FYI Debtfree before the apocalypse

Duke said:
This is my biggest fight. I can't be happy just out right owning a car, oh no. I even want to go so far as to keep the existing car, AND get a new car, so I can use my current car for all the sh*t miles, and just keep my new car for evenings and events.

I talk myself out of it every day.
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I'm going to drive my current car into the Grand Canyon Thelma and Louise style.

Or maybe James Kirk in the new Star Trek movie style, since I don't intend to be in it.
 
Ol' Diamondback Sturgeon said:
I assume you are talking about credit lines through credit cards? If you do not use them, is your credit line ever affected?
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It is. For example, you have $5k of available credit. Bonus to points. You have no debt against that credit, so a high amount of available credit. Also bonus to points. It's a wash against the fact that making regular payments to your credit also gives points. However, if you use your credit cards as a bank card, but with better security and the bonus that a lot of credit cards include a level of warranty with many purchases, and just pay them off in total at the end of every month, you get the best of all three worlds as you have high available credit, no drain on the credit, and are making payments each month on time.

You will get hit initially for getting the card, but that hit goes away after about 3 months.
 
Sarcasmo said:
Whoever owns the most bullets after the apocalypse will be king, so I suggest you invest heavily in ammo. They will be the primary currency.
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This is Knyte's line of thinking.

"food storage? We don't need that, I'll just shoot other people and take theirs"
 
Duke said:
It is. For example, you have $5k of available credit. Bonus to points. You have no debt against that credit, so a high amount of available credit. Also bonus to points. It's a wash against the fact that making regular payments to your credit also gives points. However, if you use your credit cards as a bank card, but with better security and the bonus that a lot of credit cards include a level of warranty with many purchases, and just pay them off in total at the end of every month, you get the best of all three worlds as you have high available credit, no drain on the credit, and are making payments each month on time.

You will get hit initially for getting the card, but that hit goes away after about 3 months.
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Ahhh thanks for the info.

I have a credit card in which I just use for gas only, and pay off each month.
 
fly said:
No way. Unless you have some redick rate, its never to your advantage to pay of your mortgage either...
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6.45% mortgage vs 6% vs 3% school loan. I would pay off the mortgage quicker first if I was going to pay any of them off quicker than minimum. I would be losing money through interest at a slower rate that way.
 
fly said:
No way. Unless you have some redick rate, its never to your advantage to pay of your mortgage either...
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How do you figure?

An extra $60 a month paid direct to my principle pays off my loan 7 years early, and saves a ton in interest. Small savings over time, but a large sum when added. Sure, maybe the $720 a year 'could' go to something else, but it winds up saving over itself at least 2x in the interest I won't be paying as my principle reduces faster. In the long run, that is just more cash I can use for better purposes than blowing it on interest.
 
Duke said:
How do you figure?

An extra $60 a month paid direct to my principle pays off my loan 7 years early, and saves a ton in interest. Small savings over time, but a large sum when added. Sure, maybe the $720 a year 'could' go to something else, but it winds up saving over itself at least 2x in the interest I won't be paying as my principle reduces faster. In the long run, that is just more cash I can use for better purposes than blowing it on interest.
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I'm not sure of all the reasoning, but I know some of it is due to the fact that you can count the interest paid as tax deductible. Also, taking that extra 60 and investing it into a different account will usually yield better results then you'd save on the interest or some mumbo jumbo like that.
 
Sarcasmo said:
Whoever owns the most bullets after the apocalypse will be king, so I suggest you invest heavily in ammo. They will be the primary currency.
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already on it.



oh.. and dang it if we weren't debt free. however, the wife, while I was doing my BB stint saw fit to run up about 5K in debt. :case:

we had a bunch saved (over 10K) and then that cr*ckhead hit our car costing us thousands.. and then we decided to buy another for cash.. about 5 or 6K. THEN, it broke down a few times.. cost about 1K to get it fixed (my 4500$ car purchase ended up costing about 7).

so..

AMEX rollover bill
Best Buy ("but I had to have the computer to watch you on tV")
got about 3K left on my truck, WHICH btw, seems forever damaged by the accident that also cost us the other car.

that being said, we're probably less than 10K from being totally debt free cept for the mortgage. IF we can stop spending so much.
 
kiwi said:
I'm not sure of all the reasoning, but I know some of it is due to the fact that you can count the interest paid as tax deductible. Also, taking that extra 60 and investing it into a different account will usually yield better results then you'd save on the interest or some mumbo jumbo like that.
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I could see this if the thought was that this house in particular was the last one. But if it's early on, then assume the home will be sold down the line. That extra money going into the premium early = more equity in the house to roll over into a new property. Assuming you will transact about 3-4 homes during your lifetime, the extra premium payoffs +, if lucky, any equity added in the homes increasing value, wind up countering that with a pretty low margin of risk.
 
Shalimar said:
already on it.



oh.. and dang it if we weren't debt free. however, the wife, while I was doing my BB stint saw fit to run up about 5K in debt. :case:

we had a bunch saved (over 10K) and then that cr*ckhead hit our car costing us thousands.. and then we decided to buy another for cash.. about 5 or 6K. THEN, it broke down a few times.. cost about 1K to get it fixed (my 4500$ car purchase ended up costing about 7).

so..

AMEX rollover bill
Best Buy ("but I had to have the computer to watch you on tV")
got about 3K left on my truck, WHICH btw, seems forever damaged by the accident that also cost us the other car.

that being said, we're probably less than 10K from being totally debt free cept for the mortgage. IF we can stop spending so much.
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I'll bet Janice could make some staggering sums with a web cam ;) :lol:

I keeeeed I keeeeeed!

Maybe should could get Jackie to do it, while she pockets a 'management fee'
 
Duke said:
I could see this if the thought was that this house in particular was the last one. But if it's early on, then assume the home will be sold down the line. That extra money going into the premium early = more equity in the house to roll over into a new property. Assuming you will transact about 3-4 homes during your lifetime, the extra premium payoffs +, if lucky, any equity added in the homes increasing value, wind up countering that with a pretty low margin of risk.
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Over the long haul, the stock market out performs real estate over any rolling period since the Great Depression...
 
fly said:
Over the long haul, the stock market out performs real estate over any rolling period since the Great Depression...
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Oh, I agree. And for the higher risk/reward investments, it's def a good path. But using a property as a foundation, if you will; a solid, low risk asset that appreciates over time, and never taking out the equity in loans while using other income for the riskier ventures is a good tenant to follow.

Wisely, which I am not currently, you should do both, toss a little extra a month at the premium, while your primary investment income goes into higher risk/yield investments.

Until I get the time to really focus on the stock market and learn it, my investments will remain vanilla in that arena. I'd love to have the time to do a bit more trading. I'm decent in spotting trends.
 
Duke said:
Oh, I agree. And for the higher risk/reward investments, it's def a good path. But using a property as a foundation, if you will; a solid, low risk asset that appreciates over time, and never taking out the equity in loans while using other income for the riskier ventures is a good tenant to follow.

Wisely, which I am not currently, you should do both, toss a little extra a month at the premium, while your primary investment income goes into higher risk/yield investments.

Until I get the time to really focus on the stock market and learn it, my investments will remain vanilla in that arena. I'd love to have the time to do a bit more trading. I'm decent in spotting trends.
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Long term investing isn't high risk nor is home ownership low risk. :fly: And investing heavily in real estate (which is what paying off your mortgage is) is putting all your eggs in one basket. God forbid the price go down, like... now.

And stop thinking you can beat the market. It's a common mistake and ALWAYS costly.
 
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