Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-10-2017, 05:40 AM   #81
Thinks s/he gets paid by the post
gayl's Avatar
 
Join Date: Jun 2004
Location: Diablo Valley (SF Bay Area)
Posts: 2,231
Quote:
Originally Posted by pb4uski View Post
.... there are good loans and bad loans... learn the difference.
+1000
gayl is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-10-2017, 07:15 AM   #82
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands, TX
Posts: 12,806
Quote:
Originally Posted by Meadbh View Post
With all due respect, I think that advice is nonsense. As a medical professional, during her career she may very well go into private practice. If so, it would be to her advantage to borrow, within reason, to set up her office. She will probably purchase a home. How many people can purchase a home without going into debt? (Mortgages are debts, in case anyone has forgotten). Finally, she may well wish to do as I have done, and invest in income property (which could be her office building). Leveraging an investment that produces regular, reliable cash flow is a great way to build wealth.

I still have over $100K of investment debt (down by 80% from peak). My leveraged property investments gave me great peace of mind during the Great Recession. They were the only part of my portfolio which was not shrinking daily, and the cash kept flowing in. I do not fear good debt. It gives me peace of mind.
+1000! Nothing like using other people's money to build your wealth.
__________________
Everyone has a plan until they get punched in the mouth...philosopher Mike Tyson
aja8888 is offline   Reply With Quote
Old 11-10-2017, 05:12 PM   #83
Full time employment: Posting here.
 
Join Date: Sep 2014
Posts: 524
Quote:
Originally Posted by Meadbh View Post
With all due respect, I think that advice is nonsense. As a medical professional, during her career she may very well go into private practice. If so, it would be to her advantage to borrow, within reason, to set up her office. She will probably purchase a home. How many people can purchase a home without going into debt? (Mortgages are debts, in case anyone has forgotten). Finally, she may well wish to do as I have done, and invest in income property (which could be her office building). Leveraging an investment that produces regular, reliable cash flow is a great way to build wealth.

I still have over $100K of investment debt (down by 80% from peak). My leveraged property investments gave me great peace of mind during the Great Recession. They were the only part of my portfolio which was not shrinking daily, and the cash kept flowing in. I do not fear good debt. It gives me peace of mind.
I think his point is its about a "state of mind" to LBYM. Obviously most people consider a mortgage good debt or if you are a highly compensated lawyer or Medical professional you can invest in your office if you choose. Yes you will have some necessary overhead.

DD only has 28k in student loan debt so thats impressive. If her income is truly high enough now she will be out of debt in no time.

If she chooses a frugal lifestyle and max saves like many millennials are doing she could go the opposite route you have taken.
She could easily pay cash for a house in 10 years during the next housing collapse if she so chooses.

Nothing wrong with the phycology of LBYM and trying to avoid debt at all costs.
purplesky is offline   Reply With Quote
Old 11-10-2017, 05:25 PM   #84
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,156
WADR, avoiding "debt at all costs" is very short sighted.

Our first house is one example... bought an "expandable" gambrel for ~$75k with 20% down.... put $10k in improvements + a lot of sweat equity building out 3 bedrooms and two baths on the top floor.... I was RIFed about 4 years later so we moved closer to home and to a LCOL area... in the meantime the area where the gambrel was located was booming... sold for ~$156k. So our $15k down + $10k for improvements yielded ~$90k in our pocket at closing... and our new house in the LCOL area was less than that.

If I had avoided debt at all costs during my adult life I would be a lot poorer today.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is online now   Reply With Quote
Old 11-10-2017, 05:41 PM   #85
Thinks s/he gets paid by the post
 
Join Date: Dec 2014
Location: St. Charles
Posts: 2,961
I would argue there not "good" debt and "bad" debt, but "wise debt" and "dumb debt".

Wise debt can include housing, home improvements, business expenditures, necessities (cars for an example), if the price is reasonable and not an over indulgence.

"Dumb debt" would be carried forward debt on high interest credit cards, buying too much house, or car, or toys that stretch your limit.

I suspect we have all had some level of "dumb debt" in our lives. You can over come it and prosper, as long as you don't keep on doing it.

