Author Topic: Defeat the Net Debt  (Read 57191 times)

catlady

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Re: Defeat the Net Debt
« Reply #250 on: September 11, 2020, 01:32:49 PM »
This looks like the place for me \o/. I have a question though when you calculate your net debt do you include the price of the house if it sells as an asset? Or just the money that you have right now?

As the OP, I will weigh in that when I started this thread, I conceived it as being the net of debts vs. the taxable financial assets in our various accounts. (So non-retirement.) I donít include the value of the house. It is sort of, if I need to pay everything off today, how much am I short? I started it in part because of all the debates over mortgage payoffs vs. investments. You can work both sides of the ledger to reduce your net debt. Hope that helps.

Cheers,
Frugalecon

Makes sense. So to jump in.
Mortgage: -312,399.80
Saving account: 1,122.28
RRSP: 6000
RRSP SO: 1200

Net Debt: - 304,078

Well that calculation made me sad :/
Don't be sad. Everybody has to start somewhere, and you've managed to get yourself into a house already, hooray! I am concerned that your reserves are a bit low if something big on the house breaks, so maybe start with beefing up your EF a bit.

This is a classic case for cranking up the investments in lieu of mortgage acceleration. Invest first, so your investments will eventually do a lot of the lifting for you. Once your investment accounts balloon, as they inevitably will with time, you can consider mortgage obliteration.

Feel free to start a Case Study or ask questions over on the Don't Payoff Your Mortgage thread. We welcome discussion on both sides of the topic and we don't bite ;-)

Thanks for the kind words!

We had 34K in savings the begging of the year. But we changed the roof, the thermopump and then I freaked out and we payed the car (:/ ) So now we restart the emergency fund and hopefully we can bounce fast ^^
I did a case study https://forum.mrmoneymustache.com/case-studies/budget-and-how-to-proceed/msg2691166/#msg2691166

The payment of the car should have freed 390$ a month but I bumped the mortgage payment with 250$ a month.
« Last Edit: September 11, 2020, 05:55:19 PM by catlady »

frugalecon

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Re: Defeat the Net Debt
« Reply #251 on: September 11, 2020, 04:41:24 PM »
This looks like the place for me \o/. I have a question though when you calculate your net debt do you include the price of the house if it sells as an asset? Or just the money that you have right now?

As the OP, I will weigh in that when I started this thread, I conceived it as being the net of debts vs. the taxable financial assets in our various accounts. (So non-retirement.) I donít include the value of the house. It is sort of, if I need to pay everything off today, how much am I short? I started it in part because of all the debates over mortgage payoffs vs. investments. You can work both sides of the ledger to reduce your net debt. Hope that helps.

Cheers,
Frugalecon

Makes sense. So to jump in.
Mortgage: -312,399.80
Saving account: 1,122.28
RRSP: 6000
RRSP SO: 1200

Net Debt: - 304,078

Well that calculation made me sad :/
Don't be sad. Everybody has to start somewhere, and you've managed to get yourself into a house already, hooray! I am concerned that your reserves are a bit low if something big on the house breaks, so maybe start with beefing up your EF a bit.

This is a classic case for cranking up the investments in lieu of mortgage acceleration. Invest first, so your investments will eventually do a lot of the lifting for you. Once your investment accounts balloon, as they inevitably will with time, you can consider mortgage obliteration.

Feel free to start a Case Study or ask questions over on the Don't Payoff Your Mortgage thread. We welcome discussion on both sides of the topic and we don't bite ;-)

Thanks for the kind words!

We had 34K in savings the begging of the year. But we changed the roof, the thermopump and then I freaked out and we payed the car (:/ ) So now we restart the emergency fund and hopefully we can bounce fast ^^
I did a case study https://forum.mrmoneymustache.com/case-studies/budget-and-how-to-proceed/msg2691166/#msg2691166

The payment of the card should have freed 390$ a month but I bumped the mortgage payment with 250$ a month.

I will vouch for the fact that @Dicey is the catís pajamas. She is always rooting for people to succeed, and she bucked me up when I was dealing with a crazy situation.

catlady

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Re: Defeat the Net Debt
« Reply #252 on: September 14, 2020, 07:58:03 PM »
This looks like the place for me \o/. I have a question though when you calculate your net debt do you include the price of the house if it sells as an asset? Or just the money that you have right now?

As the OP, I will weigh in that when I started this thread, I conceived it as being the net of debts vs. the taxable financial assets in our various accounts. (So non-retirement.) I donít include the value of the house. It is sort of, if I need to pay everything off today, how much am I short? I started it in part because of all the debates over mortgage payoffs vs. investments. You can work both sides of the ledger to reduce your net debt. Hope that helps.

Cheers,
Frugalecon

Makes sense. So to jump in.
Mortgage: -312,399.80
Saving account: 1,122.28
RRSP: 6000
RRSP SO: 1200

Net Debt: - 304,078

Well that calculation made me sad :/
Don't be sad. Everybody has to start somewhere, and you've managed to get yourself into a house already, hooray! I am concerned that your reserves are a bit low if something big on the house breaks, so maybe start with beefing up your EF a bit.

This is a classic case for cranking up the investments in lieu of mortgage acceleration. Invest first, so your investments will eventually do a lot of the lifting for you. Once your investment accounts balloon, as they inevitably will with time, you can consider mortgage obliteration.

Feel free to start a Case Study or ask questions over on the Don't Payoff Your Mortgage thread. We welcome discussion on both sides of the topic and we don't bite ;-)

Thanks for the kind words!

