With Jacob snowshoeing / backpacking up on Mt Hood, and Julie/Matthew driving halfway to the coast to transport a friend, I rang up Ken to see if he was up for some 2-player gaming.  He was open to just about anything so I setup Combat Commander: Europe, scenario 5.  This is the "saving Castle Wolfenstein" scenario or something similar - the Germans are defending a chateau in Belgium and the Americans are storming the castle.  Not unlike scenario 2 that Jacob and I played recently.  I like "unbalanced" scenarios like this more than the 1st scenario where both sides are on a generic recon mission.  Of course they aren't really unbalanced because of the initial conditions - in fact, I'm finding the scenarios so far to be incredibly well balance.  Either luck, coincidence, or they did a fair amount of scenario playtesting.

This was a marathon game, lasting nearly 5 hours with very little teaching and downtime involved.  I used a selective disclosure method of teaching the game which works quite well when you have an accommodating partner.  Ken and I are similar in that we both prefer not to grok the whole game at the start and just get into it.  We didn't bother discussing artillery or ordinance until we got cards that forced me to teach him.

The game play was incredibly tense - the best I've experienced so far.  I spent all of the game in the 22-27 VP range until Ken took over the chateau (worth at least 15 points), which gave me a very slight 3-4 point margin.  The problem was I was fast approaching my casualty surrender limit.  My other problem was that I had a secret 3VP objective of, you guessed it, the very same chateau which made my margin even slimmer.

We managed to trigger two separate sudden death trigger tests, but neither one played out to my favor.  So it became a waiting game to see if another time trigger would happen or if Ken would draw an advance card to wipe out my surrender unit.  Well, it didn't and he did, so game over.  I'm glad Ken's first try at this game was so involved and rewarding - I suspect he'll want to come back for more.   Prediction: CC:E and CC:A are going to be my two most played games in 2007.

Thanks to Travis.  I'm surprised I missed any of these questions.

Rock Star
You scored 98%!

You damn rock star. You know all the basics, and if you got any wrong, I bet it was that stupid Traveling Wilburys question. Your friends are probably intimidated by your knowledge of classic rock and envy your impressive collection. When a classic rock song comes on the radio, you can probably identify it before the vocals kick in most of the time. You probably get good scores on the "maiden name of Clapton's mom" tests, too.

Jacob and I have been on a roll lately, playing Combat Commander: Europe twice and Command & Colors: Ancients three times over the past 2 weeks.  I'm most excited about CC:E, so let's talk about that first.

Coming on the heels of trying out ASL SK#1, CC:E hit the sweet spot the game Jacob and I were looking for. The card-driven nature of the game is the right solution to the ASL problem of "oh my there are so many choices I might have... how do I decide?"  This game is nowhere near the ease of play as C&C Ancients or Memoir '44 - this is a real war game folks!  It has counters with little numbers on them, challenging timing rules, and concepts for routing and rallying similar to ASL.

Still, we both found the game very approachable and fast-paced if not short.  Our games are averaging around 2 hours 30 minutes right now, though we may get it down to 2 hours with repeated play.  We started with the Fat Lipki first scenario, with Jacob playing the Germans and me the Russians.

This scenario has a small number of units with both sides on recon.  One thing I really like about the game is the variable / hidden victory objectives which should greatly enhance replayability.  This time around we both had the main building (objective 5) in the middle of the map as our secret objective so that's where all the action was.  I snuck out a marginal victory of 3 points by surrounding Jacob from the woods across the road.  I also brought some units around the back side near his original starting point, which turned out to be a smart move as he marched a unit off my side of the board (that scores VPs for him) then brought him back in the next turn on his side.  I don't quite see how that fits the simulation, but it is an interesting game mechanic.

Our second game was scenario 2, with the Americans and Germans fighting it out in the hedgerows.  This really is a hopeless scenario for the Germans, but the starting conditions are balanced such that it is very playable.  We found this scenario to be much more engaging, especially because the units involved gave us more options from the cards (radio and artillery for Jacob as the Americans and some ordinance for the Germans).  This was another close game but in the end Jacob was able to overrun my position and get the requisite victory points.  I'm rating this a 9 after two plays.

