I lived my entire life without debt

Monocrom

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But are they skewed if each time the two individuals are willing to try again with new partners?
 

importculture

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People who earn above the median income use dept as leverage to minimize taxes while also being used to invest in assets. There's good ways to use dept if you're smart and disciplined. A lot of creditors do have bad practices. But in the end company's survive through profits and not through bleeding hearts. Kind of disheartening when you think about it.
 

Monocrom

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People who earn above the median income use dept as leverage to minimize taxes while also being used to invest in assets. There's good ways to use dept if you're smart and disciplined. A lot of creditors do have bad practices. But in the end company's survive through profits and not through bleeding hearts. Kind of disheartening when you think about it.
The bottom line is The Bottom Line.
If it was legal and brought in huge profits, creditors would be kicking puppies all day long! Boot-makers would be flooded with orders, and be backlogged for a decade.
 

gadget_lover

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I did not read the whole thread, so sorry if this is repeated.

The basic concept of setting aside money in advance is valid, but it is best expressed as "managing a budget."

It works differently than "saving money for 60 months to buy a car". Saving is always noticed as a drain on your funds. Making payments of predetermined amounts to a fund is easily ignored because it's consistant. Every payday you add money to an account to buy the next car.

If your car lasts longer than expected you may find that you have a goodly amount of money in your car account by the time you are ready for a new one. A case in point is my wife's car. We put 500 a month into the car purchase fund, assuming a $30,000 every 5 years. Once you add the trade in, that lets us buy a car for about $40,000 without being impacted by the outlay. She's had her car since 2009. That's 14 years of adding $6,000 a year into the car fund. We have about $85,000 in the car fund. We also have money in a house repair fund and another fund that holds money for insurance payments. We even have a fund just for buying toys like flashlights, tools and hobby paraphernalia.



You can use the same basic process when buying a home, but it's different because you need to live somewhere while buying the house. That means you are almost required to take out a loan with the accompanying 200 or 300 percent interest due to the compounding. That is where the idea of paying it off early comes in. If you get a $200K loan at 10% interest compounding monthly, you will pay close to $630K over the course of 30 years. That is with payments of $1,755.14 per month.

The equation changes greatly if you add an extra $100 per payment "to be applied to the principle". The extra money will take 7 years off your mortgage and it will save you about $125,000 in interest. You don't even notice the extra outlay after a few months. If you add an extra $200 a month (instead of $100) you would save $175,000 in interest and the loan would be paid off in only 20 years. At the end of the 20 years the house is yours free and clear.

I used the web site at https://www.mycalculators.com/ca/loancalcm.html to come up with those figures. Fill in every box except 1 and it will calculate the rest of the values.
 

gadget_lover

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In re: equitable divorces...

I've divorced twice. I had two children from the first wife. None from the second. I negotiated, and received, full custody of the children in the first divorce since she was wanting to "be free and footloose". She had visitation rights every other weekend and half of the holidays.

When we went for the final appearance before judge, he skimmed the paperwork and then addressed my wife. The honorable idiot said to her, "I see that you did not ask for child support. You are entitled to child support until the children reach adulthood. Were you aware of that?"

I politely interrupted and explained that since I had the custody of the kids and a steady income from a stable career, I had waived my rights to child support. He did not pursue the issue.

During the divorce from the second wife the judge, on a whim, gave my soon to be ex wife visitation with MY sons every other week and for 1/2 of the holidays plus part of the summer.

I had to explain that under his plan I'd only have MY kids during the weekdays and never on Christmas or a birthday. I added to that the fact that Ex #1 and Ex#2 did not get along and would never come to an agreement over a visitation schedule. He gave in. Ex #2 saw the kids exactly once in the year following the divorce, and chose not to see them after that.

There is no equity in a california court of law.
 

LuxLuthor

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Zero debt, ever. No credit cards, no bank loans for anything, no auto loans. I always thought - If you want something, save your pennies until you have enough. I always borrowed from myself, from my emergency fund. At zero percent interest loan you might say.

Yeah, well there is something to be said about making money using other people's money (OPM). I took out a second mortgage on my home at 2.9% and invested money in stocks and made a fortune with it.

Being debt free seems pointless IF you have adequate income to cover the interest. Credit cards using OPM and paying balance in full every month is a no brainer.

