Question

Is it important to you, to be completely debt free? Tell me WHY

Answer 1

Being debt free is the quickest way to become wealthy with minimal risks.  

Answer 2

Nope! We bought a house last year. It’s important to me to have equity that we can lean into to purchase more property. It is important to have the credit cards and student loans paid off. Both are almost complete, so having those two extra payments go away for good will free up money with which we can invest.  

Comments

@pampas80008 debt can be a tool to generate wealth. Best way to measure is the impact it has on your personal cash flow!  

Answer 3

I don't have it as a goal currently, but I doubt anyone who is debt free regrets it. especially if they own their own home and have other investments like the stock market. I really think it's a personal choice. What matches your goals, and what makes you sleep well at night.  

Comments

@mcdaniel absolutely agree  

Answer 4

Honestly for peace of mind. Debt gives me anxiety.  

Comments

@denning agreed

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@denning agreed, got rid of student loans about a year ago, and while I could have explored better return opportunities I felt so much better getting that off my “books”

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@stampede me too! A student debt relief maybe legit maybe scam called me several times after and I was so happy to say no I don’t owe! Take me off your list.  

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@denning anxiety is dangerous! Are you debt free at the moment?  

Answer 5

We are completely debt free. Own 2 cars, no student loans or credit cards. We rent a home currently. Important to me during times like this because I’m not obligated to anyone

Comments

@opportune do you want to own a home one day? Or happy renting?  

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@sinotibetan74 I wouldn’t mind it one day. Right now there is way to much uncertainty of how our economy or society could look in a year. 30 million people out of work. Before any of this happened 7 million people were 90 days behind on car payments. Corporate debt is at an all time high. Point being a lot can still happen thank makes me feel like now might not be the best time to buy a home

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@opportune absolutely agree that timing is probably not quite right. A little uncertainty will always do that. Do you think you will utilise debt to purchase the house when you do?  

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@sinotibetan74 I live in a high cost of living area. I’d never be able to purchase a home without a mortgage. The thing that is scary is any equity you have in your home is just a reflection of the current market conditions. The total of the loan is real.  

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@opportune so do you think that will be something you look to pay off early as well?  

Answer 6

It is important for me to be consumer debt free as I just can't find it justifiable to hold on too and comes with unacceptable interest rates. I'm okay with mortgage debt and vehicle loans within reason, though would take advantage of paying them off early if circumstances permit.  

Comments

@national85 very healthy outlook  

Answer 7

YES! My only debt was my home for 10 years and a car loan for 3 months. The best reason to be debt free is in case like right now, i have NO fear about losing my home, being kicked out, having my car taken away. I suppose the worst thing would be not being able to pay land taxes, but the government is pretty slow to kick you out of your house for that. Edit: Math wise, it wasn't good to pay off my home early. Not at all! But i kinda broke even with my timing and the recent stock market drop.  

Answer 8

Hell no! Cheap debt is leverage!  

Comments

@stadtholder agreed  

Answer 9

Debt free is the ticket to my success. House and self storage facility paid in full. I had a car loan 1 time when we were 23. No student loans, no credit card debt. Of course I could take all the money I used to pay off both and roll it into more property, but no bank will ever be able to come take what's mine. I also think if you are using cash for investing, you make far smarter choices. You grow slower, but your lessons don't hurt as bad!  

Comments

@joelynn3 I love the call out about “lessons don’t hurt as bad”

Answer 10

Yes. To me, debt free = financial independence.  

Comments

@spencer8887, there is still risk even with 0% financing. It's not the interest that generates the risk, it's the size of the debt that must be serviced. It really depends- if you already have the financial backing, it pretty much is risk-free. It's when people leverage beyond their means to repay where they run into trouble (Airbnbs are a great example of that right now). To your last point, it's impossible to live independently of money. That's not what financial independence is. You're always going to be dependent on your investment(s) to generate cash for you to live on. Being dependent on an employer is much higher risk than being dependent on the government or the economy.  

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@ihs6847 “it’s impossible to live independently of money” - off topic but wait until I start building my Sustainable Living Communities. which will negate the necessity of money for our basic needs (food, water, shelter)  

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@story I would love to know if you have made it to being debt free?  

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@sinotibetan74 only mortgage left to go. Sadly, that ones gonna be a while.  

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@story yeah that one does take a while, but keep on going! Well done  

Answer 11

Define debt further. I think carrying a credit card balance is bad and this is almost undisputed. Car loan debt not good. Mortgage and rental properties are a totally different story. But I think all debt being gone before retirement makes sense.  

Comments

@tali787 healthy outlook right here  

Answer 12

Debt makes me nauseous and it's part of the reason I'm still at my day job. I really rather stick nails under my fingernails where I'm at but what can you do

Comments

@rillis77 - The visual!  

