Poll
Question:
When will you celebrate your personal debt-free day?
Option 1: I'm debt-free right now!
votes: 22
Option 2: Within the year
votes: 2
Option 3: Within the next 5 years
votes: 4
Option 4: Within the decade
votes: 5
Option 5: Within the next 25 years
votes: 6
Option 6: More that 25 years, but I'll get there
votes: 2
Option 7: I'll be a debt-serf 'till I die, if not longer
votes: 7
Inspired by my upcomming moment of glory, when I will, at long last, pay off my mortgage - in two months!
I don't have any debt right now, but then I only rent the place I live in.
You're just showing off. <_<
Mortgage will be paid off in 19 years. Just in time to retire.
Quote from: Barrister on June 07, 2012, 09:08:14 AM
You're just showing off. <_<
You better believe it. When that mortgage goes, I'm holdin a damn
ceremony, complete with ritual burning of documentation in the backyard BBQ. :showoff:
QuoteMortgage will be paid off in 19 years. Just in time to retire.
Yeah, but when you retire - government gravy train pension! :D
Pay off everything but the house in less than three years. Sell the house and get a new one in 4.
My plan is to get a 15 year on the next one and pay it off in half the time. But that sorta depends on how my Engineering ambitions play out. This is a marathon, not a sprint.
When you pay it off Malthus will you scream 'FREEEEEEEDOOOM' Braveheart style?
Just refinanced my mortgages to a incredible fixed rate of only 2,5% for a twenty year bond... Had 19 years left o nthe old one, but it was too good to pass up
V
29 years & 8 months left on my mortgage.
I expect I'll have a car loan or 2 most of my life, I currently have 2, 1 with 5 years, the other 3.
I have no other outstanding debt.
Quote from: Grey Fox on June 07, 2012, 09:24:50 AM
I expect I'll have a car loan or 2 most of my life, I currently have 2, 1 with 5 years, the other 3.
YOu can't save up and get one? YOu will save tons of cash if you do. Car loans are one of the curses of the Middle Class.
Assuming our household income does not decline, then I will be completely debt-free within five years (realistically, sooner than that).
Quote from: Valmy on June 07, 2012, 09:13:15 AM
When you pay it off Malthus will you scream 'FREEEEEEEDOOOM' Braveheart style?
:yes:
Until I'm hoarse.
Of course, my wife then plans to plunge us right back into debt to renovate the place, buy new furniture, etc. ... :cry:
I gotta admit that it is pretty overdue, our stuff is mostly the same as we bought when we moved into our first apartment. We figured no point buying new stuff while Carl is in his scribbling-on-stuff-with-crayon phase.
Payed off my career development loan a few months ago. I am
adverse to taking on any debts so that's all I had.
Proper student loans don't count of course.
Quote from: Malthus on June 07, 2012, 09:27:59 AM
Of course, my wife then plans to plunge us right back into debt to renovate the place, buy new furniture, etc. ... :cry:
You know...sometimes you can get really good deals on furniture if you pay cash. You might want to suggest to her that you take the money you are not paying on the mortgage every month and put it in a furniture fund and buy the stuff outright. The renovations might be a little too pricey for that though.
Quote from: Valmy on June 07, 2012, 09:26:50 AM
Quote from: Grey Fox on June 07, 2012, 09:24:50 AM
I expect I'll have a car loan or 2 most of my life, I currently have 2, 1 with 5 years, the other 3.
YOu can't save up and get one? YOu will save tons of cash if you do. Car loans are one of the curses of the Middle Class.
Probably not. When my gf's car is paid off (3 years) we'll need to buy a new, bigger one.
I doubt I'll have ever the financial leeway to pay ~400$ in car loans & also save 400$ towards the next ones.
Quote from: Grey Fox on June 07, 2012, 09:34:29 AM
Probably not. When my gf's car is paid off (3 years) we'll need to buy a new, bigger one.
I doubt I'll have ever the financial leeway to pay ~400$ in car loans & also save 400$ towards the next ones.
Yeah you need a few years with no payments to save up. But maybe after the bigger one is paid off. Surely you are not going to need a new car every five years your entire life?
Quote from: Valmy on June 07, 2012, 09:30:56 AM
Quote from: Malthus on June 07, 2012, 09:27:59 AM
Of course, my wife then plans to plunge us right back into debt to renovate the place, buy new furniture, etc. ... :cry:
You know...sometimes you can get really good deals on furniture if you pay cash. You might want to suggest to her that you take the money you are not paying on the mortgage every month and put it in a furniture fund and buy the stuff outright. The renovations might be a little too pricey for that though.
We have some money set aside, but it will not cover the major renos my wife has in mind.
Mind you, if she gets a new kitchen, family room and first-floor washroom, I get my library on the second floor. :D
What I'm dreading is moving out and dealing with contractors. :(
My God man :lol: why not just tear the place down and build it again from scratch?
Well I hope you get a good interest rate. Just got to pay it off early.
Never had a loan of any kind in my life.
