So in order to follow through with my recent discoveries of freedom and the libertarian mindset I have decided I need to eliminate all debt, Pay for things only when I have money in hand to pay for them, save and invest so I am financially free as well as spiritually and intellectually.
I’m looking at approx 2 years to get out of all debt except my house. CC, Student loans, Car Payments, furniture loan, etc… This is assuming neither my wife or I experience any increase in pay, which she just got a transfer at work and I’m assuming that the increased responsibility will come with a pay raise and she is also in a position where she can pick up overtime hours.
I have listened to Dave Ramsey for a couple times on internet radio and read through his website. The plan sounds cool and there are a lot of people who call into his show every day and post success stories on his website. People who followed his plan who have climbed out of debt, paid off thier home in thier 30’s, Amassed a retirement fund of 200,000 in thier 40’s etc…
Any one else follow Dave? If you don’t and you want to get yourself out of debt and have the physical freedom to go along with your intellectual and spiritual freedom, give him a look. I’m excited to tell you the truth.
Dave has a good, solid, common sense program. It is nothing fancy, just the kinds of things our grandparents used to live by.
I used to go to church with Dave. That is where he actually started his program, after climbing his way up out of a second bankruptcy. He was big into real estate in the eighties, got overextended, and when the economy slowed he got slammed.
I think it is an excellent idea. Get his books (easy to find on Amazon) and follow the program. If your wife is on board, you will do great. If not, you’re screwed.
[quote]JEATON wrote:
Dave has a good, solid, common sense program. It is nothing fancy, just the kinds of things our grandparents used to live by.
I used to go to church with Dave. That is where he actually started his program, after climbing his way up out of a second bankruptcy. He was big into real estate in the eighties, got overextended, and when the economy slowed he got slammed.
I think it is an excellent idea. Get his books (easy to find on Amazon) and follow the program. If your wife is on board, you will do great. If not, you’re screwed. [/quote]
She is on board, though she is not as rabid as I am. I am ready to turn the heat down to 55, cancel the cable and internet, eat beans & rice, etc… But, we pay off around $800 in debt per month, so if we just stop adding to it, we will do very good. I still wouldn’t mind cutting some areas back and throwing $1000 per month at it. We will see what we can do.
The good news is we bought a house and got married last year. That is where a lot of our debt came from, and now there are no more “big reasons” to continue further into debt. We are getting the $1000 aside and then cutting the cards up.
Anyway, I am no expert on all things Ramsey but as far as I remember from previous discussions he is the AA of debt managament, i.e. you dont make any debts.
However, total abstinence seems a bit strange to me when it comes to a tool that can be quite useful.
You just have to know what you are doing and “just say no” does not lead to a responsible way of dealing with debt.
I think his principles are sound and make sense, and more importantly, they do not seem like a gimmick. My parents never taught me about money management, and in my early 20’s I accumulated some debt I didn’t like. Dave’s ideas work IMO, and I applaud you for wanting to end your debt.
Anyway, I am no expert on all things Ramsey but as far as I remember from previous discussions he is the AA of debt managament, i.e. you dont make any debts.
However, total abstinence seems a bit strange to me when it comes to a tool that can be quite useful.
You just have to know what you are doing and “just say no” does not lead to a responsible way of dealing with debt.
[/quote]
Curious, when would you consider debt a good tool. I guess that worthwhile student loans and a smart mortgage may be considered good debt, but consumer product debt seem pretty wasteful to me.
Dave Ramsey sells books and advice that my dad has told me since I was born. Only I had to pay for the advice and live it before I actually understood it. I too am getting out of debt. T-minus 11 months.
I do have a zero interest furniture loan for like 5,000. Thats not too bad, it’s over 4 years too. I’ll pay that off last. The only potential downside to something like that is if you miss a payment or don’t pay it off in the 4 years then the interest is charged back to the beginning. And thats like 24%. SOooooooo, I’m not missing a payment and will have it paid off a few months ahead of time MINIMUM.
Anyways, All of that other stuff is well and dandy, but it doesn’t apply to someone who is already elbow deep in debt or higher. I am, and need to get out. Now is not the time for me to contemplate when it’s good or when it’s bad, I just need out.
Anyway, I am no expert on all things Ramsey but as far as I remember from previous discussions he is the AA of debt managament, i.e. you dont make any debts.
However, total abstinence seems a bit strange to me when it comes to a tool that can be quite useful.
