Adventures In Financial Planning

I woke up yesterday feeling pretty awesome.

“Of course you did, Dan.  You always wake up awesome.”, you reply.

Ah shucks, thanks.

But yesterday was a bit more awesome than a lot of other days.  Yesterday I met with my financial advisor (FA) at the Royal Bank of Canada to discuss my finances, or lack thereof.  More specifically, I met with my FA to refinance my mortgage.  I know, talk about exciting stuff!

Anyway, my intent was to capitalize on the lower interest rates that are readily available now.  Interest rates that are far lower than the rate I first negotiated 3+ years ago, when I bought my condo.  Of course, at the time of said purchase the rate was quite low.  It’s amazing how things can change from year to year.

Waving her magic financial wand, my FA was able to renegotiate a lower interest rate in only a few minutes.  Crazy fast people.  Crazy fast.  So, after signing several papers, and with some presto-change-o, I now have a shiny not-so-new mortgage.  A mortgage with an interest rate that is significantly lower than what it was when it was first shiny-and-new, and one with the exact same time line for repayment as what I had before.  And to top off all of that most excellent financial news, the refinance did not require a penalty fee.  This, my dear friends, is awesome on a financial level that I can’t even begin to explain.

In other financial news, I was also able to pay a huge chunk of student debt off yesterday, thus being able to cross off item #38 from my Not-So-Bucket-List list.  I am feeling so full of awesome right now, I can hardly stand it.  Hardly. Stand. It.

A comparison of interest payments before (blue) and after (red) refinancing (including interest on student loan payments). Sponge Bob is dancing in the Happy-Happy-Fun-Zone.

So what does this mean for my bottom line?  It means that I save in excess of $50,000 dollars over the remainder of my mortgage and student loans.  The savings are pretty obvious when you take a look at the graph above¹.  It outlines the cumulative interest payments from now until the mortgage is paid in full, including all the interest that I would be paying on my student debt (blue line).  It also includes a shiny red line.  That line, my dear friends, represents my new financial picture; one with a lower interest rate on my mortgage, and student loans completely paid off in the very near future.  Sponge Bob is so happy, he’s dancing in the land of savings; a land I call the Happy-Happy-Fun-Zone.  This Happy-Happy-Fun-Zone represents all the extra money I won’t be spending on debt.  And that represents a lot of travel and adventure.  I’m so happy I might have to join Sponge Bob in a celebratory dance.

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¹ You had to know that I would make a graph.