Americans in general have come to accept living beyond their means as normal behavior. What do I mesn by this? Where where should I begin? So many of your neighbors, even the ones living in mcmansions who appear to be affluent and carefree are living paycheck to paycheck, have thousands and thousands in credit and auto debt and lack any real ownership of property. Im going to make some statements here that may seem backwards, but consider that society conditions you to be a consumer above all else:
--Eliminate all debt systematically, beginning with high interest credit card balances.
--Forget the car payments! Buy used and pay cash. This is difficult for car people like us
But it is vital. Dont worry about what strangers think of your possessions.
--use savings from above to save money for emergencies
--once above is accomplished, invest money and pay down mortgage as fast as possible.
Why am i being so preachy? Because this way of life will be so much less stressful, and you will end up
Living beyond your means
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(Continued) actually owning and not renting your lifestyle. Put yourself in a position to be able to give to charity and not be a charity case.
Dave Ramsey is an excellent resource.
Think this is nonsense? Before the popularity of credit, at the turn of last century people could save up and pay cash for a modest house! Think.about that for a minute! Credit and financing have driven up the price
of cars and homes. This trend has consistently led to effectively renting all
material things. Dont fall into the trap! Dont be a hamster on a wheel.
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I wouldn't start with the high interest payments first. I would start with the lowest balance first because debt payments are all emotional. If you have these small little victorys that will keep you motivated to keep living on nothing and tackle the larger debts. If I started with the mortgage as my first goal then the cars and credit cards, I will never see the light at the end of the tunnel.
Remember if it was all math related most people wouldn't in the situation that they are in.
I would also have emergency money stashed away first above all else because what do you do when an emergency occurs before you saved any money from early payments?
Good point about the base emergency fund. I didnt touch on that.
I agree completely.
Besides B.I.T.O.G. web-site,
Everyday I also go to Bogleheads.org
John Bogle was the Founder of Vanguard Mutual Funds.
The bogleheads are people who invest with the philosophy of:
1) Low Cost Management Fees
2) No Commissions
3) Well Diversfied
4) Index Funds
People everyday are firing their Financial Advisers and taking the simple approach to investing.
I remeber a story some years ago in the press where they interviewed people who had a real net worth over $1,000,000. The characteristics always stuck in my mind and some are as follows:
1. Lived in a more modest house that was paid for.
2. Had almost NO electronic subscriptions. No cable TV, cell phone at a minimum, etc.
3. Paid off credit cards in full each month, ie they treated it as they would their checkbook and only used it for things they could pay for.
4. Many had older cars and kept them an avarage of ten years or more.
5. Debt payment on mortgage was religious and mortgages were typically paid off in under 10 years. Means all available cash was used to do this for a time.
6. Took as much advantage as they could of 401k, IRA, etc.
7. Rarely went out to eat.
By the time these folks were at 50 years old, they were debt free and worth over a million dollars or more.
I've always lived below my means and invested my money. I've never had a car loan in my life
My former neighbor is one of those guys....zero debt, modest home, always used cars....age 52 just got diagnosed with stage 4 cancer. Doc says he has until Thanksgiving...maybe.
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
Who's right???
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
Who's right???
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If only the U.S. Government could take this advice.....
I adopted Ramsey's advice about 5 years ago. The man is a frickin' financial genius.
Originally Posted By: Clubber_Lang
Think this is nonsense?
Why is everyone so quick to shun the use of credit? It is actually a good thing in some instances.
Originally Posted By: Doog
My former neighbor is one of those guys....zero debt, modest home, always used cars....age 52 just got diagnosed with stage 4 cancer. Doc says he has until Thanksgiving...maybe.
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
Who's right???
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
Who's right??? My former neighbor is one of those guys....zero debt, modest home, always used cars....age 52 just got diagnosed with stage 4 cancer. Doc says he has until Thanksgiving...maybe.
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
bad luck with your health is awful, but consider this: when your
Irresponsible friend is 70, too old to work he will have to work anyway
Because he was so impulsive. Or we all will have to pay for him, which
Is a bunch of %$#&. A topic im not getting into. Btw, im going to pay
Cash for an older, small boat that will seat 4. Bet i can find an awesome
Mckee craft 14 footer that will do 35mph for $1500. Not the $15000 most
Would finance. You can do what you want on a budget within reason.
Who's right???
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
bad luck with your health is awful, but consider this: when your
Irresponsible friend is 70, too old to work he will have to work anyway
Because he was so impulsive. Or we all will have to pay for him, which
Is a bunch of %$#&. A topic im not getting into. Btw, im going to pay
Cash for an older, small boat that will seat 4. Bet i can find an awesome
Mckee craft 14 footer that will do 35mph for $1500. Not the $15000 most
Would finance. You can do what you want on a budget within reason.
Who's right???
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Originally Posted By: SVTCobra
Originally Posted By: Doog
My former neighbor is one of those guys....zero debt, modest home, always used cars....age 52 just got diagnosed with stage 4 cancer. Doc says he has until Thanksgiving...maybe.
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
Who's right???
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
Who's right???
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Originally Posted By: dparm
Why is everyone so quick to shun the use of credit? It is actually a good thing in some instances.
Here is my advice:
https://www.youtube.com/watch?v=52UxIgsC_0g
Originally Posted By: Clubber_Lang
My former neighbor is one of those guys....zero debt, modest home, always used cars....age 52 just got diagnosed with stage 4 cancer. Doc says he has until Thanksgiving...maybe.
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
bad luck with your health is awful, but consider this: when your
Irresponsible friend is 70, too old to work he will have to work anyway
Because he was so impulsive. Or we all will have to pay for him, which
Is a bunch of %$#&. A topic im not getting into. Btw, im going to pay
Cash for an older, small boat that will seat 4. Bet i can find an awesome
Mckee craft 14 footer that will do 35mph for $1500. Not the $15000 most
Would finance. You can do what you want on a budget within reason.
Who's right???
My other buddy lives on his MasterCard, big home, always a new Lexus for the wife, smokes, drinks, has boats and 2 vacations every year. zero money in savings....he will live to be 90.
bad luck with your health is awful, but consider this: when your
Irresponsible friend is 70, too old to work he will have to work anyway
Because he was so impulsive. Or we all will have to pay for him, which
Is a bunch of %$#&. A topic im not getting into. Btw, im going to pay
Cash for an older, small boat that will seat 4. Bet i can find an awesome
Mckee craft 14 footer that will do 35mph for $1500. Not the $15000 most
Would finance. You can do what you want on a budget within reason.
Who's right??? 
Originally Posted By: CHARLIEBRONSON21
Originally Posted By: dparm
Why is everyone so quick to shun the use of credit? It is actually a good thing in some instances.
Originally Posted By: dparm
Frankly I don't understand this thread.
you can finance cars usually 0 to 2.9% interest.
a mortgage should be under 5%
by high interest its percentage not total $$$ interest
usually CC's first then other high interest %
unless you financed your house with a CC that would be last on the list or close.
Originally Posted By: SVTCobra
I wouldn't start with the high interest payments first. I would start with the lowest balance first because debt payments are all emotional. If you have these small little victorys that will keep you motivated to keep living on nothing and tackle the larger debts. If I started with the mortgage as my first goal then the cars and credit cards, I will never see the light at the end of the tunnel.
Remember if it was all math related most people wouldn't in the situation that they are in.
I would also have emergency money stashed away first above all else because what do you do when an emergency occurs before you saved any money from early payments?
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