sellthefarm said:

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yeah, fair enough - I guess I meant the more typical first marriage situation pre-children

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Quote:

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What makes you think so? I have no debt currently so there is no question about stressing out about it. Haven't had any since 2018. I have a pretty good net worth as well.

What I shared with the OP was some learning that I had from my experiences. Of course, he may choose to take it or ignore it. Just like he will do to other bits of advice on this thread.

Your approach may be to take a lot of debt, invest in the market and make a lot of money. Sure that can work. However, the risk is there when the market crashes, and you aren't quick to get your money out (I am almost never quick enough), you lose a lot. My friend used to do this. My approach is to pay off all debt first, be worry free about the downside and only focus on the upside. As years go by, I notice many people who are financially strong pay off debt as soon as they can. Also I want to add that "doing a little more" does not mean "don't want to pay off debt". I mentioned earlier to have a plan to pay off the 45k in about 2 years. Maybe 3.

I am not looking to get into an argument as there is purely subjective and neither viewpoint is "wrong", if you love debt go right ahead.

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themissinglink said:

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Quote:

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What makes you think so? I have no debt currently so there is no question about stressing out about it. Haven't had any since 2018. I have a pretty good net worth as well.

What I shared with the OP was some learning that I had from my experiences. Of course, he may choose to take it or ignore it. Just like he will do to other bits of advice on this thread.

Your approach may be to take a lot of debt, invest in the market and make a lot of money. Sure that can work. However, the risk is there when the market crashes, and you aren't quick to get your money out (I am almost never quick enough), you lose a lot. My friend used to do this. My approach is to pay off all debt first, be worry free about the downside and only focus on the upside. As years go by, I notice many people who are financially strong pay off debt as soon as they can. Also I want to add that "doing a little more" does not mean "don't want to pay off debt". I mentioned earlier to have a plan to pay off the 45k in about 2 years. Maybe 3.

I am not looking to get into an argument as there is purely subjective and neither viewpoint is "wrong", if you love debt go right ahead.

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We may be closer than either of us thinks on exactly how much debt I think OP should have. I'm not suggesting taking on any more debt, other than maybe a mortgage in the near future (1-2 years) after building up a slightly bigger emergency fund. In OP's situation, I'd be more worried about the mortgage debt with current rates than paying off the ~$45k student loan at 4.75% (though we don't know the specific terms if a variable rate).

Again, the advice to pay off all debt is probably appropriate for the majority of Americans, but I think it's not great for people that can appropriately manage money (which I think might apply to OP and much of the TexAgs B&I board).

I see too many people say "pay off debt" without considering potential liquidity and solvency issues in the worst case situations like a market crash you mentioned. When markets crash and people lose their job because the underlying economy sucks, I'd rather they have $100k in highly liquid, safe after-tax assets with $50k of debt (if at a low rate), than just $50k of cash. It gives you a longer runway to stay liquid and solvent without dipping into retirement accounts where there can be significant tax penalty.

To personalize the situation, I have a 2.6% mortgage and more than enough in after-tax liquid investments to pay off my mortgage, but I sleep better at night knowing that if the economy goes to ****, markets crash, and I get fired tomorrow, I can be unemployed for at least 3-4 years (even at substantially lower equity valuations) before even thinking about dipping into retirement funds. If my mortgage rate were significantly higher (6-7%), I'd certainly be paying it down quicker.

Obviously OP can't just go and get the same mortgage rate I got today, but I'd feel somewhat similar about his student loans as I do with my mortgage. It's debt and there needs to be a plan to pay it off, but it's very, very manageable given his current situation. I'd be more concerned with potentially buying too much house.

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GeorgiAg said:

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None of you practiced divorce law and it shows.

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Allen Gamble said:

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AggieT said:

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I'd also recommend not posting your financials using your real name on a rival message board.

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Ha, thankfully it's a character from a movie I enjoy. Will Ferrell and Mark Wahlberg, if you will

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YouBet said:

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Disciplined people use debt to their advantage and only carry debt that is "necessary". But I'm also a big fan of being debt free once you get to a point in life you can swing it.

I paid off my grad school loans early even though they were only at 1.25% interest simply because I wanted it off the books. I could have made more in the market, obviously, but didn't care. I valued that $0 on the balance sheet more.

