Why I paid off my house

GETTING RID OF HUGE DEBT FAST CAN LEAD TO FREEDOM It’s not just about the R1.2m saved in unpaid interest.

When I turned 30, I wondered whether I could be debtfree by 35. This was hypothetical, considering I was still paying off someone else’s bond and hadn’t even bought my current car.

But, given the lucky situation I found myself in – unmarried, zero kids – I figured it must be possible. I wanted to prove to myself that it is possible. I despise debt. And this is perhaps key to why I decided to a) buy a property and b) ensure I paid it off as quickly as I could.

Philosophically, I believe it’s better to own the house you live in than pay rent every month.

When I bought a house, I was resolute to settle that mountain of debt as fast as possible. It started off slightly more complicated than a typical new bond but end-to-end, this took somewhere around four years.

Not having giant chunks of money leaving your account (be that for a bond, car, student loan, or credit card) hours after you receive your salary means you can then extricate yourself from all sort of other restrictive arrangements. For example, switching your cellphone contract to prepaid.

What freedom does not mean is a never-ending spending spree because you suddenly have so much extra money.

Additionally, this freedom means you can structure your short-term and retirement savings in a calculated, structured way and stick to it. What better use did I have for any money I had saved?

I firmly believe that I am much better off today.

Freedom and flexibility are two sides of the same coin. Not having any debt obligations means I have the flexibility to do things like buy the new iPhone when it comes out every year or take a two-week overseas holiday sometime during the course of next year. Or upgrade my mountain bike. I have the flexibility to perhaps study further.

It also means I don’t suddenly find myself in debt when there’s one of those unexpected emergencies that life throws at you, like a geyser packing up or a dental emergency.

This flexibility, particularly from the unknown, is priceless and precious few middle-class South Africans have it.

I’ve saved over R1.2 million in unpaid interest over the full 20year period. The trick now is to turn that into a lot more within the next decade-and-a-half.

This gives you some idea of why I made the conscious and deliberate choice to pay off a roughly R1 million bond in a crazily ambitious timeframe.

Far more interesting, I hope, is how I managed to actually do so… (see Saturday’s Personal Finance).

Hilton Tarrant works at immedia.