Poll: what is your debt to total asset ratio?

[Mulligan]

I am never amazed at how any discussion here can get down to the absolute minutia of detail. It depends on "what is, is" minutia, ha! To a dummy like me, if it is paid off each month there is no debt... Otherwise everyone is in debt. When you get your cable or phone bill in the mail and open it up, you are in debt. You owe and you haven't paid yet.

 

[W2R]

I am never amazed at how any discussion here can get down to the absolute minutia of detail. It depends on "what is, is" minutia, ha! To a dummy like me, if it is paid off each month there is no debt... Otherwise everyone is in debt. When you get your cable or phone bill in the mail and open it up, you are in debt. You owe and you haven't paid yet.

Oh, good point. I hadn't thought of it that way. Before reading your post I thought it was debt if you owed anything on your credit card, even if you were paying it off in full every month. But now, after reading your post, I'm not so sure.

 

[Meadbh]

Having taken masters level courses in accounting and finance, I get so frustrated when everyone wants to impose their own definitions.

Debt ratio means the sum of current and long term debt, divided by total assets:
What is Debt Ratio? definition and meaning

Current debt is anything you owe that you must pay back within a year:
What is Current Debt? definition and meaning

Therefore, if you understand that credit card debt, whether incurred yesterday or last month, is something you must pay back within a year, you must include it in current debt. If you believe that credit card debt need not be paid back within a year, what are you doing on this forum?

 

[Meadbh]

I am never amazed at how any discussion here can get down to the absolute minutia of detail. It depends on "what is, is" minutia, ha! To a dummy like me, if it is paid off each month there is no debt... Otherwise everyone is in debt. When you get your cable or phone bill in the mail and open it up, you are in debt. You owe and you haven't paid yet.

Yes, Mulligan, everyone is in debt. Just look at what happens when you die. Your executor's first job is to pay the bills that you owe.

 

[Mulligan]

Having taken masters level courses in accounting and finance, I get so frustrated when everyone wants to impose their own definitions.

Debt ratio means the sum of current and long term debt, divided by total assets:
What is Debt Ratio? definition and meaning

Current debt is anything you owe that you must pay back within a year:
What is Current Debt? definition and meaning

Therefore, if you understand that credit card debt, whether incurred yesterday or last month, is something you must pay back within a year, you must include it in current debt. If you believe that credit card debt need not be paid back within a year, what are you doing on this forum?

I have been in some type of credit card debt (long term, not paid off monthly) since 1987 and retired at 45 seven years ago. I am here! It may get all paid off in 2 years, or maybe not. The 2% I pay them yearly is less than my 6% income generated from money I would have to pay it off with, so my desire level isn't high.

 

[Meadbh]

I have been in some type of credit card debt (long term, not paid off monthly) since 1987 and retired at 45 seven years ago. I am here! It may get all paid off in 2 years, or maybe not. The 2% I pay them yearly is less than my 6% income generated from money I would have to pay it off with, so my desire level isn't high.

If you have found a credit card that charges 2% interest, more power to you.

 

[Mulligan]

If you have found a credit card that charges 2% interest, more power to you.

No power or effort needed....They mail access charge CC checks 2-3 times a month. The interest is zero but access fee is 2% for 15 months. So I guess if I wanted to get to the minute level it is not 2% but slightly under even allowing for the upfront payment of the 2% fee of course.
Heck one time about 15 years ago, another CC had 2% access fee and 0.99% annual rate with no time limit. I know they regretted that offer as I milked them for about 10 years on that one. Never saw that offer again.

 

[Danmar]

This is really getting silly.

 

[Nemo2]

This is really getting silly.

 

[sheehs1]

Zero. No mortgage and pay off CC every month. I suppose for some portion of the month I have some small percentage on CC...until the bill comes and I pay it off.

 

[SpinDr]

At 7.8% which includes a mortgage and small car loan. Paying off the mortgage is something I consider but it being a 3.25% loan and only having about 4 years left from the original 10 year loan I'm not sure it would make it worthwhile.

Definitely will be happy when it's paid off!