We had 34K in savings the begging of the year. But we changed the roof, the thermopump and then I freaked out and we payed the car (:/ ) So now we restart the emergency fund and hopefully we can bounce fast ^^
I did a case study https://forum.mrmoneymustache.com/case-studies/budget-and-how-to-proceed/msg2691166/#msg2691166

The payment of the card should have freed 390$ a month but I bumped the mortgage payment with 250$ a month.

I will vouch for the fact that @Dicey is the catís pajamas. She is always rooting for people to succeed, and she bucked me up when I was dealing with a crazy situation.

Honestly everyone has been great! Super helpful and I am getting the hang of it. Slow but steady lol. Thanks guys 🥰

An Unassuming Moose

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Re: Defeat the Net Debt
« Reply #253 on: September 15, 2020, 08:31:04 AM »
September Update:

Debts:
$10700 > $10700
$59700 > $59700
$130800 > $130700
$139900> $138900
$249900 > $249900


Assets:
$165300 > $169800
$155900 > $166100


Totals $335900 - $589900 = $254000

Past history:
Spoiler: show
Sept 2019: $318800
Oct 2019: $306600
Nov 2019: $296300
Jan 2020: $289200
Feb 2020: $286600
Mar 2020: $328700
April 2020: $314500
May 2020: $324200
June 2020: $292400
July 2020: $280300
August 2020: $269800

frugalecon

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Re: Defeat the Net Debt
« Reply #254 on: September 30, 2020, 03:33:14 PM »
Total Debt: $162,217
Total Taxable Assets: $163,648

Net Debt:

[09.30.2020] $1,431 NET DEBT DEFEATED (Note: I am the OP, so I have been along for the whole ride so far. Good luck to everyone else! And may I never rejoin you!)
[09.01.2020] ($3,804)
[08.01.2020] ($10,615)
[07.01.2020] ($14,810)
[06.01.2020] ($23,983)
[05.15.2020] ($29,995)
[05.01.2020] ($32,441)
[04.02.2020] ($39,721) (global pandemic made the car go in reverse)
[03.01.2020] ($36,672)
[02.01.2020] ($38,955)
[01.06.2020] ($44,380) (Transferred out of taxable for backdoor Roth)
[12.22.2019] ($40,825) (Alas, had to withdraw $$ from taxable to pay for some home repairs)
[12.02.2019] ($33,885)
[11.02.2019] ($37,740)
[10.07.2019] ($43,292)
[9.06.2019] ($46,479)
[8.03.2019] ($47,514)
[7.02.2019] ($49,990)
[6.01.2019] ($53,091)
[5.03.2019] ($57,000)
[4.03.2019] ($58,280)
[3.02.2019] ($62,770)
[2.02.2019] ($68,065)
[1.03.2019] ($76,999)
[12.03.2018] ($80,591)
[11.30.2018] ($83,584)
[11.01.2018] ($90,537)
[09.03.2018] ($96,664)
[07.28.2018] ($103,664)
« Last Edit: September 30, 2020, 04:04:45 PM by frugalecon »

Dicey

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Re: Defeat the Net Debt
« Reply #255 on: September 30, 2020, 05:44:35 PM »
Total Debt: $162,217
Total Taxable Assets: $163,648

Net Debt:

[09.30.2020] $1,431 NET DEBT DEFEATED (Note: I am the OP, so I have been along for the whole ride so far. Good luck to everyone else! And may I never rejoin you!)
[09.01.2020] ($3,804)
[08.01.2020] ($10,615)
[07.01.2020] ($14,810)
[06.01.2020] ($23,983)
[05.15.2020] ($29,995)
[05.01.2020] ($32,441)
[04.02.2020] ($39,721) (global pandemic made the car go in reverse)
[03.01.2020] ($36,672)
[02.01.2020] ($38,955)
[01.06.2020] ($44,380) (Transferred out of taxable for backdoor Roth)
[12.22.2019] ($40,825) (Alas, had to withdraw $$ from taxable to pay for some home repairs)
[12.02.2019] ($33,885)
[11.02.2019] ($37,740)
[10.07.2019] ($43,292)
[9.06.2019] ($46,479)
[8.03.2019] ($47,514)
[7.02.2019] ($49,990)
[6.01.2019] ($53,091)
[5.03.2019] ($57,000)
[4.03.2019] ($58,280)
[3.02.2019] ($62,770)
[2.02.2019] ($68,065)
[1.03.2019] ($76,999)
[12.03.2018] ($80,591)
[11.30.2018] ($83,584)
[11.01.2018] ($90,537)
[09.03.2018] ($96,664)
[07.28.2018] ($103,664)
That might be the best reason to be a cheerful motherfucker* I've ever seen. Congratulations!

*If you don't get this reference, you're not reading Sailor Sam's journal and you're really missing out.

Kierun

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Re: Defeat the Net Debt
« Reply #256 on: September 30, 2020, 07:11:12 PM »
Congratulations!

frugalecon

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Re: Defeat the Net Debt
« Reply #257 on: September 30, 2020, 07:14:57 PM »
Total Debt: $162,217
Total Taxable Assets: $163,648

Net Debt:

[09.30.2020] $1,431 NET DEBT DEFEATED (Note: I am the OP, so I have been along for the whole ride so far. Good luck to everyone else! And may I never rejoin you!)
[09.01.2020] ($3,804)
[08.01.2020] ($10,615)
[07.01.2020] ($14,810)
[06.01.2020] ($23,983)
[05.15.2020] ($29,995)
[05.01.2020] ($32,441)
[04.02.2020] ($39,721) (global pandemic made the car go in reverse)
[03.01.2020] ($36,672)
[02.01.2020] ($38,955)
[01.06.2020] ($44,380) (Transferred out of taxable for backdoor Roth)
[12.22.2019] ($40,825) (Alas, had to withdraw $$ from taxable to pay for some home repairs)
[12.02.2019] ($33,885)
[11.02.2019] ($37,740)
[10.07.2019] ($43,292)
[9.06.2019] ($46,479)
[8.03.2019] ($47,514)
[7.02.2019] ($49,990)
[6.01.2019] ($53,091)
[5.03.2019] ($57,000)
[4.03.2019] ($58,280)
[3.02.2019] ($62,770)
[2.02.2019] ($68,065)
[1.03.2019] ($76,999)
[12.03.2018] ($80,591)
[11.30.2018] ($83,584)
[11.01.2018] ($90,537)
[09.03.2018] ($96,664)
[07.28.2018] ($103,664)
That might be the best reason to be a cheerful motherfucker* I've ever seen. Congratulations!

