"I actually know people who have no debt."

[RossMAN]

Originally posted by: Mookow

Originally posted by: RossMAN
I used to hate having NO CREDIT.

Now I hate having too much of OUTSTANDING CREDIT.

Anytime I apply for a new cc I get approved for $5k-$10k

Just float one of those my way. I'll only use it for emergencies and stuff...

Sure just PM me your e-mail and I'll send you the cc number, how about an Amazon/First USA cc with $10k limit?

 

[EvilYoda]

Well isn't that how the businesses of America prosper? People spend money they don't have and worry about it later.

I've never bought anything I couldn't pay for within a payment period...I'm working at a highend A/V store right now, and I won't order my new equipment until I know I have 75% of it covered, so that I can get a good charge on a CC and pay it off immediately...thus getting me some new toys and improving my credit

 

[ElFenix]

i consider any liabilities to be debt

 

[Mookow]

Originally posted by: RossMAN

Originally posted by: Mookow

Originally posted by: RossMAN
I used to hate having NO CREDIT.

Now I hate having too much of OUTSTANDING CREDIT.

Anytime I apply for a new cc I get approved for $5k-$10k

Just float one of those my way. I'll only use it for emergencies and stuff...

Sure just PM me your e-mail and I'll send you the cc number, how about an Amazon/First USA cc with $10k limit?

That sounds good, but I think you should just PM me the number

 

[allisolm]

used to hate having NO CREDIT.
Now I hate having too much of OUTSTANDING CREDIT.
Anytime I apply for a new cc I get approved for $5k-$10k

Know what you mean. Just got new ATM debit cards and the accompanying material reminded me that I was limited to $25,000 in daily purchases. Yikes!

 

[Salvador]

I'd tell you, but you probably don't care to hear about it.

Sal

 

[Armitage]

If he means no unsecured debt, that's completely reasonable. I never used to carry a credit card balance that I couldn't (or didn't) pay off in 2 months max. Car was paid off, nothing but a mortgage payment of about 1/5 of my take home pay @ age 32.

Then I got optomistic in '01 and bought a new truck ... technically not unsecured ... never been upside down on it, but on my mental scale of healthy debt, it's down the list a bit. Then the wife convinced me to build a huge addition onto our home ... largish home equity loan. Again, not unsecured, but cutting things a bit tighter. I wanted the addition, but wanted it about half the size of what it ended up being.

Now, wife is leaving me and wants half of everything. So fvck it. I'm letting the credit card debt creep up, because it only gets subtracted from my net worth when it comes time to divide assets. I can't go out and buy a $4K TV or such ... you are barred from making "extrodinary expenditures" and such without the other parties consent during a divorce. But I'm damn well getting what I need.

I'll have no problem paying it off once this is over, because I'll likely not have a mortgage payment anymore. Or maybe I'll just run it up into bankruptcy, and she can have half of that

 

[SP33Demon]

Originally posted by: ergeorge
If he means no unsecured debt, that's completely reasonable. I never used to carry a credit card balance that I couldn't (or didn't) pay off in 2 months max. Car was paid off, nothing but a mortgage payment of about 1/5 of my take home pay @ age 32.

Then I got optomistic in '01 and bought a new truck ... technically not unsecured ... never been upside down on it, but on my mental scale of healthy debt, it's down the list a bit. Then the wife convinced me to build a huge addition onto our home ... largish home equity loan. Again, not unsecured, but cutting things a bit tighter. I wanted the addition, but wanted it about half the size of what it ended up being.

Now, wife is leaving me and wants half of everything. So fvck it. I'm letting the credit card debt creep up, because it only gets subtracted from my net worth when it comes time to divide assets. I can't go out and buy a $4K TV or such ... you are barred from making "extrodinary expenditures" and such without the other parties consent during a divorce. But I'm damn well getting what I need.

I'll have no problem paying it off once this is over, because I'll likely not have a mortgage payment anymore. Or maybe I'll just run it up into bankruptcy, and she can have half of that

What's up with all the divorces on AT? Very sad.

 

[dirtboy]

I have no consumer debt, except a mortgage. Okay, small lie... I recently financed a washer, dryer and refrig at 0%. I could have paid cash, but I didn't want to run out of money moving into the new place. I'll have that paid off well before the 12 month free interest period is up.

Other than that, it's not that hard to be debt free. When I went to school I paid for classes as I took them. I paid my car off and kept it. Not only that, but I maintain it, so even after 8+ years it still runs well and looks good.

 

[melly]

It was great that my parents paid for my undergrad and not having to have that debt hanging over my head when I left school. What kind of way is that to start a life, anyway? Now I have a decent job with decent pay and my current 'debts' if you want to call them that are my car lease and soon to be mortgage.