 

[ElizabethT]

0% since paying off the mortgage some 10 years ago, 5 year prior to FIRE. We use a credit card for most of our purchases, which is then paid off at the end of each month, because 1) I am not comfortable using a debit card other than for ATM withdrawals - way too many data breaches by companies I used to consider 'safe,' and 2) we much enjoy getting 2% in cash back rewards for using our credit card vs our debit card.

If this disqualifies us from the 0% club I guess we'll have to live with that.

 

[Ronnieboy]

Life is pretty cheap when you have zero debt.

I like this quote.

I'll see if I can explain this to family members.....

 

[Helena]

.

I have no debt. My house was paid off years before I retired.

I do use a credit card for the cash rewards. I pay it off every month so I pay zero interest and zero fees. Actually the cc company is paying me to use their card.

 

[jimnjana]

I guess I am in second place at about 25%. Like a workerbee I have a mortgage with 20 years to go and a car payment slapped on a zero percent CC with 2% access check fee I roll over every 15 months.
The debt was there when I retired and my pension take home income was about same as take home paycheck. No real reason to change. Even with the debt payments I dont spend 70% of my monthly pension income. I am just not a big spender. It will get paid off one of these years, or not...Who knows.

Think I just moved ahead of you at about 30% or so... 400K mortgage at 3.25%, and just took a 28K note on a car for DW at 1.8%. Dealer gave us 250 bucks to take the financing, we can pay it off in 4 months with now penalty just accrued interest. No cc debt as we pay it off each month. Ditto on the no reason to change.

 

[Helena]

400K mortgage at 3.25%

I'd have a heart attack if I had a 400k mortgage !!

HGTV routinely shows people shopping for houses costing more than 400k.

I could never afford one of those. But I could afford to retire early debt free with a nice nest egg because I lived frugally in a much less expensive part of the country.

25 years ago, I bought my first 1100 sqft 3 bedroom house for $35,000. 15 years ago I upgraded to a 2200 sqft 4 bedroom house in a nice neighborhood for $135.000.

.

 

[ziggy29]

Overall, on average about 0.15%. That's my average credit card indebtedness at any one time (paid off each month) divided by net worth (using only cash and investments, not personal property).

Last year for the first time, when we bought a new car for my wife we paid in cash -- just wrote a check for the entire amount. It felt great to drive away without car payments for years in our future!

 

[CardsFan]

I answered <10%, per the definition, but my actual debt (cc paid monthly) is less than 0.10%

 

[Helena]

Last year for the first time, when we bought a new car for my wife we paid in cash -- just wrote a check for the entire amount. It felt great to drive away without car payments for years in our future!

I'm still driving my old Honda I paid off right before I retired. I hope to drive it a few more years... then pay cash for a new one.

I've heard it is better not to tell the car dealership in advance that you are paying cash. Is that right ??

 

[traineeinvestor]

8.3% = comprising the mortgage on our home, mortgages on investment properties, cc debt (paid off in full each month) and monthly accruals for larger expenses like taxes, holidays and a sinking fund for home renovations. 7.8% if you exclude the monthly cc debt and the accruals.

All the mortgages are P+I so the balance goes down each month.

Quite frankly, I consider our gearing to be too low. If/when local property prices become more reasonable, we would likely borrow to buy another property.

 

[Al18]

Only debt is two car loans - one will be paid off when I retire, while the other will be paid off 2.5 years later (0% APR). Total debt is 2.1% of NW.

 

[2017ish]

If refinancing goes smoothly this week, will be going into retirement with 2.75% mtg. that constitutes ~4.5% of our assets. Monthly credit cards can at times add another .5% or so, depending upon travel plans and where we are in the billing cycle.

 

[Greg V]

6.9% total debt includes a mortgage (2.5% rate) and credit card balance paid in full each month

 

[kaudrey]

We're about 18%, with mortgages on our townhouse and our cabin; we are in our mid-40s and about 10 years to retirement.

 

[2Pizzas]

At 17% with a mortgage on our primary residence(2.5% rate).