Why you (probably) shouldn’t pay off your mortgage early

Obligatory disclaimer: I’m not a CFP, fiduciary, CPA, or lawyer. I cannot be held liable for any investment or financial management decisions you make based on my blog rambling.

For me, a mortgage comes with a heavy emotional weight. When I was young, my family went through bankruptcy and we were afraid that we’d lose our house. I remember my mom talking about it a lot, and I was pretty scared of what bankruptcy was going to lead to for us. We were going to be living in our car? But no, my mom was worried we’d lose the car too. What then?!

That’s neither here nor there. Suffice it to say, when we bought our first house, I wanted to pay it off ASAP. The best we could do then was an extra $100/month, which on a 30-year mortgage typically reduces your payoff schedule by 11 years! So we’d pay it off in 19 years instead of 30.

When we sold that house 6 years later and bought our new one, I was… what, 29? Almost 30. And I was looking at our 30-year mortgage and thinking we could pay it off by the time I was 40. Score!

But I was also starting to learn more about personal finance around that time. And over the next 2-3 years, I would start budgeting better and investing more to build our retirement savings. It became increasingly clear to me that paying off our 3.875% mortgage didn’t make much sense when I could put that same money into the stock market for an inflation-adjusted return of 7% compounded over the next 20 years. (And if we just look at the last few years, I’ve been getting more like 15% per annum.)

Then coronavirus came and interest rates fell through the floor. In 2020, we refinanced our house and took cash out of our equity for home improvement projects. We switched from a 30-year mortgage to a 15-year, our monthly payment went up by ~$400, our interest rate dropped to 2.875%, and our total savings on interest will be over $25,000 compared to the 30-year, even with the increased debt from the cash-out refi. We’ll also pay off our mortgage several years sooner than we’d originally anticipated.

I just checked and we could throw everything “extra” at the mortgage and pay it off in 4.5 years. By extra, I mean reducing retirement investments and not going on vacation ever and maintaining a gazelle-like focus on paying off the mortgage. For the sake of clarity, our mortgage balance is currently $142,998.96.

Given the short time-frame, you should use 10% in a compound interest calculator to compare against investing in indexes. 4-5 years is a bit short for averaging index returns, but this is all hypothetical, so let’s not worry about it. Investing everything that we might throw at the mortgage in 5 years only returns $139,196. That’s $3,802 less than paying off the mortgage. So it makes more sense to pay off the mortgage, right? Nope.

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2020 Reflections

At the beginning of 2020, or the end of 2019, I decided that my blog going forward would be written to my future self. And I’ve had a tradition, maintained pretty regularly over the last decade, of writing a year in review. Some years, it’s comprehensive and I write about my job, our church, our finances, my education, our family, etc. Some years, it’s brief.

2020 contained so much, and yet this blog will be quite brief. We did indeed have a lot happen in 2020, and for us, much of it was pretty good. Financially, we’ve made wise choices and are doing well. Isaac was born. I achieved some big goals at work and am optimistic that 2021 will be a really great year for me and my teams at Adaptavist. Our church is thriving despite us not meeting in person since March 2020. April and I read through the Bible last year, and are doing it again in 2021, and we both feel like our relationships with God have grown. Biden won the election and Trump may finally be held accountable for his crimes.

But I can’t bring myself to take an hour or two looking back over 2020 and writing. I want to look forward. I have a baby to snuggle with and a toddler to play with. I want to finish building our new playground this morning. We should take a walk to the coffee shop to get more beans. I’ve got another few chapters of Job to listen to today. I want to take this weekend to let my brain rest, and then Monday I dive into a new task at work that I’m excited about and I think will be really good for my teams.

The Lord is our God, The Lord is one. I pray that 2021 surprises us with goodness.

Graduated from Vision Therapy

I wanted to record here that I have finished vision therapy.

A few years ago, an optometrist observed that my left eye had a problem: it turned off. He was flipping the lenses and asking “better or worse?” and each time I said there was no change. My left eye wasn’t transmitting anything to my brain. Or rather, my brain had turned my left eye off.

