Financial freedom…it is often regarded as an urban legend by some.
Beginning with our childhood, we are often taught a general outline of how to proceed in life.
As elementary students, we are taught to continue with our education and go to college. This in turn prepares us for the workforce and we figure out what we would like to do in the world for work.
After college, we are “socially programmed” to get a job working for a business or a company. This allows us to make money and get a mortgage to buy a house.
We also buy and consume stuff. The majority of people in developed countries, purchase possessions and become an economic slave to the economy.
Our mortgage and housing costs take up anywhere from 25% to 40% or more depending on where you draw the line in the sand on housing costs. There are ways to save money on housing costs, but you will always have that big monthly mortgage payment unless you can address it.
We continue on this path for the next 40 years until we reach something called retirement. At that point our biggest expense, which is our house, will be paid off.
During this 30-40 year period, the bank made TONS of money off of you and that monthly mortgage payment you sent in 360 times; one every month. You have paid them above and beyond what the cost of that house initially was because of something called mortgage loan interest.
If you follow this pathway, which the majority of the world’s population does in developed countries, you will be able to achieve financial freedom in your late 60s or early 70s.
No wonder people struggle how to live in retirement with no money available.
Your life plan doesn’t have to be this way.
There are ways you can transform your life and achieve financial freedom much sooner. If you can find ways to pay off your mortgage early, you are addressing the number one expense that is taking up the majority of your income every month.
Financial freedom is a real thing. It’s not some “pie-in-the-sky” theory or buzzword. I have financial freedom in my life and so do many others.
Below are the stories of several personal finance experts and how they were able to attain financial freedom and transform their lives.
Financial Freedom: Personal Finance Experts Reveal Their Journey
I have been living a life of financial freedom for almost three years now. When I look back it’s still really hard for me to comprehend my current lifestyle. I got to financial freedom by traveling down a few different avenues. There were things I stopped buying which yielded a ton of savings. I was also able to pay off my mortgage early, downsize, and moved into a housing cooperative and was able to pay cash.
The greatest changes I noticed in my life were not all financial ones. Sure I was able to put together a really solid retirement savings strategy, but I also started to notice how my life had been transformed. I didn’t have financial stress anymore. And because of that, I started to live this different lifestyle and look at things differently in the world. I wanted to know if I was the only one who went through what I call a “mindset reset” or if others had major lifestyle changes when they started living a life of financial freedom.
I posed the following questions below to personal finance experts who have either paid off their mortgage or are mortgage free right now. Specifically I wanted to know:
How Has Your Life Changed?
How was your life when you had a mortgage? How much of your monthly payment was dedicated to housing/mortgage?
Do you notice or look at things differently in the world or in your life? What have you done with the extra money?
And now, what has been the greatest thing about being mortgage free? Is it the financial freedom?
Do you have more time now to do other things in your life? Volunteer or take part in community causes since you may have less worry now about money?
These were the responses below:
Tim from Life for the Better
How Has Your Life Changed?
My life has changed by having extra cash left over in my budget. This has allowed me to put more towards retirement and travel. I’ve also been able to give more to others. I’m not stressed to make more money for my budget so I’ve given more time to others.
How was your life when you had a mortgage? How much of your monthly payment was dedicated to housing/mortgage?
When I had a mortgage my life wasn’t out of the ordinary. My mortgage for the tiny house was $400-500 with insurance. Then I own a rental property and it’s mortgage is $750.
Do you notice or look at things differently in the world or in your life? What have you done with the extra money?
Completely! As I’ve said before I’ve had more time to give to others. I’ve done more random acts of kindness now that my budget has more wiggle room. I’ve also have traveled more and experienced life.
And now, what has been the greatest thing about being mortgage free? Is it financial freedom? Do you have more time now to do other things in your life? Volunteer or take part in community causes since you may have less worry now about money?
The greatest thing about being mortgage free is having the freedom to do what I’d like with my extra time and money. I’ve definitely volunteered more with the community and have done random acts of kindness.
Andrew from Family Money Plan
How Has Your Life Changed?
There are a lot of small differences that I notice. One is that I no longer check my bank balance 12 times a day (I haven’t checked it this week). Which is nice, when you don’t have a big chunk of money coming out every month your thoughts around money change. Another big one is when we want to do something it’s more about what we want to do rather than how can we afford to do it.
The biggest thing is peace of mind. Being mortgage free means that we are able to have a certain calm around all things money and that means being able to think thing through and having more options.
How was your life when you had a mortgage?
When we had our mortgage it was stressful. Every month you knew there was going to be a big chunk of money coming out so we needed to change everything around our finances and our lifestyle to make sure we could put as much down as possible on our mortgage every month
How much of your monthly payment was dedicated to housing/mortgage?
To get out of our mortgage quickly we lived on one income. That was the goal, we didn’t always hit it, but we did our best to so that we could pay off our mortgage quicker.
Do you notice or look at things differently in the world or in your life now?
I do. I notice that most people are trapped by their debt and don’t realize it. We were the same way. You just assume that it’s a normal way for things to be. Because all you see is other people doing the small thing. Now that we have escaped the clutches of our mortgage we realize that there is a whole other world out there and that things can be pretty awesome when you aren’t struggling with debt.
What have you done with the extra money?
The extra money has been spent on trips with our family and the bulk of it gets invested.
Andrew Daniels is the creator of the Mortgage Free Master Plan a 1 hour course that helps others create a plan to pay off their mortgage faster.
Marc from Vital Dollar
How Has Your Life Changed?
My wife and I paid off a 30-year mortgage in 4 years (2014). Then in 2016 we moved to a different house and paid cash to avoid taking out a mortgage.
