Author Topic: How old were you when you started wanting to be debt free?  (Read 9480 times)

P938LVR

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How old were you when you started wanting to be debt free?
« on: July 19, 2014, 12:20:45 PM »
I was probably 29 but it is still no where close to happening!

Middlesbrough

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Re: How old were you when you started wanting to be debt free?
« Reply #1 on: July 19, 2014, 12:35:25 PM »
When I was 19 and first took on any debt.

Malaysia41

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Re: How old were you when you started wanting to be debt free?
« Reply #2 on: July 19, 2014, 12:39:59 PM »
I can't remember ever feeling okay with debt.  I've wanted to be debt free since I was, what, 8? Back then I hoarded my money and loaned it to my siblings at 10% interest per week compounded daily. 

Of course, I took on some foolish debt in my early twenties - but not a lot.  Currently we have one mortgage payment (15 yr fixed will have it paid off <10), but the mortgage is 30% the value of the home - which is rented out and the renters are paying the interest and principal paydown.  So *that* debt I'm comfortable with.

(modification added here):  But I can't be high and mighty about debt, for I owe a huge debt of gratitude to my parents, who, bless their hearts, financed my university education ( I helped a little with scholarships & work, but really, they paid for it).  They gave me the gift of 0 student loan debt going into my career.   I lurk on these forums and read case studies of people taking on crazy student loan debt and it makes me more and more grateful to my parents.
« Last Edit: July 19, 2014, 12:51:18 PM by Malaysia41 »

Gray Matter

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Re: How old were you when you started wanting to be debt free?
« Reply #3 on: July 19, 2014, 12:59:07 PM »
We never had tons of debt, but I remember thinking mortgage, car loan, and student loans were normal and as long as you were making the payments fine, no reason to pay off early.  It wasn't until I was about 37, with three kids, and the markets started going haywire and I realized how exposed we were because of our debt if one of us lost our job, and how much it diminished our freedom of choice.

catccc

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Re: How old were you when you started wanting to be debt free?
« Reply #4 on: July 19, 2014, 01:39:46 PM »
I have never carried debt, so I suppose I wanted to be debt free at a very young age.  When I learned how credit cards worked when I was 15, I wanted to earn rewards and not pay interest. 

DH wanted to be debt free (only student loans) after learning how much interest it was.  He just kinda took them out during undergrad, or his parents did for him, really.  One I brought them to his attention, we killed them immediately.

One day we will probably have a mortgage, but that day still hasn't come.  When it does, I will debate between paying off the house and investing more...

The Mobile Mustachian

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Re: How old were you when you started wanting to be debt free?
« Reply #5 on: July 19, 2014, 02:09:11 PM »
I was 10 years old. I saw what debt does to relationships (my parents) and knew that bad debt (not investment related) puts shackles on people who could otherwise have a pretty decent life. Now fortunately, they have changed their ways and are very close to being debt free. =)

deborah

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Re: How old were you when you started wanting to be debt free?
« Reply #6 on: July 19, 2014, 02:55:55 PM »
I was 12, and home sick with the flu. The electricity man came to turn off the electricity, the water man to turn off the water, the telephone people rang to say they were turning off the phone. All were confronted with an upset little girl, and (of course) didn't do it. But it was a close run thing.

Sonorous Epithet

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Re: How old were you when you started wanting to be debt free?
« Reply #7 on: July 19, 2014, 03:01:36 PM »
When I was 19 or so, I maxed out my first credit card, with a credit limit of $1,000. I realized how long it would take me to pay down with my crappy part-time job and that got me scared enough of using credit cards to do any serious damage.

When I was 25, I found out what my student loan debts were, and how suddenly a debt I don't remember taking on (I remember being in the financial aid office once, and my mom discussing HER finances with the officer, and that's about it) would be costing me a huge chunk of my first career salary. The debt wasn't even that big ($15k) but it's what got me finally interested in learning about personal finance.

basd

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Re: How old were you when you started wanting to be debt free?
« Reply #8 on: July 19, 2014, 03:37:51 PM »
About a year, a year and a half ago. Before that, I was happy with my interest-only mortgage (low monthly costs) and my student debt (I surely enjoyed those beers!), but learning that my wife was pregnant with our first child made me rethink a lot. Now, I'd rather get rid off all these debts as soon as possible (got rid of the 15k student loan and the first 10k of the mortgage already).

Exflyboy

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Re: How old were you when you started wanting to be debt free?
« Reply #9 on: July 19, 2014, 04:03:02 PM »
When I was about 12 and my Dad's union (in the UK) forced him to go on strike.. But the apartment came with his job.

Everything was bought on credit, furtniture, the car, appliances etc.

I suddenly realised we could be out on the street!

