Being debtless? Not possible…

Today I was going to write a post about the beginning process for filing insurance claims in the setting of a total loss…i.e. my house and an entire community worth of homes going poof. Unfortunately and fortunately I have been too busy to get to that post.

Between wonderful friends inviting us over for dinners, Halloween, call, talking to property adjusters, talking to lawyers, architects, the county and city, and organizing receipts to ensure I am paid back from my insurance, I have been busy.

Still I plan on getting to a bunch of posts soon. For instance, why am I talking to adjusters (plural) and lawyers? Short answer, the insurance company has not been as generous as I initially had thought they would be. The more hoops they make me jump through, the more apt I am to seeking further advice.

Anyway, we will save those posts for another day. Today I publish something I probably wrote 2 months ago. It is about being debt free and how preposterous that once sounded to me.

Being debtless? A joke!

When I was young, I grew up in a Muslim household. Not Muslim in that we ever went to mosque (maybe once in my childhood) or that I was raised on strong tenants of religion. More like a Muslim who left a country because it became too Muslim and less Western. Yes I am talking about Iran in the 1980s. Still, I was Muslim and so I took it upon myself to learn something’s about such said religion. If I was going to be made fun of as a kid growing up in the South, then I might as well know why I was being made fun of.

I digress….being debtless

So one of the interesting things I learned was that a person can not make there once in a lifetime obligatory trip to Mecca (also known as the Hajj) if they have debt. Now as a kid I thought this was crazy, but the rules clearly state that a person should fulfill all of their debts and be able to pay their way to Mecca before trying to go.

Seems simple enough. Makes sense that you should be clean of debt and your duty to others before fulfilling a duty to God and yourself. But still, I thought it was crazy. This is impossible. There is no way to be debt free. Maybe in other countries or back in 600 AD, but not in modern America. I knew this idea was insane because I grew up in a house that treated debt as a way if life.

Why is debt inevitable?

It was not that my parents had a lot of debt, they just never seemed to be discuss being debt free. At minimum we could expect to have a 30-year mortgage until, well for 30 years. Right? And there are credit cards. Oh and car loans. Lots and lots of way to borrow money to buy things and stay in debt. Ah what a pipe dream to be debtless.

So this is how I lived most of my life thus far. To be exact, 34 years of my life. Actually probably more like 35 years of my life, and I am just 37. Even when I started getting my financial house in order I did not plan on being debt free. Just debt free with a 30 year mortgage.

How naive. Funny how a child felt that debt was inevitable. What a terrible way to grow up and think. Society put it in my young head that I would never be debt free. Ever.

I suspect I am not the only kid growing up this way. Considering that 8 in 10 Americans are in debt (per this article) it is not surprising we would grow up expecting debt to be part of modern day life. Even in this article about debt, there is a quote from an “expert” that “(Americans) know they need debt, but they don’t actually want it”.

THEY NEED DEBT! We only need debt because we buy things we can’t afford because society has convinced us to buy stuff.

Wisen up young buck!

Alas, I have wised up. While now I am not particularly interested in going on a pilgrimage to Mecca and not particularly religious, I now know I can be debt free. It is possible. It just takes planning, saving, and not making stupid money mistakes. Once I am debt free, then I am free. I am free to pursue my own interests and if that includes going to Mecca, well then it would be my prerogative.

So wisen up America. You too can be debt free! Even if you grew up thinking debt was an inevitable part of life, Maybe you were wiser, knowing to never take on too much debt.

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DadsDollarsDebts

I am a Dad and Doctor trying to find financial freedom by owning my dollars and debts. Helping dads with their finances so they can focus on the family.

15 thoughts on “Being debtless? Not possible…

  • November 17, 2017 at 4:20 pm
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    When I went to college I didn’t have any debt, instead I had 2 jobs. I worked 5 years before med school so I had enough to pay for that EXCEPT inflation took me out in the early 80’s. So I went in the Navy and incurred a different kind of debt, payback, but that worked out to my advantage as well. I learned a LOT of stuff in the Navy. I bought one car with debt and decided never again. Instead I put away $234 into a muni bond fund every week (back when muni bond funds actually paid something). When it came time to buy another car, between the residual value on my car and what was in the bond fund, I paid cash. I basically became my own leasing company. It turns out the best time to sell the car is around 60K miles since that car qualifies for a loan. You get over 75K the loan equity in the car goes away.

    I was reading over on ERN’s site and maybe paying a mortgage is like my leasing company deal. I’m basically paying myself rent. It’s cash flow positive if you invest the differential between what you pay in mortgage and what you would pay in rent.

    My 19yo kid was telling me today about how she washed a guy’s car window for a dollar. She was washing her own window and he said “Hey wash mine”. She wanted a 99 cent coffee so she said OK I’ll wash it for a dollar! She walked away with her coffee plus a penny. She’s been like that her whole life, makes me smile.

