Deleted
Joined: Oct 7, 2024 10:28:46 GMT -5
Posts: 0
|
Post by Deleted on Jan 26, 2016 9:31:17 GMT -5
Maybe I misunderstood what you were saying... ? Or maybe you misunderstood me... But yes, I agree that different things make better or worse personal financial sense based on the individual.
|
|
teen persuasion
Senior Member
Joined: Dec 20, 2010 21:58:49 GMT -5
Posts: 4,161
|
Post by teen persuasion on Jan 26, 2016 9:41:08 GMT -5
I don't think its more or less financial sense. I think its different. I think that different things work for different people, kind of like how some of us are all cash and some are all cc.. not everything works for, or frankly motivates, people in the same way. I definitely agree. I learned just how different my money mindset is from DH's mindset soon after we moved in together. He had a credit card balance, very small (needed brakes, was broke college student, if no cash then default to credit card). His mindset was "hoard cash on hand, so pay only minimum payment". I saw the amount of interest owed relative to minimum payment (majority, actually) and was aghast at the idea of continuing to pay that interest for months until he reached zero. I'm a math nerd, I couldn't help calculating out the total he'd pay following his path. He was oblivious to the total, he just saw "minimum now" and did that. It's too long ago now to recall real numbers, but something like $60 total, $15 minimum, but $10 was interest. So I immediately saw he was really only paying $5. He never saw it that way, until I pointed it out. I will give him this: he didn't fight me on it. He had the cash to pay it off, and he did because I said it was better. He really didn't want to hear the details, though. He would never think to save, money is just something to trade for stuff I want. If I have it, great. If I don't, and need something, that's what credit cards are for. No planning for the future, moneywise.
|
|
gregintenn
Senior Member
Resident hillbilly
Joined: Dec 28, 2015 17:07:59 GMT -5
Posts: 2,840
|
Post by gregintenn on Jan 26, 2016 9:47:37 GMT -5
I don't think its more or less financial sense. I think its different. I think that different things work for different people, kind of like how some of us are all cash and some are all cc.. not everything works for, or frankly motivates, people in the same way. I disagree. It is pretty easy to prove that it makes more financial sense to take a dollar and invest it versus taking a dollar and paying down a mortgage with it. But just because something makes better financial sense doesn't mean it makes better personal finance sense, because of the items you indicated. I think it makes more sense to pay the mortgage off, then invest the old mortgage payment monthly.
|
|
ArchietheDragon
Junior Associate
Joined: Jul 7, 2014 14:29:23 GMT -5
Posts: 6,379
|
Post by ArchietheDragon on Jan 26, 2016 9:50:20 GMT -5
Maybe I misunderstood what you were saying... ? Or maybe you misunderstood me... But yes, I agree that different things make better or worse personal financial sense based on the individual. I don't think I misunderstood. I just disagreed with your premise about financial sense. In my book, financial sense is fairly black and white. It is mathematical. One way is better than another way as defined by effect on your finances (net worth). Personal finances is not black and white. It depends on the person. It deals with psychology. It deals with irrational and illogical decisions. It may be a semantic issue, but to me it is more than that.
|
|
ArchietheDragon
Junior Associate
Joined: Jul 7, 2014 14:29:23 GMT -5
Posts: 6,379
|
Post by ArchietheDragon on Jan 26, 2016 9:51:00 GMT -5
I disagree. It is pretty easy to prove that it makes more financial sense to take a dollar and invest it versus taking a dollar and paying down a mortgage with it. But just because something makes better financial sense doesn't mean it makes better personal finance sense, because of the items you indicated. I think it makes more sense to pay the mortgage off, then invest the old mortgage payment monthly. It does not.