Quote from: Grey Fox on June 07, 2012, 09:34:29 AM
Quote from: Valmy on June 07, 2012, 09:26:50 AM
Quote from: Grey Fox on June 07, 2012, 09:24:50 AM
I expect I'll have a car loan or 2 most of my life, I currently have 2, 1 with 5 years, the other 3.
YOu can't save up and get one? YOu will save tons of cash if you do. Car loans are one of the curses of the Middle Class.
Probably not. When my gf's car is paid off (3 years) we'll need to buy a new, bigger one.
I doubt I'll have ever the financial leeway to pay ~400$ in car loans & also save 400$ towards the next ones.
What we did was to drive a crappy beater into the ground, relying on my wife's dad's mechanic buddy to keep it rolling. Thus saved up enough money to buy the next car.
People these days don't wanna do stuff like that - they want a new, good car all the time.
In the condo for 15 years, I'm halfway through my 30 year fixed mortgage. I could refinance or pay it off earlier, but meh, I know what I pay a month, and I'm comfortable with that. And I have a shitload of equity, even in this shitty housing economy.
Quote from: Valmy on June 07, 2012, 09:41:41 AM
My God man :lol: why not just tear the place down and build it again from scratch?
Well I hope you get a good interest rate. Just got to pay it off early.
Oh, we have the line of credit already - we rolled what was left of the mortgage into that. ;)
The reason we don't want to build from scratch or buy a new place - well, there's two. The first is location. Our house is very well located, in fact we could never afford to buy here if we tried to buy now. Second, it has a lot of nice period features.
Quote from: DGuller on June 07, 2012, 09:42:34 AM
Never had a loan of any kind in my life.
:thumbsup:
Quote from: DGuller on June 07, 2012, 09:42:34 AM
Never had a loan of any kind in my life.
It's good to be sceptical of debt, but there's such a thing as being too sceptical.
Going into debt to buy a house is generally a positive investment. You're purchasing an asset that will likely appreciate, will save you money on rent. Student loans are similarily an investment in yourself.
No loans, no wife, pay off bills each month.
Quote from: Barrister on June 07, 2012, 09:50:57 AM
You're purchasing an asset that will likely appreciate, will save you money on rent.
Unless it doesn't. But, yeah, rent is simply throwing money away--even worse, it's letting someone else benefit with an asset that's appreciating.
Quote from: CountDeMoney on June 07, 2012, 09:53:40 AM
Quote from: Barrister on June 07, 2012, 09:50:57 AM
You're purchasing an asset that will likely appreciate, will save you money on rent.
Unless it doesn't. But, yeah, rent is simply throwing money away--even worse, it's letting someone else benefit with an asset that's appreciating.
Oh, you guys are in for it now ... :D
Plus mortgages these days are absurdly low interest rates.
Granted realestate is a great way to lose everything, and so are student loans, if you are not careful.
Quote from: DGuller on June 07, 2012, 09:42:34 AM
Never had a loan of any kind in my life.
Loans can be useful, as long as you make them for defined and controlled reasons. The problem people have is that they use loans to finance a lifestyle they can't afford.
Quote from: Malthus on June 07, 2012, 09:59:21 AM
Loans can be useful, as long as you make them for defined and controlled reasons. The problem people have is that they use loans to finance a lifestyle they can't afford.
Maybe DGuller just has lots of money.
Personally I'm debt free since I finished paying my car last may. As a family unit, within the next 5-10 years we'll finish paying the mortgate of my flat.
I still have a small mortgage on a house. I could pay it off early but would be foolish to do so as the interest rate is Bank of England base rate +0.9%, ie 1.4%. It is better to use the money to hold shares in safe utilities and reap the profits. So, unless the base rate increases rapidly, not debt-free until 2022. Unless we take a net debt view, in which case we have been debt-free for some years.
Quote from: Valmy on June 07, 2012, 10:01:34 AM
Quote from: Malthus on June 07, 2012, 09:59:21 AM
Loans can be useful, as long as you make them for defined and controlled reasons. The problem people have is that they use loans to finance a lifestyle they can't afford.
Maybe DGuller just has lots of money.
Given his love of BK stackers and his residing in NJ, I'd guess that the just has very few expenses.
I will get my student debt paid off in a year of work. So, I will be soon be debt free, but only temporarily, until I buy a house. <_<
Quote from: Barrister on June 07, 2012, 09:50:57 AM
Quote from: DGuller on June 07, 2012, 09:42:34 AM
Never had a loan of any kind in my life.
It's good to be sceptical of debt, but there's such a thing as being too sceptical.
Going into debt to buy a house is generally a positive investment. You're purchasing an asset that will likely appreciate, will save you money on rent. Student loans are similarily an investment in yourself.
It's not that I'm skeptical of debt, but I just never had a compelling reason to get into it. I had full scholarship for college, I had enough liquid funds to buy off my car in full when its lease expired, and I don't have a home-ownership fetish that most Americans have. If in future it would make sense for me to buy a house, then sure, I'll do that, and I'll get my mortgage, but I won't do that just because I can.
I'm free baby.
Never as long as there is a mortgage deduction in the US. My net worth will go positive in a couple years though.
