0.00% Debt, Anyone? (Page 2)

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Good post. 

We are down to a Mortgage and one car....  Hoping to have the house paid off in 16 years......    just in time for the first of my two kids to goto college!!!!  Can't even imagine college cost in 16 years so we will need to be debt free.....

However, since Trixie seems to have a secret CC i may have to question my wife on this as well, she is very sneaky......  but then again i have a secret slush (tri-fund) as well.....

And, of course, you don't have to sacrifice savings/retirement in order to payoff a 15 year mortgage in 15 years. You can do both - pay off mortgage AND put money into your 401k, savings, etc.

I am almost there.

No CC Debt, 2 cars that are paid for. (An older car, and a newer one purchased with a 2 year loan)

I have a 10 year mortgage on my house that I refi'd into 4 years ago (Fixed 4.25%) and have been accelerating. My savings/investmets are also growing at a modest rate. (With monthly contributions)

Plan on being there is all goes well by 2012.

Just a question... what's your reason for accelerating a 4.25 Fixed mortgage?  Is is financial, or psychological?  It can't be financial, can it?

N.B.  Not criticizing if it is more of a mental reason for wanting to have it paid off, that's cool, just wondering. 

Well, my realtor was telling me I was a fool to ever pay off a loan like this since it is just about the cheapest money you can borrow.

The thing of it is, I have no other debt this is where debt service goes.

He seemed to think the best approach was to use the extra money I am sending to the Mortgage to add to the money I already invest every month but that did not pass the smell test for me.

Why would I invest money at some long term rate of return and end up paying interest on it for then next 6 years. Granted, I would still be in the black on paper, but the long term economic gain would be offset by real interest payments now.

Seemed like a better bet for me to just pay down the mortgage.

I have some large expenses coming up in about 10 years and it would be very nice to just pay out of pocket for it instead of dipping into savings/investments to pay for it. (even though some of my investments are earmarked to pay for these expenses)

Fair enough... also, the gap between the 4.25 you are paying now and the 7 or 8% you'd gain over the long-term is narrower than that, when you figure in the mortgage interest tax deduction and capital gains taxes.

Not debt free (yet) but working towards that goal. 

As for Mortgage versus investment.  For most of us, a mortgage is our cheapest opportunity to borrow money.  To the extent housing debt prevents other forms of installment loans (car loans, credit cards, etc.) it isn't too bad.  The current mortgage tornado reinforces the point that unsustainable housing debt isn't good either.  The compounding works both ways, and as long as your investments can provide a greater risk-adjusted return than pre-paying the mortgage, invest (that's the whole principle behind bonds, borrow money at a rate lower than you can invest in your business). 

No CC (thanks to the wife who is diligent... I'd prolly let it slide )

No car payment - Feb 08 was the last one (wife has a 0% car loan which we could pay off, but that's pointless)

No mortgage (which I rue every April 15  )

No student loans (paid off with family help)

No family $$ owed

wow, that must be a kickazz bike, what did you buy for $22k???   

F....no

It's all about using OPM to create more assets. And besides a little fear in crashing financial is good for the entrepreneurial soul.

Though some days I feel like a hamster on a wheel with my wife cranking the speed.

Dude, stealing is not the answer

nevermind, it wasn't that funny

I saw it... comedy gold, man!

Just the house is left.  I'm trying to have that debt gone in the next 10.5 months.

Dave is pretty cool.  I just started listening to him. 

Yes, I am on the DR plan too.  I have paid off 25K in debt so far and have about 17k left and then a piece of land I am tring to sell.

I can't wait to call in and screem "we're debt free".  If the land sells, we should be done with the debt by the end of the year. 

Freedom, here we come.  Never going to use a CC again and never getting a loan for anything again.  I love not having payments. 

Tax advantage by having a mortgage.  For example in a 25% tax bracket, a loan of 200k, and interest of 5%.  That is 10k interest per year. 

You are sending the bank 10k to save 2.5k becuase you get a deduction.  Does not make much sense to me. 

You can give the $ to a non-profit and get the same tax deduction yet not have the loan or make the bank rich. 

Dave Ramsey does NOT recomend to pay house off before saving for retirement.

Baby Step 4 is 15% in retirment and Baby Step 6 is pay off the house.  He often says he does not want someone to retire with a 200k paid for house but have no money in retirement and that is why the baby steps are in the specific order.