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Once upon a time, home appreciation along with steady pay raises and guaranteed pensions made up for not having a real cash nest egg. That was then, this is now! Homeowners can no longer afford to spend their entire careers on mortgage payments. In the New Normal, only those with their own saving and investment accounts can count on financial security.

The challenge is how to build such accounts without steady pay raises? The solution is hiding in plain sight: Pay off the mortgage by age 50-55, then invest former mortgage payments in saving and investment accounts during the last 10-15 years of career. This is the “Nest Egg Strategy,” a tried-and-true solution used by earlier generations.

Many claim to already know this, “old hat,” but all they’ve really heard is that it’s a good idea to pay off the mortgage “early.” Few realize it can result in a cash nest egg that’s five times their annual income (the very amount needed for retirement). A person earning $48,000 a year (before taxes) can amass a $242,000 cash nest egg, for example. Most people are astonished – they had no idea that converting mortgage payments into income-producing capital could be worth that much!

Learn how much your own mortgage payments are worth by visiting the Financial Calculators tab. As farmers would say, “A pound of crop is worth a ton of theory.”

This is a long term course correction, not an immedate fix. Yet, with the fading of “borrow dear, repay cheap,” spending an entire career on mortgage payments is an Opportunity Cost that’s hardly cheap!

Unscramble Your Nest Egg explains everything you need to know. In addition to the “Nest Egg Strategy,” it also provides insights on how to pick the best mortgage – evaluate tradeoffs between the greater borrowing power and smaller nest egg of a longer-term mortgage. Those with an existing mortgage are provided the ins and outs of “prepayment” methods, so they “buy back time” from the repayment schedule, and earmark them for a cash nest egg.

(Don’t worry about math, online calculators do it all for you.)

Safeguarding money is not the only benefit of the Nest Egg Strategy. For many readers, ensuring their home sanctuary will be safe may be the greatest benefit of all.   There’s no place like home; Home is Sacred Space! 

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