Saying you want to be financially independent by forty is one thing. Having a plan is another.
So, here is our plan:
- Pay off our home by January 1, 2014. This is really where our family is different from the others on the block, and from some the other early-retirement/financial households. The math almost always says to put your money into the market rather than to pay down low-interest, sometimes-but-not-always-deductible home debt. It does in our case, too: we have a fixed 15 year mortgage at 4.25% and an index mutual fund will beat that most years. But here is one area where our psyche wins over the spreadsheet. I want the psychological freedom of having absolutely no debt. To that end, we're making an extra payment to principle every month. My gut says that once the home is paid off, my work performance may improve as I'd be willing to take more risks and to advocate interesting ideas, possibly making the psychological benefits financial ones, too.