Jacob and I are getting to be pros at C&C: Ancients, with most games finishing in less than 40 minutes.  Friday night we played the Lake Trasimenus scenario, with Jacob playing the Carthaginians and me the Romans.  This is a tough one for the Romans to win I think - or at least that's going to be my ongoing defense as I can't seem to beat Jacob in this game.  He won 6-3.

Today we played back-to-back scenarios of Himera from the 1st expansion. This scenario pits the Carthaginians against Syracuse, and has a great setup: a Syracuse leader and cavalry sneak into the Carthaginian camp then proceed to wreak havoc.  Both of our games turned out to be decent simulations, with the Carthaginian camp getting nearly wiped out in both cases (I played Carthage both times) and solid counter-attacks from the right in both cases.  The first game was over fast, with Jacob taking all 6 flags before I got my first.  I made a few serious tactical errors, attacking without room for retreat when I could have easily left myself some buffer.  On our second go-around I fared much better, losing 6-5.  I think I would have won had I delayed a counter-attack on the right and instead escaped with Hamilcar and the calvary from the camp on the left. 

The three scenarios we played lasted 35, 30, and 40 minutes.  Setup time is down to about 10 minutes.

So the real question is this: because we're having so much fun with C&C: Ancients, should I even consider getting BattleLore?

I'm loving the cheat sheets ruby application.  Install Ruby, gem, then follow Err the Blog's complex (heh) instructions.

I even added my own cheat sheet on GTD.

If you spend a lot of time in a console or terminal window, you should check this out.

I  hosted our Tuesday night gaming session this week and got to break out a couple of Essen releases that haven't seen much action since my return.

Mike spied Die Baumeister von Arkadia on my shelf and we agreed it would a good choice for the 3 or 4 players we were expecting.  I'd been staring at this game on my shelf for sometime wondering why I hadn't played it since returning from Essen - it was one of my favorites there.

The game taught and played very quickly.  The one strategy I remembered to convey is to not wait too long to use your flags to cash in seals and get new workers - the game can end very suddenly and it is hard to win if you've not managed to get your works out generating seals for you.  Peter got the knack of the game very quickly and won by a decent margin.  We played the game in about an hour - great game value for time invested.

Next we played a press-your-luck chicken game that Peter made.  It has some interesting mechanics to it but something wasn't quite right.  We may have played a rule or two incorrectly.  I'd be willing to try it again after some review.

Peter had to go so Mike, George, and I elected to play the much derided Alhambra Dice Game.  Make sure you try this game before you write it off - it isn't nearly as bad as many are saying, and there are some interesting choices to make at times.  Still, the luck of the dice rules and the best laid plans can be for naught if the dice don't agree with you.

My one complaint with the game is that it is too long.  It took 90 minutes to play a full game, and it doesn't hold up well alongside Arkadia.  Perhaps a game with four rounds, scoring after the 2nd and 4th, would be better.

I've managed to have my voice show up in a couple of interesting places lately.  First, my friends over at Distinction Communication had me record a radio spot for them promoting an upcoming public seminar.  We've sent about 30 people through this training at Corillian - these guys are top-notch and if you need to up the ante for business public speaking you should check these guys out.  This spot has been running for the past 2 weeks on 1190 KEX here in Portland.

Second, I was interviewed by good friend and co-worker Scott Hanselman for his Hanselminutes podcast Board Gaming for Programmers.  In this podcast Scott, Eli Smith, and I introduce Scott's geek programmer audience to another world of geekiness - modern boardgames.  Scott tells me he's focused on the WAF (wife acceptance factor) and introducing his wife Mo to 10 Days in Africa and hopes to try Jambo and Settlers soon.  I think that's a good order - Jambo is a great two-player game (though not trivial to learn) but don't wait too long to try out Settlers!

Jacob and I spent Saturday and Sunday up at Nanitch Lodge with our Boy Scout troop.  This is the sixth straight year I've been to a scout outing up on the mountain, but my first time spending the night in the lodge.  We shared the lodge with three other local troops and had a blast.  The weather was perfect (highs in the low 30s), we got a nice blanket of snow on Saturday, and the snow tubing was exciting as always (and no injuries!).  Here's a great shot of Jacob getting some air.

