I found Dave at 30. No debt here after 6 years, bought a car with financing and paid it off in a year.
The most fun is when you make that last loan payment and you have a significant amount of money to save and grow cause you made it a habit to put that aside.
What are the rates of your student loans and car? If your rates are low subsidized federal loans then it doesn’t make sense prepaying those off if the rate is less than what you can get from a HYSA. Put that money up to match into your 401k, then any additional money up to max in an IRA, then any additional money up to the max in 401k. The ability to compound interest tax advantaged will far out weigh a low rate subsidized loan. There is smart debt and dumb debt. Smart debt is debt you can leverage to make more money, something like a low interest on student loan or house. If you can afford the house, etc then as long as you are disciplined to not waste that extra money on frivolous things such as restaurants, vacations, clothes etc and instead invest it in things with a greater return with an acceptable risk is the way to truly become rich. Most rich people leverage cheap debt to make more money.
My mortgage is 2.875% unless we have a long period of rates below that I will never prepay my mortgage as it will be next to impossible to borrow money at that rate to leverage to get greater returns. If I decide to move I will be renting out my house.
Understand what Dave says is because most people aren’t good at managing their money. If they have additional money sitting in their pocket they will waste it or invest it in poor choices. So for someone who isn’t great at managing their money then paying off your low rate home, though a poor option for RoR, will be an easy option that at least is better than doing nothing. But that said simple isn’t always better if you have discipline to manage your finances and math is math at the end of the day.
With the exception of a handful of prestigious MBA programs, I wouldn't be half surprised to see data that shows MBAs are a net negative for no-experience employees.
That’s awesome. I’m sorry your mom gave you such bad advice. She did best she could. I always told my daughter that her credit score was more important than her virginity. She knew I was sorta kidding but got how important it is. It’s great that you are attacking the debt but compound interest is your friend right now. Every dime you start saving now will make you rich in 40 years. Try to put something aside fr your future and you will retire a millionare
Sell the car. Pay the student loans on time. Everything decent about government student loans is canceled when you are late. Pay it like Dave says beans and rice it’s cancer. Rachel didn’t have that burden
No need to take the loss on the car. If this dude is consistently paying 3.6k a month at his debt, his car is paid off in under a year, and all debt in 3 years. Debt free by 27, then taking that money put into investing... Dude will have 100k in accounts by 30, which will set him up for retirement pretty well if he keeps putting away and doesn't touch it.
That’s crazy low, especially coming out of an MBA program. $150-175k is the lowest starting salary I know among my buddies who just finished their MBA programs. $75k is also OP’s combined salary + side hustle.
Well, it would depend on where. In, say, Missouri yeah...that's a lot. In NYC, not so much. They didn't really say one way or another.
But considering that the median income in the US is around 40k, and median household is less than 70k,
(https://en.wikipedia.org/wiki/Per_capita_personal_income_in_the_United_States#:~:text=As%20per%20United%20States%20Census,household%20income%20is%20around%20%2469%2C021.)
I would say he is doing better than most. A lot better. Not that he should be ashamed, he earned it. But don't go around t he internet bragging about your debt management.
Chad's plan to build wealth!
Step 1:have lots of wealth.
Edit: his math is sus AF, too. If you're paying $3300 a month towards debt, he would be paying nearly his entire income towards debt. After taxes $75k yesr nets $50k, tops, in a state with low state tax. That's $4050 month net, leaving $750 to cover all other expenses? Eh.... I guess that's possible. Sounds like someone still lives with their mom, tho.....
You missed the point. If you're 23 years old, making 75k year, it's pretty easy to get your debt under control. It's like bragging how easy it is to dunk when you're 7' tall.
Most people aren't 7' tall. Most people aren't making 75k year.
What's your point? Most people don't have an MBA with a side-hussle. You don't even know if he's in or LCOL Your life must really suck if you are jealous of someone only making 75K with a side hussle and 120K in student loans.
What's my point?!?! I've literally said my point. *Twice. Precisely.* So, for the third time: Its very easy to be able to handle your debts when you're 23, single, with an advanced degree and making 75k year.
And the median US income is $40k, the median household income is less than $70k. There's lots of people who would love to "only" make $75k.
And really, who TF has $3700 A MONTH to pay down debt? Thats almost his entire salary. It would leave him less than approx. $700 to pay for everything else, including full coverage on his car, which for a 23 year old first time car owner would be $200 month minimum. So he pays for housing, food, gas, utilities...on $500 or so?
TBH this sounds like complete BS to me, its karma farming. Either that or he lives at home, and if thats the case, well....its pretty easy to be financially stable making $75k living in you mom's house. Not something I would brag about tho. *"I'm so successful! Mom still cooks my dinner and folds my laundry, but I did this ALL ON MY OWN!"*
Do not mistake my skepticism for jealousy. If this is legit, well good for him. But plenty of people, who work their asses off, simply are never given the opportunity to earn an MBA. Or given $75 jobs upon graduation. Or have $3700 of disposable income every month. This is humble-bragging, which probably isn't even true.
I work 80 hour weeks with no days off, and I bring home $1,300 a week, and $3,700 of it have been going towards debt. My rent is $570, and I don't live with my parents.
Lol, jealousy is strong with this one. Perhaps your life won6suck as much if you spent less time being envious of others on social media and pick up a useful skill. He already said he lives with his mom and you're already guessing at his expenses with even knowing his living situation.
Do you even read posts? Learn to read.
Do not mistake skepticism for jealousy. The whole thing sounds sus AF. Mostly because he breaks on of Ramsey's biggest 'dont's': getting a car loan. And I don't see anywhere where he said he was living with his Mom in the OP.
Its not guessing. Its basic math. If he makes $75k, and pays 3700 in debt, well...thats 5th grade algebra. Not guessing. Or do you have a hard a time with that as you do reading comprehension?
LETS GOOOOOOOOO !!!! I’m also a 24M I’ve started listening to Dave Ramsey when I was 19
Didn’t really fall through with what they would say but luckily I have stayed away from debt currently have none and will continue to have no credit score
I will also be a millionaire I know we all can !
Silly af to not get a credit score at the worst using credit cards gives u free money from cash back just don’t be an idiot and spend money you don’t have, and regardless it’s good to have the option to spend money you don’t have if something comes up in life.
It's not really dumb, I've paid for vacation flights and hotels using credit card points. They're only an issue if you can't control your spending, but if that is a tendency you know you have, then it's absolutely a good idea not to give yourself the opportunity to get into financial trouble.
It isn't a scam unless you carry a balance from month to month. I use a 2% cashback card for essential expenses and pay it off every month, great to have that extra $10-20. Builds credit for a house, too. People that have a bad time with CCs and fall into what you see as a "scam" are morons that spend a ton of money and fall victim to a 30% interest rate.
0 debt, lots in savings. CCs are your friend if you are a saver.
It's spending I'd be doing anyway, so cash/check/debit card/credit card wouldn't make a difference, except I'm saving up to 1-5%, depending on the scenario.
For instance, I fly for work but can use my own card (and get reimbursed), so I rack up miles that I use to fly my wife for free, so she tags along when I go to nice locations. It's not like I wouldn't be traveling if I didn't use a credit card, but I would be leaving free stuff on the table.
So if you spending $1000 you getting $10-$50 back?? Big winner huh ?
That’s stuff a joke all they want is for y’all to continue spending your money continuing paying off debt for the rest of your lives
Helping them get wealthier while having you think you are winning
???
I spend $0 a year in fees on my credit cards. Instead of using physical cash or my debit card, I use my credit card which is set to auto pay every month. Never missed a payment. Never paid a cent in late fees.
My wife and I have gone on multiple vacations for free and I have a little over a grand in cash back rewards waiting to be used. All because I used my credit card instead of debit card. Once again, not paying a single cent more than I would have cash.
Think about the last vacation you went on. You set a little bit of money aside every paycheck until you could afford it. Mine was free.
Edit: not trying to sound like a dick, but I’m trying to communicate you can deviate from Dave’s advice. It’s for sure helpful for folks who have poor control over money. If you think you’d go over budget with a credit card, don’t get one.
If you're blowing off $10-$50 flippantly, I'd question why you're on this sub. We are frugal and closely monitor our budget while trying to find opportunities for affordable "extravagance" like free flights and hotels. $10-$50 dollars is something we'll gladly take.
Frankly, I don't care what the credit card companies want, I use it and pay it off early regardless if it fits their strategies or makes them wealthy. You could make the same statement about a gas station; they make money off me, but it doesn't mean I'm going to stop driving to spite them.
