Today's news was filled with sensational headlines about the swine flu so I decided to make my own sensational headline. 3 months ago, when I got a pay cut, I took one of my mortgage spreadsheets and figured out how soon I could pay off the mortgage if I cashed in my 401k. I have many mortgage scenarios. For a while one of them tracked my mortgage payoff date if I sold one acre of land out of the 4 that I have. I crossed that point in January. I estimated that I could get $50k for my one acre (if someone would actually buy it) and my mortgage amount was $50k. My mortgage is at $47k now so I deleted that spreadsheet.
My next spreadsheet tracked my mortgage payoff date if I cashed in my 401k. I mis-calculated a few months ago and thought that I would have to work until August to reach that goal. I checked my 401k today, subtracted taxes and the 10% penalty and found that I have already reached that goal. It did help that my 401k balance went up a little in the last few months.
Yea! Another goal met. My next goal is to not have to sell the RV. I will reach that goal in July. Then after that it will be to not have to cash in the 401k.
I like to do this because it makes me feel more secure when people around me get laid off. If I got laid off right now I could pay off my mortgage and I would have $600 a month coming in from my rental house. $600 a month would cover all of my basic bills and would give me the luxury of finding a job I loved. That is my goal, to not have to get another dreary job just to pay the mortgage. Of course it would totally screw up my long-term retirement plans but as each month goes by and I make my extra mortgage payments I won't have to choose between my 401k and being mortgage free. I can have both.