How many times have you heard this saying: start with the end in mind?
But what does it actually mean? And how can it be applied to your home loan?
Some people might say that it means to visualise yourself as having paid off your loan. What would that look like? Would you take more holidays? Would you take more luxurious holidays? Would you start buying organic food? Would you buy a fancier car? Would you have extravagant parties?
What would you do?
And how would you feel? Ecstatic? Free? Happier? Or maybe less stressed because you no longer have a loan over your head?
Sure, I can create a wonderful idealised romanticised image in my mind about what that would look like, but that doesn’t actually help me to pay my home loan off. I can even imagine the feeling of what it’s like to be loan free; but that’s not practical either.
Thinking about how I imagine my life to look and feel like after I repay my loan are not going to help me actually get there. I can dream as much as I like (I am very good at daydreaming by the way) and I can have as much wishful thinking as I like, but that is not going to pay off my home loan.
It’s much simpler than that. It’s much simpler than trying to come up with a visual representation of what life would be like when you’re debt free.
When I think about starting with the end in mind; for me this starts with asking one question—When?
When do you want to pay your home loan off by?
How long do you want to take to pay off your home loan? When do you want this loan to end?
In reading the book, you might be thinking, “well, it’s five years of course! Otherwise I wouldn’t be reading the book!”
I wrote the book to show that it can be done in five years, but in some situations it may not be possible; for example, maybe:
- you already have a home loan that cannot be paid off in five years;
- house prices are too expensive to pay off in five years;
- your deposit is smaller than you would have liked for the house you want;
- you want to buy a family home, and family homes are generally more expensive.
We purchased our first home because we wanted to buy a first home that we could pay off in five years. We bought a cheap home in a suburb over an hours drive from Sydney.
When it came time to buying our second home, a house in our favourite location, we were willing to buy something that would take us longer than five years to pay off. We used the same principles behind this book to create a plan that would allow us to pay it in just over 10 years.
It was still faster than 30 years and we were still saving hundreds of thousands of dollars.
Whatever your situation, whatever stage you are at in your home loan journey, you can get there faster. The principles of Pay it in 5 are still relevant, no matter where you are in your home loan journey.
The book is all about paying your loan off faster, it doesn’t have to be in five years. It can be done in 7, 10 or 15 years if you like… you choose how many years you would like to pay your home loan off based on your situation. If it takes 7 or more years that’s still great, and definitely beats 30 years.
If you are a first home buyer, try to aim for somewhere between 5 and 10 years because that’s where you will see the most amount of saving. Anything less than 20 or 15 years is a win, but between 5 and 10 years is a great place to make big savings; really big savings.
And who doesn’t want to save hundreds of thousands of dollars?
You will want to pay your loan off faster because you will love being able to save lots of money in a short amount of time so you can buy a home in your favourite suburb sooner… or spend it in any way you please (ahhh…. like holidays on the coral reef or the ski fields!).
Once you have paid your home loan off, you can do whatever you like with your money, as it will be your money again.
We paid our home loan off faster. And you know what, you can too.
It starts by thinking of home loans in reverse.