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How I'm Paying Off My Mortgage In Two Years

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The goal

            In 2009 my wife and I were living in her home state of Hawaii. She had completed graduate school and I discharged out of the Navy. We were both working as teachers at a small private school near Waikiki. It was a wonderful life. I bicycled to school, taught PE and science, and loved it. I was in great shape and my wife was settling in nicely with her classes and curriculum.

            Then the bottom fell out of the market, banks stopped lending, and 1 million teachers in our country were laid off. I was one of those teachers.

            Fast forward three years, a move to my home state of Texas, and multiple jobs. I was running a restaurant in the Dallas area and we were struggling financially. All the money that we’d saved while we were newlyweds was gone. We had a 1 year old at home and money was tight. As I was running the restaurant, I noticed this group of young men that came in, always drank, and had tons of money. As I got to know them, I learned that they were oil field guys who had gone to the rigs when they graduated high school. As the years rolled by they moved up the ladder and were making amazing amounts of money. I was frustrated with my place in life and wanted more.

            As the weeks rolled by our conversations got longer and they saw me hustle. One day I overheard one of the guys directing some trucks on his phone. I told him that I could be a good truck driver for him. He paused, looked me up and down, and said, “Ok. Be at the yard tomorrow morning at 5 a.m. I’ll start you at $15/hour and we’ll go from there.” I told the owner of the restaurant what just happened. Miraculously, he understood and wished me good luck.

            I did good work for Tucker and moved up quickly. This is how I am going to pay off my house in two years.

            Upon receiving my first paycheck in the oil field, I was shocked. I’d never made this much money in two weeks. I did the math. I’d have to work 34 days as a teacher to make what I made in 14 days in the oil field. My wife and I were ecstatic. We were still living like she was teaching and I was running a restaurant. So we started stockpiling money.

            In my beginning days of the oil field we were renting a house, and I hated that. I got no tax advantages and I didn’t want to give a landlord my money. So after a few months in the oil field, I called the landlord and asked if we could buy the house. Contrary to what I thought was going to happen, she agreed. She’d collected two years worth of rent from us and was happy with her financial gain on the house. The house cost $80,000. I was making $1,200/week driving the truck. (That’s what I took home).

            We bought the house and our monthly payment with taxes was lower than the rent we paid. I looked at my wife and said, “We’ve got to knock out our car payments and then attack this house. I’ll go deeper in to the oil field and make more money. But we can wake up in two years and be debt free!” My wonderful wife agreed and I set out on a financial journey that I enjoyed. Instead of counting money and hoping we had enough, I was stockpiling!

            My first step was to pay off the car, which we only owed $3,700 on. I bore down and knocked it out in two months. Here’s the numbers

Wife monthly pay: $2,500 (she teaches at a small private school)

My monthly pay: $4,800.

Total: $7,300

Total household expenses: $2,000.

Leftover after expenses: $5,300.

            So I stopped paying the normal payment and attacked that thing. The banker was amazed, which made me happy. Now I was going to be keeping my money, and not giving it to him.

            Along the way I got a job on the rig sites, so I left the truck. My pay increased significantly. I was now pulling down $1,800/week take home. Plus we had 401k/health insurance/company truck. Due to the company truck, my personal expenses dropped.

            We kept living as if our finances had not changed from our old lives. I saved up $10,000 into an emergency fund and God blessed us with another child.

            Once the emergency fund was in place, I started knocking out my mortgage all the while keeping our spending accounts healthy.

            Here’s my two year plan:

Wife’s monthly income: $2,500

My monthly income: $7,200

Total: $9,700

Mortgage payment: $721 (15 year mortgage)

Mortgage balance $69,000

            My wife and I can keep our monthly living costs around $2,000 or a little bit higher. This leaves me with $7,700 in discretionary income. If you take the amount of months in two years, 24 months, and divide it into $69,000 you get: $69,000/24 = $2,875. For all of you out there that pay a mortgage, you know that interest is involved. I looked up a loan payment calculator from bankrate and calculated that if I pay $3,100 per month for 24 months, I will own my home debt free.

            I know that this way of life isn’t for everyone. You have to take the mentality that you are re-building your lives. You only walk into a restaurant if you work there. Expensive coffee shops aren’t even on your radar. You pack your lunch and waste nothing.

            But if you can get your personal finances in order, pay down debts and position yourself, becoming debt free is an enormous amount of fun. I cannot wait until June 2016 when I burn my last mortgage statement.

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Comments

Jun 4, 2014 4:49pm
spotila
What a great read. Having a positive net worth and especially being debt free is an amazing feeling that not a lot of people seem to have these days. Keep at it, it feels great!
Jun 5, 2014 3:00pm
crewjohn
Thanks Spotila. You're right. I think the point of the article was to get people thinking out of their normal patterns. The downturn in the economy forced me to think this way. "No job was a bad job" was my mantra.
Jun 5, 2014 3:37pm
spotila
Absolutely. That reminds me of Pat Flynn @ SmartPassiveIncome - he was laid off due to the downturn, made it big with blogging/affiliate marketing etc. It's all about thinking outside the box.
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