Last night Julie and I walked over to Matthew's school to see his big 4th grade play on the history of Oregon (My Oregon Report by Ralph Nelson).  Matthew played Thomas Jefferson - the guy who swindled Napoleon out of the Louisiana Purchase and set Lewis and Clark off on their way to Oregon.  Matthew did a great job acting and singing and we are very proud of him.

GameStorm 9, March 30 - April 1 at the Portland Airport Sheraton, will be featuring Reiner Knizia as its guest of honor this year.  There are several reasons why I'm excited to attend this year:

• Dr. Knizia will be there
• I will be running the Kniziathon
• This location should be substantially better than the Red Lion last year.  Our hotel room situation was a disaster last year, and I've already managed to book a nice room with 2 queen beds.
• The timing is nice, coming right on the end of spring break for the kids.  This will make it easy for Jacob and I to get there early on Friday and miss the often terrible cross-town traffic.

Time to catch up on some recent gaming!

Through the Ages

Two weekends ago Jacob and I tried to take on the full game of Through the Ages.  Jacob has been itching to play this again and I was happy to accommodate - this was clearly one of the top games I played in 2006.

The last time we played we tried the advanced game and we were excited to experience the full experience - mostly because we wanted to get Bill Gates as a leader.

I did a much better job this time around managing my military.  I wanted to make sure I didn't fall too far behind him and get sent into a downward spiral as we started to reveal events.  This strategy worked out well, especially coupled with Michelangelo - I had a stable military with some accelerated culture production that allowed me to race away with the lead.

Four hours into the game, we were easily 2 hours from being done.  I was so far ahead that we both agreed to stop the game.  The game felt longer this time around, and I'm not sure why.  Downtime wasn't bad at all, so maybe it was just unfamiliarity with the rules at the start.  Still, I'm not sure I'm prepared to invest 5-6 hours for the full game.

ASK Start Kit #1

Time to revisit my nemesis ASL, via the second scenario of the Starter Kit #1 that introduces machine guns.  If you recall, we made good progress last time we played this but I still expressed some frustration with the rules and jargon. I truly thought we'd be well poised to move on to the next set of rules, but in reality we were right back where we started.  As I read the rules, I keep wanting to create my own abstractions to simplify things - I just don't care about the level of realism that the core system offers.  The terseness of the rules is such a hindrance, and the index is nearly worthless.  Case in point: we were trying to figure out ROF (rate-of-fire) for LMGs (light machine guns) etc.  I understand the concept, but I could not for the life of me figure out how you determine if the gun gets another fire.  Look up ROF in the index and you get pointed to MG section, but there's no clue there as to how ROF is triggered.  Turns out this is explained in brief early on in the rules, and it took 5-10 minutes of reading and re-reading to figure this out.

Imagine how frustrating it is for Jacob to sit there wait while I dig through the rules trying to figure out this (very important) rule.  This is where being terse is a huge hindrance for the rules - MMP should double the size of the rulebook and include redundant information as appropriate via callouts and other explanatory text.  I'm sure the SK is big improvement over starting with the ASL rulebook, but I think there's room for improvement.  After receiving Combat Commander: Europe last week I'm forecasting that ASL will never get played again in my household in favor for this lighter, more dynamic squad level game.  More on that later.

Big Kini

I've played Big Kini 3 times in the past few weeks and I continue to be impressed with this mostly undiscovered game.  Doug did a nice writeup of my last session playing this and brought up a good point about the human factors, but I wouldn't get too concerned about his issues.  I think after a play or two the eye candy on the board gets to be pretty decipherable.

Web of Power

I finally got a chance to play Web of Power while over at Mike's a couple of weeks ago.  Wow, what a fun but tough game to figure out (strategy-wise).  I've been reading about Web of Power (and the related game China) for some time but never pulled the trigger on a purchase, primarily because I'd like to try before I buy.  George had played before but needed some time to refresh on the rules, but once we started the game was over within 45 minutes.  Matt did an impressive job taking advantage of connections between provinces (I didn't even notice the connections over sea lanes!) and easily beat us.  A fun time and I'd like to try China now to see if that would be a good purchase option.

