Mrs. Giddyup and I are attending one of Dave Ramsey's Financial Peace Universities (DaveRamsey.com). It is pretty interesting stuff. We get to go for free since I am an Endorsed Local Provider for Dave Ramsey. I have no debt issues.... RIGHT!! Anyway, one of our classmates is an IT guy for one of the big national banks. He was telling us that his bank is having a day of celebration this Friday. Friday will mark the day that this bank's customers will go past the $10,000,000,000 ($10 Billion) in indebtedness to them. Each employee is getting $25 in restaurant gift certificates to go out and have a party on "our" account. Further he said that the bank expects to rake in at least $100 Billion from this indebtedness. Be careful out there! Anybody out there living a debt-free life? If so, my hats off to you. We are on our way, but with 4 kids: 2 in college and 2 in pre-school it's a long climb up....
Viva capitalism. Best system in the world and still somehow totally gross. Maybe the employees will spend the money on cake. Yeah, the queen woulda liked that.
Debt sucks. I got fully out of debt shortly after meeting my wife, who was a banker at the time. I finally was fed up with bill collectors harassing me, so I put every penny I earned into paying off my CCs and personal loans. We got tired of all these credit card companies making money off of us, so since 2000, we pay them off in full every month. The good rule of thumb is, never charge what you don't actually have in your bank account. That way, it keeps you out of trouble. Technically, we have debt on our home and car loans. But I consider that good debt.
We're pretty much in the same boat as the codell's. I have a house note and one car note. That's it. Well, except for kid's braces. I'm still paying the dentist for those.
Surely Im not the only one whos father used pliers to pull teeth that were ready to come out..............
We owe my dad 50K for our house - other than that we are free and clear. I hate debt...if you can't pay for something with cash - you can't afford it. While I agree on a house loan being reasonable debt, I can't agree on a car loan. Even if you are getting a 1.9% loan for 5 years, you still probably bought more car because of it. I just don't see the point of borrowing money to buy a depreciable asset.
Car debt is not considered good debit, but it is consider an acceptable debt. Its hard to pay a car up front in cash ... and if you have that much cash on hand, then why do you have it sitting idle instead of investing??
Exactly. If I have the $25,000 to pay cash for a new car, I'd rather pay 2-4% interest on the car loan and have that $25,000 earning me 10-15% interest invested somewhere.
Two months ago I became completely debt free for only the second time since I started working at 15. Car's paid off, no credit card debt. Now I'm looking to start law school...
Giddyup, I hope you'll share that story with Dave Ramsey. That really pisses me off. I was debt free...until I married my wife who has a ton of credit card debt and a car note. Now it's "our" debt. She works part time so we can care for our son, but she's looking for a good full-time position.
My parents taught me to avoid debt at all costs. Credit card? Balance paid in full EVERY MONTH. I refuse to live beyond my means. Car. Paid in full. No debt. Not until I buy a house I guess.
Gentlemen, let's be clear here, debt is an instrument that provides an individual leverage in leading a more fulfilling life. If you have credit capacity and a strong, predictable income, then there is no reason not to have a *healthy* mix of debt and equity on your own personal balance sheet. An example: If you are making good money in a secure job, would you save all your money in order to pay for a house in cash? Of course not. Why pay for something in one day when you will use that something for 30 years? Many of the best credits in the world have debt in their lives. Finding the optimal balance that maximizes your utility while still maintaining an adequate credit profile is how debt should be used. I like to capitalize my personal finances in the same way that a corporation would capitalize itself. Very few optimal corporate capital structures are debt free. Microsoft is one of the worst managers of capital structure on this planet. They have $49 billion in cash and liquid investments that is earning roughly 2% interest. That is misallocated capital. They have no debt on their balance sheet. They are not maximizing their credit capacity, and as a result, they are operating beneath their means. Many overly conservative consumers operate in the same fashion. It's folly.
How do you think acquiring debt could help Microsoft? I have read a couple of articles that praised Microsoft for their strong position in cash.
I'm on the same track w/ you, drapg. Thinking of buying a house this August. I'm pretty sure that will knock my ass out, but better than living in an apt and the interest rates being so low..
Just like everything else in life...moderation. Having a moderate amount of debt to maximize your lifestyle while being able to have liquidity to invest is good. Running up 20,000 in credit card bills while in college: bad.
Ditto this whole post for me. I paid off all my debt about 2 years ago. It took A LOT of sacrifice to do it, but it's worth it. Now I have 1 credit card that I pay IN FULL every month. I'll never go back to being in debt. Some of the worst years of my life.