*If you don't get this reference, you're not reading Sailor Sam's journal and you're really missing out.

Thanks, @Dicey , I really love the way you are always cheering people on!

frugalecon

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Re: Defeat the Net Debt
« Reply #258 on: September 30, 2020, 07:17:00 PM »
Congratulations!

Thanks! I have had some setbacks along the way with unexpected expenses that have slowed me down, but it is a nice milestone to reach.

RWD

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Re: Defeat the Net Debt
« Reply #259 on: September 30, 2020, 08:24:06 PM »

diapasoun

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Re: Defeat the Net Debt
« Reply #260 on: October 04, 2020, 01:00:22 PM »
HECK YES CONGRATULATIONS!!!

terrifictim

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Re: Defeat the Net Debt
« Reply #261 on: October 05, 2020, 04:00:14 PM »
Saw this thread from DPOYM Club and thought I would join as well for motivation:

10/1/18
Mortgage: 197,600
Taxable: 29,922
Net Taxable: 167,678
Retirement: 162,233
Net Retirement: 5,445

4/1/19
Mortgage 1: 194,859
Mortgage 2 (Income Producing Rental but Still Debt): 214,044
Taxable: 39,184
Net Taxable: 369,719
Retirement: 184,669
Net Retirement: 185,050

6/1/19
Mortgage 1: 193,934
Mortgage 2 (Income Producing Rental but Still Debt): 212,909
Taxable: 42,489
Net Taxable: 364,354
Retirement: 198,262
Net Retirement: 166,092

Doing this really helps with the motivation. It's tempting to focus on the debt side and see how slowly it is reducing - but to see the asset side continue to increase and know I'm buying more "perpetual money-making machines" keeps me staying the course.

8/1/19
Mortgage 1: 193,004
Mortgage 2 (Income Producing Rental but Still Debt): 212,147
Taxable: 46,884
Cash/EF: 46,473
Net Taxable: 311,794
Retirement: 216,119
Net Retirement: 95,675

Some nice market gains + realizing I hadn't been including my EF. It's cool to know I could knock out one of the mortgages in a moment if I had to - and will be even better when I have enough that I could knock out both.

6/1/20
Mortgage 1: 188,262
Mortgage 2 (Income Producing Rental but Still Debt): 208,263
Taxable: 55,912
Cash/EF: 33,796
Net Taxable: 306,817
Retirement: 265,942
Net Retirement: 40,875

Cool to see the progress over the last year. Even with DW going to part time this year - and then going to no time soon (Kid # 1 in Aug!) been able to put $50k in retirement while continuing to slowly whittle down both mortgages. Goal is be in the green in Net Retirement by next year.

10/1/20
Mortgage 1: 187,938
Mortgage 2 (Income Producing Rental but Still Debt): 206,675
Taxable: 58,908
Cash/EF: 40,293
Net Taxable: 295,412
Retirement: 304,633
Net Retirement: 9,254

NET DEBT DEFEATED (LEVEL 1)!
Next goal (level 2) is to save enough in After-Tax accounts to be able to pay for one of the mortgages. There's also a possibility that I convert Mortgage 1 into a rental property and get a new mortgage for the primary home which would put me back in the Net Debt race. Also fully anticipating a stock market correction which would put me back in the red. But for the moment, holy cow - did not think the stock market would keep on going up like it has since June.

Dutch Comfort

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Re: Defeat the Net Debt
« Reply #262 on: October 06, 2020, 01:18:01 AM »
Mortgage (EUR 331K)
Assets EUR 35K

Net debt
July 2020 (EUR 314K)
September 2020 (EUR 313K)
October 2020 (EUR 296K) (included other savings accounts)

I thought it was better to include the other savings accounts, although these accounts are to be used for travel, school costs for the kids and house maintenance, but as long as we can pay these from our current accounts, these will not be touched!
Congrats to @frugalecon and @terrifictim who have succesfully defeated the debt! May we soon join you!

talltexan

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Re: Defeat the Net Debt
« Reply #263 on: October 06, 2020, 09:20:54 AM »
Congratulations! My only remaining debt is my mortgage, so I don't have to go through a series of statements. Will be joining you soon, hopefully.

Ag Eitilt

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Re: Defeat the Net Debt
« Reply #264 on: October 08, 2020, 06:02:26 AM »
Been lurking in a couple threads for a while, and this seems a good place to break silence, even if mine seems to have turned into more of a case study.  I've had a bit over a year enacting my plans for asset allocation, but have been hampered a bit by a combination of decidedly not being frugal through college and wanting to fit a mental health break between compressing nearly an entire four years of classes into two and a half (once glimmers of financial sense started sparking) and going into the infamously overtime-prone field of computer programming; that break unfortunately comes with a much reduced salary.