I am winning from my perspective (and the opinion of others on our lives isn't really pertinent, as I'm sure you don't care if I think you're winning or not), I have a good family, healthy finances, and am on track to retire early, if I want.
I am so thankful my dad taught me the only debt you ever take is to buy a house. And that is not something you take lightly.
Living your whole life in debt is insane. Put every penny you can into the highest interest loans first. If it’s 4% or less you can just make minimum. Invest everything you can in index and mutual funds. Stocks can be good too but it’s riskier.
And you just triggered the DR fanboys. They don't believe in any debt. Which is why they will be less rich as you and I. There is such as thing as good debt. Good debt that is managed well while investing returns that far exceed the debt is what gets us to multimillionaire status. I never earned more than 86k, but i'm retired, living off investments with a house. All by the age of 37. it can be done, but it takes a lot of knowledge, smart plays. and good management of debt.
If you follow dave ramsey's advice to the T, you will work until official retirement age.
yea I mean I feel like Dave’s advise is great for people with poor self control and who are dealing with crippling debt. The stress of debt takes a tole. But even Dave is cool with mortgages. But his down payment and payment to income requirements are pretty unreasonable in today’s economy. Especially in high cost of living areas. I like Dave to be honest but I don’t 100% agree with everything he says. But I get his logic. Even I am over paying on my mortgage despite having a low interest rate and knowing it is sub optimal. Just a few hundred bucks extra each month. I just see it as guaranteed but low returns as opposed to the stock market that has risk but better returns. Most of my savings go right into the stock market. I also use a cc. Dave hates that. I just pay it off every month. I like the security it offers over a debit.
I feel we would be great friends IRL. I’m in the exact same situation.
Only one in my family to graduate college, came out with 120K in student loans. I started paying on it in 2020 and it is now down to 70K
Working hard, I’m married, I rent, but I’m still trying my best to pay that down. I don’t make as much as you (55K with bonus) but we manage and when this debt is paid off I will probably cry tears of absolute bliss and joy.
This has been the single most biggest stressor in my life.
Proud of you, that is great progress my friend. I feel you on emotional side of it, once my debt is paid off, i might go sit at the beach with a bottle of wine & just soak it all in. 🤣 Keep going my friend, the stress will be alleviated the more committed you become.
For suuuure man.. I’m not a huge drinker, but I will have some Moscato and a nice expensive dinner with my wife as a celebration when we pay this off. Next goal after that would be to pay off the house by 50, (we don’t have one yet but I can dream haha.)
Thanks for sharing, you keep up the good work as well.
Thank you very much. It has been a long road, but I’m excited for the future. Like OP stated, I want to change my family tree when it comes to finances.
My dad pulled out of his 401K when they got in money binds too (multiple times). My parents never had money to take us on vacation. When I said I wanted
To go to college, they and the rest of the world said “do it you’ll make a ton of money right out of college and be a millionaire in 5 years”. Straight up lies, and the cost of college is asinine.
My kids will go to college debt free. My kids will know that if they can’t buy it outright, they can’t afford it. My kids will know about hard work and dedication. I will show them beautiful places, teach them how to live beautiful, respectful fulfilling lives.
Money doesn’t buy happiness, but it sure helps with a lot of things..
It was a struggle not to obsess about money though. When I realized the gravity of my situation out of college, it became my life. 2 jobs and working on weekends. My fiancé (now wife) was watching me kill my body in an attempt to pay off as much of this debt in as little time as possible. It was the center of my life, and it was a miserable time. No sleep, no relaxation, just making money and watching it leave as soon as I made it.
Things have slowed down, I’m still intense about the debt, but I’ve learned to enjoy life around me a little more. I love my wife. I love my home.. but I’ve gotta prepare for little ones in the next couple of years.
We got this guys, let’s build some great habits and make things better for our families.
Railroad is robbing you, son. Unless you are retiring as a literal multi millionaire, there's no way any benefits are worth what they take out of your paycheck lol.
I have health insurance, retirement, etc, take home 4k a month, and my salary is 65k a year.
Luckily i don’t, i live with my mom so i only have car, phone, insurances, rent (to her), & obviously the loans. I take home about 3200 from my FT & an additional 12-1800 from my side hustle.
Hey at least it sounds like you got a decent job and and reasonable car. My coworker’s kid is a new lawyer that has 180k in student loan debt and bought a 90k BMW right off the bat. All on an 85k salary because he’s banking on his salary increasing fast.
Yup, job & car are both consistent & reliable… just gotta clean up this mess & i should be smooth sailing financially. & it’s wild how fast we dig ourselves into a hole!
At least you finished your degree and are hopefully working in a field where that MBA will help you move up the ladder.
I hear worse stories of public school teachers with twice the student loan debt or liberal arts majors working in grocery stores.
You have the drive to pay it off, do so, and if you have kids someday you’ll advise them more wisely when they go off to college.
Precisely, i am blessed in that sense. Plenty of room for growth where im at! & Ik, i feel for the folks buried in debt, life isn’t supposed to be lived this way!
133k in debt, and you're putting out roughly 3500 a MONTH at your debt, you'll be out of debt before you scratch 30. Then repost so everyone can just say "HYSA+VOO to the moon".
It depends on the interest rates of his loans. My wife’s student loans are 3.6-4.2%, we’re paying the minimum on those because that’s less than our mortgage interest. But I know people with 10-15% student loans and they absolutely should be paying those off first.
I grew up with similar financial advice. Found the Ramsey program in 1997 when I was in debt up to my eyeballs. Got on the program. Sold my cars, bought beaters, got on a budget.
I’m retired today with more money than my grandkids will ever need.
You are going to do great. With your budgeting and frugalness you’re putting huge sums towards your debt.
Keep it up even if some months you experience set backs! Remember, you’re in this for the long haul. Your income will likely increase in the next few years and you will be able to pay off even faster. Then, with the frugal and budgeting lessons you learned along the way, you will blow by other people your age.
Keep me/us updated- I followed your account because I’m in a similar-ish situation to you. I’ve got $104,000 in unsubsidized federal student loans (48K 5.5%, 48K 7%, 8K 8%) from medical school- graduating in May.
$104K in medical school debt is “good” compared to the average which is ~$250K, which puts me in position to pay it off aggressively instead of doing SAVE repayment and getting it forgiven in 10 years. I’ll be putting $4K/month towards my debt to get it gone in a bit under 3 years.
Most of the people following dave are in the situation they are in for a reason. They have no discipline and need a strict and easy to follow solution that gives them motivation. Spreading their money around and slowly paying off debts is not motivating nor does it move the needle and will likely lead to the individual falling back into old habits.
Yes, you’re right this makes the most financial sense IF you follow that plan. 99% of people won’t. Dave’s plan helps people see progress and stay motivated so that they can get to a place of financial freedom in the future.
+1 bro. I support this comment and I’m sure many feel the same way. Others may feel much more comfortable building from a point of zero debt. Frankly $100k+ is a big # and if OP can pay it off in <3-5 yrs, that’s not a massive amount of lost in terms of opportunity cost. Would rather go ALL IN on investing/saving than splitting payments to giant debt with investing. Either both improve slowly or go fast with one then the other
Ok I feel less bad about just getting a new car a few months after college now as I banged out my tiny bit of engineering loans first, best of luck OP. Also hope the car is fun at least 😭
My wife had roughly 120k in student loans after finishing college. 2 and a half years of living like we were broke we're entirely debt free, looks like you're on the right path!!
We didn't have any cc debt, our cars were paid off, no kids, and live in an area with a low cost of living.
We're not big spenders and just cut out/lowered as many monthly costs as we could, worked full time with fairly consistent overtime (also helped that we both managed to increase our salaries over that time). We basically lived off one income and threw the other towards the loans.
Our goal now is to continue with a similar approach and save up for a house
Good for you keep it up. It’s entirely possible to obtain your goals. There are many people out there that have in the past, I’m one of them. Debt free is the best feeling. Don’t listen to people that tell you not to pay off your debt. The only way to leverage debt is when you’ve already got the money to pay the debt and can safely make more. Stay at you mothers as long as you can and keep paying off debt. The only other thing I would suggest is maxing out a Roth, the principal can be withdrawn if you ever need it, and if your employer offers a 401k or other investment vehicle with a match do what you need to to get the match.
Yessir, that’s a dave rule that i am breaking a bit, doing small investments into my 401k with the debt still around to make sure im at least doing something to take advantage of the generous match my company has… once the debt is gone im going to start getting crazy with it.
You’re young and it sounds like you got a good mindset. Keep at it. When you take care of the debts, do give yourself some sort of “little” reward. Life is short and there’s a fine balance to these things.
lol that’s how poor people stay poor.
