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I wasn't being 100% literal, I thought you would laugh. But actually debt has been the primary catalyst in getting me motivated to further my education, work in private industry, simply to get ahead. For me personally debt is good. Perhaps debt will replace greed as the primary human force
I'm usually a proponent of debt as a useful tool, but I don't can't possibly consider this to be an acceptable use for debt.
It'll be a sad day when debt is the primary driver of human existence.
I'm usually a proponent of debt as a useful tool, but I don't can't possibly consider this to be an acceptable use for debt.
It'll be a sad day when debt is the primary driver of human existence.
Fine, but for me debt was a motivator.
I had a good "regular" job, borrowed $72,000 (adjusted) to go to graduate school. This debt motivated me to work hard and find a good job.
A few years into my new career I borrowed $247,000 (adjusted) to open my own place. Trust me when I tell you that debt was probably the biggest motivator I ever had. It forced me to work 24/7 to make my business viable.
I still use debt to motivate me. But for debt I'd still be at my first "regular" job. Of course I'd be retired but that's another story.
i kind of figured that but i figured i should ask because if thats the case then the cost of the debt isnt really 3.7% (its less).
Only if that person itemizes. 65% of taxpayers don't itemize; generally speaking, I'm sure that people with mortgages are more likely to itemize their deductions that those without, but in some parts of the country the interest on a mortgage for a home priced at the median falls well below the standard deduction.
For instance, the interest in the first year of a $100,000 mortgage (which will buy plenty of house in my area) at 3.5% would be $3469, which is well below the current standard deduction.
So while you're not really wrong, you're not 100% right, either.
To the theme of the thread, it MAKES NO SENSE to be debt free unless you have enough cash reserves to stop working tomorrow. If you don't, having debt that's affordable with low interest, gives you better cashflow management.
Does it make sense to be "debt-free" with $1,000 in savings but have an emergency pop up that requires the entire $1,000? OR, does it make sense to keep a debt load of $5,000 with a monthly payment of $75 but with savings of $6,000 so that when that emergency comes up for that $1,000 you can easily cover it?
It's why when people like Dave Ramsey RAIL against debt, just because he used it inefficiently leading to his bankruptcy, it ticks me off. Debt used properly, is an EXCELLENT cashflow management and leveraging tool. I would even go as far today that if you aren't using debt as a cashflow management and leveraging tool, you are sort of "behind" in terms of standards of living.
BTW.....the entire country of the US is ran on debt, so apparently the US knows that debt leverage is pretty sweet, huh?
Only if that person itemizes. 65% of taxpayers don't itemize; generally speaking, I'm sure that people with mortgages are more likely to itemize their deductions that those without, but in some parts of the country the interest on a mortgage for a home priced at the median falls well below the standard deduction.
For instance, the interest in the first year of a $100,000 mortgage (which will buy plenty of house in my area) at 3.5% would be $3469, which is well below the current standard deduction.
So while you're not really wrong, you're not 100% right, either.
We will not be able to itemize next year because we refied this year on a I/O arm and the interest drop will put us under the standard deduction so we will claim the standard in 2015, pay our 2015 property taxes in jan 2016 and then itemize in 2016 ah fun
To the theme of the thread, it MAKES NO SENSE to be debt free unless you have enough cash reserves to stop working tomorrow. If you don't, having debt that's affordable with low interest, gives you better cashflow management.
Does it make sense to be "debt-free" with $1,000 in savings but have an emergency pop up that requires the entire $1,000? OR, does it make sense to keep a debt load of $5,000 with a monthly payment of $75 but with savings of $6,000 so that when that emergency comes up for that $1,000 you can easily cover it?
It's why when people like Dave Ramsey RAIL against debt, just because he used it inefficiently leading to his bankruptcy, it ticks me off. Debt used properly, is an EXCELLENT cashflow management and leveraging tool. I would even go as far today that if you aren't using debt as a cashflow management and leveraging tool, you are sort of "behind" in terms of standards of living.
BTW.....the entire country of the US is ran on debt, so apparently the US knows that debt leverage is pretty sweet, huh?
I have enough cash reserves to last a year without working and I'm also debt free and am on track for retirement. To each his/her own.
I have enough cash reserves to last a year without working and I'm also debt free and am on track for retirement. To each his/her own.
For my example, I would say enough cash reserves to stop working period, not just for a year. Basically, assuming your personal expenses stay the same, you have enough in savings and the monies you make off the interest on those savings, to carry you over. In that case, there's no reason for the outstanding debt carry. It's basically like being in a state of Retirement.
To the theme of the thread, it MAKES NO SENSE to be debt free unless you have enough cash reserves to stop working tomorrow. If you don't, having debt that's affordable with low interest, gives you better cashflow management.
Does it make sense to be "debt-free" with $1,000 in savings but have an emergency pop up that requires the entire $1,000? OR, does it make sense to keep a debt load of $5,000 with a monthly payment of $75 but with savings of $6,000 so that when that emergency comes up for that $1,000 you can easily cover it?
It's why when people like Dave Ramsey RAIL against debt, just because he used it inefficiently leading to his bankruptcy, it ticks me off. Debt used properly, is an EXCELLENT cashflow management and leveraging tool. I would even go as far today that if you aren't using debt as a cashflow management and leveraging tool, you are sort of "behind" in terms of standards of living.
BTW.....the entire country of the US is ran on debt, so apparently the US knows that debt leverage is pretty sweet, huh?
For my example, I would say enough cash reserves to stop working period, not just for a year. Basically, assuming your personal expenses stay the same, you have enough in savings and the monies you make off the interest on those savings, to carry you over. In that case, there's no reason for the outstanding debt carry. It's basically like being in a state of Retirement.
The idea of being in as much debt as needed until you have enough to retire on NOW is absurd. No bank would give such a huge loan to someone making a modest income. The last time they did that was in 2005-2007. I think you know as well as I do what happened as a result.
The idea of being in as much debt as needed until you have enough to retire on NOW is absurd. No bank would give such a huge loan to someone making a modest income. The last time they did that was in 2005-2007. I think you know as well as I do what happened as a result.
Wait now, I didn't say be in debt to your eyeballs and I didn't say to over extend on debt. I said use an efficient level of debt with interest and payments you can afford, for better cashflow management and leverage.
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