our mortgage early. In that post, I walked you through our journey up until that point, from simply making extra payments each month to investing the extra payment in a brokerage account. Over the last year there’s been a new plot twist (as I alluded to in this post!), and I’m happy to pull back the curtain today!
Let’s look at a timeline, shall we?
Spring 2013: We buy our house! We pull together a 13% down payment.
Fall 2014: After paying off our car loans, we use about half of what we had been paying to make an extra mortgage payment each month (directly to the bank), and the other half to build up a fund for our next car purchase.
Fall 2015: Car fund complete, we shift the amount we’d been paying toward our mortgage, too. Instead of paying down our mortgage directly, though, we begin transferring the extra monthly amount into a brokerage account and invest it in a mutual fund.*
The main critique of paying off a mortgage early is that it doesn’t make sense to pay off a low interest rate mortgage when you could be earning higher rates of return by investing. We still planned to pay ours off early, but ALSO wanted to take advantage of compounding interest by investing the extra payment instead of applying it directly to the mortgage. We were comfortable with the extra risk that exposed us to (and the extra willpower it required of us!).
When we saved enough to pay off our mortgage, we would pay it in one lump sum. Hooray, right!?
My husband, though. He’s always thinking. And last year, he came to me with a suggestion: what if, instead of simply saving the amount we needed to pay off our mortgage and then handing it over to the bank in one huge sum, we saved a little longer – maybe two or three years, maybe less, maybe more (depending on the market’s performance). If we could wait just a few years longer, then we would have amassed a large enough amount of money that, carefully invested, the returns themselves would be large enough to cover our monthly mortgage payment, meaning our mortgage would no longer need to be a part of our household budget.
It would be as if we had paid off our mortgage, and yet, we’d also be realizing these other benefits:
1. We would not lose the mortgage interest tax deduction (less of an issue under current tax law).
2. By the miracle of compound interest, in 23 years, when we make the actual final payment, our calculations project we should still have anywhere from 50% to 150% of the money we started with (!!!).
3. That large remaining lump sum could then be used to pay for kiddo college tuition, a rental property, a fabulous vacation, some really extravagant generosity, or – most likely – all of the above.
A mostly unrelated but highly adorable photo of Shep and our home
When John first presented this plan, I was not particularly enthused – all I heard was “a few more years of saving” and no “we’re debt freeeeee!!!” scream. (Because technically we wouldn’t be, and it would be weird to scream “we have XXX in our bank account!!!”)
But John’s desire was to make the most of our years of sacrifice, because we both desire to be good stewards of our money. This sounds harsh, but to work so hard to save so much and then sink it directly into a illiquid asset like a home instead of allowing it to continue to grow seemed like a squandering of possibility. If we could steadfastly reach this goal at a relatively young age, it would behoove us to continue that momentum instead of slamming on the brakes by sinking it into our home.
Okay – I was on board. And maybe you’re nodding alongside me right now. This all sounds good, right?!
Here’s the HUGE X factor – with this iteration of the plan, like the last one, we are vastly more exposed to the market than we would be if we were making payments directly to the bank each month. As I talked about in this post, by making those payments directly, it’s like getting a guaranteed 4% (or whatever your mortgage interest rate is) return – nothing thrilling, but respectable for zero risk. Our approach requires accepting that the money we’re socking away could actually lose value – and that’s why we don’t know exactly how long it will take us to reach our goal.
Worth mentioning at this juncture: if you like the idea of trying something like this, I would highly recommend working with a financial advisor (and one who understands what you’re trying to do). Of course, it’s possible to make investment decisions on your own, but I don’t want to give you the impression that it’s just little Miss Creative Director over here knowing all the things and that you should be able to do the same. John IS a financial advisor, and if he weren’t, we would definitely be seeking expertise on decisions of such magnitude.
A final word of caution, the same one I gave in my last mortgage post: I would only consider doing our “next level” system if you have a long track record of steely willpower with your money. It is so tempting to just take a little here or there as you watch that fund grow and other needs come up. If you’re nervous you’d be tempted or don’t want to stomach the risk, just apply the extra payments straight to your mortgage – done and done. Also a fantastic option.
I want to end by saying I realize this post is Marvelous Money 301. It’s a more advanced topic than I usually touch on, and perhaps it feels wildly out of reach for you right now. I get that. I share this not to brag (!!!) or make you feel defeated (hopefully you know that!), but to stretch your imagination of what’s possible, and perhaps plant in you an idea that you’d never heard of before.
My next MM post (series!) is going to be squarely back at the 101 level, and it’s the most-requested topic that I’ve yet to touch on: investing 101! I can think of few topics that are simultaneously as intimidating and as powerful. I’m excited to dig in :)
*Earlier this year, as an experiment, we shifted our money from mutual funds into a managed account. We’ll talk about this more in the forthcoming investment series!
A final reminder: I am not a financial professional, and nothing I say here should be construed as investment advice! I’m just one gal sharing her story :)
26 August 2019
Here’s a question for you: do you wear makeup every day?
Most days? Some days? Never?
For a long time, I’ve worn some makeup pretty much every day – usually under-eye concealer, a light BB cream, cream blush, a little bit of setting powder, and a tiny bit of eyeliner on the lower outer corners of my eyes. Sometimes mascara.
It’s not really a “fun” thing for me (it’s also not not-fun – just neutral!), but I do like how I look when I wear it. It’s hardly noticeable, but with makeup, my complexion is just a little more even and my eyes are a little more prominent.
The second day we were in Maine this year, though, I put on my usual sunscreen and then… walked out the door. Why? A few reasons, I think:
1) In this particular community, it’s an established norm. Most Islanders subscribe to the classic New England throw-on-a-hat-and-call-it-a-day look. Many people wear tees, shorts, and sandals every day; I’m in good company with a no-makeup look.
