Reflective post incoming — It has recently come to my attention that if my wife and I sold all of our investments and pooled our savings accounts that we would be 100% debt free. I’m not going to lie, it’s a pretty exciting prospect. However, it also means that we are entering another chapter of our lives, the life after debt chapter.
I have spent so much time and effort working out how best to get out of debt, that now that we can do it, I don’t exactly know what we should do next. Obviously this is a great situation to be in, particularly with both of us being under 30 years of age, but being someone who is very goal orientated, it leaves me with a bit of a void in terms of what to do next.
With a young son and my wife not working, I am very cognisant of the need for me to continue bringing home the bacon. However, now that we can pay off all of our debts if we wanted to, I need to find a new purpose, or strive towards a new goal. Ultimately my main goal of being able to be at home full time and not tied to a job remains unchanged, it just means that now I have a little more freedom to invest or spend money however I please.
Recently this new found freedom has meant that I have been investing a lot more time into my side income ideas, more penny stocks and also an online store that my wife and I are working on. All of these things are great fun and should ultimately bring me one step closer to my goal of staying at home with my family, it’s just interesting having such a big change in focus so quickly. Normally I am a little bit more on top of my finances and could have told you to the month when we could have paid off our debt, but recently I have made a lot of really good investments on the stock market and have managed to increase my portfolio from $15,000 into close to $65,000 within the last year.
Now these types of returns are astronomical considering the time frame, and I owe it entirely to trading penny stocks. My conundrum now is, do I sell my stocks and pay off the mortgage debt in full? Or do I leave the debt on the books and just continue making money on the side.
I am in two minds at the moment… Option 1 sees me paying off our debt completely and starting our investment portfolio from scratch. This is appealing in that we own our house and are rid of the shackles of debt. The problem is that we would essentially have no money left over and would take some time to get a small nest egg to get investing again.
Option 2 sees me paying off the remainder of the debt slowly, but also retaining access to the hundreds of thousands of dollars in our offset account that we have built up over the last 6-7 years. This enables me to buy large parcels of stocks or invest in other opportunities on a whim, but it also means we continue to have the debt for a while longer.
At the moment i’m fairly sure option 2 is where I am heading, as I like having a large chunk of cash as a safety net / investment fund. Although the thought of owning our house outright is hugely exciting. I guess in a way we sort of do own it outright, it all comes down to mindset and what you are comfortable doing with your money.
Also, I will update our debt progress page one day soon, I just have to find the time 🙂
Are you debt free? What would you do if you were me?