My Parents will never know the effect this had on me... And not having enough money still worries me today.. I retired in Jan at 52 wand currently have $1.4M plus a paid off house.

Isn't that crazy?

Frank

khotte

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Re: How old were you when you started wanting to be debt free?
« Reply #10 on: July 19, 2014, 04:04:13 PM »
When I was 23 and found MMM. I drastically changed things around and got my act in order!

The Borgs

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Re: How old were you when you started wanting to be debt free?
« Reply #11 on: July 19, 2014, 04:43:19 PM »
I was 11 and my biological father left. He left my mother and I in a house with a crapload of debt, my mother was taking care of her elderly parents in it and we were up a brown creek sans paddle.

Mum got through it cleaning other peoples houses and working a job, whilst we lived a very frugal life. It wasn't an easy ride.

I started saving. Every bit of birthday money went into a high interest account. My first day of work was on my 16th birthday when I started my weekend job (because prior to 16 no-one would hire), I worked every weekend and every holiday, saving every penny.

By working that hard and working during university I graduated after 4 years with no debt and savings. Right now we're in a home with zero debt, no mortgage, no credit cards, no loans. I have some serious mental issues with it being any other way.

zinethstache

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Re: How old were you when you started wanting to be debt free?
« Reply #12 on: July 19, 2014, 05:30:49 PM »
I was always frugal, saved up for what I wanted, sought better jobs to earn the $$ for what I wanted. Married a frugal man. Took 22 years to convince him to use debt wisely and invest it. Now he is FI, managing our properties. It feels good to know that all of our living expenses are now covered by passive income. My day job is responsible for our discretionary spending and medical costs. It is really hard to keep our discretionary spending to a minimum and NOT go into any 'stupid' debt for instant gratification. Our DTI is very, very low so it it tempting to buy now, pay later. We are disciplined, sticking with our plan to continue to invest in properties so I can FIRE in the next 4 years.

In younger years I envisioned my future would consist of owning properties. I did envision "owning" them, so Im not quite there yet with my vision since I have mortgages. The interest rates we have are so low it will never make sense to pay them off early. Ironically, my debt free dream is a very long way off.

mpg350

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Re: How old were you when you started wanting to be debt free?
« Reply #13 on: July 19, 2014, 06:29:34 PM »
Always been frugal it was in my DNA.

davef

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Re: How old were you when you started wanting to be debt free?
« Reply #14 on: July 19, 2014, 10:31:39 PM »
When I was 15 I got my first job and my first car. A few months later I realized that I would not be able to afford an apartment when I graduate high school and want to get out if I still had a car payment. I paid of the $4,000 loan (to my dad) over the next year and have lived debt free (except for mortgages) since.

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Re: How old were you when you started wanting to be debt free?
« Reply #15 on: July 19, 2014, 11:21:10 PM »
It's great to see so many here who were / are debt adverse at such a young age.

For me,  I was 39 with a failed business, marriage,  $17,000 of IRS debt,  $4000 of CC debt @ 24%.    5 years later I have a great job, no debt and knocking on $60k net worth... Better late then never.

2007-2010 AD was a life changing and eye opening experience.

tomsang

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Re: How old were you when you started wanting to be debt free?
« Reply #16 on: July 20, 2014, 01:15:57 AM »
Haven't hit the age yet. To me debt is not evil or bad. Debt is a tool that can be used to facilitate or detract from wealth creation. Currently there are a number of governments that are trying to spur economic growth by giving away free money. If used properly this money will accelerate the time to financial independence. To me not having debt is not fiscally responsible at the current interest rates. You can get credit cards at 3% or less, 30year find rate mortgages at 4% or less, car loans at sub 5%. If you are debt free, mathematically you should be going to the bank to see if you can get a loan to invest for longterm growth.

surfhb

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Re: How old were you when you started wanting to be debt free?
« Reply #17 on: July 20, 2014, 02:00:30 AM »
Haven't hit the age yet. To me debt is not evil or bad. Debt is a tool that can be used to facilitate or detract from wealth creation. Currently there are a number of governments that are trying to spur economic growth by giving away free money. If used properly this money will accelerate the time to financial independence. To me not having debt is not fiscally responsible at the current interest rates. You can get credit cards at 3% or less, 30year find rate mortgages at 4% or less, car loans at sub 5%. If you are debt free, mathematically you should be going to the bank to see if you can get a loan to invest for longterm growth.

Ah yeah.....taking out a loan for long term investing?   What rate would you be happy with on a unsecured loan (or worse, a secured loan)to use as investment capital?   

