Why I’m Contributing More Towards Mortgage Instead of Investments

Happy Diwali to my readers who celebrate it.

I am typing this from the comfort of my parents’ house. It’s been great to meet family and cousins after a long time.

The last time I shared an update, I was unemployed and in the process of interviewing. The good news is, I got the job and it’s been 4 months that I’ve been employed at this company. The bad news is that since this job is in a completely new industry I’ve had to spend an inordinate amount of time understanding new concepts. I am not going to say that this is the reason for my absence on this blog. I’ve been generally lazy to update here since it’s the boring middle. All my investments are automated. All my expenses are budgeted. It’s time to wait and watch.

Losing the job has been blessing in disguise. I was able to disconnect from our overly connected world and travel. In the last 6-7 years whenever I traveled I had to attend to one or two urgent and important work related tasks. I couldn’t completely disconnect which meant checking emails and slack all the time to ensure you aren’t missing anything important. Being unemployed meant that I could uninstall slack and didn’t have to check my emails except for my updates on bus and train tickets. Importantly, I didn’t have to carry my laptop with me all the time. I remember hiking with a laptop in my bag and it wasn’t fun. With the absence of the need to stay connected, I can assure you traveling is a different ballgame. I could stay in the moment and soak in all that nature had to offer.

But I am back being employed. And I am grateful. I have a Housing Loan to pay off.

Mortgage Remaining

Mortgage Remaining68901016248000

I’ve made insane amount of progress in last 2-3 months. I’ve been adding everything extra towards the loan and even paid double or triple (three times) the amount of my monthly payment. This has been possible due to my increased monthly income. I got a 15% raise when I joined the new company and it has added incentives at the end of the year.

The reason I’m doubling down on paying off the loan is because of increased interest rates. When I first got the loan it was around 6.75% and now it has gone up to 8.90%. I would like to bring the mortgage down to the point where my principle and interest amounts are similar in my monthly instalments.

Math begs to add everything extra in investments. Having been unemployed with such a large mortgage to payoff have made me reconsider my priorities.

Barista FI

Oct 2022:   INR -25,01,289
April 2022: INR -27,91,113
June 2021:  INR -20,63,716
April 2021: INR -30,59,460

I am quite embarrassed that I’ve made almost non existent progress in this department. All of my earnings are completely dedicated to paying down the house loan. In fact, even the rent I make from the apartment goes towards extra payments towards the loan.

Additionally, since the market has been down again, it feels like my investments aren’t working for me even though I’ve been making monthly contributions. I mean I’ve been in the market for 4+ years now surely some of my investments should have been doubled đŸ˜†. I am expecting the market to show me some love. Show me the money. Make it rain. Recently Purple wrote about what contributed more to her net worth – her investments or contributions. Her investments started outpacing her contributions only by year 8. So there’s a long way to go.

For all its worth, I’ve managed to continue with the course and did not stop my monthly investments.

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