This biggest change for us has been reduced stress and improved financial security. I am self-employed and my wife is a stay-at-home mom. Being a single-income family that has an unpredictable income brings some stress due to the unknowns.
We decided to pay off our mortgage 4 years ago because we thought it would give us more peace of mind eliminating our biggest monthly bill and knowing that our house is paid for, even if my income drops. We try to save and invest as much as we can, so the money that we don’t need to spend on a mortgage payment increases what we’re able to save for the future.
Due to my income that fluctuates a lot, I can’t really give a percentage of income that we spent on our mortgage. The mortgage at our old house was around $1,000 per month.
Russell from Unconventional Prosperity
www.unconventionalprosperity.com
How Has Your Life Changed?
My wife and I live mortgage free. But it is not because we have paid off our $216,000 mortgage – we still have a balance of about $200,000.
The reason that we live mortgage free is because we rent out our three spare bedrooms to students. The tenants pay our mortgage and then some! We usually have about $500 profit and live mortgage free every month.
It has not always been such smooth sailing though. We have had some very interesting tenants. One woman that rented a room from us seemed relatively nice and normal. Unfortunately, she had a psychotic episode and almost burned the house down.
She left the gas from our stove on, but not ignited. The 2000 sq. ft house filled with gas. Luckily, no one was home at the time and when we returned home, we managed to open all the windows and doors without incident. Unfortunately, it turned out that the woman had a severe mental illness. She ended up being locked up in a mental hospital for months and of course we did not get any rent for her room for that time.
Another incident that we have had to face, was when a tenant just let his dog poop all over the house and wouldn’t clean it up. He even moved his girlfriend in without asking us or having us add her to the lease. We eventually had to ask him to leave.
These stories are just to make the point that there has been some degree of sacrifice in order to live mortgage free. Most of our tenants have been great and some have become our long-term friends. Apart from the incidents mentioned above, we have maintained a 100% occupancy rate for the rooms in our house.
The effects of living mortgage free have been fantastic for us! We are able to invest in our blogging businesses (StockMillionaires.com and https://www.unconventionalprosperity.com) using the money we have saved by not having to pay a mortgage. This has allowed us to rapidly grow these businesses and helped us to become financially free in our early thirties.
Sebastian from Money Saved Money Earned
How Has Your Life Changed?
My life changed dramatically after I paid off my mortgage. I paid off my mortgage in 13.5 years. I was able to dedicate money to other areas that I wouldn’t have been able to if I’d still had a mortgage. For instance, I was able to remodel my kitchen several years ago, replace vehicles, travel more, and assist my kids with their college expenses. I was also able to retire earlier than I expected because I didn’t have a mortgage payment.
How was your life when you had a mortgage? How much of your monthly payment was dedicated to housing/mortgage?
My life was much more restricted when I was paying the mortgage, as that was my major expense. I had significantly more pressure to stay within my budget and to stick to the necessities. My mortgage was about 25% of my monthly expenses, but I also dedicated additional money every month in order to pay it off early.
Do you notice or look at things differently in the world or in your life? What have you done with the extra money?
I would definitely say I’ve looked at the world differently since paying off my mortgage. I’ve opened my eyes to more of my wants, and indulged in more luxuries. While I’m still quite frugal, I don’t worry about splurging every once in awhile. I’ve used the extra money for increased travel, a kitchen remodel, to replace older vehicles, and to help the people I care about.
And now, what has been the greatest thing about being mortgage free? Is it the financial freedom? Do you have more time now to do other things in your life? Volunteer or take part in community causes since you may have less worry now about money?
First of all, the greatest feeling is owning such a large asset free and clear. The value of my home has risen significantly in the last 27 years, and all that equity is available to me should I need it. Other than that, the best thing about being mortgage free is being able to retire earlier and the freedom to do things that I wasn’t able to while I was working.
Emma from Little House Lovely Home
How Has Your Life Changed?
We paid off our mortgage in April of 2018. After intentionally downsizing to a smaller home with our kids, we became ultra-motivated to get out of bad debt (I like debt for income-producing assets, but otherwise, no) completely so we could travel more. It’s always been our dream to travel the world with our kids. We are not high-income earners so we had to grow the gap between our income and expenses. Reducing our housing cost by downsizing and then eliminating that monthly mortgage payment has freed up over $1000 a month.
Being mortgage-free has definitely changed our outlook on life. We no longer worry about much at all. I am a stay at home mom and can now afford to remain one as long as my kids need me. My husband has a lifestyle job which earns less than his trade but is a ten-minute bike ride from our house. He’s home by 4.15 every afternoon to spend time with the kids. No weekend callouts or bringing work stress home.
And now, what has been the greatest thing about being mortgage free? Is it the financial freedom? Do you have more time now to do other things in your life? Volunteer or take part in community causes since you may have less worry now about money?
Long-term travel is now in our reach. We have options when it comes to our home. We can rent it out in the regular manner to long-term tenants or put it on Airbnb when we travel. Either way, it’ll make us some money while we travel.
Since paying off our home, the extra income has gone into padding our savings account and funding some local adventures. The extra money is also paying for us to travel to Fiji as a family in the New Year.
I’ve also increased our grocery budget so we can buy better quality food, something I just couldn’t justify when we were in hardcore debt repayment mode.
But perhaps the best part of being completely mortgage-free is security. Knowing our home is ours as long as we need it helps me to sleep better at night.
FINANCIAL FREEDOM, FOLLOWING YOUR DREAMS, TRANSFORMING YOUR LIFE…IT ALL BEGINS WITH YOU!
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