Burn Your Mortgage with Sean Cooper

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Posted in Debt Help
Posted by J. Douglas Hoyes, CA, CPA, LIT, CIRP, CBV

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Sean Cooper returns to the podcast today to talk about his new book, Burn Your Mortgage, to be published on March 1, 2017.  Sean worked up to 80 hours a week for many years to save for a down payment, and then he managed to pay off his mortgage in less than four years.  He held a mortgage burning party that was covered by the CBC, and that’s where the fun began.

Some people applauded his frugal lifestyle, but others said that it’s not realistic to work that hard just to pay off a mortgage quicker, earning him a lot of online haters, which is where I got involved in the story when I was interviewed by the CBC in a follow up article. I believe that some of Sean’s strategies will work for some people; the key is to listen to his ideas and apply what you are able to do, given your financial situation.  As Sean Cooper says, the starting point is:

setting a goal, because for so many people what keeps them from being homeowners is they’re not able to come up with that down payment.

On today’s show Sean Cooper talks about his new book, talks about the on-line haters, and provides advice on how to “burn your mortgage”.

Tips to Pay Off Your Mortgage Sooner

Make bi-weekly accelerated payments. Sean says This is the less painful than monthly payments as you’re matching it up with your paycheque from work. You’ll end up paying an extra month’s worth of payments a year.

Make lump sum payments. It’s great to treat yourself with your tax refund cash or holiday bonus, but try something practical instead – like putting it towards your mortgage. Lump sum payments go directly towards your principle, and not a principle/interest split like the standard mortgage payments.

Round up. This can make a big difference over the life of your mortgage, saving you a lot on interest in particiular. If your mortgage payment is $713, round that up and make a payment of $725 instead.

they end up being house rich and cash poor. And while you may own a beautiful house you won’t have any money left over for anything else

Resources mentioned on the show:

FULL TRANSCRIPT show #129 with Sean Cooper

burn-your-mortgageDoug Hoyes: For most Canadians a mortgage is something that takes 20 years to pay off so what would you think of a guy who managed to pay off his mortgage in just three years and two months. You know who I’m talking about because I interviewed him back on show number 81. Sean Cooper became something of a media sensation for, as he put it, burning his mortgage.

I say he became a media sensation because some people viewed him as an inspiration because he lived frugally and paid off his $255,000 mortgage quickly. Other people had the opposite view. They said what Sean did wasn’t realistic for the average person. During those three years that Sean worked to pay off his mortgage he was fortunate in that while he was going to school he was able to live with his family and work part-time jobs so he graduated with no student debt. And he was single so he was able to work multiple jobs, often up to 80 hours a week to make the money necessary to pay off his mortgage quickly.

I remember seeing his story first on CBC and I very clearly remember the follow up article that CBC ran covering the reaction to this story because I was interviewed for it. I’ll put links to both of those stories on the show notes to this podcast over at hoyes.com. The second CBC story was titled Sean Cooper pays off mortgage in three years and earns online hate. I bet he did. One reader is quoted as saying, what is he going to do next, buy a car and sell his kidneys to pay for it?

When I was asked for my opinion I said that I applauded Sean Cooper’s accomplishment but his extreme methods are out of reach for many. I was quoted in the story as saying that is not realistic for a single mother of a two-year old kid. I offered the opinion that some readers were offended because they felt like they were being shamed for not also working 80 hours a week.

I also made the point that I believe individuals shouldn’t shoulder all the blame. I said that personal choice definitely contributes to debt as can many other factors such as bad luck, one’s health, a tough economy and policies that allow easy access to massive loans. So, high debt is not entirely the borrowers’ fault.

That story on the CBC website has over 1,700 comments so you know it struck a nerve. That follow up story was over a year ago in January 2016 so what’s happened to Sean Cooper since? Did he run and hide never to be heard from again? Nope, the opposite, he’s taking on his haters and in a new book he’s titled it not surprisingly Burn Your Mortgage. What’s happened over the last year and what’s in the book? Well, let’s find out. Sean Cooper welcome back to Debt Free in 30, how are you doing today?