2) I’ve known these people my whole life, and they’ve known me – I’m known and loved. I feel like one of the reasons I wear makeup in my “normal life” is to try to manage the first impressions of others, and that’s not necessary here.
3) It’s an active place. We’re in the water, in the sun, on the boat, walking, swimming, playing tennis. There’s little point in spending too much time applying product just to have it wash off a few hours later.
4) I rarely look in the mirror there. At home or at work, I pass mirrors several times a day and give myself a once-over each time. I spend a LOT more time outside in Maine, and it seems to be out of sight, out of mind with me – I just think about what I look like a lot less.
5) When I’m in a beautiful place, I find I care less about my own beauty. I’m just grateful to be there, and I already feel like my best self living my best life :)
In my continual quest to live my best Maine life at home, I’ve been forgoing makeup more often since our return. These days, I’d say I’m wearing it about 4/7 days a week. I generally don’t wear it on days we’re planning to ride our bikes, or days I’m working from home and won’t be “on camera.” I’d love to get to the point where a CC cream or concealer doesn’t make any difference, and my hope is that by wearing makeup less often and letting my skin breathe, I’ll get there faster! :)
This is a topic that could go much broader and deeper, but we’ll leave it there for today. I welcome your thoughts on any of this, but mostly I’m curious: do you wear makeup every day?
Photos from Maine, sans makeup. Affiliate links are used in this post!
22 August 2019
Here’s the thing: it is as idyllic as it looks. It’s blue ocean as far as the eye can see, and blue sky as far as the eye can see, and salty-seaweedy air, and cool evenings, and eating blueberries off the bush, and cousins who love each other, and reading all afternoon, and charming shingled cottages with actual lobster buoys hanging on the side.
And here’s something else, something I am becoming increasingly aware of with each passing year: these things don’t just happen, they are made to happen. This place, it takes people making budgets and writing by-laws and picking up brush in the sun and asking after each other’s children to keep humming along so beautifully. These family cottages, they take people agreeing on common rules and doing the dishes even though they’re on vacation and abiding alongside each other even when they couldn’t be more different.
It’s easier to go it alone, but it’s not more beautiful. That kind of beauty is hard to show in photos, but somehow, it seems to be reflected in the scenery of our beloved island in Maine, and that I can show you…
For those who are new: “the island” is a small community off the coast of Maine with 36 cottages and one truck. Two of those cottages belong to my Dad’s side of the family and my Mom’s side of the family (that’s how they met – both have been in their families for generations, and they grew up going to this place each summer, just like I have!). The one truck can be used to help move the big suitcases (and VERY excited kiddos), but everything else gets pushed and pulled in Gardenway carts. Good thing Pop Pop has lots of help :)
Shep had to wait almost a whole year for his first trip to Maine, but I think he’d say it was worth the wait!
The daily reading club :) No, June is not yet reading chapter books – she just wanted to do everything her big cousin was doing!
The view from my Dad’s family’s cottage. How???
We had an early riser in our crew many mornings which, while not my preferred outcome on vacation, was hard to be grumpy about with views like this.
One night we had a fire on the beach and roasted s’mores. It was so nice to wear a sweatshirt after the North Carolina heat!
My stripes guys :)
Even the color and pattern of the rock here is as familiar and comforting to me as the back of my own hand…
I saved a few of my favorite photos for last. They’re not the best lit or perfectly composed, but they capture that beauty I spoke to at the beginning of this post.
Snuggles, hugs, and lots of giggles.
I’ll leave you with this girl gang. So lucky to be together with these gals (and our guys!).
Maine in previous years:
15 August 2019
2014 (and a video – one of my favorites!)
One of the activities at our book swap party was a simple jar where gals could drop in their favorite books of all time – the ones they think everyone should read! I was SO intrigued to read the picks, and I thought you might be, too…
All the King’s Men by Robert Penn Warren
An American Marriage by Tayari Jones
Americanah by Chimamanda Ngozi Adiche
Ask Again, Yes by Mary Beth Keane
Bad Blood by John Carreyrou
The Book Thief by Markus Zusak*
The Bright Hour by Nina Riggs
The Coddling of the American Mind by Greg Lukianoff and Jonathan Haidt*
The Cruel Prince by Holly Black
Cutting for Stone by Abraham Verghese
Defending Jacob by William Landay
East of Eden by John Steinbeck
Educated by Tara Westover*
Eleanor Oliphant is Completely Fine by Gail Honeyman
Ella Enchanted by Gail Carson Levine*
Field Notes on Love by Jennifer Smith
A Girl of the Limberlost by Gene Stratton-Porter
I Was Anastasia by Ariel Lawhon
Jitterbug Perfume by Tom Robbins
Just Mercy by Bryan Stevenson
Limelight by Amy Poeppel
The Lost Art of Keeping Secrets by Eva Rice
Maybe You Should Talk to Someone by Lori Gottlieb
The Nightingale by Kristin Hannah*
The Pillars of the Earth by Ken Follett*
The Seven Sisters series by Lucinda Riley
Small Great Things by Jodi Picoult
The Sound of Gravel by Ruth Wariner
The Stand by Stephen King
To All the Boys I’ve Loved Before by Jenny Han
When I Pray For You by Matthew Paul Turner
Why We Sleep by Matthew Walker
…and Pressley suggested we all just follow Annie B. Jones for the best book recommendations!
I’ve cosigned with an * the ones I’ve read above, but consider this your end-of-summer reading list from a whole gaggle of smart, fun, well-read friends! :)
What would you add? Which books on this list can you cosign to?
Affiliate links are used in this post!