Financial Survival

[308]

Save yourself one heck of a lot of money by getting out of all debt plus it will give you a freedom few will ever know. That money you save turns into real wealth and will help you become a free man. Being free is the most wealth you can have.

Good advice. The wife and I are going through Dave Ramsey's Financial Peace University (FPU) to see if we are on track. We have no credit card debt, but have a mortgage and a small auto loan. So far it looks like we have been on the right track. We have been saving 25% of our gross, and give +10% to charities

The thing is, we have been sold a bill of goods and brainwashed into believing debt is good. We put a bit in the savings account and earn 1-2% and welcome the bank's offer to use their credit card to borrow our own money at 12%+

We watch TV at night not realizing the the program costs $88/per second to produce while the advertizing is sold for $10,000/per second. So the question that is not asked by the audience is, "what business are the network programmers in?"

I have almost convinced our 24-yr old office manager to start adding to her 401K with baby steps of $10/week. At 24, saving only $20 per week until 70yrs old, and earning the historical 10% rate of return, she will have $1-million in the bank. This will probably quadruple very easily because once she is used to the idea, and begins to see the compounding of interest, she will begin to save an increasingly larger percentage of here income, especially as she moves into her higher earing years of the 40s-50s. The sad thing is, not many of us are taught these concepts in a way that gets us excited and motivated to ensure that we do not become slaves to the government in our later years.

Rant off...

 

[Oregonhunter5]

10% isn't easy, unless they have the education on where and how.
The sad thing is, people aren't using self control.

 

[308]

10% isn't easy, unless they have the education on where and how.
The sad thing is, people aren't using self control.

$10 per week to the 401k and they'll probably see $7.50 less on the paycheck
Better yet, if they get a tax return at the end of the year, simply increase their payroll exemptions and move those $$ from Ob0ngo's hands to their own tax exempt savings and reduce their gross taxable income to boot. I know its a hard concept for the immediate gratification crowd

 

[Just Jim]

The way media works they sell you what they have by telling you it has great value. Americans fall for the sales pitch and life style. Debt is slavery, it owns you. When they ask you your credit score it's about how much you can get for your life. Media is the salesman and the banks own them. We would all save money if people would stop useing credit, prices would fall like a rock.

 

[NoFlinch]

.............. The idea being, when I retire, my new property/house will be paid for.

The big wild card is what happens when my health eventual fails.
.

And if you are not already doing it, start bi-monthly payments. I am certain you know of their advantage......

Do what I am doing. Stay healthy until the day you die.

 

[Just Jim]

How many of you guys are watching the dollar? At the moment it is the world currency, that can change overnight. What will that do to your financial plan?

 

[NoFlinch]

Next time you drive by some apartments, look at all the nice newer cars in the parking areas.

Next time you drive by an area with a lot of known rentals, look at all the nice cars/boats/trailers/etc. in the driveways...

Drive through a trailer park.....

I spent 25 years in the Real Estate lending side of Banking. I took about 10,000 loan apps.

The ONE THING (one of the things) I learned is that MOST people who drive expensive cars don't have any money.

Got lotsa' toys?
Probably have no money.....

 

[The Heretic]

The way media works they sell you what they have by telling you it has great value. Americans fall for the sales pitch and life style. Debt is slavery, it owns you. When they ask you your credit score it's about how much you can get for your life. Media is the salesman and the banks own them. We would all save money if people would stop useing credit, prices would fall like a rock.

Instant gratification.

Buy it now, pay for it later - twice if you ever do get it paid off (home many people ever payoff their mortgage? Hell, how many people payoff their car before they buy a new one?).

Keep up with the Joneses - always have a nice new car (with a huge car payment), live in the nicest place you can barely afford with nice new furniture, a new fridge with icemaker and a nice big TV with sound system. All of these things you MUST have, even if you have to go into deep deep debt - modern necessities and all that.

My commuter car, that I have owned for almost ten years, is getting a little long in the tooth. It has about 110K on it, has a broken windshield I haven't replaced because it still does its job and since I drive 4 miles on a gravel road it will probably just get broken again. The passenger mirror is broken, the passenger side has a big dent and scrape. But it still runs fine, it still gets almost 30 MPG, it is still reliable and takes me to work in comfort every weekday.

Some while ago, while riding in his new car to go to a group lunch, a coworker asked me when I was going to get a new car. I asked him when his new car would be paid off - he got my point. My car may be a bit worse for wear, but it has been paid for, for almost ten years. the only reason I have to get a new car is that I really should have a small AWD vehicle instead.

My parents never had a car they never bought outright, with cash. The only time they ever bought a new car was the very last one they bought before my father died.

It's only been in the last 50 years or so that the consumerist, easy credit, buy everything on credit has been really pushed, and increasingly so, until now, almost everything someone buys, is on credit.

