[quote]pushharder wrote:
How’s this?
[/quote]
Better. I figured if anyone knew about “burnin’”…
[quote]dollarbill44 wrote:
Hmm, so where are you putting your money to make it grow and keep pace with inflation?
DB[/quote]
Excellent point.
If you incorporate inflation and the tax write off you obtain from a mortgage (especially at the lower rates) your debt isn’t that significant.
Use EXCEL to calculate the NPV of your mortgage. Make an amortization table, incorporate inflation and tax breaks and see how it all works out.
By investing in a home, you have put your money in a place where it can accumulate interest at a rate comparable to or above the current inflation rate.
The last time I checked, the inflation rate was at 2.78%. I forgot exactly where I got that figure, so don’t quote me exactly. OK, with a 2.78% inflation rate and say your bank pays 2.5% on savings, you are actually losing money by doing nothing.
Not to mention that you will be making more money in the future and the amount that you pay for your debt becomes less substantial.
The debt free example works perfectly when considering depreciation. To quote Warren Buffett: “Never pay interest on anything that depreciates.” Another benefit of buying a house straight up is that closing costs won’t eat a hole in your wallet.
But if you invest in a home, you are living in a better environment and simulataneously investing your living expenses. You will be paying your bills regardless.
[quote]Chewie wrote:
dollarbill44 wrote:
Hmm, so where are you putting your money to make it grow and keep pace with inflation?
DB
Excellent point.
If you incorporate inflation and the tax write off you obtain from a mortgage (especially at the lower rates) your debt isn’t that significant.
Use EXCEL to calculate the NPV of your mortgage. Make an amortization table, incorporate inflation and tax breaks and see how it all works out.
By investing in a home, you have put your money in a place where it can accumulate interest at a rate comparable to or above the current inflation rate.
The last time I checked, the inflation rate was at 2.78%. I forgot exactly where I got that figure, so don’t quote me exactly. OK, with a 2.78% inflation rate and say your bank pays 2.5% on savings, you are actually losing money by doing nothing.
Not to mention that you will be making more money in the future and the amount that you pay for your debt becomes less substantial.
The debt free example works perfectly when considering depreciation. To quote Warren Buffett: “Never pay interest on anything that depreciates.” Another benefit of buying a house straight up is that closing costs won’t eat a hole in your wallet.
But if you invest in a home, you are living in a better environment and simulataneously investing your living expenses. You will be paying your bills regardless.
[/quote]Question ? Remember the trend in the mid to late 80’s where big corporations were buying up smaller outfits and closing them down for big tax brakes not to mention putting all those people out of work.Was’nt that going in debt to actually recieve a better gain on your money??
[quote]pushharder wrote:
…and now back to our regularly scheduled program…[/quote]
PushHarder,Better be careful postin all them fire pics,some young whippersnapper fresh out of the academy or arson class ,will think your one of them fellers that gets his kicks startin them burnins so you can take pics and fightem.
Is it too late for me t’jump in and talk about that schmuck texasguy? I sure as hell hope not; it’d make me a happy little man to make fun o’ his goat face.
[quote]Chewie wrote:
dollarbill44 wrote:
Hmm, so where are you putting your money to make it grow and keep pace with inflation?
DB
Excellent point.
If you incorporate inflation and the tax write off you obtain from a mortgage (especially at the lower rates) your debt isn’t that significant.
But if you invest in a home, you are living in a better environment and simulataneously investing your living expenses. You will be paying your bills regardless.
[/quote]
I invest in the markets. I have a stock portfolio, as well as several mutual funds. To assume I am stuffing cash in a mattress is to miss the point of being debt free.
I own the current home I live in - Why would I go into debt to finance another house when I can save the money and buy it for cash for less money than I would get a mortgage?
If you want a mortgage - get one. Mortgage debt is the only debt that Ramsey doesn’t disagree with… for others.
I am not sure why you guys just can’t get the fact that I am debt free, and I abhor owing anyone anything. That does not mean I am scared to invest, or am scared of debt. I hate debt. There is a difference.
If anyone is still interested - I am in day 3 of trying to get my floor installed. Really, it is night 3 as I have had to be out of town during the day for the last couple of days and can only work on the floor at night. I think we can get it finished tonight.
The washer and dryer will be delivered tomorrow.
Living in the middle of no where sucks ass when you have to buy shit that is too big to fit in your vehicle.
[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]
My point is that he’s a grown up that handles his own life.
I have a mortgage and had to take out business loans. I’m going to be debt free except for my home in under 5 years.
Who gives a shit what he does with his life. Grown ups can figure stuff out for themselves. If a grown up doesn’t want a mortgage, who cares? If he has one who cares?
If you have cash and investments, you pay your bills, and so on what you think doesn’t really matter. You’re already doing most right stuff, the rest is just a matter of personal prefernce unique to an adult’s personal decision.
[quote]CaliforniaLaw wrote:
rainjack wrote:
How is living debt-free unsopisticated?
I need a credit card to be evolved?
Tell me how driving a new car with a $600 monthly payment makes you higher brow than me.
Debt=sophistication? You are out of your idiotic mind. Or maybe you think all the bankruptcies clogging our courts are a sign of enlightenment?
You equate all debt with “consumer debt.” You’re ignoring leverage. That’s really all I need to know about your level of sophistication when it comes to debt. Here are some slides covering the upside of debt:
http://web.mit.edu/11.431j/www/Fall91602/431_GMch131.ppt
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.
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).
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?
Texasguy may have his issues, but he has a long way to go before he’s half the jack ass you are.[/quote]
Your argument is circular. Obviously debt can be used for leverage, but only if you need it. If you didnt need loans for your education then you wouldnt have debt.
