Debt free, totally. When I settled the financial portion of my divorce, the attorney noted that she had never had a client who had assets to divide rather than debt to divide.
I’ve been so broke I had to borrow money to buy amoxicillin for my daughter’s ear infection, I don’t ever want to go back there again.
There are plenty of people out there who live on the edge of their credit. I do the accounting for some of them. It’s really sad to see people with 3 maxed out credit cards and 2 maxed out lines of credit along with a payment plan to the IRS because they never send in estimated payments or pay themselves on regular payroll with tax withheld and have no cash at the end of the year to pay their taxes. And of course they don’t have their records available for us until the extension almost is up, and so they’re paying penalties and interest on the taxes that were due months ago, even if they don’t have a failure to file penalty. Yes, we deal with some small business owners who take very good care of their money, but it saddens me how many just can’t stop their spending. If they have available credit, they use it on something frivolous. They pay the credit card company $200 a month, $100 of which is interest, and then they put another $100 on the card. Month after month.
As glad as I am that the Dope’s denizens are smart with their debt, there are a lot of people out there who aren’t.
I was debt free from about 1974 until I bought a house in 1998. I just never racked up debt for any reason. If I couldn’t pay cash or pay it off at the end of the month, we did without it. Was it because I was financially well off? Not at all; I was a military man with four kids for most of that time.
In 1998 we bought a house, my first. We paid it off early in about 2007 and have been debt free since then, even though we sold that place and bought another, more expensive one.
My neighbor filed for bankruptcy. She told her lawyer that she felt guilty about taking all that money and not paying it back. “Don’t worry”, he said, “you have already paid back more than you ever borrowed, in fees, penalties, interest. Go to sleep.”
While her scruples about personal financial responsibility are unusual, her balance sheet with lenders was certainly not.
Sorry, that’s a myth about the people who’ve had their homes foreclosed. Here’s the facts. In 2010 at the height of the Great Recession, bringing on a collapse of housing prices, the percentage of homes being foreclosed peaked at just over 2%. One home in fifty. 2.4 million units is a lot of foreclosures for sure, but it’s out of a huge number.
Home foreclosures just don’t happen that frequently, and you know why? Because most people are pretty damn careful with their mortgages. The people going bankrupt weren’t the people buying houses to live in, they were the speculators buying houses to flip.
And dude, travel? I’ve worked on five different continents and stayed in places ranging from squalid guesthouses in India where I had to compete with cockroaches, lizards, and spiders for the showers to five star hotels in Moscow, where the towels were so thick and fluffy I could barely close my suitcase, and here’s a tip. The five star hotels are better.
Dude, not all people who lose their homes are foreclosure statistics. Millions just overbought because the terms looked easy, and then had to sell down. Not to mention people who borrowed to flip a house, then discovered 5X profit is not automatic. More losers than winners, just like racetracks and commodity futures, and even more disastrous if you do it on borrowed capital…
Depends on why you’re travelling. I’m more with jtur on this one when traveling alone and not for business. I don’t like those four- or five-star all-inclusive Carribean resorts (you can start digging my grave if I ever agree to one of those, because I’m surely on my way out at that point) and would rather stay at an Air BnB with hopefully a cooking space, whether a kitchen or outdoor grill. To me, it’s more fun and “better,” but not everyone desires the same things out of travel and accommodation.
Wrong as wrong can be. Owning real estate is not a zero sum game like a racetrack or commodities. It’s like the stock market, absent specialized trades like futures that are zero sum. Everybody can make money.
More people make money than lose money in housing, especially if they had a modicum of brains. If you didn’t, that says more about you than about the housing market. Yeah, if you foolishly overbought and assumed you’d be able to refinance when the five year balloon payment came along you might get a little pinched, but that doesn’t happen to most people. Most people do the sensible thing and bought a house they could afford.
That housing collapse was pretty bad, but here’s a link to the Case-Schiller U.S. National Home Price Index. Even if you bought at the absolute peak of the market in July of 2006 and just rode it out for a decade you’d have been positive in September of 2016.
Ten years is a long time to wait to break even, but you’ve gotta live somewhere anyway.
People that borrowed to flip houses, you know why they had a half dozen TV shows about them? Because it was unusual, it was a man bites dog story, hardly anyone was doing it and people are always interested in freaks. It’s like the tiny house stuff you see all over. Nobody you know is living in one, but there it is. A couple of TV series and a few New York Times articles doesn’t make a trend.
I’m surprised. None of our three properties have reached peak market values yet (and some are still a good bit off.) There’s a lot of variance in those numbers. I reckon we have another 10 years to go with the one property we did actually buy in 2007 during near-peak time (and it’s not a speculative property–a condo in a large building in a popular university area.) The other two we bought years later, well off-peak times. The house I’m living in now was bought for $275K back in 2007. We bought it for $225K last year.
