what if?, page-13

Hi travelbug2

Thinking ahead is nearly always useful. The same issue has exercised my mind, quite a bit. Always useful to think through the options, before one is faced with the various moments of decision.

For many of us, the idea of killing off a mortgage is very enticing, as it has so often been for many of us that carry that big financial millstone, or perhaps that open maw that must be fed regularly, or it will gobble us up instead.

But on the other hand, if I am generally happy with my work and lifestyle, my health is OK, and the interest rate on my mortgage is reasonable (if it weren't, most of us could do something about that now without cashing any shares in), then perhaps I can look at it all from a simple financial point of view.

When ADO hits 80 cents, it will not be a flash in the pan. It will be a marker beside the trail, on the way upwards. So, do I cash in enough to kill the mortgage, or do I wear the interest cost of say 6-7% per annum on that $300k-$600k mortgage (say $40,000 per annum on $600k), or take the punt that the SP will move upwards over the following twelve months, and perhaps double, yielding another $600k?

My decision will be based on

(a) my level of confidence in the future of the company,
(b) my need for any cash for lifestyle purposes,
(c) my caution to reduce risk by spreading the ADO asset somewhat.

Obviously, (a) and (c) have an inverse relationship. At any rate, in the current market, I'm reasonably confident that even with a selection of blue chips, one can better 7% ROI. But each to their own. I have friends and family who want much greater certainty, so don't buy shares. And they shouldn't - 'twould only keep them awake at night.

Now, how long before I am challenged on the "when" assertion at the opening of my fourth paragraph?