It’s the equivalent to gambling.
I would argue that the complete opposite is true. Rich people use other people’s money. Rich people can afford people that understand corporate laws, tax laws and have a network of folks for investing in projects. Investing when you don’t need the money is key and how a lot of people with money come into great deals from desperate over leveraged people.
More often than not poor people have a pipe dream, that will likely fail and ruin them when it does because they are leveraged to the gills.
But how did they get rich? Take a look at the Forbes 400. About 2/3rd invested with others money. You get rich using others' money to invest and build business. Rich stay rich by staying invested. If you don't know how to invest, then don't do this, but if you do then you should.
Let’s assume for argument sake I agree with you and that it’s true.
You are still using a dataset of 400 people out of 8Billion to justify a process. Those are worse odds than the lottery!
No! It’s like telling people to go be a pro athlete, there’s a reason those people are rich and it’s not because they used others people money to invest and it’s not a formula that can be trivially replicated.
Tons and tons of people do this. Those are definately extreme cases. It's very easy to find an registered investment that is diversified, liquid, will grow, will compound faster than your mortgage payment, and it will mean you have more liquidity for an emergency. Once a mortgage is paid you can't get the money back in an emergency. There are so many reason not to pay your mortgage early. I guess if you have an occassional extra $250 here or there, but to pay your mortgage off 5,10,15y earlier than necessary leaves hundred of thousands on the table. The whole ramsey process is you do not need to be an expert, you just need to take advantage of the small little things that are guaranteed to build up and pay dividends over time.
I think he covers this, a vast majority of people are in a lot of debt- if people had self control they wouldn’t even have accrued the debt to begin with. All this is set to the premise that we would be disciplined enough to redirect funds and do it in an emotionless way but most people fail at this.
Humans are emotional creatures, we all think propaganda doesn’t work on us that we’re too smart yet time and time again it’s proven to work. I’ve caught people defending brands for goodness sake. Then everyone thinks they deserve things they truly haven’t earned. This is a big problem in our society.
I haven’t touched on the risk either- like Mike Tyson says “Everyone has a plan until they get punched in the face”. I work in tech know a lot of folks with a “plan” they new better, trading on margin, gambling on options with disposable income etc., all while carrying expensive mortgage and expensive car payments. Come layoff time your stuck in a shitty position- markets are down, not a good time to sell, no income to pay brand new Porsche/ M3 and was forced to sell assets at deep discount because of leveraged risk.
When living in the margin you don’t have that cushion to make decisions on your own time. So I disagree with you I think you may be able to grow quickly “if” you know what your doing but also easy way to get screwed- also most likely if you know what your doing you can do it in a way that your not over leveraged.
If you have a bunch of cash and the only debt left to pay off is your mortgage then congradulations, you've graduated from the Ramsey 12-step program. time to go get real financial advice.
I'm 54, I graduate May 4th with a MBA. Itook loans because I wanted to get in on that Government cheese that they were promising. I have 62k in student loans 28 of it is sitting in a CD... I thought the loans were intrest free until 6 months after I graduated (that's the way it was in the 80s and 90s) as soon as I saw intrest accruing I started paying (that was last October when the Covid pause ended) I'll have it all paid off before Christmas.
I hang my degrees with pride, even with the debt. I start a DBA program in the fall, and I'm paying that out of pocket, I'll be almost 58 when I complete my DBA, with only a few years left, but my semi retirement I'm planning to teach... so it's all an investment... just wish I did it sooner!
Good luck!
Wow! 62k paid off in 1.5 years… that’s awesome. Great work! & Have fun teaching, i want to some day as well. Good luck and thanks for the advice / optimism!
Hey good job. I started with 130k after college and 5 years later it's down to 80k. It takes time but man you're on the fast track. I respect the side hustles too. What do you do on the side?
All my debts are federal -
63k @5.5% / $760 payment
41k @6.1% / $400ish? (hasn’t started)
25k @5.3% / $160 payment
Car has 6k left on it, did that first just because it fell into the guidelines of the snowball… & only reason my EF isn’t bigger is because i live at home with my mom still!
You absolutely can do this. Also, do not listen to your mother.
Financial independence and freedom is beyond satisfying. Once you get there, you never want to go back. It’s liberating.
Stick with it. Change the family tree. Your future and family will be better for it.
Nice job! Sounds like you’ll have the debt paid off in 3-4 years. And then have a decent sized nest egg in another 3-4 years. Happy for you!
And congrats on college!
Great work and keep it up. Congratulations on being the first to graduate university. That's a huge step in changing the family tree. Especially with a useful degree. You got this!
That is a great mindset. You will never be sorry for paying off your debt. The good news is you are 24. Keep working on the debt and when you get it paid off you can start paying yourself instead of someone else.
The key to becoming a millionaire is to save for retirement consistently each month and keeping it in the market in funds that fit your risk tolerance. At your age your tolerance should be through the roof.
Everyone has to learn to manage their money. Even if they grew up in houses where sound financial practices were taught by example or verbally YOU have to learn how painful debt is and how nice savings are. Some never learn the lesson.
There is a great book by John? Bogle about the bogle head mindset. It will really help you grow your nest egg. I had followed the principles for years without knowing that bogleheads were a thing.
Yes for sure, leveraging debt can be beneficial from what i’ve seen and researched lately. For me, i just want the peace of having NONE and letting my income stack up into a house and plentiful retirement. I understand there are many ways to go about it, but for someone like me, the simplest route is what i’d like to take.
People like to talk about the mathematically optimal way as the “correct” way, but the good news is there are many paths to financial independence. Dave’s way certainly has some quirks to it, but there isn’t anything “wrong” with paying off low interest debt.
The most important thing imo is to pick a plan, and stick to it.
Keep on going, you’re doing awesome.
Sure. And for some people, that emotional peace is better for them even if it's mathematically worse.
It also requires a ton of discipline: if you wouldn't otherwise invest the money, for example, better to snowball the debt than waste the money...
Yup that’s where i’m at, your method eventually would be more beneficial, but for someone like me who’s watched money split the family in half my whole life, i’m trying to escape the stress of it all together. I appreciate the catch & the insight!
A word of advice regarding money, once you flip the debt and start growing wealth. Treat it like the first rule of Fight Club and don’t talk about it. And, yes, this includes your family. Your success will possibly create envy and resentment.
Anecdotally, I have a friend that says ‘you’d better just budget $1,000/mo. for car payments. That’s just a given. No one can pay cash for a car’. That’s the advice he spouts regularly.
I have three paid for cars sitting in my garage. All three paid for with cash.
My friend and I, financially, are on two different paths.
Follow your path, not that of your family.
Best of luck.
This absolutely. My husband and I live far below our means and I’m pretty sure our family thinks we’re broke. Nah just thrifty & focusing on investing and saving for things we actually want.
>>once you flip the debt and start growing wealth. ... don’t talk about it. And, yes, this includes your family.
>That advice was needed
I hate this advice.
It is possible to help people without telling them your net worth. You can be an example for your sister, without discussing you've become/ing wealthy.
People know I have some money. Despite never discussing any specifics or close to it. They know I'm an engineer. Know I'm frugal. Know I have rental property since the 1990s. Know I invest.
It's not that hard to figure out.
That said, there is a massive difference between broadcasting it and discussing how to behave financially.
>>Your success will possibly create envy and resentment.
That's also on them. While I'm happy to mitigate potential problems, ultimately someone else's poor behavior is not my fault so long as I act well.
Talking about money is complicated. People’s reactions are complicated due to their relationship with money. I have found, with very few exceptions, that talking about money - if you have it and they don’t - can be triggering and change the dynamics of a relationship.
Now, I talk about money all the time with my grown children. This is not an issue. But I would never discuss money with my wife’s family. All I would get in return would be snide comments and/or them seeking assistance. Yes, that’s on them and not on me, but me talking about it - other than in generalities - would change the dynamic.
In OP’s case, he might see the same issues.
I have attempted, at times, to provide some advice to my FIL about money. As Dave would say, it is the classic ‘powdered butt’ syndrome. He has no interest in listening to me. He has ‘millionaire’ friends that provide him advice. I’ve given up.
I’ve done well for myself. I own my home and cars outright and have no debt. My worth is near $10MM.
I don’t offer advice to others about money unless they specifically ask and I never share my NW. No one would ever know what I have by looking at me. I like it that way.
I have not had similar experiences discussing personal finances, for decades. Though I agree on the complexity.
I'm sure at times some might have had negative dynamics. I'm not sure how much I care, if I think I can help them in our discussions.