|
|
teen persuasion
Senior Member
Joined: Dec 20, 2010 21:58:49 GMT -5
Posts: 4,161
|
Post by teen persuasion on Jan 26, 2016 9:51:13 GMT -5
I don't think its more or less financial sense. I think its different. I think that different things work for different people, kind of like how some of us are all cash and some are all cc.. not everything works for, or frankly motivates, people in the same way. I disagree. It is pretty easy to prove that it makes more financial sense to take a dollar and invest it versus taking a dollar and paying down a mortgage with it. But just because something makes better financial sense doesn't mean it makes better personal finance sense, because of the items you indicated. With today's low mortgage rates I would invest vs prepaying our mortgage. It is not always true. I did the math. A guaranteed 9.75% return from prepaying our mortgage was better than possible returns from investments. I was investing during that period, too, in fact increasing DH's 401k contributions helped speed things up. Lower AGI increased our refundable credits, and I threw those at the mortgage each year. The better I optimized, the more I had to invest and prepay.
|
|
gregintenn
Senior Member
Resident hillbilly
Joined: Dec 28, 2015 17:07:59 GMT -5
Posts: 2,840
|
Post by gregintenn on Jan 26, 2016 9:52:54 GMT -5
I think it makes more sense to pay the mortgage off, then invest the old mortgage payment monthly. It does not. You are forgetting RISK. Where are you making more this year so far than the interest rate on a mortgage? How long will this last? I don't know either.
|
|
ArchietheDragon
Junior Associate
Joined: Jul 7, 2014 14:29:23 GMT -5
Posts: 6,379
|
Post by ArchietheDragon on Jan 26, 2016 9:54:08 GMT -5
I disagree. It is pretty easy to prove that it makes more financial sense to take a dollar and invest it versus taking a dollar and paying down a mortgage with it. But just because something makes better financial sense doesn't mean it makes better personal finance sense, because of the items you indicated. With today's low mortgage rates I would invest vs prepaying our mortgage. It is not always true. I did the math. A guaranteed 9.75% return from prepaying our mortgage was better than possible returns from investments. I was investing during that period, too, in fact increasing DH's 401k contributions helped speed things up. Lower AGI increased our refundable credits, and I threw those at the mortgage each year. The better I optimized, the more I had to invest and prepay. I was going to add a caveat about the current interest rate environment, but I didn't. I don't know for sure, but I would bet that it makes sense most of the time, even in high mortgage rate environments.
|
|
ArchietheDragon
Junior Associate
Joined: Jul 7, 2014 14:29:23 GMT -5
Posts: 6,379
|
Post by ArchietheDragon on Jan 26, 2016 9:54:40 GMT -5
You are forgetting RISK. Where are you making more this year so far than the interest rate on a mortgage? How long will this last? I don't know either. There is risk. But I am not forgetting it.
|
|
SVT
Well-Known Member
Joined: Dec 20, 2010 15:39:33 GMT -5
Posts: 1,491
|
Post by SVT on Jan 26, 2016 9:54:38 GMT -5
But since this thread is about being debt free, for you debt free people out there: 1. At what age did you become debt free? It seems like most are retirement 50+? 2. Did you have real estate? Did you pay down your mortgage early? or were you always a renter? Do you think one or the other helped you? 3. Has being debt free always been your goal? Has it always been your lifestyle or were you "born again"? 4. What was the biggest thing that contributed toward attaining your goals? Was it really the latte factor? 1. I became debt free 2.5 years ago, at the age of 27. 2. The only reason I don't have debt is that I don't own a home. Once I do, I'll have mortgage debt. 3. No, being debt free hasn't always been a goal of mine. Having a high income and saving more than 50% of it has allowed me to max all retirement accounts and have a few dozen more thousands per year to do whatever. The decision was pay off the debt, or invest in taxable. I chose to pay off the debt that year, treating it like a bond, by earning an interest equivalent to the interest rate on the debt (was 100% stocks at the time). And I saved it all up then paid it off in one fell swoop. I've been investing in taxable ever since. The goal is to increase net worth. 4. No, it was NOT the latte factor. I have a high income, and save more than half of it. At one point, for a couple of years in my mid 20's, I saved about 75% of it. It was having a paid off car (bought new car when I was 18, 12 years ago) and at the time in my mid 20's, living in a low cost house share arrangement for just a few hundred dollars per month. So it was income and saving a lot of money on the 2 biggest costs; housing and transportation. I spend quite a bit on the little stuff.
