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Friday, November 30, 2018

A Major decision, and the last post for some time.

I know given the context of recent posts this seems abrupt, and it is, but it's been a carefully thought out subject and we've decided to just pay off the house.

For whatever reason, I am not able to replicate my performance with real money on any level. I have in fact reversed my performance from a 45 degree uptrend with paper trading, to a 45 degree downtrend with real money. I have my theories as to the incorrect actions I am taking, but at the root of those actions I am just too emotional and undisciplined to make it happen right now. While I could continue to trade small and work on adapting to real money, it has come to my attention just how different things could be if I used all that money to just pay the house off instead.

We currently owe about $142,000 on the house. I have spent time using mortgage calculators and we have developed a plan that will allow us to pay our home off in almost exactly 4 years if we are able to follow it.

Out of the $30,000 I started my trading account with, I am extremely grateful to have only lost 1.5% of that ($470) after all my losses, bringing the account down to $29,530. The only reason I am down so little is because I took a trade in Sugar for a profit of $960, and my very last trade (which I closed yesterday) was in Orange Juice which made me about $470. (Fun fact, my OJ went up enough to nearly have me break even on my account that day, but I put in a modest limit order to just get out with a profit.) I did not trade either of those (Sugar/OJ) the way I wanted to, but it's in the past now.

Anyhow, I have transfered the $29,530 back to my checking account and as soon as it posts I will be setting up a payment on my mortgage for a lump sum payment of $37,354. That payment will include a one time lump sum payment of $35k, a monthly over payment of $1.5k we plan on doing every single month, and of of course, our regular mortgage payment which is $854.64. I have determined that if I can work 60 hours a week, we should be able to over pay $1,500 every month and still pay the rest of the bills. Yes, anything can happen to possibly throw this plan off, but I have got so many reasons to do this. I have written them down and would like to share them:

#1. Think of the relief you will feel when you are free of the burden!

#2. You are already used to the hours, and you love your job! You've lasted 9 years so what's another 4?

#3. It's better to attack your bill with all the resources you have for a short period, because the shorter period increases the odds of resources being available to do so.

#4. You will see market opportunities come and go, and you will miss them. Realize that hindsight will cause you to feel that you missed out, but there are no guarantees you would have capitalized on even the best setup profitably. Do not remorse your decision to do this, as you will be able to recoup this money so fast it will amaze you. You will be in a much better position than you have ever been in, so it's worth it to hold off on trading until this 4 years is over. It will fly by, and you can use this time to become a better trader!

#5. You can, and you will do this. Do not entertain any idea otherwise!

#6. You are saving $66,000 by doing this! You could buy an entire house out east with that kind of money!

There are of course other thoughts that I am sure will come in the future and I may update this post with them, but that's all I have for now. Both my wife and I are excited, and this reminds me of the journey I had over the road to save as much as possible so I could try my hand at day trading. Trading didn't work out then, and it didn't work out now, but the challenge of saving and grinding away at it all was fulfilling and just my type of challenge. This is a much longer version of that, but with extremely tangible results that will change things dramatically for us. Wish us well.