Debt free people chime in

[OILFIELDTRASH]

Just wondering how you got to be debt free and what it's actually like. I don't count people with apartments as debt free so homeowners only please. I'm about to head down the boring road of just paying off debts instead of accumulating more. I don't have a need of having more income monthly I just would like to see what it's like to be debt free. Something to strive for. What kind of sacrifices were made? Is it like a weight lifted off your chest?

 

[foghorn67]

I don't know what you intend for not including apartment dwellers, people that outright own their house have to pay property taxes. Sometimes that's high, sometimes it's a few bucks.


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[CraKaJaX]

Paying rent each month is not 'debt' - it's just another payment. There's nothing being accrued.

 

[Tormac]

My house and cars are paid off, I suspect that is what you mean.

I hate to say it, but if you are an average middle class kinda person, you have to always make over payments on the things that you owe money on. Oh, and do without things that you do not actually need, and put that money into extra over-payments. Make over-payments on everything that you are paying interest on, pay off the highest interest rate items first, and avoid taking out more loans.

As far as what it is like, imagine having the money that you make every month for a car payment, and a house payment in your bank account instead.

 

[Tweak155]

I was 100% debt free for a year or 2 until I decided to "upgrade" my house. It sucks having a payment again, but honestly I've never had a problem with money so it's not a ton different. Of course, if preference were stated, I'll take debt free over debt!

The truth is though, even if you have no current decided allocation of funds, life happens and you will continue to spend more money anyway.

 

[Carson Dyle]

Just wondering how you got to be debt free and what it's actually like. I don't count people with apartments as debt free so homeowners only please.

So, only homeowners without mortgages?

Sometimes debt is good. Given the choice between a big mortgage at under 3% and using investments to pay off the mortgage, I'll take the mortgage.

Like many things (think: drug addiction, bad relationships) the key is not getting into debt in the first place.

 

[Humpy]

I have cheap debt so it doesn't feel any different than being debt free.

 

[highland145]

No debt other than a 15 y.o.

Love it. Yes, I have property tax but it's about $1250/year for the house, 2 vehicles and another 8 ac piece.

Quite my job to work for myself. Had a house payment at the time but no other debt. Couldn't have done that if we owed a bunch of $$. The wife paid the bills for a year + until I could take $$ out of the company. I make ~2.5X what I was making which has allowed other things like the kitchen remodel/yard makeover/kids private school/vacations/etc...At this point, a very good decision for me.

Both vehicles are 2010 Toyotas so we shouldn't have too many problems in the next several years.

 

[monkeydelmagico]

I started my life and career leveraging to the hilt. New house, new car, new everything. They all got old and the payments were still there. I spent the next decade getting rid of all of it. Frugal living allowed me to be debt free. I now own the house, cars, and toys. I live well below my means. The sacrifice for us is buying a foreclosure house, shopping for cars at auction or the back lots, furnishing the house with garage sale furniture, and having last years toys like boats and campers.

Having lived both ways I can honestly say both lifestyles have their appeal. My life goals have changed and I want to retire much earlier. Adopting a cheap ass lifestyle now and learning to live on less will make that transition a lot easier.

 

[GRIFFIN1]

I have no debt, but I also don't have a home and my car is 15 years old. I sometimes think I'm being stupid by not getting in debt for nicer things. I worry that inflation will end up paying for the nice homes and cars that other people have enjoyed while I've lived like a hobo to avoid going in debt. Then my cash will be worthless and I will still not have a nice house or car.

I don't really want a home though because it's just something else to worry about.

I do like the feeling I have when I realize that I don't really have to go to work.

 

[Carson Dyle]

I'm about to head down the boring road of just paying off debts instead of accumulating more.

You mean: The "boring" (to you) road of not buying more shit.

My God, you're about to embark upon a life of being unable to post about the new car, the new motorcycle, television, drone or kitchen appliance. That's practically forum suicide among these nitwits.

 

[highland145]

I have no debt, but I also don't have a home and my car is 15 years old. I sometimes think I'm being stupid by not getting in debt for nicer things. I worry that inflation will end up paying for the nice homes and cars that other people have enjoyed while I've lived like a hobo to avoid going in debt. Then my cash will be worthless and I will still not have a nice house or car.

I don't really want a home though because it's just something else to worry about.

I do like the feeling I have when I realize that I don't really have to go to work.

My Dad owed on the 1st car that he bought in 1957 and the house in 1961. Nothing else ever. He made good $$ as a mechanic at Kimberly Clark. Had a pension and a 401K. He died nearly 3 years ago. My Mom now has about $500K in retirement funds and no debt. Would he have spent some of that if he had a do over? I doubt it. He grew up poor and was a saver "just in case". "This house provides a roof and this car gets me to work." ~2009, my sister brow beat him into buying Mom a new car to replace the ...1986 Lincoln she was driving.

 

[stlc8tr]

What's so great about being debt free?

As long as you're cash flow positive and have a positive net worth, who cares?

 

[NetWareHead]

Does it count if the debt exists but is being paid off by someone else's money?

Own some properties and the rent paid by tenants pays for the mortgage, taxes, insurance utilities etc... each month. Some of them even earn a profit.

Our current place we live in is a 2 family house and the upstairs tenants pay the majority of the property's expenses.

 

[ControlD]

We paid off our house something like seven or eight years ago, so basically debt free since then. It hasn't really changed my life one way or the other except I have a lot more money going into savings now.