Quote from: Grey Fox on June 07, 2012, 09:24:50 AM
29 years & 8 months left on my mortgage.
I have no other outstanding debt.
:hug:
Pretty much the same as me.
I have no debt. So technically now.
Quote from: MadImmortalMan on June 07, 2012, 12:45:32 PM
Never as long as there is a mortgage deduction in the US. My net worth will go positive in a couple years though.
I do not understand why the mortgage deduction is a great deal. Unless you are paying less money to the bank than you would be paying in taxes (and how is that possible?) it seems like you would come out behind.
I mean yeah it is great when you have to have a mortgage anyway but it seems like a silly reason to keep an unneeded mortgage around.
Quote from: Valmy on June 07, 2012, 01:03:37 PM
Unless you are paying less money to the bank than you would be paying in taxes (and how is that possible?
It's very possible, especially with the latest housing crash. North Georgia is a major buyer's market at the moment--$150-200k houses are going for $50-75k, easy. At that rate, it's entirely likely the mortgage is incredibly low while the person buying is making decent coin in Atlanta.
Quote from: Valmy on June 07, 2012, 01:03:37 PM
I do not understand why the mortgage deduction is a great deal. Unless you are paying less money to the bank than you would be paying in taxes (and how is that possible?) it seems like you would come out behind.
I mean yeah it is great when you have to have a mortgage anyway but it seems like a silly reason to keep an unneeded mortgage around.
If my income were so high that the offset is not significant, and interest rates were high enough that I could not safely take advantage of the leverage, then you would be right. If that is the case when my mortgage is paid off in 20 years, then I won't get another. If rates are like they are now, I'm taking out another at a tax-deductable 3% and buying REITs that pay 7% or making further real estate investments with it. Or something like that. Who knows what it will look like in 20 years though.
Quote from: Habbaku on June 07, 2012, 01:09:03 PM
Quote from: Valmy on June 07, 2012, 01:03:37 PM
Unless you are paying less money to the bank than you would be paying in taxes (and how is that possible?
It's very possible, especially with the latest housing crash. North Georgia is a major buyer's market at the moment--$150-200k houses are going for $50-75k, easy. At that rate, it's entirely likely the mortgage is incredibly low while the person buying is making decent coin in Atlanta.
Are you sure $50-75k houses aren't going for $50-75k? :P
Free.
Quote from: alfred russel on June 07, 2012, 01:29:47 PM
Quote from: Habbaku on June 07, 2012, 01:09:03 PM
Quote from: Valmy on June 07, 2012, 01:03:37 PM
Unless you are paying less money to the bank than you would be paying in taxes (and how is that possible?
It's very possible, especially with the latest housing crash. North Georgia is a major buyer's market at the moment--$150-200k houses are going for $50-75k, easy. At that rate, it's entirely likely the mortgage is incredibly low while the person buying is making decent coin in Atlanta.
Are you sure $50-75k houses aren't going for $50-75k? :P
:D I think the real valuation of those $50-75k is closer to $80k, yes.
Incidentally malthus, you said "at long last" you will pay off your mortgage, but IIRC it has only been 6 years or so :hmm:
Quote from: Tyr on June 07, 2012, 09:28:38 AM
Payed off my career development loan a few months ago.
What's this?
Quote from: Admiral Yi on June 07, 2012, 02:56:36 PM
What's this?
I think commercial student loan of up to £10 000. The first year they're 0% interest (or the government pays the interest). I should be getting one next year.
I doubt I'll ever be out of debt.
Car is paid off, flat is rented (bubble and all that) and I never buy on credit.
Quote from: Iormlund on June 07, 2012, 03:26:45 PM
Car is paid off, flat is rented (bubble and all that) and I never buy on credit.
I think I buy almost everything on credit. I like my reward points/cashback.
Quote from: garbon on June 07, 2012, 03:46:28 PM
Quote from: Iormlund on June 07, 2012, 03:26:45 PM
Car is paid off, flat is rented (bubble and all that) and I never buy on credit.
I think I buy almost everything on credit. I like my reward points/cashback.
Ditto; I use either my Amazon or Discover card to buy everything and just pay it off at the end of the month.
Quote from: Richard Hakluyt on June 07, 2012, 02:05:58 PM
Incidentally malthus, you said "at long last" you will pay off your mortgage, but IIRC it has only been 6 years or so :hmm:
True enough, but we lived in an apartment for a decade saving money for a down payment (well, not the whole decade - maybe the last five years or so). So add another five years of prep to that.
I won't be debt free until I die, but I'm cool with that. I'd rather die owing someone else money than die with someone owing me.
Just sent off re-fi paperwork. Looking at getting 3.75% on 30 year, with a possibility to convert to 15 year at less if the appraisal works out, which it should. I've got 12.5 k in equity, assuming my house didn't lose any value from when I bought it. Projected real equity based on recent comps is more like $25k.
Debt-free since age 21. However, I am looking later this year for a 15 or 30-year mortgage w/ 20% downpayment to buy a condo/townhouse.
Malthus: FU.
Paid off my auto loan about 3 years ago, and am free as a bird now.
