The prime lending rate in Canada recently went down. What that means to me is my variable rate mortgage just got cheaper ie. the biweekly amount owning dropped. What I will do about that is increase my payment to where it was before. By making this small step (a few dollars increase), my overall amortization just dropped by a couple of months. Sweet!!!
I've been doing some very serious thinking the last few days about my financial plan. I use a spreadsheet to track monthly cash flow (isn't it all about the cash flow?!) up to 2012. My plan A was to max out the 15% mortgage prepayment allowed by the rules of my mortgage yearly. Should I succeed, then it would mean complete debt freedom in about 4 years.
With the markets having taken such a dive, buying opportunities have been abound. The investor in me wants in. So do I put in place plan B which is to divide what was to be the mortgage prepayment by 50% and invest as well?
Another aspect of my money plan is to increase my cash position to cover inevitable costs of life and home ownership--kind of like what condos have to draw from in "x" years when all the roofs need to be replaced etc. I have established a number of savings accounts nicknamed for the various categories ready to go.
In the end, what made my decision easier is coming back to the question of "What do I know for sure?"
I know that I have debt.
I know that I want to work 2 days a week.
I know that I want to take advantage of this economical opportunity but only in a proportion that won't lengthen my debt free date or undermine my liquidity.
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