When I was a young adult (about 40 years ago) starting out on my own, the only credit cards you could get were mostly dept. store cards. My first was a JC Penney card with a $200 limit - I got it because I wanted a hunting rifle and a "quadraphonic" stereo - which I did buy. The ultimate was a BankAmericard that you could increasingly use other places (dept. stores would not honor them at first - you had to use their car - one the latest holdouts I remember was Meier & Franks).

Until the late 80s I had a LOT of credit card debt - until I was using one to pay the others, rotating around until they were all maxed out. Then I got laid off, and almost went bankrupt. With a loan from my family to make ends meet, I found another job and then it took me ten years to pay off all my debt.

For 5 years I had no debt. I built up my credit rating and my cash savings, put 20% down on my current property (house and 20 forested acres), and now I am building my savings up again (after putting $25K into property improvements this year).

The only debt I have is my mortgage. When I retire in 5 years, hopefully I won't have that either.

It was an incredible free feeling when I had no debt whatsoever. Even better will be when I have no debt, have a house and acreage, have good retirement income and I don't have to work.

 

[NoFlinch]

I was smart.
I invested in Gold & Silver.......

Actually I invested about 20K in metals, but that's long term SHTF money.

I DID invest in Real Estate, back when it was a good investment...saw the crash coming, sold most of it, now have $$ in the bank.

BUT, I don't trust the Banking system, nor the "Value" of my dollars, so what to do???????????????

 

[The Heretic]

Next time you drive by some apartments, look at all the nice newer cars in the parking areas.

Next time you drive by an area with a lot of known rentals, look at all the nice cars/boats/trailers/etc. in the driveways...

Drive through a trailer park.....

I spent 25 years in the Real Estate lending side of Banking. I took about 10,000 loan apps.

The ONE THING (one of the things) I learned is that MOST people who drive expensive cars don't have any money.

Got lotsa' toys?
Probably have no money.....

I noticed this when I was young.

I didn't understand how all these people who lived in not very nice houses, could have these nice cars, when my family rode around in cars that were ten years old or more, yet we lived in a decent house.

My ex-wife didn't understand the concept of debt either - she was always spending more than we had, going into debt and so on. It was one of the main factors in our marriage failing. Afterwards, when we were divorced but struggling to pay for my daughters healthcare bills, my brother and his wife bought a brand new house - at which point she suggest that we should borrow from them because surely they must have a lot of money, having bought a new expensive house. I knew for a fact that my brother was now extremely cash poor.

 

[Just Jim]

Instant gratification.

Buy it now, pay for it later - twice if you ever do get it paid off (home many people ever payoff their mortgage? Hell, how many people payoff their car before they buy a new one?).

Keep up with the Joneses - always have a nice new car (with a huge car payment), live in the nicest place you can barely afford with nice new furniture, a new fridge with icemaker and a nice big TV with sound system. All of these things you MUST have, even if you have to go into deep deep debt - modern necessities and all that.

My commuter car, that I have owned for almost ten years, is getting a little long in the tooth. It has about 110K on it, has a broken windshield I haven't replaced because it still does its job and since I drive 4 miles on a gravel road it will probably just get broken again. The passenger mirror is broken, the passenger side has a big dent and scrape. But it still runs fine, it still gets almost 30 MPG, it is still reliable and takes me to work in comfort every weekday.

Some while ago, while riding in his new car to go to a group lunch, a coworker asked me when I was going to get a new car. I asked him when his new car would be paid off - he got my point. My car may be a bit worse for wear, but it has been paid for, for almost ten years. the only reason I have to get a new car is that I really should have a small AWD vehicle instead.

My parents never had a car they never bought outright, with cash. The only time they ever bought a new car was the very last one they bought before my father died.

It's only been in the last 50 years or so that the consumerist, easy credit, buy everything on credit has been really pushed, and increasingly so, until now, almost everything someone buys, is on credit.

When I was a young adult (about 40 years ago) starting out on my own, the only credit cards you could get were mostly dept. store cards. My first was a JC Penney card with a $200 limit - I got it because I wanted a hunting rifle and a "quadraphonic" stereo - which I did buy. The ultimate was a BankAmericard that you could increasingly use other places (dept. stores would not honor them at first - you had to use their car - one the latest holdouts I remember was Meier & Franks).

Until the late 80s I had a LOT of credit card debt - until I was using one to pay the others, rotating around until they were all maxed out. Then I got laid off, and almost went bankrupt. With a loan from my family to make ends meet, I found another job and then it took me ten years to pay off all my debt.

For 5 years I had no debt. I built up my credit rating and my cash savings, put 20% down on my current property (house and 20 forested acres), and now I am building my savings up again (after putting $25K into property improvements this year).

