I’ve discussed at length on this blog paying off the condo – that I should pay it off rapidly, and in order to do that, whether it’s better for me to pay the money down on the mortgage as soon as I get it, or to collect it all and then pay it off all at once.
In the beginning of the exercise, the mortgage was a $101k mountain. I inspired myself to climb the mountain by saying it was only 10 months to finish. I paused on my ascension to max out retirement (and take a few vacations). I resumed and climbed really hard last October. Now that I’m just (by Friday) $10k / 2-3 months away, I find myself looking at another mountain – the big pile of money I’ve built up. That pile of money has real power – it would allow me to fix up and sell the condo as soon as I felt like it. It would allow me to quit my job if I felt like it.
I’ve thought a little about how I’d like to max out retirement for 2017. I have until April 2018 to do it. One viable way is for me to save up even more, and then closer to the end of the year just dedicate 100% of my paycheck to the 401(k) and live off savings. Assuming I could save $4k a month, I’d have the $24k needed for retirement. If I didn’t pay off the condo, beyond the $24k to live off of, I’d have $45k+ in reserve that could be used to pay off / sell the condo / make big changes in my life whenever I felt the time was right. If I pay all the money down on the condo, making big changes in my life would be less tempting, since I’d have to first save up enough cash to make the transition happen, and just the logistics of doing that would make entertaining a big change a very unappealing topic. This isn’t great, because it could cause me to overlook some truly special opportunities.
This isn’t to say that I won’t pay off the condo. I am not sure. I probably will. But it is a recognition that cash is king, and I’ve never had $80k outside of retirement savings. I’ve never really thought about how I might invest that. It’s a good problem to have.