Sean Cooper: I’m doing well Doug, thanks for having me back.

Doug Hoyes: Well, thanks for being here. As I said in the intro you were a guest back on show #81 that aired about a year ago in March 2016 so I invite everyone listening to that podcast to listen to it and hear your full story. But let’s start with you giving us a quick refresher on how you managed to pay off your mortgage so fast. So, I’ve got the facts basically right, it was around $255,000 was your mortgage and it was just over three years that you paid it off. So, in simple terms, general terms, how did you do it?

Sean Cooper: Well, the main way that I did it was I was a single homeowner. So, I had my full-time job and I basically looked for side hustles, so extra ways to make money. So, for example I worked as a financial journalist, I also worked part-time at a supermarket and I also lived in the basement and rented out the upstairs of my house to bring in extra rental income. So, by doing all those things at once I was able to make lump sum payments against my mortgage and pay it off in a little over three years.

Doug Hoyes: So when you say you worked at a supermarket, you weren’t the CEO of the supermarket, you were a worker at the supermarket.

Sean Cooper: Yes, I was just a grocery clerk at the supermarket.

Doug Hoyes: So this was not a glorious job, you were kind of doing whatever you could to make a buck to get the mortgage paid off.

Sean Cooper: Exactly.

Doug Hoyes: So I read one of the quotes in the introduction about what one of the haters said about you, you know, what’s he going to do sell a kidney to keep paying off it off. Give me another example of what one of the haters said about you online in that CBC interview.

Sean Cooper: Well, another comment that I received was, it said get another privileged white man bragging about how he did it on his own but did anyone notice how big his down payment was or the fact that he has a $75,000 full-time job?

Doug Hoyes: And I mean I guess those are true facts. You do have a job and you did have a big down payment. So address that then, the down payment that you had, how long did it take you to accumulate that down payment?

Sean Cooper: Well, I was saving the down payment since when I was in university so I was saving it since 2008. And I bought my house in August 2012, so it pretty much took me four years to save that sizable down payment.

Doug Hoyes: So it was four years of being just as frugal as in the three years after when you were paying off the mortgage. That’s how you managed to do it.

Sean Cooper: Yes, exactly. And I lived with my mother and paid her $600 a month in rent so I wasn’t living at home for free by any means.

Doug Hoyes: But you were still able to save some money. Okay, so we got all these haters out there and like I said I remember seeing the article and being quoted in it as well. So, with all these people taking a run at you, why then would you put yourself out there again and decide to write a book about it?

Sean Cooper: Well, first of all I mean my story was definitely very polarizing but the whole point of trying to pay off my mortgage was to basically try to inspire the younger generation and show them that home ownership is still realistic. Because if I watch the news nowadays it seems like they’re always talking about how high the home prices are in Toronto and Vancouver. And I just wanted to show if somebody who’s single can purchase a house and pay it off quickly then it’s realistic for some other people to buy a house. They may not be able to do exactly what I did and pay it off in three years but if they can aim to pay off their house sooner than 25 years, maybe 10, 15, 20 years then I think that’s great.

Doug Hoyes: And I think that’s a key point. You’re not going out there saying well, I did it in three years everyone should do it in three years. You understand that your situation is different than everyone else’s situation and really your message is one of hope and inspiration well, okay it doesn’t have to be 25 years. That’s really what you’re saying.

Sean Cooper: Yes. I mean people nowadays with their mortgage, they treat it kind of like an ATM, they take out home equity line of credit so I’m basically saying your mortgage doesn’t need to be a life sentence. There are things that you can do in your everyday life to pay down your mortgage sooner and enjoy debt freedom.

Doug Hoyes: And we’re going to talk about some of those things. So, I mean you were gracious enough to send me an advanced copy of, a draft of your book which is going to be available on March 1st. It’s available for pre-order on Amazon right now. And at the end of the show we’ll sort of give some more details on that.

