Cash Flow With Joe

To be, or not be free and clear

To be, or not be free and clear


I come from the Dave Ramsey school of thought when it comes to managing finances. I don’t like personal debt, and I prefer to pay cash for things. As a matter of fact, Ashley and I have never had a car payment during our marriage. We no longer have any student loan debt, and we only use our personal credit cards on purchases that will gain us travel points, and then we pay the cards right off.


That being said, we have a lot of mortgages because of our real estate investing. And one of our goals has always been to get those properties free and clear as quickly as possible so that we can maximize the cashflow of our rentals. To tell you the truth, one of our 2021 goals was to get at least four mortgages paid off.


But recent events have caused me to question whether going all in to get these properties free and clear is the best strategy for us. Let me explain what I mean.


When Marybeth died, it shook my world. It caused me to really start thinking about what I’m doing on this earth and if I’m making the most out of the time and resources Yahweh has blessed me with. It illustrated very clearly for me that we are not promised another breath.


I started thinking about what I heard on the podcast called Front Row Dads. The host had a guest suggest that over 75% of the time a person spends with their parents takes place prior to the age of 18. They then coupled that idea with the concept that you only get 18 summers to spend with your kids, and that really put things into perspective for me.


You see, my oldest just turned 9. If the 18 summers thing is true, I’m halfway done with him. My daughter turns 8 this month. This means I’m nearing the halfway mark with her, too. So, is using my time, energy, and money to get our properties free and clear the best idea?


Before I give you my answer, let’s do some calculator work. Suppose you had a private mortgage that had a principal balance of $50,000. It had interest only payment of 8% with a 25-year term.


So, what is your monthly payment?


In case you don’t know, to figure interest-only payments, you take the balance, multiply it by the annual interest rate and then divide by 12 to get the monthly payment. So, $50,000 times 8% equals $4,000 in interest annually. Divide that by 12 months and your monthly payment is $333.33.


So, it costs you less than $350 a month to use the $50,000.


The next question is important. If you were to take the $50,000 in cash that you have right now and payoff that mortgage, how long would it take you to recoup that money?


The way you figure that calculation is to take your previous monthly payment and divide it by the amount you just paid off.


So, $50,000 divided by $333.33 is 150 month, or 12.5 years.


Twelve and half years, huh? And that’s the same timeframe for any 8% interest only loan, regardless of the loan balance. All of a sudden, paying that off doesn’t sound too appealing. I can take that same money and go on at least five more adventures like the one we just took to the Grand Canyon where we got to see Yahweh’s wonderful creation and spend quality time with each other making lifelong memories.


We can do these things during the time period where our children need us the most and are when we can be the most influential. We can solidify our family bond even deeper by taking full advantage of the 18 summers we have left. And we can do it all while our rental properties pay for it.



That sounds a lot like financial freedom to me.


Don’t get me wrong; I still want free-and-clear properties. I just think I need to work a plan that pays them off a little slower so that we can take advantage of the time we have now while we still have it.


Joe and Ashley English buy houses and mobile homes in Northwest Georgia. For more information or to ask a question, go to or call Joe at 678-986-6813.


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