Should I pay off all my debt?

[tonyf7]

*edit*

I read the entire thread after posting.

Your situation sounds like a mess, pay off the debt first.

Haha, thanks for the input.

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[OldFaithful]

are you also a family man?

Yes I am, and it plays into my decision making matrix all the time. They are much of my motivation to start my own project.

You're from Jonesboro! I've been thru there several times in years gone by. It's a beautiful old town, if I recall correctly.

Congrats on the recent growth of your business, I hope you figure out the best path for you and yours. Oh, and welcome to the forum!

 

[tonyf7]

Yes I am, and it plays into my decision making matrix all the time. They are much of my motivation to start my own project.

You're from Jonesboro! I've been thru there several times in years gone by. It's a beautiful old town, if I recall correctly.

Congrats on the recent growth of your business, I hope you figure out the best path for you and yours. Oh, and welcome to the forum!

Having a family definitely makes for a different decision making matrix, doesn't it.

Yes, Jonesboro. Small but growing town. Real estate is especially blowing up right now but properties are still relatively cheap. Have been pondering dipping into that realm as well. If you ever swing through again we can do lunch and plan our domination of the world. [emoji23]

Thank you for the insightful advice and best to you and your family as well.

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[Get Right]

First, welcome to the forum! I like the research that you have already done into the situation. The forum is packed with little nuggets of wealth you can use.

A few things stood out to me:

First was your level of contentment. Not sure I would mess with that a whole lot!

Second was the desire/need to be either 100% debt free or plow the money into something else. I would encourage you see why you feel that way. You have a lot more options. For instance you could just pay a few thousand per month off of the debt and have it gone in a reasonable time period without wiping out a big chunk of change. You could also start a little side project with the intent of it solely paying off debt (kind of making it a game).

Third, I would encourage you to play the game Cashflow. You can run through many, many different debt/income scenarios in a short amount of time. Based on advice form a previous forum participant, I would use his "play it at least 10 times" rule.

Good luck and let us know what you decide!

 

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[tonyf7]

First, welcome to the forum! I like the research that you have already done into the situation. The forum is packed with little nuggets of wealth you can use.

A few things stood out to me:

First was your level of contentment. Not sure I would mess with that a whole lot!

Second was the desire/need to be either 100% debt free or plow the money into something else. I would encourage you see why you feel that way. You have a lot more options. For instance you could just pay a few thousand per month off of the debt and have it gone in a reasonable time period without wiping out a big chunk of change. You could also start a little side project with the intent of it solely paying off debt (kind of making it a game).

Third, I would encourage you to play the game Cashflow. You can run through many, many different debt/income scenarios in a short amount of time. Based on advice form a previous forum participant, I would use his "play it at least 10 times" rule.

Good luck and let us know what you decide!

I actually bought Cashflow years ago and gifted it to a friend. Things have changed drastically since then and I'm willing to bet it I would get more out of it today than I did back then.

When it comes to debt I tend to be aggressive about it. At 19 years old I got my first credit card and still remember the sting of being in debt and having to work a job I hated to pay it off. That's probably what fuels my thinking behind it all.

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[MJ DeMarco]

I really like the idea of not owing anyone a dime

And let me tell you, the feeling is priceless.

WWMJDD?

I would attack your non-essential debts: That is your car note and your student loans. However I would not use your retirement accounts for this purpose, nor would I go cash broke either-- I just would make these debts a priority, followed by your business.

As for the real estate, this sounds like an asset that is working for you at the moment, so the debt there has a purpose.

As always, this is my opinion and not a professional, tax, legal, or financial advice -- its WWMJDD? LOL.

And finally, congrats on making progress and having a success story unfolding and on the horizon.

 

[tonyf7]

And let me tell you, the feeling is priceless.



I would attack your non-essential debts: That is your car note and your student loans. However I would not use your retirement accounts for this purpose, nor would I go cash broke either-- I just would make these debts a priority, followed by your business.

As for the real estate, this sounds like an asset that is working for you at the moment, so the debt there has a purpose.

As always, this is my opinion and not a professional, tax, legal, or financial advice -- its WWMJDD? LOL.

And finally, congrats on making progress and having a success story unfolding and on the horizon.

Thanks MJ! Appreciate the input from a bona fide Fastlaner.

IF I were to sell the rental, the proceeds from the sale should be enough to cover all our debt and still leave every penny of our savings intact.

That's why I'm so tempted to eradicate all of it in one fell swoop!

However, using other peoples money to pay down the rental is also nice and so is the cash flow. But man, debt free at 36 would be boss...[emoji41]

Thanks for your WWMJDD perspective. [emoji23]

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[biophase]

After reading through this whole thing I have two opinions:

1) You mention that you like to use the cashflow. I am getting a tiny feeling that you maybe don't budget or spend when you have money. Therefore, I wonder if going debt free will increase your spending habits. What good is freeing up an extra $500/mo if you end up spending it on fancy dinners.

2) I would sell my rental and pay off the house and student loans. Having a free and clear home feels awesome. It relieves alot of stress because you will always have a home with little ongoing costs. You can afford to make business mistakes and still survive and bounce back this way.

If you did not pay off debt and make a bad business decision and lose a tenant, your whole empire could crumble into nothing.

 

[tonyf7]

After reading through this whole thing I have two opinions:

1) You mention that you like to use the cashflow. I am getting a tiny feeling that you maybe don't budget or spend when you have money. Therefore, I wonder if going debt free will increase your spending habits. What good is freeing up an extra $500/mo if you end up spending it on fancy dinners.

