Author Topic: The excitement to get past the debt is consuming.  (Read 6474 times)

Bigjones

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The excitement to get past the debt is consuming.
« on: October 13, 2014, 09:58:32 AM »
Im so consumed trying to pay off this last debt bill (outside of my mortgage)! As some of you know, ive been paying off my debt as quickly as possible.  Im down to the final 8k roughly.  And should be able to pay off another $2500 this month of it.

What I find , is finding myself day dreaming about the day when its gone and im able to have the enjoyment of trying to put away that $2500 a month (69% of my household income after taxes and other living expenses).

Everyday I spend a few minutes going over my accounts, my calendar with bills figuring out to the penny what I can spend on this debt and then thinking about what its going to feel like when savings $2500 a month.  I know I know, I need to keep a healthy balance.  But the daydreaming part is kinda fun if not compulsive :)

Bob W

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Re: The excitement to get past the debt is consuming.
« Reply #1 on: October 13, 2014, 10:04:01 AM »
Just for fun you might start keeping track of net worth on a daily basis.   Part of the formula would include a daily increase of your home based on a 3% annual increase.  (10 bucks? 10)

I'm so impressed with your 69% figure!  That is just awesome.

By keeping a net worth figure you will be motivated to increase the 69% to 75% and beyond.   Some
obsessions are better than others!

Bigjones

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Re: The excitement to get past the debt is consuming.
« Reply #2 on: October 13, 2014, 10:09:57 AM »
For full disclosure that 69% will end up being a bit lower once this loan is payed off and I concentrate on paying my mortgage down with a amortization table to 11 years.  My ultimate goal is to retire in 11 years with that day my mortgage being paid off.  I currently owe about 70k on it.

Im actually looking for a nice excel template for net worth etc.

TomTX

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Re: The excitement to get past the debt is consuming.
« Reply #3 on: October 13, 2014, 10:27:06 AM »
Paying the mortgage faster may not be the optimal path to faster FI.

There have been recent threads on the topic,  but what are your loan terms? Rate, fixed\variable,  etc. Are you able to refinance if the current terms are poor?

Bigjones

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Re: The excitement to get past the debt is consuming.
« Reply #4 on: October 13, 2014, 10:34:19 AM »
Hi Tom,

Currently I owe ZERO on the mortgage but have a Home Equity at a fixed 4.25%    What happened was I used all cash to build it but ran short and home equitied my way to completion.

Just paying the interest is roughly $200 a month, my plan was pay roughly $700 a month on it to have it paid off in 10-11yrs.

What do you think?

andrea-stache

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Re: The excitement to get past the debt is consuming.
« Reply #5 on: October 14, 2014, 08:49:24 AM »
I remember that same feeling when we were paying off the mortgage.  It was very consuming to plan and strategize until I had every dollar allocated.  I used to feel so good when making a huge payment.  Every time I went for a run, I was doing the math in my head about how much was left to pay off and calculating the $ payments and months.

We had a huge (anti-mustachian) celebration on 3/15/13 when we paid it off.  I wish I had that same excitement and enthusiasm towards savings and watching our accounts grow as I did with depleting the debt.  I don't know why...but it's just not the same.  Sure, I send that old mortgage payment to Vanguard each month...but it's just not as thrilling as getting down to $0 owed.

Cheddar Stacker

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Re: The excitement to get past the debt is consuming.
« Reply #6 on: October 14, 2014, 08:57:43 AM »
Hi Tom,

Currently I owe ZERO on the mortgage but have a Home Equity at a fixed 4.25%    What happened was I used all cash to build it but ran short and home equitied my way to completion.

Just paying the interest is roughly $200 a month, my plan was pay roughly $700 a month on it to have it paid off in 10-11yrs.

What do you think?

I'm not tom, but I think that's a solid plan as long as you keep putting that $2,500 ish/month into investments. That's ~83% invest and 17% mortgage reduction which is a good mix.

Congrats on knocking down the rest of your debts.

rjbf65

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Re: The excitement to get past the debt is consuming.
« Reply #7 on: October 14, 2014, 10:48:28 AM »
I'm a fan of the debt reduction plan as well even though the math may not always agree..  My plan for next year is to max out the tax advantaged accounts and then any additonal dollars left over are to go towards prinicipal reduction.  I do see the advantages to each strategy.  I just think a paid for house would feel awesome. 

