You have to have some debt to establish credit. A buddy of mine was always running his mouth about no credit cards, etc… He went to buy a home and could not get a mortgage because he did not have a good enough credit score. I do not agree with how this system works, but it is far out of my control. Some debt, does not have to be much, is good, as long as you show a good record of on time payments.
Yup the banks like to see a history of debt that gets paid off-never mind that your friend probably paid all his bills on time, they do not care. So hey if you are trying to establish some credit, research all the stuff that helps and hurts, alot is counter intuitive.
You have to have some debt to establish credit. A buddy of mine was always running his mouth about no credit cards, etc… He went to buy a home and could not get a mortgage because he did not have a good enough credit score. I do not agree with how this system works, but it is far out of my control. Some debt, does not have to be much, is good, as long as you show a good record of on time payments.
I run a no borrow system. Pay cash have cash. Works great for me. Credit is one of the biggest scams it self.
My Grandfather never had a credit card either. When he went to buy a new Warrior after he retired, he told the salesman he was paying cash in one lump sum. The salesman almost had a stroke.
I do believe you need to establish some kind of credit to qualify for a mortgage unless of course you have few hundred thousand laying around to pay cash for that too.
You have to have some debt to establish credit.
Not exactly correct. You don’t have to have debt to establish credit. You have to have a history of having and using credit. There’s a difference. Debt means you currently owe some entity money that was lent to you in the past. You can use credit without being in debt.
Mrs. Grouse and I put all expenses on our AMEX and Visa cards to earn the reward points. We pay the bill off every month.
We have no credit card debt and never have, but I’ve been told several times when applying for car loans (0.0% interest both times!) that we have the highest credit score the loan officer had ever seen. Why would that be if we have no debt? Because use a lot of credit and have several high limit open lines, and we pay it back. That’s what makes for a high credit score.
<div class=”d4p-bbt-quote-title”>robby wrote:</div>
You have to have some debt to establish credit. A buddy of mine was always running his mouth about no credit cards, etc… He went to buy a home and could not get a mortgage because he did not have a good enough credit score. I do not agree with how this system works, but it is far out of my control. Some debt, does not have to be much, is good, as long as you show a good record of on time payments.I run a no borrow system. Pay cash have cash. Works great for me. Credit is one of the biggest scams it self.
I don’t pay anything in cash have not in a long time. Only pull tabs. Every expense goes on a card and I get free money from them. Lots of free Scheels gift cards and free airline miles. Plenty of free tackle and trips in the last ten years. Keep a single C note in the wallet at all times mostly in case I find a hot pull tab box, but also in case of an emergency. Same one has been there 9 months now I think. Pull tab boxes have been good to me lately.😂 I prefer to get cash back for spending my money.
Like I said earlier different strokes for different folks, but if I can have my money make me money or save me money for spending it I will take full advantage of that every time.
I told my Banker I want to apply for a line of credit and he asked me what I need the money for. I told him I don’t need any money. He asked me “then why do you want a line of credit?” I said if I ever need money you will never lend it to me.
He looked at me with this weird look and said ok. A week later he called me and said “your line of credit is approved.”
I don’t have any sort of credit card. I’m the cash guy and Mrs. Bucky has the card. We put everything on Mrs. Bucky’s card when together and she’s got everything set up to automatically notify her of the balance and pay it off 100% each month. In return, we cash all of her rewards in on flights. We haven’t paid for a flight or rental car in 10 years…and she travels a lot.
You have to have some debt to establish credit.
Not exactly true. I’m debt free besides my mortgage and my credit score was 818 last time I checked
You have to have some debt to establish credit.
Not exactly true. Grouses post hit the nail on the head. I’m debt free besides my mortgage and my credit score was 818 last time I checked
The thing I like about being debt free is everything is financially easier. That cant be overstated. I have more flexibility, more options and more control. If I want to buy something I can. If I want to borrow I can put more money down and lower a monthly payment or overpay monthly and effectively lower the interest rate. I can leverage house equity if I want. If I need to plan a purchase I don’t have to plan around other debt commitments.