Student loans: $100 481.70 (yay, nearly five digits!)
  • Stafford @4.231% average: $24 789.46
  • Plus @6.875%: $75 692.24 (not technically under my name, but we agreed I'd be responsible for it)
Taxable assets: $6 940.28
  • Emergency savings: $2 357.48 (target $3 500, i.e. three months' expenses counting minimum loan payments)
  • Investments: $3 382.80
  • Checking: ~$1 200 (one month + a bit of play; deposits exceeding that value put to other use)
Total static accounts: $93 541.42

Recurring expenses: $381.16/month
  • Health insurance: $182
  • Auto insurance: $107.66
  • Church tithe: $50
  • Political donations: $22
  • Entertainment: $19.50 (almost exclusively direct to YouTubers or other content creators)
Main incidental expenses: $137.81/month (for an artificially-constructed but representative "month")
  • Gas: $59.13
  • Food: $37.86
  • Groceries: $22.97
  • Entertainment: $18.85
Taxable income: ~$1 650/month

Net cash flow: $1 131.03/month

Well, at least it's flowing in the right direction.  The raw rate will definitely drop once the student loan suspension ends, but I'm also hoping to leverage my degree into something a bit higher-paying than my current customer service job (which is, while not lucrative, one I love) around the same time.  Planning on trying to move for that, especially depending on how the election goes, so cash flow will probably change drastically across the board.

Housing, utilities, and the majority of food are currently paid by living with my parents in exchange for non-cash services (and we all enjoy each other's company anyway).  My focus is and has been on padding the emergency fund a bit more, though this year has provided its share of financial distractions: first actually getting a driver's license and car (bad financially, but comes in handy), then a very attractive sale on stocks (good, but I lacked the cash on hand to do much with it), and most recently the aforementioned opportunity to get five times and counting the value on loan payments (very good).  I'm probably not going to be able to resist taking further advantage of the last, either, while I still can.  Finally, I'm sure some of you cringed at the last three lines of recurring spending, but giving/giving back in those ways is very meaningful to me, and there are actually a couple more causes I want to add to them, once I have a better idea of where things will end up.
« Last Edit: October 08, 2020, 01:48:41 PM by ag Eitilt »

Kierun

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Re: Defeat the Net Debt
« Reply #265 on: October 08, 2020, 06:25:42 PM »
04/20 - ~(579k)
05/20 - ~(545k)
06/20 - ~(544k)
07/20 - ~(536k)
08/20 - ~(524k)
09/20
Mortgage: ~364k
Mortgage: ~347k

Taxable: ~189k

Net: ~(522k)
10/20
Mortgage: ~363k
Mortgage: ~346k

Taxable: ~201k The market go up a lot or something?

Net: ~(508k)

An Unassuming Moose

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Re: Defeat the Net Debt
« Reply #266 on: October 15, 2020, 09:16:59 AM »
September Update:

Debts:
$10700 > $0
$0 > $15000
$59700 > $59700
$130700 > $130600
$138900> $158200
$249900 > $249900


Assets:
$169800 > $183631
$166100 > $164600


Totals $348200 - $613400 = $265200

Getting home from a multi-month work contract within the next few weeks. Then it's time to finish renovations on the house in order to turn it into a rental. After that, debt will the next thing in my crosshairs. This number should begin a rapid drop circa end of January 2021.

Past history:
Spoiler: show
Sept 2019: $318800
Oct 2019: $306600
Nov 2019: $296300
Jan 2020: $289200
Feb 2020: $286600
Mar 2020: $328700
April 2020: $314500
May 2020: $324200
June 2020: $292400
July 2020: $280300
August 2020: $269800
September 2020: $254500
October 2020: $265200

Kierun

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Re: Defeat the Net Debt
« Reply #267 on: November 10, 2020, 05:29:45 AM »
05/20 - ~(545k)
06/20 - ~(544k)
07/20 - ~(536k)
08/20 - ~(524k)
09/20 - ~(522k)
10/20
Mortgage: ~363k
Mortgage: ~346k

Taxable: ~201k

Net: ~(508k)
11/20
Mortgage: ~361k
Mortgage: ~346k

Taxable: ~212k

Net: ~(495k)

Dutch Comfort

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Re: Defeat the Net Debt
« Reply #268 on: November 13, 2020, 01:38:26 AM »
Mortgage (EUR 330K)
Assets EUR 36K

Net debt
July 2020 (EUR 314K)
September 2020 (EUR 313K)
October 2020 (EUR 296K) (included other savings accounts)
November 2020 (EUR 294K)

An Unassuming Moose

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Re: Defeat the Net Debt
« Reply #269 on: November 15, 2020, 01:50:57 AM »
November Update:

Debts:

$15000 > $15000
$59700 > $59700
$130600 > $130500
$158200> $157700
$249900 > $249900


Assets:
$183600 > $192500
$164600 > $175700


Totals $368200 - $612800 = -$244600

Lowest it's been since I started tracking. I've got lots of dry powder too, just finishing up some projects before I put it to work.

Past history:
Spoiler: show
Sept 2019: $318800
Oct 2019: $306600
Nov 2019: $296300
Jan 2020: $289200
Feb 2020: $286600
Mar 2020: $328700
April 2020: $314500
May 2020: $324200
June 2020: $292400
July 2020: $280300
August 2020: $269800
September 2020: $254500
October 2020: $265200
November 2020: 244600

terrifictim

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Re: Defeat the Net Debt
« Reply #270 on: November 24, 2020, 10:27:34 AM »
Saw this thread from DPOYM Club and thought I would join as well for motivation:

10/1/18 Net Debt*: 5,445
* Did not account for Rental Property Mortgage
4/1/19 Net Debt: 185,050
6/1/19 Net Debt: 166,092
8/1/19 Net Debt: 95,675
6/1/20 Net Debt: 40,875
10/1/20 Net Debt: 9,254

NET DEBT DEFEATED (LEVEL 1)!
Next goal (level 2) is to save enough in After-Tax accounts to be able to pay for one of the mortgages. There's also a possibility that I convert Mortgage 1 into a rental property and get a new mortgage for the primary home which would put me back in the Net Debt race. Also fully anticipating a stock market correction which would put me back in the red. But for the moment, holy cow - did not think the stock market would keep on going up like it has since June.