 

[Descartes]

Originally posted by: xmellyx
It was great that my parents paid for my undergrad and not having to have that debt hanging over my head when I left school. What kind of way is that to start a life, anyway? Now I have a decent job with decent pay and my current 'debts' if you want to call them that are my car lease and soon to be mortgage.

The life of those not privileged with such parental affluence.

 

[wyvrn]

The majority of our debt is "good". We have two investment properties with positive cashflow. We have student loans, where if we had not taken them, our income would be about half of what it is now. The only "bad" debt we have is for an SUV that we bought after our car was stolen. The car had been paid off for years and was in reasonably good shape. Damn! Point is, sometimes it's good to take on debt, if taking on that debt brings you greater rewards. However, trying to explain this to some of my family gets blank stares. None of them have any money saved up.

 

[Excelsior]

Originally posted by: bozack

Originally posted by: Redhotjrm That's just rediculous =( When you say decent, do you mean size / location / quality or what? $275k goes a looooong way here in Northern Kentucky / Greater Cincinnati area. Here is an example:
Off the Northern Kentucky MLS .. custom built for $275k

Want to really hear ridiculous, we just started looking at houses this weekend, a two bedroom townhouse in a not so nice neighborhood costs anywhere from $350-400K and it is only about 1K sq feet of living space, for anything decent you have to spend 400K plus and that is for a condo and not even near the city....

For a full fledged single family house expect to pay at least $450K and it will be over 50 years old at least, for something relatively new you are looking at $750-800K and not even close to the city....

Here are few links just to give you an example....

Ripoff 1

Ripoff 2

Ripoff 3

I cannot even imagine being debt free in taxachusetts especially when we only make slightly over 100K combined which here is a pittance, damn I should have been a lawyer.

That makes me sick! Ripoff #2 costs as much as the house I live in now, and it is a 3500+ sqfeet, 4 bedroom, 3.5 bath 2 story house, built around 1994.

 

[Hector13]

Originally posted by: Skoorb
Wow, really? I heard this from a guy on Friday. He spoke as if he was shocked at it - maybe the same way I'd say I know of people who can fly. He went on to say that "These people have a different mindset than the rest of us. Their thoughts are that if you can't pay for something, then don't buy it. They don't use credit to buy things.". Man, is that ever sad to hear from a 35 year old father of 3, making at least $70k/year. I know that his savings is in the range of $0-2000.

This sort of attitude will guarantee that he never has much money to his name, because he spends at the limits of what he takes in.

If you ask me (which no one did...) people who shun all debt are just as ignorant as people who never live without any debt.

Money is just like any other asset: it can be lent or borrowed. The ability to "rent" money from others (or yourself in the future) is one of the greatest achievements of our society. The interest you pay on any debt is just the cost of using money now that you may not have access to otherwise. If this cost is worth it to you (and you can pay it), then by all means, spend away.

What the hell is the point of dying an old rich man who has lived frugally his old life? $10,000 is worth a lot more to me now in my early 20s than $20,000 will be to me in 10 years (or $40,000 by the time I am 50). If this concept doesn't make sense to you, than I fear you may be living a very boring life that you may regret in the future.

 

[mAdD INDIAN]

Originally posted by: Skoorb

is a mortgage considered part of debt?

It is debt, but I presume that he was talking in regards to consumer debt like a car, but more specifically a credit card. Being 35 without a mortgage (and actually living in a house) is almost unheard of...

you gotta be stingy to be like that.

My dad was like that. WHen we moved to Canada, first thing he did was buy a house..and paid it off in 6 years. No spending on superflous things until house was paid off. No cd player, no home theater, nothing. We just had a computer and a decent tv for entertainment. Granted we were lucky in the sense we moved to another country for a few years (where housinsg was paid for) and house we had was put for rent.

 

[rufruf44]

Originally posted by: Hector13

Originally posted by: Skoorb
Wow, really? I heard this from a guy on Friday. He spoke as if he was shocked at it - maybe the same way I'd say I know of people who can fly. He went on to say that "These people have a different mindset than the rest of us. Their thoughts are that if you can't pay for something, then don't buy it. They don't use credit to buy things.". Man, is that ever sad to hear from a 35 year old father of 3, making at least $70k/year. I know that his savings is in the range of $0-2000.

This sort of attitude will guarantee that he never has much money to his name, because he spends at the limits of what he takes in.

If you ask me (which no one did...) people who shun all debt are just as ignorant as people who never live without any debt.

Money is just like any other asset: it can be lent or borrowed. The ability to "rent" money from others (or yourself in the future) is one of the greatest achievements of our society. The interest you pay on any debt is just the cost of using money now that you may not have access to otherwise. If this cost is worth it to you (and you can pay it), then by all means, spend away.

What the hell is the point of dying an old rich man who has lived frugally his old life? $10,000 is worth a lot more to me now in my early 20s than $20,000 will be to me in 10 years (or $40,000 by the time I am 50). If this concept doesn't make sense to you, than I fear you may be living a very boring life that you may regret in the future.

