At the Money Mavens Network, we have decided to share our summer vacation projects. It is always fun to see what others are up to during their vacations so we can get more ideas for our own.

On my side, summer vacations will be pretty quiet this year. I am still taking my 2 weeks of vacation but since I am broke, I’ll be looking for frugal-stay-at-home (most of the time) kinds of activities. We recently purchased a second car, we will move into a new house and I will reimburse the loan from my parents shortly. This is how we ended-up with no budget for summer vacation this year .

So how can we still have fun while staying home for our summer vacation?

When you think about it, there are several things you can do even if you don’t plan on going somewhere for your summer vacation. My wife and I sat down and started thinking about some cheap activities:

#1 Picnic by the lake

We are lucky enough to live in a city with a huge public lake. There are water games, playground for the kids and a nice place to have a picnic by the lake. While the kids will have fun in the park, we will be able to enjoy a nice sunny afternoon on a comfy blanket.

We will probably rent a kayak for an hour or two. This won’t cost too much and will be a great activity for the entire family.

#2 Invite people over

Since we are not going anywhere, why not invite people over for a BBQ? We will invite a bunch of our friends and everybody will bring something to eat. Hot dogs and hamburgers are quite cheap and when friends bring chips and refreshments, we’ll be all set to have a great time

#3 Museums and libraries

I like to learn new something new everyday and I like to share that with my children. On a rainy day, we will prepare to visit a museum or will borrow a few books from the library. Here again, these are cheap activities and we will have the opportunity to spend quality time together.

#4 Camping!

We are planning to go camping for 2-3 days on a trip. While this option is not completely free, camping is a good compromise between going away and staying home for the entire 2 weeks! It will be a lot of fun to chase bugs and tell my children scary tales .

#5 Building a cabin in the trees

Now that we have purchased a house with a lot of land with plenty of trees, my son asked me for a cabin in the woods. So we will gather building materials here and there (and maybe recycle old furniture at the same time ) and we try to build something. I am not a handyman but I am very excited about the fun we will have to hammer nails with my son

#6 Take some time off for me!

I have a few books that I got for Christmas and a few videogames that I have wanted to try. This will be the perfect occasion to just escape to my cave, turn on the TV and relax! There is nothing like reading a good book in the sun with a nice glass of wine I just can’t wait for that moment of peace!

So as you can see, my summer vacation will be pretty quiet and frugal this year. In the end, what is really important about vacation is to:

#1 Take some time to rest

#2 Have a good time with the ones you love

Once those 2 objectives have been met, I will consider that my summer vacation is a success.

Now let’s take a look at what other members of the Money Mavens Network have to say about their summer vacations:

Having Fun Yet? 8 Ways To Ensure Your Road Trip Sucks @ Len Penzo

Cheap Vacation @ Canadian Finance Blog

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At the Money Mavens Network, we have decided to bring another great debate to the table: should you pay off your mortgage or invest your extra cash?

Many young individuals feel an incredible pressure when looking at their mortgage statement. I remember the very first time I went online after buying my first house: the only thing I saw is that I owed $184,000 to the bank. This was almost 200K! At first, your heart stops beating, you are gasping for air, your brain slows down; time freezes. Is there any worse feeling? Probably the one you have when the foreclosure letter for this 184K mortgage arrives via a bailiff  ;-).

This is why many people believe they are better off debt free and focus on paying off their mortgage as fast as they can. But are they really doing the best thing by paying off their mortgage loans instead of investing their extra savings?

I think you are better off investing your money than increasing your mortgage payments.

Yup! I am not part of those anti-debt group. I think debt is really good for you. However, you better know how to manage your personal finances and get control over your debt to create wealth with your money.

Let’s start with the facts: Mortgage or Investment?

If you take this debate on a pure battle of numbers, you will end-up with the same result after 30 years or so. In fact, if you put all your savings towards your mortgage, you will end-up with a net worth equal to the scenario where you pay your mortgage according to the regular schedule and invest the difference. However, in order to get the same net worth, you must keep using  the same amount used for your mortgage payment and start investing it once your mortgage is paid off.

Do you have this discipline of paying off your mortgage faster and then, investing the very same amount, in its entirety?

Imagine that you have been struggling for 15 years to put $1,500 per month on your mortgage in order to pay it off in 15 years instead of 25 or 30 years. What is your reward after 15 hard years? You need to keep struggling to invest the very same amount ($1,500) in the markets in order to get even with scenario #2! Do you have this discipline? I’m not quite sure….

The power of compound interest

There is another reason why I prefer investing money than paying off my debts and it’s called the marvellous power of compound interest! While interest on your debt is paid as it is charged, interest on your capital is being added year after year. Therefore, if you have 100K of debt at 5%, you will always pay $5,000 per year in interest (if you don’t reimburse the capital).

However, if you invest 100K at 5%, the first year you will make $5,000. Then, the second year, you will make 5% on $105,000$ and not $100,000. Therefore, the interest earned during the second year is $5250. $250 more in your pocket during the second year already. And the number keeps growing year after year. If there is only one financial principal you have to understand in life, it is the compounding of interest.

