After spending your years with your eyes on the prize, employing these tips to pay off your mortgage faster and thinking about the future of your family, you’re THIS CLOSE to paying off your mortgage.
The day you own your own home outright is a huge achievement, and not something to be taken lightly. So congratulations to you!
Now that you don’t have to put your hard earned income into paying off debt each month, you’re in a prime position to tick other things off your life’s bucket list. And you’ve every right to take that trip to Fiji, or buy that new computer.
But keep this in mind: excitement makes us do some crazy things, and when it comes to your money, I want you to think with your head, and not your emotions.
Now that we’ve got Dad’s Advice out of the way, the question is…what now?
Do you…
- Finally take that around-the-world trip you’ve always dreamed of? Obviously. Save that extra money you’re no longer paying your lender, and enjoy yourself!
- Use your home as equity and start borrowing again to buy more property, maybe even an investment property in Sydney? You could do.
- Invest your money elsewhere, like the share market?
- Stay out of the Sydney property market and just enjoy your home?
Before you go any further, ask yourself – what is your end goal?
For most people who’ve been seriously introspective about their goals, ambitions and financial future, I’m guessing that:
- You want to be independent of work, or to work a little bit less. You’re longing to invest your time in doing things you love, like travelling, or volunteering, or learning something new. Hell, it could even be starting up another business!
- To be financially free so that you’re in a place where travel and learning for the fun of it are no longer out of reach. Because with that mortgage paid off, you won’t have to spend all of your time working. Which isn’t to say that working is terrible for all people. You might even love your work. And if you do, kudos to you! But let’s just say you want to be in a space where work is something you choose to do because you love it, and not just because you need the income.
So with all of this in mind and your mortgage almost blasted into your financial past, it’s time to consider your options and think about the rest of your financial future.
How to get wise with your finances when it’s D-Day for your mortgage
- Make extra super contributions
Making extra super contributions is a low-risk tactic for slowly building up a little bit more cash for retirement. If the property market game is not for you, this could be a viable and easy enough option. - Use your house as equity to purchase an investment property
Investing in Sydney’s property market is big business, and has delivered great results for some. If creating a passive income stream is part of your big dream, it’s time to decide on a dollar figure that you need for long-term passive income. How much will you need to live comfortably the rest of your life? How much would you like? How much income would you need to make from tenants’ rental payments to not just break even but make a profit?As a general rule, property’s a lot less volatile than entering the stock market. If you do your research on the right area, talk to an honest and genuine mortgage broker in Sydney, there’s ample opportunity for financial growth. Plus, the added bonus of rental income!
But as we all know, what goes up can come down. While Sydney property is on a high at the moment, you’ll need to consider how you’ll deal with any downward turns in the property market. It’s not always easy to quickly sell property if you need fast access to cash.
- Upgrade your home
With your mortgage finally paid off, the sale of your home will be 100% yours. If you’re not planning on retiring for a while and are thinking of a nice beachside hideaway or a premium location in Sydney, this will give you more than enough for a deposit for another mortgage so that you can upgrade your home. - Build your dream business
With extra disposable income to invest elsewhere, you might decide it’s now time to start up that business you’ve been dreaming out for years. Or you could invest in another business, and use their growth to create your own wealth.If you invest in a well-run business that meets a market need, you could reap substantial returns over time. As well as enjoy financial fulfillment, you’ll also get a sense of personal satisfaction too.
But remember that not all businesses succeed, particularly start-ups in their first year.
- Trading Shares
When you buy shares in a company, you become a part-owner of that entity. There are two ways to make money from shares:
– Buying shares and then selling them for a profit.
– Earning income from dividend payment, which is like extra pocket money for shareholders, that’s drawn on a quarterly basis from the company’s profits.
You can either buy shares in companies directly or in a market fund which covers lots of companies. - Term deposit account
Like your regular savings account, but with turbo-charged interest and you can’t touch it. No really, it’s a forced savings strategy as you invest the money for a set period – like a year – and you won’t be able to withdraw. That’s guaranteed steady and secure returns for you, no impulse splurging. No risk means a relatively low return.
The right investment option comes down to your personal goals and your family’s future. Are you looking for slow and steady growth for retirement? Opt for safer bets, like term deposits and super contributions that aren’t as volatile. Are you willing to play hardball and potentially reap the benefits of the stock market? Invest wisely and your research, and avoid taking on more debt to purchase more shares. You don’t want to put your assets at risk now that you’ve paid off your mortgage.
Remember that there’s no guarantee to financial success, and no such thing as instant wealth. Whichever option you choose – proceed with caution. If it sounds like something in your wildest dreams, it probably is.