He said it was because my old prescription was way off for my left eye, and that once we fixed the prescription, it should work itself out and be fine.

2-3 years later, it wasn’t fine. It was getting a bit worse. So I asked my optometrist what could be done and he recommended that I talk with a vision therapist. I gave them a call in the spring of 2018 and chatted over the phone enough to learn that:

  1. Going in for an assessment would cost me a couple hundred bucks.
  2. Once the assessment was done, I’d immediately need to start therapy, otherwise they’d just have to do a new assessment later.
  3. Therapy was expensive and I could expect it to cost $3-6000 depending on how long I had to go.

I couldn’t swing that in 2018, so I started saving, and then setup an FSA at work, and went in for an assessment in the spring of 2020.

My left eye was diagnosed with intermittent exotropia, which means it drifted to the left, but only sometimes. And that drift was happening because my brain was turning it off. I began doing therapy at the optometrist for an hour a week, and I was supposed to do it at home 3-4 times a week. I did alright at the beginning, but quickly my home therapy dwindled until I was doing almost nothing for the last few months. I would blame it on the new baby, except I wasn’t doing much home therapy before Isaac came along.

Despite my lack of work at home, my vision continued to improve. I had exercises and tests and did all kinds of things to improve my muscle control of my eyes, my focusing system, and my ability to process input from both eyes at the same time. That last was surprisingly difficult and exhausting at first.

Each set of therapy sessions was 12 weeks long followed by an assessment, and yesterday I had my third assessment (if you include that first one). After 27 weeks total, I graduated from vision therapy with a clean bill of health. I exceeded all of the tests they had, went as far as their machines can assess, and am doing great!

My left eye will still drift on occasion, but it never turns off, and I can both tell when it’s drifting and I can move it back into alignment. I can consciously keep it solid and forward 100% of the time now.

They recommended I still do one of my therapy exercises 1-2 times a week to maintain my processing, and I have appointments in 1, 3, and 6 months to check in and make sure there is no regression. But I doubt there will be given the huge improvements I have experienced in the last few months despite little at-home effort. So much of the therapy was learning the feel of my eye muscles and how to control them, and now that I have that, I don’t think I’ll lose it. The doctor echoed that and said that the vast majority of people never need to return for more therapy.

So I’m excited to be better, but I’m also a little sad. I started vision therapy after the pandemic got bad, and meeting with the three women at Vision Clinic who conducted my therapy every week has been one of my only social outings and connections. I spent over half of 2020 seeing them every week, and now it’s over except for the follow-up check-ins.

In response to the 2020 US Election: The Word of the Lord

Wednesday morning around 4:30 am, I began to pray. I think Biden was technically ahead in the popular vote at the time, but over 65 million people had cast votes for Trump. One comment on Reddit summed up my feelings perfectly: my heart is broken.

Donald Trump is demonstrably evil. He created a policy to separate children from their parents and put them into concentration camps. He undermined our education system. His actions contributed to the death of over 230,000 Americans and counting. It seems likely that he has raped multiple women and gotten away with it. He has denigrated our military, our veterans, our teachers, our healthcare workers, the fourth estate, and pretty much everyone but himself. He abandoned our allies in the Middle East and left them to be slaughtered. He has demonstrated a level of sexism and racism that has made us numb to it. He ordered a physical attack on a church for a photo op. He encourages and aligns with white supremacists. He is a fascist who has sided with evil leaders in other countries while spurning both our allies and US intelligence agencies.

And as of this writing, we know that over 70 million Americans voted for him.

Heartbroken and confused, I began to pray. God, I asked, why is this happening? Is the USA under the sway of a fallen angel, one of those powers and principalities against which we must pray? Have you ordained the fall of the USA? Or is this just human sin and evil made manifest? The stories in the Old Testament give us lots of examples of what happens to a nation that has a sinful leader who is not following God. The wages of sin is death.

