04/07/2026
Epic Mortgage Burning Party
20 Years Ago
In April 2006 we spent two mortgage payments throwing an epic mortgage burning party that is still talked about today. We rented tents and tables to set up by the pool and hired Carol and Bill Bayley of the legendary Bayley’s Seafood Restaurant to provide the food. Our oldest daughter (14) and her friend served (and tasted a few) frozen daiquiris from the machine we rented. Our entertainment was provided by David "Coconut Dave" Waugh performing live on the steel drums. Our neighbors behind us (not invited) had the police shut us down for noise. I soaked the mortgage with the tiki torch oil to make the picture of the main event more dramatic.
I still believe that it is important to celebrate our financial wins whenever we can. I know some of my clients and students act like they’re annoyed with me asking about their wins (which they KNOW is coming). However, it is too easy to get disillusioned with the hard work and the setbacks that frequently occur if we don’t celebrate our wins. When the setbacks occur adjust your plans and prepare for the next blessing.
How did we do it? [If you are one of the Dave Ramsey Pharisees stop reading now]. We did NOT make extra payments to the mortgage. Instead, whenever we had extra money for the mortgage we invested in an S&P 500 index fund. Although our interest rate was less than the 11% on our first house, at 6% the math says that it would probably take longer to payoff the mortgage this way if the S&P 500 returned its average 10%. If you have a 2-3% mortgage the math is more favorable. What the math doesn’t tell you is the emotional drain of living on our six month emergency fund for eight months and watching our equity (laughing at us) tied up in the house. We decided to maintain our liquidity even if it ended up delaying paying off our mortgage (Luckily, it accelerated the time). Once our investment reached the payout amount, we wrote a check and started planning our party.