NET DEBT DEFEATED (LEVEL 1.1)!
11/24/20
Net Debt (Including Cash/EF): 49,456
Net Debt (Excluding Cash/EF): 3,058

To keep myself motivated I'm putting some sub steps in between level 1 and level 2 of the net debt defeat.  Beating Level 1.1 means that I could defeat my Net Debt and still keep my EF fully funded. The remaining steps:
Level 1.0 - All my liquid money (Pre-Tax, Post-Tax, After-Tax, Emergency Fund) can pay off all debts. Doing this would leave me broke but with 2 paid off properties. - Reached 10/1/20
Level 1.1 - Most of my liquid money (Pre-Tax, Post-Tax,  After-Tax) can pay off all debts. Doing this would leave me with an Emergency Fund and with 2 paid off properties. - Reached 11/24/20
Level 1.2 - Some of my liquid money (Post-Tax,  After-Tax) can pay off all debts. Doing this would leave me with most of my retirement (Pre-Tax), Emergency Fund, and paid off properties.
Level 2.0 - After-Tax money can pay off all debts. At this point I can decide whether to get rid of the debts in one shot or keep them going and keep adding to the investments.

frugalecon

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Re: Defeat the Net Debt
« Reply #271 on: November 25, 2020, 04:04:10 AM »
Saw this thread from DPOYM Club and thought I would join as well for motivation:

10/1/18 Net Debt*: 5,445
* Did not account for Rental Property Mortgage
4/1/19 Net Debt: 185,050
6/1/19 Net Debt: 166,092
8/1/19 Net Debt: 95,675
6/1/20 Net Debt: 40,875
10/1/20 Net Debt: 9,254

NET DEBT DEFEATED (LEVEL 1)!
Next goal (level 2) is to save enough in After-Tax accounts to be able to pay for one of the mortgages. There's also a possibility that I convert Mortgage 1 into a rental property and get a new mortgage for the primary home which would put me back in the Net Debt race. Also fully anticipating a stock market correction which would put me back in the red. But for the moment, holy cow - did not think the stock market would keep on going up like it has since June.

NET DEBT DEFEATED (LEVEL 1.1)!
11/24/20
Net Debt (Including Cash/EF): 49,456
Net Debt (Excluding Cash/EF): 3,058

To keep myself motivated I'm putting some sub steps in between level 1 and level 2 of the net debt defeat.  Beating Level 1.1 means that I could defeat my Net Debt and still keep my EF fully funded. The remaining steps:
Level 1.0 - All my liquid money (Pre-Tax, Post-Tax, After-Tax, Emergency Fund) can pay off all debts. Doing this would leave me broke but with 2 paid off properties. - Reached 10/1/20
Level 1.1 - Most of my liquid money (Pre-Tax, Post-Tax,  After-Tax) can pay off all debts. Doing this would leave me with an Emergency Fund and with 2 paid off properties. - Reached 11/24/20
Level 1.2 - Some of my liquid money (Post-Tax,  After-Tax) can pay off all debts. Doing this would leave me with most of my retirement (Pre-Tax), Emergency Fund, and paid off properties.
Level 2.0 - After-Tax money can pay off all debts. At this point I can decide whether to get rid of the debts in one shot or keep them going and keep adding to the investments.

Congrats on the progress, Tim! Itís terrific! (Wink)

I can report that being at your level 2 is pretty sweet.

TyGuy

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Re: Defeat the Net Debt
« Reply #272 on: November 29, 2020, 11:02:01 AM »
Hello,

I've been reading this thread for the past few months and I am now ready to join, as the whirlwind of buy my first home is now slowing down. I am currently making out my 401k but contributions have been slow to my taxable accounts. Additionally, I drew upon my taxable accounts for the down payment on my new home, as well as to pay for some of the immediate renovations I performed. I am now in a position to begin increasing my taxable account, though I expect the progress to be slow over the next 12-15 months before it starts increasing with some intensity. Additionally, I am not including what is in my CC or Checking (I keep a 2-3k buffer in my checking as well) as the amount is negligible in my opinion. I also have access to 5k at anytime that is "banked" as comp time for work, but it is advantages for me to leave it banked as my payout rate increases with my rate of pay, which is near average market returns (I consider this as part of my emergency fund, as this is not part of vacation/sick time, which would come as an additional payout if I were to lose my job). I look forward to making some headway on this journey with you all!


Debts:
Mortgage 247,206.01 (2.9% interest, so I only pay an extra $100 or so a month, as the prospect of killing the loan several years earlier, helps create momentum for me internally)

Student Loans: 21,456.11 (These are currently sitting at 0% due to COVID, so I have not made payments on them since April, when interest resumes (at ~3.8%) I will begin making significant payments, as I want them gone.