But you can still "blow" some money on a splurge (cruise, European vacation, or a little trip to Florida), as long as you plan for it.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
CardsFan is online now   Reply With Quote
Old 11-10-2017, 05:48 PM   #86
Full time employment: Posting here.
 
Join Date: Sep 2014
Posts: 524
Quote:
Originally Posted by pb4uski View Post
WADR, avoiding "debt at all costs" is very short sighted.

Our first house is one example... bought an "expandable" gambrel for ~$75k with 20% down.... put $10k in improvements + a lot of sweat equity building out 3 bedrooms and two baths on the top floor.... I was RIFed about 4 years later so we moved closer to home and to a LCOL area... in the meantime the area where the gambrel was located was booming... sold for ~$156k. So our $15k down + $10k for improvements yielded ~$90k in our pocket at closing... and our new house in the LCOL area was less than that.

If I had avoided debt at all costs during my adult life I would be a lot poorer today.
It's a state of mind. An attitude to avoid lifestyle creep and keeping up with the Jones.

Yes you take out a mortgage but a mortgage you can easily afford.

Many people buy too much house because they ignore " avoid debt at all cost".

With credit card debt it should be taken literally.
purplesky is offline   Reply With Quote
Old 11-10-2017, 05:56 PM   #87
Full time employment: Posting here.
 
Join Date: Sep 2014
Posts: 524
Quote:
Originally Posted by CardsFan View Post
I would argue there not "good" debt and "bad" debt, but "wise debt" and "dumb debt".

Wise debt can include housing, home improvements, business expenditures, necessities (cars for an example), if the price is reasonable and not an over indulgence.

"Dumb debt" would be carried forward debt on high interest credit cards, buying too much house, or car, or toys that stretch your limit.

I suspect we have all had some level of "dumb debt" in our lives. You can over come it and prosper, as long as you don't keep on doing it.

But you can still "blow" some money on a splurge (cruise, European vacation, or a little trip to Florida), as long as you plan for it.
+1000
purplesky is offline   Reply With Quote
Old 11-10-2017, 05:59 PM   #88
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 30,156
Well, truth be known, the mortgage on that first house was a burden.... certainly not "easily afford"..... we stretched ourselves and scrimped for a couple years until I received a couple raises and the mortgage payments became more comfortable... but I'm not sure that is unusual for a first home.

We took a calculated risk.... and it turned out well.

I guess my point is that it is poor advice to eschew all debt (though I would agree on credit card debt).

My dad was a successful businessman and multi-millionaire and didn't like debt and later admitted that one regret was not using other people's money more.

I think CardsFan hit the nail on the head.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.

Retired Jan 2012 at age 56
pb4uski is online now   Reply With Quote
Old 11-10-2017, 06:04 PM   #89
Full time employment: Posting here.
 
Join Date: Sep 2014
Posts: 524
Quote:
Originally Posted by pb4uski View Post
Well, truth be known, the mortgage on that first house was a burden.... certainly not "easily afford"..... we stretched ourselves and scrimped for a couple years until I received a couple raises and the mortgage payments became more comfortable... but I'm not sure that is unusual for a first home.

We took a calculated risk.... and it turned out well.

I guess my point is that it is poor advice to eschew all debt (though I would agree on credit card debt).

My dad was a successful businessman and multi-millionaire and didn't like debt and later admitted that one regret was not using other people's money more.

I think CardsFan hit the nail on the head.
+1000
purplesky is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
SIMPLE IRA - Is this an excess contribution? gindie FIRE and Money 26 02-08-2007 08:29 AM
Personal Umbrella versus Personal Excess Liability policies ? Linney FIRE and Money 25 11-28-2006 08:06 PM
Is this really excess funds? oldcrowcall FIRE and Money 2 10-06-2005 10:06 PM
"I got rid of all the excess in my life." dex Other topics 0 06-15-2005 07:32 PM
'excess'? Marshac FIRE and Money 2 02-17-2005 05:35 PM

» Quick Links

 
All times are GMT -6. The time now is 07:01 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.