Poll: what is your debt to total asset ratio?

[B0bL0blaw]

I might have the highest ratio in the thread! 50.87%


Breakdown:
Debt = 550k = 110k student loans + 440k mortgage
Assets = 1.1M = 650k house + 300k retirement accounts + 125k taxable brokerage account + 25k savings account


Age 34

[Meadbh]

Quote:

Originally Posted by B0bL0blaw I might have the highest ratio in the thread! 50.87% Breakdown: Debt = 550k = 110k student loans + 440k mortgage Assets = 1.1M = 650k house + 300k retirement accounts + 125k taxable brokerage account + 25k savings account Age 34

And you may well be the youngest respondent.

[B0bL0blaw]

Quote:

Originally Posted by Meadbh And you may well be the youngest respondent.

That's what I'm telling myself so that I don't feel too bad about being the outlier!

[Meadbh]

Quote:

Originally Posted by B0bL0blaw That's what I'm telling myself so that I don't feel too bad about being the outlier!

You have a positive net worth of over half a million dollars, and you are at the peak of your human capital.

[B0bL0blaw]

Quote:

Originally Posted by Meadbh You have a positive net worth of over half a million dollars, and you are at the peak of your human capital.

Tell me more... Ha! Yeah I'm not down in the dumps about my current financial status, just appropriately humbled by the degree to which I am currently leveraged!

[dallas27]

Quote:

Originally Posted by GTFan Debt has nothing to do with the interest rate, there's plenty of people that buy cars or furniture at zero percent interest. Same for borrowing money from your family. Debt to most consumers is getting a loan that's paid back over time. Charging stuff on a CC and paying it back when the monthly bill comes is not debt under that understanding, just like it isn't for utility bills or taxes due. But strictly speaking it IS debt because you owe another party for goods or services rendered. Or you have a tax liability that has to be paid, so you owe the gov't. before the tax due date. And legally it will be treated as debt if you fail to pay. We just don't think of it that way because you don't obtain a formal loan with monthly payments, even though that's really what you're doing informally from month to month.

Of course you are right, but i couldn't disagree with you more. You are splitting hairs into the monthly minutia of service on credit. While mathematically you are more right than me, you would be wholly unwelcome in a reasonable discussion at a party with average people, and your "rightness" has no impact on any of them. Pick your battles better, yolo, and this is hardly worth your time.


Sent from my iPhone using Early Retirement Forum

[Amethyst]

I disagree. At the party, he/she would be over in the corner splitting hairs with me and (assuming he/she is not too serious/earnest about everything) we would be enjoying ourselves.

I like hearing outlier points of view when they have logic to back them up.

Quote:

Originally Posted by dallas27 you would be wholly unwelcome in a reasonable discussion at a party with average people,

[DrRoy]

0%, not counting CC paid in full every month.

[rodi]

Interesting about the property taxes - here in CA I think you PREpay the property taxes... so if you go to sell, before the end of the year, you get a pro-rated refund.

Insurance is also pre-pay for the year. So those would not be debts if you pay the taxes and insurance in full when they are due.

Now the utility bills... there's an argument to be made that pre-billing usage is a liability.

[exnavynuke]

Quote:

Originally Posted by B0bL0blaw I might have the highest ratio in the thread! 50.87% Breakdown: Debt = 550k = 110k student loans + 440k mortgage Assets = 1.1M = 650k house + 300k retirement accounts + 125k taxable brokerage account + 25k savings account Age 34

If you moved here, you could buy a nice 4/3 house on 1/4+ acre for $210k (paid with current equity) and change your situation to 110K student loans and 450k assets in accounts..... COL matters

[Sarpy]

I answered <10%, but only owe monthly CC bills, which I pay off totally every month. Oh well. Results will be off a bit I assume--no way to edit that I can tell.

[Meadbh]

Quote:

Originally Posted by Sarpy I answered <10%, but only owe monthly CC bills, which I pay off totally every month. Oh well. Results will be off a bit I assume--no way to edit that I can tell.

Actually, you answered correctly, just as the poll was designed. Thank you!

[GTFan]

It seems to have been designed for those that lean towards the pedantic, IMO.

[Totoro]

Quote:

Originally Posted by Amethyst I disagree. At the party, he/she would be over in the corner splitting hairs with me and (assuming he/she is not too serious/earnest about everything) we would be enjoying ourselves. I like hearing outlier points of view when they have logic to back them up.

+1.

Also, much can be said about this forum, but not that we have too many average people here.

[Meadbh]

Quote:

Originally Posted by GTFan It seems to have been designed for those that lean towards the pedantic, IMO.

I was a scientific researcher before RE. Precision is important.

[B0bL0blaw]

Quote:

Originally Posted by exnavynuke If you moved here, you could buy a nice 4/3 house on 1/4+ acre for $210k (paid with current equity) and change your situation to 110K student loans and 450k assets in accounts..... COL matters

My guess is that my income would take a serious hit as well! But I do expect we'll move to a LCOL area if/when we RE.

[Nemo2]

Quote:

Originally Posted by Totoro Also, much can be said about this forum, but not that we have too many average people here.

It has been said that the 'average person' has one testicle and one breast.

[Meadbh]

This poll has now closed. There was a good response to this study, with 292 participants. The results show that over 51% of respondents indicated that they had no debt. Their posts make clear that many of this group do in fact have short term credit card debt, meaning that the true percentage without "any debt whatsoever" is smaller. The cumulative percentage of this "no debt" group and those reporting a debt to asset ratio of <10% is close to 85%. The curve is significantly skewed to the left. My impression is that the majority of the respondents, at least those who participated in the (lively) discussion, were already retired.

I had not anticipated a normal distribution, but I had thought the skew would be less pronounced, based on the never ending discussions about paying off mortgages in retirement. One poster indicated that the categories should have increased by 5% rather than 10%. To implement such a study design would have required many more categories, which would have made the study more difficult to interpret with a small dataset, or a lower cutoff, which would have masked the fact that a small minority of respondents have a debt to asset ratio of >40%.

The results are informative and I thank everyone who participated. Mods, please close this thread when you feel it appropriate.