The Reverse Mortgage on Lifestyle and Time

Go to school. Listen for the bell to ring. Graduate. Go to college. Listen for the bell to ring. Get a degree. Work for Corporate America. Clock in and clock out. Retire. Then do what you want to do…Maybe…

The status-quo.

Years of paying your dues through a lifetime of work, for the comfortable and secure life in the future.

A mortgage on life everyone traditionally has to pay, until it’s paid off completely, right?

What if you could do the opposite?

Let me introduce you to a new “life product” in the “Lifestyle Department Store.”

The Reverse Mortgage of Lifestyle (The Reverse Mortgage of Time).

Thank you for the analogy Mat Florian! And Big news yesterday from Mat… A refinance took place on a property in we own in Connecticut — A home we’ve owned for 10 years. Mat is a college buddy, good friend, and business partner.

Backstory:

In college Mat and I decided to own a property near school that we can live in, and rent a couple rooms. We made our purchase and the math proved fruitful for the next two years.

Little did we know of the growing pains soon to come while no longer living there. We began renting it out, to whomever, as remote landlords, and quickly saw that the same math does not apply to the new business model.

We had to figure something out.

We decided to remain partners and determined to turn this original venture into a positive once again. This took a lot of trust and communication with my friend/partner since I found myself living in Florida soon after I left.

Today I am happy to report that not only did we remain partners, but also still great friends. Our original investment has been in the black for years now and is in the mix of a stable portfolio of investment properties managed exclusively by my friend. Our property is now an LLC with a commercial banking relationship linked to the credibility of a stable investment portfolio.

I’m one lucky son-of-a-bitch to have Mat as a business partner. The guy runs a tight ship, and it shows in his portfolio of college rental properties he’s built over the last 10 years.

Mat and I were catching up about our property, and my year long world travels.

So I was talking with Mat yesterday…

He asked me how my travels were going, and if I had a business/monetary path tied to my travels. He was intrigued, as I told him I’m not pursuing business success as avidly as I did during my 20’s. I’m focused more on experiences, my writing, and reading; things I’m extremely passionate about.

Cleverly, he stated, “You are living the reverse mortgage lifestyle. You are doing the reverse of what most Americans do. Most people work until they hit a level of security before they travel, pursue an art or a passion that doesn’t immediately earn money.”

We laughed about, and a light bulb flashed in my mind. I’m living the reverse mortgage of life right now. A reverse mortgage of time.

From an investment standpoint, the reverse mortgage option has somewhat of a negative connotation.

Let’s address this to get a better understanding of the context of this analogy.

A reverse mortgage is a special type of home loan for people 62 years of age or older. It requires no monthly mortgage payment. This allows elders to use the equity built up in their homes, and defer payments until they die, or sell the home. The interest is added to the loan balance each month.

Now, let’s relate this definition of a reverse mortgage to my life…

I’m not working. I have no income. I’m living off the equity I’ve built up over the last 10 years in the work place, i.e. my savings. I’m deferring payments on my “life mortgage,” i.e. deferring working a full time job, to be able to travel, experience, and have freedom of time.

This is something that most people would wait to do until retirement.

Disclaimer: I did not wake up one morning and do this. This took years of working full time, earning, saving, and having an opportunity to increase my income. An opportunity I am very grateful for through the company I worked for.

I tell you this is possible for you as well.

What I am doing is deferring an investment in the future, for an investment in the present.

Now, I’m realistic too. Just like the real estate reverse mortgage, deferred payments don’t last forever. Interest builds up over time. Savings accounts dwindle. The metaphorical loan on life needs to be paid. I can’t NOT make money forever.

Mat continued, “People acquire a reverse mortgage in real estate to get ahead financially in the present moment in hopes to be able to prepare for financial burdens of the future (Reverse Mortgage sale, or payoff).”

In the Reverse Mortgage Lifestyle, reverse mortgage time gained by not working is an opportunity of a lifetime. To squeeze the most out of life right now.

Time to experience. Time to travel. Time to be still. To gain perspective. Time to recharge the batteries.

It’s also time for me to be creative. Time to write. Time to read. Time to develop a business, an art that I am passionate about, and can monetize.

How I handle my reverse mortgage of time, will determine, how my reverse mortgage lifestyle changes, or continues when the deferred payment become due.

I’m grateful for this time I have. It’s a privilege. It’s an opportunity. I don’t want to squander the opportunity. I will not squander the opportunity.

If I do, I’ll have a highly inflated interest rate mortgage on life to pay down in the future.

It’s a shift in mindset. It takes some preparation. But the shift in mindset comes first.

We continued to talk, and Mat finished the topic with a slogan:

“The Reverse Mortgage Lifestyle. A Reverse Mortgage on Time: Who are you today? Because tomorrow will be asking.”

We both chuckled heartedly.

When I hung up the phone after talking to Mat, I thought of 3 things walking back into the coffee shop.

1. I’m grateful for Mat as a business partner.
2. I’m grateful for this privilege and opportunity at this stage in my life.
3. I better get my shit together even more. Tomorrow will be asking.