Note: this is going to be a personal, lengthy, non-gaming related post.  Don't worry - I'm not going to turn this into a personal finance blog.  There are a number of things I just wanna say and this is my platform for saying it.

Some Ancient History

I was raised in a frugal household but we didn't talk much about money.  My parents stressed economy in a number of ways: minimizing the use of air conditioning and heating, not wasting money on sometimes inferior name-brand clothes, and not eating out.  While I don't remember conversations about saving, use of credit, we did often talk about the stock market and insurance (both parents were in the insurance business).  Heading off to college I had a decent idea of how to manage money, but these ideas were mostly from intuition and random observations and certainly not through any sort of programmed training (school, parents, or other sources).

My memories of my college years and finances mostly involve stress.  I went to a very expensive private university but had a full tuition scholarship from the US Air Force plus a grant from the engineering school that paid for some of my housing and book costs.  I didn't work during school - I didn't think it would be possible to manage getting 2 BS degrees plus fulfill my ROTC obligations while holding down a job.  The Air Force paid me $100 per month as a stipend which helped cover some basic expenses.

The stress came in regarding how I handled my finances in relation to my parents, and the mutual expectations we had in this area which were largely never discussed.  My (immature) thinking at the time was largely "hey, I got a free ride and my parents are almost completely off the hook for college.  They should gladly provide the free cash I need to live comfortably at school."  I'm sure my parents had a very different perspective.  My dad had gone through a number of job changes over the past 5 years (that's why I changed high schools 5 times) and I suspect finances were tighter then they had expected going into my college years.  The real issue here is that we never sat down and talked about expectations.  What sort of budget should I be living on?  How much should I expect to receive from my parents on a monthly basis?  Instead, we basically lived month to month for four years, with periodic phone calls from me asking for more money.  I hardly lived a flamboyant life during those years, but I certainly wasn't frugal either.  It also didn't help that the summer jobs I held only covered my living expenses and didn't allow me to put away money to carry me through the school year.  This was certainly a conscious choice on my part.

I think it was around my sophomore or junior year that I responded to my first credit card offer.  Even in the late 80s the credit card companies were all over college campuses.  I don't know if I got a free pizza or t-shirt with my card, but I didn't have any problems qualifying and so started my adult life in managing debt.  I lived month to month accumulating a small amount of debt, making monthly payments more than the minimum but less than the payoff.  I assumed that I would be able to clean it all up once I started my day job after college.

Towards the end of undergrad I decided that I would delay my active duty commitment and go to graduate school.  I was originally accepted into a USAF program that would pay for 1-2 years of graduate engineering work and did not expect to have to pay.  I was all set to go to Stanford when I got the word in March or April that the program was discontinued - if I wanted to delay I would instead have to pay my own way.  The good news is that I wouldn't incur any additional active duty commitment while on the educational delay.  I readjusted my sites for grad school on a less expensive institution, especially given the fact that it was too late to get any reasonable financial aid package.  I decided that UCSB was a great fit - affordable, a better program fit (I'd be studying computer and software architecture instead of signal processing), and a two year program that would be well paced for me.

This choice also led to some additional stress - once again, I never sat down with my parents to fully discuss the financial implications of this choice.  I was planning on having them fill in some financial gaps for me in order to attend school based on an indirect, non-specific conversation we had that spring.  That summer (1990) things came to a head when I realized that they were not going to be able to provide much assistance at all.  This led to some mutual frustration and a bit of scrambling on my part.  I decided to drive to California quite a bit earlier than originally planned to explore my options for financial aid, work, etc.  I think arrived in Santa Barbara around 3-4 weeks before the start of classes.