But I mean I’ve gone through it and right in the introduction you have a section called your mortgage is your top financial priority. So, I want to know is that really true? Lots of experts say it’s crazy to invest money in the overheated real estate market. I mean right now we’re recording this in Toronto. That’s about as overheated as it can get since Vancouver’s kind of cooled off a bit. The experts would say that a balanced stock and bond portfolio can earn you over the long-term historically maybe 5, 6% annually like forever, whereas the real estate market can go up and it can go down.

So, you obviously don’t fully agree with that or else you would have put all your money in the stock market, not in a house. Why do you believe that real estate is an important investment?

Sean Cooper: Well, first of all for some people it might make sense to rent rather than own, I’m not saying every single person should own a house. So, I just wanted to make that clear. But I’m a fan of home ownership because you might be able to make as much money by renting and investing. But the thing is you have to be financially disciplined if the money like renting is generally cheaper than owing a house but you only do well if you end up investing that money that you end up saving. So, when you’re renting you don’t have to pay things like property taxes, you may only have to pay a certain percentage of utilities, so basically your monthly carrying costs are lower.

So, if you take that extra money and put it in, invest it in index funds or mutual funds or whatnot, then you could end up doing almost as well as a homeowner but the things is people aren’t financially disciplined and they end up spending that on vacations or the buy a nicer car. So, I’m a big fan of the for savings that home offers because if you don’t make your mortgage payments, then the bank will take your home away. So, that’s definitely a good incentive to pay off your mortgage quickly.

Doug Hoyes: And that’s a good point. So, they key word there is discipline. And it becomes in effect an automatic savings plan then. If I have to make my mortgage payment every month, like you say if I don’t make it I’m getting kicked out of my house, whereas okay am I going to put the money into my stock fund, my mutual fund, my RSP, whatever this month? Well, maybe I won’t, maybe I’ll go on a vacation, I’ve got more leeway. And so one of your central points is yeah, you’ve a house, you’ve got no choice, you’ve got to make the payments.

So, on that same point then so let’s say I bought a house, you obviously are an advocate of getting it paid down as quickly as possible. So, let me take the alternate point of view here and say oh, you’re crazy Sean because the interest rates today are really, really low on a mortgage and the stock market if you look back over the last year or two or three, has done really well. Now of course if you look back to 2008 or some other times it’s not done so well.

But at the moment the stock market seems to be reasonably buoyant, interest rates are really low so would it not make more sense to have as high a mortgage as I can at a very low interest rate and instead of paying down the mortgage, use that extra money to invest in stocks or something else?

Sean Cooper: Well, I think it’s dangerous to take on a lot of debt. I mean each quarter I see the household debt hit a new record. So, that’s definitely concerning for me and that’s one of the main reasons that I wrote my book. So, a lot of people aren’t really in a hurry to pay down their debt because they think oh my mortgage is below 3%, why should I be in any hurry? Rather than, with low mortgage rates, rather than seeing it as an opportunity to pile on as much debt as possible, I see it as an opportunity to pay off the biggest debt of your lifetime. Because mortgage rates, I mean I don’t have a crystal ball but generally I think they’ll be probably higher in the next 25 years if you take that long to pay it off.

So, you know, nowadays when you take on a mortgage generally over half of your payment goes towards the principle as opposed to interest but if you go back a decade, probably about a quarter of that would go towards principle. So, if you are really focused and you want to pay off your mortgage, then take advantage of low interest rates and you can really get your mortgage paid off a lot quicker than just a decade ago.

Doug Hoyes: Yeah so don’t look at the low interest rates as an opportunity to borrow more, look it as an opportunity to get it paid off even quicker, that same payment will get it paid off even quicker.

So, let’s talk about the issue of good debt vs. bad debt. And I did a podcast on this, you might even have guested on that one as well, I can’t remember exactly. So, the prevailing wisdom is well a mortgage is a good debt because the house goes up in value so the bigger the mortgage the better, it’s good, it’s good, it’s good. But, you know, that’s not always the case.

