Comments on: A Life Without Debt: Building Wealth http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/ Bridging the gap between saving money and investing Fri, 10 Feb 2012 02:42:04 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Hector Avellaneda http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-792167 Hector Avellaneda Thu, 07 Oct 2010 02:24:25 +0000 http://www.savingadvice.com/blog/?p=4275#comment-792167 Saddie - I think your story is great testimonial of what can happen when people live below their means and practice delayed gratification. I graduated from college about 2 years ago and while I was able to land a nice job with a cushy salary, school left me 45K in the whole. Furthermore, the economy has left me with many job uncertainties. I decided that work alone was not going to let pay off student debt as fast as I wanted to, so I decided to work for myself and started a business. I've met with a lot of entrepreneurs in my industry and seen the income potential that is possible if you're, your own boss and are willing to work hard. I've even met 7 figure/yr earners. What do you think about business as a means to build wealth? Have you and your spouse ever thought about starting a business? Why? Why not? I am interested in your perspective! I look forward to your response. Thanks! Saddie –

I think your story is great testimonial of what can happen when people live below their means and practice delayed gratification. I graduated from college about 2 years ago and while I was able to land a nice job with a cushy salary, school left me 45K in the whole. Furthermore, the economy has left me with many job uncertainties. I decided that work alone was not going to let pay off student debt as fast as I wanted to, so I decided to work for myself and started a business. I’ve met with a lot of entrepreneurs in my industry and seen the income potential that is possible if you’re, your own boss and are willing to work hard. I’ve even met 7 figure/yr earners.

What do you think about business as a means to build wealth? Have you and your spouse ever thought about starting a business? Why? Why not? I am interested in your perspective!

I look forward to your response. Thanks!

]]> By: CPA http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-572008 CPA Thu, 09 Apr 2009 04:55:35 +0000 http://www.savingadvice.com/blog/?p=4275#comment-572008 Ken, The many fees you will pay for your house include property taxes, insurance, maintenance costs, repair costs, and interest expense (which your tax deduction only partially offsets). Also factor in any closing costs you paid as well as a realtor's commission you will pay / have paid. Furthermore, houses appreciate on average over the long term at about inflation or maybe 1-2% above inflation. It is possible that your house is a good investment, but it's also much more likely that you are missing a chance at earning good money in the stock market or another investment long term because your cash flow is tied up in your house (which you may or may not be making money on - even at average appreciation.) Also, that house appreciation mentioned above is not guaranteed by any means, and if you for any reason go into foreclosure you lose your entire investment (in other words, you are risking a lot.) Tax benefits and low rates do not necessarily equate to a good investment. Those are just two of many factors to consider when determining if you are making money on a house. Ken,

The many fees you will pay for your house include property taxes, insurance, maintenance costs, repair costs, and interest expense (which your tax deduction only partially offsets). Also factor in any closing costs you paid as well as a realtor’s commission you will pay / have paid. Furthermore, houses appreciate on average over the long term at about inflation or maybe 1-2% above inflation. It is possible that your house is a good investment, but it’s also much more likely that you are missing a chance at earning good money in the stock market or another investment long term because your cash flow is tied up in your house (which you may or may not be making money on – even at average appreciation.)

Also, that house appreciation mentioned above is not guaranteed by any means, and if you for any reason go into foreclosure you lose your entire investment (in other words, you are risking a lot.)

Tax benefits and low rates do not necessarily equate to a good investment. Those are just two of many factors to consider when determining if you are making money on a house.

]]> By: Sadie http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-561216 Sadie Wed, 25 Mar 2009 16:34:09 +0000 http://www.savingadvice.com/blog/?p=4275#comment-561216 @ jr. EFT/ETF'(some people abbreviate one way, some another) are Exchange Traded Funds. A good explanation of them and how they differ from mutual funds can be found here: http://www.fool.com/etf/etf02.htm @ jr. EFT/ETF’(some people abbreviate one way, some another) are Exchange Traded Funds. A good explanation of them and how they differ from mutual funds can be found here:

http://www.fool.com/etf/etf02.htm

]]> By: jr http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-561196 jr Wed, 25 Mar 2009 15:25:39 +0000 http://www.savingadvice.com/blog/?p=4275#comment-561196 I asked: What are EFT's? I asked: What are EFT’s?

]]> By: Diane http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-560837 Diane Wed, 25 Mar 2009 03:47:15 +0000 http://www.savingadvice.com/blog/?p=4275#comment-560837 Good for you! It goes to show what is possible when 2 people work together with the same ideals. I wish I'd been that wise when I was younger! Though I'm finally debt-free, it has put me years behind in retirement funding. I'm trying to teach my sons a better way of doing things. I hope some of the younger readers out there are taking note! Good for you! It goes to show what is possible when 2 people work together with the same ideals.

I wish I’d been that wise when I was younger! Though I’m finally debt-free, it has put me years behind in retirement funding.

I’m trying to teach my sons a better way of doing things. I hope some of the younger readers out there are taking note!

]]> By: Kate http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-560415 Kate Tue, 24 Mar 2009 15:38:31 +0000 http://www.savingadvice.com/blog/?p=4275#comment-560415 Shane, I'll second that! I am truly inspired by your savings success. Being in debt, especially credit card debt, is a hard habit to break, but it's something that all of us can achieve if we are willing to make small sacrifices throughout our lives. Whether we are choosing a less glamorous car or a more modest home, we can use "the power of small" to make a huge difference in our bank accounts! Shane, I’ll second that! I am truly inspired by your savings success. Being in debt, especially credit card debt, is a hard habit to break, but it’s something that all of us can achieve if we are willing to make small sacrifices throughout our lives. Whether we are choosing a less glamorous car or a more modest home, we can use “the power of small” to make a huge difference in our bank accounts!

]]> By: Shane http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-560383 Shane Tue, 24 Mar 2009 14:33:30 +0000 http://www.savingadvice.com/blog/?p=4275#comment-560383 A million net worth by mid-30s !! That's inspiring !! Well Done ! :-) A million net worth by mid-30s !! That’s inspiring !!

Well Done ! :-)

]]> By: jr http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-560381 jr Tue, 24 Mar 2009 14:28:10 +0000 http://www.savingadvice.com/blog/?p=4275#comment-560381 What are EFT's? What are EFT’s?

]]> By: Ken http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-560340 Ken Tue, 24 Mar 2009 12:04:45 +0000 http://www.savingadvice.com/blog/?p=4275#comment-560340 I like to carry a large mortgage for the tax benefits and with rates so low .. I believe over time my investments will return more money instead of selling them to pay off my mortgage. I like to carry a large mortgage for the tax benefits and with rates so low .. I believe over time my investments will return more money instead of selling them to pay off my mortgage.

]]> By: the weakonomist http://www.pfadvice.com/2009/03/24/a-life-without-debt-building-wealth/comment-page-1/#comment-560336 the weakonomist Tue, 24 Mar 2009 11:03:30 +0000 http://www.savingadvice.com/blog/?p=4275#comment-560336 Debt is a shackle that keeps too many people from enjoying life. Sure that car is nice and your furniture looks good, but you can't afford for your kid to play soccer and haven't been on a good vacation in years because you have too many payments. I went to business school so I know all about how useful debt can be, but I'm still terrified of it. Debt is a shackle that keeps too many people from enjoying life. Sure that car is nice and your furniture looks good, but you can’t afford for your kid to play soccer and haven’t been on a good vacation in years because you have too many payments.

I went to business school so I know all about how useful debt can be, but I’m still terrified of it.

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