Paid off my debts at the end of my first year in Korea.
At the current payment plan, 13 years, but I intend to prepay it. I have positive equity though which I think is more important than being debt free.
I can see how for people near retirement age being debt free can be a good thing, but for people in their twenties it usually means they either have very rich parents or are lazy layabouts who have accomplished nothing.
Let's see should be debt free by Nov of 2013, but then thinking i need a new car as of 4 cars have the newest is 1993 :lol:
Quote from: katmai on June 08, 2012, 01:22:14 AM
Let's see should be debt free by Nov of 2013, but then thinking i need a new car as of 4 cars have the newest is 1993 :lol:
You still driving that little 4 cylinder hoopdie you brought to Pennsylvania that one time?
Quote from: Ideologue on June 08, 2012, 12:41:47 AM
Malthus: FU.
I'll have you know that as the smoke of burning mortgage documents wafts unto heaven ... I'll be thinking of you. ;)
Quote from: Habbaku on June 07, 2012, 03:55:49 PM
Quote from: garbon on June 07, 2012, 03:46:28 PM
Quote from: Iormlund on June 07, 2012, 03:26:45 PM
Car is paid off, flat is rented (bubble and all that) and I never buy on credit.
I think I buy almost everything on credit. I like my reward points/cashback.
Ditto; I use either my Amazon or Discover card to buy everything and just pay it off at the end of the month.
Yep. Never carry a balance so it is a win-win.
Quote from: Martinus on June 08, 2012, 01:20:13 AM
I can see how for people near retirement age being debt free can be a good thing, but for people in their twenties it usually means they either have very rich parents or are lazy layabouts who have accomplished nothing.
That's an idiotic attitude that fuels debt bubbles. Debt is dangerous, and individuals are not limited liability corporations. They have utility curves, and they can't tolerate bankruptcy well. If I were 100% richer, my life wouldn't be materially different, but it sure as hell would be materially different if I were 100% poorer. It doesn't mean that you shouldn't ever take on debt, but it does mean that you should approach the decision on take on debt very carefully.
Quote from: garbon on June 08, 2012, 09:22:11 AM
Yep. Never carry a balance so it is a win-win.
My opinion exactly.
Credit cards as ways to accumulate points & perks = good.
Credit cards as a way to borrow money at very high interest rates = bad.
I'm scheduled to pay off my mortgage when I'm 65, the year I retire :weep:
I stand to inherit the best part of a house sometime before then which should improve my prospects somewhat.
My ex and I found we could pay off our mortgage with our endowment shortly before we went our separate ways and split the value of the house, d'oh!
I got an interest-free credit card as a way to buy a laptop and TV on free instalments, but I seem to have forgotten I was broke and put more on it so I won't have paid it off by the time the interest-free period is up, so I'll need to get another deal and transfer the balance.
I keep telling the youths I work with to get credit cards. Even if they only put one thing a month, like a grocery shop, then pay it back it's the only way they'll get a credit rating and get a mortgage.
Credit cards are super dangerous for me. I just spend more when I have them and especially tempting when unexpected expenses pop up. I can see how the super disciplined out there can manage them but NEVER AGAIN.
Quote from: Brazen on June 08, 2012, 10:13:59 AM
I keep telling the youths I work with to get credit cards. Even if they only put one thing a month, like a grocery shop, then pay it back it's the only way they'll get a credit rating and get a mortgage.
My mother had us get credit cards as soon as we could for that purpose.
We are making progress.
Re-financed a couple years ago at 4.375% for 15 years, house will be paid of in 9.5 years at the current payment rate.
Just paid off the wifes car loan. Still have my car loan, and my student loan.
Money that was going towards the wife's car payment will now be moved to the student loan payment.
Should be debt free when the house is paid off.
Quote from: Martinus on June 08, 2012, 01:20:13 AM
I can see how for people near retirement age being debt free can be a good thing, but for people in their twenties it usually means they either have very rich parents or are lazy layabouts who have accomplished nothing.
:lol:
I can't tell you how many thirty-somethings I know who are enslaved to their mortgages right now, after following that same logic.
Quote from: Iormlund on June 08, 2012, 11:12:05 AM
Quote from: Martinus on June 08, 2012, 01:20:13 AM
I can see how for people near retirement age being debt free can be a good thing, but for people in their twenties it usually means they either have very rich parents or are lazy layabouts who have accomplished nothing.
:lol:
I can't tell you how many thirty-somethings I know who are enslaved to their mortgages right now, after following that same logic.
Being enslaved to a mortgage has one upside - it can work as a sort of forced savings, making your average spendthrift young adult save money they would, if left to themselves, blow. I know lots of happy thirty-somethings with no mortgage who live paycheque to paycheque and find themselves 40-somethings without any savings. They could have taken all that cash they saved by not having a mortgage and saved it in another form, but most people don't.
Not that I think real estate is the best investment out there ...
