I will be entering a new phase in my life. I will have a fixed amount of money coming in every month which is about 1/3 of what I make. I will also have a rent income which will hopefully help a little bit. Then the rest will be flexible depending on the projects. I will be working as a free lance consultant affiliated with a Consultancy Company but I shall not be on their payroll. They will try to guarantee me a minimum of 4 days a month. If I work 9 days a month, my total income will match what I am currently making. So, why am I giving up a steady income stream while I have the debt? For peace of mind, for flexibility and for my sanity. I no longer want to be a part of the rat-race.
However, this new life-style is unchartered territory for me so I am trying to build up a cash cushion to handle the fluctuating income stream. Once my apartment debt is paid, I will have a lot more breathing room so anything and everything I earn on top of my passive income can be spent on home renovation projects, travel and other things.
I keep referring to my debt as apartment debt, not mortgage because it is not a mortgage. In my country there is a stupid regulation that penalizes you when you pay your mortgage earlier. Since I had 75% as down payment for the apartment, I had decided to take a consumer loan with a slightly higher interest rate which does not penalize you when you pay it earlier. Since my siblings are in the finance business, they came up with three sets of debt schemes minimizing the interest load. It worked out pretty well because right after I took out those loans, the interest rates increased. Actually, the current rates are much higher than my debt with the highest interest rate of 12,60%. Think 15+%.
I will have to see what the new income stream will be like during the next 6 months to make/modify long-term plans. My goal is to wipe-out debt and build an EF of a whole year's worth of expenses. Once I reach that goal, I will be extremely relieved.