 

Sid Hoffman

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Re: The excitement to get past the debt is consuming.
« Reply #8 on: October 14, 2014, 02:07:02 PM »
I wish I had that same excitement and enthusiasm towards savings and watching our accounts grow as I did with depleting the debt.  I don't know why...but it's just not the same.  Sure, I send that old mortgage payment to Vanguard each month...but it's just not as thrilling as getting down to $0 owed.

I think you actually partially answered the question yourself.  With debt, you have a clear amount owed and a solid target of $0 as the goal.  For savings however, you have only a fuzzy picture of how much you have saved up, since it goes up and down every day, every year with the markets and no solid target of when you are "done" saving.  Are you going to be good on $700k?  Or is your savings only up to $700k because of a huge bull market run and you should instead save to $800k to survive a downturn?  Are your calculations accurate and sustainable?  What about healthcare costs post FI when you are paying unsubsidized insurance rates?

I think the biggest problem with getting excited about saving for FI is that both the assets and amount needed to be sustainably FI are very fuzzy.  Debt is very clear, so it's easier to know how close you are and the moment you are done.

Thegoblinchief

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Re: The excitement to get past the debt is consuming.
« Reply #9 on: October 15, 2014, 07:31:18 AM »
One thing that may help you keep excited about building investments is to read spoonman's journal and see how he put "possibility spaces" he unlocked with each new threshold in investment income.

GetItRight

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Re: The excitement to get past the debt is consuming.
« Reply #10 on: October 15, 2014, 09:53:41 AM »
It is consuming for me too. All student loan debt, but since optimizing the interest rates and so forth I am less depressed and more obsessed. I look forward to the bills coming due each month and pay immediately so I feel "safe" for a month and change. I used to drop a couple grand every month to the highest interest but lately I've been making several additional smaller payments throughout the month to get every last penny I can reasonably afford paid off. Probably not prudent as my EF has shrunk but I just want to be done with the debt so I can be free. Not free to retire as that's a long way off, but free to live my life as I see fit, take a risk on a new job, move across the country, or even free to do nothing different at all but just not feel stuck. But I check mint several times a day, check/update spreadsheets, crunch numbers in my head, consider various options to optimize debt, reduce spending, generate additional income, etc... All day, every day. It is consuming, but it should be considering the amount of money I don't have that I wasted on school.

lukebuz

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Re: The excitement to get past the debt is consuming.
« Reply #11 on: October 15, 2014, 11:40:31 AM »
Take it from someone who spent 4 years getting out of debt.  It's anti-climatic.  I sent my last payment off last month, and then said.  "Now what?"
Save more.  Yay.  I guess.

Cheddar Stacker

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Re: The excitement to get past the debt is consuming.
« Reply #12 on: October 15, 2014, 12:10:20 PM »
Take it from someone who spent 4 years getting out of debt.  It's anti-climatic.  I sent my last payment off last month, and then said.  "Now what?"
Save more.  Yay.  I guess.

Well, congrats anyway. And yes, save more and invest. Stocks are on sale today.

Stellar

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Re: The excitement to get past the debt is consuming.
« Reply #13 on: October 18, 2014, 07:55:48 AM »
I am right with you, Bigjones!  I created my first post last week and have since managed to pay $1000 towards the CC Debt!  I don't see how the excitement and anticipation can end... it has to be just as fun watching the balances grow...

GardenFun

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Re: The excitement to get past the debt is consuming.
« Reply #14 on: October 18, 2014, 08:03:43 AM »
Take it from someone who spent 4 years getting out of debt.  It's anti-climatic.  I sent my last payment off last month, and then said.  "Now what?"
Save more.  Yay.  I guess.

+1.  Paid off last debt (mortgage) 4 years ago and felt the same way. 

With paying off debt, we were in charge of our own destiny - scrimp here and put more toward principal.  Saving in index funds for FIRE is theoretically the same (saving toward a goal), but for some reason it doesn't have that same "I'm in charge and tackling this issue". 