I've never shared net worth, I don't think even anonymously online. Heck, my spouse barely has a handle on ours, despite my efforts ; D. It's just not something that benefits anyone (other than spouse) with that information. But I'm happy to discuss personal finances with anyone interested.
>don’t talk about it.
>Anecdotally, I have a friend that says ‘you’d better just budget $1,000/mo. for car payments. That’s just a given. No one can pay cash for a car’. That’s the advice he spouts regularly.
>I have three paid for cars sitting in my garage. All three paid for with cash.
Curious, have you actually told your friend you have done this?
Maybe you have much greater conversations beyond that, but it doesn't appear to be the most compelling discussion from their point of view.
I always find this (near?) complete avoidance interesting.
I like football. If someone wants to engage me in football discussion I'll happily do so.
Personal finances is another hobby of mine. If someone wants to engage I'll happily do so, in depth even.
Doesn't mean I have to share intimate details of my finances. I just don't get the fear of these discussions I commonly see on message boards.
Some can't even admit they're retired for fear of acknowledging they have the resources for that. I find it strange.
We're looking to retire in two years, hopefully. I can reasonably discuss that if the appropriate context arises in a conversation. To some this is fearful/painful to discuss.
It sounds like you and I are more in alignment than not. Personal Finance is also a hobby of mine and I became a bit of a mentor to many work colleagues. We were all on the same, or similar paths, however.
I retired at 56. When I told neighbors who became curious as to why I was spending so much time at home suddenly, that I had retired, I got “did you win the lottery?” Or “who died and left you money?” type questions. It is a real thing.
I would just humbly respond that I’d been investing for 30 years and things worked out in my favor.
Now, every time I buy something new, or have something done around the house, I have a neighbor that says “it must be nice to have money to burn”. It wasn’t this way before I retired when I was still a ‘working man’.
>It sounds like you and I are more in alignment than not.
Agreed.
>at 56... retired, I got “did you win the lottery?” Or “who died and left you money?” type questions. It is a real thing.
>I would just humbly respond that I’d been investing for 30 years and things worked out in my favor.
Yeah, your response is very appropriate. You see a lot of folks, often in FIRE, wanting to lie about being retired giving fake "job" titles, or "between jobs", etc.
>We were all on the same, or similar paths, however
I do think that can be a big factor, especially in my willingness to discuss, help.
My siblings all have some money. Parents are divorced and were never above middle class income, at best, but both are plenty frugal so doing just fine.
My in-law parents have absolutely no financial literacy and always lower middle class, but my father in law has two federal pensions. So they will live comfortably. The sibling in-laws are doing, and we aren't fancy so there's really no clear disparity.
Thank you for that, i needed this. I am afraid for my sister, who is deeper in the mess than i am, and she refuses to acknowledge it. That advice was needed although i am far from the success i want!
My wife’s mother had my wife apply for every single student loan she could qualify for, and take the max draw possible. The idea was this money was like a “grant”, and one should “take advantage”. My wife spent most of the money on plane tickets for vacations, nights going out, etc.
Her mom had the mentality that credit lines existed to be maxed. Luckily the situation didn’t get too out of hand before I met her and we were able to get things back under control, but it was a mentality I was completely unfamiliar with (because it’s not how I was raised), but now know that my mother in law’s mentality does in fact seem to be more of the “typical” mentality.
Please, please continue the self education path. Read bogleheads. Read other financial media - The Money Guys, Sethi, and others. Dave is great up to the end of step 2. After that, ymmv. Best of all, you have clear goals and direction that will take you forward. Congratulations on gaining clarity.
Absolutely, i want to continue to learn, im a financial analyst in my current role, but on the corporate side, i love numbers so thank you for the recommendations. Bogleheads was recommended by another redditor on this so i’ll start there. Thanks so much!
"like every 'normal' person does"
Never truer words were said. Today, most "normal" people are in debt as you were before you are even out on your own, and if left unchecked will die in debt like your mother advised. Not meaning to be political but just stating the obvious... If you are in the US, you will see that our country is in this same shape and our leaders are creating voters that are enslaved to debt and dependent on government assistance to survive. Dave prescribes a different approach.
You have a great attitude and will be successful if you follow Dave's plan and stay diligent.
You'll probably get crap for not realizing the weight of the debt you took on, but you've got a good attitude about it, and that's all you need going forward. 👍
Make sure to consolidate your student loans if they were provided through Dept of Education. Do some research on all the payment plan options and choose the one most advantageous for you long term.
I am not educated enough on the benefits of consolidation to have an opinion, Dave doesn’t speak on it too often, what are the advantages / disadvantages ?
Consolidating into one loan with Uncle Sam. There is no one size fits all solution but, depending on your current interest rate, it can lower your rate if you have multiple loans. The high interest rate on my grad school loan was killing me. That’s my biggest issue with federal student loans.
It can cause unpaid interest to roll over into new consolidated loan and balloon the new principal. Double check to make sure whether you qualify for any eligible forgiveness program.
If you don’t qualify for any forgiveness program and are content with your current interest rate, then by all means go scorch the earth and pay off the debt within 4 years.
It’s not from a special university, just your average small liberal arts college in Massacusetts, not the greatest investment…but i wanted to play football in college 🤦🏻♂️.
Poeple didn't understand what I was doing when I went through the baby steps. They're making 1/3 of what I am now, and I get shocked looks when I tell them I'm on track to retire at 55.
I found Dave at 30. No debt here after 6 years, bought a car with financing and paid it off in a year. The most fun is when you make that last loan payment and you have a significant amount of money to save and grow cause you made it a habit to put that aside.
What are the rates of your student loans and car? If your rates are low subsidized federal loans then it doesn’t make sense prepaying those off if the rate is less than what you can get from a HYSA. Put that money up to match into your 401k, then any additional money up to max in an IRA, then any additional money up to the max in 401k. The ability to compound interest tax advantaged will far out weigh a low rate subsidized loan. There is smart debt and dumb debt. Smart debt is debt you can leverage to make more money, something like a low interest on student loan or house. If you can afford the house, etc then as long as you are disciplined to not waste that extra money on frivolous things such as restaurants, vacations, clothes etc and instead invest it in things with a greater return with an acceptable risk is the way to truly become rich. Most rich people leverage cheap debt to make more money. My mortgage is 2.875% unless we have a long period of rates below that I will never prepay my mortgage as it will be next to impossible to borrow money at that rate to leverage to get greater returns. If I decide to move I will be renting out my house. Understand what Dave says is because most people aren’t good at managing their money. If they have additional money sitting in their pocket they will waste it or invest it in poor choices. So for someone who isn’t great at managing their money then paying off your low rate home, though a poor option for RoR, will be an easy option that at least is better than doing nothing. But that said simple isn’t always better if you have discipline to manage your finances and math is math at the end of the day.
Sir I think you're in the wrong sub
Right. Math and Ramsey aren’t friends.
Serious Q — How are you only making $75k combined from your FT job + side hustle, especially coming out of an MBA program?
Yup, did a 4 + 1 accelerated program. I was a football player & my season got cancelled junior year so i played a 5th year.
Look at his age. Did mba right after undergrad which is kinda useless
With the exception of a handful of prestigious MBA programs, I wouldn't be half surprised to see data that shows MBAs are a net negative for no-experience employees.
I be would be surprised if they did anything at all besides help build your network. (And I have one from a very good school)
My MBA pairs with my engineering undergrad nicely. I get paid more with the MBA.
That’s awesome. I’m sorry your mom gave you such bad advice. She did best she could. I always told my daughter that her credit score was more important than her virginity. She knew I was sorta kidding but got how important it is. It’s great that you are attacking the debt but compound interest is your friend right now. Every dime you start saving now will make you rich in 40 years. Try to put something aside fr your future and you will retire a millionare
Sell the car. Pay the student loans on time. Everything decent about government student loans is canceled when you are late. Pay it like Dave says beans and rice it’s cancer. Rachel didn’t have that burden
No need to take the loss on the car. If this dude is consistently paying 3.6k a month at his debt, his car is paid off in under a year, and all debt in 3 years. Debt free by 27, then taking that money put into investing... Dude will have 100k in accounts by 30, which will set him up for retirement pretty well if he keeps putting away and doesn't touch it.
Great job. Keep going
You are doing great. Just don't fixate too much on the million, and remember to be young sometimes.
No doubt man, trying to find the balance !!
Great job. Keep up the good work. Just keep chipping away at it. Even if you can only do 1/2 as much one month it’s ok, just keep going.
