0.00% Debt, Anyone?

My husband is, does that count??  He has a good job and was frugal.  Didn't buy stuff unless he could pay cash, cars included.

I still have college loans, and a CC.   Shhhhhh.

Getting there. Soon, soon! By end of this year, if I work hard. Or, just work.

Got a 15yr mortgage 15 yrs ago.

Never had college loans (Pell grants first year, then worked full time while going to college so I paid as I went).

My car has been paid off for 10 years - I'm overdue for a new car! Which I'd llike to buy for cash.

I've been living very frugally these last 4 years. Very little credit card debt and been paying off what I had.

I am spoiled by my family, so I have no student loans (my dad does, but I don't!) and no car payments (I only pay the insurance). I don't own a house. And I always pay off my credit card statement. I also make crap, so I guess it's good that I have no debt, so I can save what little I can.

We're working on it using the techniques in his book Total Money Makeover.

And yes, you're nuts. I'm not sure what that has to do with this subject, though. 

There is some value to specific types of loans.  While we were told in "Hamlet" - neither a creditor nor a lender be, there is taxable benefits.

I just scored a huge tax advantage paying interest on my mortgage.  If I had paid cash for a house, we'd still be in a one-bedroom apartment saving up for a double-wide trailer.  I also reaped a serious financial windfall by placing some $$ on one card with a 1/9% APR and taking a 5% rewards.

Not to mention, I've just phased out the tax benefits of my student loans and they'll be paid off shortly.

My goal has never been to be out of debt, but rather my goal has always been to have a positive personal balance sheet, while minimizing any interest amounts I pay.  (e.g. I have no problem taking a zero interest car loan)

We hope to be at house payment only in 6 months.  We need to sell a car, though... anybody interested in a lovely 2001 Lexus IS300?  Low miles...

The tax benefits from having a mortgage are too good to pass up, IMO.

Not sure why you'd want to be house payment free.   The interest is cheap and if I had the means to pay off my house, I'd rather save/invest it.   I'd rather have a $1500 house payment and $300k in the bank, than no house payment and no money in the bank.  To me, that is more financial security than no debt.  I lose my job, I have a huge cash reserve to keep my debts paid and family fed.  I am not sure I ever want to pay off my house until I have well over double it's payoff amount in liquid assets. 

I was a big fan of Dave Ramsey for a few months, but I realized he is a little too far to one side.  Mainstream America is too far to the other.   Balance is key.    Some debt can be a useful tool, some debt is just stupid and risky.   No debt means losing out on potential opportunity to build more wealth while taking a risk-free lower return.   Plus Ramsey acts like he got rich by following his program.  No, he got rich by writing a book and getting a radio show.  I am sure if had a best-seller and a syndicated talk show, I could live debt free and still be wealthy too.  

The only loan I have is my mortgage. 

Paid off all the school load, car and credit cards. 

Mortgage Debt?  Tax Relief, ummmmmmm...?

If you make $70,000 a year, you are in the 25% tax bracket AND if you pay the bank $10,000 for the year on a $200,000 mortgage, you save $2,500 in taxes.   You are still out $7,500 as opposed to no mortgage. 

Also, no one has ever had a foreclosure on a paid off house...you are assuming unnecessary risk.  

How is this a good thing? 

I attempted to answer that a little in my response.  I agree you don't make money on teh mortgage deduction, but it makes it cheap.   If you invest instead of payoff, you nearly break even after 30 years, but you have a paid off house AND tons of cash in the bank.  If you payoff first and then start saving, you never catch up due to lost years of compounding.   Plus as I said, I'd rather have lots of cash and lots of debt at a low interest rate, than no cash and no debt.  That is more risk, but more reward.  So you gotta take what you feel comfortable with.  

Trying to pay off your house can be risky as well. What if you lose your job when you have your house 90% paid off?  You can still get foreclosed on and you'd lose the $200k you've paid down.  If you saved money instead you could stay afloat for a long time. 

Yeah, what tk said.  But if you've got lots of other savings/assets, then go for it - pay off your house.   

Okay....

Good discussion.  Say you invest money (and still have a mortgage) and get 12% return!  Good.

Take away inflation and you are now at a 8.5% return VS a 5.5 % mortgage payout.  You net 3% and are assuming risk on the house.  It may or may not be worth the risk.

Now, that said - - I'm not following my own advice.  I invest and have a mortgage but it is interesting to look at the issue in the above terms. 

Not even close but my goal at least is to never buy a new car and slowly chip away at my CC debt.

Recently sold my house and now am renting.  Not really a smart move but after new AC and foundation repair I was constantly stressed about repair and it was not worth it.  My goal is to own a house outright but that is not likely, next is to be able to afford a house and not have to worry about repairs.

I agree with the previous poster that Dave Ramsey is a little out there and some debt is good as long as you have net worth.  I do think that paying off your house and not having a loan is a good idea.  I don't agree with the it is low interest and you get tax savings.  If you buy a house for $300K (in Dallas at 6%int for 30yrs) our payment is $1800 plus taxes and insurance, which around here are high, probably 6K a year in nice neighborhood so $500/month = Total payment of $2600.  Int the first you with interest and taxes you can write-off around $22,500 (standard deduction is around $13K I believe) so you are going to save a % of your taxes based on our tax bracket on an add'l $10K or so (no granted you have the ability to write off other things at this point though so additional savings are possible.)  I don't think you really save all that much.  Now granted if you have $300K to invest and can make a decent % it might be worth your while to keep the cash and invest but the way the stock market is today you would loose your shirt. Oh, and if you pay the house off you can always borrow against it if you lose job, etc. so the cash is there if needed.

I guess it really depends on where you want to be.  There are so many possibilities about how the situation could play out.  Even with CC debt.  If you can find a CC that is paying 0% interest with a $20K limit, why not borrow the $20K and invest, even if you get 5% that is $1K of free money.

If you are going to factor in inflation, the cost of paying my mortgage payment in years 20-30 is likely pretty inexpensive cash.   Also, you can't discount the power of the lost years of compounding.  Sure, you pay off your house in ten years and then invest double, but you'll likely never catch up. 

I am down to college loans and a mortgage on my condo I am renting out in another state.  Will buy a house soon to live in, so I will have that mortgage too....

I'm just going to sum up my opinion:

No house payment, good.

Lots of money in savings, good.

Sacrificing savings/retirement to pay off house early, questionable.