So, what are some of the biggest mistakes home owners are making with their mortgage? And let’s get into some practical advice here ’cause that’s the whole point of this show. I don’t want to just spout our opinions, we want to give people actual advice. So, what are some of the biggest mistakes homeowners are making with their mortgage and more importantly how can they avoid making those mistakes?

Sean Cooper: Well, I think generally when people are buying houses, a big mistake that I’m seeing is they’re buying too much house. For example when they go to the bank they’re told that they can purchase a house for let’s say $800,000, they go out and spend that amount of money or they even get into a bidding war and end up spending slightly more than that.

So, what happens is they end up being house rich and cash poor. And while you may own a beautiful house you won’t have any money left over for anything else really because maybe 50% of your income will be going towards your mortgage and then you have to pay all the other expenses. So, let’s say you end up spending 20% more than you thought on a house, that means you’re going to be spending generally 20% more on home insurance, utilities, property taxes and you won’t want to leave that extra room that you got in the bigger house empty so you’ll end up spending more on furnishing and you’ll have an extra room to clean as well. So, I’m not a big fan of spending too much money on a house, you won’t be able to save for retirement either.

Doug Hoyes: And that kind of goes against convention of wisdom people go oh well, houses in Toronto have been going up 20% for the last 10 years, I just made that number up, I don’t know what the real number is. But they’ve certainly been going up a lot.

So, if I had bought a $100,000 house, well it would be worth $120,000 a year later but if I bought a $200,000 house it would be worth $240,000 a year later. I would have made an extra $20,000 if I had bought a bigger house, therefore the bigger the house the better. And you’re saying yeah but from a cash flow point of view, your hydro, your property taxes, everything is bigger if the house is bigger.

Sean Cooper: Exactly.

Doug Hoyes: So you are an advocate of buying a house but buying as realistic a house as possible not buying as big a house as possible.

Sean Cooper: Yeah, you don’t have to go out and buy a McMansion.

Doug Hoyes: And so the house that you bought is not, I assume 10,000 square feet on four acres.

Sean Cooper: No, it’s a bit smaller than that.

Doug Hoyes: And that’s one of the reasons you were able to afford it. It was a moderate house.

Sean Cooper: Yes. And when I bought my house I wanted to buy a house that I could pay off quickly. So, I didn’t go out and spend a million dollars on house.

Doug Hoyes: And are you still living in that same house?

Sean Cooper: Yes, I am still living there and I’m actually still living in the basement.

Doug Hoyes: Still living, so you’re still renting out the top floor.

Sean Cooper: Yes.

Doug Hoyes: And do you have plans to buy a multimillion dollar house in the next year or two or are you quite content with what you’re doing?

Sean Cooper: I’m happy where I am now. I mean personally I have like 85, 90% of my net worth tied up in real estate so I’m trying to diversify it some more liquid investment so I’m – basically when I was paying down my mortgage, I wasn’t able to maximize my TFSA so what I’m doing is I’m taking the old amount of money that I used to put towards my mortgage and I’m putting that in my TFSA so I’m kind of taking the approach that a renter would take.

Doug Hoyes: Got you. I see what you’re saying. So, step one was to get the mortgage paid off but now that I’m freeing up cash, I don’t necessarily need, in fact you don’t need to go out and buy a bigger house now so I’m not completely as you say house rich and cash poor. Let’s take that extra money, put it into the other investments, which I guess kind of comes back to what we were saying earlier about the experts who say you should be diversifying. Well, you actually agree with that. Okay I’ve got the house paid off, great. Now I can go on to the next step.

So, let’s talk about your book. It’s called Burn Your Mortgage. I mean there’s the famous clip of you on the CBC there burning your mortgage. And what does burning your mortgage mean? Where does that whole phrase come from? Why do people burn their mortgage? Is it just a cool thing to do? Is it a tradition, what is it?

Sean Cooper: Well, actually I saw an old episode of All in the Family where Archie Bunker actually had a mortgage burning party so that was always in the back of my mind. And I guess it’s just symbolically it’s your moment of achieving financial freedom so paying off your mortgage, especially this day in age is difficult with how much debt people are taking on. So, I think it’s a good thing to celebrate.