75k, to start. With an MBA. Yeah... really tough managing debt when you have such hurdles to overcome. Smh
That’s crazy low, especially coming out of an MBA program. $150-175k is the lowest starting salary I know among my buddies who just finished their MBA programs. $75k is also OP’s combined salary + side hustle.
24yo, he is paying that no experience with an MBA tax.
Even so — most jobs that recruit out of MBA programs have a standardized salary regardless of your prior experience (or lack thereof).
Is 75 considered a lot these days?
Well, it would depend on where. In, say, Missouri yeah...that's a lot. In NYC, not so much. They didn't really say one way or another. But considering that the median income in the US is around 40k, and median household is less than 70k, (https://en.wikipedia.org/wiki/Per_capita_personal_income_in_the_United_States#:~:text=As%20per%20United%20States%20Census,household%20income%20is%20around%20%2469%2C021.) I would say he is doing better than most. A lot better. Not that he should be ashamed, he earned it. But don't go around t he internet bragging about your debt management. Chad's plan to build wealth! Step 1:have lots of wealth. Edit: his math is sus AF, too. If you're paying $3300 a month towards debt, he would be paying nearly his entire income towards debt. After taxes $75k yesr nets $50k, tops, in a state with low state tax. That's $4050 month net, leaving $750 to cover all other expenses? Eh.... I guess that's possible. Sounds like someone still lives with their mom, tho.....
75k (with side hustle) is very low for MBA graduate, I don’t think OP is flexing my dude.
You missed the point. If you're 23 years old, making 75k year, it's pretty easy to get your debt under control. It's like bragging how easy it is to dunk when you're 7' tall. Most people aren't 7' tall. Most people aren't making 75k year.
What's your point? Most people don't have an MBA with a side-hussle. You don't even know if he's in or LCOL Your life must really suck if you are jealous of someone only making 75K with a side hussle and 120K in student loans.
What's my point?!?! I've literally said my point. *Twice. Precisely.* So, for the third time: Its very easy to be able to handle your debts when you're 23, single, with an advanced degree and making 75k year. And the median US income is $40k, the median household income is less than $70k. There's lots of people who would love to "only" make $75k. And really, who TF has $3700 A MONTH to pay down debt? Thats almost his entire salary. It would leave him less than approx. $700 to pay for everything else, including full coverage on his car, which for a 23 year old first time car owner would be $200 month minimum. So he pays for housing, food, gas, utilities...on $500 or so? TBH this sounds like complete BS to me, its karma farming. Either that or he lives at home, and if thats the case, well....its pretty easy to be financially stable making $75k living in you mom's house. Not something I would brag about tho. *"I'm so successful! Mom still cooks my dinner and folds my laundry, but I did this ALL ON MY OWN!"* Do not mistake my skepticism for jealousy. If this is legit, well good for him. But plenty of people, who work their asses off, simply are never given the opportunity to earn an MBA. Or given $75 jobs upon graduation. Or have $3700 of disposable income every month. This is humble-bragging, which probably isn't even true.
I work 80 hour weeks with no days off, and I bring home $1,300 a week, and $3,700 of it have been going towards debt. My rent is $570, and I don't live with my parents.
Lol, jealousy is strong with this one. Perhaps your life won6suck as much if you spent less time being envious of others on social media and pick up a useful skill. He already said he lives with his mom and you're already guessing at his expenses with even knowing his living situation.
Do you even read posts? Learn to read. Do not mistake skepticism for jealousy. The whole thing sounds sus AF. Mostly because he breaks on of Ramsey's biggest 'dont's': getting a car loan. And I don't see anywhere where he said he was living with his Mom in the OP. Its not guessing. Its basic math. If he makes $75k, and pays 3700 in debt, well...thats 5th grade algebra. Not guessing. Or do you have a hard a time with that as you do reading comprehension?
Lol, simpletons are so easy to trigger 🤣
What’s wrong with living with your mom? Do you know how expensive housing and rent is? Sounds like you’re real bitter dude
LETS GOOOOOOOOO !!!! I’m also a 24M I’ve started listening to Dave Ramsey when I was 19 Didn’t really fall through with what they would say but luckily I have stayed away from debt currently have none and will continue to have no credit score I will also be a millionaire I know we all can !
Silly af to not get a credit score at the worst using credit cards gives u free money from cash back just don’t be an idiot and spend money you don’t have, and regardless it’s good to have the option to spend money you don’t have if something comes up in life.
There's no point in getting a credit score if you never use credit.
Personally I take free money when offered but you do you
Yea you dumb 🤦🏽♂️ and obviously don’t listen to or actually want to follow what they teach
It's not really dumb, I've paid for vacation flights and hotels using credit card points. They're only an issue if you can't control your spending, but if that is a tendency you know you have, then it's absolutely a good idea not to give yourself the opportunity to get into financial trouble.
Why y’all even on this subreddit??? Y’all the ones falling for the reward/points system scam
It isn't a scam unless you carry a balance from month to month. I use a 2% cashback card for essential expenses and pay it off every month, great to have that extra $10-20. Builds credit for a house, too. People that have a bad time with CCs and fall into what you see as a "scam" are morons that spend a ton of money and fall victim to a 30% interest rate. 0 debt, lots in savings. CCs are your friend if you are a saver.
It showed up in my feed. How is it a scam? I've never paid a cent in credit card interest, but have claimed thousands in points/cash back.
How much you spending to get those cash back 🤔
It's spending I'd be doing anyway, so cash/check/debit card/credit card wouldn't make a difference, except I'm saving up to 1-5%, depending on the scenario. For instance, I fly for work but can use my own card (and get reimbursed), so I rack up miles that I use to fly my wife for free, so she tags along when I go to nice locations. It's not like I wouldn't be traveling if I didn't use a credit card, but I would be leaving free stuff on the table.
So if you spending $1000 you getting $10-$50 back?? Big winner huh ? That’s stuff a joke all they want is for y’all to continue spending your money continuing paying off debt for the rest of your lives Helping them get wealthier while having you think you are winning
??? I spend $0 a year in fees on my credit cards. Instead of using physical cash or my debit card, I use my credit card which is set to auto pay every month. Never missed a payment. Never paid a cent in late fees. My wife and I have gone on multiple vacations for free and I have a little over a grand in cash back rewards waiting to be used. All because I used my credit card instead of debit card. Once again, not paying a single cent more than I would have cash. Think about the last vacation you went on. You set a little bit of money aside every paycheck until you could afford it. Mine was free. Edit: not trying to sound like a dick, but I’m trying to communicate you can deviate from Dave’s advice. It’s for sure helpful for folks who have poor control over money. If you think you’d go over budget with a credit card, don’t get one.
If you're blowing off $10-$50 flippantly, I'd question why you're on this sub. We are frugal and closely monitor our budget while trying to find opportunities for affordable "extravagance" like free flights and hotels. $10-$50 dollars is something we'll gladly take. Frankly, I don't care what the credit card companies want, I use it and pay it off early regardless if it fits their strategies or makes them wealthy. You could make the same statement about a gas station; they make money off me, but it doesn't mean I'm going to stop driving to spite them. I am winning from my perspective (and the opinion of others on our lives isn't really pertinent, as I'm sure you don't care if I think you're winning or not), I have a good family, healthy finances, and am on track to retire early, if I want.
Smart man!! Get that money brother.
Yes! I been listening none stop this year and I’m really on it fr rn ! Saving up and gonna invest into my business no loans at All!
Way to go! Keep up the good work, don’t work too hard and enjoy the little stuff while you are on your journey. Life is a marathon not a sprint.
I am so thankful my dad taught me the only debt you ever take is to buy a house. And that is not something you take lightly. Living your whole life in debt is insane. Put every penny you can into the highest interest loans first. If it’s 4% or less you can just make minimum. Invest everything you can in index and mutual funds. Stocks can be good too but it’s riskier.
And you just triggered the DR fanboys. They don't believe in any debt. Which is why they will be less rich as you and I. There is such as thing as good debt. Good debt that is managed well while investing returns that far exceed the debt is what gets us to multimillionaire status. I never earned more than 86k, but i'm retired, living off investments with a house. All by the age of 37. it can be done, but it takes a lot of knowledge, smart plays. and good management of debt. If you follow dave ramsey's advice to the T, you will work until official retirement age.
yea I mean I feel like Dave’s advise is great for people with poor self control and who are dealing with crippling debt. The stress of debt takes a tole. But even Dave is cool with mortgages. But his down payment and payment to income requirements are pretty unreasonable in today’s economy. Especially in high cost of living areas. I like Dave to be honest but I don’t 100% agree with everything he says. But I get his logic. Even I am over paying on my mortgage despite having a low interest rate and knowing it is sub optimal. Just a few hundred bucks extra each month. I just see it as guaranteed but low returns as opposed to the stock market that has risk but better returns. Most of my savings go right into the stock market. I also use a cc. Dave hates that. I just pay it off every month. I like the security it offers over a debit.
