Friday, December 16, 2005

Long Term Financial Goals Driven by Voluntary Simplicity

Voluntary simplicity means something different to every person who practices it. For some, it means living off the land in a farm house and being self-sufficient. For others, it means living without a car and cable TV. I have read a dozen books on the topic as I sought to embrace simplicity in my own life. I was disgruntled with corporate life - I was working long hours in a high stress position. I felt bitter that I was dependent on this job for my livelihood. I was secretly hoping I would get laid off so I would be forced into a change. The layoff never happened and I was too scared to leave my job. As I explored ways to change my life so that I wasn't so dependent on that corporate paycheck I stumbled upon the concept of voluntary simplicity. After much research and reflection, I decided to stay with my company to take advantage of the good pay and benefits, but I switched to a lower stress position with more reasonable work hours. In essence, I quit climbing the corporate ladder in exchange for a personal life. It was a very difficult decision to make. I have given up future promotional opportunities with my company but in hindsight, it was the best decision and I'm thrilled with it. I no longer work past 5:00 pm; I no longer dread going to work on Mondays, and when I get together with my friends, the most common topic of conversation is how much they all hate their jobs. I can just smile and say mine is great. They're jealous! Now as I embark on setting my long term financial goals, I have decided that my 'financial comfort zone' will be when I pay off my condo. I know that many personal finance experts believe that this is a bad idea - the opportunity cost of investment gains vs. the mortgage interest rate, yadda yadda yadda. But for me, the peace of mind that I'll have my mortgage wiped out in less than 30 years is worth more to me than any additional gains I would have made investing those extra principal payments. I am also saving a fortune in future interest payments. Plus, once my condo is paid off I'll no longer feel like I'm chained to my corporate job. I can also move out and rent it for much higher profits than if I have a massive mortgage payment. This strategy might not work for everyone, but it's definitely for me.

Read how I quantify my 2006 financial goals and objectives.

2 comments:

change is a good thing said...

I could not agree more!!! I can't wait to have my mortgage paid off, serious peace of mind! I'm only in my first year of a 30 year mortgage, but it's always exciting to me to see that I owe less and less each month and I love to add to the payment as much as I can. I am very frugal, so it's nice to have the funds there to pay the extra.

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