Posted on 11/20/2020 9:28:51 AM PST by Kaslin
Long before the coronavirus hit our shores, our society’s focus on instant gratification has in many respects made acts of self-sacrifice a lost art.
On Monday, Rep. Alynna Pressley, D-Mass, claimed canceling student debt represents a “racial justice issue.” The following day, I submitted a contrary piece of evidence: I paid off my mortgage — with a balance far exceeding the average American’s student loan balance — seven years early.
At a time many Americans remain unemployed or underemployed, I recognize the economic hardship millions of families face, through circumstances (i.e., a global pandemic) not of their own making. Given the recent growth in coronavirus cases, extending the suspension on student loan payments past its current Dec. 31 expiration date seems an entirely fair and reasonable move.
But as someone who specifically decided against going to an Ivy League school due to the additional debt that would rack up, I recognize that incurring student debt ultimately represents a choice. Indiscriminately negating the effects of those choices does an injustice to those students who made tough decisions — working their way through school or starting out at a community college to save money — to avoid taking on massive amounts of student debt in the first place.
Likewise, my decision to pay off my mortgage as soon as possible also represented a choice. The real experience of spending the past four-plus years running my own business further motivated the drive to become debt-free as soon as I could. Can I obtain, and retain, clients? Will I have enough money to pay the bills? Those were just a few of the many questions about the uncertainty of entrepreneurship.
Paying off my mortgage early came in part due to luck. I got a very fortunate break when I went on a game show nearly eight years ago, the winnings from which put my savings into overdrive. But even with that lucky break, achieving such a milestone came down not to any single big decision, but to many small ones, most of which involved four words: I can’t afford it.
That attitude meant skipping dinners out, or paying bills at restaurants and bars with cash to discourage over-spending. It meant not traveling to the 2012 Olympics in the city I had lived in and loved, because doing so would have depleted most of my emergency fund. And it meant second-guessing, and ultimately forgoing, a lavish vacation with my game show winnings.
I’ll admit that I occasionally took this attitude to extremes, like the time many years ago I woke up to a frigid apartment and found the thermostat read 48 degrees. (I did turn the heat on immediately.) But as with many goals, I wouldn’t have accomplished mine without focusing on the main priority (paying off my mortgage), and subsuming other financial goals to that bigger picture.
Our society’s focus on instant gratification has in many respects made acts of self-sacrifice a lost art. Congress has shown such little discipline in failing to set spending priorities that our nation faced trillion-dollar deficits well before the coronavirus ever hit our shores. Even after the pandemic fades, and the restrictions on social life ease, a renewed appreciation of self-sacrifice would serve American society well — provided we leaven it with the proper perspective.
Unlike some contrarian millennials, I don’t plan to embrace the “Financial Independence, Retire Early” mantra and settle back into a work-free lifestyle. While I recognize the pull of an independent lifestyle — it’s why I started my own business — I can’t envision myself retiring now, and possibly not ever. I find the work I do mentally stimulating, and enjoy the vast majority of it, so why should I quit?
That said, both the maturity that comes with entering one’s fifth decade and the financial independence of a debt-free lifestyle have led me to an important lesson: the opposite of “more” is often not “less,” but “enough.” That could mean not taking an additional client or project, because the extra work isn’t worth the time and hassle when money isn’t an issue. It could also mean overcoming one’s inherent desire to save every penny and forcing oneself to splurge and travel more (and yes, I had to practically force myself to do this several years ago; I eventually learned my lesson — and am glad I did.)
Most importantly, I look forward to giving back in both time and treasure to the people and causes that matter to me. That means taking more time to spend with friends, and hopefully (post-pandemic) travel with them too. It also means increasing my charitable contributions now that I don’t have a mortgage payment.
If financial advisor Suze Orman calls money a vehicle to provide security, then paying off a mortgage (or student loan debt) provides a much-needed safety blanket to sleep easier in insecure times. Ticking that accomplishment ticked off the financial to-do list means I have eaten my proverbial vegetables — providing a chance to savor dessert. The rent-free and mortgage-free lifestyle should give provide time and space to enjoy many of the things I wanted to experience in prior years but felt uncomfortable doing so.