The only debt I have is my mortgage. When I retire in 5 years, hopefully I won't have that either.

It was an incredible free feeling when I had no debt whatsoever. Even better will be when I have no debt, have a house and acreage, have good retirement income and I don't have to work.

I used to work on the road so I had to have reliable transportation. Miss one day worth of work and I could have bought a cheap rig for that loss of money. Plus when my wife was alive I would never trust her life to an unreliable rig. Transportation to me is a live or die item, but it has to be good. That being said I keep a spare rig, I want to make sure I can get somewhere if I have the need. I won't put my life on hold for car repairs.

I don't have any car payments and my extra rig is uninsured unless I drive it.

 

[The Heretic]

And if you are not already doing it, start bi-monthly payments. I am certain you know of their advantage......

Do what I am doing. Stay healthy until the day you die.

I checked into it before I bought the property, and no, there is no real advantage to it unless you set it up with the mortgage holder from the outset, and most do not want to setup mortgages that way. They just hold the first payment until you make the second monthly payment.

The outfits that promise to do this for you basically do the same thing, and you get no real benefit from it.

Plus, you do a lot better if you instead just pay a some extra on the principal - even if it is just a thousand a year.

I haven't started paying extra on the principal just yet. I had (and still have) property improvements to make. If I was going to be here long term I would be doing it now, but I will be selling in five years and I need to make most of the improvements now so they will look right when I am ready to sell (when I retire).

 

[Just Jim]

I noticed this when I was young.

I didn't understand how all these people who lived in not very nice houses, could have these nice cars, when my family rode around in cars that were ten years old or more, yet we lived in a decent house.

My ex-wife didn't understand the concept of debt either - she was always spending more than we had, going into debt and so on. It was one of the main factors in our marriage failing. Afterwards, when we were divorced but struggling to pay for my daughters healthcare bills, my brother and his wife bought a brand new house - at which point she suggest that we should borrow from them because surely they must have a lot of money, having bought a new expensive house. I knew for a fact that my brother was now extremely cash poor.

You are right, all new things prove is that you have spent money not that you have money. I have family that spends their future for what they want today. There is no way they can ever see daylight and will be debt slaves the rest of their lives. I asked how they will ever pay their house off and the reply was, nobody ever does do they?

 

[NoFlinch]

This reminds me of the OSP officer who I know down here.
He bought a new house, a boat for the driveway, and settled in.

About 2 years later, I saw foreclosure papers on the windows (He never mentioned problems to me...but I "figured").

I met with him, and loaned him $$ to "lessen the burden".

Later, in thinking about it, Here was a Law enforcement officer, under a tremendous amount of financial strain, patrolling the streets and highways....

YIKES!

Creditors LOVE to loan $$ to Law Enforcement.....and MOST of them have no clue about finances!!

He eventually turned his life around, now lives "under" his means, and is paying me back, little by little....(no hurry)

 

[The Heretic]

I no longer "loan" anyone any significant amount of money except my kids.

No one has ever paid back a single cent, even though they always promise to.

 

[Just Jim]

I no longer "loan" anyone any significant amount of money except my kids.

No one has ever paid back a single cent, even though they always promise to.

I got a crew of men I run with, all of them are reliable in their dealings. We all use cash and sometimes a good deal comes along that you just didn't bring enough cash. Right now I picked up $350 worth of stuff for a friend knowing he will pay for it when I see him next. I have borrowed or loaned many times under these circumstances and have always been paid back. Its business and building a good rep is part of survival, financial and physical.

 

[NoFlinch]

I no longer "loan" anyone any significant amount of money except my kids.
No one has ever paid back a single cent, even though they always promise to.

OK, so you're smarter than me...

I loaned $5500 to the nephew of my insurance agent, at her suggestion.

The guy comes from a very well known law enforcement family, and is married to the daughter of a Bank President.

Sounds pretty impressive, HUH?

He included my debt in his BK filing, which was just approved by the court.

LUCKILY??, he had paid back about 3K, so I only lost $2500!

YES!

 

[Just Jim]

OK, so you're smarter than me...

I loaned $5500 to the nephew of my insurance agent, at her suggestion.

The guy comes from a very well known law enforcement family, and is married to the daughter of a Bank President.

Sounds pretty impressive, HUH?

He included my debt in his BK filing, which was just approved by the court.

LUCKILY??, he had paid back about 3K, so I only lost $2500!

YES!

I loan to people who have a history of paying it back but realize I may get the money back. I have had way more family not pay me than friends.

 

[The Heretic]

The people who are most likely to pay me back never ask for a loan.

 

[Just Jim]

The people who are most likely to pay me back never ask for a loan.

Those are the people I go into deals with, you know it's all going to work out.