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aSK anything: 5.0: Designated Steve-vivor


Heimdallr

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12 hours ago, Cearbhall said:

I really encourage anyone that still has to work for a paycheck, especially if they don't love their job, to work hard towards financial independence to buy freedom. It is the best purchase you will ever make. Even if you love your job it is important as things can -- and likely will -- change. All it takes is a change in who the boss is and a job you love can become something that you dread.

A strategy that I can suggest: First, learn a valuable skill and get a high paying job. For me it was a job with a big software company out of college. I didn't love the job but it paid quite nicely. I stuck with it too long. I wish I realized earlier that the goal of this job was not to earn money to spend going out on weekends and restaurants all the time. Don't spend all the money you make. The higher percentage you save the sooner you'll be free to find employment doing what you like without respect for earnings rather than being forced to work for the money. 

If you still need to work for someone else to pay your necessary bills you are basically an indentured servant. When you leave college, don't inflate your spending to your new salary. If you are like me you were very happy with your level of spending in college. If you are really hardcore keep your spending exactly as it was through college. For sure when you get new jobs, raises, promotions and such invest at least half of your additional take home pay. Live on half of your take home pay and you'll easily be free to do whatever you want after 20 years of the grind. If that sounds like too much, and it does to me now although I took that long, save a higher percentage. You can be done with mandatory work in just a decade of your life if you can get to a 70% savings rate. Take tips from The Richest Man in Babylon.

If even 10 years of grinding sounds like too much, and after being through the grind I can see a strong argument that it is, take tips from The Mexican fisherman

Work income being mandatory for your survival is an unfortunate place to be in life IMO. It is a shame to waste your life energy doing things that you don't really want to be doing. As you get older you'll realize that time is a most valuable resource and you can't really buy more of it with money. Health is the other key factor. Eat well, exercise, take care of yourself and hope for the best.

Good luck!

Unfortunately, we were not smart enough and didn't have access to all the information that they have today when I was in college.  Certainly, if I could do it over, I would, but I can only go from here forward...which means doing it the Dave Ramsey-lite way of doing it (he is smart about finances, but is a jackass about everything else...I'm not sure I could even have a beer with the guy) by paying down our debt completely.  We should be down to just the house and student loans in a couple of years.  

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6 minutes ago, vike daddy said:

how are you guys, particularly the yutes, doing with debt?

the only debt i have (proud to say) is on two house mortgages, and one i owe so little on i could pay off easily.

Not too bad actually at this point. A mortgage and wife has a few student loans left, but we're going to have paid off the new windows we put into our house before the baby.

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32 minutes ago, vike daddy said:

how are you guys, particularly the yutes, doing with debt?

the only debt i have (proud to say) is on two house mortgages, and one i owe so little on i could pay off easily.

I have 40k in debt due to student loans. 180k for my home mortgage. 25k on my Camaro. 5k in credit card bills,

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32 minutes ago, vike daddy said:

how are you guys, particularly the yutes, doing with debt?

the only debt i have (proud to say) is on two house mortgages, and one i owe so little on i could pay off easily.

I'll be 29 in September and I have a student loan, a mortgage, and a car loan.

Car should be paid off in a year, if not sooner, at which point I might consider getting a different vehicle.

Student loan hopefully in 10 years. I recently refinanced and have begun to make extra payments on the principal balance.

Bought my house in 2016 so I've got some time on that one. Although I'm pretty sure I'll be out of that house before it's paid off.

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1 hour ago, vike daddy said:

how are you guys, particularly the yutes, doing with debt?

the only debt i have (proud to say) is on two house mortgages, and one i owe so little on i could pay off easily.

45k for me personally, another 60k if we include my wife. 

I owe about 10k in student loans, 10k in credit card debt (play stupid games, win stupid prizes), and then another 25k on a personal loan. 

Nearly all of my wife’s sum in student loan dept. 

 

Still paying for mistakes made 10 years ago, and it’s totally impacting our ability to buy a home. 

Right now my rock and hard place is the decision to go back to school. I’m currently making decent money, but going back to school would easily double that income. However, it would also increase my debt ~45k over the next 3-4 years. Also, what the hell do I go back to school for!?

Edited by SemperFeist
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3 hours ago, vike daddy said:

how are you guys, particularly the yutes, doing with debt?

Not a yute but I'll share what I did in case it helps any of the yutes around here learn something from it. 