Its all about priority and preference. If you choose to enjoy life and spend the money now, then more power to you. Some people prefer work their butt off now and retire when they're in their 40s or 50s. Others prefer somewhere in between.

I personally hates all ebt which includes mortgages (especially with the insane housing prices in some area). Still having hard time convincing myself i'm making an "investment"

 

[mAdD INDIAN]

Originally posted by: Excelsior

Originally posted by: bozack

Originally posted by: Redhotjrm That's just rediculous =( When you say decent, do you mean size / location / quality or what? $275k goes a looooong way here in Northern Kentucky / Greater Cincinnati area. Here is an example:
Off the Northern Kentucky MLS .. custom built for $275k

Want to really hear ridiculous, we just started looking at houses this weekend, a two bedroom townhouse in a not so nice neighborhood costs anywhere from $350-400K and it is only about 1K sq feet of living space, for anything decent you have to spend 400K plus and that is for a condo and not even near the city....

For a full fledged single family house expect to pay at least $450K and it will be over 50 years old at least, for something relatively new you are looking at $750-800K and not even close to the city....

Here are few links just to give you an example....

Ripoff 1

Boston-area is retarded for housing!! Their prices are insane and their houses look like crap. My uncle recently bought a house in Sudbury, MA. For the price he paid for that house, he could have bought a near-mansion in Toronto, Canada!
Ripoff 2

Ripoff 3

I cannot even imagine being debt free in taxachusetts especially when we only make slightly over 100K combined which here is a pittance, damn I should have been a lawyer.

That makes me sick! Ripoff #2 costs as much as the house I live in now, and it is a 3500+ sqfeet, 4 bedroom, 3.5 bath 2 story house, built around 1994.

Boston-area is retarded for housing!! Their prices are insane and their houses look like crap. My uncle recently bought a house in Sudbury, MA. For the price he paid for that house, he could have bought a near-mansion in Toronto, Canada!

 

[Hector13]

Originally posted by: rufruf44
Its all about priority and preference. If you choose to enjoy life and spend the money now, then more power to you. Some people prefer work their butt off now and retire when they're in their 40s or 50s. Others prefer somewhere in between.

I personally hates all ebt which includes mortgages (especially with the insane housing prices in some area). Still having hard time convincing myself i'm making an "investment"

thank you.. that is my point. It is a personal choice; it has nothing to do with right or wrong. If you feel confident that you will make more money later on in life than you will now (usually a safe bet for recent college grads and the like), than there is little reason not to spend more than you make. It doesn't make you and "dumber" than those who live their whole lives without debt.

 

[Squisher]

Hmm, if I had no debt I'd be living in a crappy house driving crappy cars that I'd be spending a huge chunk of my life fixing, but that would be fine because I wouldn't be having any fun saving every cent with nothing going for entertainment.

 

[llfour]

Any other Dave Ramsey fans on here?

I am 28 and married. We have not debt except a mortgage. That includes two bachelors degrees from private universtities as well as two masters degrees (and our parents did not pay for any of them). No credit cards, no car payments. Looking to pay off the $140k house in 12 years. Don't care about a credit score because we pay cash for everything including cars. We just save until I have enough to buy a nice used car. Don't need a credit card for emergencies because we have the money in savings to cover any deductible I might need to pay. We are now working towards a 4 month emergency fund of about $10,000 that would give us peace of mind should we both lose our jobs. We found a program a crazy dude on the radio that is fanatical about dumping debt and followed his program and paid off $54,000 in two years. We lived on one income and paid debt with the other. Some people think we are crazy, but we hope to be crazy rich by the time we are 55 and can enjoy a long retirement. The program is called Financial Peace University and the website is www.daveramsey.com

 

[Parrotheader]

Originally posted by: llfour
Any other Dave Ramsey fans on here?

That's kind of what I was thinking too. Skoorb's spiel sounded a lot like a Dave Ramsey story (he's been on the radio in this market for years.)

Other than our house we don't carry any major debt either. Got 2 more years on a 3 year truck payment (we could actually pay it off now, but prefer having that extra emergency cushion in savings.) But that's it. We pay off our credit cards every month. Pay my wife's grad school tuition out of our current income. Never finance any major purchases like furniture, etc. We just put them on our credit card, get the points/miles benefit from the purchase and then pay the credit card off immediately. I know there's some pros to using low interest financing, but we find paying something off immediately forces you to realize its true cost and doesn't allow you to build a false sense of your net worth until the payment period hits.

We THOUGHT about doing a 15 year mortgage since it would obviously pay the house off much faster for only about 25% more each month. But that was the one area where we drew the line for security sake. Should one of us lose our job (or choose to stay home with our future family which we'd like to do if possible) that way we wouldn't be saddled with having to make a much higher monthly payment on a house at a time when every dollar is critical. We realize it'll cost much more over the long haul, but we always have the option of paying it off early should we choose to do so (right now I'm just enjoying the 'free' equity we're getting out of appreciating market value.)

