Paying off debt

P49Y-CY

fomocomofo
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Nice job.
We're currently on baby steps 4/5/6.

Just re-fied our house down to a 2.25% 15 year fixed (hope to be paid off in 10), 15% going into retirement and a healthy 6 month emergency fund. We're about $50K from being EDM's.

Life is good...

What is an EDM?
 

derklug

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I hope more young people get it. My son is in banking and tells horror stories of people of all ages who are maxed out on everything and don't hesitate to spend more every time they get more credit. His only debt is his house and he makes double payments on that.
 

*Jay*

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What is an EDM?
Every Day Millionaires I believe. Wife and I have a ways to go for that but aside from our mortgage and my Raptor we are debt free. Deciding on how fast I want to pay both off but possible private school for the kiddo keeps throwing me off, just need to sit down and do the math already
 

nickf2005

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I had not really heard this term so I did some digging and calculations.

I think we just squeak by. The equity in our home (thanks to rising home values and my wife's tenacious mortgage payment plan) is big, as well as our retirement savings.

As someone said above, we need to focus on savings as well, to build liquid assets and ability to make big-ticket purchases without financing. The wife's Edge is nearing its end of life I have to imagine. 2010 with 176k+ miles.

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ford fanatic

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Every Day Millionaires I believe. Wife and I have a ways to go for that but aside from our mortgage and my Raptor we are debt free. Deciding on how fast I want to pay both off but possible private school for the kiddo keeps throwing me off, just need to sit down and do the math already

That's correct. We're so close, depending on how the market does for that day we go just a hair over. -$50K was just a conservative number...
 

Relaxed Chaos

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Paying off high interest debt is absolutely the right thing to do. Get outta that shit.

Consider that if your mortgage interest rate is low, it's likely you will make A LOT more money investing any extra money you have available in 5-15% long term investments compared to paying off a 3% interest loan faster.

Do the math. Pay off and invest based on the math.

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nxhappy

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cars are a killer man. and really, NO ONE needs a brand new car. Honestly the older shit is more reliable anyway. my buddy bought a brand new jeep, $60k after all said and done. Payment about $700 a month. When people do this shit I think why in gods name did you do that? Most cars depreciate FAST in value. If you "need" a newer car, but something 5 or 6 years old. that way you aren't taking the depreciation. $700 on a car loan is pretty crazy considering most mortgages are 1200 to 2000.

That being said my adivse to YOU op.....open open a roth IRA or stock account, if you have not already. Use that extra money and dump it in those accounts. for roth the max is 6000 per year. Stock account or 401 there is no limit. Stick with large cap stocks AKA apple, microsoft, amazon, google, walmart, google...the companies making billions. Also stick with s&p500 companies and index.
 

MG0h3

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cars are a killer man. and really, NO ONE needs a brand new car. Honestly the older shit is more reliable anyway. my buddy bought a brand new jeep, $60k after all said and done. Payment about $700 a month. When people do this shit I think why in gods name did you do that? Most cars depreciate FAST in value. If you "need" a newer car, but something 5 or 6 years old. that way you aren't taking the depreciation. $700 on a car loan is pretty crazy considering most mortgages are 1200 to 2000.

That being said my adivse to YOU op.....open open a roth IRA or stock account, if you have not already. Use that extra money and dump it in those accounts. for roth the max is 6000 per year. Stock account or 401 there is no limit. Stick with large cap stocks AKA apple, microsoft, amazon, google, walmart, google...the companies making billions. Also stick with s&p500 companies and index.

Halfway considering taking the equity out of my house and investing it, but that’s risky too.

I’m seriously concerned that we’ll have a major economic slowdown once we stop adding 30% to the deficit in bailouts.


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72MachOne99GT

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I need someone with a real investment background to smack some sense into my wife.

For years now I’ve tried telling her, “Everyone, everywhere, says to max a roth every year. I don’t know why, but 10/10 can’t be wrong.”

and she just won’t listen.

partially my fault because im afraid to bite the bullet and do my own investing.
 

MG0h3

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I need someone with a real investment background to smack some sense into my wife.

For years now I’ve tried telling her, “Everyone, everywhere, says to max a roth every year. I don’t know why, but 10/10 can’t be wrong.”

and she just won’t listen.

partially my fault because im afraid to bite the bullet and do my own investing.

I’d start with opening an account.

Some banks partner with stock brokerages.

Some people play with single stocks for income, but typically either grab a fund or ETF based on the DOW or S&P for a retirement fund. Being diversified is also good, so you can look at dividend stocks.

The market is wanky right now.

Can move 2-3% in a couple days based on something POTUS says.


“BLM is doing God’s work”
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ford fanatic

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I need someone with a real investment background to smack some sense into my wife.

For years now I’ve tried telling her, “Everyone, everywhere, says to max a roth every year. I don’t know why, but 10/10 can’t be wrong.”

and she just won’t listen.

partially my fault because im afraid to bite the bullet and do my own investing.

You and your wife need to hire an investment advisor...
 

wundrbird

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I need someone with a real investment background to smack some sense into my wife.

For years now I’ve tried telling her, “Everyone, everywhere, says to max a roth every year. I don’t know why, but 10/10 can’t be wrong.”

and she just won’t listen.

partially my fault because im afraid to bite the bullet and do my own investing.

If you're already putting money in a 401(k), here's the logic:

You invest $500/month for 30 years in a 401(k). Your 30 year total investment will be $180k out of pocket, and you'll have a total of roughly $1.1mil after 30 years at 10%. With a 401(k) you don't pay taxes on the $180k when it's originally invested, but you'll pay taxes on all $1.1 million as you take disbursements.