That decision paid off as I was able to make myself somewhat of a nuisance in the graduate engineering office.  I got things underway to work towards in-state tuition and let them know that I was very interested in any teaching or research assistantships (TA, RA) that are available.  I also managed to pull in a $7,500 student loan which would allow me to at least get through the first semester.  My persistence was noticed - a new grant came in for an RA position that an existing TA was going to fill.  That left an opening and I got the first call - I'd be teaching the undergraduate EE control systems lab.  This TA position also came with another benefit - they would grant me in-state tuition starting with the first semester.  This was HUGE for me, allowing me to get through 2 years of grad school without taking out any more than the $7,500 loan.  It didn't hurt that Julie and I married in May 1991 and I was able to lean on my new sugar-mommy.

This is all leading to some key points:

• Julie and I entered into our marriage with some of my credit card debt (less than $2000, maybe less than $1000) plus my $7,500 student loan.
• Julie brought no debt to our marriage.  In fact, if I recall, she brought a tidy some of money that was left over from her education fund.

Early Married Life

If I were to assign a grade to how we managed our finances in our early married life, I would give us a B+ or A-. 

We've purchased 4 cars in 15 years, all new, all financed.  The good news is we paid off every car we purchased within 18 months of the purchase.  We're going on 9 years for our Dodge Durango and 6 years for the Toyota RAV4, with no immediate plans to replace either.

We bought our first home in Boise when I left the USAF to work for Micron Technologies.  We bought our second home when we moved to Sherwood, Oregon in 1998.  We took advantage of a VA loan to get essentially a zero down mortgage for the Boise home, and built enough equity there to get a decent down payment for the Sherwood house.  Early on we started making additional principal payments on our home with the thought that it would be nice to have it free and clear sometime short of 30 years.

We've always managed to fully fund any tax-free or tax-deferred retirement options at our disposal.  Julie grew up with strong foundation of savings, mostly derived from mother-mandated reading of the Richest Man in Babylon, and we believe firmly in the pay-yourself-first mentality.  Company sponsored retirement plans are a great way to optimize this model.

Credit cards have always had a place in our household, though early on we committed to paying off balances each month and not carrying debt.  We were not always 100% compliant with this policy, sometimes going overboard and having to play catchup.  Every 3-4 years we would have a collective "oh shit" experience and regroup, look at our budget, and get things under control.  This moment was almost always inspired by a month when we couldn't cover the credit card balance.

Still, we felt that we were doing just fine and knew that we were handling our finances better than your average married couple in America.  We had a healthy fear of consumer debt and a decent nose for telling good debt from bad debt.  Here's a recap of our situation at this time:

• Our only debt is our house
• From time to time we overspend on the credit card and can't pay the full amount off at the end of the month
• We are saving in company-sponsored retirement plans, plus a bit extra in Roth IRAs, but that's it

The Last 3 Years

I started listening to Dave Ramsey on a local radio station about 3-4 years ago.  He was a lot preachier then, even condescending at times, but his message resonated with me: stay out of debt and free up cash flow so that you can fund the things that are important to you.  "Live like no-one else, so that later you can live like no-one else."  I'm not to proud to admit that what I loved the most was the associated schadenfreude as I listened to all of the stories from those poor souls that were taking out payday loans to make their minimum credit card payments.  It didn't hurt that most of the callers have southern/rural accents, only adding to the sense of elitism one can feel living here in the enlightened Pacific northwest.  None of this stuff really applies to us, right?  We pay off our credit cards every month, don't have a car payment, and are well on our way to paying off our home.

In fact, we were likely vastly under-performing our potential in terms of savings, security, and future planning.  We had long ago abandoned any sort of budgeting process and really only discussed high ticket purchases.  If I wanted a new book, CD, DVD, or boardgame I would just buy it.  We had fallen into the trip of many supposedly affluent Americans - allowing our spending to grow exactly in proportion to income growth and failing to take advantage of opportunities to leverage that cash flow for even greater opportunities.

About 3 years ago we were fortunate enough to be able to take some Corillian stock earnings off the table.  While I had long ago lobbied against paying off the house too early (the math just doesn't make sense, does it?), Julie and I had a heart-to-heart and decided that we would use any extra cash available to pay off the house.  We managed to do so in early 2004 and it was an amazing life event for us.  Unfortunately, there were some mistakes in tax accounting and we ended up having to write a large check to the IRS in early 2005.  Where did they money come from?  You guessed it - a home equity line of credit.  So just like that, we were back into some house debt.