Assets:
Savings: $1,000 (I would like to get this back up to 5K)
Taxable 1: $3,887.66
Taxable 2: $2,432.56


Net Debt: (261,341.90)


Please feel free to weigh in on my plan (but I will likely stay commited to paying off my student loans quickly once interest returns, as it would give me major motivation and piece of mind going forward). My plan is as followed: Continue to max out take advantaged accounts (401k and IRA), increase savings to 5k (In high interest rate account), pay $1,000 a month on student loans (until completed), increase taxable accounts with remaining cash left over each month (likely to only be small amounts for the next 12-15 months).

frugalecon

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Re: Defeat the Net Debt
« Reply #273 on: November 29, 2020, 04:43:59 PM »
Hello,

I've been reading this thread for the past few months and I am now ready to join, as the whirlwind of buy my first home is now slowing down. I am currently making out my 401k but contributions have been slow to my taxable accounts. Additionally, I drew upon my taxable accounts for the down payment on my new home, as well as to pay for some of the immediate renovations I performed. I am now in a position to begin increasing my taxable account, though I expect the progress to be slow over the next 12-15 months before it starts increasing with some intensity. Additionally, I am not including what is in my CC or Checking (I keep a 2-3k buffer in my checking as well) as the amount is negligible in my opinion. I also have access to 5k at anytime that is "banked" as comp time for work, but it is advantages for me to leave it banked as my payout rate increases with my rate of pay, which is near average market returns (I consider this as part of my emergency fund, as this is not part of vacation/sick time, which would come as an additional payout if I were to lose my job). I look forward to making some headway on this journey with you all!


Debts:
Mortgage 247,206.01 (2.9% interest, so I only pay an extra $100 or so a month, as the prospect of killing the loan several years earlier, helps create momentum for me internally)

Student Loans: 21,456.11 (These are currently sitting at 0% due to COVID, so I have not made payments on them since April, when interest resumes (at ~3.8%) I will begin making significant payments, as I want them gone.


Assets:
Savings: $1,000 (I would like to get this back up to 5K)
Taxable 1: $3,887.66
Taxable 2: $2,432.56


Net Debt: (261,341.90)


Please feel free to weigh in on my plan (but I will likely stay commited to paying off my student loans quickly once interest returns, as it would give me major motivation and piece of mind going forward). My plan is as followed: Continue to max out take advantaged accounts (401k and IRA), increase savings to 5k (In high interest rate account), pay $1,000 a month on student loans (until completed), increase taxable accounts with remaining cash left over each month (likely to only be small amounts for the next 12-15 months).

Welcome to the thread, TyGuy. Sounds like you have a good plan in place. As the OP, I will share that the most important thing is to keep plugging away.

talltexan

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Re: Defeat the Net Debt
« Reply #274 on: December 02, 2020, 07:01:12 AM »
@TyGuy , what kinds of assets do you own in the taxable accounts? Seems to me like you could have that account be at parity with your student loan within six months, depending on your savings rate and market dynamics (sooner if you pause your 401(k) contributions).

TyGuy

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Re: Defeat the Net Debt
« Reply #275 on: December 06, 2020, 03:02:08 PM »
@TyGuy , what kinds of assets do you own in the taxable accounts? Seems to me like you could have that account be at parity with your student loan within six months, depending on your savings rate and market dynamics (sooner if you pause your 401(k) contributions).

My Taxable account is split between a Vanguard index fund and some small, freelance investments in stocks. The 401 max is non-negotiable due to the the over 30% savings in tax breaks. The index fund is also providing me some piece of mind as an additional source of savings for my emergency fund at the moment (until I increase my current emergency fund).

talltexan

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Re: Defeat the Net Debt
« Reply #276 on: December 07, 2020, 01:59:11 PM »
Latest statement on taxable came in the mail, and dang there's a nice increase during year 2020. With our former house finally selling, we've steamrolled over a ton of debt.

Kierun

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Re: Defeat the Net Debt
« Reply #277 on: December 08, 2020, 01:58:04 PM »
06/20 - ~(544k)
07/20 - ~(536k)
08/20 - ~(524k)
09/20 - ~(522k)
10/20 - ~(508k)
11/20
Mortgage: ~361k
Mortgage: ~346k

Taxable: ~212k

Net: ~(495k)
12/20
Mortgage: ~360k
Mortgage: ~345k

Taxable: ~230k

Net: ~(475k)

Dicey

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Re: Defeat the Net Debt
« Reply #278 on: December 09, 2020, 07:52:52 AM »
If one gives away pieces of their mind, how long before peace of mind becomes impossible to achieve? Asking for a friend.

TyGuy

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Re: Defeat the Net Debt
« Reply #279 on: December 10, 2020, 12:53:22 PM »
If one gives away pieces of their mind, how long before peace of mind becomes impossible to achieve? Asking for a friend.

Hi @Dicey,

I'm not sure if this was directed at me, but I see you on many of these threads and would be interested to hear you thoughts!

Kierun

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Re: Defeat the Net Debt
« Reply #280 on: December 10, 2020, 01:29:31 PM »
If one gives away pieces of their mind, how long before peace of mind becomes impossible to achieve? Asking for a friend.
If ignorance is bliss then perhaps the more one gives away the more possible for peace of mind to be achieved

Dicey

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Re: Defeat the Net Debt
« Reply #281 on: December 10, 2020, 03:22:50 PM »
If one gives away pieces of their mind, how long before peace of mind becomes impossible to achieve? Asking for a friend.
If ignorance is bliss then perhaps the more one gives away the more possible for peace of mind to be achieved
Or for Mustachian Principles to take root...

Dutch Comfort

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Re: Defeat the Net Debt
« Reply #282 on: December 15, 2020, 12:49:11 AM »
Mortgage (EUR 330K)
Assets EUR 37K

Net debt
July 2020 (EUR 314K)
September 2020 (EUR 313K)
October 2020 (EUR 296K) (included other savings accounts)
November 2020 (EUR 294K)
December 2020 (EUR 293K)

Goal for 2021: (EUR 270K)...... Considered doable if no major setback on markets / jobs.

