Debt

[Ryst]

I just got out of debt. What a feeling. IMO, being in debt is no way to live and I'll never borrow a single penny again. Just curious where you guys stand? How many of you are in debt (not including a house)? As I was getting out of debt I studied quite a bit about consumer spending, debt, and how I was doing everything wrong. I was terrible with money. It's a very interesting topic. Discuss.

[Coaster]

by definition in this country, you can not be out of debt, ever. all the money you "own" is actually "loaned" from the federal reserve and must be paid back at interest.

 

look it up. 1906, 1907 and 1913 are signifigant years in our history.

[Dessalines]

Not carrying any debt besides our mortgage which is almost paid off. The first thing any good reputable financial advisor will have you do is pay off all revolving debt and get on a pay as you go basis.

[UstadKhanAli]

I just got out of debt. What a feeling. IMO, being in debt is no way to live and I'll never borrow a single penny again. Just curious where you guys stand? How many of you are in debt (not including a house)? As I was getting out of debt I studied quite a bit about consumer spending, debt, and how I was doing everything wrong. I was terrible with money. It's a very interesting topic. Discuss.

 

I am not in debt. I was before, and it was a sickening feeling. I have automatic payments that pay the full amount each month on my credit card and don't have any payments on anything else, including my car (I've always bought used cars).

[Coaster]

 

I am not in debt.

 

 

So...........inflation applies not to you?

 

does anyone know about the federal reserve act?

[UstadKhanAli]

So...........inflation applies not to you? does anyone know about the federal reserve act?

 

In the sense that the OP is discussing, no, I am not in debt. I answered the question in the spirit of that.

 

If we open it up to discuss inflation and the federal reserve act and my backward-sliding wages and loss of other personal income and my mutual funds and 403(b) and my house losing $100,000-150,000 in value, the devaluation of the dollar, and other things...well, I'll let you guess!

[rjt]

Well like Ken, in the spirit of the original post, I am not in debt (feel free to include the house.) I ALWAYS felt that owning was throwing money away and that if I could only pay everything off, I could afford to live cheaply. After a reasonable number of years to get out of debt, I can travel, enjoy life and do so on a sensible pension, because I have not been in debt for many years. I often think of Kyle in Dune "Fear is the mind killer".... well to me "Debt is the future killer!!!"

[ggm1960]

I turned the debt I used to have into a much larger surplus. Now I wish I knew where it could make the most return!

[Ernest Buckley]

Having been in the red and in the black, I can tell you, life is a lot less stressful in the black. Debt is a terrible feeling that is a slow dis-ease. It creeps up on you and then one day you realize you`re drowning. Not pretty. The best advice I ever got concerning $$$... only buy it if you have the cash. In other words, don`t use credit. These days, I pretty much use a Credit Card only if I have to. Its also nice to pay yourself first. Depending on your job, most places can take money out of your paycheck and send it somewhere where it`ll go into some sort of 401 or other investment. I only mention this for our younger lads out there. I know many people feel strongly about home ownership or renting, I think it really depends on where you live. For example, here in the metropolis I live in, a multi family is a much better investment than a 1 family. Granted, a family is a nice idea but long term... the multi family is the way to go. OT... if you have cash lying around, nows a great time to invest in real estate... think multi family.

[UstadKhanAli]

 

The best advice I ever got concerning $$$... only buy it if you have the cash.

 

 

That's a must or you fall into a hole fast.

 

Another one is to automatically "scrape" some off the top each month, or from each paycheck, and have it deposited into a savings account of some kind. You never touch it; it's all saved automatically.

[MrKnobs]

There are some things you should borrow for. A modestly priced house is one. General rule is buy things that appreciate, lease things that depreciate. That's extra true for credit purchases.

 

We owe just $10,000 on our house. We could pay that from our checking account, but it wouldn't be wise as (a) the loan carries a MCC certificate that would let a low income buyer assume the 20% interest credit all the way back to the original amount borrowed, and (b) there's currently a federal tax credit for mortgages that does not directly tie to the amount of interest paid and does not require filing Schedule A, itemized deductions.

 

That's it, that the only thing we owe.

 

We live far below our means, we save 43% of our income annually after taxes, we save and invest. We rarely buy something we don't actually need, although we allow ourselves a few exceptions to that rule.

 

As for Coaster's point, I agree that inflation is a big hole in the leaky bucket of savings, but there are ways to offshore money, invest in commodities, precious metals, foreign currencies, ETFs and securitie, etc. that more than offset inflation. In fact, even presently we hold a significant amount of securities that increase in value with inflation.

 

I think I can safely say that we're not in debt.

 

Terry D.

[Ernest Buckley]

Ken,

 

Yeah, I mentioned that...

 

 

Depending on your job, most places can take money out of your paycheck and send it somewhere where it`ll go into some sort of 401 or other investment. I only mention this for our younger lads out there.

 

[UstadKhanAli]

 

Ken, Yeah, I mentioned that...

 

 

Yup, I saw your post, but the reason I mentioned that was that even if you don't stuff it in a 401(k) (or 403(b), as I mentioned that I have before), you can simply take some and put it in a saving account so that it is not necessarily going into your retirement account, but going into your savings account, where it is still liquid if you want to access it for a rainy day or whatever. ING or Ally or things like that are examples of such accounts, or you can simply set one up with your bank or credit union. Personally, I do both the 403(b) and a savings account, and in addition, I have some elsewhere. Just trying to save some cash. Us teachers don't make truckloads of money, so it's important to try and sock some away.

[Ernest Buckley]

My wife is a teacher! You guys have my utmost respect.

[ggm1960]

 

Another one is to automatically "scrape" some off the top each month, or from each paycheck, and have it deposited into a savings account of some kind. You never touch it; it's all saved automatically.

 

 

 

I used to have my modest cash surplus in a capital one money market fund where it was getting 4%. After the last election that tanked and is currently around 1.1%.

 

Something cool happened recently though.... my credit union began offering 3% on a balance up to $25K with a new checking account and the simple conditions are switching to electronic statements, using debt card 15 times per month and logging into the website at least once a month.

That was a no brainer and I quickly transferred the majority of my capital one money market fund back over to this new checking account!

[michaelhigh]

I filed bankrupcy in the 90's after starting my own recording studio that was underwhelming as an attempt at business. That said, the studio was essentially free, and I put out an album that did moderately well, garnering airplay all over the country.