Now, our modest home is paid for.

We have a split level (in-law suite) and my parents live with us rent free. Our “half” of the house brings us to just over 1000 square feet. It takes me a whole day to clean the place (maybe I do it more thoroughly then the average joe!). But I couldn’t imagine cleaning a 3500 or 4000 square foot house every week!

Give me small and give me comfy!! But best of all make it easy to maintain!

All the people I know who have substantial debt live in a 3,000+ square foot house then cry and whine about the ‘economy’ causing their struggles.

As for us…. we bought a rat-filled, paint-peeling shack in a nice neighborhood and have fixed it up ourselves….twice…. so our next house should be bought with cash completely debt-free. But in my case, it will be 1800′ or less…. WAY smaller than what any of my more stylish friends live in.

To me debt free is worth more than a bunch of unnecessary square feet.

You don’t have to live in an expensive rental. You don’t have to have a car loan and expensive car. You don’t have to eat out. You don’t have to spend a lot of money on clothes and ‘things’. You don’t have to spend a lot on food.

It does really depend on what you are prepared to do without to get the end result you want.

As to you can’t find home or land for that kind of money. (9 years ago I bought a small home on a large lot for $60,000 in a nice town. 7 years later (right after the market crashed) we sold it for the same $60,000 and moved into the home my hubby built for us (worth much more than what we put into it–sweat equity). There are still plenty of places in the country where you can get real estate reasonably priced, but you can’t expect a mini McMansion for those kind of prices. My SIL and BIL bought a new home 8 years ago for around $250,000. It supposedly was the ONLY thing they could find. I’ve seen pictures of the home-it is huge, it is a McMansion and I’m sure if they had been WILLING to live in a lesser house they could have found one for much cheaper. It is the willingness to be frugal that separates those that have a paid off house and those that don’t. This same couple always cry proverty and then you hear about the 50th birthday party she threw her hubby, you know they either have plenty of cash or plenty of credit on their credit cards. That bash had to have run a good $5000!

A few observations about your scenario:

1. You must have had a pretty substantial income to pay off a 65000 debt in 5 years, and amass 70k in savings in the similar # of years — and still live.

2. You got a steal on real estate. In today’s market, unless you’re buying land next to a landfill or nuclear test site, you can’t get real estate for those $. We’ve been looking for a larger lot to build our dream home on (similar to what you describe), and can’t even get the dirt for under 100k.

Most people who want to own a home (and still feed their family) will simply have to carry a mortgage most of their life.

Few have the patience, discipline, or money to do what you’ve described.

Three years before the end we discovered thrift and within a year were saving so much money and deeply regretted the lost opportunities.

Also, we noticed so little difference in our lives after thrift it was laughable.

We managed to sell our house just before the crash hit the UK. We rented for a time and when we retired moved to a lovely place to live. We have enough money to buy our much smaller retirement home and some in the bank as a reserve.

The freedom of no mortgage is a revalation – we could have done it ten years before we did. Still – at least we got there in the end!

Also think of it this way, a mortgage is generally a fixed cost while your income tends to go up over time. In 30 years, your mortgage from today will seem like nothing relative to your current expenses.

The idea of owning a home outright is great, but outside of paying early to avoid PMI or get rid of a second mortgage it generally is better from a cash flow perspective and time value of money perspective to not pay it early.

So if you have a fixed rate of 5% and you assume long term inflation of 2%, it is really only costing you 3% per year to carry the debt. Can you find long term investments that can beat 3% interest? I think I can.