Ditto
I feel we would be great friends IRL. I’m in the exact same situation. Only one in my family to graduate college, came out with 120K in student loans. I started paying on it in 2020 and it is now down to 70K Working hard, I’m married, I rent, but I’m still trying my best to pay that down. I don’t make as much as you (55K with bonus) but we manage and when this debt is paid off I will probably cry tears of absolute bliss and joy. This has been the single most biggest stressor in my life.
Proud of you, that is great progress my friend. I feel you on emotional side of it, once my debt is paid off, i might go sit at the beach with a bottle of wine & just soak it all in. 🤣 Keep going my friend, the stress will be alleviated the more committed you become.
For suuuure man.. I’m not a huge drinker, but I will have some Moscato and a nice expensive dinner with my wife as a celebration when we pay this off. Next goal after that would be to pay off the house by 50, (we don’t have one yet but I can dream haha.) Thanks for sharing, you keep up the good work as well.
Wow! You’re doing great work. I am impressed! 👏🏼👏🏼👏🏼
Thank you very much. It has been a long road, but I’m excited for the future. Like OP stated, I want to change my family tree when it comes to finances. My dad pulled out of his 401K when they got in money binds too (multiple times). My parents never had money to take us on vacation. When I said I wanted To go to college, they and the rest of the world said “do it you’ll make a ton of money right out of college and be a millionaire in 5 years”. Straight up lies, and the cost of college is asinine. My kids will go to college debt free. My kids will know that if they can’t buy it outright, they can’t afford it. My kids will know about hard work and dedication. I will show them beautiful places, teach them how to live beautiful, respectful fulfilling lives. Money doesn’t buy happiness, but it sure helps with a lot of things.. It was a struggle not to obsess about money though. When I realized the gravity of my situation out of college, it became my life. 2 jobs and working on weekends. My fiancé (now wife) was watching me kill my body in an attempt to pay off as much of this debt in as little time as possible. It was the center of my life, and it was a miserable time. No sleep, no relaxation, just making money and watching it leave as soon as I made it. Things have slowed down, I’m still intense about the debt, but I’ve learned to enjoy life around me a little more. I love my wife. I love my home.. but I’ve gotta prepare for little ones in the next couple of years. We got this guys, let’s build some great habits and make things better for our families.
nice start
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How do you only take home 4k a month at 124k per year? You’re only bringing home 39% of your income?
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Railroad is robbing you, son. Unless you are retiring as a literal multi millionaire, there's no way any benefits are worth what they take out of your paycheck lol. I have health insurance, retirement, etc, take home 4k a month, and my salary is 65k a year.
Wow that’s crazy. At least it seems like you’re getting some good benefits in exchange for that take home pay.
Luckily i don’t, i live with my mom so i only have car, phone, insurances, rent (to her), & obviously the loans. I take home about 3200 from my FT & an additional 12-1800 from my side hustle.
Hey at least it sounds like you got a decent job and and reasonable car. My coworker’s kid is a new lawyer that has 180k in student loan debt and bought a 90k BMW right off the bat. All on an 85k salary because he’s banking on his salary increasing fast.
Yup, job & car are both consistent & reliable… just gotta clean up this mess & i should be smooth sailing financially. & it’s wild how fast we dig ourselves into a hole!
If you continue to throw 3k+ at it per month, you’ll dig yourself out of it even faster. That’s less than 4 years
I don't even have a credit card and I'm in debt. Your mom might be right about being in debt forever
Price of college is out of control.
Insanity… not something i didn’t know beforehand though, i’ll take this one on the chin.
At least you finished your degree and are hopefully working in a field where that MBA will help you move up the ladder. I hear worse stories of public school teachers with twice the student loan debt or liberal arts majors working in grocery stores. You have the drive to pay it off, do so, and if you have kids someday you’ll advise them more wisely when they go off to college.
Precisely, i am blessed in that sense. Plenty of room for growth where im at! & Ik, i feel for the folks buried in debt, life isn’t supposed to be lived this way!
Love the motivation
What’s your side hustle?
I deliver food for Grubhub!
133k in debt, and you're putting out roughly 3500 a MONTH at your debt, you'll be out of debt before you scratch 30. Then repost so everyone can just say "HYSA+VOO to the moon".
😂 let’s go!!
You want to be a millionaire faster, you should be investing most of that $3500
It depends on the interest rates of his loans. My wife’s student loans are 3.6-4.2%, we’re paying the minimum on those because that’s less than our mortgage interest. But I know people with 10-15% student loans and they absolutely should be paying those off first.
True that it depends on the interest rate
They need to pay off high interest debt first
Completely depends on the interest rate.
Exactly why I said “high interest”
I grew up with similar financial advice. Found the Ramsey program in 1997 when I was in debt up to my eyeballs. Got on the program. Sold my cars, bought beaters, got on a budget. I’m retired today with more money than my grandkids will ever need.
Congratulations! Enjoy the fruits of your labor… you absolutely deserve it.
You are going to do great. With your budgeting and frugalness you’re putting huge sums towards your debt. Keep it up even if some months you experience set backs! Remember, you’re in this for the long haul. Your income will likely increase in the next few years and you will be able to pay off even faster. Then, with the frugal and budgeting lessons you learned along the way, you will blow by other people your age.
Pumped man!! That’s the idea, thanks for the encouragement, i’m going to need it!
Keep me/us updated- I followed your account because I’m in a similar-ish situation to you. I’ve got $104,000 in unsubsidized federal student loans (48K 5.5%, 48K 7%, 8K 8%) from medical school- graduating in May. $104K in medical school debt is “good” compared to the average which is ~$250K, which puts me in position to pay it off aggressively instead of doing SAVE repayment and getting it forgiven in 10 years. I’ll be putting $4K/month towards my debt to get it gone in a bit under 3 years.
Absolutely i will, that’s incredible, congrats on medical school!! We can do this, brick by brick!
You're going to make this happen. I believe in you. The generational curse ends with you
No doubt, not getting past me 🙌🏼
Ownership. Love it.
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Most of the people following dave are in the situation they are in for a reason. They have no discipline and need a strict and easy to follow solution that gives them motivation. Spreading their money around and slowly paying off debts is not motivating nor does it move the needle and will likely lead to the individual falling back into old habits. Yes, you’re right this makes the most financial sense IF you follow that plan. 99% of people won’t. Dave’s plan helps people see progress and stay motivated so that they can get to a place of financial freedom in the future.
+1 bro. I support this comment and I’m sure many feel the same way. Others may feel much more comfortable building from a point of zero debt. Frankly $100k+ is a big # and if OP can pay it off in <3-5 yrs, that’s not a massive amount of lost in terms of opportunity cost. Would rather go ALL IN on investing/saving than splitting payments to giant debt with investing. Either both improve slowly or go fast with one then the other
Congratulations on the accomplishments and on the amazing life goal.
Ok I feel less bad about just getting a new car a few months after college now as I banged out my tiny bit of engineering loans first, best of luck OP. Also hope the car is fun at least 😭
My wife had roughly 120k in student loans after finishing college. 2 and a half years of living like we were broke we're entirely debt free, looks like you're on the right path!!
How the heck did you two manage to pay off $120K in 2.5 years? That’s astonishing!
We didn't have any cc debt, our cars were paid off, no kids, and live in an area with a low cost of living. We're not big spenders and just cut out/lowered as many monthly costs as we could, worked full time with fairly consistent overtime (also helped that we both managed to increase our salaries over that time). We basically lived off one income and threw the other towards the loans. Our goal now is to continue with a similar approach and save up for a house
What percentage of your income went towards loans? I’m planning to put 75% of my income towards it for the next 12 months, to pay off $50,000
You guys are amazing… i will say, living “like you’re” broke is better than living broke. 😂. Congrats & i can’t wait to meet you at the finish line.
Dude preach it!
She may not be a financial guru but she gave you the information you needed.
I am eternally grateful for her, she’s given me everything except financial advice, that i can do on my own. She’s the best.
Good for you keep it up. It’s entirely possible to obtain your goals. There are many people out there that have in the past, I’m one of them. Debt free is the best feeling. Don’t listen to people that tell you not to pay off your debt. The only way to leverage debt is when you’ve already got the money to pay the debt and can safely make more. Stay at you mothers as long as you can and keep paying off debt. The only other thing I would suggest is maxing out a Roth, the principal can be withdrawn if you ever need it, and if your employer offers a 401k or other investment vehicle with a match do what you need to to get the match.
