Browse Month: October 2017

Smart Financial Decisions: Paying Off Our Mortgage

Financial IndependenceA few months before starting Retiring On My Terms, Mrs. ROMT and I made one of the biggest decisions of our financial lives.

We decided to pay off our mortgage.

There appear to be at least two very vocal camps in the personal finance community when it comes to discussions about paying off one’s mortgage and other debt.

The first camp is passionate about eliminating all debt as soon as possible.

The second camp believes almost any debt is ok, as long as you expect to earn a higher rate of return on your investments than you are paying in interest.

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Q3 2017 Financial Scorecard: 75% Of The Way To FIRE!

Financial IndependenceAs we head into autumn, the leaves are changing colors, the baseball playoffs are underway, and football season is heating up as the weather is cooling off.

Which can mean only one thing for the ROMT family: it’s time to report on our financial progress during the third quarter!

Publicly tracking our progress towards financial independence and early retirement has really focused our attention on the topic. I’m pleased with the progress we made over the past three months on our Net Worth, 529 Account Funding, and Passive Income goals. We still have a lot of work ahead of us, but during the third quarter we were heading down our path to FIRE with all cylinders firing!

Without further ado, let’s take a look at our progress as of September 30, 2017:

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Solar Energy Update: Our Rapidly Shrinking Electric Bill!

Solar PowerAs the months go by, I am increasingly optimistic our family’s decision to install solar panels earlier this year will ultimately be categorized as a Smart Financial Decision.

For the month of September, our electric bill dropped by 93% relative to 2016! That follows declines of 91% in July and 95% in August!

Those results are as good as could be expected, and given recent  rhetoric out of Washington, the timing of our purchase may have been just about perfect. In late September, the U.S. International Trade Commission ruled that inexpensive foreign solar panels have had a negative impact on domestic manufacturers. This decision opened the door for President Trump to consider imposing a tariff on imported solar panels. The Solar Energy Industry Association believes higher tariffs could eliminate over 80,000 U.S. jobs, while another estimate claims tariffs could increase the cost of residential solar energy systems by 15%. Continue Reading

Investing 101: All About Bonds

BondsAs we continue our series on the basics of investing, we next turn our attention to bonds.

In my opinion, bonds get a bit of a bad rap in the FIRE community.

Bonds can be a bit more complicated and more challenging for an individual investor to purchase than bank products, and may not generate the same returns as stocks, but I think bonds can still play an important role in many portfolios.

As a general rule, bonds fit in between bank products and stocks when considering risk and reward. Over the long run, you will probably earn more by investing in bonds than in bank products, while also taking more risk. Over the long run, you will probably earn less by investing in bonds than in stocks, while also taking less risk.

That said, there are exceptions to every rule. Investing in certain high yield bonds or distressed debt can be extremely risky – but also potentially offer significant rewards.

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