Debt is the single most dangerous obstacle to building wealth. I have always had a natural dislike for debt. This is true to a fault. On one hand, paying off my ~$18k college debt (college was much cheaper back then) as quickly as possible was about the only thing that I did right in my first couple years out of college. On the other hand, I forfeited a lot of opportunity cost by paying off my cheap 15 year mortgage in less than half the term. Mathematically, I should have held onto that cheap debt and invested the the money I used to quickly pay it off. It would have been most financially beneficial to invest that money into an asset that generated more than the cost of the cheap mortgage.

I have been debt free for ~10 years -- we've been in a raging bull the whole time since -- by now and consequently left full time employment well before the government defined retirement age.  In the end, I am happy with my decision to eliminate debt quickly and the security it brought even while knowing that the most financially savvy move would have been to invest that money. I'm simply not that advanced.

Decisions should not be made based entirely on what gives the largest financial advantage. Just make sure that when you spend money you realize how much you are spending, what that costs you in your situation, and whether you are getting out of it enough to justify the cost. If your lifestyle matches -- or god forbid exceeds -- your income you are no more than a gilded slave. Don't sell your freedom for fleeting things and conveniences for which billions of advertising dollars are spent trying to make you believe you need. Trying to make you believe that the cost is something other than your very freedom.

I have made lots of financial mistakes, being as aggressive as I was in eliminating debt is just a small such mistake; it doesn't matter too much as long as you are able to maintain a habit of spending much less than you make. Far and away the most important thing is getting in the habit of investing a percentage of your work income.

Edited by Cearbhall
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In my capacity as a chaplain educator, I have worked with Millennials who have both undergraduate and graduate level education debt to the tune of $100,000!  That kind of debt at 29, 30 years old just blows my mind.  Those of you in this community who don't see an end to paying off debt...man...I feel for you.  Hard to get your legs under you in life when you owe more than you earn.

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2 hours ago, Virginia Viking said:

In my capacity as a chaplain educator, I have worked with Millennials who have both undergraduate and graduate level education debt to the tune of $100,000!  That kind of debt at 29, 30 years old just blows my mind.  Those of you in this community who don't see an end to paying off debt...man...I feel for you.  Hard to get your legs under you in life when you owe more than you earn.

Student debt is going to be the next big bubble to burst. 

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11 hours ago, vike daddy said:

how are you guys, particularly the yutes, doing with debt?

the only debt i have (proud to say) is on two house mortgages, and one i owe so little on i could pay off easily.

Just took out a loan for the shop I built. First loan since high school. Got laughed at because it was just a simple cash loan to buy a car. 

 

To many people rent in the world now and it is a great thing 

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16 minutes ago, Virginia Viking said:

Those of you in this community who don't see an end to paying off debt...man...I feel for you.  Hard to get your legs under you in life when you owe more than you earn.

So true! The ethics of encouraging 18 year old kids to start taking out huge student loans is questionable IMO. After high school I went to college because it seemed to be the default option. Nobody encouraged me to think through the ramifications of taking on the debt and whether it would be worth it. The system makes it really easy for kids that have been taught zero financial skills in the school system to make decisions that will be a drag on them for a good chunk of their lives.

I am just happy that after a couple years working towards a math major I stumbled into something that led to a job that pays well. If I continued to get only a math major I might have been trying to pay back student loans with a much lower paying job. 

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11 hours ago, vike daddy said:

how are you guys, particularly the yutes, doing with debt?

the only debt i have (proud to say) is on two house mortgages, and one i owe so little on i could pay off easily.

All paid off until I buy a home. I guess I have a couple hundred on my credit card at any given moment but I pay it off with every paycheck. 

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50 minutes ago, Cearbhall said:

The system makes it really easy for kids that have been taught zero financial skills in the school system to make decisions that will be a drag on them for a good chunk of their lives.

The system preys on them. 

Walk around a campus at the start of each semester, and at the end, and you’ll find lenders and credit card companies all over the place trying to sell kids to take on more debt, either by loan or credit. 

My 2nd year in school, coming back for the spring semester, I had someone aggressively try to get me to sign up for a $5,000 student loan. When I told him that I didn’t need it because my parents were helping me, he started saying that I could use it for other things. I didn’t need to use it for school. Went so far as to try and get me to use it for a “unbelievable spring break”. How many 18-22 year olds fell for something like that?

Edited by SemperFeist
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One of the things that sticks with me from college is kids who would take out a bigger loan than they needed, just so they would get a bigger overage check to waste on beer and spring break trips.

I wonder if any of them regret that. Any overages I got went right back to my student bill. I did get a bit lucky when it came to other financial assistance and cutting down some of my college expenses, but I'm just glad I was able to graduate with no student debt. And I was on the 6-year plan! (don't ask lol)

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