As far as how to get there? First, don't accumulate crazy amounts of debt to start with. Just because you get pre-approved for a $450k house doesn't mean you need to rush out and get something so expensive. Make extra payments. The standard stuff. There is nothing wrong with having some debt as long as you don't go crazy with it.

 

[highland145]

What's so great about being debt free?

As long as you're cash flow positive and have a positive net worth, who cares?

And that's the idea. If I or the wife become unemployed, we won't lose our house/cars/stuff.

 

[Svnla]

I always follow this simple rule: "Money in > money out/spend less than what you make".

<<<----- never been in long term debts. Student loans paid off, new vehicle paid by cash in full, CC balances are paid before due dates, over 1 year of emergency fund, and so on.

Sacrifices? I don't have a flashy new car in every other year or eat out at a fancy restaurant every night.

Only you can determine what is more important. More money in the bank or more new/flashy stuffs in your house/garage.

 

[dud]

Plain and simple ... you spend less than you take in. An old friend from India once told me "We Indians learned a long time ago how to save money." I was curious, so I asked "How?". He replied "You don't spend it".

I've been debt free for almost 12 years and avoid the common debt traps such as credit card offers and such. It takes discipline and honestly answering the question "Will this purchase really make me happy?"

 

[jlee]

Plain and simple ... you spend less than you take in. An old friend from India once told me "We Indians learned a long time ago how to save money." I was curious, so I asked "How?". He replied "You don't spend it".

I've been debt free for almost 12 years and avoid the common debt traps such as credit card offers and such. It takes discipline and honestly answering the question "Will this purchase really make me happy?"

Pretty much. I'd even go further on "will this purchase really make me happy" and say "a year from now, will this purchase have been worthwhile".

I have no debt other than the mortgage on my rental house, which is ~$400/mo cashflow positive. It's nice.

 

[ponyo]

Debt free with house, cars, everything. There's no secret or quick rich scheme. You just have to make way more than you spend over period of many years and pay off your debt. High income makes everything much easier and faster. So if you want to be debt free quick, focus on increasing your income. People like to focus on the small stuff like cutting minor expenses but cost cutting can only help so much. The truth is you need big income. Then the small stuff don't really matter.

As far as sacrifices, it was mostly free time as I worked long hours for about 10 years. I worked 60-80 hours a week for a decade. So I was able to save lot of money and didn't have lot of time to spend it. Now I work about 20 hours a week and make more than when I was working 80 hours a week. Funny how that works out.

 

[Red Squirrel]

Not debt free as my mortgage is a long way from being paid, but it's my only long term debt. Every now and then I might make a big purchase (Central A/C this year) and dip into the credit line which I did this year, but each time I pay it off, it definitely is a weight off my shoulder. idealy I try to only keep the credit line for emergency stuff, but decided to splurge this year.

I pay $200 bi-weekly extra on my mortgage ($600 total) so I hope to pay that off much sooner than the 25 years it was set for.

With bills, taxes etc and other costs of living that keeps going up though, I figure at some point I'll have to lower that payment to have enough money for all the bills, but I'll keep it that high as long as I can.

 

[Mai72]

There is such a thing as good debt. Not all debt is bad. You'll never get wealthy without using the bank's money.

In my case, I'm going to be purchasing multi-family apartments. My goal is to have $100k saved. This will in turn allow me to purchase property in the $400-500k range. I figure I'll be able to see immediate returns of 12% annually. And from there it will only increase. By the time I sell the property it will be worth $1m easily. That's how you use debt. This will also allow me to create passive income, which will in turn allow me to travel and do the things I want to do. While I'm making profit on my rentals.

I have a buddy who gets a 30% return on his rentals. Try doing that with a 401k. He's a multi-millionaire who does what he wants. When he wants. Doesn't own a house either. He's not even 40. He was the first person to talk to me about multi-family apartments. Then I found Grant Cardone. $100m with 4 businesses and $500m in rentals. All on the back of other peoples money. AKA= Good debt.

 

[rh71]

We paid off our house something like seven or eight years ago, so basically debt free since then. It hasn't really changed my life one way or the other except I have a lot more money going into savings now.

As far as how to get there? First, don't accumulate crazy amounts of debt to start with. Just because you get pre-approved for a $450k house doesn't mean you need to rush out and get something so expensive. Make extra payments. The standard stuff. There is nothing wrong with having some debt as long as you don't go crazy with it.

We're about 4 years away from paying it off and I get giddy about seeing my savings go up instead of staying flat for the last few years (kids didn't help). I do want to buy a nice new car next... but I think these kids need college or something.

 

[rh71]

As far as sacrifices, it was mostly free time as I worked long hours for about 10 years. I worked 60-80 hours a week for a decade. So I was able to save lot of money and didn't have lot of time to spend it. Now I work about 20 hours a week and make more than when I was working 80 hours a week. Funny how that works out.

Did you have kids through all that? I don't think many are willing to work crazy hours and miss out on their life, which is the whole point of all this (unless you don't like kids). Cutting expenses here and there while being "safe" at their job is as good as it gets for many.

 

[Miramonti]

Just wondering how you got to be debt free and what it's actually like. I don't count people with apartments as debt free so homeowners only please. I'm about to head down the boring road of just paying off debts instead of accumulating more. I don't have a need of having more income monthly I just would like to see what it's like to be debt free. Something to strive for. What kind of sacrifices were made? Is it like a weight lifted off your chest?

I don't know why you discount renters, but I suspect that I either disagree with you, or you are misguided. I 'own' a home (not paid off), have no debt outside current outstanding bills, and know for certain I would be FAR better off financially if I were currently renting instead.