Introduce Yourself

Kevin,

Welcome to the forum. So far it seems like a good forum, but I'm surprised that it hasn't gotten bigger. 4 posters so far. Hopefully Mr. Bach will say something in his January newsletter to remind those who forgot to participate that this is here.

You make it sound like you are old . Calling the rest of us young! 37 is not old my friend. My friend's Grandad is 86 and went elk hunting with us this year. If you called him old, he would probably show you real quick just how young he is Maybe we just got quicker starts would be a better way to put it. I finished my proffesional education at 19 bought my home at 21, got married at 22, my boy was born when I was 24 and I bought my first rental property a few months later. Just a side note: I am not a so-called "Rich Kid" Mom and Dad couldn't even afford to give me moral support, I have worked hard for everything I have, and am proud of it.

Now for some support. From your post here and the other post you wrote, it sounds like you are doing great! All lawyer jokes aside The one thing that I would suggest is that you focus on your three months living expenses first. I don't know what your expenses are, but I would guess that three months of them don't add up to $30k and that you are probably a good ways there already. For me, that cushion was the most important goal to do first. I worked on it for 6 months, and then one day, after a paycheck with lots of overtime on it, I took my checkbook down to where I keep that money market account and wrote one huge {huge then} check to finish it. As I walked out of the building the feeling I had was great! Knowing that whatever happened I had THREE months of cushion!

I suggest that you concentrate on 3 months living expenses first for 3 reasons. One: You will finish it before you finish the school debt or the house debt, and when you first start, you need a quick win to keep up you spirits and to show that you CAN do what you want to do. Two: If you focus on on thing at a time you can conquer subsequent challanges easier, example: $300 to 3 months L.E., $200 extra to student loans, $200 extra to credit cards or auto loans. Verses $700 to 3 months L.E. for 6 months then $700 plus the minimum to the next quickest payoff, then $700 plus the min that you were paying plus the min on the next one and so on. Third: That feeling I had when I finished on mine, I want everyone to have that feeling for themselves.

Joe

P.S. What kind of work to you do as a lawyer? Criminal, divorce, legal?

Joe,

Thanks for all the advise.

As to the young persons, I was replying to first couple of posts! Those guys mentioned they are in their early twenties, I think. Boy, it would be great to have started doing the steps then! I would imagine that becoming debt-free would make one feel young too. I received a setback today on my student loan. As I mentioned in my earlier post, I had set my online banking to pay a $125 payment every pay period. I saw the first one post to my account today and was very excited. Then, I went to the Direct Loan Servicing website and logged onto my account. The payment that was supposed to have been applied to principal was applied to interest. So, I called them to complain and was told that the only way that extra payments would go to principal is if I could time my extra payments to arrive with my regular payment. The catch there is that the regular payment is deducted from my checking account by the Student Loan Servicing on the 14th of each month. Thus, I am very frustrated and feel hopeless about it. They have such a racket going. I am thinking on how I can still pay this debt off first . Any ideas?

I am a state court judge handling civil, criminal, probate, etc. cases. My wife is a school teacher and she started back to work this past fall (after spending a few years at home with my young son). Now, I am able to max my 401k. I would prefer to pay the debt off first (and defer less), but since she started working again the Taxman took notice so I'd rather defer it than pay Uncle Sam. Plus, our debt load is only about 20% so I prefer to defer!

I am excited about this forum. I don't chat online much but I'm very interested in becoming debt-free. My reasoning is I don't want to owe anyone! Simple, I know but I watched my "old school" parents pay cash for nearly everything. I was debt-free until I went to law school at the age of 24. Most professionals end up with at least some student loan debt and many end up with more than me. Also, I could not have made my present income without my degree so there are always trade offs, I guess.

I hope you have a great weekend and thanks again for the advise.

Kevin.

Kevin,

Don't worry about the age thing, I was just kidding you. I'm 26 now and every year I get another year older. It will be nice when I am not the youngest one around though, and get a few more years under my belt.

About the stundent loan. Don't worry. There is no need to feel hopeless, you can feel frustrated, for a little bit, but never hopeless, never. I had to deal with the same thing you are about the way they like their payments. I've got a few ideas for you:

transfer the debt. You mentioned that you have a house, if you have enough equity, you could use it to pay off the student loan, you may get a better interest rate, and more than likely will get to work with people who will treat you better and be more flexible on the repayment terms. You can use any of the normal ways, refi, heloc, 2nd mortgage whatever, talk to your banker.

I take it that the biggest probelm that you are having is that you get paid every two weeks, but the student loan is taken out on the 14th. Easy fix. Instead of having the direct pay out of your paycheck, have it paid out of your checking account. You already have the minimum coming out of there, so just call them and say that you want the mimimum plus $50 or whatever taken out on the 14th. Or you can open a seperate account, checking savings, money market, whatever, have the money come out of your paychecks, go into that account, and then pay the bill on the 14th automatically out of that account, and leave a few hundred cushion for the parts of the year when your paycheck lands right after the 14th.

