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Wow Yassin1987, impressive. Some people have debt their entire lives. We chose not to and apparently, like yourself, we lived well within our means. My wife and I retired 15-20 years before most other people. We are avid followers of Clark Howard (consumer advocate). Not everyone has the desire to quit working early, but it was a priority for us and we planned accordingly. Most people have little self control/discipline, you are an exception and that will serve you well in the future.
Wow Yassin1987, impressive. Some people have debt their entire lives. We chose not to and apparently, like yourself, we lived well within our means. My wife and I retired 15-20 years before most other people. We are avid followers of Clark Howard (consumer advocate). Not everyone has the desire to quit working early, but it was a priority for us and we planned accordingly. Most people have little self control/discipline, you are an exception and that will serve you well in the future.
Thanks! A bit of an update. I decided to bite the bullet and pay off my car loan. So I no longer have any recurring debt.
The only debt I would be ok with are loans/mortgages with appreciating assets attached to it. I'm 50/50 on a car loan. While interest rates are relatively low on those loans, you're still paying money for the privilege to take out the loan.
As soon as I sell my house, I will be completely debt free and I plan on staying that way. Therefore, I wouldn't need to stress about finances because I have no debt at all, although I will need to pay for rent.
Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by eddiehaskell
I like my low income/no debt approach which I laid out in the huge “retire in your 20s living on $20k/year†thread. It’s a pretty simple lifestyle and you don’t have to worry about getting anything paid. I really hate making payments on stuff I that after a few years I don’t enjoy or use as much.
Too many factors at play and too many questions that need to be asked to give a solid answer. Does my earning potential ever increase with the lower income option? How much debt we talking? What is the income to start?
With that being said, many people make this decision when they go to college. They choose lower income jobs through working part time, or not at all and they get deeper into debt through student loans. The idea is that eventually this will increase their earning potential. Most of the time college pays for itself assuming you choose a good career path.
So I guess I made the more debt, higher income decision and it has worked out well for me!
I am retired. We live near a state university campus, and socially we know many current students. One thing that amazes me is to see how many of these students have chosen majors that do not lead to high paying careers. they are steering themselves toward low-pay or careers outside of their degree fields. And nearly all of them are racking up a lot of student debt.
I am concerned about how many of them [after they graduate] will be earning between Minimum-Wage and 2X MW in their 30s while facing student debt equal to a home mortgage.
I am no college counselor, but it seems that nobody is giving them good advice.
Simple math. If you spend everything you make you will have nothing left no matter how much you earn. If you make a little but spend very little then of course you have something leftover. I would rather have the higher income and lot's of debt (but personally I wouldn't leverage myself that much) as you can always shed some of those debts. The more you make, compared to the next person in the same locale and family situation, the easier it should be to save.
Eventually it comes down to shedding expenses which is going to be easier for the person with high income. A person with very little income can only downgrade so far where the person with the higher income has a large amount they can downgrade.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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I have always had relatively low income and moderate debt.
If I had a choice ....it would definitely be high Income and high debt, then you actually HAVE a choice!
As mentioned, it often takes high debt to gain high income. (that's fine with me). I would never consider college debt as a good investment leading to high income. WAGE income is seldom high income... investments = money working FOR you (not youworking for a salary... (incremental income... not 'substantial' income))
If you become injured, sick, disabled, required to give care to a family member... your wage income will disappear,
Investment income flows, whether you are in Toronto, Tokyo, or Tahiti.
I prefer little debt, I have a mortgage thats 1/5 the value of the home and thats it. I hate being in debt, especially as you age. I have always even when we were poor put money away even if it was only 25.00. We were able to almost pay our first house in cash because of that.
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