Im just a student right now but im in a similar amount of debt, and i dont really have any huge tips but i find little tricks help.
-never eat out
-buy meat at a butcher/bulk
-eat only cheap healthy shit (theres no tax on “real” food
-wear your jeans 4 times or more, wear your shirts twice (once layered)
-if you pay utilities, turn off all the lights, take fast showers, etc
-i get a bus pass included in my tuition, but in the summer i just rollerbladed/biked to class
-no credit cards
-if you have extra space where you live, sublet
-stop bulking = less food to eat
-dont use your cellphone, switch to a cheap voip ~ 15$ a month
-get cheaper slower internet
-when i do my laundry i cram two loads of wash into one dryer, or even better just hang shit up
-meticulously try and squeeze every penny out of your tax returns
-if you have a car, do all the maintenance and repairs yourself (saves TONS of money)
-no more tv- go to the damn library instead
-food bank
all this is stuff i do, i know it wont all apply but i literally have my expenses down to TOTAL minimum. it takes a while to get used to but once you are, i find myself easier to please and happier because im so low maintenance.
also i get kind of a happy zen feeling knowing that i have very little in the way of ties to society, kind of a minimalist thing.
You can’t just look at paying off a 7% mortgage as equivalent to a guaranteed return of 7% in an investment. You are disregarding the tax-deductions on the interest paid on the mortgage which will take your breakeven return even lower to a level that you should be able to earn in the market, provided you invest wisely. I am a firm believer in carrying a traditional, fixed-rate mortgage precisely for that reason, even if you can pay it off.
[quote]dollarbill44 wrote:
You can’t just look at paying off a 7% mortgage as equivalent to a guaranteed return of 7% in an investment. You are disregarding the tax-deductions on the interest paid on the mortgage which will take your breakeven return even lower to a level that you should be able to earn in the market, provided you invest wisely. I am a firm believer in carrying a traditional, fixed-rate mortgage precisely for that reason, even if you can pay it off.
DB[/quote]
I agree with you except I like adjustable loans. If you’re financially secure enough to afford a traditional interest rate on a loan, you may as well take the lower rate of the adjustable loan. I think adjustable are only a bad idea for those who require them to afford the house.
When we got our house I crunched the numbers on a traditional at 6.1 (i think) verses an adjustable at 3.75, which would start adjusting after 7 years. With the worse case scenario it was something like eleven years before we would pay out as much as with the fixed rate. Who knows if we’ll be in the house after 11 years and whose to say the interest rate hikes would be worse case? I took the 3.75 and I’m glad I did.
Looks like things have changed regarding home loans. I just checked the rates at the credit union where we got our home loan. I’d take the fixed with these new numbers. Even a 1 year adjustable is not significantly lower than the fixed at 6%.
Edit: I just tried to paste the rates off their rate board but it came out really screwy. 30yr fixed was 6%, 7/1 something like 5.85 and 1/1 something like 5.15.
Some good advice on here IMO. Debt is indeed slavery. One thing I would add is, you are young. Put everything you can into a 401k too at work. At least up to the match point of the company. I’ve decided to invest in emerging markets especially China right now. I read a piece about the demographics and birthrates of various nations. I think its here on T-Nation someplace. Japan and Europe seem to be declining while China is “gearing up” economy wise. Again, just my opinion. Good luck to you sir.
[quote]btm62 wrote:
Some good advice on here IMO. Debt is indeed slavery. One thing I would add is, you are young. Put everything you can into a 401k too at work. At least up to the match point of the company. I’ve decided to invest in emerging markets especially China right now. I read a piece about the demographics and birthrates of various nations. I think its here on T-Nation someplace. Japan and Europe seem to be declining while China is “gearing up” economy wise. Again, just my opinion. Good luck to you sir.[/quote]
China is a no brainer. India, Brazil and Russia are probably good bets too. However, you have to be very careful with these markets. When a market goes up so fast for so long they are likely to have a huge setback at some point. These markets are all likely to have 50 percent pullbacks with in the next few years. You don’t want to be in them when that happens, especially with new money. Think US market in 2000-2002.