 

[StageLeft]

Originally posted by: Hector13
If you ask me (which no one did...) people who shun all debt are just as ignorant as people who never live without any debt.

I agree. I have a mortgage.

What the hell is the point of dying an old rich man who has lived frugally his old life? $10,000 is worth a lot more to me now in my early 20s than $20,000 will be to me in 10 years (or $40,000 by the time I am 50). If this concept doesn't make sense to you, than I fear you may be living a very boring life that you may regret in the future.

It's a balancing act...

thank you.. that is my point. It is a personal choice; it has nothing to do with right or wrong. If you feel confident that you will make more money later on in life than you will now (usually a safe bet for recent college grads and the like), than there is little reason not to spend more than you make. It doesn't make you and "dumber" than those who live their whole lives without debt.

I think it is not a personal choice in most cases. Overspending is in the same vein as overeating. Most people feel victims to it and are not in control of it. These people will always tell you "When I get my credit cards paid off...". Yeah, you've been saying that for a decade. Put up or shut up! The only time I spent what I didn't have was on the tailend of my schooling, because I knew I'd make more money. This guy is 35. It's time to start being realistic. Chasing one's spending is almost always a bad idea. Even if your income does go up you're constantly financing your spending and paying interest on it. In regards to the fellow I mentioned yes his spending does make him dumber. He wants a future which he can never have because he's not understood the basics of interest rates and retirement and net worth. He's a slave and a victim to his spending, instead of empowered in the situation. His attitude mirrors the average American (the average American household having $9k in credit card debt and very little in the way of net assets).

BTW guys, I've never heard of Dave Ramsey. My opinions on the matter have been formed by reading a couple of books some years ago and, most importantly, applying grade 4 math skills with common sense.

Never finance any major purchases like furniture, etc. We just put them on our credit card, get the points/miles benefit from the purchase and then pay the credit card off immediately. I know there's some pros to using low interest financing, but we find paying something off immediately forces you to realize its true cost and doesn't allow you to build a false sense of your net worth until the payment period hits.

We're the exact same way I won't do a 0% finance on a $500 item simply because it's a poor mindset. Once I finance the first piece of furniture God knows where I'll stop. We use our CC for absolutely everything and rack up points.

 

[cchen]

Originally posted by: bozack

Originally posted by: Redhotjrm That's just rediculous =( When you say decent, do you mean size / location / quality or what? $275k goes a looooong way here in Northern Kentucky / Greater Cincinnati area. Here is an example:
Off the Northern Kentucky MLS .. custom built for $275k

Want to really hear ridiculous, we just started looking at houses this weekend, a two bedroom townhouse in a not so nice neighborhood costs anywhere from $350-400K and it is only about 1K sq feet of living space, for anything decent you have to spend 400K plus and that is for a condo and not even near the city....

For a full fledged single family house expect to pay at least $450K and it will be over 50 years old at least, for something relatively new you are looking at $750-800K and not even close to the city....

Here are few links just to give you an example....

Ripoff 1

Ripoff 2

Ripoff 3

I cannot even imagine being debt free in taxachusetts especially when we only make slightly over 100K combined which here is a pittance, damn I should have been a lawyer.

I don't really find that a ripoff.... heck, a decent house in Harlem now costs over a million, so go figure.


Anyway about the debt, if you've ever taken any basic accounting or finance class you should have learned (this is just a basic summary)that some debt is ok, since it allows you opportunities that you wouldn't be able to afford without the debt (house, education ,etc). And in most of these cases the debt is worth it since you get a high return on investment (not always in financial terms)

 

[rufruf44]

Dave Ramsey's rules are not much more than basic financial suggestion than anyone with a good sense of logic can figure out themselves. His debit card suggestion otoh, is one of the stupidest suggestion. Credit card is much superior than debit card, and comes with nice perks too. Then again, he cater to those who can't control their own finances, it might be good for them.

 

[DuffmanOhYeah]

Originally posted by: Scarpozzi
I took a business strategy class. In the class we had a fake company and every week we got stock reports, etc. At the last week, my company placed 3rd. The only reason I didn't do any better was because I didn't have enough debt. Evidently, a little bit of debt helps your buying power and makes a company worth more...I'm sure this carries over to any situation.

Personal and corporate debt are two very different animals. A corporation with a good credit rating has a very low borrow cost. Usually in the neighborhood of 3-5%. Personal debt on the other hand (the kind most people carry is in the range of 20% or higher. Its easy for corporations to get a greater than 5% return on borrowed capital. Thats why they do it. People on the other hand will almost never get a greater than 20% return on their borrowed capital.