Doug Hoyes: So, it was pretty cool. Well, it got you on TV too; it was definitely a good thing. So, the book Burn Your Mortgage is divided into three parts. I want to kind of give people a taste for what they’ll get when they actually read the whole book. So, tell me about part one, part one, I mean I summarize it as being tools to set yourself for financial freedom. So, give me a taste of some of the things that you’re talking about in that first part, what do you mean by tools, what do you mean by financial freedom?

Sean Cooper: Well, my book you don’t have to own a house to benefit from it, you might be a first-time home buyer or be a renter who wants to get into the market. So, basically in order to purchase a house you have to have all your finances in order. So, if you have a lot of credit card debt, it doesn’t make sense for you to go out and buy a house and take on a mortgage and more debt. So, it’s about getting your financial house in order.

So, for example I talked about it in the beginning of the book setting a goal because for so many people what keeps them from being homeowners is they’re not able to come up with that down payment. So, by setting yourself a specific goal, basically by setting yourself a specific goal of how you’re going to come up with your down payment, I find that effective. So, basically say I want to buy a house in for example three years time and I’m going to save for example a $60,000 down payment and figure out exactly how much from each paycheque you need to save to reach that down payment. Because $60,000 on itself seems like a massive amount of money but kind of breaking it down into smaller amounts it makes it seem less intimidating.

Doug Hoyes: So what you’re really talking about is financial money management principles that apply in lots of different cases. I can save money, it might be to buy a house but it might be to save for retirement. It might be to go on a vacation, it could be for anything. Those same principles apply in all cases. And you’re right, it’s the old joke, what’s the best way to eat an elephant? Well, one bite at a time.

So, $60,000 if you wanted to save that over three years well, that’s $20,000 a year. That’s $10,000 in six months, that’s $5,000 in three months. Is that realistic? Well, it depends on your situation and so on. But it’s a lot easier to save $5,000 in three months than $60,000 I guess.

So, really the first part of the book you’re laying the ground work for basic financial principles, anyone can use. You don’t have to be a homeowner; you don’t even have to want to buy a home I guess. These are principles that will work for anyone who wants to get their financial life in order.

Sean Cooper: Exactly. Everyone will benefit from reading the first part of the book.

Doug Hoyes: So then the second part of the book, which I would summarize as being home buying and mortgages, obviously this is a section much more geared towards people who want to buy a house and obviously you’re going to need a mortgage to do it. So, what are the kind of areas that get covered in the part two, home buying and mortgages section?

Sean Cooper: Well, I kind of walk people through the whole situation of purchasing a house and things to look at. So, for example some people have to make big decisions like living in the, in urban area or suburban. And then of course you have to decide on property types, so, condo, townhouse or detached house, so, I kind of look at the pros and cons of that and I go through the list of needs and wants when you’re a homebuyer.

Because I find a lot of people nowadays are getting needs and wants mixed up. For example things like granite countertops, stainless steel appliances, people seem to be putting that on the needs list rather than the wants list. So, it’s kind of taking a big picture approach to buying a house and seeing exactly if you want those things how much money it’s going to cost you. But it’s going to be a trade off because it’s going to take you that much longer to pay off your mortgage so it’s just kind of taking a big picture overview of your finances.

Doug Hoyes: Yeah, that’s a good point. You can buy a house with, whatever the opposite of granite countertops is. That doesn’t mean five years from now you can’t remodel and put granite countertops in. You’ve got the house paid for at that point. You’ve got extra money. But start as slowly as you can with as inexpensive a house as you can and let it build from there. I never thought about that whole decision making process about, you know, urban or rural or what.

We’re recording this in my Toronto office which is at Yonge and King, right smack in downtown. And to come to this office every day obviously it would be easier if you lived in a condo, you know, just up the street. But there are pros and cons to that. You’re living in a much smaller place, you’re living in some 600 square foot place as opposed to a 1,500 square foot, 2,000 square foot house that you could live in if you went out to, you know, Etobicoke or Oshawa or wherever and commuted in.

