What is your "Debt Free Date"

[Professor Marvel]

MWRR
I hope you realise that if you had done that in, oh say, 2004, you would be in a different situation. Many factors play into end results. I also feel that land is one of the few things worth going inot debt for and it has resulted well for me. However, recently many people have lost a lot of money with the same concept. Selfishly, I am glad you and I are not in that group. Good work.

 

[ray66v]

I currently have no debt.

My wife on the other hand.............

 

[MossRoad]

I've never been technically "debt free", as we carry a home equity loan line of credit on our house for tax purposes. The home equity loan is a mortgage. Here, if you have a mortgage, you get to claim a mortgage exemption on your property taxes. That exemption is always more than any interest we pay on the home equity loan annually. Goofy laws. We use it to buy used cars, fix up the house, etc... but we have always had enough cash on hand to pay it off if, for some reason, we had to.

Which brings up the idea of "debt free" VS "in-the-black". We've been in-the black since before we got married. Our net worth continues to grow every year except for a short period a few years ago when it went down just a tad during the recession. :laughing: We are back past that point and gaining again now.

One word of advice I will give to anyone that is struggling or starting out or just wants to build their net worth... NEVER EVER PURCHASE A NEW CAR! It is absolutely THE biggest instant waste of money you can ever do. Instant depreciation of your hard earned money is not a smart decision. With the advent of extended long term transferable factory warranties, you can find a good three-four year old car with factory warranty that someone else has eaten the depreciation on. Sure, once you get to having enough money to treat yourself to extravagant gifts, toys, etc... do what you want with your own money. But if you are trying to build wealth, skip the new cars. :thumbsup:

 

[JB4310]

Proof that debt is just like any other tool; useful when used properly.
Pay-as-you-go can work well, too.
Managing either philosophy is the key.

I agree, the basic concept of borrowing money and paying it back on time is not bad, especially for big ticket items like homes and cars.

But debt instruments have been so manipulated by the big institutions, to the point of nearly collapsing countries, even the whole worlds economy. Making interest bearing investments the worlds greatest industry. Making gain on doing nothing but paper work is so tempting, it has become an evil force, not unlike the devil some certain beliefs make it out to be.

JB

 

[RickB]

One word of advice I will give to anyone that is struggling or starting out or just wants to build their net worth... NEVER EVER PURCHASE A NEW CAR! It is absolutely THE biggest instant waste of money you can ever do. Instant depreciation of your hard earned money is not a smart decision. . :thumbsup:

Likely that this is the best advise in the thread. The definition of 'lost capital'.

 

[JB4310]

Likely that this is the best advise in the thread. The definition of 'lost capital'.

The key there is struggling, I bought a few new vehicles when I could afford them and have no regrets.

The problem some struggling people face is the uncertainty of a used vehicle, they can not afford that uncertainty, especially if they are not mechanically inclined. They are almost forced into the new vehicle with the warranty protection.

I May be looking at a new vehicle for my wife in the next couple of years, but have bought 3 used vehicles in the last 3 years. With 4 drivers in the house and 5th coming soon, no way we could have all new vehicles now.

Just have to hone my lost mechanical skills and work on cars more often now. It was nice for a few years of all new vehicles to never have to pop the hood or climb under a car/truck

JB

 

[MWRR]

Don't know about the rest of you, but here in Illinois we will never be "Debt Free". Even if I had everything paid free and clear it would still cost me close to $800 a month (real estate taxes and insurance) for the "privilege to own my home and land. And of course this doesn稚 include State and Federal income taxes. DON探 GET ME STARTED DOWN THIS ROAD!!!

If things went really south in this county I would lose my house and ground because I couldn稚 pay the taxes. It has happened before in this country back in my grand parents day.

 

[MWRR]

MWRR
I hope you realise that if you had done that in, oh say, 2004, you would be in a different situation. Many factors play into end results. I also feel that land is one of the few things worth going inot debt for and it has resulted well for me. However, recently many people have lost a lot of money with the same concept. Selfishly, I am glad you and I are not in that group. Good work.

You are somewhat correct. Home prices here have gone down or stayed flat for the last several years. However, farm land has never slowed down. A piece of ground a couple miles from me just sold last month for $10,000 and acre. I thought I had really stuck my neck out in 1979 when I spent $950 acre for my first piece of ground. I just wonder if the bottom will fall out of the farm ground like it did in the early 80's. In 1983 I purchased my second piece of ground at a foreclosure sale for $450 an acre, but the interest rate on my loan was 18%. Those were some tough times and don't want to go back there!

 

[R_Walter]

It's not how much debt you have, it's how much net worth, as the last few posters realize. Those who worry about debt aren't managing their finances well.

 

[Cat_Driver]

If you manage debt, debt can make you a lot of money. I listen to this guy on the radio telling everyone to pay off your home and credit cards and be debt free and yell it on the radio. Well I think it's BS.

I could have paid off home several time over, but with the low rate I have I have the cash that I would have paid off the home working for me.

Had I dumped the cash in the home I wouldn't have the cash to purchase tax lein sale properties.

Had I paid off my home I couldn't buy a lien sale home and 10 acres of land for 20K cash and turn around and sell it for 80K. Or I couldn't buy other home for pennies on the dollar and collect rent money till I die. So you see one deal pays for all the interest on my home loan money that I am not paying off, and I still have the working cash to do it OVER and OVER and OVER and OVER again.

Without cash on hand and giving it to the bank I would have nothing to work with. Cash used right is like any other tool, a shovel, a tractor, a hammer. It is a tool. It's a tool to work and make more money.

Nope, sorry folks I hate to be the fly in the ointment, but not having cash prevents one from making that money work.

The key thought is cash management. I think the problem with the younger generation is they get the loan just by being able to sign their name. Then they can probably make the payment just fine, but then they refinance for a car, boat RV etc. The refi for something that will not make them money.

Don't believe me. Take a look at any Tax lien sale in your area and see what the final price for properties went for.

Why anyone would take good old fashion cash and hand it to a bank to pay off a home when they can double, triple, quadruple that money is beyond me.

Why someone would pay off one home, when they could buy four homes for that money just doesn't make sense. Live in that one home and rent out the four homes and that is your retirement money till they drop you in a hole.

What do you gain by paying off a home, you save that interest, big deal. You don't get any income from that .

I just looked just now on the tax lein site for Ca., and there is a Condo on a golf course in Palm Desert Ca with a bid of 24K. value 500K.

See, I could give my money to the BANK who will make more money on MY MONEY, or I can take MY MONEY and make MORE MONEY.