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@denning I'm good at painting a picture

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@rillis77 really good at painting a picture  

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@sinotibetan74 wait until you see my artwork

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@ gr3g. 1ve5

Answer 13

To reach financial independence, yes. I have a document called 'Path to Freedom' that outlines all the debt I do and will have in my lifetime. I keep track of it pretty well and it aids me in planning that FIRE life I want in about 12 more years.  

Answer 14

It makes sense to borrow money if it's for an investment, such as buying a house, starting/growing a business or learning job skills/student loan. Having some liquid savings which keeps up with the inflation for unexpected emergencies is as important as paying rent/mortgage, food and utilities. Having a good credit score is also important. There are always credit card offers with no interest for a year which can be helpful in cases of emergency as well. Sticking with minimalist basic essentials for living is the key for remaining debt free. And of course, never forget about constantly adding to the retirement account. Because it is the only way to retire early and do what you want.  

Comments

@margravine6136 good thinking  

Answer 15

No. When necessary, I leverage debt, because it can be more logical to do so instead of paying cash (i. e. 0% financing available on something you’ve saved cash for, and you continue receiving interest on the cash and pay 0% on the debt). Also, debt is acceptable if it is expected to directly or indirectly increase your income (i. e. student loans, training materials, etc. )

Answer 16

During difficult times we’re reminded of the benefits of being debt-free. If you own your home then no-one can take that from you.  

Comments

@communicative Unless you fall behind on paying your taxes

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You never own your own home. Like @uuge6 said. I have always thought of it this way. The home is twice as expensive paying all the taxes, utilities, upkeep AND mortgage. . Home with debt = pay two rentals. When the mortgage is paid then only paying for the taxes, utilities, upkeep. . Home without debt = pay one rental.  

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@azarria94051, technically you own the home, you just rent the land from the government. My "rent" is about $147/month in taxes, plus another $130/month in insurance. But you won't find rent that cheap anywhere. But I get what you're saying. We had a bad AC system installation from when our home was built. It cost $25K to replace. To pay it off within a year means we're paying the cost of a mortgage again. That's a good way to look at it.  

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@ihs6847 I am more conservative with my definition Tax lien foreclosure is the sale of a property resulting from the property owner's failure to pay tax liabilities. A tax lien foreclosure occurs when the property owner has not paid the required taxes, including property taxes and federal and state income taxes

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@azarria94051 gotcha. But to me, that's like saying we don't live in a free society because if you break the law, you go to jail.  

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@ihs6847 that’s exactly why we don’t live in a free society!  

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It depends where you live . if you live in the UK, then you pay rates not land tax!  

Answer 17

Bad debt, like collections or credit cards, yes. Good debt, like a car payment or a mortgage, not so much.  

Comments

@turtledove Car loans as good debt is debatable. If you get a good, low interest, low term loan and a car is a necessity, sure. I know some people with 7-13% interest car loans, wouldn't consider that good debt even if a car is a necessity.  

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Erica, 3. 2%, so I'm going to classify it as "good".  

Answer 18

Ain't nothin but a heartache

Comments

@whitechapel9294 have you been able to achieve being debt free?  

Answer 19

I'd like to be debt free but it's not #1 on my list currently. I'm able to invest still. My unsecured debt isn't charging me & I live below my means.  

Answer 20

I suppose it is a form of freedom. You can pick up and leave, move to the woods, travel abroad, or become a hermit, without having to worry about anyone else. "Owe no man any thing, but to love one another"

Answer 21

Freedom  

Answer 22

No. Low interest debt is fine. If I can make more interest off investments I'll prioritiZe that. My car is at 1. 9% and my house 4. 875% and I can easily beat those.  

Answer 23

Only debt I want is house and maybe a leased car

Comments

@bevins why would you lease a car when you can buy a new one for free every so often?  

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@spencer8887 if you buying the car in cash I don't consider that free. Or u mean 0% apr

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@bevins no, I mean using the same money over and over to buy cars:  
https://youtu.be/g8qhPsGLDpw

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@spencer8887 I see your point. #wisdom

Answer 24

Because "the borrower is the slave of the lender".  

Answer 25

Yes, being debt free relieves you of so much stress. You have more money to save and do the things you want without having to worry about if you have enough money. Debt is like a headache that will only go away once you take care of the problem.  

Answer 26

I don't care so much about my student loan, but I want to pay off my car so I can take that monthly payment and save it to eventually buy my next car with cash!  

Answer 27

Not really, it depends on the type of debt and the interest rate environment.  

Answer 28

Yep! Should be completely debt free by the time I turn 38 in a year and a half.