    Reply
    • November 17, 2017 at 11:06 pm
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      Smart kid. Resourceful.ERNs site is pretty good. He has a lot of number crunching. As for mortgage’s, I know it may make some math and tax planning sense but I would much rather not have one.

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      • November 18, 2017 at 5:34 pm
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        I’m plus minus on a mortgage. The way I describe investing the delta between cost of rent and a mortgage cost, the mortgage becomes leverage which is IMHO different than debt. Putting a trip on the CC to see the heads at Easter Island is debt. Since you need a place to live, how does the Islamic faith look upon leverage? This is very interesting to me.

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        • November 18, 2017 at 8:21 pm
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          Not sure how the Islamic faith looks upon leverage…it’s an interesting question. I suspect business loans are fine, just don’t be back paid? Hmm…

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  • November 3, 2017 at 7:25 am
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    It’s a mindset I guess. If the mortgage interest deduction is capped at $500,000 mortgage next year, I will pay down $320,000 of primary mortgage debt in an instant!

    But that is so cheap here that I don’t think it’s that big of a deal.

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    • November 3, 2017 at 7:33 am
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      It is true. California home prices are high. The current situation in Santa Rosa has driven up prices further. Still I am thinking of buying a smaller place to live in for a few years and then renting it out once the new home opens.

      Reply
  • November 1, 2017 at 4:08 pm
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    Being truly debt free is complicated. I am “technically” debt free though I have lots of things that need to be paid for (whilst I still save for a larger retirement). I have no mortgage. I have a decent amount invested in stocks, bonds, funds, commodities, 429Plan, etc.. and a good chunk of saved up cash. I own a small, modest condo outright but don’t live in it (family lives in it) but technically it is mine. However, I’m on the hook for renting my own place (in an expensive part of the country that justifies our higher income). One day I can sell that condo or move into it (still a nice safe landing if ever needed). I have 2 kids in college that I am supporting. No financial struggles currently and I have the cash to make it all happen for a good amount of time into the future. Though my idea of retirement keeps my spouse and I working the two incomes. Still, I feel a bit of future-pseudo debt that hangs over me. Like, what if I lose my job, or some other unexpected high cost scenario comes along. It’s great to be debt free but I don’t think my personality will ever allow me to feel truly debt free.

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    • November 1, 2017 at 4:11 pm
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      Having a home, even one you don’t live in is important. With the recent fires I know of many renters who have been asked to leave so that families of the owner can move in (people who lost their homes due to fires). Indeed the renters in many ways are having the hardest time.

      As for the future- having no debt and a roof over your head is a big win. The rest is adjustable.

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  • November 1, 2017 at 6:04 am
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    You know, I don’t think debt is inevitable. We just tell ourselves that because Americans love instant gratification. You can work hard and pay cash to have the things you desire; it’s just not immediate. Debt panders to our me-me-me, need-need-need lizard brain.

    I love that many religions warn people of the dangers of debt. It holds us all hostage and makes life difficult and stressful.

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    • November 1, 2017 at 6:04 am
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      Also that really sucks that people teased you for your heritage. I’m so sorry you went through that.

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    • November 1, 2017 at 7:34 am
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      I guess they (religions) really had figured out somethings way back thousands of years ago. Debt is a trap for sure and part of our desire to fit in and buy things leads to that entrapment.

      As for getting picked on, it is what it is. Kids are kids, and they are often mean. If it wasn’t for being Iranian it probably would have been for being a skinny, unathletic kid. Most of us come out ahead at the end anyway.

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  • November 1, 2017 at 4:37 am
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    It’s it amazing how many unwritten rules we believe in for no good reason? So many of our struggles tie back to these unwritten rules we don’t even realize we consider rules.

    When we’re young, the path to success involves fitting in. When we’re older, the path to success is distinguishing yourself and NOT fitting in. What a world! 🙂

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    • November 1, 2017 at 7:31 am
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      What a great quote! But very true Jim. As we get older, the outcasts sometimes make the largest impact in history and humanity.

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  • November 1, 2017 at 4:03 am
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    I remember hearing someone tell me (and my fellow dinner party attendees) “All Americans are just going to live life in debt… its just how it is.”

    I was just out of college, but I knew he had to be wrong… there had to be another way. It was just before I stumbled on the personal finance world and I am so glad I did! Being in debt is an option, but it is not the only option.

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    • November 1, 2017 at 7:29 am
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      I wish I had learned it way back then. It was actually in fellowship at the ripe age of 29 when I realized one of my colleagues had no debt. He said his family always taught him it was better to live within your means and debt free. BLEW- MY – MIND!

      Reply

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