So, you’re saying those are things you must specifically think about. And a lot of people don’t, it’s like oh I want that great house without thinking what are my commuting costs going to be, what’s my commuting time going to be? So, you’re advocating in effect, take a blank sheet of paper and write down all of those different factors. That’s really what you’re saying.

Sean Cooper: Yes. I mean buying a house is probably the biggest financial transaction of your lifetime so I think you should definitely spend a reasonable amount of time before making that decision. It shouldn’t just be made it on a whim.

Doug Hoyes: Yeah, more time you spend to pick a pair of jeans probably would be good advice, so I agree with that.

Sean Cooper: Exactly.

Doug Hoyes: So, part number three then is how to protect yourself as a homeowner. So, you’ve bought the house, you’re well on your way to getting it paid off, what do you mean by protect yourself? What are the kinds of things you talk about in that section?

Sean Cooper: Well, I talk about first of all home insurance and go over the basics of that. And I also talk about the matrimonial home because unfortunately divorce is kind of a reality of life. So, I just kind of lay out a few scenarios and I think people really need to think about, you know, what were to happen if I were to, if my marriage or relationship were to not work out and perhaps consider getting a pre-nup agreement rather than having it a surprise at the end of the day. So, it is kind of planning out your finances in advance rather than it having it be a big surprise if something ends up happening later on in life.

Doug Hoyes: Well and things like what if I lose my job?

Sean Cooper: Exactly.

Doug Hoyes: What if I get sick, what if? So, think of those things in advance, expect the best but prepare for the worst is really what you’re saying.

So, you kind of touched on this a bit earlier but I want to make sure we’ve hit the point because of course this show is called Debt Free in 30. We want to talk about debt and getting out of debt. Your speciality or what your book is about is getting out of mortgage debt but obviously there’s a whole bunch of other kinds of other debt too. What would be your advice for someone who currently has debt? You know, they’ve got credit cards or bank loans and some day they want to own a home? Is there a strategy that you would be suggesting for someone in that situation?

Sean Cooper: Well, first of all if you have any high interest debt, whether it’s credit card debt or payday loans, definitely focus on paying that off first and foremost. So, two popular ways to pay down debt are the debt avalanche and debt snowball methods. So, when you pay with the debt avalanche method you pay down the debt with the highest interest rate, whereas with the debt snowball you pay down the debt in order from smallest largest balance.

So, those two methods, for example with the debt avalanche method, let’s say you had two credit cards where you had balances owing and one of them was at – one of them was a regular credit card at 18% and you had a retail credit card at 29%. So, you would focus on paying off the retail credit card at 29% because it’s costing you the most since it has the highest interest rate.

But for some people they find it more motivating to pay off the debt with the smallest balance because they can kind of – let’s say they owed balances on three different credit cards they can kind of knock off the lowest one and then the next lowest one and then the next lowest one after that. And it’s just motivating for them to, you know, get rid of one debt at a time. So, basically I would say pick the one that works best for you and at the end of the day as long as you reach debt freedom that’s all that matters.

Doug Hoyes: Yeah and I’ve always been an advocate of, of course I’m an accountant, I’m a numbers guy, well as are you, and okay, if I’ve got a 29% interest credit card and a 10% interest credit card I will save the most money by paying off the 29% one first. But you are right, there are those who would advocate well, this is also a psychological thing and if I can see that I’m knocking off, I’ve got that $200 old cell phone bill, if I can knock it off that’s one less thing I’ve got to worry about, one less payment that I’ve got to make.

I guess the point you’re making and we can debate which one is right or which one is wrong and part of it has to do with not just with math but with your own psychology is you’ve got to do it, it doesn’t matter which one you’re going with. So, you’re advocating obviously getting out of debt before you try to be buying a home because having high interest rate debt is just going to make it that much harder to ever pay off your mortgage. It’s pretty much as simple as that is it?

