Strategy 58 of 107
Sell what sits unused: gold jewelry, collectibles, a boat or a second vehicle
What it is
List items worth real money you no longer use.
Steps
- List items worth real money you no longer use.
- Get more than one appraisal or offer; sell through reputable dealers or auctions.
- Send the proceeds to principal; selling a boat or car also ends its insurance, storage and upkeep, which goes to principal monthly.
Repeat: Once per item.
Measure: Net proceeds (enter as a one-time amount).
Try it in the calculator Enter its amount in "One-time amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- Prices swing; gold and collectibles can sell below what was paid.
- Gains on collectibles are taxed at up to 28%; losses on personal items are not deductible.
Who it fits
Average household, Higher earners, Higher net worth, with assets, Business owners, Newlyweds, Married couples, College students, Single, Grandmas and grandpas (62 and over), No high school diploma, No college degree
Needs
Any homeowner with a mortgage.
How predictable
Depends on markets or variable rates
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (average household). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.
They follow the steps: list items worth real money you no longer use.
Suppose it brings a one-time $30,000 on principal. The loan would be paid off in 22 years 10 months instead of 30 years, saving about $134,798 in interest. To finish in five years, they would still need about $3,387 a month more from other strategies. That is why the five-year sequences stack several at once.
The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.
Sequences that use it
- Sell what you don't use: Turn idle things into principal, end their carrying costs, then recast to lower the payment.
- Five-year sprint: sell what is not the home: Large one-time sales carry most of a five-year payoff. Pay the tax first, send the rest to principal, then recast.
Sources and more information
Where to get help
Related strategies
- 59. Sell a timeshare or vacation property that costs more than it gives
- 51. Split off and sell extra land, with the lender's partial release
- 67. Move idle savings above the emergency fund to principal
- 71. Sell in a high-cost area and buy for cash somewhere less expensive
- 72. Live-in improve and sell, every two years, tax-free gain each time
- 43. 65 and over: sell a policy you no longer need instead of surrendering it