|
|
teen persuasion
Senior Member
Joined: Dec 20, 2010 21:58:49 GMT -5
Posts: 4,161
|
Post by teen persuasion on Jan 26, 2016 10:12:37 GMT -5
With today's low mortgage rates I would invest vs prepaying our mortgage. It is not always true. I did the math. A guaranteed 9.75% return from prepaying our mortgage was better than possible returns from investments. I was investing during that period, too, in fact increasing DH's 401k contributions helped speed things up. Lower AGI increased our refundable credits, and I threw those at the mortgage each year. The better I optimized, the more I had to invest and prepay. I was going to add a caveat about the current interest rate environment, but I didn't. I don't know for sure, but I would bet that it makes sense most of the time, even in high mortgage rate environments. It's not a given that the market will return more, though, so I thought a nearly 10% guaranteed return was better. Bird in the hand, and all that. I think we were aggressively prepaying from around 2000 - 2009 when it finished off. I was also learning to make better investments over those years, sometimes the hard way. I was much more informed when we began maxing accounts. Per my amortization schedule, I hit it much more aggressively early in the period; I could see that $10k had much more effect in the beginning than in later years. Towards the end I just let it ride more, beginning to divert the money to retirement more heavily.
|
|
ArchietheDragon
Junior Associate
Joined: Jul 7, 2014 14:29:23 GMT -5
Posts: 6,379
|
Post by ArchietheDragon on Jan 26, 2016 10:13:29 GMT -5
I was going to add a caveat about the current interest rate environment, but I didn't. I don't know for sure, but I would bet that it makes sense most of the time, even in high mortgage rate environments. It's not a given that the market will return more, though, True. That is never a given.
|
|
svwashout
Established Member
Joined: May 22, 2011 12:41:13 GMT -5
Posts: 382
|
Post by svwashout on Jan 26, 2016 10:46:54 GMT -5
1. At what age did you become debt free? It seems like most are retirement 50+? 40 was my original goal. I paid my house off just short of my 41st birthday. 2. Did you have real estate? Did you pay down your mortgage early? or were you always a renter? Do you think one or the other helped you? I have a 2000 sf brick home on 8 acres. 3. Has being debt free always been your goal? Has it always been your lifestyle or were you "born again"? Yes. Early retirement, debt free, and financial independence has been my goal for a long time. 4. What was the biggest thing that contributed toward attaining your goals? Was it really the latte factor? My wife and her two siblings were raised by their widowed mother who worked at a shirt factory for minimum wage. This made my wife very much a saver and not a spender. Although I wasn't this way, it rubbed off on me. Listening to Dave Ramsey's program on the radio also helped inspire me to become debt free.
Yes, I am too: 1. I never borrowed money in my life. My education after high school was covered by full freight scholarships that included living stipends of which I typically spent about half. I work in a field where wages rise quickly early on then stop rising in early middle age. 2. I have been a renter since I turned 18, and I've never owned real estate, but I'm looking now. I don't think it made any difference because I would never have taken a mortgage to buy a home. 3. Taking on debt has never been my goal. I guess in lifestyle terms I prefer to neither invest nor spend other people's money. I'm not religious so that's not a factor, unless the Bible says 'thou shalt borrow whenever given the opportunity'. 4. My goals have been first financial independence, then net worth milestones of which I always thought the next one was the last but another one always came behind it. The primary factor that allowed me to reach these goals was spending aversion and/or procrastination. A bit of luck in the stock market was a distant second factor. I've never tasted latte so that wasn't a factor, unless they put something in it that causes people to make detrimental financial decisions.
|
|
NancysSummerSip
Community Leader
Joined: Dec 19, 2010 19:19:42 GMT -5
Posts: 36,676
Today's Mood: Full of piss and vinegar
Favorite Drink: Anything with ice
|
Post by NancysSummerSip on Jan 26, 2016 10:48:00 GMT -5
No, those people qualify for Medicaid, which was expanded under the ACA. Furthermore, since a large percentage of the homeless are mentally ill, they probably qualify for Medicare under their disability. That was true before the ACA.
