My Father's Day So Far

[rainjack]

[quote]CaliforniaLaw wrote:

It’s pretty clear you have your mind made up about debt. That’s fine. But that you only thought “consumer debt” when I mentioned debt, simply proved my point. Debt is so much broader.[/quote]

I listed a mortgage as the first type of debt. That is not consumer debt. I am sure you already knew this.

You need to be a tad more thorough in your rush to be right - it just makes you look even more stupid than you have proven yourself to be in just this one thread.

But I am glad to have your permission to actually think for myself.

As for my own debt: I don’t have any consumer debt. But I do have student loan debt. Going into debt has enabled me to make substantially more money than if I had not gone into debt. So going into debt has been a very wise move for me (especially when you factor in the interest rates for my loans - many of which are so low that paying anything above the interest of them, in light of average market returns, is an irrational economic move).

Which proves the point made previously about debt being little more than a means to instant gratification. You have your way of doing things - and I am sure they work for you. But I paid off my loans because it means more to me to clear my debt than it does to have more cash now.

In your world, there wouldn’t be any doctors, since only a fool would go into debt, right? Going into debt to earn a professional degree, under your simplistic view of debt, would be stupid. Instead, a person should take years to save the 250K he or she would need for medical school. But how many years of extremely high income of being a doctor would that person give up in order to save that money? Would the opportunity cost associated with not earning “doctor money” be greater or less than the costs associated with servicing student loan debt?

You choose medical school to make your point? How many people go to medical school? Of those how many make it through?

There are a few professions where the entry cost is so high that maybe one would need some help.

But - you are using a fringe of society to make your point for the entirety.

My dad would kick the shit out of me for making such a weak argument. Evidently, your father encouraged such dipshittery. Well done.

Texasguy may have his issues, but he has a long way to go before he’s half the jack ass you are.

I live debt free and I am a jackass? A simplistic jackass? There is no denying I am a jackass. I freely admit to that. But your ear and ignorance of living debt free makse you far worse than a jackass.

I can only hope your prejudice and hatred don’t extend to skin color.

[laster]

Debt as a tool comes down to risk tolerance. This, as does just about everything else in life, comes down to individual preference.

My risk tolerance is low, but I will reason this: A professional who takes student loans to obtain a required degree in a field with high barriers to entry takes a bet - on himself. If you know who you are, this isn’t a bad thing.

Compare this to an investor who buys stock on margin, or even outright- how much does he REALLY know about the company and their place in the market? There is a high likelihood that someone else is controlling his future. It’s all about risk tolerance, but for me, it would be easier to bet on the guy who looks back at me in the mirror.

[laster]

rainjack,

I am also a CPA, and I also like Dave Ramsey’s stuff…however, it doesn’t apply to everyone’s situation (what does?). Financially, I’m a risk taking sissy, but that’s what it takes for me to sleep at night. Others do things differently and sleep just as well, I’m sure.

I think it’s summed up best by this old saying my grandfather had:

The world don’t move to the beat of just one drum, what might be right for you, may not be right for some…

A man is born, he’s a man of means, then along comes two…they got nothing but their dreams…

C’MON EVERYBODY!

[tom63]

I don’t see how people could have a problem with how Rainjack lives his life. I didn’t see him asking anyone to help him pay his bills.

Not everyone may be able to live like him, but there is nothing wrong with what he’s doing.

[orion]

[quote]laster wrote:
rainjack,

I am also a CPA, and I also like Dave Ramsey’s stuff…however, it doesn’t apply to everyone’s situation (what does?). Financially, I’m a risk taking sissy, but that’s what it takes for me to sleep at night. Others do things differently and sleep just as well, I’m sure.

I think it’s summed up best by this old saying my grandfather had:

The world don’t move to the beat of just one drum, what might be right for you, may not be right for some…

A man is born, he’s a man of means, then along comes two…they got nothing but their dreams…

C’MON EVERYBODY![/quote]

As far as I understand this guys (Ramseys) approach he deals with debt as an alcoholic should be with alcohol.