I prayed and I listened for God’s still, small voice. And what I heard was:

Seek first the kingdom of God. I, the Lord your God, will provide for and watch over you. Serve the Lord by leading your family and serving them. Serve the Lord by serving in your community and helping people. Take up your cross daily and remain faithful.

It doesn’t matter who wins, God says. Whether it’s Trump or Biden, you must serve me, and serve your family, and serve your neighbors. Whether it’s Trump or Biden, remain in me and I will be faithful to you.

There is work for me to do no matter who is president. Biden getting elected doesn’t absolve me of my responsibilities. I don’t get to stop advocating for good and leave it to the Democrats. It doesn’t make my work easier or my yoke lighter. Only the Lord can do that.

I am glad that Biden won the election, but this has given me a new perspective. I’m probably going to follow politics and news and other things a bit less. I’ll continue donating money to causes and organizations I believe in, and voting for good and against evil, but I need to spend less energy thinking and worrying about national and international politics.

I need to spend more time in the Word, more time praying for our leaders, and more time learning from God how I can best serve my family and my community.

36 “Teacher, which is the great commandment in the Law?” 37 And he said to him, “You shall love the Lord your God with all your heart and with all your soul and with all your mind. 38 This is the great and first commandment. 39 And a second is like it: You shall love your neighbor as yourself. 40 On these two commandments depend all the Law and the Prophets.”

Matthew 22:36-40

Sitting in the garage

April is off to pick up dinner.

I’m sitting in the garage with the doors open.

And Simon is delightedly running circles around the garage, the van, and the doors.

It’s idyllic. And I wonder, are there people out there in similar circumstances who take this for granted? Who can just enjoy it without much analysis?

Because I am very aware of how blessed I am. And I am very aware of how temporal this is. It could pass in a moment.

I am deliberate in enjoying it. In soaking it in. Because I know how quickly and easily it could be gone.

Would being unaware be better? I don’t know. I think it might.

Is being aware better? I think it might. No way to know one way or the other, really. I can’t compare.

Oh well. I’ll appreciate it. I appreciate Simon’s excitement about the cat across the street, and the rain, and the old license plates we still have lying around.

None of this has been about you

Last weekend, I listened to a sermon from the SW Vineyard Church in London: How do we handle conflict?

And this was joined to my reflections on some situations at work, and BLM and the riots, and the racists who are opposed to BLM, and the people who refuse to wear masks because it “infringes on their freedom.” There are a lot of power struggles going on. There are people in power, or who are used to having a privileged position, who feel threatened.

And when combining all of these thoughts with that sermon, this song came to mind. I didn’t know why at the time, but I listened to it again.

And I had an epiphany. Forgiveness isn’t about you, it’s about me.

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Deuteronomy 26:13

On tithing:

…then you shall say before the Lord your God, “I have removed the sacred portion out of my house, and moreover, I have given it to the Levite, the sojourner, the fatherless, and the widow, according to all your commandment that you have commanded me.”

Deuteronomy 26:13a in the English Standard Version

This really jumped out at me yesterday in regards to our giving:

  • The Levite: our tithe to Springfield Vineyard Church.
  • The sojourner: our donation to the ACLU who continue to advocate on behalf of immigrants, particularly the children imprisoned in internment camps on the southern border of the USA.
  • The fatherless: next month, we’ll begin giving to the Boys and Girls Club of Springfield. Those kids aren’t necessarily fatherless, but this fits with the idea of helping provide for kids.
  • The widow: our donation to both Planned Parenthood and the Pregnancy Care Center. Again, not specifically to widows, but potentially to help women who aren’t otherwise getting the help they need.

Verse 13 continues through verse 14:

I have not transgressed any of your commandments, nor have I forgotten them. I have not eaten of the tithe while I was mourning, or removed any of it while I was unclean, or offered any of it to the dead. I have obeyed the voice of the Lord my God. I have done according to all that you have commanded me.

Deuteronomy 26:13b-14 in the English Standard Version