I know quite a few people that came from a farm family, no one stayed on the farm and … dad and mom cash rented. Trusts created … land sold when parents die.
A quarter section of good reliable farm land will get you $320K – $360K or more … Two sections of land … three kids … Oh boy.
Let me know where this $2,000/ acre good farmland is and I will buy every acre in sight
<div class=”d4p-bbt-quote-title”>Brittman wrote:</div>
I know quite a few people that came from a farm family, no one stayed on the farm and … dad and mom cash rented. Trusts created … land sold when parents die.A quarter section of good reliable farm land will get you $320K – $360K or more … Two sections of land … three kids … Oh boy.
Let me know where this $2,000/ acre good farmland is and I will buy every acre in sight
Ha! No doubt!
The county average here for 2019 (most recent available data) is right at $6000 per acre for ag land.
We just purchased 40 acres @ $3100 an acre cash about 8 weeks ago. We also threw in 3 years worth of ag rights that they could keep (essentially a free lease) if they closed on it within 30 days. We only bought it at that price because we knew our neighbor was looking to sell as a part of their retirement and it butted up to 160 acres of family land. I’ve done a ton of work for them over the years cutting trails, taking care of windfalls, mowing ditches, etc. They could’ve easily got $6k on the open market.
Yes, I agree that people who inherit land can be well-positioned…but ultimately if they have no intent to liquidate it doesn’t really play any role in relieving debt. I know I’ll never sell our land or our family’s. It will be passed on to our kids.
Never is a very long time.
Just my opinion the only time to worry about being debt free is by the time you retire.
Enjoy life while you can. To each their own.
Thanks,
RVRDUX
Just closed on refinancing the house Last week. Last refi was 2015 with a 30 year mortgage.
We lowered our interest rate from 4.25 to 2.875. We also shortened the term to a 20 year putting us 5 years ahead of our previous refi. We also took out about 20% of our equity to make home improvements. Our home was built in ‘97 and has had no improvement during that time so these are badly needed for various reasons.
My goal is to be relatively debt free by retirement at around age 60. This refi and cash out keeps us on track and only cost us about $150 extra each month.
I’m pretty sure I could’ve reduced the term to a 15 year and a lower interest rate, but we would have had to reduce our 401K and HSA contributions. We also contribute to a dependent care FSA which is tax free, and Roth 401K and Roth IRAs. The bulk of our HSA is invested like a 401k a d can be used for health insurance if we decide to retire early. I’d prefer to add money to these accounts at a 10-20% return rather than opt to pay down the mortgage at 2.875% or even the 4.25% interest.
There’s a lot of ways to get to retirement and beyond. There’s no one way that is better than all the rest. You also need to deal with the cards you were dealt and losing my father at 21 probably sent me on the path I’m currently on and don’t regret any bit of it.
One thing I hear quite a bit that baffles me is with regards to social security. You can start collecting at age 62 but I hear a lot of people say they’re going to wait until say 65 because they’ll get a extra $300 or so per month. Let’s say for math purposes you could get $20,000 a year starting at 62, that’s sixty grand by the time your 65. That extra 300 a month would take 16.5 years to hit $60,000. Take it while you’re young enough to enjoy it.
That’s a no brainer. A bird in the hand Baby!
If you go on the US SS website, they do everything in their power to influence you to wait.
^I couldn’t agree more. Take it now and trust the government never. The SS system will eventually get hacked apart or reorganized causing chaos. Some generation is eventually going to get completely burnt by having paid in and receiving nothing (or a value that’s worth so little due to inflation that you may as well forget it).
^I couldn’t agree more. Take it now and trust the government never. The SS system will eventually get hacked apart or reorganized causing chaos. Some generation is eventually going to get completely burnt by having paid in and receiving nothing (or a value that’s worth so little due to inflation that you may as well forget it).
I’ve been hearing about the collapse of social security ever since I can remember. Never has happened, no politician wants to be the one to go after the money. So I don’t worry about them raiding it.
However, I do worry about it becoming under funded as it’s now more fashionable to not work and accept government assistance then to pull your big boy pants on and get a job. Total lack of pride and self respect these days.
