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What Does Financial Freedom Mean To You?

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  • #16
    Originally posted by ~bs View Post
    hookers and blow every day on the beach with no pizzarazi or poporazi interference
    james.c.hendrickson@gmail.com
    202.468.6043

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    • #17
      I find it interesting that some people define financial freedom as having paid off their mortgage. For me it's just having enough passive income to cover my expenses so I can spend my time how I please - be that working, traveling, volunteering, taking classes, etc. Sure having a paid off mortgage would be nice as it lowers the amount of passive income I need to achieve FI, but it isn't a requirement to getting there, and by my analysis, investing more now, as opposed to throwing it at the mortgage balance, will get me there faster. Did I still buy a modest home and make decisions to lower the total interest owed, absolutely. It's all part of the bigger picture, but paying off the mortgage doesn't define financial freedom for me.

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      • #18
        Originally posted by riverwed070707 View Post
        I find it interesting that some people define financial freedom as having paid off their mortgage. For me it's just having enough passive income to cover my expenses so I can spend my time how I please - be that working, traveling, volunteering, taking classes, etc. Sure having a paid off mortgage would be nice as it lowers the amount of passive income I need to achieve FI, but it isn't a requirement to getting there, and by my analysis, investing more now, as opposed to throwing it at the mortgage balance, will get me there faster. Did I still buy a modest home and make decisions to lower the total interest owed, absolutely. It's all part of the bigger picture, but paying off the mortgage doesn't define financial freedom for me.
        I think the "paid off mortgage" deal is largely psychological. To Dave Ramsey, it's like the Holy Grail. But if you paid off your mortgage, you obviously put some significant assets into making that happen. Not a thing wrong with that. But those assets could have been deployed elsewhere to either make or lose money.

        It's no secret that I have a lot of RE debt. I could sell one of those properties and pay off my house immediately, but then I would lose a significant, income-producing asset to do so.

        It's all a matter of what you value in terms of your personal finances.
        How can you have any pudding if you don't eat your meat?

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        • #19
          Originally posted by TexasHusker View Post

          I think the "paid off mortgage" deal is largely psychological. To Dave Ramsey, it's like the Holy Grail. But if you paid off your mortgage, you obviously put some significant assets into making that happen. Not a thing wrong with that. But those assets could have been deployed elsewhere to either make or lose money.

          It's no secret that I have a lot of RE debt. I could sell one of those properties and pay off my house immediately, but then I would lose a significant, income-producing asset to do so.

          It's all a matter of what you value in terms of your personal finances.
          Texas, I take it you disagree with Dave Ramsey on this particular point?
          james.c.hendrickson@gmail.com
          202.468.6043

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          • #20
            Originally posted by james.hendrickson View Post

            Texas, I take it you disagree with Dave Ramsey on this particular point?
            I can't speak for TH but I wouldn't say I disagree with Dave on this. His entire plan is built around helping people get out of debt. In that realm, paying off your mortgage obviously makes sense as part of the grand plan. His plan isn't about investing and income. It's laser-focused on debt. It's not right or wrong. It's just one possible approach.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

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            • #21
              Originally posted by TexasHusker View Post

              I think the "paid off mortgage" deal is largely psychological... if you paid off your mortgage, you obviously put some significant assets into making that happen. Not a thing wrong with that. But those assets could have been deployed elsewhere to either make or lose money.
              Exactly. We just paid off our mortgage a week or so ago. Yes, we paid it off "early" but not that early as we have been in the house for a little over 25 years. We could have paid it off a long time ago as we now have a $1.2 million portfolio and the original loan was only for $113,600. We've had the assets to pay it off for a very long time but chose to invest our money elsewhere for a higher return. We had just gotten to the point where throwing a little extra at it every month for the past year was enough to get rid of it.

              Now our monthly fixed expenses are $700 lower meaning we need $8,400/year less in income to support ourselves.
              Steve

              * Despite the high cost of living, it remains very popular.
              * Why should I pay for my daughter's education when she already knows everything?
              * There are no shortcuts to anywhere worth going.

              Comment


              • #22
                Originally posted by james.hendrickson View Post

                Texas, I take it you disagree with Dave Ramsey on this particular point?
                nope. to each his own.
                How can you have any pudding if you don't eat your meat?

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                • #23
                  I'm appreciative of the freedom from worry that being financially secure provides. Whatever life throws at us, financially we can bounce back from it. If I'm wiped off the planet tomorrow, I know that - financially speaking - the people (and pet) I love will be OK.

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                  • #24
                    not needing to work as work. We are there bare bones the $40k/year mr money mustache and others can live on we can do. But do we want to? No. So then we end up "wanting" money. Do we need more? No.
                    LivingAlmostLarge Blog

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                    • #25
                      I think we might be there as well. If I walked out of my job today, we would have enough savings to fund $100k / year. This covers all our expenses (including taxes, cars, home repair) with 10% margin, but does not include any travel / blow that dough type money. We are very fortunate that my COLA pension + SS @ 70 = $100k, so once we hit 70, all of our expenses are covered. We really only need enough saved to bridge us from 55 to 70, which is about $800k. Plus we get free health care until medicare kicks in at 65 and then a free supplement to medicare. This makes a huge difference in expenses.

                      The plan is to work for another 1.5 years and retire @ 55. That will give us around $25k/year of fun money. And allows us to access my 401k funds immediately (rule of 55).

                      This situation makes work much more bearable.
                      Last edited by corn18; 09-05-2019, 04:00 PM.

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                      • #26
                        I've always lived within my mean's so I've never had to worry about money even at the "average" salary we've always made. Now retired with no house payment, big pension and a huge investment account I still feel the exact same way as I did at age 25. And I still don't waste or spend my money on things I don't need.

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                        • #27
                          Originally posted by Drake3287 View Post
                          I've always lived within my mean's
                          your mean's what?

                          How can you have any pudding if you don't eat your meat?

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                          • #28
                            Originally posted by TexasHusker View Post

                            your mean's what?
                            Not spending more than I make while at the same time always saving a little money for the future from each paycheck. Doing this for 30 years will make you a millionaire fairly painlessly. Whether I made 60k at age 25 or 150k at 50, I've always lived the same basic comfortable life style without doing without. Now that I'm retired at an early age I can afford those little luxuries most can only dream of during retirement.

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                            • #29
                              Originally posted by Drake3287 View Post

                              Not spending more than I make while at the same time always saving a little money for the future from each paycheck. Doing this for 30 years will make you a millionaire fairly painlessly. Whether I made 60k at age 25 or 150k at 50, I've always lived the same basic comfortable life style without doing without. Now that I'm retired at an early age I can afford those little luxuries most can only dream of during retirement.
                              Drake, TH was being sarcastic and commenting on your typo of "mean's" instead of "means".
                              Steve

                              * Despite the high cost of living, it remains very popular.
                              * Why should I pay for my daughter's education when she already knows everything?
                              * There are no shortcuts to anywhere worth going.

                              Comment


                              • #30
                                I noticed that afterwards! Grammar or spelling was never my strong subject in school.

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