Now about the being debt free. WHEN you get debt free, if that is what you want, that will be great. But I wouldn't lose any sleep over it. The debt that you say you have: home mortgage and student loans, is good debt in my mind. It is not the same kind of debt as financing a big screen T.V. at Sears with their credit card at 26%. Debt is a tool. Debt by itself is not good or evil. Just like the gun debate {I don't know where you stand on guns, so if this offends you I don't mean it that way} you put a loaded gun on a table, and as long as no-one picks it up it is harmless. If you put a American Express card with a $20,000 limit on the table, it too is harmless until someone picks it up. Then it is up to that person as to whether the tool is used for good or evil. The way that you have been using debt, as you describe in your posts is good, and there is no need to feel bad about having it. Pay it off, yes, but do not allow debt or money to frustrate you for extended periods or to make you feel hopeless. Life is too short for that.


Joe

Joe,

Thanks for the advise. I'm against paying the loan off by Home Equity (although it is sound advise). I paid off my wife's car and a sunroom we had built two years ago adding 20k to our mortgage. It was a necessity at the time because she was not working and thus, I was our only source of income. So, I want that time to be the only "added principal" on our mortgage. We have enough equity in our home (to pay off my student loan), but the way I look at it, if something ever happened to my job/income then I would rather Uncle Sam eat it than my house . I'll keep working at it and find a way to pay it off early. My only other debt is about 13k that I owe to one of the national credit cards. Basically, I paid off a home equity line with it because they were offering 3.99 fixed for the life of the balance. My home equity rate was about 5.5 percent so it was a better deal even though I can't deduct the interest now. The balance is for remodeling of our house over the past 2 years, my wifes masters classes and yes a 56" DLP television . Oh well, everyone has to live a bit. I have them take it out of my checking account each month so that I can't be penalized and lose the special rate. So, those are my 3 debts and my motivation to pay them off over the next 6 years. Then, at the ripe old age of 44, I can not worry about work. Fortunately, I'm saving about 18 % of my gross for retirement (retirement and 401k combined). So, I think I'm following Mr. Bach's model, pretty well. What about you?

Joe,

I meant to mention to you earlier that you should read Harry S. Dent's books; especially, The Roaring 2000's and most recent, The Next Great Bubble Boom. From your earlier posts, I noticed that you seem to be into real estate and he does a great deal of specific yearly, real estate forecasting. Although he is an Economist (I had a minor in Economics ) and the data can be somewhat boring, he writes with good relevancy and gives some great tips about when and when not to invest in the market, real estate, etc.

Take Care, Kevin.

Hi everyone,

I'm new to this forum, I live in Canada and am 25, and have just finished the CA designation. Thus far, we have paid off our student loans (about $30k combined, 5 yrs ago/3yrs ago convocated), bought a home (10% downpayment) and a car a little over a year ago, and are getting married in July.

We've been making extra lump payments on our home (already bi-weekly) when we can, about an extra $3500 over the last year, and have started putting away $150 per paycheck into an RRSP (I believe it is equivalent to the US IRA), which I plan to increase by $50 very soon, however we both have lots of unused RRSP room which we need to use, both for retirement planning purposes and the wonderful tax deduction.

Anyone else find themselves realizing that they are feel unprepared to take the next step? My easy solutions right now are to increase the RRSP contributions and see if I can increase the automatic withdrawal for the mortgage payments, but then what??? Start investing?? One thing I am realizing that smaller changes are much easier to make then larger ones, so what would be your suggestion for the next small change?

Hi! My name is Barbara and I live in the San Diego county area. At this time there are no Meetup Groups here, so I am depending on help from others. I have recently bought Start Late Finish Rich, and since I truly am a babyboomer I really have a late start!! I also have the Smart Women Finish Rich(1st edition) somewhere in the house.
I am attempting to save at least $7.00 a day as the book recommends but does anyone have any suggestions as to what to so with it besides keeping it in a coffeecan? I am all ears or eyes as the case may be.
Thank you for your time and assistance.

Just finished reading Auto Millionaire. Set up my ING Rainy Day fund to automatically draw from my checking account each week until I get to three months expenses. After I get that done then I'll split my "Pay Yourself First" funds between paying off my debts and open a Roth IRA to set my foundation.

Also as discussed earlier this is my plan for a secure future. I'm also learning about RE to begin my plan for a rich and wealthy future as talked about in RDPD.

Thanks for all the great thoughts and ideas shared by everyone. At 31 I'm glad I'm learning all this now and not 20 years from now.

How nice to see this David Bach Group! However - there should be many more people! It may be very hard to find and it is not that easy to get access..... took me a while

Can you imagine, up to now I haven't read a book from David yet. I will though!
But I met him once and heard some of his ideas and it took a minute to be sold on what he is talking and writing about. Much more to learn for me though!

I am a babyboomer too and lived kind of "careless", spent my money as I got it - just stupid.
So - once convinced - I started spending less - keeping records of my spending - thinking before I buy... Thought, this is woth a try! All in the spirit of the Latte Factor. Nobody ever got me that motivated. David Bach in person is just a great guy and he gets people motivated!

It took me a couple of months and I have saved more than 10,000 USD.
Can you imagine?! Unbelievable I thought and I will not stop using this strategy, now that I know it works!

But - being new in the states - I have no clue what to do next! We have a house to pay and a small amount on our credit card - will be paid next month. Cars are paid off - but eventually we might need a new car...
Then the 401K and one life insurance in another country - that is it. Not enough! I will save money and don't know where to go with it and what to do and how to learn the basics.

Any advise from you guys?
Thanks!
And I hope, this group will grow!

Not much going on in here.....