Congratulations to those who are doing well! For those who are struggling - hang in there...there is tremendous opportunity out there even if you can't see it right now. For all the challenges we're facing right now, there still aren't many places outside the U.S. that offer the level of opportunity available here to improve one's life. As a result, where we are as individuals today does not have to predict where we'll be five or ten years from now.
For us, a lot of investment in education, hard work, and sacrifice have paid off. It wasn't easy to get where we are today...particularly as I was raised on welfare and food stamps as a child. When our income increased as we advanced in our professions we still lived as though we were earning $50k between both of us. 90% of our disposable income was invested in appreciating assets and assets that produce, or enable production of additional income. It wasn't until a year ago that I actually sold a car I'd owned to someone other than a salvage yard. "Pay cash and drive it until it drops." That was my motto for 90% of my vehicle purchases.
In fact, the 'busa is the first vehicle I've ever purchased brand new.
Personal residence...20 years left on the mortgage. The principle outstanding is less than half the value of the home, and liquid capital is available to pay it off at present. At 5.5% interest, at present time it's better to hang on to the cash in the event an attractive investment opportunity presents itself.
Rental property...one single-family home...20 years left on the mortgage. Again, capital is available to pay off the note if necessary. The property has been rented by the same tenant for the last six years.
Commercial property and business...three years left on the original business loan. Eighteen years left on the mortgage. Due in large part to the local economy we've been subsidizing operations some for almost two years now. I could lay off a couple of employees and return to work there again, but we have good employees and my time has more value elsewhere. This is a long term investment that we don't require a salary from, and it's also the single largest asset and liability on our household balance sheet.
Business #3 has $9000 worth of equipment paid for. This isn't a big venture, or one that pays a lot, but I enjoy it. In many ways it's like having another rental property without the maintenance headache.
Business #4 has a substantial mortgage, but generates a significant amount of profit above and beyond debt service requirements.
I still have a $10,000 balance on a student loan. At 2% interest, it's not worth paying off early.
Our retirement accounts are over funded by most measures.
Now for the depreciating assets...
2000 Jeep Grand Cherokee...paid for.
2004 Infinity G35 coupe...paid cash for.
2008 'Busa...paid cash for.
1973 Dodge Charger...paid cash for fifteen years ago.
All things considered we owe about $800,000. That may seem like a big number, but all of this debt was acrued to finance assets that appreciate in value, produce income, provide tax benefits, or all of the above. None of it was used to finance assets that historically depreciate over time.
Despite what some believe, debt in itself is not inherently bad. What the debt is allocated to is the key.
Has every investment worked out? Of course not. Every one has been a learning experience though, and the more we learn, the easier it is to earn.
B.T.W. we're in our late 30's/early 40's. We didn't achieve what we have overnight.
Good stuff.
paid for
it too was paid for
