Are you free of debt?

[KFC911]

I've always been of the opinion that being in debt is like being a slave to your debt masters . Granted, I could be worth a LOT more if I had leveraged more (debt) over the years, but that's not how I roll. I can't fathom being 40+ years old and borrowing for a car or making mortgage payments in your 50s and beyond . Different strokes I reckon...where do you stand? Discuss...

[billybek]

Was debt free.

Finishing off a renovation project put an amount on my line of credit at low interest that I am paying off again.

Paid cash for the last few vehicles, only one that was new.

[ckelly78z]

Completely debt free including 10 acre farm, with about 5 good vehicles, several ATVs/dirtbikes, and John deere equipment. We built a 104'x60' pole barn/stables/riding arena 2 years ago and went into a small short term loan for it, but otherwise, been plugging away 20% into 401K for the last few years, (did 6% for the last 25 years).

[onewhippedpuppy]

Only the house and we are getting close, it's a 15 year fixed and we send as much extra as possible. We don't have brand new cars, the latest designer clothes, or take elaborate vacations, but we live a good life within our means. Getting laid off in 2014 taught my wife and I a very important lesson about debt vs risk and the importance of savings, being heavily leveraged and profitable is well and good until the SHTF.

[tadd]

First wife had horrible medical expenses for the 18 years we were together. Now that she has passed on, things are improving. What we do for love...

If you are in good shape, count your blessings. It can turn (change) on a dime.

My life experience has taught me that you can plan all you want, do the 'right' things, but if luck goes sour, you can be Fked right quick.

One thing I did right was get the PhD in chemistry. It has kept me afloat with a good paying job even when 80k on the CCs in the hole.

[sc_rufctr]

100% dept free. The only thing I'm thinking about now is my retirement. I'm 51.

And I wont be remarrying or anything silly like that.

[GH85Carrera]

We are debt free. I certainly remember the bad old days of receiving a utility bill and wondering how I was going to pay that, and knowing that my mortgage showed another 25 years to pay it off.

My problem back then was I bought a house a little before I really had the assets to do it. In the long run it was a good investment, but it was tough for a while.

My wife retired last year. I am still working but I have a great job that I enjoy and it is hardly a tough job. To quote the man that started our company, he "took early retirement at age 92"

[flatbutt]

Oh H-E-L-L NO.

[jhynesrockmtn]

I was for years, now I'm a debtor and a lender. I bought an apt. building with the assumption I'd get cashed out on another property I sold. That changed and now I'm carrying a 5% note on that deal and had to leverage my home for a down and take a loan to buy the building. I'm ok using debt on rental real estate when the cash flow works. At these rates (4.25% on a commercial loan) it makes sense. The plan is to pay it off when we get to the point of retirement.

[VincentVega]

Doesnt make sense to me right now. I'm happy to take advantage of low rates and live a little. Not into a loan on a car but I drive old cars I guess. I'd much rather have $$ available than have everything tied up in a mortgage.

[fintstone]

Personally, I separate my debt between investment debt and personal debt. I have multiple rental homes. Some are paid off and some are not but have significant equity. I could sell some and pay off others to eliminate debt/payments, but that would also reduce potential growth and tax advantages...so I have chosen not to do so, even though it would increase my cash flow. Having some leverage is a big investment advantage. Currently, all proceeds are channeled back into paying off the mortgages, but it will take at least 10 more years to pay all off.

As far as personal debt, I have a large mortgage on a home I purchased only a couple of years ago. I have enough in retirement accounts that I can access without penalty (other than income tax) and could easily pay it off, but with the low interest rates and tax advantage...it does not make financial sense (although I often think about doing so). I have a defined pension plan where I will not really need extra cash flow to live my relatively frugal lifestyle. There

So, I could be debt free if I chose to do so...but choose not to. I have not borrowed for cars or anything else for about 15 years. That does seem to be unwise in most cases.

[LakeCleElum]

My parents grew up during the depression and I was raised to not buy anything till you could afford to pay cash. Then buy the cheapest thing you can and fix it daily.

The only debt in the last 48 years was a six month home loan waiting for a house I was selling to close. Then I paid off the next house. Current house and cabin all paid for in cash as I built. Never, ever a loan for a car, motorcycle, tractor, snowmobile, vacation, etc.

Going thru life w/o a mortgage gives one the opportunity and really save for an early retirement. People will say houses and college cost more now and it can't be done any more. Not sure, but wages were not very much back in those days.

Tadd is right, luck can throw a wrench in your plans at any time. If you have your health, you have everything.

[Shadetree930]

Originally Posted by fintstone

with the low interest rates and tax advantage...it does not make financial sense

And there it is in a nutshell.

Being debt free sounds nice at a conceptual level but sometimes it makes better financial sense to use someone else's money.

The assumption being that you could pay it all off if you wanted/needed to, but why do so when you can get a better return on your money elsewhere?

[aschen]

100% free turn 40 next week. My house is quite modest however, but its mine. Living expenses are very low in texas and I didn't get married until I was 34ish so I had alot of opportunities to save

I think this will change soon, as we are having a 3rd kid at the EOY so we will need a bigger house and car. I am trying to upsize conservatively though, as I dont want to end up with a mcmansion and a big mortgage.

[Nickshu]

No personal debt. Lots of business/investment debt. I do not ascribe to philosophy of debt free being a good thing. I'd rather invest, say, $40K I have in cash into something that can provide a return and keep making the loan payment than taking that $40K and paying off the loan to make myself feel good for being debt free.

As my financial planner says, "what good is being debt free if you are debt free and broke?"

[sc_rufctr]

Originally Posted by Shadetree930

And there it is in a nutshell.

Being debt free sounds nice at a conceptual level but sometimes it makes better financial sense to use someone else's money.

The assumption being that you could pay it all off if you wanted/needed to, but why do so when you can get a better return on your money elsewhere?

The real problem is too much dept. My daughter just bought her first house with her partner. They're struggling right now but they're also learning a lot.

I actually like seeing my kids struggle & fight for something worthwhile. I feel a huge amount of pride when they come out on top.

[aschen]

if a bank is willing to loan you say 200k for a mortgage at xx percent, what do you know that they do not, such that you have a high probability of a better return than them?


I think the real discussion is the joys of living significantly below your means, and not necessarily debt free vs debt

[vash]

right this moment..i am carrying a balance of $76+ change on my credit card and that is it.

DEBT FREE.

i might owe my friend the next round of beer.

that however is about to change, as i am preparing for the biggest purchase of my life. ever.

[Shadetree930]

Originally Posted by sc_rufctr

The real problem is too much dept. My daughter just bought her first house with her partner. They're struggling right now but they're also learning a lot.

Carrying debt that you can not cover is a different beast altogether and one that is constantly breathing down your neck.

However, the ability to carry debt that you can cover is an investment strategy that is a 1st world problem.

Do I need to move this comment to another thread?

[vash]

my credit and debt happiness..i have little to do with it.

it's my wife. she just knows how to handle money. i owe it to her. we went 7-8 years with just me working, and her going back to school...and i have (it's modest) more cash than ever before.
i'm far from rich. in CA, i might be considered poor

it's nice to have money do some of the work for you..and that kind of debt is alright.