Therein lies hope for all of us, as this year we’ll all remember and yet want to forget slowly winds to a close. While we all wish the pandemic would have disappeared months ago, it will in time recede, and we can enjoy the things we’ve longed for over the past eight months. Just as soon as the sun rises in the east every morning, sticking to a course of action will in time prove to be its own reward.
One of my son’s had a modest but tardy student loan debt when he enlisted in the Army. He was in SatCom and during his training, to facilitate his high security clearance, they made him pay it off on his buck Private pay.
Now, Democrats want to tax him and everyone else to pay off all unpaid student loans?
I listen to Ramsey on occasion. It’s sad the debt load most people have. His advice is sound. My cousin and his wife did the debt free scream on the radio a couple years ago.
Besides the mortgage and an occasional car payment, we’ve always been debt free. It’s hard. We live frugally.
Now that the kids are out of the house, we don’t have to be as frugal but it’s just become a way of life.
If I’m at the store, I rarely buy clothes and when I do, they are always on sale or clearance. Most of the shirts I wear are free cause I need company logo shirts for my job.
I’m in the process of refinancing to a 15 year mortgage. 401K is in great shape but will probably get destroyed if Biden wins.
Besides a personal education loan for one of my daughters, my kids are all independent and fully debt free. One son paid off $30K in student debt within a year.
Seconded.
Started listening to Dave Ramsey about 12 years ago and realized we were doing this by intuition.
Debt-free for over 8 yrs now. And that includes paying cash for 2 cars (Late-model, used. Just “enough” to replace 2 that were hit by other “drivers”).
The trick (after the other debts) was to keep throwing cash at the principal on the house mortgage. Started early with that ($50/month, minimum), then increasing as more cash became available. Not having cable TV, the latest cellphone, fancy dinners/vacations really helped the cashflow. That and a second life in the Army Reserves (”One weekend a month, 2 weeks a year”. “Oh yeah, that’s your free time”).
We kind of did that on a home mortgage about 25 years ago. We put the principle payment of current month on top off our payment. It was easy for the first 4-5 years and started to become a big house payment. We backed it down to an extra $300 I think, and paid it off way early. Probably should have bought stocks or gold though.
Great point. Another great point along those lines, is that many many people actually signed up for the military, primarily, in order to get college funding via the GI Bill. Now, they want to give that same benefit to everyone, without getting their service in return? BS, I say.
Why no collision insurance?
I do support for a company and talk with co-workers on the phone and they seem to always have an iPhone. I bet they are paying the extra $25/month payment plan so do not realize the true cost. They are renting the phone.
Not only can you pay off debt, you can build wealth too.
The big problem beyond hitting tax payers with the bill is that forgiving student debt will only mean a continuing rise in tuition costs. If pols really are concerned about student debt perhaps they should have a discussion about endowments just sitting there.
Collision insurance on older vehicles is a waste of money. I'd add in that many people pay too much for insurance by having low deductibles. If I buy a new vehicle I generally keep collision insurance for 75,000 miles then drop it, and I have the deductible at $1000. Any damage that amounts to less than $1000 I'm going to fix out of pocket and not file a claim. Filing a claim for a $700 fix is dumb, they'll raise your rates and you'll quickly end up paying more in the higher premiums than if you'd paid it yourself.
There are also a lot of unneeded add on insurance premiums you'll find if you go through your policy line by line. Some I've removed have been lost wages compensation (my company covers that), medical coverage (company again), towing coverage (AAA for that), passenger medical (I almost never have a passenger), rental car for when vehicle is in the shop (I have a second car), etc. These add up to a lot of money every year and I don't need any of them. A lot of money is wasted because your friendly local insurance agent slips these into your policy as standard fare. Most will never notice them and pay thousands for unneeded insurance over the years.
Insurance is a necessary evil but it's one of the most grossly profitable industries out there and it's easy to get scammed by them. There's a reason the most opulent office buildings in any mid sized American city are owned by insurance companies. It's not because they're consistently paying out more in claims than they take in. You've got to have it, but if you let them they'll take you to the cleaners.