Quote from: Malthus on June 08, 2012, 12:34:20 PM
Being enslaved to a mortgage has one upside - it can work as a sort of forced savings, making your average spendthrift young adult save money they would, if left to themselves, blow. I know lots of happy thirty-somethings with no mortgage who live paycheque to paycheque and find themselves 40-somethings without any savings. They could have taken all that cash they saved by not having a mortgage and saved it in another form, but most people don't.
Being enslaved to a mortgage generally means one of two things though right?
Either: A. you are way underwater because you borrowed against it OR you bought when the realestate market was high and now it crashed.
or
B. Your mortgage is such a huge percentage of your income you cannot save or meet your expenses. So you have to borrow or live hand to mouth.
House poor as we say over here. Also Euros do tend to save money so they may not even be getting the forced savings advantage that tends to save us hyper consuming North Americans.
Quote from: Valmy on June 08, 2012, 12:37:15 PM
Quote from: Malthus on June 08, 2012, 12:34:20 PM
Being enslaved to a mortgage has one upside - it can work as a sort of forced savings, making your average spendthrift young adult save money they would, if left to themselves, blow. I know lots of happy thirty-somethings with no mortgage who live paycheque to paycheque and find themselves 40-somethings without any savings. They could have taken all that cash they saved by not having a mortgage and saved it in another form, but most people don't.
Being enslaved to a mortgage generally means one of two things though right?
Either: A. you are way underwater because you borrowed against it OR you bought when the realestate market was high and now it crashed.
or
B. Your mortgage is such a huge percentage of your income you cannot save or meet your expenses. So you have to borrow or live hand to mouth.
House poor as we say over here. Also Euros do tend to save money so they may not even be getting the forced savings advantage that tends to save us hyper consuming North Americans.
Well, there is certainly *never* any reason to borrow more than you can afford. The "real estate market crashed" only matters if you plan on reselling in the near future.
I took "enslaved" to mean more simply that they have to work to pay the mortgage.
Poors. :rolleyes:
Quote from: Ed Anger on June 08, 2012, 02:06:36 PM
Poors. :rolleyes:
Someday I shall ascend to the wealthy class and then I shall um....
:hmm:
no longet be mocked by Ed Anger I suppose.
Quote from: Malthus on June 08, 2012, 12:34:20 PM
Quote from: Iormlund on June 08, 2012, 11:12:05 AM
Quote from: Martinus on June 08, 2012, 01:20:13 AM
I can see how for people near retirement age being debt free can be a good thing, but for people in their twenties it usually means they either have very rich parents or are lazy layabouts who have accomplished nothing.
:lol:
I can't tell you how many thirty-somethings I know who are enslaved to their mortgages right now, after following that same logic.
Being enslaved to a mortgage has one upside - it can work as a sort of forced savings, making your average spendthrift young adult save money they would, if left to themselves, blow. I know lots of happy thirty-somethings with no mortgage who live paycheque to paycheque and find themselves 40-somethings without any savings. They could have taken all that cash they saved by not having a mortgage and saved it in another form, but most people don't.
Not that I think real estate is the best investment out there ...
It seems like a bit of a drastic move. I find it easier to just allocate higher percentage to 401k. That allows me to save passively without being tied down by a major lifestyle decision.
401k is probably more illiquid than a house.
Quote from: Admiral Yi on June 08, 2012, 02:29:01 PM
401k is probably more illiquid than a house.
Not sure whether that's true, but if it is, then it's a feature, not a bug, if the objective is forced savings.
Quote from: DGuller on June 08, 2012, 02:33:05 PM
Not sure whether that's true, but if it is, then it's a feature, not a bug, if the objective is forced savings.
But a 401K forces your forced savings into retirement savings.
Quote from: CountDeMoney on June 08, 2012, 05:51:14 AM
Quote from: katmai on June 08, 2012, 01:22:14 AM
Let's see should be debt free by Nov of 2013, but then thinking i need a new car as of 4 cars have the newest is 1993 :lol:
You still driving that little 4 cylinder hoopdie you brought to Pennsylvania that one time?
nope, but it is still sitting in my driveway.
Quote from: Valmy on June 08, 2012, 02:18:40 PM
Quote from: Ed Anger on June 08, 2012, 02:06:36 PM
Poors. :rolleyes:
Someday I shall ascend to the wealthy class and then I shall um....
:hmm:
no longet be mocked by Ed Anger I suppose.
I'm sure as long as there is Languish, there will still be mockery. :D
Quote from: DGuller on June 08, 2012, 02:26:04 PM
It seems like a bit of a drastic move. I find it easier to just allocate higher percentage to 401k. That allows me to save passively without being tied down by a major lifestyle decision.
Certainly, for those with the discipline to save in other ways, there is no need to set up a forced savings mechanism. Saving on one's own has the benefit of not tying all of one's savings to one thing.
Many people lack that discipline, though.
Quote from: Malthus on June 08, 2012, 03:26:25 PM
Many people lack that discipline, though.
There are alot of great ways to save for those of us with no discpline. Automatic drafting or paycheck witholdhing into mutual funds or retirement every month requires no discipline and is my preferred method since I pretty freaking undisciplined.
