Awesome PDF - getting out of debt slavery

[thomas70]

Re: Awesome PDF - getting out of debt slavery

He says that "bankers get to legally steal almost 1/2 of that right off the bat." So for some reason he is suggesting that someone earning $2500/month would be paying $1200/month in interest charges. I'm not sure how he arrived at that amount. If you are paying nearly half of your income in interest charges, you are in serious trouble.

According to the PDF, if you had a $180,000 mortgage you'd be paying $972 a month in interest. And that's with an average 6.5% rate.

What about student loans, credit cards, car payments? You could hit MORE THAN $1200 real quick.

[bjl584]

Re: Awesome PDF - getting out of debt slavery

The author is focusing on the wrong evil. He made the mistake of overextending himself if he is paying $1200 a month in interest charges. Did the evil banker make him buy that new house, car, or designer clothes? Was it the evil stock market's fault? Was it the system trying to hold him down? No. It was his personal choice to live his life the way that he did. The more I think about this paper the more I think that this is just another case of victimhood whereby someone is trying to blame all of their shortcomings in inadequencies on someone or something else. It's time for this person to suck it up, take responsibility for their own actions, and do what they need to do to make things right. I hate excuses and mindless blaming of other factors on your problems. Stand up, brush the dust off, be a man, and make things right.

[Broken Arrow]

Re: Awesome PDF - getting out of debt slavery

Since most everyone has hit the technical details, I'll just focus on the message in general.

Well, before that, I just want to state that I prefer the more pragmatic approach of just running the numbers. For example, why am I contributing so much to my 401k as opposed to paying down my student loans? I think, by now, everybody on this board knows just how much I despise my student loans. However, the reason I'm not paying it down is because of *drum roll* the numbers. My dollars simply goes farther this way.

Back to the message itself, I would say to be careful of extremist rhetoric of any kind. Yes, while it can be empowering, we can also run the risk of causing short-sightedness. For example, if I did absolutely nothing else except to pay off my student loans, I would indeed be debt-free fairly quickly, but at what cost?

Having said that, I also have no problem with such rhetoric. I too would very much would like to be debt free sooner rather than later. I just don't want to do so at the expense of limiting my long-term financial potential.

[thomas70]

Re: Awesome PDF - getting out of debt slavery

He made the mistake of overextending himself if he is paying $1200 a month in interest charges. Did the evil banker make him buy that new house, car, or designer clothes?
...
The more I think about this paper the more I think that this is just another case of victimhood whereby someone is trying to blame all of their shortcomings in inadequencies on someone or something else.

Um...did you even read the PDF?

The first few lines:

I am very unusual. I have almost no debt (I still owe $8,000 on my house—but I have only been a homeowner for 2 years). I have no car loans or credit card balances. Our expenses our low, so I can work at a job that I actually enjoy doing. My job is not high-stress, nor do we have to worry about our bills. My wife can stay home to raise our family, because no banker overlord forces us to do otherwise.

[disneysteve]

Re: Awesome PDF - getting out of debt slavery

According to the PDF, if you had a $180,000 mortgage you'd be paying $972 a month in interest. And that's with an average 6.5% rate.

What about student loans, credit cards, car payments? You could hit MORE THAN $1200 real quick.

But a $2,500 monthly income is only $30,000/year. Someone earning 30K isn't likely to have a 180K mortgage. Heck, I earn over 4 times that much and don't have anywhere near a 180K mortgage. That's more than our house cost.

[disneysteve]

Re: Awesome PDF - getting out of debt slavery

Something else really irked me. He says at least two different times how you should send your kids to private school. He states that the poor sap who is in debt sends his kids to public school because he can't afford private school.

We send our daughter to public school by choice. If my income tripled tomorrow, I would still send her to public school. It isn't about the money.

[safari]

Re: Awesome PDF - getting out of debt slavery

Steve, may I ask why you're against private schools?

[bjl584]

Re: Awesome PDF - getting out of debt slavery

[QUOTE=thomas70]Um...did you even read the PDF?

Yes, I read it. I should clarify. The author is not playing the role of victim here, but he is still lashing out at the "system" (capitalism I guess) and holds an extreme biased against it. It's a very jaded one sided way of looking at things. Corporations are evil, banks are evil, creditors are evil, etc.... Why would he hold these views had he not had some financial trouble or some experience with debt at some point in his life? He wouldn't. This is learned behavior. He feels this way for a reason. The "system" is a two way street. If you are intelligent enough, patient enough, and have enough common sense, you can make it work in your favor. You can make interest and investments work for you. The author of this article has apparently totally given up, quit, and decided that instead of trying to do something intelligent with his finances, that it would be better to demagoge the entire "system" and bury his money in the back yard. That is the part that I can not agree with. He is living a 0 risk lifestyle. 0 risk equals 0 success. "Better to try and fail than to not try at all."

[disneysteve]

Re: Awesome PDF - getting out of debt slavery

Steve, may I ask why you're against private schools?

I'm not against private schools. I just support public schools. I don't think public schools should be the last resort option only for people who can't afford something else. I think we need to focus on making our public schools better - not encouraging folks to abandon them and send their kids to private schools instead as soon as they can afford to.

[tinapbeana]

Re: Awesome PDF - getting out of debt slavery

I'm not against private schools. I just support public schools. I don't think public schools should be the last resort option only for people who can't afford something else. I think we need to focus on making our public schools better - not encouraging folks to abandon them and send their kids to private schools instead as soon as they can afford to.

here here.... how can our public schools get any better if they lose promising students and involved parents?

[disneysteve]

Re: Awesome PDF - getting out of debt slavery

He is living a 0 risk lifestyle.

Actually, he is taking plenty of risk. By not putting his money in the bank or investing in the market, he is taking a huge risk that he will be able to continue to support himself even though his money will be steadily losing value to inflation. Right now, his money is losing about 3% each year. Unless his income steadily increases to keep up with inflation, I don't know how he expects to survive financially.

[bjl584]

Re: Awesome PDF - getting out of debt slavery

[QUOTE=disneysteve]Actually, he is taking plenty of risk.

That is true. I was talking about taking risk from an investment and savings point of view. He is in fact taking a risk by doing nothing at all. Bottom line: This article has some good points, but it is full of holes and shouldn't be followed blindly. The author is obviously angry and biased toward the system, and this causes his judgement and common sense to be clouded. In my opinion, if he would have preached a debt free lifestyle while at the same time been pro-investment, this paper would have been much more convincing to me. I can't get based his anger and biased. It makes me suspicious.

[Ima saver]

Re: Awesome PDF - getting out of debt slavery

Gosh Steve, that is unusual. The average house cost in the country is around $225,000, isn't it? It is hard to find land and build a house for under $200,000 around here.

[poundwise]

Re: Awesome PDF - getting out of debt slavery


I think it should be noted that there can be dramatic variance between public schools across the country. Some public schools and systems are models of success and aptitude while others are miserable failures. There is also a similar, though perhaps not as wide, margin between different private schools.

A private school is not automatically better because it is private. But neither is a family automatically elitist or abandoning the system because they choose to send their child(ren) to a private school.

[disneysteve]

Re: Awesome PDF - getting out of debt slavery

I think it should be noted that there can be dramatic variance between public schools across the country. Some public schools and systems are models of success and aptitude while others are miserable failures. There is also a similar, though perhaps not as wide, margin between different private schools.

A private school is not automatically better because it is private. But neither is a family automatically elitist or abandoning the system because they choose to send their child(ren) to a private school.

I agree completely! I just didn't like the implication that only people who can't afford private school send their kids to public school. That certainly isn't the case.