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Sound Off - 100% Debt Free

No personal debt, although I’m self employed and have business debt, hopefully that’s taken care of in the next 6 or 7 years, Doing double truck payments.
 
Still have 11 months left on the wife's car at 2.5% interest. Then I have around 24K left on an SBA disaster loan. I didn't actually need the money from that loan but at 0.8% interest on a 30-year loan, I figured it would be a good idea to have the extra cash on hand. Otherwise, debt free.

I Got to know my SIL's father, who is a multimillionaire, and he has convinced me that debt is not always a bad thing and when used and managed correctly it is a great tool for generating wealth. But I'm still kind of stuck in the mindset that debt is bad. My dad drilled that into me pretty deep, I guess.
 
I’m 34. Never been negative on net worth, but lived damn poor for a while. No student loans. Paid off second vehicle 4 years ago. Renting an apartment, no home, no mortgage. That probably will change soon, but I don’t know where I need to buy, or if I’ll have to quit this really good paying gig to follow the woman back to the mountains.
 
I Got to know my SIL's father, who is a multimillionaire, and he has convinced me that debt is not always a bad thing and when used and managed correctly it is a great tool for generating wealth. But I'm still kind of stuck in the mindset that debt is bad. My dad drilled that into me pretty deep, I guess.
There is truth to that. I would rather owe a million dollars on a 5-million-dollar asset than have a half million-dollar asset paid for. I have been debt free several times in my life and don't really see the point. If I have a regret in life, it is not using borrowed money more aggressively when I was younger.
 
Retired earlier than we first anticipated, but the key was when younger and working at more than one job, we decided to make double mortgage payments and continue to pay off any credit cards monthly. It allowed early retirement which provides much greater freedom to volunteer, spoil grandkids, hunt, garden, and whatever suits us.
 
Still have 11 months left on the wife's car at 2.5% interest. Then I have around 24K left on an SBA disaster loan. I didn't actually need the money from that loan but at 0.8% interest on a 30-year loan, I figured it would be a good idea to have the extra cash on hand. Otherwise, debt free.

I Got to know my SIL's father, who is a multimillionaire, and he has convinced me that debt is not always a bad thing and when used and managed correctly it is a great tool for generating wealth. But I'm still kind of stuck in the mindset that debt is bad. My dad drilled that into me pretty deep, I guess.
I was raised the same as you, and there were times if we hadn't owned our small ranch we would have been on the streets.

Having said that, money market at 5 1/4%+ is pretty easy to find right now, so paying off 2.5% would be a net loss.

And yes, using debt to generate wealth, e.g. contractors borrowing is a real thing if you know what you're doing. Mine his wisdom.
 
It's crazy but with the increasing interest rates there seems to have been an uptick in the low or zero interest rate gimmicks.

I couldn't resist and picked up a credit card from Fidelity with 0% interest for 15 months. Take the same amount that would pay it off monthly into my Fidelity money market fund earning 4.99% right now. In 15 months I'll have earned close to $2,000 in interest income on the money sitting there and paid zero interest expense on the credit card.

I paid cash for my last 2 vehicles but right before interest rates jumped up I took out title loans on them with the local credit union at 1.9% and 2.4% (One vehicle was a year older so didn't get as good of a rate for it). Same thing, take that money and sit it in the money market account and am making money by taking out debt. That is going to make even more money as at one point I had some of that money in the inflation based treasury notes that was earning 9.62% for 6 months.

Both of those things take discipline. You can't take out a zero percent credit card and max it out on crap and not have a plan to pay it off when it comes due.

With the way interest rates are right now, from a pure numbers perspective you might be able to earn more on your money in a very safe place than the rates on some of your older loans would cost. To me it wouldn't make sense to pay off a 4% mortgage any earlier than I had to because I can make more than that safely investing it instead.

I'm not debt free, but my debt is less than 5% of my assets and I know that at any time that I actually needed to, I could pay off the debt (including my mortgage) by writing a check (or making an electronic transfer).
 
With the way interest rates are right now, from a pure numbers perspective you might be able to earn more on your money in a very safe place than the rates on some of your older loans would cost. To me it wouldn't make sense to pay off a 4% mortgage any earlier than I had to because I can make more than that safely investing it instead.

yeah, our mortgage is 3.5% and i'm not paying a dime extra on the payment at that rate. we have a large enough emergency fund and savings to be investing about half of our cash and the money market, as you said, is currently basically 5%. i'd rather all extra cash beyond the necessary liquid savings go either in the market for a min 5 year sit, or hang out in the money market fund.
 
yeah, our mortgage is 3.5% and i'm not paying a dime extra on the payment at that rate. we have a large enough emergency fund and savings to be investing about half of our cash and the money market, as you said, is currently basically 5%. i'd rather all extra cash beyond the necessary liquid savings go either in the market for a min 5 year sit, or hang out in the money market fund.
Enjoying a sub 3% mortgage and investing anything that would have been used to pay it off early in 5%+ Tbills.
 
Credit cards these days are great. I use mine all the time because they give me cash back when I do. I pay the balance every month with no interest, so it is a small but steady income.
 
I generally agree its great to be debt free, but there are some exceptions. My current mortgage is 1.99%, which for a few years was basically free money. I pay off credit card in total monthly, have no car payments. Borrowing at low interest rates can be tax advantage, meaning the borrowed money is not taxed as income. But, many people have stupid debt.
 
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