Trying to stick money in a savings account is a pretty tried and proven way for me to NOT save money :blush:
Quote from: Valmy on June 08, 2012, 03:42:15 PM
Quote from: Malthus on June 08, 2012, 03:26:25 PM
Many people lack that discipline, though.
There are alot of great ways to save for those of us with no discpline. Automatic drafting or paycheck witholdhing into mutual funds or retirement every month requires no discipline and is my preferred method since I pretty freaking undisciplined.
Trying to stick money in a savings account is a pretty tried and proven way for me to NOT save money :blush:
That's a good method - I do something similar myself (I have an automatic transfer of funds into a savings account).
Thing is, these methods lack the gun-to-the-head imperative of a mortgage. They require *some* discipline, if not as much, because (aside from retirement savings which in Canada at least has tax implications) if you want, you can take that cash out and spend it.
So good methods for those with at least *some* self-discipline.
You can think of it as a hierarchy from most disiplined to least:
Most: I will deposit my pay into my chequing account and, on my own, divvy it out into various payments and savings. Look, I have a budget on my spread-sheet ... !
Medium: I have set up an automatic withdrawal from my account into savings and retirement, and I live off the rest. I have a rough idea of what I spend on stuff, but budgets are for accountants and other such lowly creatures.
Low: I have a mortgage and so I can't spend every single dime. But at the end of the day, I have equity.
None: savings? What's that? I'm on my way to get a payday loan, there's a party tonight!
When I said enslaved I meant that they are tied to a very expensive mortgage for up to 30 years (often around half household income).
When coupled with huge unemployment that's not at all good. If you are lucky your wage will be frozen. If you're not you might see a drop in salary or downright lose the job.
You can't sell the place if you find a job in other city - and even if you did, you won't get enough to return the mortgage. You can't toss the keys at the bank. And Hod help you if you break up with your significant other. My generation used to live with their folks through their 20s to save enough to afford a flat. Now many have to let that same flat to meet payments, and find themselves living with their parents again.
Quote from: Iormlund on June 08, 2012, 04:21:37 PM
When I said enslaved I meant that they are tied to a very expensive mortgage for up to 30 years (often around half household income).
Yeah this is what I thought.
Quote from: Iormlund on June 08, 2012, 04:21:37 PM
When I said enslaved I meant that they are tied to a very expensive mortgage for up to 30 years (often around half household income).
When coupled with huge unemployment that's not at all good. If you are lucky your wage will be frozen. If you're not you might see a drop in salary or downright lose the job.
You can't sell the place if you find a job in other city - and even if you did, you won't get enough to return the mortgage. You can't toss the keys at the bank. And Hod help you if you break up with your significant other. My generation used to live with their folks through their 20s to save enough to afford a flat. Now many have to let that same flat to meet payments, and find themselves living with their parents again.
I'm amazed that (a) anyone would be dumb enough to take out a mortgage for "half their income" (I assume you mean their monthly payments are half of their income), or (b) that a bank would lend out that much.
Now, obviously that isn't a good idea. For one, mortgage rates are at a historic low, they can only go up, and if they do and your rate isn't fixed you are truly fucked. For another, even if that wasn't true, half your income is way, way too much. The usual limit I've heard is around 30% of one's gross income, and even that is too much in my opinion.
That being said - the fact that some people are borrowing way, way too much isn't really a critique of borrowing at all, is it? That's like saying pencils are bad because some people stab themselves in the eye with them. :D
Quote from: Malthus on June 08, 2012, 04:36:51 PM
I'm amazed that (a) anyone would be dumb enough to take out a mortgage for "half their income" (I assume you mean their monthly payments are half of their income), or (b) that a bank would lend out that much.
I know lots of people whose mortages are half their income and they are actually pretty intelligent people in most ways. It just amazes me. However they are mostly single people who are in that situation...still that strikes me as a disaster waiting to happen.
Ours is 28% and frankly I think that was too high. The final one I will shoot for more like 20%
I seem to get money every month and it seems to accumulate over time.
Quote from: The Brain on June 08, 2012, 04:42:35 PM
I seem to get money every month and it seems to accumulate over time.
Aren't we special.
Quote from: Malthus on June 08, 2012, 03:55:49 PM
Most: I will deposit my pay into my chequing account and, on my own, divvy it out into various payments and savings. Look, I have a budget on my spread-sheet ... !
This would be us, as well as my parents, bro, and most of the rest of my family.
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None: savings? What's that? I'm on my way to get a payday loan, there's a party tonight!
This would be most of the other people in Princesca's family. :ph34r:
My mortgage has a ways to go but I'm paying it off faster on an accelerated payment program. Thiry year mortgage but should be paid off in about a dozen years. I could pay it off a lot sooner if I decide to do that when I retire, which should be withing five years to retire. Depends on how things look when I retire.
Quote from: katmai on June 08, 2012, 03:19:46 PM
Quote from: CountDeMoney on June 08, 2012, 05:51:14 AM
Quote from: katmai on June 08, 2012, 01:22:14 AM
Let's see should be debt free by Nov of 2013, but then thinking i need a new car as of 4 cars have the newest is 1993 :lol:
You still driving that little 4 cylinder hoopdie you brought to Pennsylvania that one time?
nope, but it is still sitting in my driveway.
