This might be old school. But I'm Debt Free Today.
- Thread starter Rusky
- Start date
Make more money. I was already saving / investing (I'm a boring investor though - roth ira / kids edu type).
I didnt want to quote the whole picture because that image is way to big. But you do know they use lots of makeup and digitally enhance those photos
Ive had better without all that.
I'm not even sure how it happened. For some reason American people think its a normal thing.
I think its human farming in a way.
Davay. Make monies.
Rusky you like my Tupac quote?
[ame=http://www.youtube.com/watch?v=lXPqs4eJZrI]Tupac - How Do You Want It Lyrics - YouTube[/ame]
I'm assuming you debt free guys are including mortgages in that correct? It's hard to buy a $900k house for cash unless you've been stackin it up for a while. Aside from a mortgage, I don't have any debt to speak of, but getting that mortgage paid off takes some time. Even guys making good money will agree that getting that home loan paid off, while a top priority, just doesn't happen overnight.
And congrats Rusky. That's got to be a great feeling knowing that you have no major financial obligations each month aside from your normal living expenses.
And congrats Rusky. That's got to be a great feeling knowing that you have no major financial obligations each month aside from your normal living expenses.
Mortgages are typically a good decision when buying a house, it's almost "good" debt to have. If you're any good at business, your money will be better put to work in your business than tied up in a house. I don't understand people's obsessions with paying it off early, etc. Build valuable assets up elsewhere, faster.
Even credit cards have their place. If I can grow my investment in a business at 100+% per year, then why wouldn't I pay 17% on my credit card to do that, if I didn't have other capital available?
The "stupid" debt is when you take on debt in order to purchase something that won't appreciate in value. You're pretty much throwing wealth away. So taking out a loan in order to buy a nice car is stupid (unless that car allows you to start the business that grows at 100%+ per year...). Going for 2 weeks away in the Maldives on a credit card is stupid, etc, etc..
I no longer have a mortgage so that is true for me.
However, you don't have to live in a $900k house though. I live in a gated community right on a golf course in my backyard and a have a private marina and I paid no where near that range. I even own several other lots around me that are all wooded and private so I don't have to mess with neighbors. My home is not small and I don't buy generic furniture and I still came in under $450k
Unless you chose to live in an area that is astronomically high in housing prices, or live in a home much much larger then your needs, I see no reason why people would have a $900k+ mortgage.
Your assuming all/every business owner can grow their business at 100%+ every year. Before online business's came around, I worked for a lot of bricks and mortar companies that were local/regional and at best they could only grow 20-30% per year. I know several online ecommerce companies that only grow at that same rate and these companies are in the $10-20MM range annually. True, you can get 100%+ growth if you only do a small amount of sales/biz in your first couple years, but at some point you reach a level where even 50%+ growth is not possible. You still might not be "rolling in the money" as a owner even at this point.
Not every business/owner can reach such a high level of growth year over year.
Also, there are case were people do have the capital available to them to not only pay off their mortgage, but reinvest money into their business and have some left over to spare. So why not?
Lot's of people do not want the hassle of moving money around in their bank accounts, keeping up with monthly bills, and the general headaches of having a mortgage to begin with. I know that I typically pay ahead bills such as my electric, water, phone, etc.. so I do not have to look at a bill each month. I don't have the option of paying online, going paper less, or putting it on a Visa/MC for each bill though.
I can tell you this, having a mortgage is an asset protection method if you are not smart enough to set up other types of protection like a Trust though when it comes time for someone to sue you.
If I lived anywhere but Southern California, I'd be set up exactly like you. Unfortunately to have a nice 3000 sq/foot house in the San Diego area (in 2005), that's what it costs. Fortunately we've been diligent about paying that down over the past 7 years, and we've got it in the 500's, but that's still a pretty good payment that I would love to get rid of.
That's what i was thinking maybe. I was even thinking SD actually.
My home came in a bit larger then 3k sq ft. and we bought this one in 2009. Not sure how much different the market was in 2005 compared to 2009, but I am sure regardless the southern Cali market has always been high compared to the rest of the country with exceptions like Boston, etc.
I'm no financial expert, but the value of buying a house is debatable. First of all, there's a tax credit you get for paying a mortgage (a tax break for rich folks). This is a plus.
People think that when they pay off a mortgage they own the property, but this is a mass delusion. You still have to pay lots of money in the form of property taxes. If you don't they take your house away. So instead of paying mortgage to the bank, you become a renter to the town and school district. And you're never free of this obligation.
I know a person who pays $2k a month in property taxes alone, so how is this not like being a renter?
The value of home ownership depends on a lot of varying factors, and should be evaluated on a case by case basis. Renting from a landlord may be cheaper and more hassle-free.
A landlord isn't going to let you rent from him property tax free though, he will pass that amount on to you in the form of your rent, or higher rent, each year as well as his insurance ( which you can opt not to have if you own your home, not that you should ).
If you rent or own, you are not going to escape property taxes. What you can control is where you buy ( cheaper taxes or property ) and what you buy ( which will effect your taxes as well ).
Also, if you skip out on property taxes there are long waiting times and lots of paperwork before your property is just taken from you. I have looked into tax lien sales several times in my state and surrounding and it takes a very very delinquent person to lose their home this way, even then it takes months and months for it to happen.. years sometimes even.