Being debt free became a superstitious belief because so many have no personal discipline regarding money, behavior, integrity, etc.
 

alpg88

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I also have no debt, all CC are paid in full every month, my home is paid off. We do not buy cars, we lease them, so no loans. It is really not practical today not to have a CC nor a credit score. When you are financially responsible, and have a good credit score, more doors are open for you.
 

jtr1962

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Yeah, well there is something to be said about making money using other people's money (OPM). I took out a second mortgage on my home at 2.9% and invested money in stocks and made a fortune with it.
I would personally never mortgage the roof over my head to invest the money. People can and do lose money in the stock market. I go by the old adage never invest more than you can afford to lose. Besides, honestly the markets have done squat for a long time. It seems every time I have a good year, the next few I lose most of the gains I made.

Right now treasuries at 5% sound like a good place to park money.

A paid-for house these days is as good as gold. My dad paid made his last mortgage payment in 2003.
Being debt free became a superstitious belief because so many have no personal discipline regarding money, behavior, integrity, etc.
There are other reasons as well. Not having debt means fewer bills to worry about paying each month. Right now the only recurring monthly bills I have are Verizon cable/internet/phone, the electric bill, and my two credit cards. The quarterly bills are water/sewer and real estate taxes. Annual bills are home insurance and the premiums on my mother's health insurance (i.e. I could pay these monthly but I like the simplicity of just paying them annually-less stuff to worry about). The only thing remaining is home heating oil, which is basically "as needed" when we get oil deliveries, typically about 5 times per year. If I could pay the electric, Verizon, water, and real estate taxes annually I would.
 

LuxLuthor

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I would personally never mortgage the roof over my head to invest the money. People can and do lose money in the stock market. I go by the old adage never invest more than you can afford to lose. Besides, honestly the markets have done squat for a long time. It seems every time I have a good year, the next few I lose most of the gains I made.

Right now treasuries at 5% sound like a good place to park money.

A paid-for house these days is as good as gold. My dad paid made his last mortgage payment in 2003.

There are other reasons as well. Not having debt means fewer bills to worry about paying each month. Right now the only recurring monthly bills I have are Verizon cable/internet/phone, the electric bill, and my two credit cards. The quarterly bills are water/sewer and real estate taxes. Annual bills are home insurance and the premiums on my mother's health insurance (i.e. I could pay these monthly but I like the simplicity of just paying them annually-less stuff to worry about). The only thing remaining is home heating oil, which is basically "as needed" when we get oil deliveries, typically about 5 times per year. If I could pay the electric, Verizon, water, and real estate taxes annually I would.
Well all my bills are setup as simple autopay, and I never worry about bills.

I never have borrowed more than I can afford, including the second mortgage. Fact is that I did make a lot using that 2.9% interest rate using OPM.

If a person cannot make more than 3% investing even in bad times, then you shouldn't bother.

Owning a home that builds equity is a useful investment/asset, but using it as collateral to make real money in addition to the improving value is intelligent. All savvy investors understand how to leverage OPM.

There are still people who keep all the money under the mattress or in safe deposit box as actual cash....having no idea how much they are losing due to devaluation and inflation. It is a superstition for those who don't understand how to effectively manage and grow money.

Would I take a mortgage at a 5-6% or higher rate and make these claims? Nope. 2.9% was like winning the lottery and you were stupid not to take advantage of it.
 
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jtr1962

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If a person cannot make more than 3% investing even in bad times, then you shouldn't bother.
I make more than 3%, but hardly enough to turn a 2.9% home equity loan into a fortune. I stick to mutual funds. I'm not touching individual stocks with a ten-foot pole. I don't really have the expertise for it, nor the time to spend watching the markets that closely.

Right now my financial advisor at my bank manages my investments. That includes occasionally selling funds he feels are doing nothing, then purchasing better prospects.
Owning a home that builds equity is a useful investment/asset, but using it as collateral to make real money in addition to the improving value is intelligent. All savvy investors understand how to leverage OPM.
If a person has the time/expertise for this, great. To me a home is a place to live in. Historically, home prices only more or less rose with inflation. The last ~40 years is an anomaly. Many home equity loans have a clause which states if the equity in the home falls below the outstanding loan, the bank can call the entire amount in. If home prices drop a lot of people with equity loans will be hurt. And given how inflated housing is now, a major correction looks likely. My parents' home cost them $52K in 1978. Corrected for inflation, it should be worth about $250K, $300K tops. The supposed market place is $850K.

