6 Tips to Pay your Mortgage in just 5 Years
Note: This article has no financial counseling purposes or similar, the only purpose is to give a perspective of how was my process being employed and a professional to achieve the payment of my mortgage in 5 years in one of the most expensive cities to live in Mexico.
I have decided to create my first article of medium to give you an idea of how to pay your mortgage in just 5 years, the idea is to inspire and motivate you with a series of tips that led me to achieve it. We are closing 2018 and why not have the New Year’s purpose of having your own home.
Personally I would have liked to read something like this to have a better perspective on something more local or landed, and some friends and co-workers have asked me how I achieved it, I know there are more like them that have the interest to know more about the subject (Who does not want to have their own roof?), that’s why I decided to write it with the idea that it will serve more people in posterity.
Here I share with you a series of practical tips while I talk about how I start my process:
#1. Analyze Who You Are and Who You Want To Be
To give you some context about me, I’m 31 years old, I’m an interface graphic designer (I also do “little drawings”), I’m happily married since the age of 24 with a great woman and in a short time my family has grown to 5, giving life to 3 beautiful blessings (owners of my fortnights).
I do not remember at any time in my adolescence or as a child having had any formal financial conversation or anything like that, the only thing I saw and heard from adults was that you had to “smash it” to make a living with hard work and knowing how to “move”, without a doubt this is fundamental and every time I real to follow that advice of the part, but it does not end there …
Some years ago I really began to know myself and make adjustments in my life that would allow me to have more confidence in myself and to continue with more push to achieve my goals, that is why my next recommendation is:
#2. Follow your Instincts and Reduce External Noise
Returning to the main theme, the whole issue of auto credits or housing in my native hometown were always viewed with fear, there people prefer to go step by step from buying your land, build the base, then gray work, etc. etc. Here in the city it seems there is no time for this and things are different to own your house.
I remember when I told my father for the first time that he had thought about processing the mortgage with a bank, he practically told me that I would end up paying double the real cost of the house and that he recommended me to buy in my hometown that was at 40 min. towards the south of the City of Monterrey. Since I was a boy, my goal was always to live in Monterrey and be part of this great city that carries good energy and is always moving, that’s why I followed my instincts despite the criticism, part of the drive I owe to my father-in-law. It motivated me and gave me confidence in making this decision when I was 26 years old, since he had already gone through the same thing in this lands in his youth.
#3. Do the Math and Stop Throwing Your Money in Unnecessary Expenses
Someone with a stable job at this age (26 to 30 years) is hardly enough to have a savings for a down payment, since either you live with your parents and have a higher lifestyle, or pay some high income for closeness to your work or in any area that meets your standards of living that you would like to have, adding that we want to keep up with the latest from Apple or Nintendo and become purchases like “quick wins” that give you a pleasure in the short term and next month we are seeing what is new to acquire, and it becomes an endless circle.
I think everything has its time and I’m not against buying you gifts of this kind for your hard work, what I mean is that if you analyze more in detail your finances you can adjust the “real” lifestyle and take advantage of more your budget to generate something that will lead you to a more promising future.
I’ve read before about the idea of renting instead of buying your house, and that money investing in a business or idea that in the future gives you the liquidity to have a better lifestyle, that’s not a bad idea, but in my case and being very stubborn, I did not apply since I needed a roof to live, so I made the decision instead of paying rent, moving that same money to the interests of the bank for a couple of years in which in parallel I saw the way to increase my income flow to start with additional contributions to capital. It was a painful process the first 3 months, but I managed to adjust my expenses to pay my monthly payments.
In cities like Monterrey, it is increasingly difficult to acquire a home in an appropriate place near your work.
First step: Save for the down payment
A good down payment of approximately 30% of the total cost of the home you want) will be crucial to have a comfortable monthly payment that does not impact your basic expenses of food, services and transportation, some experts mention that your monthly mortgage credit should not exceed 30% of your income to avoid risks with your finances.
Here in Mexico, bank loans are usually obtained for 20 or 25 years. Under this idea after seeing several areas that I liked I decided to start with the process and finish my payments in 2030 (What? …)
#4. Read More Books that Have a Practical Effect on Your Life. Invest in You
Until a couple of years ago I started to get interested in reading outside of my profession themes, one day I found a book on basic finances “for mortals” and decided to give it a try and sit down to read (Rich dad, Poor Dad by Robert Kiyosaki), and I ended up hooked by the practicality and ease of taking some ideas, I started to see the value of these “motivational” readings that led me to want to inquire more, so I kept searching and reading more authors about personal growth and little by little I took action, generating more goals while reading and changing my basic psychology that I had pre-loaded. I recommend looking for more authors like Tony Robbins, Robin Sharma, Napoleon Hill, etc. (see book references at the end).
This step of reading inspired me to make better decisions in my current job, to have more initiative taking more responsibility and on the other hand to dedicate more time in personal projects instead of spending my free time in leisure or unproductive activities. This allowed me to generate value within the company where I work and abroad, having greater impact and exposure of my professional services.
#5. Make a Working Framework and Do Not Miss it from your Sight Day to Day
Already entered into this subject of credit, after 3 years paying my normal monthly payments, I heard a friend say that “the only way to eat a complete whale, is to start from bite to bite.”
Second step: Create an Excel Document
Under this principle, in December 2016 I decided to generate a small excel (Super Basic) with more feasible objectives per month, as a kind of game that would keep me motivated month by month without losing sight of the big goal, which was to finish paying my house in December of 2018. This framework is now part of my life since there I add my new objectives and help me manage my financial plans in the future.
Having a list or plan at hand makes you attract the results in your subconscious and then bring it to the conscious and then materialize it in your physical state. * Read about “law of attraction.”
#6 Keep “Selling it Everything”, Inspire and Don’t Stop Learning
I know that paying your house is not the end of the road, however, this achievement gives you more confidence in yourself to have more financial flexibility to create or undertake new projects. Throughout these 2 intense years of the process I have learned about working smarter, having patience, discipline, action and perseverance, which has left me a lot of learning in these 2 years.
Share your plans with your partner or your family, this will make you have support in your new challenge.
Thank you all for reading, I wish you much success in your projects and personal growth.
The Seasons of Life — by Jim Ron
Awaken the Giant Within — by Tony Robbins
Outliers —by Malcolm Gladwell
The Monk Who Sold His Ferrari —by Robin Sharma
Think and Grow Rich — by Napoleon Hill
The Power of Positive Thinking — by Norman Peale