Finally paid off my mortgage, now what?

Question

After 7 years of scrimping and saving, I've finally paid off my mortgage. I'm single, under forty with no kids. I haven't put anything in RRSPs (401k in US?). I'd like my money to start making money. What's are my options?

Answer 1

Find out from the government what your overall RRSP limit is (it's part of the letter they send you after you send in your tax return and you can also get it by phone and on-line). Then, contribute as much as you can afford to your RRSP, until you hit that limit. You'll get a refund that is in proportion to your tax bracket for the money you've invested in your RRSP - if you are in a 30% tax bracket you will get back 30% of what you invested. Take that money that you get back as a tax refund and re-invest it in your RRSP until you reach your max (which will likely be tens of thousands of dollars).
It's great that you've paid off your mortgage, but you've been missing out on the miracle of compound interest for years and need to start making up for that.
Take a money management course and get a self directed RRSP account from somewhere like TDWaterhouse and start to invest in a diversified way (no more than 10% of your portfolio in any one investment) and you will be well on your way.
Always remember that no one will take care of your money as well as you will, so don't fall prey to financial advisors who just want to sell you products that make them money. Keep your MER's low and NEVER invest in a fund with a load!

Good Luck!

Answer 2

First, do a dance for getting your mortgage paid off! Mine will be...in about 25 years! ;).

Contribute the most you can per year into an IRA. Without a mortgage, and the interest payments that typically accompany a mortgage, you won't have much to write off at tax time.

By getting your mortgage paid off, you should now concentrate on building your savings. Since you're starting so late, you'll need to be very agressive in the amount you save. Your current home will pay dividends, but you'll need to sell to really get the cash out. The good news is that w/out a mortgage, your living expenses will be reduced for retirement.

You should probably speak w/a financial advisor.

Answer 3

Is 15,000 pounds $30,000? I'm 21 and have 24,000 saved and am aiming for 30,000 by the end of the year. I was looking to buy in the 300,000 range. I'm planning on renting it out as an investment property for a few years to help build equity, then when the mortgage is smaller ill be able to manage the repayments as they will be smaller

Answer 4

Each month, take the money you would normally have used to pay your mortgage and put it in savings. Then every six months to a year, take that money (minus the interest earned) and put that into an interest bearing CD. This way, your money is making money for you in two ways.

Good luck and congratulations!

Answer 5

Congratulations, now you have lost your largest tax write off. Refinance the house, buy more property, invest in stocks, or indexes, anything that gets you better than CD's. Put all that money to work for you to make more money. Whatever your house is worth it is earning you 0%. Any build up in value is gravy. A good annuity will give you income later as well.

Answer 6

39 years old and just made my last payment!!!! on my $450,000.00 mortgage!!!

Answer 7

ord shares, pf shares, ETF's, managed funds, trackers, commodities, property, CD's, ISA's, premium bonds, futures, options, pensions, corprate bonds, gilt bonds, regular savings, SAYE, savings accounts, spread betting, CFD's, forex, warrants.....

Answer 8

Where are you? (Country)

I suggest you to buy a substancial life insurance policy for your your grandparents if they are still alive with your mother or father as beneficiary.

If all four are dead then you should buy a substancial life insurance policy for your parents with your brothers and sisters and you as beneficiary.

Eventually you will be a millionaire.