2) I would sell my rental and pay off the house and student loans. Having a free and clear home feels awesome. It relieves alot of stress because you will always have a home with little ongoing costs. You can afford to make business mistakes and still survive and bounce back this way.

If you did not pay off debt and make a bad business decision and lose a tenant, your whole empire could crumble into nothing.

I've actually kept a very detailed excel spreadsheet budget for almost 15 year now. I've gone from one extreme to the other in terms of following a budget.

At first I was extremely frugal and followed the budget down to the very last penny. But after a few years I found out it didn't make for a very happy home life with my wife. Penny pinching made her feel trapped and restricted and she felt that our hard earned money was meant to be enjoyed and not all hoarded. We used to argue constantly about money.

Then we went to the other extreme and became very lax with the budget, spending pretty freely and quickly realized that was not a good road to travel.

Now we're in a good place budgetwise. Not to strict and not to lax either. Sometimes over and sometimes underbudget, but never in danger. We don't argue about money anymore and everyone is happy and we're still saving.

I've already made a "debt freedom budget", factoring in our current spending habits. Very little needs to happen in order to ensure we would continue to save while maintaining our current lifestyle.

Now it's just a matter of deciding whether to pay off the debt, some of it, or none of it and use the money for other things. I'm leaning towards going all in at the moment. You're right about the empire crumbling and I don't like the fragility of the matter and the lack of control regarding that aspect.

Btw, I just read your success story post and it's inspiring. You changed your beliefs, made a decision, took a leap of faith and followed it up with massive action. Well done sire!

 

[GMSI7D]

Having a lot of debt, especially student loan is relatively unknown in Europe compared to you american guys.

yes i live in a socialist country when looking at facts and not really in a capitalist one.

so i haven't had any debt or loan of any kind in my life and thus i can't really understand the feeling that MJ DeMarco is talking about a few post above mine.

so as a reply, i would say that you shoud never have debt or loan of any kind in your life.

 

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[tonyf7]

Having a lot of debt, especially student loan is relatively unknown in Europe compared to you american guys.

yes i live in a socialist country when looking at facts and not really in a capitalist one.

so i haven't had any debt or loan of any kind in my life and thus i can't really understand the feeling that MJ DeMarco is talking about a few post above mine.

so as a reply, i would say that you shoud never have debt or loan of any kind in your life.

You Europeans are so spoiled with your debtless educational system. Haha. Just kidding.

I agree.

Debt should be the 8th deadly sin and avoided like the plague.

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[GMSI7D]

You Europeans are so spoiled with your debtless educational system. Haha. Just kidding.

I agree.

Debt should be the 8th deadly sin and avoided like the plague.

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in fact, our educational system is trash so i don't know whether we are lucky or not

maybe not .




don't forget that you guys have more freedom than we have in France.

i won't tell the details because everyone can see what we are saying on the internet, but trust me on this one.

if freedom means anything at all then you are in the right place in the USA

not me.

 

[tonyf7]

in fact, our educational system is trash so i don't know whether we are lucky or not

maybe not .




don't forget that you guys have more freedom than we have in France.

i won't tell the details because everyone can see what we are saying on the internet, but trust me on this one.

if freedom means anything at all then you are in the right place in the USA

not me.

The grass is always greener on the other side my friend. You guys are learning multiple languages in grade school meanwhile the US struggles to learn proper English.

I'm looking forward to visiting your side of the map this December. [emoji119]

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[MattR82]

How much is your investment property increasing in value every year? I would love to sell mine to cash in the equity and allow myself to fully focus on fastlane venture, but it's turned into a cash positive high growth investment so am leaving it. However that is the only debt I have.

It's different for everyone though. I remember many years ago stupidly telling my sister to hold onto her house as she would never get another chance to get a loan and it was a good investment. It was crippling her financially in the meantime, financially AND emotionally. Selling and starting on a clean slate debt free was the best thing she ever did.

 

[GMSI7D]

You guys are learning multiple languages in grade school meanwhile the US struggles to learn proper English.

I'm looking forward to visiting your side of the map this December. [emoji119]

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1) you know, my english is not very good but anyway i can communicate with you guys.

2) really ? where will you go ?

 

[tonyf7]

1) you know, my english is not very good but anyway i can communicate with you guys.

2) really ? where will you go ?

We'll be staying in Stuttgart, Germany but visiting friends in Zurich, France and Italy. We'll probably also visit Poland and Munich.

I'm open to any recommendations!

PM if you have any!

Thank you!

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[tonyf7]

How much is your investment property increasing in value every year? I would love to sell mine to cash in the equity and allow myself to fully focus on fastlane venture, but it's turned into a cash positive high growth investment so am leaving it. However that is the only debt I have.

It's different for everyone though. I remember many years ago stupidly telling my sister to hold onto her house as she would never get another chance to get a loan and it was a good investment. It was crippling her financially in the meantime, financially AND emotionally. Selling and starting on a clean slate debt free was the best thing she ever did.

The property is actually in a very high growth city (DC) in a developing neighborhood. I doubt its reached its peak but I also don't think its too far from peaking either.

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[GMSI7D]

We'll be staying in Stuttgart, Germany but visiting friends in Zurich, France and Italy. We'll probably also visit Poland and Munich.

I'm open to any recommendations!

PM if you have any!

Thank you!

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wow, this a nice trip in europe.

don't forget to go to famous place in switzerland like Zermatt to see the matterhorn moutain for example.

but anyway we are off topic . let's go back to a debt free life