Occasionally I write about being totally debt free (no mortgage, car loans or credit card debt), but I had one problem with being debt free that took me a while to solve, and that was “What do I do with the extra infusion of cash each month”? Such an increase of cash by paying off my mortgage was like getting a second job on the side! In fact paying off my mortgage has cut my annual expense by more than 25%!
Back to my problem! Obviously I don’t want to incur lifestyle creep since I worked so hard to pay off the mortgage early. To spend more just to increase my lifestyle would have meant that I basically sacrificed for nothing because I really wouldn’t be getting ahead! But what to do that extra money? I didn’t want to put it in a savings account that would earn less than 1%…
Here’s What I Did!
It turned out that my employer offers an ESPP (employee stock purchase plan) that enables me to get a 15% discount on the purchase price of my employer’s stock. Obviously, 15% beats less than 1%, but it gets even better so that option is a winner if I cash out the stock immediately after it get’s in my account. But in addition to the 15%, I’ve been putting the money into a (what I consider) safe dividend stock and making over 10% there too. So that effectively give me a return of over 25% for that each year of participating in the ESPP.
Next Step:
Why not use the money for future real estate investments? Believe it or not, but often I experiment with working on the best financial strategy until I get the best mix, much like I did with the combination of ESPP and dividend investing.
Bests,
MR
More dividend stock is a good way to go. How about P2P lending? I’ve been experimenting with that and it’s going ok so far.
I’ve thought out it, but so far I haven’t gave it a spin yet. Perhaps now is the time to consider it though. Perhaps when my dividend stocks start to drop there dividend yields…
Awesome! Way to make that money work for you.
Thanks, I was pretty happy once I figured it out 🙂
Congrats on not giving in to lifestyle creep and continuing to use your money to work for you!
Thanks Lance,
I’m all about growing assets now… 🙂
my company offers an ESPP as well, but you have to keep the stock around for 12 months before you can cash it out.. which prevents the quick cash turnover plan..
bummer.
none the less, it is a pretty sweet perk.
Great job! I cannot wait to pay off our mortgage. We are trying to work on getting a $10K emergency fund, but so far it’s not working for us. Sometimes I’m just unsure that we’re supposed to be saving money. I don’t know. Odd! It just seems that everytime we have a decent amount, something goes wrong and we have to buy something. I’m not complaining – the cash is great. But our plan is to pay for emergency fund and then start paying off mortgage. It just sometimes feels like it will never happen. Reading this has definitely given me hope:)