I’ve reached escape velocity

I’m not in debt

I have enough to carry me to end, and live a great life

Not relying on anyone,,,, I won’t receive any public pension

Did it all myself

Bernie, don't take offense, but you are out of your league.

I'm they type of guy that should avoid debt as should most consumers.

You are talking about avoiding debt on declining assets, sp is talking about using debt to build appreciating assets.


Ramseys philosophy works for the average consumer.

Robert Kiyosaki's works for others.

Millionaires use credit each and everyday. Borrowing money is cheaper then selling stock and taking from investment portfolio. Retired people that have millions burrow each for the same reason they make more on their investments then borrowed money. I know many of them not saying right or wrong but many ways to get to the end point to be financially independent.

For the record,,,

I never borrowed money, to make money

But some people do,,,,, and it’s not a bad thing

Never made more than 50k a year,,,,,

What I did was work 7 days a week, for 4-5 months straight

Take a 4-6-8 weeks off,,,,,, and not blow my money

Invest it in the capital markets

Do it again,,,,,, for 25 years,,,,

tmi

I disagree with you about Ramsey working for the average consumer. I think his system works best for those on both ends of the spectrum but poorly for those who are truly average. If you have made poor decisions and are in a lot of debt and have a hard time managing it, his system may be for you. Alternatively if you are a high earner and can save large amounts of cash relatively quickly, his system may be a great fit.

However, if you are in the middle and ever want to really get ahead, I feel his system is just as likely to hold you back as it is to help you. He will routinely encourage people to put off life changing investments until they can save enough cash to fund it without debt. Such as starting their own businesses, buying homes ect. If you are on a average salary, it will likely be decades before you could save the amount of cash to fund these kinds of endeavors. By then you would be ready to retire before you could get that business started.

I have even seen him discourage people from saving for retirement until after they have all of their debt paid off. That can cost precious time in the market that can easily cost you more in lost compound market returns than it could ever save you in interest over the years.

I'm not familiar with this guy but your statement of losing precious time of compounding over a long period holds a lot of weight and carries a big stick. The power of compounding is very real.

Nice!!

Somebody that had actually paid attention to what Ramsey sez

That’s refreshing

Although I am personally no fan of being in debt, there are certainly times when taking on a modest amount of debt can be beneficial. Take for example buying a new vehicle. Assume you have the cash available to buy a new F-150 outright for $65K. As soon as you drive off the lot, the value of that truck begins depreciating. Now, let's say you finance it instead...

You take advantage of Ford's 60 month 0% APR deal, and for the next 5 years you pay $0 in interest, an $800 monthly payment, and pay off $48k of the truck... Assuming the truck costs $65 K... you'll have $17K left to pay.... so you'll refinance that for the current rate, say 8%, and within 2 more years have it paid off. Now, for the 7 years you've been paying on this truck, you have taken the money you would have spent if you'd bought it outright and invested it in an ETF such as QQQ.......which, over the past 3 years has had a return of 32%.......at the end of the 7 years, the $65K you invested, from which you also removed the monthly payments over the 7 years, has now grown to $135,060.

So, instead of paying $65K out of pocket and having the value of the truck immediately start falling, you took advantage of leverage and instead grew that $65K to $135K AND paid for the truck. Kind of a no brainer, huh? The main difference, IMO, between rich people and poor people, is that poor people are simply uninformed on financial matters and how to use finance to work for themselves.

Sure, it might "feel good" to have no debt, but I'd rather carry the debt while increasing my wealth significantly at the same time than feel good. And besides, if you already have the money to pay for the truck in full, there really is little risk.... the money's there in your portfolio, if something catastrophic were to happen such as a job loss, just pull it out and pay off the loan. The only risk would be a market crash.

