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Yes, just barely but in actual assets. Meaning, if you take a complete accounting of my net worth, subtract out debts and ignore options etc and count retiremen
by bane 9y ago
Yes, just barely but in actual assets. Meaning, if you take a complete accounting of my net worth, subtract out debts and ignore options etc and count retirement accounts and stocks and so on. I make out to just above that number by a little bit.
Not terribly impressive if you make over $100k/yr for 15-20 years, live below your means, pay off all your debts and own where you live. But I guess I've managed not to squander too much of it either. I'd have a bit more if I traveled for pleasure less I guess. But I look at that as an investment in myself while I'm young enough to enjoy it.
I pay off debts as fast as possible as well. I own my house and cars free and clear for example and have zero student debt. So nobody is getting money from me "for free". I paid them off as rapidly as I could so I could have lots of liquid cash to spend or invest as I wish. Some people would rather spend smaller to service their debts and invest the difference -- that's probably fine as well.
Housing is most people's biggest expense and it's really nice not to be burning most of my take home income in a furnace on rent or interest.
I've been a larger millionaire twice in paper options, but the companies didn't work out and the options became worthless. Oh well. I've learned the lesson to never accept lesser pay in exchange for options or RSUs no matter the promise of an upside.
- soared 9y agoIsn't this effectively the wrong strategy though? For a portion of my loans I would earn more investing and paying the minimum amount than I would paying them off sooner.
- hkmurakami 9y agoDepends on the spread between the interest on your loans, the expected returns on your investments, and the risk of said investments. A 1% spread vs a portfolio of 100% equities might mean that the volatility compels you to opt to pay back your loans.
- sopooneo 9y agoI would add that it also hugely depends on what affect being in debt has on your behavior and spending habits. For many irrational people (such as myself) being free and clear makes me much more defensive of my savings. Whereas if I'm on the hook to anyone, I feel a bit enslaved and say "screw it" way more often.
- greyskull 9y ago> Isn't this effectively the wrong strategy though? There's no "right" strategy though, since everyone has different situations and priorities. I would have had no problem keeping my low-rate student loans while investing the extra, but I chose to burn them down quickly for the peace of mind of being debt free.
- bane 9y agoIt can be. It's not really point of strategy more than a personal preference. I just really really don't like servicing debt. On the flip side I get more liquid cash and more "fuck this, I quit" job flexibility which is basically what I'm buying.
- yojo 9y agoI just bought a car with a 6 year, 0.9%APR loan. I literally make more in an FDIC insured bank account. If you have a mortgage on your primary residence on the US, the interest is tax deductible. This can make your effective rate extremely low, and it's not hard to find an investment with better returns. Not all loans are bad; some are subsidized. It often makes sense to keep those ones.
- bane 9y agoI actually agree with this. It's more a matter of personal preference for me, I just prefer to have all the cash liquid instead of obligated somewhere. I usually just stuff it all in the FDIC insured bank account until I decide to invest it somewhere or spend it. But it does make it much easier to go "you know what, I'm going to go to France next month." and then do it. On the house front, I'm actually in the middle of a search for a new home so I can start enjoying those sweet tax breaks again and then get somebody to rent my first home so I'll basically get the new home for almost free.