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Tuesday, January 1, 2013

Reasonable Certainty

New Year's Day is a day for resolution making for most folks, but not me.  If there is anything I've learned it's that I'm not going to change. At this point,  I don't even think I'll make goals for this year, as I find that life has a way of tripping itself up.  If you want an abject lesson in humility, try listing the so-called goals you are going to get done in a year on your blog for all to see.

Instead, this year, I am going to deal in Reasonable Certainties. Like this year, there is a Reasonable Certainty that we'll get the mortgage paid off this year.  Probably by April.  I also think there is a Reasonable Certainty that we'll finally get chickens this year.

I can tell you with better than reasonable certainty that I'm going to learn a lot this year.

For instance, I have already learned that the "North Dakota" trick of leaving something dripping in order to keep it from icing up does not work.

This greeted me when I went to go check on my chicken waterer:

I did not uncouple the hose from the supply line.  I'm not even sure how this happened.  I can tell you  that both hoses are frozen solid.   In fact, there was a stalagmite of ice rising up from the floor of the enclosure.


So I can also tell you with reasonable certainty that I'll have to figure something else out for watering chickens for next winter.  Maybe a heat trace system, and I'll have to get help with that, but I am pretty sure I can get help from somebody at work.

I can also tell you with reasonable certainty that the apple trees are growing a lot faster than I thought they were.  This week we got the next level of wire up for the espaliers, and I found that the trees had grown around the wires holding them to the espalier.  I have to monitor their growth much more closely this year.  This is one that I could not fix.

I sometime wonder if I should rename this blog "What Not to Do". Maybe if I had a Reasonable Certainty of getting fruit from them, that would be one thing, but I can't even do that if the raccoons are going to beat me to them.

But pay off the mortgage and get chickens.  I am reasonably certain that I can do that much.

Everything else is up for grabs.


Miriam said...

Paying off your mortgage is HUGE! That trumps any incomplete items on your to-do list.

One of the things I like best about you and your blog is that you are real all the time. You're inquisitive and methodical and creative and resourceful and you continue to share the steps of your journey with us, whether or not they look pretty or sound good.

Can't wait for you to get those chickens!

Paula said...

Ugly reality is something I can definitely dish up!

Thanks for making my failures a little easier to take Miriam.

Anonymous said...

Congratulations on being so close to paying off your mortgage--that's amazing!! I would trade a lot of my resolutions for that reasonable certainty! :) And please do keep blogging about the successes and the failures. All of us are fumbling in the dark in this homesteading-for-the-future thing, and learning from each other is so important. But like you, my goals for this year are much less ambitious than in previous years, based on what I've learned so far...

Happy 2013!

Rachel said...

Just curious, why are you in such a hurry to pay off this house if you really want to move somewhere else?

Paula said...

Happy 2013 BYF!

Paula said...

To answer your question Rachel there are sort of two reasons for paying off the mortgage early- one is that even though I want to move to the country, that may never happen.

The biggest reason probably deserves a post of its own, but here are the basics: using round numbers, an amortization schedule that I could find online, and the best statement history that my bank can provide me, on the $125K or so that we borrowed at 5%, if we take the whole 20 years of the term to pay it back, we will pay $72,986 in interest alone, meaning we're not even touching the principal. Adding up all the interest I could find and fudging $10K for the year they can't give me, I'm figuring that when we pay off the mortgage roughly around April of 2013, our total interest paid will be more like $30K (it's currently roughly at $27160), so right off the bat you can see that we'll save $42,986 in interest by paying it off early. That's $42,986 that we can use to invest.

The other way to look at it is, if we're paying 5% interest on our mortgage, and only earning 1% on our savings, obviously we'll be further ahead if we pay off our loan first than by trying to save money at a measly 1% (and that's being generous- banks are not paying 1% now).

Then after paying off the mortgage, which is our only debt, we keep working on reducing expenses and after having 6 months income saved, throw everything at investments so that eventually, we can quit working early. If in the meantime we find a country property and build something cheap on it (hopefully for a lot less that this place was), then we can sell this house outright and take all that money (less the commission and closing costs of course) and throw that at investments. And by investments I mean something not so safe while we're working and gradually moving into something much safer like treasury bonds as we get closer to retiring.

This is a pretty simplified version of The Plan, but if you do any research into paying down your mortgage early (ours does not have an early pay off fee- some mortgages do) all the prevailing wisdom says do it- you will be so much more ahead.

Paula said...

As a follow-up to my last comment this evening I've discovered that out of my last mortgage payment, only 11% of it went to interest and 89% of it went to the principal.

Which means that we are rapidly approaching the point when all the money that goes to the mortgage payment will go to the principal and no more interest. Which also means, we're nearly done!

SmitoniusAndSonata said...

Never mind the ingrown espalier , your organisation and grasp of the mortgage market has me in awe !

Tamar@StarvingofftheLand said...

Hey, no fair! *I* was going to call *my* blog What Not To Do! We'll have to take this outside ...

Happy New Year, Paula. Although you may not get everything on your list done every year, you sure manage to accomplish a lot. You dive into everything with energy and enthusiasm, and you're willing to put the time in to learn just about anything. My hat's off to you, and to your reasonable certainties.

And congratulations in advance on the mortgage. That's a big step.