First rule of gambling: NEVER bet what you can't afford to lose

Poppycock

God always gives me enough money to pay the needs but never seems any thing much for wants. But we live in a beautiful peaceful place (except for the wind at times) so I think that has it's riches. Everything bought and payed off, nice feeling even if there's no extra

Yotetrapper, your math is correct but everyone's needs and risk tolerances are different. I personally would never spend 65 grand on an automobile, so the vehicle I buy won't get the zero percent loan. I also don't want to be stuck with that large of a monthly payment. Being debt free one can buy etfs as you speak of with the car payment money 1 month at a time since they don't have a car payment. Different ways to build wealth.

I don't disagree with any of that. I don't like having debt either. I was just pointing out that taking on debt is not always necessarily a bad thing.... at times it can make sense.

My parents taught me early on that rich people earn interest while poor people pay interest.

Using credit cards to buy everything is smart if you pay them off religiously each month paying no interest. You can accrue sky miles or get cash back on those purchases and build your credit score. Buying your vehicles with a loan is also smart if you can get a zero interest loan. If you always pay on time it will build your credit score. Best is to have saved the money for your large purchases ahead of time (invested to earn interest). You can take their loan then pay it off in full the first payment without paying interest.It will build your credit score. Building a good credit score at an early age will pay dividends later when you need it.

My parents taught me early on that rich people make earn interest while poor people pay interest. I would not call myself rich but we are comfortable because we lived within our means and seldom payed interest.

This is why I have not paid off my boys braces and I let the loan run tell the end on my wife's van. Braces are 0% and the van was 2.6%. Van is paid for a few months ago now. Only debt i card is the Braces and once a month a charg of a tank of gas or some other small purchase on my credit card I pay off a day or so later just to keeo something reporting in for a credit score since I have nothing else now that has payments that get reported.

We maximize the value of each significant transaction.
What does the money cost to borrow?
What is the opportunity cost of pulling money from savings / investments?
We worked hard for our money and want it to work hard for us.

We hate to finance anything and have a loan hanging over us.
When i bought our most recent truck, i was offered an additional $1,000 discount if i financed it. So, i confirmed there was no prepayment penalty, and wrote a check for the price minus $10,000. They financed the $10,000. When the first bill arrived, i took it to the dealer and wrote them a check for $10,032. That $1,000 discount cost me $32 in interest.

We have a cash-back credit card which we use for most purchases. I have it linked to the joint checking account to pay off the balance 5 days before the due date. We have made $300 in cash back this year.

I look at our finances nearly every day. It takes me a minimum of 5 minutes - sometimes much longer. Wife and i have a money meeting at least once per week to discuss money, business, investing, retirement funds, and the financial projects we are working towards our goals. Sometimes 5 minutes, sometimes an hour. I have a master file with sub-files to make everything simple and easy for when i kick the bucket.

We are doing some extensive estate planning because of our goals which will be administered through a private foundation that will be perpetually self funded.

Look to see if you can have an HSA account with your healthcare. My HSA account funds are held in an interest-bearing money market account so immediately accessible, but still earned $190 this year.

Each week, i work an average total of 10 hours on financial matters - each day reading the WSJ, and a private newsletter, review finances, roll over any maturing investments, do financial planning, work on tax planning and organization, read the daily oil and gas reports, and manage our ownership interest in oil and gas wells.

Everyone should open an account at Schwab or Fidelity to begin learning about and making money. It only takes $50 or less to open and fund a brokerage account. The financial resources and education then available is invaluable.

10 hours... lol.

You disagree about the average of 10 hours per week?

I think its great considering the general population won't spend 10 mins away month on finances unless its trying to figure out what bill they can put off and pay late without a shut off of services.

Im just guessing but I think yotetrap thought only 10 hrs a week was fun since she is interested in finances and investing and spends much more time than that each week learning and reading..


I know I spend more time than that but its become a hobby/borderline obsession.

I love how you and your wife have meetings and communicate. Wish my wife had more interest in it but she prefers to have me handel all the financial stuff. It's frustrating to me trying to get her on the same page but she needs a basic understanding because I may not always be here to do so. When im dead she will need to know what accounts to pull from and when and when to know if and adviser is following a solid plan or looking at commission checks with his advice.