Day 21: It's Okay If You Do It Right
by Edward Smith
26 Jul 2020
Financial Redemption Is a Choice
If you read my last article entitled 🤠How to Take Advantage of Your Unexpected Win and Avoid Losing Out!, you would have learned how we were able to sell our overpriced house and turn the whole thing around. It took some decision making and some habit changing, but we learned our lesson, cleaned the whole thing up, and were now looking pretty.
Flash Forward to 2018
By this point our California house was sold, we had moved across country, and had finished living in a hotel for three months. With the ability to pay for things in cash, we were able to quickly close on a three story, 2,640, square foot town home that cost $495,000.
It was more then what we originally intended to purchase, but this time it was okay, because we took our time, did our homework, and things were drastically different.
We were able to pay cash for more than half of the house's value. That meant that instead of buying a $500,000 home, it was like we were buying a $150,000 home that was worth $500,000. We also had done our due diligence, we knew what we could afford to spend, we refused to go over that amount, and we refused to get over our heads. We had a plan.
We could have gone smaller or bigger in this scenario, but we found a house that struck the perfect balance between what we needed and wanted. We were super careful, and we stuck to our plan and our correct numbers. Walking into the new location we found out that the $350,000 homes were older and were usually in bad areas of town with gangs, higher crime rates, and drug trafficking.
The house we found was in the middle price range. It was the perfect size for a family of four, it was located in a great area with great schools. It was only seven years old. It wasn't too large, and it came with a ton of modern amenities. It met all of our needs (and even came with extra stuff we didn't know we wanted). Best, it was very much in our price range and we could manage paying for it easily with only one job.
Returning Balance To Our Lives
Now our financial numbers were back to normal. Our house payments were only 25% of our take home pay. We were able to put down a down payment of 70% instead of 15%.
We now had choices and wiggle room. Since we had shrunk our other expenses, we decided to take the money and use it in a wise way. We voluntarily, kept paying higher on our mortgage bills each month, even though we didn't have to. We did this to, to reduce our timeline and it has always been something we were able to stop at any time.
Thanks to that decision, we are now on target to be completely done with house payments forever in two years.
Eight years of time, two more years of paying it down, and we will have paid down a thirty year mortgage in about ten years. Life is super funny that way. We turned a potential financial disaster into a life changing win.
My two sons will enter middle school, living in a fully paid for house. They both witnessed the struggle. They saw what we did. When it's all over, it will be the new family story.
The story started with a new house, in an overpriced city eight years ago. It will end with my kids receiving a super awesome education about perseverance and grit. That lesson is powerful. It will serve them well in life. All in all, things worked out marvelously.
Paying Ahead, Gets You Ahead
That's How You Turn Failures Into Victories
Wars Are Not Lost in a Single Battle. Keep Fighting, and Turn Things Around.
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