We also went in on a purchase of a beach house with Julie's mom and step-dad in the summer of 2004.  It was relatively easy to find the free cash flow to pay for the mortgage, especially considering that we had just finished paying off our primary residence (that was a big factor in the decision to participate in the purchase).

The home equity debt lingered until the fall of 2006.  Dave Ramsey showed up on my XM radio and I listened to him off and on throughout 2006, even adding his 1 hour podcast to my subscription list.  Sometime in September or October, I admitted to myself that I was just sick and tired of carrying the home equity debt.  I also admitted to myself that our spending was out of control - not going into debt out of control, but still out of control enough to potentially prevent us from reaching some long-term goals.  We needed a new plan and process to fix things up.  I decided that I would try Dave's Total Money Makeover "by the book".  Situation summary:

• Mostly paid off house - some home equity debt lingering
• Added a mortgage for the beach house
• Still playing by the same credit card rules

A New Plan

Dave Ramsey likes to characterize married couples as "the geek and the free spirit".  Can you guess which one I am?  I started doing some serious number crunching and account analysis.  I started off just using Excel with some downloaded history data from my bank and credit card accounts.  My mission: find ways to free up cash flow.  Julie and I immediately set a few end-of-year goals:

1. Get a $1000 emergency fund established
2. Pay off the home equity loan
3. Be well on our way to a fully funded $10,000+ emergency fund

Step 1 was easy, step 2 took some work.  We attacked the cash flow from a few different angles.  First, we dialed down any discretionary investing or extra payments.  This included reducing the monthly college savings for Jacob and Matthew from $1000 to $200.  We also agreed to stop making extra payments on the Salishan mortgage for a while.  Second, we agreed to get on a written budget, spending every dollar on paper before the month starts.  For the first month we did this in Excel using a downloaded template I found, but the geek in me took over and I went back to using a Personal Finance Manager (PFM).  Even though I'm a long-time Quicken fan, I decided to go with Microsoft Money this time around.  I'm sure I could have made this work with either tool, but I happened to have a free copy of Money sitting on my shelf (one of the benefits of working in the online finance business).

Side note: The budgeting tools have improved dramatically in PFMs.  My absolute favorite feature in Microsoft Money is the "reallocate..." option on budget categories.  There's nothing like a surprise in the middle of a month to throw off the best written plans, but I find that by using the reallocate feature I'm able to keep the bottom line balanced/fixed while staying on top of and reacting to surprises. I'm also using this feature to track Julie's and my slush fund for discretionary purchases without losing track of the real category that the purchase belongs to.  For example, I might start the month with a $50 boardgame budget, and a $100 slush fund for discretionary purchases.  If I spend $80 on boardgames, I reallocate $30 out of my slush fund into the boardgame category to balance the budget.

We were very realistic going into the budgeting process and didn't overdo it cost-cutting wise.  The process of writing everything down was enough to wake us up and start changing habits.  I also closed one credit card and we agreed to use our only remaining credit card for reimbursable business expenses.  Julie and I each got a First Tech debit Visa card and we started using those for all personal purchases.

I can't stress enough how important the move from credit card to debit card was.  While it isn't the same as spending green cash, using a debit card is much closer to that and when you see a bank account declining balance you feel the pain of spending much closer to purchasing event than you do with a credit card.

The end result for 2006 was that we easily met our goals and got our emergency fund up to around $6,000 by the end of the year. I also think it is having a measurable positive impact on our marriage relationship.  We are openly talking about money in a very healthy way.  We each have fairly big ticket cost items on the horizon we want to plan for, and we are doing just that: planning for them.  We are in the middle of a 3 year home remodeling project and are not going in debt to see it through conclusion.  Here's a summary of how we ended 2006:

• Debt free except for the beach house
• Almost a fully funded emergency fund
• Living on a written budget
• Poised to free up significant cashflow for savings

How We Live Today

We are still only starting this journey as we began the process with a number of projects in flight, mostly in the form of furniture purchases and other home decorating plans.  Projects like this follow a typical lifecycle: first you start measuring where you are, then you try to control the overall system to get it managed, then you start to optimize it to get the most efficiency from the moving parts.  We are just now transitioning into this optimizing stage.

