Living Mortgage Free

How did I get here from there? Perhaps it was dumb luck. Or maybe it was thoughtful common sense towards saving and planning, although in all honesty I can’t really give myself credit.

I have to come to the conclusion that, after working for 15 years at the age of 35, I took a modest plunge into my employer’s 401(k). I had no oversight from the company and surely no guidance from my parents. Dad was a farmer. Although he worked long and hard days and at times in the dark of night to maintain his dad’s and granddad’s many years of building the family assets, profitability was much less than it had been during the past generations. In part, our family’s financial security was reliant on the glory years of small farmers.

I am now semi-retired, having made an early exit from the stresses of dealing with a corporate mindset that takes a good chunk out of personal tranquility. Rather than accept a monthly retirement check, I chose a full payout of all of the moneys due me. There was no dipping into the funds for some frivolous spending. An agent with Raymond James provided me with a variety of options for investment. I felt comfortable with all of his recommendations as I pointed out my financial goals. His assurance that they were attainable as he explained the choices gave me comfort that I could realize a sense of security as I continue to age. A quick call to the agent to review the investments would result in a little tweaking in the direction that suits the mood of the financial markets.

During the same period in time, I was able to make the final payment on the mortgage of my home with the help of an inheritance from both of my parents’ deaths some 10 years prior. The sum was not huge considering five children in the family; I made sure not to squander the funds.

Rather than taking pride in the achievement of being nearly debt-free, it was a feeling of relief knowing the largest financial weight was off my back. Sister Sue commended me with the statement, “I don’t know anybody who doesn’t have a mortgage.”

For the time being living in Spring Hill, FL, in a new investor-built home after having sold the home in Orlando, squeaking by financially as my budget has been redirected from what used to be some discretionary spending to buying just the “basics” of living as we know it in America. There’s some minor debt but nothing that can’t be resolved in a reasonable amount of time with some thanks for those 1.99% introductory interest rates on a credit card.

It’s always those unexpected expenses that lead to the temptation, and eventual use, of plastic money. Property insurance and property taxes aren’t really what you’d call unexpected but they still have to be paid on a payment plan.

With all of this taken into consideration, I don’t feel secure in my long-term financial reckonings. The investments of the past five years have done very well, ranging from 12% to 20% of increased moneys. The downturn in the economy has eaten away a good chunk of those earnings but the overall picture still finds me with reasonable gains.

So, with my modest acquisition of savings and investments, including an annuity, I find myself in a unique and disbelieving situation where I am in a class with the so-called well-to-do citizens in these United States. I am among the segment of 12% of the population with the most funds for retirement.

Other figures from the 2008 Retirement Confidence Survey are extremely alarming for Americans. Roughly 61% have less than $50,000 in funds. In 2007, the figure was somewhat less at 58% and 2006 showed 65%. Today, a whopping 69% of existing retirees fit into the category.

I place myself among the 21% of workers who are “Not Too Confident” of having enough money to live comfortably throughout retirement. 43% are somewhat confident and a mere 18% are very confident. The remainder who are not at all confident is 16% - realistically I’m among this group of citizens.


This website will give you a multitude of survey results:

http://www.ebri.org/pdf/briefspdf/EBRI IB 04-2008.pdf

Conservative Me

When I purchased my first home at age 40, I took the conservative route imbedded in my rational thought process from childhood. Farmers don’t lead extravagant life styles and, as was the case with my family, vacations are few and far between so money is very precious.

If it weren’t for weekend trips “up north” Cranberry Lake near Houghton, MI, which was a mere two hour ride, and if not for the cabin built by Uncle Jerry, there would have been no vacations. Fortunately, Jerry and Ethelyn gave us four kids many summer trips to the cabin while dad and mom enjoyed a few peaceful days alone.

In the early 60’s the tranquility of rowboat fishing and dog-paddling around the dock, which Jerry had also built, gave me the best of summers. Coleman lanterns, a gas stove, a grill and a flashlight for those frightful tip-tow nighttime trips to that god-awful, spider-infested, gross-smelling outhouse were exciting experiences. They give me happy-heart memories. I’m still grateful for the simple things in my life.

I couldn’t have wanted for more. Having food a-plenty and a safe, secure and loving home life with a brother and sisters to play with were sufficient. My best friend, Chucky, whose dad worked at the Oldsmobile factory in Lansing, went on vacations to such places as Yellowstone. I was invited to go along but no one, not even Chucky, felt the degree of dismay as myself. It had nothing to do with me personally; it was asthma that kept me feeling down on the farm.

What was initially a bit of jealousy was quickly replaced with the sad fact that I would miss a significant part of the summer without bike riding, playing ball and the little adventures a couple of buddies have as kids. Those two weeks were among the worst of my life.

I’m liberal with some of my thoughts, but for the most part I lay in a stagnant pool of conservatism. Since I didn’t know Mr. and Mrs. Jones, thus having no one to keep up with, and a non-player of the social games that people play, when I sought the help of what’s-his-name, who was more a realtor than a friend, my goal was to take on a home loan that would leave me secure in a castle but well within my financial means.

I ignored words that told me that told me I could afford a home of such-and-such a value. I ignored the suggestion that an adjustable rate mortgage would be right for me but I feared it would cost me an arm and a leg if/when rates went up. After a couple of years I refinanced, not only reducing the monthly payments but also narrowing the freedom of owning the home outright from 25 to 15 years and still chipping away until it was paid off a year earlier.

I followed the same course of reasoning when I moved from Orlando to Spring Hill. I got more home for less money with cash left over that was spent on upgrading carpeting and kitchen appliances, painting the interior with semi-gloss for longer lasting, more easily maintained walls and buying a 48” plasma TV. For the most part, these were true investments. Although there’s too much credit card debt thanks to home insurance, property taxes and “the unexpecteds” of life, I’m still a mortgage-free homeowner, guaranteed to have a roof over my head.

I had the same philosophy of survival when I left home at the age of 20 with all my belongings stacked in a wholly-owned ’69 Gremlin with enough saved for a year’s rent paid in advance. No one could understand my reasoning but, since I was all alone and insecure in foreign surroundings, I could fill my tummy with many nights of macaroni and cheese, which is healthy gourmet food at that age, without the worry of living on the street or, heaven forbid, giving up and retreating to the given security of living in someone else’s home, namely my parents. I was young, free, determined and responsible enough to make it on my own. Living conservatively has always fit like a glove to my needs.