Is he curing debtoholics, not teaching how to deal with debt?

Therefore some advice that is financially off but psychologically sound?

[slimjim]

[quote]texasguy wrote:

oh no! puuleeeaassssseeee! respect me! i don’t think i can carry on!

and i still smell jelousy. i’ve been smelling it pretty much all my life.
[/quote]

I doubt you can smell anything with your head jammed that far up your ass.

[skaz05]

[quote]Professor X wrote:

Some facts:

I have debt with student loans. I had no one else pay for my education (like a couple of my classmates) and getting “Dr.” in front your name is one hell of a major adventure into the world of life long debt (ar however long it takes to pay that shit off).

Texasguy is lame. Rainjack is a jackass. These two are not the same.

Living debt free and saving for what you want is a great idea. If you can live like that and be successful, then take joy in the fact that you can do what many can’t. It does not, however, make you any more superior than Texasguy is to the hard worker who didn’t grow up rich.

Many of the professionals in this world who are considered “successful” have debt from their educations. That is just a fact of life and having that debt does not make them poor planners. It makes them people who sacrificed extreme partying for some high level textbooks for several years and who will hopefully be making enough in the future to pay back those loans as well as live comfortably in the process.

That is all. Some of you seem to lose perspective.

If any of you need that Cliff-Noted for you, just ask.[/quote]

Yes please. raises hand

[laster]

[quote]orion wrote:
laster wrote:
rainjack,

I am also a CPA, and I also like Dave Ramsey’s stuff…however, it doesn’t apply to everyone’s situation (what does?). Financially, I’m a risk taking sissy, but that’s what it takes for me to sleep at night. Others do things differently and sleep just as well, I’m sure.

I think it’s summed up best by this old saying my grandfather had:

The world don’t move to the beat of just one drum, what might be right for you, may not be right for some…

A man is born, he’s a man of means, then along comes two…they got nothing but their dreams…

C’MON EVERYBODY!

As far as I understand this guys (Ramseys) approach he deals with debt as an alcoholic should be with alcohol.

Is he curing debtoholics, not teaching how to deal with debt?

Therefore some advice that is financially off but psychologically sound?[/quote]

He pretty much tells you that debt is bad. Period. He doesn’t believe debt should be used in your personal or business life. If you have to use it, get rid of it as quickly as possible.
Kind of the “squats and milk” approach to finance.

For the most part, I agree with his approach, but then again, of course I would, I’m a tight assed accountant. I actually showed his videos to some of our employees to get them thinking.

His programs are just like everything else…if you need it very badly, you must have been out of balance somewhere. Take it too far…you’ll get out of balance somewhere else.

Balance people, balance.

[CaliforniaLaw]

[quote]tom63 wrote:
I don’t see how people could have a problem with how Rainjack lives his life. I didn’t see him asking anyone to help him pay his bills.

Not everyone may be able to live like him, but there is nothing wrong with what he’s doing.[/quote]

I never said otherwise. I did say his “All debt is evil” mantra is unsophisticated. Some debt (if leveraged properly) is rather good. If you take out debt to purchase real estate, and sell that real estate at a greater gain that the costs associated with serving the debt, then the debt wasn’t “stupid” or “evil,” etc.

[malonetd]

[quote]laster wrote:
The world don’t move to the beat of just one drum, what might be right for you, may not be right for some…

A man is born, he’s a man of means, then along comes two…they got nothing but their dreams…

C’MON EVERYBODY![/quote]

Come and knock on our door
We’ve been waiting for you
Where the kisses are hers and hers and his…

Oh…oops, wrong song

[rainjack]

[quote]CaliforniaLaw wrote:
I never said otherwise. I did say his “All debt is evil” mantra is unsophisticated. Some debt (if leveraged properly) is rather good. If you take out debt to purchase real estate, and sell that real estate at a greater gain that the costs associated with serving the debt, then the debt wasn’t “stupid” or “evil,” etc.[/quote]

To me, debt is evil. I have yet to make a value judgement on those that have debt, other than to say debt is for sucks.

