Progress to Date

  • Original Loan Amount: $204,000.00
  • Balance at Beginning of 5-year Goal (1/1/08): $188,983.82 @ 6.00%
  • Balance at Refinance in February 2009: $148,000.00 @ 4.625%
  • Outstanding Balance: $0.00 (PAID IN FULL!!!)
  • Latest Payment Date: April 2011
  • Latest Additional Principal Amount: $17,623.22
  • Amount Ahead of Schedule (since refinance): $121,462
  • Time Ahead of Schedule (since refinance): 7 years 10 months
  • Interest Saved Last Month: $23,972.48
  • Total Interest Saved: $28,435.55 ($1,037.74 on original mortgage; $27,397.81 on current mortgage)
  • Months Remaining in 5-year Goal: 20
  • Average Monthly Principal Needed to Meet Goal: N/A (Goal achieved)
  • Progress List Explained

Saturday, March 12, 2011


I've worked for my employer for more than a decade. My stated salary includes a yearly bonus which is rather predictable -- it does not vary much from one year to the next, and can be considered part of standard compensation (that is, if the company remains profitable, the bonus will be paid).

However, my employer also offers a true bonus, which is a more rare event. It is a challenge to earn (it requires a stellar performance review score), and it is not immediately paid (it has a vesting period of two years, on top of an announcement and payout schedule which means just over two years and three months pass between the time the bonus announcement is made and the final payout occurs).

I unexpectedly earned this true bonus in late 2008, around the time that the DTM project was a year old. I completed the vesting period at the end of 2010. Yesterday, at long last, the bonus was paid to me.

I consider this a windfall for our mortgage payoff. It was something I never counted on during the initial planning phases. The timing of the payment almost assures us that we will reach our original five-year goal, and makes it extremely likely that we'll be able to meet our revised goal of paying off the mortgage in the 2011 calendar year.

The company mood between the end of 2008 and the end of 2010 (my bonus vesting period) was cautious and stressful. Rumors of layoffs turned into actual layoffs, some grand in scope and some more focused. Just after one wave was complete, another rumor would crop up, followed by more cuts. It made it impossible to relax, and job security became a myth. Morale plummeted. Had I been targeted during any of those "reductions", my deferred bonus would have been lost.

Fortunately for me, my group was less affected by job losses than other areas -- we were aligned with a part of the business which remained profitable even during the lean times. I will readily admit that good luck played a role in my continued employment -- I knew many extremely intelligent and capable people who were let go because the company mandated more aggressive cuts in their lines of business. Sometimes, it's better to be lucky than good.

Meanwhile, my wife moved into a higher-paying job in the second half of last year. She's been very pleased with the move and considers this to be much closer to her "dream job" than her prior position.

Given the wider employment situation across the country, it almost feels tactless to share the news of personal success when set against a backdrop of others struggling to make ends meet. I know several people who lost their jobs in the past few years who have not been able to find suitable replacement work -- they face bleak prospects with low-paying options or very short-duration job stints interspersed with periods without an income. I try not to take our current situation for granted. Who's to say that my wife and I will both be employed at this time next year? I think it's prudent to pay off the mortgage while we have the means to do so. Once that monthly obligation is gone, our cash flow would improve significantly: given our current lifestyle, we could easily make ends meet indefinitely, even if only one of us was earning an income.

I find myself trying to envision our lives after the mortgage is gone. I'm encouraged to work towards a lifestyle which is much less dependent on earning a full-time salary. Developing multiple income streams would help offset the risk of a sudden job loss. I'm sure that will be our next project.


Anonymous said...

Congratulations on your bonus!! I enjoy following your progress and look forward to seeing the 'death of your mortgage'. I recently paid off my mortgage and it is a wonderful feeling.

Sandy @ yesiamcheap said...

Congrats of the bonus! I am happy that you look at it as a windfall and not as part of your regular compensation. Too many people relied on those windfalls to buy homes that they could not afford and live a lifestyle that was really beyond their means. I speak of the banking industry where large bonuses are the norm. Anyway, glad to see you trucking along.

The goal of building different incomes streams seems like a good one. I am working on that myself while trying to kill some debt. :)

Middle Way said...

Well written and fluid post.

I believe it is in times like this we need to hear positive stories. Too much down and out stuff slows down motivation.

I'm thrilled for you that your bonus materialized and the end is really here.

And I'll be curious to hear about your alternate income stream ideas.

B-Kat said...

I'm so pleased to have found your blog today! I am on the exact quest as you.

A bonus to throw at the mortgage really helps move the numbers along!

The thought of saving all of the money on interest and having life mortgage free really is a great motivator.

The Executioner said...

Thanks all. Always good to hear from people who have eliminated their mortgages and are reaping the benefits.

Sandy -- good luck on the debt paydown.

Middle Way -- The income streams are not fully materialized yet, probably limited to investments at first. This will be another project to itself.

B-Kat -- sounds like you are well on the road to mortgage-free living. I'll be watching your progress.