Whilst reading a book not too long ago an interesting analogy was made. It was in regards to “getting rich”, however I feel it also applies to paying off your mortgage.
You get to the finish line faster by sprinting, especially if you’re not jumping over any hurdles.
Now the obvious quote is indeed obvious, but I find it helped me a great deal in stepping back and taking a look at what exact things were important, why, and finally what hurdles where in our way to paying off our mortgage. How quickly could we get to that finish line if instead of walking down the path of life, we instead disregarded as much as possible and sprinted for the finish line? Like in business, many of the “ways” we do things in life are inefficient because we are trying to cater for a vast amount of different scenario’s. For example, the age old rule of only dedicating 30% of your income towards your mortgage means you take far longer to pay off the debt, however it allows you more money to enjoy your life, it also helps cover you if bad, unexpected things pop up. You walk to the finish line, but you enjoy it and get there safely.
Now running or even sprinting isn’t for everyone, in fact the vast majority of people seem to almost go backwards entirely over the course of their lives. They’ll pay off a small percentage of their loan over the first 10 years, be making a bigger income by that point and then go off and “purchase” an even more expensive property. Running (that is, paying more towards your debts) is harder, there are more sacrifices to make but you do indeed get to the finish quicker leaving the world open to more possibilities once you get there. It’s not for everyone but to me, I get great satisfaction from finished projects or tasks and getting to the finish line on paying off our mortgage will indeed be a sweet chapter to close. Part of the excitement surrounding it though is what we’ll be able to accomplish after that day comes as there will be such a large volume of money that for the first time in our lives will be entirely for us to do with as we please.
One of the other good benefits with sprinting is the security it brings, if you’re running the whole way and paying off more than you need to at every turn, it is very easy to pull back a bit and take things down to a walk during those rough times. If you’re walking as slowly as possible when these bad times come, there is often nothing else to do but to harshly cut back your lifestyle which can be extremely difficult to cope with and put a lot of undue stress on a couple.
The other aspect of this analogy is of course the hurdles which represent obstacles that are in the way of paying off the mortgage quicker. Now these hurdles might be there because that’s just the law (for example income tax), they might be there because we’ve never really looked at them and decided for ourselves whether or not they should be there (for example that Foxtel subscription that you kept for no reason after the 3 month free trial period expired) and other times a hurdle can be in your way because you’ve specifically put it there (for example you may have the unchangeable thought that a home loan is “good debt” and so you don’t need to pay it off quickly). Whatever the hurdle, it’s a good analogy to keep in mind as it changes your view of a problem. When you view problems or other things that stop you from getting to that finish line as quickly as possible as “hurdles” that can be simply moved to the side, you’ll find that you may be able to push yourself further than you thought. These hurdles might not always be physical things such as income tax, they can often be psychological too, but once you picture them as a physical object I find it’s much easier to devise a way around them as they’re no longer “forced” upon you as so many people feel their problems are.
How To Move Hurdles
The best way I’ve found to move hurdles out of the way it to simply go cold turkey. I often do this with a “test phase” first of maybe a month or two to see how it all goes. Along with this I try and stick to the promise to at least go for that test phase before jumping to any quick verdicts. This works the same way as the psychological trick they use on you for that 3 month “free” Foxtel subscription trial. With the Foxtel trial, you are pulled in by the thought that “oh, it’s free. Even if it’s terrible, I’ll just not use it after the 3 months is up and I won’t have lost anything”. Trouble is, people value things more when they own them than if they were instead looking to buy them. Once you “own” the Foxtel subscription, you assign a higher value to it, you also don’t want to “give it up” out of pure greed. Even if you don’t like it though, there is still a psychological barrier there because you can bet the farm they’re going to make it as hard as possible to cancel it at that 3 month mark.
Kicking that hurdle to the curb cold turkey though has a lot of advantages. You normally do it because you read some convincing article (such as this one maybe) and think “damn straight! I’m totally going to cut out _____” and so cutting it cold turkey, although hard, is spurred on by this short lived enthusiasm. The immediate change can also let you see the changes straight away which will help as well. After the initial enthusiasm has worn off (maybe 2-3 days or so) the other part comes into play, a commitment to just “try it for a month”, two months or however long you previously decided I find keeps you going. You might be miserable during the test for the first few days, but by the time a month has passed it should be enough for you to have developed any needed new habits. You will have given yourself a good amount of time to properly adjust to your new way of living and thus, you’ll be able to make a more informed decision on whether or not you should continue without that hurdle in the way. The vast majority of times I’ve found that getting rid of those hurdles not only speeds things up paying off the mortgage, but also makes me happier as well. There is often far too much clutter and crap in everyone’s lives and by giving things up we streamline everything and decrease the amount of hassle we create for ourselves.
So what hurdles are you walking / running / sprinting over? How much faster would you be going if they weren’t there? And what pace are you currently going at? Even if you remove only one single hurdle by having a bit of a think about this right now, I’m sure it will benefit your life so do give it a go.
The benefits include: 1) How to pay off your mortgage faster than 99% of people with one hour a month of work 2) How to get rid of your debt and have the freedom to spend money on the things you love, guilt free 3) Clear outline of how to setup your expenses, mortgage and general finance 4) How offset accounts work and how to get the same result without being gouged by the big banks 5) How to cut through the crap and focus on the things that truly matter when taking down a mortgage 6) How to adjust the strategy so it works for you, even if you have kids, even if you only have one income 7) How to do all of these things and maintain a normal social life (and never be cheap).