I trade China buy looking at the trading channels, buying at the bottom and selling at the top. I’ve spent very little time in China over the last two years but still made nice money.
Look at this chart;
You should be able to see a clear trading channel over the last 3 months by drawing a line roughly across the peaks and another across the bottoms. You buy at the bottom and sell at the top. You also sale if it drops much below the bottom line. That is a very bad sign especially after the a rapid increase this market has enjoyed.
You should also notice that now looks like a good time to buy. I’ll wait a day or three more before I commit since it is, as I said, dangerous market.
This is a short term trading approach. If you prefer a longer approach where you hold for longer, look at this chart;
With this chart you draw your lines disregarding the last year (it’s been too crazy). With this method you will see that this China index would be more accurately valued at about 120. It will take a while, but most likely it will get back to that trend line at some point in the next couple of years.
[quote]on edge wrote:
btm62 wrote:
Some good advice on here IMO. Debt is indeed slavery. One thing I would add is, you are young. Put everything you can into a 401k too at work. At least up to the match point of the company. I’ve decided to invest in emerging markets especially China right now. I read a piece about the demographics and birthrates of various nations. I think its here on T-Nation someplace. Japan and Europe seem to be declining while China is “gearing up” economy wise. Again, just my opinion. Good luck to you sir.
China is a no brainer. India, Brazil and Russia are probably good bets too. However, you have to be very careful with these markets. When a market goes up so fast for so long they are likely to have a huge setback at some point. These markets are all likely to have 50 percent pullbacks with in the next few years. You don’t want to be in them when that happens, especially with new money. Think US market in 2000-2002.
I trade China buy looking at the trading channels, buying at the bottom and selling at the top. I’ve spent very little time in China over the last two years but still made nice money.
Look at this chart;
You should be able to see a clear trading channel over the last 3 months by drawing a line roughly across the peaks and another across the bottoms. You buy at the bottom and sell at the top. You also sale if it drops much below the bottom line. That is a very bad sign especially after the a rapid increase this market has enjoyed.
You should also notice that now looks like a good time to buy. I’ll wait a day or three more before I commit since it is, as I said, dangerous market.
This is a short term trading approach. If you prefer a longer approach where you hold for longer, look at this chart;
With this chart you draw your lines disregarding the last year (it’s been too crazy). With this method you will see that this China index would be more accurately valued at about 120. It will take a while, but most likely it will get back to that trend line at some point in the next couple of years.
End hijack, resume debt talk.[/quote]
In case anybody cares. It’s a good thing I didn’t buy china last friday. The china index has fallen completely out of its trading channel. This is not something I would touch until I see it stabilize.
Another fan of the Dave Ramsey approach here. Our family had started it and was doing ok with this approach BUT my wife’s medical condition has put a lot of what Ramsey has suggested on hold for now. It’s hard to try to get rid of debt when you have medical bills rolling in every week.
Personally I think being debt-free is over rated. The first time I paid off all my debts I used the approach Carnak explians, paying off the lowest balance then proceeding up the chain. I eliminated all but my student loans in just under a year. I maintained a relatively debt-free status for about 3 months, then bought a new car, a new engine for my truck on one credit card, and expensed a one month vacation in Mexico on another credit card.
This time I have all my accounts loaded into Quicken. I can now easily compare investment accounts (possitive cash flow) such as 401K, stocks, funds, bonds, etc…vs debts like credit cards, car loan, student loans (negative cash flow). One, I then balance payments between the two categories based on which will yeild the greatest effect on my overall financial status and projections towards becoming a millionaire. Two, I’ve been looking at various loan options to consolidate my credit card debts under with a goal to reduce the combined interest rates by half. I believe one of the regional banks will give me a large enough loan to consolidate the creit debts and leave me with enough cash to start up a small internet based side business that I can operate/manage while at work. I’m using the ideas outlined in “4-Hour Work Week” by Tim Ferriss.
As long as my combined investments are greater than my total debt, I can live with owning some money to the man. And finally, one of my favorite quotes:
“If you ain’t in debt, you ain’t maximizing your potential!”
– My half drunk, semi-retired, I-am-working-for-the-hell-of-it professor at ACC.