I have been paying my required mortgage payment plus 152% every month in an effort to eliminate my mortgage sooner rather than later. As COVID-19 grinds the worldwide economy down, I have suspended the extra payment in favor of building up cash.
In August of 2018, I weighed the arguments for and against paying off the mortgage early and rejected the “invest the difference” mantra. I starting making extra payments on my mortgage as of January 2019. Had I instead followed popular advice and invested the difference in the S&P 500, I would have nothing to show for it but a huge loss and essentially the same mortgage balance. By ignoring the conventional dogma, not only did I avoid the loss; I also have reduced my mortgage debt considerably.
In reflecting on my ability to cut my monthly mortgage payment immediately and to accumulate cash, I am thankful that I did not succumb to the temptation to buy a more expensive home in 2019. My family would be in a more stressful position if we were tethered to a larger mortgage during this biological and economic storm. When this storm passes, as all storms do, I will resume extra mortgage payments. I want to be completely debt-free when the next storm hits, and it will.
P. Gustav Mueller, author of The Present
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