Small mortgage, own one truck, pay off CC every month, no annual fee cash back etc.
I agree but the problem is in distinguishing them which isn’t necessarily as simple as putting them in general categories, IOW to emphasize your can as far as mortgage/education loans, and someexamples of ‘depreciating assets’ one might want to finance.
For example debt on the ‘depreciating asset’ of a basic new car could make sense especially for ‘non car people’ (who benefit more from warranty and less need to interact with professional car repair places), for a car that’s needed to drive to work. And related, to avoid spending more on housing just to not need a car to drive to work.
Then as examples where ‘can’ is a key word, a lot of people fool themselves on the mortgage question via the ‘other investments will make more than mortgage is costing’ idea in two ways. First and most important by ignoring the increased consumption in owner imputed rent besides cash expenses in buying a house a bank will give you a loan for, but is bigger than you need. Second to count the bond portion of a mixed investment portfolio as part of what is earning a higher rate than the mortgage, very unlikely. I believe you yourself pointed this out on a recent thread, to count paying off a mortgage as part of one’s bond allocation. Stocks making more than a mortgage rate is likely historically (nobody knows the future). But the bank is buying a not-so-low risk bond from you aka the mortgage; turning around and lending those proceeds to highly rated corporations or municipalities let alone the issuer of the currency, the federal govt, should not make money in theory and generally won’t despite real world wrinkles like tax.
Similarly with education if that doesn’t pan out to increase income, which is sometimes foreseeable though other times not.
I personally wouldn’t offer any if/buts on borrowing to get a nicer sofa, go away on vacation etc. Back when money was tight we just did not.
Real estate is all about the location, but what people don’t think of is that as long as you’re not going from a market at the bottom to a market at the top the fact that the tide went out doesn’t hurt that badly. I bought a house near Cincinnati in 2004, then relocated to coastal North Carolina in 2009. Sure, I took a $20,000 hosing on the house in Ohio, but I stuck it to the sellers in North Carolina for more than the losses in Cincinnati.
Because of granularity in the market if you’re moving from a depressed market to say, San Francisco, you’re getting stuck, but most people do fine, and home ownership is one of the best tools we have to build wealth. You shouldn’t treat it like an ATM and pull out the equity as fast as it builds, and those 5% down mortgages are risky for the borrowers and the banks.
About the only problem I see with home ownership is that if you can get stuck with a house if you’re living in a one industry town and that industry goes belly-up. If you need to move quickly to find a new job you might have to take a big loss. There is a positive correlation between home ownership and unemployment because homeowners are not as mobile.
Will be in a month when I pay off my new-to-me car.
They’ve been hounding me to trade it in and stay on the payment-go-round forever. Nope. Go away.
I have always avoided unnecessary debt as much as possible. My fuckwit ex ran us up into horrible CC debt a couple years after we got together which took me about twice as long to get us out of and established savings and IRAs and all that. Then he did his best to run me into the ground with debt after dumping me; clawed my way out of that one, too, after a couple of years.
When the current Mr Boods was making noises about getting married, my number one condition was separate bank accounts – I am not going to be dragged down by anyone else’s debt, ever again.
If I can’t afford it, I do without.
I admit to have been a little snarky, but those who are in debt for dumb reasons are going to be less likely to post about it. And there is a big difference between being in debt because of emergencies when you are not making a lot of money and being in debt with a good salary because you just need to buy clothes every week and a new car every year.
Uh oh. When our daughter went to college we donated her horse. (Couldn’t sell it - soon after you couldn’t even donate it.)
We paid for her college. Our monthly bills went down.
After getting injured and taking more than a year off work and being denied by Social Security disability I can tell you now, all debt is bad.
One big problem with the housing market was the number of people who took out home equity loans to cash in on the increase in value, not worrying about cash flow issues. Might make sense for home improvements, but the banks were advertising using the money for trips or to pay off credit card debt.
During the housing bubble there were a number of houses near me which were getting flipped. Never have seen a real tiny house though.
Essentially debt free. I have balances on credit cards at the moment, but also enough money in the bank to pay off the balances in full every month. 
Haven’t really had any outstanding debt since I paid off my student loans.
A horse can be a great comfort in times of trouble. Or starvation.
I am debt free. I rent, not own, so no mortgage. No car. Credit cards are paid off every month. I have a line of credit I don’t use (there for emergencies).
A few years ago I had student loans to pay off. I got a “good” job and after a couple of years backtracked my net worth. I realized I was working at that job for more than a year before my net worth became a positive number. :eek:
I have a good job but not a very high-paying job. My credit score is high enough the bank keeps offering me a mortgage at a good rate, but the income is low enough that I couldn’t possibly borrow enough to buy a house. Even a condo is out of reach, which is a pretty good piece of evidence that I should not be buying a place to live. (I live in a city that’s obsessed with buying rather than renting.)