You invest the same in a Roth each month for 30 years. You don't get the initial tax break on the $180k, but all $1.1 million (principle AND interest) is tax-free when taking disbursements.
 

72MachOne99GT

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If you're already putting money in a 401(k), here's the logic:

You invest $500/month for 30 years in a 401(k). Your 30 year total investment will be $180k out of pocket, and you'll have a total of roughly $1.1mil after 30 years at 10%. With a 401(k) you don't pay taxes on the $180k when it's originally invested, but you'll pay taxes on all $1.1 million as you take disbursements.

You invest the same in a Roth each month for 30 years. You don't get the initial tax break on the $180k, but all $1.1 million (principle AND interest) is tax-free when taking disbursements.

I should have clarified that I understand the actual structural differences between roth accounts and pre-tax saving.

It’s the actual investing part I’m clueless about.

As someone said, I need to tell her we’re hiring an advisor and just start chucking money into a roth account and forget about it.
 

Silver Talon

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Great job OP and everyone else!

I'd say i'm in a transitional period in my life? I'm 36, going on 21 some days. lol.

I inherited a commercial property and a house from my father 3 years ago. Owe 100k on the commercial property, which is kinda barely keeping itself paid with the rental diesel shop in it currently, but at least not costing me anything. The house I owe 24k on, is in the middle of needing probably 75k worth of renovations, that I've been paying for out of pocket so far (probably 10k into it). Ill have 30-40k equity in it when I'm done, depending on how crazy I go with renovations. I'm living in my sisters apartment build/home now playing landlord here while the house gets tinkered on in spare time and when contractors get slow and want something to do.

Finally in the income bracket i've been striving for. Got back into a dealership, and should crest 200k this year. Hopefully with covid it maintains that level going forward. I spend waaaaaaaay too much on cars. Like way too much. I dont drink at all, do drugs, party, nothing. I eat out for lunches at work, cook when I get home, and dont spend much on much else. My 2 teenage daughters are an expense, but honestly I'm pretty lucky that they arent much for spenders. Normal school expenses and what not for them (both in highschool), and my oldest is going to be driving soon. We bought a wrecked supercharged H2 hummer that we are rebuilding together for her first car. Ill have 10k in that fixed and driving. I paid cash for it and the repairs, and shes going to pay for gas (which will be a lot!).

My vehicles is where i'm bleeding cash. My old f150 needed to be replaced last fall, and I owed a ton on it, and needed to buy a bigger plow to fit on the 2500 I bought that will do what I need it to do. Thats a cool 1485 a month going out on that, but it will be paid off in another 4.5 years. My personal supercharged H2 I borrowed money on, cause I stumbled across it right after I bought the first one, and didnt want to empty the savings to snag it. The deal was too good, and I'll make 6 or 7k on it when I'm ready to move it. Thats 450 a month for 3 years. Bought a 3/4 done twin turbo coyote setup in an 82 GT that I couldnt say no to. Thats 15k cash gone. 3k on a 87 Jaguar XJS V12 convertible that will make me money when I get bored with it. I've put probably 8k into my 68 Thunderbird this year. Clutch in the white shelby for 2k. Parts for the black burned shelby have been coming in.

I have sold a few vehicles and unused toys, and those have paid down and cleaned up a bunch of little stuff. New zero turn I needed last year is almost paid off. Bought 5k worth of new furniture last year, got under 400 left on that. Paid off a 10k personal loan. Closed all but one credit card off, which only has about 800 on it floating around. Got about 5 months of bills saved and in the bank, and If I dont get car dreams running me over, I put a pretty good chunk into my savings account. I just get itchy cause i work so much, and feel the need to treat myself and do car things. Maxing my 401k contriutions too. Got almost 20k into it this year.

I'm in a good position to start making good progress. I just need to find a way to calm the car spending some.
 

black4vcobra

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Sounds like a lot of you have made some good financial decision.

My wife (34) and I (36) are in pretty good shape too, no debt besides the mortgage at 3%, solid balances in 401ks and both of us are fairly frugal.

The worst is f'ing daycare, $13k a year. Still have almost 3 more years of that with our son and hopefully childcare costs will go WAY down after that.
 

*Jay*

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The only good part of our kiddo going to daycare is that it will take most of the sting away if/when we start private school. Its not like our public school district is one of the top in the state or anything, how does that ranking change when schools arent in person anymore???
 

wundrbird

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I should have clarified that I understand the actual structural differences between roth accounts and pre-tax saving.

It’s the actual investing part I’m clueless about.

As someone said, I need to tell her we’re hiring an advisor and just start chucking money into a roth account and forget about it.
Sorry about that! I should've known better.

I remember when our company started offering Vanguard about 7 years ago. Everyone was signed up automatically. You had to go to HR to sign OUT of it. One guy said it was going to take away from his hot rod and lottery ticket funds, so he opted out. Doh!

OP - great job! It's tough to get started, especially when the toys are calling. The wife and I only have a few grand on a credit card to pay off. Student loans and car notes are GONE! We're in the process of refinancing the house. It's currently a 30-year at 4.5% with 23 years left to pay. Refi will be 2.5% @ 15 years. $20 extra a month! We always pay extra, so at least it'll be paid off before I retire. :)
 

supercharged91m

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Great thread right here. Lots of solid points here like do you really need that etc. Brown bag it to work cook at home all things the old timers told me 2 do in the business im in. Idc that my car is 22 years old with some cancer on it either its gets me from A 2 B
 

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