[quote]rainjack wrote:
Chewie wrote:
dollarbill44 wrote:
Hmm, so where are you putting your money to make it grow and keep pace with inflation?
DB
Excellent point.
If you incorporate inflation and the tax write off you obtain from a mortgage (especially at the lower rates) your debt isn’t that significant.
But if you invest in a home, you are living in a better environment and simulataneously investing your living expenses. You will be paying your bills regardless.
I invest in the markets. I have a stock portfolio, as well as several mutual funds. To assume I am stuffing cash in a mattress is to miss the point of being debt free.
I own the current home I live in - Why would I go into debt to finance another house when I can save the money and buy it for cash for less money than I would get a mortgage?
If you want a mortgage - get one. Mortgage debt is the only debt that Ramsey doesn’t disagree with… for others.
I am not sure why you guys just can’t get the fact that I am debt free, and I abhor owing anyone anything. That does not mean I am scared to invest, or am scared of debt. I hate debt. There is a difference.
If anyone is still interested - I am in day 3 of trying to get my floor installed. Really, it is night 3 as I have had to be out of town during the day for the last couple of days and can only work on the floor at night. I think we can get it finished tonight.
The washer and dryer will be delivered tomorrow.
Living in the middle of no where sucks ass when you have to buy shit that is too big to fit in your vehicle.
[/quote]
I actually went back and read your post on Ramsey. It is a good post. I agree with it 100%.
In my post, I point out how you can use a mortgage and actually come out on top (or at least break even). Compared to someone renting, it should be a no-brainer. Now, I am not assuming that you are renting anything. Some people reading this might benefit from the points made on this thread.
I, also, am debt free except for my mortgage. My mortgage is less than the rent for my apartment was.
[quote]rainjack wrote:
Chewie wrote:
dollarbill44 wrote:
Hmm, so where are you putting your money to make it grow and keep pace with inflation?
DB
Excellent point.
If you incorporate inflation and the tax write off you obtain from a mortgage (especially at the lower rates) your debt isn’t that significant.
But if you invest in a home, you are living in a better environment and simulataneously investing your living expenses. You will be paying your bills regardless.
I invest in the markets. I have a stock portfolio, as well as several mutual funds. To assume I am stuffing cash in a mattress is to miss the point of being debt free.
[/quote]
Then either you are invested in debt-free companies (highly unlikely) or you are invested in “evil” companies.
Hey, don’t shoot the messenger.
DB
[quote]dollarbill44 wrote:
Then either you are invested in debt-free companies (highly unlikely) or you are invested in “evil” companies.
Hey, don’t shoot the messenger.
DB
[/quote]
Show me where I said business debt is evil.
Show me where I said that the government should be debt free.
Tell me that when you look at a company as a potential investment you don’t look at their debt ratio.
Maybe you don’t care how much debt a company is carrying - but it makes a difference.
If all other things are equal - which company is the more attractive: A company that has a ton of debt, or the company that has done the same job with no debt?
Debt is evil for me - but it is a necessary evil for some. Some people don’t see any evil and choose to play in the devil’s backyard because they are not patient enough to pay cash. Others use debt wisely.
Your attempts to paint me as a hypocrite are ridiculous. My parents have debt. I love them. Does that mean I love evil people?
Just because your livelihood depends on others being in debt does not mean that debt is good. It is good for you. It is evil for me.
I will be a millionaire in less than 10 years. I am not trying to brag, or throw numbers in anyone’s face. But give me some fucking credit here.
[quote]rainjack wrote:
But give me some fucking credit here.
[/quote]
Doesn’t credit have something to do with repaying debt? 
[quote]Chewie wrote:
rainjack wrote:
But give me some fucking credit here.
Doesn’t credit have something to do with repaying debt?
[/quote]
Nice.
[quote]rainjack wrote:
Show me where I said business debt is evil. [/quote]
I’m sorry, when you said debt is evil and didn’t put in exclusions, I had my Norton’s Mindreader 6.0 turned off.
I was never not giving you credit, or even calling you a hypocrite. It just seems silly to me to be so black and white about this. Your like an obtuse caveman: “hmph, water good, fire bad”. I’m just trying to shed some light on the middle ground for you. Whether you look or not, it’s still there.
DB
[quote]dollarbill44 wrote:
I was never not giving you credit, or even calling you a hypocrite. It just seems silly to me to be so black and white about this. Your like an obtuse caveman: “hmph, water good, fire bad”. I’m just trying to shed some light on the middle ground for you. Whether you look or not, it’s still there.
DB[/quote]
If you are buying debt - you are not investing in the company. But nice try.
So you are the ‘vroom’ of finance now?
How many times can I say if you want debt - go for it? I don’t think it is your mind reader that is turned off - just your reading comprehension.
I am indeed very pragmatic, and black and white about my decisions. They are usually right. And in the long term - me being debt free will grow far more wealth than debt. Short term, debt beats my ass.
When have you ever known me to play in the “shades of gray atrium”?
[quote]rainjack wrote:
dollarbill44 wrote:
I was never not giving you credit, or even calling you a hypocrite. It just seems silly to me to be so black and white about this. Your like an obtuse caveman: “hmph, water good, fire bad”. I’m just trying to shed some light on the middle ground for you. Whether you look or not, it’s still there.
DB
If you are buying debt - you are not investing in the company. But nice try.
[/quote]
Say what? If I buy $100 of Company A’s bonds, I am now a lender to Company A. My investment principal repayment is dependent on Company A’s cash flow, so therefore, I am investing in Company A.
Equity and Debt analysis of a company is fundamentally the same, with a difference in emphasis on priority of repayment.
DB
.