I totally ignore a primary home as an asset. If you sell it, you'll be spending just as much to get something comparable. Sell high, buy high. No, I'm never moving to the sticks where I might get to keep some of that equity. I can't drive, plus I'd hate living anywhere but a megacity.
There are still people who keep all the money under the mattress or in safe deposit box as actual cash....having no idea how much they are losing due to devaluation and inflation. It is a superstition for those who don't understand how to effectively manage and grow money.
I keep something in a regular bank account for emergencies but I'd say 80% of my money is invested.
Would I take a mortgage at a 5-6% or higher rate and make these claims? Nope. 2.9% was like winning the lottery and you were stupid not to take advantage of it.
Well, it's technically my mother's house so I didn't have that option. And she's had dementia for a long time, so she wasn't competent to make that decision, either. Combined, my mother and myself have high six figures in assets, not including the house. That's plenty. Plus my mom's income exceeds our expenses by a comfortable margin. Another $100K or two isn't going to make any material difference in either of our lives.
 

LuxLuthor

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Right now my financial advisor at my bank manages my investments. That includes occasionally selling funds he feels are doing nothing, then purchasing better prospects.

Yeah, been there with Financial Investor functions of banks. They make ridiculously high salaries because the money they make off of unsuspecting bank customers. They pick funds/stocks that maximum their banks return under the guise of protecting your safety. They disguise their management fees. I regard these among some of the worst investment choices a person can make, Knowing a bank financial advisor since high school, he told me that it's like shooting fish in the barrel. The bank officers see your deposits and make a lateral referral to the Finance department. It's a tiny bit above keeping your money under your mattress. You could do much better just shopping for mutual funds with Morningstar looking at short and long term performance records, but do what works for you.
 

turbodog

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Everybody is entitled to their opinion....

Lastly, I would agree the world is upside down right now, especially in the USA. The USA is quite unrecognizable (unfortunately). Over the past 5 years in particular it has gotten VERY BAD....

Opinion...

Problem is, facts don't support your opinion. Crime is trending downward, health outcomes are improving, etc.

And immigration would stop tomorrow if people would stop hiring immigrants (legal or otherwise). The simple _fact_ is, we don't have enough people for all the work. And some of the work, the hard backbreaking type, nobody but immigrants will even give it a second glance.

Facts.
 

turbodog

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...

Right now my financial advisor at my bank manages my investments. That includes occasionally selling funds he feels are doing nothing, then purchasing better prospects.
...

Emphasis mine. Practically ALL data shows your 'advisor' to be full of it, providing subpar returns while still taking a slice of your cake.

Put that crap in a fund at vanguard and book an extra 1% a year by removing that leech from your body.

I encourage you to start ~20 years ago and read the 'intro' section of berkshire hathaway's annual reports.

 
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Opinion...

Problem is, facts don't support your opinion. Crime is trending downward,
The FBI's crime statistics estimates for 2022 show that national violent crime decreased an estimated 1.7% in 2022 compared to 2021 estimates:

  • Murder and non-negligent manslaughter recorded a 2022 estimated nationwide decrease of 6.1% compared to the previous year.
  • In 2022, the estimated number of offenses in the revised rape category saw an estimated 5.4% decrease.
  • Aggravated assault in 2022 decreased an estimated 1.1% in 2022.
  • Robbery showed an estimated increase of 1.3% nationally.
1.7% is not much of a downward fall. Surely that's nothing to give one confidence that crime is no longer a huge issue. Do you have any statistics on big-city crime?

And immigration would stop tomorrow if people would stop hiring immigrants (legal or otherwise). simple _fact_ is, we don't have enough people for all the work.
I'm betting very few members at CPF have any objections to LEGAL IMMIGRATION, which seemed to provide the needed workforce for as long as I can remember.

You're a broken record, posting this same thing again and again. What don't you understand concerning management's directive not to post political opinions?

Please take trolling of this nature to the Underground where it belongs. 👇
 

turbodog

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If jobs were not available, then people seeking jobs (immigrants, from south of the border or otherwise) would not come. That's not a political opinion. It's an economic fact. Would you move to an area for a job if you knew ahead of time there were _no_ jobs available?

A an example of a political opinion would be:
"Surely that's nothing to give one confidence that crime is no longer a huge issue."

That's an opinion. Please get your assessments straight.
 

LuxLuthor

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In part some are coming here illegally to earn money, but some are fleeing bad circumstances at home, and most unfortunately, many are drawn here due to the social welfare support even if they don't work. Putting them up in nice hotels, etc., and giving all sorts of "humanitarian provisions" at taxpayer's expense is also a reality.
 

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