An Unassuming Moose

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Re: Defeat the Net Debt
« Reply #283 on: December 15, 2020, 11:45:31 AM »
December Update:

Debts:
$15000 > $15000
$59700 > $59700
$130500 > $130300
$157700> $156700
$249900 > $249900


Assets:
$192500 > $196200
$175700 > $189900


Totals $386100 - $611600 = -$225500

My net debt is over $100k less than at my peak, which occurred... 9 months ago... I don't even know, man.

Past history:
Spoiler: show
Sept 2019: $318800
Oct 2019: $306600
Nov 2019: $296300
Jan 2020: $289200
Feb 2020: $286600
Mar 2020: $328700
April 2020: $314500
May 2020: $324200
June 2020: $292400
July 2020: $280300
August 2020: $269800
September 2020: $254500
October 2020: $265200
November 2020: $244600
December 2020: $225500

Morning Glory

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Re: Defeat the Net Debt
« Reply #284 on: December 16, 2020, 05:34:31 AM »

August 2018
Mortgage: -216,524 (30 yr at 3.75%)
Taxable: 113,056
Net debt equals -103,468

February 2019
Mortgage: -211,575
Taxable: 107,649
Net debt is -103,926

Also February 2019
Mortgage: 210,176
Taxable: 123,907
Net Debt: -86,269

January 2020
Mortgage -202,002
Taxable 132,135
Net Debt -69,867

August 2020
Mortgage: 202,541
Taxable: 146,264
Net Debt: -56,277

December 2020
Mortgage 198,930
Taxable: 163,567
Net Debt: -35,363
I could probably call it defeated if I looked at the husband's accounts too. The market has been kind this year.

Kierun

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Re: Defeat the Net Debt
« Reply #285 on: January 08, 2021, 09:12:41 AM »
07/20 - ~(536k)
08/20 - ~(524k)
09/20 - ~(522k)
10/20 - ~(508k)
11/20 - ~(495k)
12/20
Mortgage: ~360k
Mortgage: ~345k

Taxable: ~230k

Net: ~(475k)
01/21
Mortgage: ~358k
Mortgage: ~345k

Taxable: ~230k

Net: ~(472k)

--eta--
I like what Dutch Comfort did so...

Goal for 2021: Net ~(115k)
« Last Edit: January 14, 2021, 03:06:07 PM by Kierun »

talltexan

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Re: Defeat the Net Debt
« Reply #286 on: January 13, 2021, 01:13:32 PM »
I've had a nice gain in a taxable account such that the stated value now exceeds our mortgage. Of course, taxes would take a bite out of that.

And it's a nice mortgage, rate below 3.0%.

Dutch Comfort

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Re: Defeat the Net Debt
« Reply #287 on: January 14, 2021, 01:10:32 AM »
Mortgage (EUR 330K)
Assets EUR 39K

Net debt
July 2020 (EUR 314K)
December 2020 (EUR 293K)

January 2021 (EUR 291K)



Goal for 2021: (EUR 270K)......

An Unassuming Moose

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Re: Defeat the Net Debt
« Reply #288 on: January 15, 2021, 07:13:35 AM »
January Update:

Debts:
$15000 > $15000
$59700 >
$0
$130300 > $129900
$156700> $157100
$249900 > $249900


Assets:
$196200 > $204000
$189900 > $194900

Totals $398900 - $551900 = -$153000

Changing gears in 2021. Calling in some debts and paying off others. It's going to be the most exciting year to date.

Past history:
Spoiler: show
Sept 2019: $318800
Oct 2019: $306600
Nov 2019: $296300
Jan 2020: $289200
Feb 2020: $286600
Mar 2020: $328700
April 2020: $314500
May 2020: $324200
June 2020: $292400
July 2020: $280300
August 2020: $269800
September 2020: $254500
October 2020: $265200
November 2020: $244600
December 2020: $225500
January 2020: $153000

Morning Glory

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Re: Defeat the Net Debt
« Reply #289 on: January 15, 2021, 02:00:19 PM »

August 2018
Mortgage: -216,524 (30 yr at 3.75%)
Taxable: 113,056
Net debt equals -103,468

February 2019
Mortgage: -211,575
Taxable: 107,649
Net debt is -103,926

Also February 2019
Mortgage: 210,176
Taxable: 123,907
Net Debt: -86,269

January 2020
Mortgage -202,002
Taxable 132,135
Net Debt -69,867

August 2020
Mortgage: 202,541
Taxable: 146,264
Net Debt: -56,277

December 2020
Mortgage 198,930
Taxable: 163,567
Net Debt: -35,363

January 2021
Mortgage: -198,022
Taxable: 169,263
Net Debt: -28,759

Getting really close!!!
« Last Edit: January 15, 2021, 02:53:01 PM by Morning Glory »

frugalecon

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Re: Defeat the Net Debt
« Reply #290 on: January 16, 2021, 10:51:48 AM »

August 2018
Mortgage: -216,524 (30 yr at 3.75%)
Taxable: 113,056
Net debt equals -103,468

February 2019
Mortgage: -211,575
Taxable: 107,649
Net debt is -103,926

Also February 2019
Mortgage: 210,176
Taxable: 123,907
Net Debt: -86,269

January 2020
Mortgage -202,002
Taxable 132,135
Net Debt -69,867

August 2020
Mortgage: 202,541
Taxable: 146,264
Net Debt: -56,277

December 2020
Mortgage 198,930
Taxable: 163,567
Net Debt: -35,363

January 2021
Mortgage: -198,022
Taxable: 169,263
Net Debt: -28,759

Getting really close!!!

Great job, Morning Glory! Looks like you will make it in 2021!

gaja

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Re: Defeat the Net Debt
« Reply #291 on: January 16, 2021, 05:57:36 PM »
Getting very close to worthless here. EOY 2020 was -$16 000, hoping to reach zero by June.