Maybe I should have said MOST debt is for sucks. Maybe that would have prevented you from piping up in here. I doubt it, but I can certainly hope.

You said I am afraid of debt. I have yet to see you support your accusation.

You call my aversion to taking on debt as “simplistic” - and your only support of this was going to med school.

Now you are talking about leveraging debt for making money. Taking out a mortgage for a home is one thing. Getting a loan to invest is quite another.

I don’t invest with OPM. To me that is the epitomy of impatience.

I am still waiting on answer as to why you say I am scared of debt. I am sure you can figure out a way to work in the starving pygmies in New Guinea to supprt your argument, if you just give it a little effort.

[rainjack]

[quote]malonetd wrote:
laster wrote:
The world don’t move to the beat of just one drum, what might be right for you, may not be right for some…

A man is born, he’s a man of means, then along comes two…they got nothing but their dreams…

C’MON EVERYBODY!

Come and knock on our door
We’ve been waiting for you
Where the kisses are hers and hers and his…

Oh…oops, wrong song[/quote]

Whatchu talkin’ about, Willis?

[rainjack]

[quote]orion wrote:
As far as I understand this guys (Ramseys) approach he deals with debt as an alcoholic should be with alcohol.

Is he curing debtoholics, not teaching how to deal with debt?

Therefore some advice that is financially off but psychologically sound?[/quote]

In the US, debt is a disease. Especially consumer debt, over extending on a mortgage, and buying new cars that put you upside down as soon as you drive off the lot.

Quite honestly, there would be a lot fewer mothers working if people could control their spending.

People have proven time and again that they are not capable of waiting to pay cash for their wants, totally inept at saving anything, and look only at how much they have left on their credit limit before making a purchase.

Dave Ramsey is a multi-multi-millionaire, and did so with no debt.

Is there a place for some debt? Absolutely…for some folks. Ramsey is not against a mortgage, but why take one out when you can pay cash?

It’s a matter of choice. Ramsey’s plan works very powerfully - and I give my newlywed clients a copy of his book for wedding gifts.

But if it’s not for you - it’s not for you.

[laster]

[quote]CaliforniaLaw wrote:
tom63 wrote:
I don’t see how people could have a problem with how Rainjack lives his life. I didn’t see him asking anyone to help him pay his bills.

Not everyone may be able to live like him, but there is nothing wrong with what he’s doing.

I never said otherwise. I did say his “All debt is evil” mantra is unsophisticated. Some debt (if leveraged properly) is rather good. If you take out debt to purchase real estate, and sell that real estate at a greater gain that the costs associated with serving the debt, then the debt wasn’t “stupid” or “evil,” etc.[/quote]

Bingo. And there is the risk factor. Some people do this constantly, and to some people this would make their ass draw up tighter than Dick’s hat band (southern expression).

If I ever started a band, it would be called Dick’s Hat Band.

[dollarbill44]

Great-fucking-googly-fucking-moogly!!! There is some ground between debt is evil and debt-free is purely idiotic.

Controlled debt can be a wise investment tool. Who can argue that a renter is stupid for taking out a mortgage, that he/she can afford in order to live in a house and take the tax benefit while building equity?

Another hypothetical where debt is a smart move: you have $30k in cash and you want to buy a house to rent out. Unfortunately, the house is $120k. You are guaranteed to cover your PMI + maintenance+property management costs from the monthly rent you charge your tenants. Are you better off sticking your $30k in a mutual fund (where returns are not guaranteed), in a savings account earning 4.5% or taking a $90k mortgage, buying the house, renting it out and building equity, from which in a couple of years you can re-lever the house and buy another one just like it and do the same thing with it?

