Poll: what is your debt to total asset ratio?

[Meadbh]

In the thread about percentage of assets in home equity, someone brought up the valid point that the data ignored debt. So here is a poll to address this question.

The number I am looking for is:

The sum total of ALL your debt (including mortgages)

Divided by....

The sum total of ALL your assets (including your home)

Multiplied by 100, to give a percentage.
​

Feel free to elaborate below. I'll start. My debt ratio is currently 3.175%, and consists of three mortgages on rental properties. (I just paid my credit card bill).

 

[Sunset]

Mine is 0% , I'm debt adverse, so much so that I usually pay off the CC every 2 weeks so my CC statement nearly always reads 0.00.
I do this so they never can hit me with a failed to make minimum payment in case I ever forget to pay.

Life is pretty cheap when you have zero debt.

Poll should have had smaller break points as in 5% , 10%, 15% etc. (IMHO)

 

[Omalley]

Sitting at 0.5% due to the 1.9% interest rate used car loan, and credit card charges in Quicken but the payments aren't due yet.

Omalley

 

[Rosie]

Zero. No mortgage, CCs and other bills paid in full every month.

 

[Corporateburnout]

We charge everything for the CC cash back rewards but pay it all in full when due. I still voted less than 10% because it's still showing as debt on Quicken.

 

[Meadbh]

We charge everything for the CC cash back rewards but pay all in full when due.

I do likewise.

 

[rodi]

No mortgage. Only debt is credit cards which are paid in full each month... so at any given point it's between 0% and 0.2%.

 

[Meadbh]

Poll should have had smaller break points as in 5% , 10%, 15% etc. (IMHO)

Too many categories make it difficult to analyze small data sets. I felt that six options was sufficient to get an overview. It matters little whether the ratio is 4.5% or 5.5%. This is not meant to be a scientific study. If the results are sufficiently interesting that a more granular analysis seems worthwhile, such a poll can be designed after this one closes on October 1.

 

[W2R]

I always pay my credit card bill in full, automatically. It was paid on the 15th and I haven't charged anything since.

Other than that, I have zero debt so that is what I chose. I really hate debt and some of you probably remember how hard it was to persuade me to get a credit card! But now I have one.

 

[Sunset]

I always pay my credit card bill in full, automatically. It was paid on the 15th and I haven't charged anything since.

Other than that, I have zero debt so that is what I chose. I really hate debt and some of you probably remember how hard it was to persuade me to get a credit card! But now I have one.

Oh, the slippery slope of debt...

 

[W2R]

Oh, the slippery slope of debt...

You know it! So far I only have one.

 

[RobbieB]

You're not going to have much fun w/o a credit card, too hard to buy stuff -

 

[HillCountry]

I have mortgage on 2 of my rental houses. Around 5% of total NW.

 

[Dash man]

I also hate debt. The USAA app on my iPhone makes it so easy to pay my credit card bills daily, I never carry a balance. We paid off our mortgage in 2010 for the home we live in, and paid off a rental property long before that. The only debt we've taken on the past few years were when we bought our cars, they offered to pay us money to finance with the dealer with no prepayment penalties or other fees. We took out the loans, verified they paid what they promised, and paid off the loan, usually within the first month or two. We nearly took out a Home Equity line of credit from PenFed recently since DW is officially retired by the end of this year (hasn't worked since June). But we decided against it after reading the small print in the loan documents. It just isn't worth it. Being debt free is a great feeling.

 

[bradaz2488]

0%. I do have one CC, but pay I off every month...

 

[target2019]

We are at 1.33%. Smaller loans for auto and HVAC.

 

[W2R]

You're not going to have much fun w/o a credit card, too hard to buy stuff -

Nah, a debit Mastercard was accepted everywhere. Never had it turned down.

 

[Accidental Retiree]

Zero. No mortgage, CCs and other bills paid in full every month.

Same here.


Sent from my iPad using Early Retirement Forum

 

[FlaGator]

Had -0- debt for many years and that was a critical part of our accumulation plan.

Fully aware of the risk and monthly cash flow impact, I took out a mortgage earlier this year to maintain higher investable assets and liquidity while the kids are still at home.

 

[akck]

Nah, a debit Mastercard was accepted everywhere. Never had it turned down.

I highly recommend not using a debit card for anything other than getting cash from a bank ATM. If your card is compromised, your bank account is at risk and while you'll be able to recover any fraudulent charges, it might take months to do so. You'll likely have your bank account closed and will need to change any automatic transactions. Your safer bet is to get a standalone credit card since there is minimal risk with fraudulent charges. For traveling, I recommend carrying 2 cards in case your primary card becomes compromised or locked (didn't inform cc company of travel). I used to carry 3 cards, but Costco switched to VISA, so I'm down to 2.

 

[MichaelB]

So, if we pay our CC balance in full each month, but this month has not yet been paid, does that mean that right now we have debt?

 

[Meadbh]

So, if we pay our CC balance in full each month, but this month has not yet been paid, does that mean that right now we have debt?

Yes! I owe, I owe, so off to work I go!" (..... or maybe not)

 

[pb4uski]

5.9%... this assumes CC balances are paid since they are on autopay and a small car loan balance that I plan to pay of in a month or so (I reduced the denominator for those items rather than leave them in the numerator.. so the numerator is my mortgage and a car loan I plan to keep and pay off over time).

Unadjusted (strictly based on the formula in the OP) it would be 6.5%.

 

[Walt34]

So, if we pay our CC balance in full each month, but this month has not yet been paid, does that mean that right now we have debt?

I would think so.

For us at the moment it's about 0.0016% because the cc bills haven't come in yet. But when they do we pay them off of course.

 

[aja8888]

0.08% - still owe $10 K on a loan (why don't I pay this off? (1.9% interest)).