It's almost like we're taking the easy way out.  ;-)  Probably why I still want to learn about purchasing individual stocks / rental properties. 

b1gm1ke11

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Re: The excitement to get past the debt is consuming.
« Reply #15 on: October 18, 2014, 09:12:48 AM »
For those who think getting out of debt is more exciting than accumulating cash in their investments, for the sake of presentation why not write yourself a mock loan with full amortization that you "pay down" instead of adding to?  I owe myself a million and amortized the number of years I have to go using 0% interest (what a deal!).  Of course all that money is going to Vanguard and hopefully it will take less time to reach a million than my amortization table.  :)

10dollarsatatime

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Re: The excitement to get past the debt is consuming.
« Reply #16 on: October 18, 2014, 01:48:31 PM »
I check my accounts several times a week, just looking for that extra bit of money to send towards the debt.  And I include my house in that.  I know the other school of thought is that investments will return more than I pay in interest, but mostly I look forward to the day I can live on $800/month.  If you ignore all the debt payments, that's what I really live on now.  In my industry, that's only 2-3 days of freelance grunt work.  One day for designer/manager positions.  And let's face it... if I had to, I could make that much flipping burgers 20 or so hours a week and be just fine.  I'm really looking forward to that freedom.

steveo

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Re: The excitement to get past the debt is consuming.
« Reply #17 on: October 18, 2014, 09:49:19 PM »
I check my accounts several times a week, just looking for that extra bit of money to send towards the debt.  And I include my house in that.  I know the other school of thought is that investments will return more than I pay in interest, but mostly I look forward to the day I can live on $800/month.  If you ignore all the debt payments, that's what I really live on now.  In my industry, that's only 2-3 days of freelance grunt work.  One day for designer/manager positions.  And let's face it... if I had to, I could make that much flipping burgers 20 or so hours a week and be just fine.  I'm really looking forward to that freedom.

This is my thoughts as well. I look at it more along the lines of becoming safer and safer over time. If I lose my decent paying job and have to work doing whatever I'll be better off if I have no debt. I do also live in Australia where I think its better to pay off your mortgage than to invest the surplus.

Even though when that will be paid off I look at investing as more about earning extra income to cover expenses. So $5k dividend income will probably pay for all of my housing costs excluding the mortgage. Another $10k will feed the family. If I keep going that way all work has to do is pick up the difference. When I get to FI work will just be to pay for fancy stuff like os holidays or whatever or not be required.

Wanderlusting

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Re: The excitement to get past the debt is consuming.
« Reply #18 on: October 19, 2014, 12:35:27 AM »
I'm still in the middle of the slog to punch through my student loan debt as well, and although it can be a slog sometimes, it's definitely exciting every time I get within a month to pay off one of the individual loans. That month I tend to focus extra hard to adjust my cash to make a larger payment in order to move onto the next. I try not to go overboard in penny pinching though, mostly because I like to use rolling averages with a buffer for my spending targets, which i've managed to hold to for the better part of two years now.

If all goes according to plan, I'll be debt free in two years, at which point my net worth will grow exponentially from what it is now, and that's the most exciting thing off all throughout all of this.

rocketpj

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Re: The excitement to get past the debt is consuming.
« Reply #19 on: October 19, 2014, 12:54:58 AM »
I see all of this as just building my resilience for whatever comes. 

Personal opinion here, but I feel like we are heading into a decade or two of very unpleasant upheaval.  I'd really like to not be part of the collateral damage when all the shady banking collides with all the poor government budgeting collides with massive personal debts and a rapidly aging population.

I don't know what's going to happen, but I do know that whatever does happen - whether things are amazing or a disaster, I'll be much better able to respond if I have no debt and as much savings as possible.  If both of our jobs go up in smoke, will we be able to survive?  If we don't have a mortgage that will sure be a lot easier.  If we have a few hundred thousand in the bank it will be even more possible.

On other fronts I see health as another form of savings.  Being healthy 20 or 50 years from now is a great way to boost my resilience to future challenges. 

steveo

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Re: The excitement to get past the debt is consuming.
« Reply #20 on: October 19, 2014, 01:10:25 AM »
I see all of this as just building my resilience for whatever comes
....
On other fronts I see health as another form of savings.  Being healthy 20 or 50 years from now is a great way to boost my resilience to future challenges.

These are good points. I view health and finances as being or critical importance. Save money, eat well and exercise.