Sean Cooper: Exactly. And when it comes time to buying a house your debt can actually affect how much house you can buy because of the debt ratios like the – gross debt service ratio and the total debt service ratio. So with the total debt service ratio they actually consider credit card debt. So, once you get that paid off you can afford to buy that much house. But of course don’t buy too much house ’cause you can end up house rich and cash poor.

Doug Hoyes: Yeah. So, you want your ratios inline. You’re going to get a better deal on the mortgage, you’re going to qualify for a better deal. So, get the debt paid off. Well, that’s excellent advice. Are there any final words of advice you’d like to give the people who are listening today, anything to do with mortgages, debt in general, anything at all? What’s kind of your closing words of advice?

Sean Cooper: Okay well I would say everyone’s probably reading my book to find out ways they can pay down their mortgage sooner so my top three tips for doing that, first of all tip number one would be pay your mortgage bi-weekly accelerated.

Now when you sign up for your mortgage not only will the bank set you on a monthly payment schedule but by setting your payment on bi-weekly accelerated to match your paycheque from work, it’s the least painful way to do it. Basically you could end up shaving off maybe two or three years off the amortization of your mortgage, which is of course how long it takes you to pay off. And it’s just basically a cash flow thing. With accelerated bi-weekly you’ll end up paying the equivalent of an extra month’s of mortgage payments a year. And you’ll barely notice it at all because you probably wouldn’t do it if you found out you were paying an extra amount.

And the second way I would say to pay off your mortgage sooner is similar to what I did, make lump sum payments so you’re probably thinking where the heck do I come up with an extra $2,000? So, you can come up with that extra money through what I like to call found money. So, if you end up getting a bonus at work or a tax refund or you get inheritance, you can take that money and basically – of course you can enjoy maybe some of it, go out for a nice dinner but you can take the rest of that and put it as a lump sum payment against your mortgage and knock off a bunch of money. And of course that goes straight to principle, it’s not a principle/interest split similar to your regular mortgage payment.

And the third tip I would say is to round up your mortgage payments. So, for example if your mortgage payment was $7.13 sorry, if your mortgage payment was $713, by rounding it up to $725, it’s only an extra $12. And that extra $12 from your mortgage payment will really make a big difference over the life of your mortgage and save you a ton of interest and perhaps pay it off two or three years earlier. So, it’s all about looking for ways to find extra money without affecting your lifestyle and reach that financial freedom that much sooner.

Doug Hoyes: And I totally agree with that. We do the same with our clients when they’re in a consumer proposal for example. If your consumer proposal payment is $400 a month, well my first question is what is your pay frequency? If you get paid every two weeks, well let’s do $200 every two weeks. And I realize really you should be taking 400 and diving by – and you’re right, if you do bi-weekly then you are making an extra payment every six months. So, at the end of the year you’ve made an extra full month’s worth of payments.

Sean Cooper: Exactly.

Doug Hoyes: I totally agree with that. So, whatever your pay frequency is, that what you should be paying your mortgage on. But don’t – you know, divide it out so you’re actually paying more. And you’re right, you’re not going to notice it. Okay, every paycheque this much comes off and it makes it much easier.

Excellent well, I think those are fantastic pieces of advice to close it. Make your mortgage payments based on your pay frequency, make lump sum payments and round up your mortgage payments. So, that’s fantastic advice Sean, thanks very much for being here.

Sean Cooper: Thanks Doug, it was a pleasure.

Doug Hoyes: Thank you and that was my chat with Sean Cooper, author of the brand new book Burn your Mortgage, the Simple Powerful Path to Financial Freedom. The book is available now for pre-order on amazon.ca and if you’re listening to this after March 1st, 2017 it’s available in Chapters and all the other major bookstores. So you can look for it there.

I will put a link to Amazon and I will put a link to everything else we discussed today including Sean’s blogs, you can read more about him, his website and the original CBC article that started this whole story from my perspective. It will be in the show notes over at hoyes.com. That’s h-o-y-e-s-dot-com.

That’s our show for today. Until next week, I’m Doug Hoyes. That was Debt Free in 30.