Occasionally I write about being totally debt free (no mortgage, car loans or credit card debt), but I had one problem with being debt free that took me a while to solve, and that was “What do I do with the extra infusion of cash each month”?  Such an increase of cash by paying off my mortgage was like getting a second job on the side!  In fact paying off my mortgage has cut my annual expense by more than 25%!

Back to my problem!  Obviously I don’t want to incur lifestyle creep since I worked so hard to pay off the mortgage early.  To spend more just to increase my lifestyle would have meant that I basically sacrificed for nothing because I really wouldn’t be getting ahead!  But what to do that extra money?  I didn’t want to put it in a savings account that would earn less than 1%…

Here’s What I Did!

It turned out that my employer offers an ESPP (employee stock purchase plan) that enables me to get a 15% discount on the purchase price of my employer’s stock.    Obviously, 15% beats less than 1%, but it gets even better so that option is a winner if I cash out the stock immediately after it get’s in my account.  But in addition to the 15%, I’ve been putting the money into a (what I consider) safe dividend stock and making over 10% there too.  So that effectively give me a return of over 25% for that each year of participating in the ESPP.

Next Step:

Why not use the money for future real estate investments?  Believe it or not, but often I experiment with working on the best financial strategy until I get the best mix, much like I did with the combination of ESPP and dividend investing.

Bests,

MR