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I have read through a lot of this not all. My feelings for what it worth. I don't think alot of people could farm at much scale without a operating loan. I grow tobacco it cost 4500 a acre start to finish. I have a pretty good size loan, at this point i don't use alot of lot it. But it is there its backed by a payed for farm that is worth more than my house. When I started i borrowed pretty much everything and payed it back the next spring. I get payed a very few times a year i don't do monthly payments. I have a pretty good sized debt load it almost completly on dirt. If i never went into debt i wouldn't have much. I have seen some absolute train wrecks with people in over there head couldn't manage had no business self employed lost it all. I have seen people start with nothing made good choices now worth several million .
Not long ago I had a 35 year old guy telling me all about how he was debt free, would never borrow a penny ever. He has a old house his grandma gave him and a oldpickup. He is tickled to death sleeps good no worries. Thats great, but some people want something different to be happy. And I have seen bankers get plenty folks in trouble.
 
kenny thomas said:
I'm not against going in debt as long as the person has a good plan to pay it back. I don't agree with having several companies on paper just in case the person makes bad decisions and can't pay it. I just don't agree with going bankrupt and beating the system.
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My Dad told me years back, "If a man's word is no good, neither is he."
 
Liberty has a good point....but around that same time period our house value had been cut in half and we owed more than it was worth.
during that time a lot of people walked away from their loan.
I signed my name to that loan and that meant I was going to pay it. I always keep my word which was more important to me than the money.
 
Mountaintown Creek Ranch said:
Liberty has a good point....but around that same time period our house value had been cut in half and we owed more than it was worth.
during that time a lot of people walked away from their loan.
I signed my name to that loan and that meant I was going to pay it. I always keep my word which was more important to me than the money.
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Yeah, 1982 I bought my first home (14% mortgage). Within 3 years it had lost 35% of it's value but I had already had it paid off. Called it the price of independence....1990 I "recouped" some of that by purchasing another home that was in RTC foreclosure ($63k for $41k 7% mortgage). Lost my job the same week I won the bid on the house. Recalled the loan application and borrowed the rest of the money I needed from my parents. Paid it off in 4 years. Rent from the first home help pay for the second. Last year those 2 properties market value was over $300,000.
 
1982vett said:
Yeah, 1982 I bought my first home (14% mortgage). Within 3 years it had lost 35% of it's value but I had already had it paid off. Called it the price of independence....1990 I "recouped" some of that by purchasing another home that was in RTC foreclosure ($63k for $41k 7% mortgage). Lost my job the same week I won the bid on the house. Recalled the loan application and borrowed the rest of the money I needed from my parents. Paid it off in 4 years. Rent from the first home help pay for the second. Last year those 2 properties market value was over $300,000.
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That's a great example of intelligent finances. Paying off homes quickly, doubling payments to save long term expenses on debt is a no-brainer... even to the people advocating debt as a tool. And yet paying cash gets defensive remarks. By paying off your houses quickly you didn't just save the interest you would have paid... you paid yourself the interest you would have paid out. Smart business...
 
For sake of discussion What if one takes that 7% money to make double payments. Invest in something that makes more than 7%
 
Travlr said:
That's a great example of intelligent finances. Paying off homes quickly, doubling payments to save long term expenses on debt is a no-brainer... even to the people advocating debt as a tool. And yet paying cash gets defensive remarks. By paying off your houses quickly you didn't just save the interest you would have paid... you paid yourself the interest you would have paid out. Smart business...
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I believe in cash .
It doesn't bother me to borrow if my money is making more money than the note.
I never have a note I can't pay off .
I built my current house in 03 cash. I haven't had a house note since 1985.
 
littletom said:
For sake of discussion What if one takes that 7% money to make double payments. Invest in something that makes more than 7%
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I did the math on that in 2018 when we bought our place. What I did was projected what our net worth would be after 30 years in two different scenarios.

Scenario A - put all of investment budget into mortgage until it's paid off. Then after the mortgage is paid off, put all of that investment budget into your actual investment, mutual funds for most.

Scenario B - pay minimum on mortgage for 30 years. Put remainder of investment budget into an investment, such as mutual funds.

Before running the numbers, I figured scenario A would win since you pay less interest and have all those years with more going toward an investment. I was wrong. Scenario B won by a long shot. That was with a 4.5% mortgage. I believe stock market averages 8% over time. Add in inflation, and paying minimum on debt wins big time. Of course, that assumes one puts more funds forth to invest than the minimum mortgage payment. If one blows their excess funds on vacations and boats, debt should probably be paid off ASAP.

People have to run their own numbers and decide what they are comfortable with. If you can't run your own numbers, best to just get rid of your debt ASAP.
 
KAstocker said:
I did the math on that in 2018 when we bought our place. What I did was projected what our net worth would be after 30 years in two different scenarios.

Scenario A - put all of investment budget into mortgage until it's paid off. Then after the mortgage is paid off, put all of that investment budget into your actual investment, mutual funds for most.

Scenario B - pay minimum on mortgage for 30 years. Put remainder of investment budget into an investment, such as mutual funds.

Before running the numbers, I figured scenario A would win since you pay less interest and have all those years with more going toward an investment. I was wrong. Scenario B won by a long shot. That was with a 4.5% mortgage. I believe stock market averages 8% over time. Add in inflation, and paying minimum on debt wins big time. Of course, that assumes one puts more funds forth to invest than the minimum mortgage payment. If one blows their excess funds on vacations and boats, debt should probably be paid off ASAP.

People have to run their own numbers and decide what they are comfortable with. If you can't run your own numbers, best to just get rid of your debt ASAP.
Click to expand...
This is about money management plain and simple.
Years ago I went and heard a leading financial advisor from Fidelity at a retirement planning session at the refinery.
He said you could take away everyone's money and start everyone over with 1K .
The guy living under the freeway overpass dead broke would be right back there and Bill Gates would still be rich as he was today.
It's not nearly as much about what you make as how you manage it.
 
KAstocker said:
I did the math on that in 2018 when we bought our place. What I did was projected what our net worth would be after 30 years in two different scenarios.

Scenario A - put all of investment budget into mortgage until it's paid off. Then after the mortgage is paid off, put all of that investment budget into your actual investment, mutual funds for most.

Scenario B - pay minimum on mortgage for 30 years. Put remainder of investment budget into an investment, such as mutual funds.

Before running the numbers, I figured scenario A would win since you pay less interest and have all those years with more going toward an investment. I was wrong. Scenario B won by a long shot. That was with a 4.5% mortgage. I believe stock market averages 8% over time. Add in inflation, and paying minimum on debt wins big time. Of course, that assumes one puts more funds forth to invest than the minimum mortgage payment.

People have to run their own numbers and decide what they are comfortable with. If you can't run your own numbers, best to just get rid of your debt ASAP.
Click to expand...


KAstocker said:
If one blows their excess funds on vacations and boats, debt should probably be paid off ASAP.
Click to expand...
This statement right here is why Dave Ramsey suggests paying off debt, because most people are not disciplined enough to forego the toys and invest their money. Dave Ramsey's plan works for most of the population but not everyone, some are self disciplined enough to handle their finances appropriately.
 
Caustic Burno said:
This is about money management plain and simple.
Years ago I went and heard a leading financial advisor from Fidelity at a retirement planning session at the refinery.
He said you could take away everyone's money and start everyone over with 1K .
The guy living under the freeway overpass dead broke would be right back there and Bill Gates would still be rich as he was today.
It's not nearly as much about what you make as how you manage it.
Click to expand...
Heard that a few times
 

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