Last time I heard people talking like this was just around 2001 or so :)
 
« Last Edit: July 20, 2014, 02:09:14 AM by surfhb »

DecD

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Re: How old were you when you started wanting to be debt free?
« Reply #18 on: July 20, 2014, 08:08:18 AM »
My parents taught me that debt (other than mortgage) is not ok, so I've never been in debt.  We do still have a mortgage...

cdttmm

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Re: How old were you when you started wanting to be debt free?
« Reply #19 on: July 20, 2014, 10:31:04 AM »
I always wanted to be debt free, but I didn't really make the commitment to living the lifestyle until I was 32. At that point, I managed to kill off my student loan debt and credit card debt pretty quickly (less than a year). The mortgage was more of a challenge, but the income from my rental property covers it so I don't consider it a big deal at this point.

FIreDrill

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Re: How old were you when you started wanting to be debt free?
« Reply #20 on: July 20, 2014, 11:00:54 AM »
I was about 21. I'm 24 now and have paid off all my debt, about 22k, and have a net worth just shy of 90k now.  Should hit 100k in the next couple months :)

rmendpara

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Re: How old were you when you started wanting to be debt free?
« Reply #21 on: July 20, 2014, 09:19:59 PM »
Turned 25 this year, paid off a mortgage on a small condo last year (probably sub-optimal, but the balance was only $25k left so it was easier to just get rid of it rather than keep track of an extra bill).

As of now, zero debt carried and don't plan to take on any unless I buy another personal residence/investment property or go back to get MBA.

I'm not really debt averse, as I work in finance and understand how it can be used to create value, but I still appreciate the flexibility of being "all equity" (no or low debt levels) in my personal book.

I do plan to have ample liquidity, as I don't enjoy being leveraged up to the hilt, but it still blows my mind how RE investing on a 75% LTV basis can still generate >10% returns on cash invested. Great stuff!

tomsang

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Re: How old were you when you started wanting to be debt free?
« Reply #22 on: July 21, 2014, 09:19:58 AM »
Haven't hit the age yet. To me debt is not evil or bad. Debt is a tool that can be used to facilitate or detract from wealth creation. Currently there are a number of governments that are trying to spur economic growth by giving away free money. If used properly this money will accelerate the time to financial independence. To me not having debt is not fiscally responsible at the current interest rates. You can get credit cards at 3% or less, 30year find rate mortgages at 4% or less, car loans at sub 5%. If you are debt free, mathematically you should be going to the bank to see if you can get a loan to invest for longterm growth.

Ah yeah.....taking out a loan for long term investing?   What rate would you be happy with on a unsecured loan (or worse, a secured loan)to use as investment capital?   

Last time I heard people talking like this was just around 2001 or so :)

For a 30 year fixed mortgage I would not be paying it off early until it was over 6% or if I could not find steady investments that would beat this rate. For all the other short term loans I would be at 5% or if I could match up an investment with my borrowing. I was able to borrow $50k on my LOC at 7% and loan it out at 18% for a bridge loan three years ago. I had a fairly strong understanding of the risks involved. I was sad when it got paid off after 18 months. 

I have purchased numerous other businesses or rentals using my LOC in the 4% - 7% range over the years with great success. My total borrowing is in excess of $1 million, with 95%+ being in fixed rate sub 4% mortgages on my house and rentals. I consider my fixed rate mortgages as part of my assets. This is my hedge against inflation. My balance sheet is in great shape.

My credit score and my understanding of how to utilize debt has improved my net worth, accelerated my time to financial independence, and has been done in a significantly safer manner than those paying off debt.  Liquidity is what kills businesses and families. Having your assets tied up in a house puts you at risk of having a liquidity event if there is a negative event in your life. Having a partially paid off mortgage and minimal assets is much more risky than having a fixed rate loan and a diversified portfolio to draw down in the event of an emergency.

Like everything, extremes are suboptimal and risky. At today's rates, having no debt is suboptimal to accelerate financial independence. The only time to have no debt  at these 30 year fixed rates is if you have so much money that the hassle of making payments offsets the gains. For those still on the quest for financial independence, paying off your 30 year fixed mortgage early is slowing down your financial independence.

Debt to blow is bad, debt to invest is good!  Debt is a tool, use it wisely and you will be rewarded.

Wess

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How old were you when you started wanting to be debt free?
« Reply #23 on: July 21, 2014, 09:39:13 AM »
It was a gradual realization, somewhere between 21 and 23. I didn't mind my student debt before then, but I started to realize how huge the end total would turn out to be. It just felt wrong to be paying so much! For so long! So I started paying it down as much as I could--just finished last week. Whew.