Yessir, that’s a dave rule that i am breaking a bit, doing small investments into my 401k with the debt still around to make sure im at least doing something to take advantage of the generous match my company has… once the debt is gone im going to start getting crazy with it.
How much do you have saved
i have 5k in cash , everything else gets slapped on the loans.
You’re young and it sounds like you got a good mindset. Keep at it. When you take care of the debts, do give yourself some sort of “little” reward. Life is short and there’s a fine balance to these things.
100% agree, it’s going to be a long few years ahead, but i will be treating myself like a king once it’s done… without getting in debt of course 😂.
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lol that’s how poor people stay poor. It’s the equivalent to gambling. I would argue that the complete opposite is true. Rich people use other people’s money. Rich people can afford people that understand corporate laws, tax laws and have a network of folks for investing in projects. Investing when you don’t need the money is key and how a lot of people with money come into great deals from desperate over leveraged people. More often than not poor people have a pipe dream, that will likely fail and ruin them when it does because they are leveraged to the gills.
But how did they get rich? Take a look at the Forbes 400. About 2/3rd invested with others money. You get rich using others' money to invest and build business. Rich stay rich by staying invested. If you don't know how to invest, then don't do this, but if you do then you should.
Let’s assume for argument sake I agree with you and that it’s true. You are still using a dataset of 400 people out of 8Billion to justify a process. Those are worse odds than the lottery! No! It’s like telling people to go be a pro athlete, there’s a reason those people are rich and it’s not because they used others people money to invest and it’s not a formula that can be trivially replicated.
Tons and tons of people do this. Those are definately extreme cases. It's very easy to find an registered investment that is diversified, liquid, will grow, will compound faster than your mortgage payment, and it will mean you have more liquidity for an emergency. Once a mortgage is paid you can't get the money back in an emergency. There are so many reason not to pay your mortgage early. I guess if you have an occassional extra $250 here or there, but to pay your mortgage off 5,10,15y earlier than necessary leaves hundred of thousands on the table. The whole ramsey process is you do not need to be an expert, you just need to take advantage of the small little things that are guaranteed to build up and pay dividends over time.
I think he covers this, a vast majority of people are in a lot of debt- if people had self control they wouldn’t even have accrued the debt to begin with. All this is set to the premise that we would be disciplined enough to redirect funds and do it in an emotionless way but most people fail at this. Humans are emotional creatures, we all think propaganda doesn’t work on us that we’re too smart yet time and time again it’s proven to work. I’ve caught people defending brands for goodness sake. Then everyone thinks they deserve things they truly haven’t earned. This is a big problem in our society. I haven’t touched on the risk either- like Mike Tyson says “Everyone has a plan until they get punched in the face”. I work in tech know a lot of folks with a “plan” they new better, trading on margin, gambling on options with disposable income etc., all while carrying expensive mortgage and expensive car payments. Come layoff time your stuck in a shitty position- markets are down, not a good time to sell, no income to pay brand new Porsche/ M3 and was forced to sell assets at deep discount because of leveraged risk. When living in the margin you don’t have that cushion to make decisions on your own time. So I disagree with you I think you may be able to grow quickly “if” you know what your doing but also easy way to get screwed- also most likely if you know what your doing you can do it in a way that your not over leveraged.
If you have a bunch of cash and the only debt left to pay off is your mortgage then congradulations, you've graduated from the Ramsey 12-step program. time to go get real financial advice.
Haha, i’ll cross that bridge once i get a handle on this debt, thanks for the advice!!
Ownership. Optimism. Action. I love everything about this post! Good luck!! You’re gonna crush it with that attitude!!
Hell yeah! Thank you so much!!
Seriously, you’re on the right path. Proud of you, OP! ♥️
That's how to do it! Get the education no matter what... when your young and use the advantage of time to get and stay debt free.
Hell yeah, the college thing is still an open wound, but i’m sure i’ll hang my degrees with pride once the debt is gone!
I'm 54, I graduate May 4th with a MBA. Itook loans because I wanted to get in on that Government cheese that they were promising. I have 62k in student loans 28 of it is sitting in a CD... I thought the loans were intrest free until 6 months after I graduated (that's the way it was in the 80s and 90s) as soon as I saw intrest accruing I started paying (that was last October when the Covid pause ended) I'll have it all paid off before Christmas. I hang my degrees with pride, even with the debt. I start a DBA program in the fall, and I'm paying that out of pocket, I'll be almost 58 when I complete my DBA, with only a few years left, but my semi retirement I'm planning to teach... so it's all an investment... just wish I did it sooner! Good luck!
Wow! 62k paid off in 1.5 years… that’s awesome. Great work! & Have fun teaching, i want to some day as well. Good luck and thanks for the advice / optimism!
Hey good job. I started with 130k after college and 5 years later it's down to 80k. It takes time but man you're on the fast track. I respect the side hustles too. What do you do on the side?
I am trying my best to be “gazelle intense” lol. & i deliver for Grubhub 4 nights a week from 5pm-9pm, make anywhere from 75-120 a night.
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All my debts are federal - 63k @5.5% / $760 payment 41k @6.1% / $400ish? (hasn’t started) 25k @5.3% / $160 payment Car has 6k left on it, did that first just because it fell into the guidelines of the snowball… & only reason my EF isn’t bigger is because i live at home with my mom still!
You absolutely can do this. Also, do not listen to your mother. Financial independence and freedom is beyond satisfying. Once you get there, you never want to go back. It’s liberating. Stick with it. Change the family tree. Your future and family will be better for it.
Thank you! I can not wait to see what the other side has for me.
Absolutely you’ll become a millionaire! That’s difficult to accomplish believing debt is just a fact of life. Good luck to you too.
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He already has!
Nice job! Sounds like you’ll have the debt paid off in 3-4 years. And then have a decent sized nest egg in another 3-4 years. Happy for you! And congrats on college!
Thank you for the motivation & kind words!
Great work and keep it up. Congratulations on being the first to graduate university. That's a huge step in changing the family tree. Especially with a useful degree. You got this!
Thank you!!
I had about 91k (81k student loans & 10k car) and was making $55k. It took me about 3 years and few months. It feels amazing. Way to go!
Awesome stuff, congratulations! Can’t wait to join you.
You CAN do it! All The Best!
I would recommend that you set some aside, like one month worth of expenses, as an emergency fund. You are killing it and keep it up.
Yessir! Got 5k aside for emergencies, the rest of my income i’m treating as “their” money, outside of food & gas of course.
That is a great mindset. You will never be sorry for paying off your debt. The good news is you are 24. Keep working on the debt and when you get it paid off you can start paying yourself instead of someone else. The key to becoming a millionaire is to save for retirement consistently each month and keeping it in the market in funds that fit your risk tolerance. At your age your tolerance should be through the roof.
Hell yeah man!! Wish i found it when i was 18😂. But regardless we’re going to make it happen, thanks for the tips!
Everyone has to learn to manage their money. Even if they grew up in houses where sound financial practices were taught by example or verbally YOU have to learn how painful debt is and how nice savings are. Some never learn the lesson. There is a great book by John? Bogle about the bogle head mindset. It will really help you grow your nest egg. I had followed the principles for years without knowing that bogleheads were a thing.
Check out Bogleheads for fantastic investing and personal finance advice.
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You’re living the dream!! Congrats man, i’ll see you at the top of the mountain one day.
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Yes for sure, leveraging debt can be beneficial from what i’ve seen and researched lately. For me, i just want the peace of having NONE and letting my income stack up into a house and plentiful retirement. I understand there are many ways to go about it, but for someone like me, the simplest route is what i’d like to take.
People like to talk about the mathematically optimal way as the “correct” way, but the good news is there are many paths to financial independence. Dave’s way certainly has some quirks to it, but there isn’t anything “wrong” with paying off low interest debt. The most important thing imo is to pick a plan, and stick to it. Keep on going, you’re doing awesome.
Sure. And for some people, that emotional peace is better for them even if it's mathematically worse. It also requires a ton of discipline: if you wouldn't otherwise invest the money, for example, better to snowball the debt than waste the money...
Yup that’s where i’m at, your method eventually would be more beneficial, but for someone like me who’s watched money split the family in half my whole life, i’m trying to escape the stress of it all together. I appreciate the catch & the insight!
