Monday, July 1, 2013

Update - July 2013

I spent some time today updating our budget and something amazing jumped out at me...


We've paid off $100,517 in only three years!

While updating our July 1st mortgage balances, I rolled my cursor over an Excel "comment" field on my budget that was dated July 31st, 2010 showing a total balance of $255,025 spread over five different mortgages.  Among the now dead and buried are our personal residence and one rental property, both of which are now owned free and clear!  Now some folks don't seem to get very excited over paying off mortgage debt, but I do.  I think deleveraging is both wise and prudent.  Moreover, just as a growing porfolio of dividend paying companies gives one a feeling of security and satisfaction, the same can be said for disappearing debt...ANY DEBT, even the "GOOD DEBT".
We're not finished.  We'll continue to whittle away at the remaining mortgage debt totalling $154,508.   I am especially interested in getting property #3 paid off as quickly as possible because doing so will increase our monthly cash flow by $424.57 or $5,094.84 annually.  That's just the principle and interest portion of the monthly loan payment, or in other words the portion you get to keep once the mortgage is retired.  How large of a portfolio stocked with dividend-paying companies would it take to bring in an annual dividend income of $5,094?

Drumroll please...

A portfolio totalling $127,371 earning 4%.  You see, at this point I can bring home income equivalent to a $127,371 portfolio for only $29,565!  But wait, there's more...kidding.  The only problem is that I can't and won't see a dime of that extra cash flow until the mortgage is paid off in full.  Banks just won't give a partial credit for that amount until we've paid off every last cent.