What I also love about this process is that we've been very inclusive of Jacob and Matthew during the process.  They can't help but eavesdrop and hear us talking about finances, and we consciously chose to be upfront with them about what we're doing so that they won't get worried that we are in financial trouble.  Jacob read Total Money Makeover cover to cover and Matthew loves to say "better than I deserve".  The boys are on a pay-for-work commission plan and have their own savings goals.  I believe they are both developing a firm understanding of good vs. bad debt and have a healthy fear of credit cards.

Julie and I each have $100 in our monthly "slush fund", which is probably a bit too small.  I would rather zero out as much of the discretionary budget categories (books, music, movies, boardgames, etc.) and rely on allocations month-to-month from the slush accounts.  We're taking it in stages and I don't want to force drastic behavior changes.

We have yet to figure out what our target/desired monthly savings rate should be, and how we want to allocate those dollars.  Should dial back up the 529 plans for the kids?  I worry about overfunding those accounts - I'm thinking we should only fund up to the state tax deduction that we get.  I'm not sure the long-term tax savings are worth the lack of flexibility we will have compared to just hiding the money away in decent mutual funds.

What the Future Holds

The single biggest looming question that Julie and I will need to face is whether or not to accelerate payoff on the Salishan mortgage.  This is a joint decision with the in-laws so it can't (easily) be a unilateral choice on our part.  This sort of decision gets into a very controversial and often divisive area of personal finance - is it wise or stupid to pay off real-estate debt early, especially on property that is very likely to have significant appreciation during the life of the mortgage?

There's a related issue that Dave Ramsey often talks about regarding how to pay down non-mortgage debts.  Conventional wisdom says that you attack the highest interest debts first and work your way toward low interest debt.  Dave says this wisdom is flawed because of the lack of recognition of the psychological benefits of knocking off entire debts - getting those small wins that show progress.  That's why he says to order your debts smallest to largest and pay them off in that order.  Other than in extreme circumstances, the difference in interest paid will be very small (when compared to the other approach) and he asserts that people are much more likely to succeed when they get that initial progress kick.

This is related to the mortgage payoff question in that there's more to the answer than just a numbers analysis.  Again, conventional wisdom says that you should take the cashflow you would use to make extra mortgage payments and invest it - you'll get a better rate of return on those funds, especially when you discount the mortgage interest rate by your tax deduction.  It just isn't this simple - there are other factors at play here:

• You need to risk-adjust any projected returns when you invest those funds.  There's no such thing as a guaranteed rate of return in the stock market.  If you want safe, guaranteed returns, it is unlikely you'll get a better return on your money than paying off the mortgage.  Still, in the long term, I doubt anyone will argue that over a 5+ year period the odds are pretty good you'll do better with a decent mutual fund.
• The psychological benefits of owning your home free and clear.  It is very liberating!  It encourages free thinking and risk taking when you don't have that $1000 (or $800 or $2000 or whatever) monthly payment looming over you.
• The discipline factor - let's face it, most people are not disciplined enough to stick to a surplus investing plan and are better off working towards a paid off home as they approach retirement age.

All that said, even if you detest what Dave Ramsey has to say about paying off mortgages (you know who you are!) it is hard not to agree with the key first steps in Dave's plan (this is from memory... Jacob can let me know if I got it right):

1. Establish a $1000 emergency fund
2. Get on a written budget
3. Stack your debts (non-mortgage) smallest to largest and attack them in that order - this is the debt snowball.
4. When you are done with the debt snowball, fully fund your emergency fund with 3-6 months of living expenses.
5. Start investing 15% of your gross income into retirement savings
6. Save for college for your kids
7. Pay off the home mortgage

I don't think you'll go wrong if you "only" accomplish steps 1-6 and decide to keep the home mortgage around for a while longer.