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I am done with the soul sucking idea that debt is necessary...

33K views 392 replies 79 participants last post by  PopPop 
#1 ·
I have given my household 17 more months to be debt free. I don't care what it takes, by Dec 2013 I am going to prove to my kids that the illusion that debt is necessary, is only an illusion. Not through words, but action. My household will not be Greece.

I grew up accepting certain things in this life as, well, that's just how it is, because that is what I grew up with. I want my kids to grow up with a completely different perspective. It starts now.
 
#213 ·
Frickin 2 months to go!! I am tired of working, tired of fighting for every penny. This holiday season is going to be damn glorious! 6 weeks of work and a flight exam separate me from freedom! (November pay is actually based on October flying)

We have been looking at downsizing the house, we'd like to. But property values around us are much higher than they were 6 years ago when we built, we should pay more, just to downsize, in the same school district. Ahhh well, I hate moving anyway.





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#214 ·
I love reading your updates.

Have I presented you with this link before?

http://www.early-retirement.org/forums/

There are lots of smart people there with an attitude that's congruent with yours.
It's a very good forum for advice on retirement living, finance, and a lot of the same things we get into here on Rat.net.

Keep up the good w**k!
 
#215 ·
My wife just reminded me that I forgot to bid for a schedule next month... Frick!

I may be on call all month... I may have to really whore myself out to make the $$ needed to kick this mortgage. But, it is badass to see a mortgage statement that shows a balance of $7400... Never thought Id see that in my lifetime! Why? Because we teach people to be ok with generational debt... Screw that idea!

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#218 ·
:bow:temptation:kneel:brick - You all just can't bail out on the system , how is this unsustainable lifestyle , growth , shopping constantly for throw away items etc suppose to go marching forward and onward ?
 
#220 ·
Honestly, if everyone lived within their means, meaning, debt free. The ”system” would probably crumble. Which is why it is good that most don't aspire to do it!

Cash for cars? Homes? No credit card debt? Buying things when you ACTUALLY had the MONEY to buy them? Our system is built on debt, finance, consuming. Most people, if on a cash only budget, could never afford the lifestyle they live today. I would argue, that is living beyond your means. Others will argue its not, because they can afford the payments. Problem as I see it is this, debt is borrowing against tomorrows wages, wages that at the time you sign the contract, are unknown.

Our economy is built on consuming, throwing away a 12 month old phone, for the new 5S for example... While other debts are left unfulfilled.

I don't know, I grew up on a small dairy farm as a child, saw very little consuming in my household. Ran machinery that my grandfather used when he owned the farm... Nothing was new, it was suitable, repairable, not expendable. My family owned three cars during my 20 years at home, all used, reliable...

My experiences were different.

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#222 ·
Well, my schedule for November is pretty good. In fact, since we have the money already saved for our last debt payment, ($5700) its actually excessive. Excessive to the tune of 3 days of work. I will probably give those days away and enjoy 16 days off...
A family friend told me that being debt free won't make us free. I will be pondering that while I am at home with my family, still fully funding my 401k, and they are at work, just to live paycheck to paycheck. Yup, that's what Im going to do. Im not free? But Im making better choices with my time.

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#223 ·
If you have the money saved to pay off your debt, you are debt free in my book. The way I figure it, as long as I have more assets than debits I'm a free man. But I realize everyone's circumstances and sensibilities are different and I applaud you for your fortitude. Either way you look at it you got where you are by making very good choices.
 
#226 ·
Upping our pre-tax savings to 29% of our income... Feels amazing!!

I understand leveraging debt, it can work. 6 years ago, that was our plan, when we built our home. Unfortunately, I personally have a real dislike for debt and payments. If I had a dime for every person I knew who leveraged low APR debt and lost their home... I'd be rich. I'm tired of flying with gentlemen 20 years my senior, who are still struggling to pay off a home. All of them at some point were doing well, but used debt to leverage their savings, and when the music stopped, their 401k couldn't save them. So three years ago, we decided to become debt free ASAP.

Fact is, if an airline captain has to look for another job, he will take a certain 50-70% pay cut, regardless of experience. Welcome to the world of Unions, where no one is special, because you are all special. So, what can you do aside from live like you earn half of what you actually do? Nothing, if you are responsible and want to truly do all that you can to be self sufficient, you are artificially poor, just in case.