You just have to know what you are doing and “just say no” does not lead to a responsible way of dealing with debt.
[/quote]
Curious, when would you consider debt a good tool. I guess that worthwhile student loans and a smart mortgage may be considered good debt, but consumer product debt seem pretty wasteful to me.
[/quote]
[As long as you are diligent in paying them off]:
Many good credit cards have cash back. So for things you would be buying anyway, such as gas and groceries, you can get something like 5% of your money back on that. Like a perpetual 5% coupon.
Also, lets say you put something big for $2000 on a 0% credit card for 2 years and put $2000 cash into some CD or savings account earning even just shit interest. So long as you don’t miss a payment… you’ll be out ahead and used “evil” credit.
Don’t fuck with it if you think you’ll forget you have to pay it back though.
^
I use a credit card with a “rewards” system. I pay it off every month and collect rewards points periodically. This is especially useful for travel.
One other aspect about using a CC for monthly expenses I like is the fact that I can use their online tools to help budget expenses by tracking historical spending data – this really helped me realize I had a happy hour drinking habit that I needed to curtail to save money. I was spending $400/month just at the bar around the corner from my house.
Dave Ramsey is good stuff from what I saw (keep in mind I am still learning the basics of economics through reading, but it seemed like common sense stuff that no one does anymore). My old Econ teacher at WP showed us a video of him and I took notes and all this shit… of course I lost them. Anyways, this thread was a good reminder, because the earlier you start the better.
About credit cards: my Econ teacher told us he only paid with credit cards if: 1) the product he was buying cost a large sum of money, and 2) online orders in case he needed to return things/get his money back.
Oh yeah… is it still a good idea to invest in mutual funds (i.e. Vanguard)? I was thinking about investing $3,000 in the more risky/more reward markets. However there can be wide fluctuations in the market, and it is not like I have a lot of money saved up in the first place, so (with the help of Vanguard) I was thinking 80% stocks, 20% bonds? I’m not sure if I want to hit the int’l market or not. I’d be investing for retirement (i.e. 30+ years).
I know I’m going a bit off-topic here but again, my econ teacher told me to look for this kind of stuff with mutual funds: inception date, average returns, who owns it (and how long he has owned it), and just checking the latest news/reviews. Do any of you have any opinions that could help me out? Is it even worth investing anymore if there could be a crash again soon due to Obama’s huge amount of spending?
[quote]Vegita wrote:
I do have a zero interest furniture loan for like 5,000. Thats not too bad, it’s over 4 years too. I’ll pay that off last. The only potential downside to something like that is if you miss a payment or don’t pay it off in the 4 years then the interest is charged back to the beginning. And thats like 24%. SOooooooo, I’m not missing a payment and will have it paid off a few months ahead of time MINIMUM.
Anyways, All of that other stuff is well and dandy, but it doesn’t apply to someone who is already elbow deep in debt or higher. I am, and need to get out. Now is not the time for me to contemplate when it’s good or when it’s bad, I just need out.
V[/quote]
Good debt is only good if it makes you passive income off of it while paying off the debt itself.
I was in some serious debt (to some people 50,000) however, what they mean by good debt is something that pays you and you do not have to work to pay it off. When I inherited my land (part of what I own). I was advised by some people to sell part of that land to pay off my other debt. I asked “What for” (points if you know who that is from).
Instead I accumulated more debt, which after it was rumoured I borrowed 200,000 dollars through my small town, then I had these “financial planners” be outraged for/at me. However, what they did not know is that I used it to buy more land, and in a year and a half had paid off the 50,000 thousand (with lots of side spending) without laying a finger on the land. That is good debt.
All debt is bad debt. I know what you;re saying that some debt is good debt. I kinda feel like that too. Debt to me is like Pain. Good Debt is like Good pain. But even good pain in time becomes just “pain” and you will want it to go away asap.
Everyone should have good money management and pay for things they can afford in cash. All other forms of payment have to be managed and used only when necessary. It’s like a drug habit that has to be kept under control. The temptation is always there.
Personally i feel that if someone is thinking about it, they should take the plunge and become self employed. Nothing is more rewarding then being free. Even if it means you have to make less. There is something intangible to it. You become more of yourself and in time realize how far you can be from your true self when your entire life is commanded and dependent on other people deciding about you. Writing your reviews, deciding raises etc… It’s all so dehumanizing to me.
America now more then ever in recent history needs people to have the confidence and be a real American. Start a business. You’ll never look back, oh and always be positive
