Author Topic: Case Study - $800,000 in debt and where to start?  (Read 17092 times)

tralfamadorian

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Re: Case Study - $800,000 in debt and where to start?
« Reply #150 on: September 26, 2017, 03:29:42 PM »

Just to put that in perspective:
1. 3600 per year - stache required: 90k
2. 5400 per year - stache required: 135k
3. 7800 per year - stache required: 195k
4. 360 per year - stache required: 9k
5. 840 per year - stache required: 21k
6. 1200 per year - stache required: 30k

Total savings: $19,200 per year
You just reduced your FIRE target by $480,000

Eye-opening breakdown Andy!  +1 

thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #151 on: September 26, 2017, 08:58:37 PM »
Adding to the list here...

Complete:

1. Credit cards have been paid off, resulting in freed up cash $300/mo
2. Winding down the Lending Club account has started, should add income of about $450/mo
3. Stopped contributing to emergency fund and misc saving accounts, resulting in freed up cash: $650/mo
4. Downgraded AMEX Platinum to AMEX Green Card, saving $30/mo
5. Disposed of BlueGreen Timeshare, saving $70/mo
6. Cancelled Crossfit membership, saving $100/mo

Just to put that in perspective:
1. 3600 per year - stache required: 90k
2. 5400 per year - stache required: 135k
3. 7800 per year - stache required: 195k
4. 360 per year - stache required: 9k
5. 840 per year - stache required: 21k
6. 1200 per year - stache required: 30k

Total savings: $19,200 per year
You just reduced your FIRE target by $480,000

Proof positive that every little bit counts!  Thanks for putting this in perspective.  These things don't seem like big moves on their own, but it certainly adds up!
Please don't mistake my ignorance for arrogance -thebloggo

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Ze Stash

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Re: Case Study - $800,000 in debt and where to start?
« Reply #152 on: September 27, 2017, 04:20:54 AM »
Adding to the list here...

Complete:

1. Credit cards have been paid off, resulting in freed up cash $300/mo
2. Winding down the Lending Club account has started, should add income of about $450/mo
3. Stopped contributing to emergency fund and misc saving accounts, resulting in freed up cash: $650/mo
4. Downgraded AMEX Platinum to AMEX Green Card, saving $30/mo
5. Disposed of BlueGreen Timeshare, saving $70/mo
6. Cancelled Crossfit membership, saving $100/mo

Just to put that in perspective:
1. 3600 per year - stache required: 90k
2. 5400 per year - stache required: 135k
3. 7800 per year - stache required: 195k
4. 360 per year - stache required: 9k
5. 840 per year - stache required: 21k
6. 1200 per year - stache required: 30k

Total savings: $19,200 per year
You just reduced your FIRE target by $480,000

I kind of disagree with this breakdown. The $450/mo from lending club and the $650/mo redirected from the savings accounts are not savings in the sense that he stopped spending that money on something. These are just cash flows that he already had redirected towards debt repayment. I agree that this is a very smart move and the money is much better used to get rid of those loans as soon as possible, but that decision did not decrease his FIRE target, as that is only determined by real spending.

Nevertheless, impressive progess thebudgetbloggo. I find it very inspiring to read your updates and am looking forward to you posting even more awesome ones.

andy85

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Re: Case Study - $800,000 in debt and where to start?
« Reply #153 on: September 27, 2017, 05:57:07 AM »
Adding to the list here...

Complete:

1. Credit cards have been paid off, resulting in freed up cash $300/mo
2. Winding down the Lending Club account has started, should add income of about $450/mo
3. Stopped contributing to emergency fund and misc saving accounts, resulting in freed up cash: $650/mo
4. Downgraded AMEX Platinum to AMEX Green Card, saving $30/mo
5. Disposed of BlueGreen Timeshare, saving $70/mo
6. Cancelled Crossfit membership, saving $100/mo

Just to put that in perspective:
1. 3600 per year - stache required: 90k
2. 5400 per year - stache required: 135k
3. 7800 per year - stache required: 195k
4. 360 per year - stache required: 9k
5. 840 per year - stache required: 21k
6. 1200 per year - stache required: 30k

Total savings: $19,200 per year
You just reduced your FIRE target by $480,000

I kind of disagree with this breakdown. The $450/mo from lending club and the $650/mo redirected from the savings accounts are not savings in the sense that he stopped spending that money on something. These are just cash flows that he already had redirected towards debt repayment. I agree that this is a very smart move and the money is much better used to get rid of those loans as soon as possible, but that decision did not decrease his FIRE target, as that is only determined by real spending.

Nevertheless, impressive progess thebudgetbloggo. I find it very inspiring to read your updates and am looking forward to you posting even more awesome ones.
Yea...i completely agree with you and thought the exact same thing when typing that post up. Not all of those expenses are 'forever expenses' and one of them is even a savings category....just trying to get the point across on how little changes add up.

bhleigh

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Re: Case Study - $800,000 in debt and where to start?
« Reply #154 on: September 27, 2017, 01:42:59 PM »
Great Job tb! I recently started to bring my wife on board with MMM. I let her pick an area that she thought she could deal with the most, the cooking. She loves to cook but also loves good wines and fancy cheeses as she is French. So far in the last month we have managed to cook only 3 meals a week. We eat the left overs the next night. That leaves one night a week that is unplanned. Still working on that one. My point is to take it slow and let her join MMM at her pace.

Good luck and keep the updates coming!
There are no problems. Only solutions we haven't found yet.

My Journal: B-Leigh's Mid-Life Crisis Avoidance

Zoot

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Re: Case Study - $800,000 in debt and where to start?
« Reply #155 on: October 02, 2017, 12:12:10 PM »
Posting to follow--great job "waking up," tbb!  :)

Villanelle

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Re: Case Study - $800,000 in debt and where to start?
« Reply #156 on: October 02, 2017, 06:02:36 PM »
It's really friggin' inspiring to watch this process work exactly as it should, but so rarely does! 

TonyV.

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Re: Case Study - $800,000 in debt and where to start?
« Reply #157 on: October 12, 2017, 10:38:37 AM »
So I just read the whole thread and it's very inspiring! I'm happy to read about someone willing to make so many changes to better their life. Keep up the good work! I really have no advice for you from my position since I think everyone else has covered everything else with better advice than I could supply. I'm just REALLY curious about a couple parts of the story and look forward to updates along with everyone else.

First off... I kept looking for but never came across what this "start up company" is all about. Who did you invest with? What is the company about? Are you seeing any returns from it yet? When do you plan on seeing them? Was it a "bad" decision and can you cut your losses? Or are you stuck with it?

Second of all... I'm curious to hear more about how the wife has responded to you finally getting a budget together and how she feels about the changes you have made and the ones you plan to make. I never saw an update on her position in this and think it would be nice to hear about.