Ammo would have been a better bet.
You can’t eat gold.
If a car has little value, it’s not worth insuring it. You’re better off saving the money and being ready to buy another car on a moment’s notice if you do wreck it.
I’ve been playing that game for decades. We’ve only had to buy a car quick one time and the guy that hit my kid wanted so badly to stay off his insurance he gave me $4000 to a $1000 car.
I had a friend who was literally paying the value of his car in insurance every year.
My wife’s car is paid off but we still have collision because it’s got some value left in it. I’ve got a company car so I don’t need to worry about that.
“Why no collision insurance?”
The insurance carrier adds commissions, expenses, taxes, and profit to the actual cost of repairing the car. Negotiating settlements and handling deductibles also add to the underlying costs. If you just pay for the repairs yourself you save all these hidden expenses. However, you need to have enough money saved up so you can replace the car if it is totaled.
Warranty coverage is the worst. What they pay out in damages is a small component of the premium for much of this coverage.
Exactly. But here’s the interesting part: That first loan we paid off was our zero interest car loan. It seemed stupid, but the psychological effect was quite real.
One payment down and applied to the rest. And that made a big difference even though it cost us more than just paying down the higher interest stuff earlier. It’s like going on a diet and watching pounds drop.
Yep. Most people don’t figure that out until it’s done the damage. School doesn’t teach it.
Looks like a lot of people have taken Dave Ramseys advice since you brought it up, funny, I was debt free except 2 mortgages, then when Barry the Muslim got elected my wife and I changed everything, sold the House and Moved out of the city. Now we have 3 paid for houses and haven’t had a nickel of debt in 8 years
Mr. mm and i never went into debt for anything.
We were fortunate that on occasion, his parents would help us out, as they did with his brothers, too.
But other than that, we lived within our means and if we didn’t have the money, we did without.
We also didn’t buy more house than we could afford. Never had a mortgage.
Just name me one thing (except brag) you can do on an iPhone12 that you can’t do on an iPhone6?
——————————
Most apps won’t work on an iPhone6. Apple pulled support back in ios13. That means as apps update for ios14 (if they don’t update, they get pulled from the App Store), they no longer will work with on iphone6.
iPhone 6s is the oldest phone supported. Support for that and iPhone 7 to be pulled in ios15.
Was debt-free and finally bought a house in late 2019 after finally getting a job that paid more than $3000 a month after decades of hard work. (was making $11k a month since March 2019). Used car fully paid off. Furloughed in April 2020. Evicted and now owe over $15000 in wage garnishment debt as property management company claim I owed back rent and penalties ($7500 in rent and $7500 in late fees / penalties), April to August rent. I left the place in March after my lease expired in
March. Left the keys in a internal key box. They were not doing move out inspections (March to August), or was the office manned March to August due to Coronavirus. So they kept charging rent. I wasn’t there so I never received a notice of a bill. I blocked the rental payment company from ACH withdrawals after they tried taking out April rent. Local rental office at the complex was not answering phones (closed), and the rental payment processing company only collects the rent, it’s not the property management company. Ran out of savings (sent everything for monthly expenses and for overseas mortgage). Left the country in End of June. It was either that or car camping. Sued in September by the debt collector. Hint. They don’t forward mail internationally and I have no relatives in the US that I haven’t talked to in 20 years to forward mail to. The AirBNB I was staying at tried forwarding my collected mail via a freight forwarder that I have been using (HopShopGo), but the forwarder destroyed the mail as it’s considered illegal cargo.
My paid off car? Blew the engine block in Omaha in April after trying long-distance delivery of pets. Had to get replacement car. Lied so that I could get loan (I was already furloughed). Tried to find cheap non-loan car on Craigslist and others in the Denver area. Nothing except “mechanics specials” for under $5000 (money I did not have)
So from a 760 FICO score in March to a 525 score now, a wage garnishment with all my credit cards cancelled (I had a perfect payment record for 2 years prior), and placement on the national eviction blacklist. I can tell they are cancelled when available credit all reads ‘$0’. Even after a perfect payment record.
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