Author Topic: Aiming for Zero  (Read 2946 times)

pennypincher

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Aiming for Zero
« on: July 08, 2012, 11:40:19 AM »
So between my husband and I and three graduate degrees between us, we have lots of student debt (sigh). Like over 100K lots. Sigh. It is however all under 5% interest, all in IBR, and there is the possibility of forgiveness after 10 years through PSLF. So as forgiveness is a possibility, it doesn't make sense to try to pay off quickly, but it still bums me out to calculate how negative our net worth is every month.

But to have something to aim towards, we're aiming for zero. At our current pace, it looks like by Oct 2013, after several years of working towards it, we will have zero net worth. Zero! We will have assets that match our debt, and hopefully over time be earning more than our debt (especially if some is forgiven).

How about out there? Anyone else aiming for zero?

Two9A

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Re: Aiming for Zero
« Reply #1 on: July 08, 2012, 01:11:27 PM »
Definitely aiming for zero. I don't have good figures on how much the houses are worth, so I'm treating them as worth zero. (Which isn't far away from the truth...)

So I'm starting quite far below zero: currently GBP -224,500. The trend is toward less negative though!

arebelspy

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Re: Aiming for Zero
« Reply #2 on: July 08, 2012, 04:01:37 PM »
Here's some relevant threads for you.

The thread Starting off your Moustachian journey with Debt? has a discussion of people in a similar situation to you, starting with a negative net worth.

The Mustachian Net Worth poll shows that about 13% of Mustachians have a negative net worth, so you definitely aren't alone.  7% have more than 100k in debt.

And finally, in Zero net worth! WOOOOO! a Mustachian celebrates reaching that goal.

You can do it, and good luck!  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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arebelspy

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Re: Aiming for Zero
« Reply #3 on: July 08, 2012, 04:09:22 PM »
Here's a post I made in another thread, which asked the question:

What do you do in these long cycles to ensure you are staying on track?

I feel like getting out of debt, especially a large amount of debt can be a long slog, and it can often get discouraging.  So here is y thoughts on that, which may help you:

Quote
Hmm.. A few ideas off the top of my head

  • Track your progress to your long term goal, update monthly.  YMOYL wall chart type thing could help
  • Set mini-goals based on amount of passive income, net worth, etc.
  • Do little "challenges" (like reduce spending by X percent or dollars is month, or don't eat out this month)
  • Start planning what you will do once FI net worth 0
  • Learn more about investing, Optimize your portfolio

Really the first one is the biggie, IMO.  Track that progress and stay motivated!

One way I do that is by tracking my net worth in a spreadsheet, putting in a best fit line, and then trying to get ABOVE that line each month (so not only a data point above the previous one, reaching a new net worth high, but a net worth increasing faster than it has been.. Hard to sustain indefinitely, but a good challenge).

Most of that applies, IMO.  Maybe not the last one.  You are trying to get from negative to 0, which is a big overall goal, set small goals (like -50k), track your progress each month to make sure your net worth is growing.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Petruchio

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Re: Aiming for Zero
« Reply #4 on: August 29, 2012, 05:15:02 PM »
I'm about 45K in the hole from student loans as well... and a low paying 20K job. I'll be rooting for you.