At this point, our only debt is revolving debt which I pay off twice a month. The peace of mind with that is priceless.

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Pinochet said:

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One thing I don't understand with all the wicked smart people on TA - why do all of you have paychecks direct deposited into a checking account? We both have our paychecks deposited into high yield savings accounts with enough auto transferred to checking each month to cover things that can't be paid by credit card. Everything else goes on credit cards that are auto paid on the due date out of the savings account. It's free money taking advantage of the credit card float and it's less stressful since no one worries about missing a payment when they're automated.

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Double Oaked said:

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Pinochet said:

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One thing I don't understand with all the wicked smart people on TA - why do all of you have paychecks direct deposited into a checking account? We both have our paychecks deposited into high yield savings accounts with enough auto transferred to checking each month to cover things that can't be paid by credit card. Everything else goes on credit cards that are auto paid on the due date out of the savings account. It's free money taking advantage of the credit card float and it's less stressful since no one worries about missing a payment when they're automated.

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Same thing, different process. Paychecks go into checking and are transferred into savings. I do it this way because I move money into multiple accounts and investments every month (HYSA, brokerage, etc.). Everything possible goes onto the credit card with auto-pay. Free money!

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Double Oaked said:

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Pinochet said:

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One thing I don't understand with all the wicked smart people on TA - why do all of you have paychecks direct deposited into a checking account? We both have our paychecks deposited into high yield savings accounts with enough auto transferred to checking each month to cover things that can't be paid by credit card. Everything else goes on credit cards that are auto paid on the due date out of the savings account. It's free money taking advantage of the credit card float and it's less stressful since no one worries about missing a payment when they're automated.

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Same thing, different process. Paychecks go into checking and are transferred into savings. I do it this way because I move money into multiple accounts and investments every month (HYSA, brokerage, etc.). Everything possible goes onto the credit card with auto-pay. Free money!

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YouBet said:

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permabull said:

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I am late to this thread so I don't know if this has already been addressed but I would seriously consider upping your house budget to around 2x your income unless you expect your income to go way down once you have kids due to going to single income.

If you move into an area that is less than 1.5x your annual income you will be far and away one of the highest earners in that neighborhood. That has its advantages in that you don't have to worry about keeping up with the Joneses because you are the Joneses, you just might have a harder time relating to your neighbors when they casually drop comments about the price of the hoa or taxes being an issue. Even upping your budget to 2x - 2.5x will still keep you as one of the highest earners in the neighborhood you move into as most people stretch to 3-5x their income for a house.

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I'm with you.

As for myself, it's hard for me to relate to the rest of this board. I struggle daily with having to converse with a bunch of lolpoors who can't afford to hold 2 years of expenses in cash. I might even let it float in my checking account that's only earning about 0.01% because I can.

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txaggie_08 said:

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I don't think you're that far off, and the other side of that is that they're young and can potentially expect some nice wage growth over the next few years.

I can admit that when we purchased our current home we made some concessions to stay in a certain price range, and then looking back just 2 years later really wish we would have stretched ourselves a little further. Now here we are not quite 4 years into the house, those concessions we made are really bothering us, and we're now working with a builder to build a new home in a neighborhood we prefer. Building costs have obviously gone up a ton the past 5 years, and we could have bought into this new neighborhood much cheaper a few years ago.

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ChoppinDs40 said:

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txaggie_08 said:

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I don't think you're that far off, and the other side of that is that they're young and can potentially expect some nice wage growth over the next few years.

I can admit that when we purchased our current home we made some concessions to stay in a certain price range, and then looking back just 2 years later really wish we would have stretched ourselves a little further. Now here we are not quite 4 years into the house, those concessions we made are really bothering us, and we're now working with a builder to build a new home in a neighborhood we prefer. Building costs have obviously gone up a ton the past 5 years, and we could have bought into this new neighborhood much cheaper a few years ago.

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We built in 2020 and moved in March 21 with historically low interest rates. Have gained >50% equity in 4 years, property taxes have gone up the same. Insurance doubled.

Now I'm super poor compared to the rest of my neighborhood. Won't be moving anywhere anytime soon.

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