Even if having debt sometimes somehow technically makes sense for investing purposes, I will never consider it an option. I even hate the idea of a mortgage. Borrowing one thing to gain another (house, car, interest, whatever) just feels so backwards to me! Not to mention the feeling I get from being told I MUST pay this amount by this date or else... It's freedom-killing.
Why would I ever buy something I quite literally cannot afford?
« Last Edit: July 21, 2014, 09:48:41 AM by Wess »

arebelspy

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Re: How old were you when you started wanting to be debt free?
« Reply #24 on: August 12, 2014, 08:27:18 PM »
Last time this question was asked it was "what age did you become debt free" rather than "what age did you want to become debt free".  Pretty similar.

http://forum.mrmoneymustache.com/share-your-badassity/when-did-you-become-debt-free/

It'd be interesting if they had polls, to compare what age people wanted to be debt free versus what age they actually became debt free.

In any case, my answer to this question is the same as last time: I hope to never become debt free.  My student loan paid off last month, and it was very sad.  I hope to carry mortgages (plural) until I die.  So I guess I haven't yet hit the age when I wanted to become debt free.  Maybe someday I'll change my mind on this.  :)
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Zaga

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Re: How old were you when you started wanting to be debt free?
« Reply #25 on: August 13, 2014, 06:54:38 AM »
I first thought of the topic when I was about 22, working in a group home.  We were all watching Little House on the Prairie, and Laura got pissed at her husband for borrowing money to buy a farm; he got pneumonia from working in the rain to pay off the debt and she made him promise to never borrow again.  I thought at the time that it was really too bad that in modern times that sort of thing was impossible.  Oddly enough I was debt free at the time, but sadly didn't stay that way.

Then right after I got married at 27 I was loaned a Dave Ramsey book and finally realized that it was a real thing in modern life to live without debt.  Still working on the debt at 34.  We could have been done long before now, but have been splitting up our funds between debt reduction and investing.

So my answer is I wanted it at 22, but didn't believe in it until 27.  Will probably achieve it at 38.

makincaid

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Re: How old were you when you started wanting to be debt free?
« Reply #26 on: August 13, 2014, 11:25:10 AM »
I can't say that there was ever a time when I didn't want to be debt-free.

jadbgee

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Re: How old were you when you started wanting to be debt free?
« Reply #27 on: August 13, 2014, 02:45:25 PM »
I've always wanted to be debt-free, but I have to say that 29 is the age where it's haunting my sleep.  It will happen, and soon.

MrsPete

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Re: How old were you when you started wanting to be debt free?
« Reply #28 on: August 13, 2014, 07:13:15 PM »
I was 11 and my biological father left. He left my mother and I in a house with a crapload of debt, my mother was taking care of her elderly parents in it and we were up a brown creek sans paddle.

Mum got through it cleaning other peoples houses and working a job, whilst we lived a very frugal life. It wasn't an easy ride.

I started saving. Every bit of birthday money went into a high interest account. My first day of work was on my 16th birthday when I started my weekend job (because prior to 16 no-one would hire), I worked every weekend and every holiday, saving every penny.

By working that hard and working during university I graduated after 4 years with no debt and savings. Right now we're in a home with zero debt, no mortgage, no credit cards, no loans. I have some serious mental issues with it being any other way.
Wow, change a detail here and you and I have lived the same life.

The Borgs

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Re: How old were you when you started wanting to be debt free?
« Reply #29 on: August 22, 2014, 05:02:42 PM »
I was 11 and my biological father left. He left my mother and I in a house with a crapload of debt, my mother was taking care of her elderly parents in it and we were up a brown creek sans paddle.

Mum got through it cleaning other peoples houses and working a job, whilst we lived a very frugal life. It wasn't an easy ride.

I started saving. Every bit of birthday money went into a high interest account. My first day of work was on my 16th birthday when I started my weekend job (because prior to 16 no-one would hire), I worked every weekend and every holiday, saving every penny.

By working that hard and working during university I graduated after 4 years with no debt and savings. Right now we're in a home with zero debt, no mortgage, no credit cards, no loans. I have some serious mental issues with it being any other way.
Wow, change a detail here and you and I have lived the same life.
Hey sis!

steveo

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Re: How old were you when you started wanting to be debt free?
« Reply #30 on: August 22, 2014, 05:35:44 PM »
I've always wanted to be debt free but I'm 41 and I still have a mortgage of about 130k.

southern granny

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Re: How old were you when you started wanting to be debt free?
« Reply #31 on: August 23, 2014, 08:04:26 PM »
I grew up with very little security, so as soon as I was on my own (at age 17) I wanted security.  I got married at 18 and we bought a house on our first anniversary.  We never made a lot of money, but we always saved some.  We couldn't save a lot when the children were home, but did save some every month.  40 years later we are still married and still live in that same house.  We still give too much money to our kids and we spend too much  money eating out with friends and on vacations, but we save money wherever else  we can.  We cook all meals during the week and carry all lunches to work.  My husband is very handy and does almost all our home repairs himself.  I shop garage sales and thrift stores.  We haven't retired yet, but my husband will retire next year and I only work part time with flexible hours.  God has blessed us with good health so far.  I am looking forward to our retirement years.