Our necessary monthly expenses just dropped to $1,100 per month, with 2 cars, my motorcycle, 2 kids, and a 6 year old 2,800 square foot home. That is less than I used to spend as a single guy, when I owned nothing! Now, those are pure necessities, insurance, food, utilities, clothing.. Insurance... Lol.

My wife also gets to remain home, raising my kids, which is priceless. Having someone else raise my kids would break my heart. Having her home, is priceless. If I lose my job, she can stay home... If we were still in debt, she would also be looking for work. We just have choices now, that we didn't necessarily have before, because there was always that $1000 mortgage payment begging to be paid.

When we were in debt, I felt a real pressure... Overtime was a blessing. Now I think I work way too much, and my family needs me more than my boss. Overtime? Never again. Don't need it, don't want it. I can actually afford to pull back to 12 days of work per month. That is power, when I can say no to work, or choose what trips I will fly and which I will not, because I can. I love my job, but not more than I love my family.

It isn't for everyone, and it isn't easy. If you told most folks that starting today they had to live on cash only, they would cringe. See, I'm the opposite, if you told me I had to borrow money to live my lifestyle, I'd cringe, I'd sell something, I'd get a second job... I'd do anything.


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#227 ·
+ 1 speedycaptain and it aint all about how much one makes , it's more about how much one gets to keep :) It took me awhile to get it .
 
#228 ·
Numerous families debt free while earning $40k or thereabouts... You are exactly correct. People have much less control over their incomes typically than they do their expenses. Those same people often believe that if they only earned more, they would get ahead. Fact is, they wouldn't, because you can't fill the sink if you don't plug the drain.

We are not rich, I earn a respectable wage, our neighborhood is a solid $160k home neighborhood. It took us three years of focus to delete $140k in debt, with 2 kids in tow. If we can do it in three years, imagine how many COULD do it in say 6 years? That's twice the time, but that concept seems alien.

Last week we were sitting around a campfire, with some good friends, we love them to death. We were at their seasonal campsite ($3000), at their camper ($15,000), with both of their $30k cars sitting nearby. They are very frank, which I appreciate, because finances shouldn't be more taboo than sex, but we are taught not to talk about it... Why? People need serious help, but it's taboo to talk about it? Stupid.

Anyway, we were talking and they said that they had been looking at selling their home because they just cannot make it, they are really struggling to make ends meet. Wait... Wait... Their income is greater than mine, the only thing separating them and us, is choice. I'd choose to sell the camper, cars and rid myself of the campsite! Any income can leave you bankrupt, the only thing saving you from that fate, is spending, which in the US, is a huge friggin problem. It's a psychological problem.

They look like the wealthiest people on the street, I look like the most destitute (until I pull out my S3)... It isn't rocket science, it's addition and subtraction, it's not theory, it's something you learn in 1st grade.

Cash is for toys... Debt is to be avoided, and only used for a necessity. 75% of Americans claim that they are either living paycheck to paycheck, or falling behind, so what does that mean for their children, their futures?

My kids are excited about becoming debt free, my daughter is at that really impressionable age, she sees what is happening in our home, our family, she listens to our conversations about responsible money management, every day. Money, finances, are not taboo in our home. Our household budget is hanging prominently on the fridge where anyone can see it. It's a fact of life, of our lives, it's a reality, it's not a dirty secret, it's information and knowledge that needs to be shared.

Do you think my father in law feels good knowing that his daughter has me providing for his daughter and grand kids? Yeah... I only hope my own daughter has someone as committed to her security. And if not, I will punch him, weekly, for being a moron and risking the futures of my daughter and her kids, and for what?

I train a lot of pilots, from many countries. It is interesting the aversion to debt that foreigners have in comparison to the American view of debt. Their upbringing was different, they were socialized differently, their values were placed elsewhere... It really makes for some very interesting trans-cons!


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#229 · (Edited)
Congrats Speedy Captain!!! I envy you not having a mortgage, I don't like mine either but it doesn't make sense for me to pay it off right now. I have peace of mind knowing I could.
I know what you mean about people losing their homes in hard times, but the mortgage is only a small part of going under. We live in a society of instant gratification, and 1upmanship .... biggest house - fanciest cars - all the toys. Creditors prey on people by making the game "easy".... for now.
The biggest mistake is financing consumables and things that depreciate. Leverage is only for appreciating items, and even real estate isn't a sure thing like it was a generation or two ago. I too am trying to stress to my kids the importance of not being dependant or beholding to anyone. I have an eighteen year old, and a thirteen year old, and my wife quit working outside the home when our first was born.
Imho, the biggest problem in our country today is that people don't raise their kids and instill morals and values in them.
 