Kudos for trying to keep that fucker on the road. :hug:
Mortgage refi rates are now well below 4%. It is simply insane.
I almost wish I owed more on my house so it would make sense to re-finance.
Quote from: CountDeMoney on June 08, 2012, 11:24:57 PM
Quote from: katmai on June 08, 2012, 03:19:46 PM
Quote from: CountDeMoney on June 08, 2012, 05:51:14 AM
Quote from: katmai on June 08, 2012, 01:22:14 AM
Let's see should be debt free by Nov of 2013, but then thinking i need a new car as of 4 cars have the newest is 1993 :lol:
You still driving that little 4 cylinder hoopdie you brought to Pennsylvania that one time?
nope, but it is still sitting in my driveway.
Kudos for trying to keep that fucker on the road. :hug:
:lol: thanks, i have an '87 GMC Sierra pickup with plow on it for my real old vehicle.
Would have a '62 ford pickup to fix up if it wasn't stolen <_<
Quote from: DGuller on June 08, 2012, 02:26:04 PM
It seems like a bit of a drastic move. I find it easier to just allocate higher percentage to 401k. That allows me to save passively without being tied down by a major lifestyle decision.
I don't have enough time and nerve to play the stock market (plus with my job, it's exceedingly difficult, as we need to jump through all sorts of reporting hoops every time we trade stocks, since our firm has access to a lot of confidential information), and since the last stock market bust I don't trust various savings plans that are based on someone investing my money for me (I know people who started saving that way in 2001 and now have half of the money they put in).
From that perspective, I can either put my money into foreign currencies and bonds, or I can put it into mortgage. The mortgage seems a better investment (although, admittedly, I put about the same amount into bonds and deposits each month as I pay as mortgage as I don't want to find myself without cash suddenly).
I'm debt free, and pay my bills on time, including credit card.
I don't own property or a car, though. :P
Quote from: Valmy on June 08, 2012, 04:39:24 PM
Quote from: Malthus on June 08, 2012, 04:36:51 PM
I'm amazed that (a) anyone would be dumb enough to take out a mortgage for "half their income" (I assume you mean their monthly payments are half of their income), or (b) that a bank would lend out that much.
I know lots of people whose mortages are half their income and they are actually pretty intelligent people in most ways. It just amazes me. However they are mostly single people who are in that situation...still that strikes me as a disaster waiting to happen.
Ours is 28% and frankly I think that was too high. The final one I will shoot for more like 20%
My mortgage is about 25% of my income after taxes. Another 25% I save. About 15% is used to help my parents (mainly with the costs of maintenance of their house which I stand to inherit so it could also be considered an investment). The rest goes to costs of living etc.
Quote from: Malthus on June 08, 2012, 04:36:51 PM
I'm amazed that (a) anyone would be dumb enough to take out a mortgage for "half their income" (I assume you mean their monthly payments are half of their income), or (b) that a bank would lend out that much.
Now, obviously that isn't a good idea. For one, mortgage rates are at a historic low, they can only go up, and if they do and your rate isn't fixed you are truly fucked. For another, even if that wasn't true, half your income is way, way too much. The usual limit I've heard is around 30% of one's gross income, and even that is too much in my opinion.
The banks were not supposed to lend over 30%, yes. They did so anyway. Why not? Those doing so were mostly politician-led regional savings institutions and there were not answerable to shareholders. And in any case, in Spain lenders own your ass and will get anything beyond minimum wage for the rest of your life if you fail to meet payments.
As for the borrowers, in dysfunctional renting market with rents costing as much as mortgage payments and interest rates well below inflation, it is no surprise pretty much everyone bought a place, price be damned. After all, prices would always go up!
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That being said - the fact that some people are borrowing way, way too much isn't really a critique of borrowing at all, is it? That's like saying pencils are bad because some people stab themselves in the eye with them. :D
I was responding to Martinus' claim that anyone that doesn't have a mortgage is some kind of failure.
26% of my net income. Banks loan on Gross income tho.
I am like the Germans here, no car and I'm renting. Not a fan of credit as well.
Quote from: Malthus on June 08, 2012, 04:36:51 PM
I'm amazed that (a) anyone would be dumb enough to take out a mortgage for "half their income" (I assume you mean their monthly payments are half of their income), or (b) that a bank would lend out that much.
Ours is 9% of our combined gross, and 20% of the lower single gross. I could get it even lower if I had another 10% equity.
When we went in to pre-qualify at BoA the loan officer was trying to convince us to go for nearly double what we wanted qualification for. My wife and I both thought she was nuts.
Quote from: Baron von Schtinkenbutt on June 10, 2012, 09:18:07 PM
When we went in to pre-qualify at BoA the loan officer was trying to convince us to go for nearly double what we wanted qualification for. My wife and I both thought she was nuts.
I bet she was pushing that shit hard. That's how they make their money, rat bastards.
Heh my wife lost patience and paid off the remainder of the mortgage today with some money she had lying around in her chequing account - it was only a few thousand.