I don’t even pay my mortgage back! I invest everything!

Yup, I could be categorized as a financial extremist . I truly believe that compounding interest is way better than paying off debt with my hard earned money. Therefore, I just pay interest only on my mortgage and I invest the difference in the stock market (or my online company). While the bank doesn’t like it because I always keep the same level of debt, let me tell you that my level of assets has increased a great deal over the past 5 years.

I don’t recommend that everyone be that extreme. After all, I work in the finance industry and I know what I want to accomplish and follow what I am doing very closely. I would not take such “risk” if I wasn’t working in this field. However, I truly believe that if you have an extra $200 per month, you should invest it instead of putting it down as a capital payment on your mortgage.

If you slow down your debt payoff process to buy a car, go on vacation or eat out, you are wasting serious money. However, if you prefer to buy assets (invest your money) instead of paying off your long-term debt, you have a seriously good chance of growing your net worth much faster!

So here what other Money Mavens think about whether you should pay off your mortgage or invest your money:

Free Calculator to Pay Off your Mortgage or Invest @ Wealth Pilgrim

12 Good Reasons Why You Should (and Should Not) Pay Off the Mortgage @ Len Penzo

Mortgage or Save @ Joe Taxpayer

Pay Off Mortgage Sooner, Invest, Or Save? The Math Analysis @ Money Help For Christians

Should You Grow Your Nest Egg or Pay Off  Your Mortgage? @ Enemy of Debt

As you have perhaps already heard, I am the lucky new owner of Green Panda Treehouse for about a month now. Since our recent  purchase, I’ve been approached by a group of bloggers to create a blog network (another one!)

What is Money Mavens?

I’d say that our group has something different to offer than other Personal Finance networks in the blogosphere; each of us are “experts” in a specific niche of personal finance. This is why the content you read on my blog will be different than others. Since personal finance is such a broad topic, it is a great news that you have access to all these experienced bloggers through this network.

We do run group projects once in a while based on readers’ questions or simply inspiration. So if you have a topic you want us to cover, please send me an email to green.panda.treehouse(at)gmail(dot)com.

We will be starting a group project in the next few days… stay tuned!

In the meantime, here is a description of the bloggers who make up the Money Mavens:

Money Mavens Network Members

Canadian Finance Blog

Canadian Finance Blog is the Canadian source for personal finance.  The site covers universal topics such as how to invest wisely as well as tips on how you can save money on everyday expenses and bills.  As one of the leading sites based in Canada, numerous topics that matter to Canadians are covered, including RRSPs, TFSAs and Canadian taxes.

Enemy of Debt

Brad Chaffee founded Enemy of Debt in 2008 in an effort to motivate and inspire financial discipline by focusing on behavior and truth. Brad feels that by learning personal responsibility, debt free principles, and the importance of planning people can learn how to take control of their finances one step at a time.

Fiscal Geek

FiscalGeek focuses on Personal Finance from the view of a Geek. Paul makes no apologies about his inner geekdom, and that is why his audience appreciates him so much. He spreads his knowledge about finance and technology to help his readers improve their fiscal fitness, one spreadsheet at a time.

Green Panda Treehouse

I work in the financial industry and am specialized in personal finance. I’m always trying to find ways to make more money creatively instead of waiting for my pay check every two weeks. I love to try different things and will post true stories about them. I am currently building my own online business while working 4 days a week at my day job.

JoeTaxpayer

JoeTaxpayer is the founder of the eponymous www.JoeTaxpayer.com where he has been blogging on various financial topics for over three years. He is interested in all aspects of financial planning with a strong focus on tax issues and retirement planning. Joe is also a frequent contributor and one of the moderators of the Usenet group misc.taxes.moderated and guest blogger at the TurboTax blog.

Len Penzo dot Com

When it comes to writing about the world of personal finance, Len definitely marches to the beat of his own drummer! In a uniquely irreverent and highly-entertaining style, Len covers a broad array of money topics, with an emphasis on personal responsibility and running your household like a business – just like he has done successfully for the past 20 years.

Money Help For Christians

Money Help For Christians (MH4C) promotes a frugal, simple, debt-free, and generous lifestyle so Christians can faithfully maximize their resources by putting them at the disposal of God’s Kingdom. MH4C is committed to providing relevant resources in order to assist Christians in this effort.

The Oblivious Investor

At The Oblivious Investor, Mike writes about ways to invest successfully without having to watch the market from day to day or month to month. He covers topics like asset allocation, building low-maintenance portfolios, and making the most out of your retirement accounts.

Wealth Pilgrim

Wealth Pilgrim is about financial balance.  On the one hand, Neal believes most of all of us can do better financially.  Spend more mindfully, invest smarter, get better educated, make sure we maximize our earnings.  On the other hand, there are some things that are beyond our control. Rather than allow those realities diminish our joy in life, Neal feels we should learn to accept them and find joy in those limitations. Neal writes about finding this balance on his blog Wealth Pilgrim.

Author: Mike.

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