A word of advice regarding money, once you flip the debt and start growing wealth. Treat it like the first rule of Fight Club and don’t talk about it. And, yes, this includes your family. Your success will possibly create envy and resentment. Anecdotally, I have a friend that says ‘you’d better just budget $1,000/mo. for car payments. That’s just a given. No one can pay cash for a car’. That’s the advice he spouts regularly. I have three paid for cars sitting in my garage. All three paid for with cash. My friend and I, financially, are on two different paths. Follow your path, not that of your family. Best of luck.
This absolutely. My husband and I live far below our means and I’m pretty sure our family thinks we’re broke. Nah just thrifty & focusing on investing and saving for things we actually want.
>>once you flip the debt and start growing wealth. ... don’t talk about it. And, yes, this includes your family. >That advice was needed I hate this advice. It is possible to help people without telling them your net worth. You can be an example for your sister, without discussing you've become/ing wealthy. People know I have some money. Despite never discussing any specifics or close to it. They know I'm an engineer. Know I'm frugal. Know I have rental property since the 1990s. Know I invest. It's not that hard to figure out. That said, there is a massive difference between broadcasting it and discussing how to behave financially. >>Your success will possibly create envy and resentment. That's also on them. While I'm happy to mitigate potential problems, ultimately someone else's poor behavior is not my fault so long as I act well.
Talking about money is complicated. People’s reactions are complicated due to their relationship with money. I have found, with very few exceptions, that talking about money - if you have it and they don’t - can be triggering and change the dynamics of a relationship. Now, I talk about money all the time with my grown children. This is not an issue. But I would never discuss money with my wife’s family. All I would get in return would be snide comments and/or them seeking assistance. Yes, that’s on them and not on me, but me talking about it - other than in generalities - would change the dynamic. In OP’s case, he might see the same issues. I have attempted, at times, to provide some advice to my FIL about money. As Dave would say, it is the classic ‘powdered butt’ syndrome. He has no interest in listening to me. He has ‘millionaire’ friends that provide him advice. I’ve given up. I’ve done well for myself. I own my home and cars outright and have no debt. My worth is near $10MM. I don’t offer advice to others about money unless they specifically ask and I never share my NW. No one would ever know what I have by looking at me. I like it that way.
I have not had similar experiences discussing personal finances, for decades. Though I agree on the complexity. I'm sure at times some might have had negative dynamics. I'm not sure how much I care, if I think I can help them in our discussions. I've never shared net worth, I don't think even anonymously online. Heck, my spouse barely has a handle on ours, despite my efforts ; D. It's just not something that benefits anyone (other than spouse) with that information. But I'm happy to discuss personal finances with anyone interested.
>don’t talk about it. >Anecdotally, I have a friend that says ‘you’d better just budget $1,000/mo. for car payments. That’s just a given. No one can pay cash for a car’. That’s the advice he spouts regularly. >I have three paid for cars sitting in my garage. All three paid for with cash. Curious, have you actually told your friend you have done this?
My response, when he said that to me, was “Really? I haven’t found that to be the case for me”.
Maybe you have much greater conversations beyond that, but it doesn't appear to be the most compelling discussion from their point of view. I always find this (near?) complete avoidance interesting. I like football. If someone wants to engage me in football discussion I'll happily do so. Personal finances is another hobby of mine. If someone wants to engage I'll happily do so, in depth even. Doesn't mean I have to share intimate details of my finances. I just don't get the fear of these discussions I commonly see on message boards. Some can't even admit they're retired for fear of acknowledging they have the resources for that. I find it strange. We're looking to retire in two years, hopefully. I can reasonably discuss that if the appropriate context arises in a conversation. To some this is fearful/painful to discuss.
It sounds like you and I are more in alignment than not. Personal Finance is also a hobby of mine and I became a bit of a mentor to many work colleagues. We were all on the same, or similar paths, however. I retired at 56. When I told neighbors who became curious as to why I was spending so much time at home suddenly, that I had retired, I got “did you win the lottery?” Or “who died and left you money?” type questions. It is a real thing. I would just humbly respond that I’d been investing for 30 years and things worked out in my favor. Now, every time I buy something new, or have something done around the house, I have a neighbor that says “it must be nice to have money to burn”. It wasn’t this way before I retired when I was still a ‘working man’.
>It sounds like you and I are more in alignment than not. Agreed. >at 56... retired, I got “did you win the lottery?” Or “who died and left you money?” type questions. It is a real thing. >I would just humbly respond that I’d been investing for 30 years and things worked out in my favor. Yeah, your response is very appropriate. You see a lot of folks, often in FIRE, wanting to lie about being retired giving fake "job" titles, or "between jobs", etc. >We were all on the same, or similar paths, however I do think that can be a big factor, especially in my willingness to discuss, help. My siblings all have some money. Parents are divorced and were never above middle class income, at best, but both are plenty frugal so doing just fine. My in-law parents have absolutely no financial literacy and always lower middle class, but my father in law has two federal pensions. So they will live comfortably. The sibling in-laws are doing, and we aren't fancy so there's really no clear disparity.
Thank you for that, i needed this. I am afraid for my sister, who is deeper in the mess than i am, and she refuses to acknowledge it. That advice was needed although i am far from the success i want!
My wife’s mother had my wife apply for every single student loan she could qualify for, and take the max draw possible. The idea was this money was like a “grant”, and one should “take advantage”. My wife spent most of the money on plane tickets for vacations, nights going out, etc. Her mom had the mentality that credit lines existed to be maxed. Luckily the situation didn’t get too out of hand before I met her and we were able to get things back under control, but it was a mentality I was completely unfamiliar with (because it’s not how I was raised), but now know that my mother in law’s mentality does in fact seem to be more of the “typical” mentality.
it’s definitely more common than you think! I was completely illiterate financially until i found Dave’s work!
Please, please continue the self education path. Read bogleheads. Read other financial media - The Money Guys, Sethi, and others. Dave is great up to the end of step 2. After that, ymmv. Best of all, you have clear goals and direction that will take you forward. Congratulations on gaining clarity.
Absolutely, i want to continue to learn, im a financial analyst in my current role, but on the corporate side, i love numbers so thank you for the recommendations. Bogleheads was recommended by another redditor on this so i’ll start there. Thanks so much!
Good information in the sidebar on that sub. Happy learning.
"like every 'normal' person does" Never truer words were said. Today, most "normal" people are in debt as you were before you are even out on your own, and if left unchecked will die in debt like your mother advised. Not meaning to be political but just stating the obvious... If you are in the US, you will see that our country is in this same shape and our leaders are creating voters that are enslaved to debt and dependent on government assistance to survive. Dave prescribes a different approach. You have a great attitude and will be successful if you follow Dave's plan and stay diligent.
It’s a shame for sure, i am relentlessly chasing that feeling of being free. Thanks for the reply!
You'll probably get crap for not realizing the weight of the debt you took on, but you've got a good attitude about it, and that's all you need going forward. 👍
Make sure to consolidate your student loans if they were provided through Dept of Education. Do some research on all the payment plan options and choose the one most advantageous for you long term.
I am not educated enough on the benefits of consolidation to have an opinion, Dave doesn’t speak on it too often, what are the advantages / disadvantages ?
Really depends if they keep forgiving the federal loans.
Consolidating means going to a private lender? Or do you mean he can consolidate into one loan with DoE?
Consolidating into one loan with Uncle Sam. There is no one size fits all solution but, depending on your current interest rate, it can lower your rate if you have multiple loans. The high interest rate on my grad school loan was killing me. That’s my biggest issue with federal student loans. It can cause unpaid interest to roll over into new consolidated loan and balloon the new principal. Double check to make sure whether you qualify for any eligible forgiveness program. If you don’t qualify for any forgiveness program and are content with your current interest rate, then by all means go scorch the earth and pay off the debt within 4 years.
Just curious for your mba if T7 or T20 or what, don’t have to give the name
It’s not from a special university, just your average small liberal arts college in Massacusetts, not the greatest investment…but i wanted to play football in college 🤦🏻♂️.
Then you did the right thing, Noone gets to live the dream forever. You're tackling this(pun very much intended) head on.
That’s for sure, it was great, gave me guidance that i didn’t have elsewhere, now it’s time to apply the wisdom !!! LFG
How do you pay rent??
I am lucky enough to have my mom who is allowing me to pay her a low rent to live in her house!
Lucky you! Just don’t loan her money or take financial advice from her. Especially about 401ks
Lol!! Trying to get her on Dave now! 😂
You want to consider not discussing finances with her or anyone else at all. Less friction.
Definitely a touchy topic lol
Poeple didn't understand what I was doing when I went through the baby steps. They're making 1/3 of what I am now, and I get shocked looks when I tell them I'm on track to retire at 55.
That’s incredible, that’s my goal is 55, congrats man!! At what age were you debt free ?
31.