These are simplistic examples, but they have to be with the time and space allotments of the internet and my patience. If debt is truly evil than there are a lot of really rich evil people out there.

Tangible Net Worth is far more important than debt levels.

Conversely, living debt free is the only way some people can live in order to maintain their sanity. Whatever it takes for you to get your sleep is fine with me.

DB

[rainjack]

[quote]dollarbill44 wrote:
Great-fucking-googly-fucking-moogly!!! There is some ground between debt is evil and debt-free is purely idiotic.

Controlled debt can be a wise investment tool. Who can argue that a renter is stupid for taking out a mortgage, that he/she can afford in order to live in a house and take the tax benefit while building equity?

Another hypothetical where debt is a smart move: you have $30k in cash and you want to buy a house to rent out. Unfortunately, the house is $120k. You are guaranteed to cover your PMI + maintenance+property management costs from the monthly rent you charge your tenants. Are you better off sticking your $30k in a mutual fund (where returns are not guaranteed), in a savings account earning 4.5% or taking a $90k mortgage, buying the house, renting it out and building equity, from which in a couple of years you can re-lever the house and buy another one just like it and do the same thing with it?

These are simplistic examples, but they have to be with the time and space allotments of the internet and my patience. If debt is truly evil than there are a lot of really rich evil people out there.

Tangible Net Worth is far more important than debt levels.

Conversely, living debt free is the only way some people can live in order to maintain their sanity. Whatever it takes for you to get your sleep is fine with me.

DB[/quote]

You make the assumption that you are guaranteed 100% occupancy at X dollars per month. You also assume that the realesteate market will continue to be hot, and you investment will appreciate.

What happens when the bubble bursts, and homes get really cheap? What happens when the price you charge for rent doesn’t cover your costs?

You make assumptions that are just not viable.

Here’s a simple rule: The higher the risk, the higher the return.

There is risk in everything you do, and every penny you borrow. If there were not risk, the only interest would be that to cover time value.

I live in a depressed area. Your scenario would be a fool’s bet, and a banker’s delight.

You could get rich - or you could default.

[dollarbill44]

[quote]rainjack wrote:

You make the assumption that you are guaranteed 100% occupancy at X dollars per month. You also assume that the realesteate market will continue to be hot, and you investment will appreciate.

What happens when the bubble bursts, and homes get really cheap? What happens when the price you charge for rent doesn’t cover your costs?

You make assumptions that are just not viable.

Here’s a simple rule: The higher the risk, the higher the return.

There is risk in everything you do, and every penny you borrow. If there were not risk, the only interest would be that to cover time value.

I live in a depressed area. Your scenario would be a fool’s bet, and a banker’s delight.

You could get rich - or you could default.

[/quote]

You’re being silly at this point. There is middle ground that you cannot see for your blindness. Check out the Forbes richest people list and tell me how many of those people eschew debt.

I specifically stated that I kept the examples simple. I stated no such assumptions that you reference, although certainly there are assumptions behind the investment (not necessarily what you’ve listed). One of my assumptions is that you don’t sink your money into a stupid investment, like buying rental properties in a depressed market. I don’t know if you’re aware, but there is no law in the U.S. that says you have to buy investment property where you live.

Sure there is risk involved, but there is also risk in holding cash. One of the first rules of investing is don’t invest if you aren’t willing to lose your investment.

I make a living structuring and analyzing debt and leveraged investments. I know a thing or two about a thing or two and I know that debt, used in the right way, is a means to much greater wealth than being debt-free.

But, if you re-read my post, I can understand people not being comfortable taking on some debt. I made no comments on people’s levels of sophistication based on their debt-averseness.

A final thought, anyone who thinks debt is evil doesn’t believe in the banking system or the financial system. Debt is how banks make money and expand the money supply. Just about every company uses debt, so that limits where you can safely invest. Bonds are, well, debt, so that eliminates them as good investments. Hmm, so where are you putting your money to make it grow and keep pace with inflation?

DB