Arbitrage

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Re: Defeat the Net Debt
« Reply #292 on: January 18, 2021, 08:51:21 AM »
Mortgage: $(372.0k)
Student Loan: $(27.1k)
Taxable: $313.3k

Net: $(85.8k)


Jan 2019: ($290.2k)
Apr 2019: ($278.4k)
Sep 2019: ($248.7k)
Dec 2019: ($217.3k)
Jul 2020: ($191.8k)
Jan 2021: ($85.8k)

Wow...taxable investments up about $100k in 6 months.  I knew that I'd been plowing a lot of money into taxable but that still threw me for a loop. 

Of course, with the plan to buy a second house (planning to buy the new house before we move and sell the old house), these numbers could get really bad for a bit.

Kierun

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Re: Defeat the Net Debt
« Reply #293 on: February 09, 2021, 10:57:03 AM »
08/20 - ~(524k)
09/20 - ~(522k)
10/20 - ~(508k)
11/20 - ~(495k)
12/20 - ~(475k)
01/21
Mortgage: ~358k
Mortgage: ~345k

Taxable: ~230k

Net: ~(472k)
02/21
Mortgage: ~357k
Mortgage: ~344k

Taxable: ~235k

Net: ~(466k)

Goal for 2021: Net ~(115k)

talltexan

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Re: Defeat the Net Debt
« Reply #294 on: February 10, 2021, 11:50:39 AM »
Mortgage: $(372.0k)
Student Loan: $(27.1k)
Taxable: $313.3k

Net: $(85.8k)


Jan 2019: ($290.2k)
Apr 2019: ($278.4k)
Sep 2019: ($248.7k)
Dec 2019: ($217.3k)
Jul 2020: ($191.8k)
Jan 2021: ($85.8k)

Wow...taxable investments up about $100k in 6 months.  I knew that I'd been plowing a lot of money into taxable but that still threw me for a loop. 

Of course, with the plan to buy a second house (planning to buy the new house before we move and sell the old house), these numbers could get really bad for a bit.

@Arbitrage , just want to offer a word of encouragement to you going through a "two house" phase: we were there for about five months ending roughly a year ago, and the large taxable account made it possible. Having those extra resources--we were able to borrow against them rather than sell--made it simple to swing the financing on two houses. Wishing you all the best!

Arbitrage

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Re: Defeat the Net Debt
« Reply #295 on: February 10, 2021, 01:50:22 PM »

@Arbitrage , just want to offer a word of encouragement to you going through a "two house" phase: we were there for about five months ending roughly a year ago, and the large taxable account made it possible. Having those extra resources--we were able to borrow against them rather than sell--made it simple to swing the financing on two houses. Wishing you all the best!

@talltexan Thanks for the good word.  We're in the midst of the search now, though it's slow going due to a near-absence of inventory, with everything being snatched up lightning-quick.  Got most of the financing lined up now, but the rapid price increases and low inventory may force our hand into paying more and dipping further into our taxable account than previously desired.  Nevertheless, we do have the flexibility as you say, and should be able to offer up without an appraisal contingency, since we'll be bringing plenty of cash to the table.

An Unassuming Moose

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Re: Defeat the Net Debt
« Reply #296 on: February 15, 2021, 07:22:34 AM »
January Update:

Debts:
$15000 > $15100
$130300 > $129700
$156700> $157100
$249900 > $249900

Assets:
$204000 > $208700
$194900 > $193600

Totals $402300 - $551800 = -$149500

Still progressing. Expecting a bit of backpedaling ahead, but a good end of year. With great luck, I might knock this out by the start of 2022. With average luck, by the end of 2022.

Past history:
Spoiler: show
Sept 2019: $318800
Oct 2019: $306600
Nov 2019: $296300
Jan 2020: $289200
Feb 2020: $286600
Mar 2020: $328700
April 2020: $314500
May 2020: $324200
June 2020: $292400
July 2020: $280300
August 2020: $269800
September 2020: $254500
October 2020: $265200
November 2020: $244600
December 2020: $225500
January 2021: $153000
February 2021: $149500

Dutch Comfort

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Re: Defeat the Net Debt
« Reply #297 on: March 01, 2021, 01:09:34 AM »
Mortgage (EUR 329K)
Assets EUR 40K

Net debt
July 2020 (EUR 314K) - started tracking
December 2020 (EUR 293K)

January 2021 (EUR 291K)
February 2021 (EUR 289K)


Goal for 2021: (EUR 270K)......

A little progress each month in the right direction.....

Kierun

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Re: Defeat the Net Debt
« Reply #298 on: March 09, 2021, 09:16:44 AM »
09/20 - ~(522k)
10/20 - ~(508k)
11/20 - ~(495k)
12/20 - ~(475k)
01/21 ~(472k)
02/21
Mortgage: ~357k
Mortgage: ~344k

Taxable: ~235k

Net: ~(466k)
03/21
Mortgage: ~355k
Mortgage: ~344k

Taxable: ~231k

Net: ~(467k)

Goal for 2021: Net ~(115k)

TyGuy

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Re: Defeat the Net Debt
« Reply #299 on: March 10, 2021, 04:01:54 PM »
Debts:
Mortgage: 249,879 (refinanced to 15 year at 1.75%, hence the small, temporary increase here)

Student Loans: 21,456.11 (Can defer interest free until at least September)


Assets:
Savings: $1,000 (I would like to get this back up to 5K)
Taxable 1: $4,253
Taxable 2: $2,279


Net Debt: Dec 2020 (261,341)
               Mar 2021 (263,803)