#230 ·
Agreed. This plan just assures that my wife can remain present in the home, and that I too can now devote more time to my family during my children's most impressionable years.

Having a two income household in order to support a lifestyle of consumption, at the cost of raising my kids, is unacceptable. I'd give up quite a few luxuries in order to assure my children's security and future. Not a single expense has not undergone scrutiny. We even called AT&T and refused to pay the monthly fee that they charge for our television and internet. We negotiated and locked in a much lower than market rate. Most subscription services would rather keep you at a lower rate, than lose you altogether.

Now, could we afford to pay more? Spend more? Well, yes, to a fairly large degree, but why? The act of consumption redistributes my wealth, which is in reality my time, my influence in my household. Time is money, and money is time, I don't desire to have my time redistributed to my workplace, I'd like to keep it at home.

I'm teaching my kids that you can have things that you want in life, but it takes time, it doesn't all come at once. Instant gratification is a tremendous issue with younger generations.

Truly, a mortgage alone typically will not sink you financially, typically it is only a small portion of a much larger issue with spending. However, the one thing that I would hate to lose due to repossession, would be the home in which I raise my kids. A home is stability, a safe haven for children, the loss of which can cause far reaching emotional issues for said children. If I lose a car, a motorcycle, or have consumer debt that is unpaid, that is one thing, losing a home is on another level.

Luckily, I now have 2 cars and a bike and a home free and clear... So with any luck, I won't make another debt payment in my life. Imagine it, no loan payments for the rest of my life! No interest charges!

Our next goal is my wife's "new" van. In 5 months we will pay cash for her new van, which means that I will get out of my trusty 22 yr old car, and into her fancy 2004 SUV! We be livin just like those rich folk!








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#232 ·
We try to buy at about 6 years, as the most drastic depreciation will take place in that time. A lot of people only drive 10k per year, so you are getting a $30k vehicle, with 60k miles, for $12k. Seems like a no brainer. We will drive it until it literally dies, 7-10 years... Cost per mile is very low! I will drive the oldest car in the 'hood if it means sending my kids to college without debt.

We did receive some great news this week. It's open enrollment, and my HSA max out of pocket dropped by 50%, my employer contribution gets deposited in its entirety on Jan 1st, and my premium increase was $9/mo. I'm pretty damn stoked about that! Healthcare is one necessary expense that is sometimes hard to wrangle. I don't see healthcare as a choice, it comes right behind having a roof, and before nearly everything else.


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#251 ·
We try to buy at about 6 years, as the most drastic depreciation will take place in that time. A lot of people only drive 10k per year, so you are getting a $30k vehicle, with 60k miles, for $12k. Seems like a no brainer. We will drive it until it literally dies, 7-10 years... Cost per mile is very low! I will drive the oldest car in the 'hood if it means sending my kids to college without debt.



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Congrats on your paying off of debt. I buy new cars and keep them for their entire service life. By carefully watching for incentives and rebate's I have been able to buy 2 new cars for about $22k each. That way I get the latest safety equipment and technology I can afford and I pay taxes on the fewest transactions. The cars I got had active stability etc.. and side curtain airbags and they will remain cheap to maintain for many years.
 
#233 ·
We requested our payoff statement yesterday. Afterward we called the bank to discuss details about removing the lien from the property and what to expect in regards to receiving our deed. The lady on the other end was very congratulatory, but then asked if we were going to go buy a boat or something else big now that we have our home paid off. Sigh... No. Paying off debt is hard, remaining in debt is easy, I'm not going back, never going to be slave to the lender again.

That being said, getting out of debt is temporary, living debt free is forever. I can assure you that now I can actually AFFORD to have MORE fun than those who can only afford to finance theirs. For the past three years we lived like nobody else, so that for the next 60 years, we can live like nobody else.





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#234 ·
#235 ·
The only thing we owe on is our home, and it will be paid off by next June. We could pay it off today, but it would deplete our savings into the uncomfortable mode. We are in the camp of if we want or need it, we pay cash for it. It kills me to watch people buy things like an rv, or boat and go into debt because they have to have it, have to keep up with the Jones. Very slippery slope !
 
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