I get you hate the ACA, I'm not a fan either. But you should get your facts right about what there is to hate.
Forgive me. I forgot for a moment that we taxpayers are responsible for providing these folks with insurance. You're not providing us with insurance. Most of us pay something, though about 87% of those signed up for the ACA do get some kind of subsidy. I happen to get a small tax credit with the ACA, but I happen to be unemployed at the moment. Working vigorously 6-8 hours a day to change that, however. And that's on top of doing freelance work. I'm not a fan of the plan either; it has issues. But it is preferable to having no insurance and winding up hospitalized with tens of thousands in bills that would require me to sell all I own in order to pay them. And FWIW, everyone I've dealt with so far, at both healthcare.gov, the local navigator at the health department and my plan provider have been very nice. More than I can say for some of my judgmental "friends" who think I'm a fuck-up for being unemployed.
|
|
Deleted
Joined: Oct 7, 2024 10:28:46 GMT -5
Posts: 0
|
Post by Deleted on Jan 26, 2016 11:14:30 GMT -5
Its funny though, the ACA is the only think that would assist a person who might happen to have no debt but lost their job and found out they had cancer.
|
|
HoneyBBQ
Junior Associate
Joined: Dec 27, 2010 10:36:09 GMT -5
Posts: 5,395
Mini-Profile Background: {"image":"","color":"3b444e"}
|
Post by HoneyBBQ on Jan 26, 2016 11:15:36 GMT -5
You know that million-dollar check is a bit more impressive when it is all equity and you get to keep the whole thing. Just sayin' Um....you misunderstood. It will be. I have around 700k in equity right now.
|
|
alinal
Established Member
Joined: Mar 27, 2013 11:46:12 GMT -5
Posts: 344
|
Post by alinal on Jan 26, 2016 12:07:07 GMT -5
1. At what age did you become debt free? It seems like most are retirement 50+?
I was debt free between 24 and 26 (paid off student loans and car loan) and again at 34 (paid off mortgage).
2. Did you have real estate? Did you pay down your mortgage early? or were you always a renter? Do you think one or the other helped you?
I paid off my mortgage early. I would have been debt free earlier/longer if I hadn't purchased my home (um, obviously).
3. Has being debt free always been your goal? Has it always been your lifestyle or were you "born again"?
Being debt free was always my goal. I'm weird and was "born that way", I believe - always good with money. I have used debt as a tool, but always with the intention of paying it off early, in the best case scenario. When I got divorced, I was worried that was the end of my debt free goals, but *silly me* of course it wasn't - it just took a few extra years.
4. What was the biggest thing that contributed toward attaining your goals? Was it really the latte factor?
It's never the latte factor. Biggest contributors was having a good job/income and modest wants. Not increasing my standard of living at a fast rate. Having a spouse (temporarily) with the same goal. Being mindful of where my money goes, and making sure it goes to what I believe is important and not dumb sh!t.
I'm also lucky in that my employer contributes 10% profit sharing to my 401k every year, so I wasn't concerned about not maxing out my retirement savings for those years. Yes, I could have EVEN. MORE. MONEY. in retirement, but I think I'll be fine. More than fine. And the peace of mind I personally get from having a paid off home (being single with no one to fall back on) is priceless.
|
|
tallguy
Senior Associate
Joined: Apr 2, 2011 19:21:59 GMT -5
Posts: 14,563
|
Post by tallguy on Jan 26, 2016 12:30:10 GMT -5
You know that million-dollar check is a bit more impressive when it is all equity and you get to keep the whole thing. Just sayin' Um....you misunderstood. It will be. I have around 700k in equity right now. I didn't misunderstand. Just noted that if you were debt-free it would be a REAL million-dollar check NOW.
(It was a joke. Don't worry about it.)
|
|
murphath
Well-Known Member
Joined: Dec 22, 2010 16:12:33 GMT -5
Posts: 1,981
|
Post by murphath on Jan 26, 2016 13:12:38 GMT -5
Finished mortgage at age 55. I guess we could have done that sooner but....
DD1 discovered figure skating at age 6. Don't let your child get on the ice if you want to save money or sleep in. However, it paid dividends in that she is the most disciplined person I know--besides DD2 who preferred basketball.
Paid for Catholic school for 3 kids through 8th grade. One of the 3 wanted to continue on in Catholic high school, so we said yes.
Paid for college for 3 kids--granted, we had them go to community college first which was incredibly inexpensive. And DD2 got some significant athletic/academic scholarships.
A couple weddings in there that involved travel and footing some of the bills.
In all other areas of our lives, we were extremely frugal, i.e. cooked at home, brought lunches to work/school, camping for vacations, cars driven forever etc.. Our kids weren't spoiled with costly stuff, but once they discovered a passion, we were willing to foot the bill.
Would I change anything to have paid off the house sooner--no way. They are our best work!
|
|
|
Post by mojothehelpermonkey on Jan 26, 2016 15:12:49 GMT -5
1. At what age did you become debt free? It seems like most are retirement 50+?I became debt free at 25 when I inherited money from my dad. I almost immediately paid off my student loans, even though that probably wasn't the smartest financial decision. 2. Did you have real estate? Did you pay down your mortgage early? or were you always a renter? Do you think one or the other helped you?I don't own a house*, but my fiance and I would like to buy one within the next few years (yay debt). His credit isn't great, but he doesn't have any debt either. That is rare for my peer group (mid to late 30s). None of our friends even own homes out here (HCOLA). 3. Has being debt free always been your goal? Has it always been your lifestyle or were you "born again"?Being debt free has always been a goal for me, but one of the things that I have learned on these boards is that it isn't always the best idea financially. Until I had a healthy emergency fund, I was motivated by an unhealthy fear of not being able to pay my bills if anything went wrong. 4. What was the biggest thing that contributed toward attaining your goals? Was it really the latte factor?It was all the ramen noodles that I ate in grad school. J/K... If I had not inherited money, I probably would not have been able to pay off my student loans until I was in my early 30s. *I forgot that I actually do own 1/2 of my dad's house. My brother has lived there for over a decade and put a lot of work into it, so I think of it as his house. He pays the property taxes.
|
|
gregintenn
Senior Member
Resident hillbilly
Joined: Dec 28, 2015 17:07:59 GMT -5
Posts: 2,840
|
Post by gregintenn on Jan 26, 2016 15:26:28 GMT -5
Forgive me. I forgot for a moment that we taxpayers are responsible for providing these folks with insurance. You're not providing us with insurance. Most of us pay something, though about 87% of those signed up for the ACA do get some kind of subsidy. I happen to get a small tax credit with the ACA, but I happen to be unemployed at the moment. Working vigorously 6-8 hours a day to change that, however. And that's on top of doing freelance work. I'm not a fan of the plan either; it has issues. But it is preferable to having no insurance and winding up hospitalized with tens of thousands in bills that would require me to sell all I own in order to pay them. And FWIW, everyone I've dealt with so far, at both healthcare.gov, the local navigator at the health department and my plan provider have been very nice. More than I can say for some of my judgmental "friends" who think I'm a fuck-up for being unemployed. What does it cost you per month?
|
|
NancysSummerSip
Community Leader
Joined: Dec 19, 2010 19:19:42 GMT -5
Posts: 36,676
Today's Mood: Full of piss and vinegar
Favorite Drink: Anything with ice
|
Post by NancysSummerSip on Jan 26, 2016 15:32:31 GMT -5
You're not providing us with insurance. Most of us pay something, though about 87% of those signed up for the ACA do get some kind of subsidy. I happen to get a small tax credit with the ACA, but I happen to be unemployed at the moment. Working vigorously 6-8 hours a day to change that, however. And that's on top of doing freelance work. I'm not a fan of the plan either; it has issues. But it is preferable to having no insurance and winding up hospitalized with tens of thousands in bills that would require me to sell all I own in order to pay them. And FWIW, everyone I've dealt with so far, at both healthcare.gov, the local navigator at the health department and my plan provider have been very nice. More than I can say for some of my judgmental "friends" who think I'm a fuck-up for being unemployed. What does it cost you per month? About $200, with a $300 or so tax credit. The deductible is lower than my previous plan by a bit, but the co-pays are three times higher for doctors, and twice as high for drugs. Mind you, the tax credit will be reduced or go away entirely when I find a job and have to report it to the gubmint. And yes, you have to report changes in your income or face federal fraud charges. If I am going to go to federal prison, I can assure you, it won't be for something like this. I consider the ACA a temporary measure, since I am looking for work with benefits; the benefits are a deal-breaker for me. No matter how much I like a job, the benefits have to be there. And regardless of who is elected in November, I don't think the ACA will survive. It may be around in a different form, but I don't expect it to survive the next president.
|
|
gregintenn
Senior Member
Resident hillbilly
Joined: Dec 28, 2015 17:07:59 GMT -5
Posts: 2,840
|
Post by gregintenn on Jan 26, 2016 15:34:08 GMT -5
What does it cost you per month? About $200, with a $300 or so tax credit. The deductible is lower than my previous plan by a bit, but the co-pays are three times higher for doctors, and twice as high for drugs. Mind you, the tax credit will be reduced or go away entirely when I find a job and have to report it to the gubmint. And yes, you have to report changes in your income or face federal fraud charges. If I am going to go to federal prison, I can assure you, it won't be for something like this. I consider the ACA a temporary measure, since I am looking for work with benefits; the benefits are a deal-breaker for me. No matter how much I like a job, the benefits have to be there. And regardless of who is elected in November, I don't think the ACA will survive. It may be around in a different form, but I don't expect it to survive the next president. If we're not providing that, where do you propose this comes from. Obama's private stash?
|
|
b2r
Junior Associate
Joined: Dec 21, 2010 10:35:25 GMT -5
Posts: 7,257
|
Post by b2r on Jan 26, 2016 15:37:30 GMT -5
|
|
NancysSummerSip
Community Leader
Joined: Dec 19, 2010 19:19:42 GMT -5
Posts: 36,676
Today's Mood: Full of piss and vinegar
Favorite Drink: Anything with ice
|
Post by NancysSummerSip on Jan 26, 2016 19:28:27 GMT -5
About $200, with a $300 or so tax credit. The deductible is lower than my previous plan by a bit, but the co-pays are three times higher for doctors, and twice as high for drugs. Mind you, the tax credit will be reduced or go away entirely when I find a job and have to report it to the gubmint. And yes, you have to report changes in your income or face federal fraud charges. If I am going to go to federal prison, I can assure you, it won't be for something like this. I consider the ACA a temporary measure, since I am looking for work with benefits; the benefits are a deal-breaker for me. No matter how much I like a job, the benefits have to be there. And regardless of who is elected in November, I don't think the ACA will survive. It may be around in a different form, but I don't expect it to survive the next president. If we're not providing that, where do you propose this comes from. Obama's private stash? You're not the only one paying taxes. I still do. And have been in the work force for over 40 years, with no terminations, leaves or gaps in employment. Sorry it burns your personal bacon that people get laid off and need help. But frankly, I don't give a crap what you think. I've never been one to kick someone when they need a temporary hand up, as opposed to a hand out, particularly if they've earned it. Clearly, on your fluffy little cloud, life is different. Sounds really nice up there.
|
|