While in college I worked with a local non profit that helped local families figure out debt issues and sort through that stuff. I had 0 real world experience and literally did everything by the book but it was enough to inform me of multiple things.
1. don’t try and keep up with the joneses. The joneses are up to their eyeballs in debt.
2. It basically directed me to follow a different path. It literally turned me into a cheapskate for the most part. which allowed us to pay off my minimal student loans (worked nearly full time all 5 years of college) and basically during our 18 years of post college life, have only had mortgage debt.
Here is what I will say. Whether you realize it or not. Debt is a psychological anchor tied around your neck. most people don’t even feel the tug. don’t know its there until its gone. I always encourage people to try and get there. get debt free. and if there isn’t this weight lifted from you that you didn’t even know was there, its very easy to go out and find more debt.
Someone already mentioned it but in the end set a goal. set a savings goal with cushion built in. and then….live your life. spend your money on things that you’ll enjoy.
We have a good friend who grew up living very low income. like it was noticable as kids. a few years back, the dad got sick and went to the older kid and said we need to talk about what the plan is after should I die. and the son basically assumed there was next to nothing…likely a mortgage to deal with. The home was paid off, and there was about 5 million in retirement accounts. his dad decided so he could retire, the sock away 50% of his income. his dad died at 60 while still working. Basically lived his life working. Obviously an extreme case. but the children were hurt knowing how their lives were growing up basically needlessly.
When we talk about life and money we are really talking about risk. You have to weigh all financial decisions through the eyes of risk. We do it all the time regarding investments, but we rarely do it elsewhere.
oh and I like Dave Ramsey. I think that most people know they should exercise and eat right, but many people need someone to help motivate them to do so and hire a person. For them its likely the right decision. Its the same thing when it comes to following the baby steps. I giggle when people tell me they don’t need Dave to tell them to get out of debt but then feel the need to hire a financial advisor to tell them how to invest.
And when you create a catchall program, you are going to have people who scoff at it. but its a catchall. If Dave easily relents for 1 instance, it weakens the system. Which is why he doesn’t (even though you can often tell on his program there are times he wants to tell someone to do something different)
I think he’s horribly old fashioned when it comes to investing (i believe he ignores financial behavior) but has a very strong get out of debt program (really leans into financial behavior)
While in college I worked with a local non profit that helped local families figure out debt issues and sort through that stuff. I had 0 real world experience and literally did everything by the book but it was enough to inform me of multiple things.
1. don’t try and keep up with the joneses. The joneses are up to their eyeballs in debt.
2. It basically directed me to follow a different path. It literally turned me into a cheapskate for the most part. which allowed us to pay off my minimal student loans (worked nearly full time all 5 years of college) and basically during our 18 years of post college life, have only had mortgage debt.
Here is what I will say. Whether you realize it or not. Debt is a psychological anchor tied around your neck. most people don’t even feel the tug. don’t know its there until its gone. I always encourage people to try and get there. get debt free. and if there isn’t this weight lifted from you that you didn’t even know was there, its very easy to go out and find more debt.
Someone already mentioned it but in the end set a goal. set a savings goal with cushion built in. and then….live your life. spend your money on things that you’ll enjoy.
We have a good friend who grew up living very low income. like it was noticable as kids. a few years back, the dad got sick and went to the older kid and said we need to talk about what the plan is after should I die. and the son basically assumed there was next to nothing…likely a mortgage to deal with. The home was paid off, and there was about 5 million in retirement accounts. his dad decided so he could retire, the sock away 50% of his income. his dad died at 60 while still working. Basically lived his life working. Obviously an extreme case. but the children were hurt knowing how their lives were growing up basically needlessly.
When we talk about life and money we are really talking about risk. You have to weigh all financial decisions through the eyes of risk. We do it all the time regarding investments, but we rarely do it elsewhere.
Great advice HND! I lost 2 friends in the last year to heart attacks too, one was 39 the other 40, both on their daily run. It’s important to plan for the future, but live for today!
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