D-Day is today, not August as planned. Our mortgage is ... gone.
Feels a bit strange not to have that hanging about. :D
Quote from: Malthus on June 18, 2012, 04:00:02 PM
Heh my wife lost patience and paid off the remainder of the mortgage today with some money she had lying around in her chequing account - it was only a few thousand.
D-Day is today, not August as planned. Our mortgage is ... gone.
Feels a bit strange not to have that hanging about. :D
Congratulations! That didn't take you very long... I'm very jealous.
Quote from: PRC on June 18, 2012, 04:25:19 PM
Quote from: Malthus on June 18, 2012, 04:00:02 PM
Heh my wife lost patience and paid off the remainder of the mortgage today with some money she had lying around in her chequing account - it was only a few thousand.
D-Day is today, not August as planned. Our mortgage is ... gone.
Feels a bit strange not to have that hanging about. :D
Congratulations! That didn't take you very long... I'm very jealous.
Thanks. :)
Actually, the short time is a bit misleading, as we saved up a big wack of cash beforehand - by living in the same apartment for 10 years prior to buying a house. Our downpayment was about half.
While our mortgage was only for 6 and three-quarters years or so, when you figure that period, it was closer to 12-15 years.
Just made my last car payment! :w00t:
Quote from: garbon on June 27, 2012, 03:24:42 PM
Just made my last car payment! :w00t:
Time to buy a new car!
Quote from: katmai on June 27, 2012, 03:28:54 PM
Quote from: garbon on June 27, 2012, 03:24:42 PM
Just made my last car payment! :w00t:
Time to buy a new car!
I did just receive several mailers about being pre-approved for a car loan. :shifty:
I made my last electricity bill payment three mon
Great, now I'm having trouble getting the banks to stop making automatic withdrawals from my account to pay the non-existant mortgage. :glare:
Go online and cancel it. Saves the hassle.
Quote from: CountDeMoney on June 10, 2012, 09:22:54 PM
Quote from: Baron von Schtinkenbutt on June 10, 2012, 09:18:07 PM
When we went in to pre-qualify at BoA the loan officer was trying to convince us to go for nearly double what we wanted qualification for. My wife and I both thought she was nuts.
I bet she was pushing that shit hard. That's how they make their money, rat bastards.
Banks make money lending?? Why was I never told this before? :o
Quote from: Malthus on June 18, 2012, 04:00:02 PM
Heh my wife lost patience and paid off the remainder of the mortgage today with some money she had lying around in her chequing account - it was only a few thousand.
I keep telling Princesca to do this with our HELOC, since we have well more than enough in savings to pay it off, but for some reason she won't. :hmm:
I'm a Keynesian and believe getting out of debt is bad for the economy.
I don't have any debt for "personal" reasons. Meaning debt that covers "living" (mortgage, revolving credit card debt etc.) We do leverage our money to make more money though. Properly done there is no reason not to trade on margin, which we do. We've also incorporated our property management venture and have some personal financial ties to it, in the grand scheme we eventually hope to have the property management business on solid enough grounds that it is truly separate from our finances so that if it all goes under we won't have any problems. However when we started it up there was no real way to do that, we needed a fairly large loan from a bank and they needed our personal credit profile to approve it (really my wife's, since she makes several multiples as much as I do in regular income.)
I also voted debt-serf forever, I see no reason to ever stop leveraging money. But if you're smart you work to the point where an LLC is the one that is actually going into debt, not you personally.
Quote from: OttoVonBismarck on June 27, 2012, 08:27:44 PM
I also voted debt-serf forever, I see no reason to ever stop leveraging money. But if you're smart you work to the point where an LLC is the one that is actually going into debt, not you personally.
I wouldn't count that sort of debt towards debt-serfdom, myself.
Anyway, like they say, owe the bank a little money and the bank owns you, owe the bank a lot of money and you own them. ;)
Quote from: Caliga on June 27, 2012, 06:10:37 PM
Quote from: Malthus on June 18, 2012, 04:00:02 PM
Heh my wife lost patience and paid off the remainder of the mortgage today with some money she had lying around in her chequing account - it was only a few thousand.
I keep telling Princesca to do this with our HELOC, since we have well more than enough in savings to pay it off, but for some reason she won't. :hmm:
I admit, paying off debt makes a reasonably good investment - even at these low interest rates, it's hard to find investments with a better return at low risk - but the primary benefits are subjective, not financial.
Quote from: garbon on June 27, 2012, 03:24:42 PM
Just made my last car payment! :w00t:
I did that over 4 years ago. :P
My wife still has one, though. <_<
Debt free, but mainly because I can't afford the deposit needed for a house in the current market. It's not simply a question of saving the money I would have spent on mortgage payments, as I have rent to pay.
Best of all, I very much doubt my parents intend on leaving me anything, because they will have spent it all by the time they die. Baby boomers. :lol:
About to be approved on my 15 year at about 3%.
Two paid-for cars.
Almost out of consumer debt.
Life is good.
Quote from: DGuller on June 27, 2012, 03:34:30 PM
I made my last electricity bill payment three mon
:lol: