Being poor has nothing to do with income.

[Dantilla]

Originally Posted by GH85Carrera

He was very wealthy, but still wanted that few bucks cheaper deal.

How do you suppose he got wealthy?
Be careful with every dime, and they accumulate.

[Rick Lee]

I used to work for Joeaksa's boss, who's worth high nine or low 10 figures. No cheaper man in the world. And I have to respect the hell out of that.

[Superman]

Originally Posted by Dantilla

Be careful with every dime, and they accumulate.

Pounds are made of ounces. Ounces are made of grams.

[fintstone]

Any healthy person with an average intelligence (or higher) can easily become relatively wealthy over a lifetime of work in this country. It is not that difficult if one works at it.

A little self-discipline and delayed gratification goes a long way. Choosing not to spend after-tax dollars is really helpful as they represent many more "pretax dollars earned". In many ways, people with much smaller incomes can essentially live as well as those making a great deal more if they don't fritter away their money on nonsense and "invest" their time and money on their housing, their education/knowledge, etc...and put aside the money that others waste playing (into financial investments that grow over time). The compounding value of time and money is enormous.

[flatbutt]

Originally Posted by Dantilla

How do you suppose he got wealthy?
Be careful with every dime, and they accumulate.

I'm not wealthy by today's standards but what I do have has been built on frugal and not wasteful living. Bills got paid first. If anything was left over half went into the bank. One quarter went into investment. The other quarter was for whatever which usually meant a pizza. When I could I paid down the principal of my mortgage. For instance, when my truck loan was paid off I took that monthly payment and used it to pay down the mortgage. I avoided thousands in interest.

[fisher22]

^^^
Self-discipline, delayed gratification and nonsense spending are simple concepts that I’ve attempted to explain to family members and close friends MANY times. Even the occasional young bank teller who shows an interest at what they perceive is a comfortable account balance. But it also takes a certain kind of personality to actually do it. In my experience, that person is 1 in 100 or fewer. Or I’m just not convincing enough.

[911 Rod]

In our day it was all about paying off the mortgage to remove the debt.
In the present situation, with the price of homes, I don't know if this is achievable anymore.
My son has a $600,000 mortgage which is triple the amount of my highest mortgage.
He and his wife are teachers, so they make okay money.
It might make more sense to just pay the regular mortgage payment so you have money to have a life.
$1,000/month is 25 years to pay $300,000

[flatbutt]

Originally Posted by 911 Rod

In our day it was all about paying off the mortgage to remove the debt.
In the present situation, with the price of homes, I don't know if this is achievable anymore.
My son has a $600,000 mortgage which is triple the amount of my highest mortgage.
He and his wife are teachers, so they make okay money.
It might make more sense to just pay the regular mortgage payment so you have money to have a life.
$1,000/month is 25 years to pay $300,000

My children have mortgages that would make me weep but they have the income to manage them and they have my discipline.

[Rick Lee]

How can two teachers afford a $600k mortgage? Is it interest-only? My wife and I make several times what teachers make and I'd not be comfortable with a mortgage that size. What is that P&I payment? $5000/mo?

[Noah930]

Originally Posted by Rick Lee

How can two teachers afford a $600k mortgage? Is it interest-only? My wife and I make several times what teachers make and I'd not be comfortable with a mortgage that size. What is that P&I payment? $5000/mo?

A lot would depend on the interest rate, too. Our mortgage started off at the same amount as Rod's kids'. Off the top of my head, I think the monthly note was about $3000--our interest rate was in the high-5s?

But I get your point and agree with the sentiment. $600K is a lot of money to owe. At the same time, if you view it not necessarily as an amount you have to pay off before retirement, but rather as a means to build wealth/equity for when you do retire and downsize, then maybe it's not as daunting.

[Seahawk]

Originally Posted by flatbutt

I'm not wealthy by today's standards but what I do have has been built on frugal and not wasteful living...

Sure, but you didn't have to pay for glasses, so...



The basics of personal finance have remained and will remain constant in terms of budget items and percentages of income going into the budget of each. The money has to come from somewhere...most people have no idea, no household budget. Trust me, I know.

My Dad could make copper wire out of a penny but he wasn't cheap, he sought value and tried, as have I, to not borrow and assume debt across the spectrum.

It works.

Cars. Over the years, I have owned 20 or more "frivolous" cars, not DD's or long distance family machines, something that made me smile. One car at a time, however, and I worked budgets and lost money on maybe three cars...and I always sold the one I owned first.

I am not monetarily wealthy by any stretch of the imagination but I probably define real wealth differently than most. Real wealth is not income based anymore than being poor is.

The most important thing is that we, my wife and I, know exactly were we are financially and are simpatico on where we want our family to be.

[911 Rod]

Originally Posted by Rick Lee

How can two teachers afford a $600k mortgage? Is it interest-only? My wife and I make several times what teachers make and I'd not be comfortable with a mortgage that size. What is that P&I payment? $5000/mo?

I did a quick calculation and it's $3,500/month. They have a basement apartment that they rent for $1,500/month.
The real kick in the head is that after 5 years @ 5% you pay off $70,000 to the principal and $140,000 in interest!
Remember when interest rates were in the teens and you paid for the front door after 5 years?

[KFC911]

In general, I think most folks on this board have figured it out, and found a path that works ... for them. But it's also about balance, living & enjoying life too imo. I've pi$$ed away a small fortune over the years .... after doing a lot of the "right $tuff" first ..... then I .... well.... I digress ....

NO REGERT$ .... except the tattoo

[Cajundaddy]

Managing money is a skill just like riding a bike, rebuilding a 3.0L Carrera motor, or learning to fly.

Most of my extended family came from nothing and were painfully frugal. As a result I absorbed many of those traits but these skills can just as easily be learned from a book. You just have to want it enough to get control of money so it never controls you. I never made a big pile of cash and some business transactions and RE deals went better than others but I managed to hang onto enough. Now sharing these experiences with my kids and grandkids.

[Seahawk]

Originally Posted by KC911

In general, I think most folks on this board have figured it out, and found a path that works ... for them. But it's also about balance, living & enjoying life too imo.

Why wouldn't it be? No one here has enjoyed life more than I have, IMO; I just know how to afford it, most do not, on my own terms....I know what works for me.

Again, IMHO.

Rick, your posts on this sector of life are always fascinating.

[KFC911]

Originally Posted by Seahawk

Why wouldn't it be? No one here has enjoyed life more than I have, IMO; I just know how to afford it, most do not, on my own terms....I know what works for me.

Again, IMHO.

Rick, your posts on this sector of life are always fascinating.

Paul, I've known a few folks who didn't have the balance .... and it's just sad from my perspective too.

You've lived LARGE

[Seahawk]

Originally Posted by KC911

Paul, I've known a few folks who didn't have the balance .... and it's just sad from my perspective too.

Oh, I get it.

"Large" is a relative term

[GH85Carrera]

Originally Posted by 911 Rod

I did a quick calculation and it's $3,500/month. They have a basement apartment that they rent for $1,500/month.
The real kick in the head is that after 5 years @ 5% you pay off $70,000 to the principal and $140,000 in interest!
Remember when interest rates were in the teens and you paid for the front door after 5 years?

My first house had a super bargain mortgage rate of only 12.5%. At the time the banks, credit unions and savings and loans were charging 18% for a 30 year note.

I ran an amortization schedule on my 30 year note and saw the principal paid on the first payment was about 5 bucks. So I owned the key for the door, and that was about all. I ran the amortization for a 20 year term, and the payment only went up something like 15 bucks. So I did that.

I love having no debt at all, except the airplane loan, and the business owns that and the airplane is worth over double the loan amount. No doubt, we could sell the our 2004 Cessna 182T in a short time for more than we paid for it.

[Rick Lee]

Originally Posted by 911 Rod

I did a quick calculation and it's $3,500/month. They have a basement apartment that they rent for $1,500/month.
The real kick in the head is that after 5 years @ 5% you pay off $70,000 to the principal and $140,000 in interest!
Remember when interest rates were in the teens and you paid for the front door after 5 years?

Ok, a $600k loan amount at 5.9% on a 30 yr note is $3500/mo P&I only. No way are taxes and insurance a dime less than another $1500. So that's easily $5k/mo. and that's when absolutely nothing goes wrong with the house. That used to be an eye-popping amount to me. I've made that much in a day and I've made less than that in a month. The thing is that I couldn't wrap my head around being on the hook for that amount every single month for 30 yrs.

Used to be that, back of the envelope math, you should not have a mortgage more than 3x your annual household income. At my age now I'm thinking more about having zero mortgage before I retire. Though I love what I do so much, that I will never retire as long as I'm physically able to do the work. Still, I hate the feeling of longterm debt.

[flatbutt]

Originally Posted by Seahawk

Sure, but you didn't have to pay for glasses, so...

.

Plus, I am grounded in a concept (somewhat esoteric) that far too many people are unaware of. That is the knowledge that what I have is in fact "enough". I'm not referring to the number of zeroes in my acc't balance.