Tuesday, June 19, 2007

Light at the End of the Tunnel

Well we did it, for the second time. Okay get your mind's out of the gutters. We paid off the mortgage. We are mortgage free for the second time. Last time it lasted about 3 years before we added on to the house and bought our RV lot. I wonder how long I can hold out this time before I drag myself back in to a financial quagmire.

We didn't owe that much, we had the savings to cover it and they were not making much interest so we decided to up the return on our savings by paying off the mortgage. Net effect we went from a net loss of 2 1/2 percent to 0 percent return cause the money was spent. So while we are making nothing we are saving 2 1/2 percent (Since the term deposits were only earning 3 percent and the mortgage was 5 and 1/2 ) Now we can save the money we were paying on the mortgage and invest it theoretically.

Anyway it is good to see no loans on the books. We are in the black. The light at the end of the tunnel was not just another train on the same track. Can you imagine?! So what to do with all our lucre. I don't know but it probably won't earn very much. But we do have a very valuable asset free and clear. This house is a two storey, originally 1000 square feet or so that we added on to to bring it up to 1300 sq feet.

Original purchase price $72,000 in 82 at 18 percent (where the hell is that rate now that I have savings eh?) Paid off the first time in 94. Then we added on for 50000 and bought the RV lot for another 20000 or so. so between the two properties we have 140000 invested. The interest we paid is, frankly money down the rat hole so we won't even go there. I learned now that I can sell the house for almost 400K (Yep it's Calgary home of house prices that make Torontonians nostalgic for the 80's). The lot is probably good for another 50-75K. So that makes it nearly half a mil if I wanted to be homeless. Am I a lucky investor or what? That's it dumb luck. Don't let anyone tell you that they planned it in the real estate market. It is all of us that are in my positions who are saying how the heck do I get my money out of this? If I could figure that out I would be clever.

I do know one guy who has or is sort of doing it. A buddy at work is selling out an moving back to Saskatchewan. He will be out from under (way out because his house doubled since he bought it) he will have enough to get a very make that very very nice place in Regina and rather than being unemployed as he thought he would be the company will let him set up and work his same job out of our Regina branch. (Computers are clever things he can work there live cheap and do the same job.) And it wasn't his idea, he only wanted to go back to be close to elderly parents and family. He was planning to quit and look for a job when he got there.

So that's the solution I guess. Sell out here, move back to Saskatchewan a go there and take a job or better yet the same job. Well Saskatchewan is nice but I think I'll wait till the company opens a warehouse in Lahaina Maui.

Still working on Freedom 85...


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