Comments on: Confusion with Optimal Personal Finance Strategies

By: Paul E. Alberga

Paul E. Alberga — Tue, 09 Sep 2008 05:38:30 +0000

Daniel and I share the same confusion on this matter. Throughout my young life I was always taught to avoid risky debt at all costs, and with the current fiscal situation in this country, I am frankly embarrassed.

During the housing boom a lot of wealth was created in the U.S., but now that wealth has been transfered three to four times over. If we also consider the U.S. national debt of 9.76 Trillion (That’s a “T” PEOPLE!) We are entering a serious tipping point for the history of our world dominance.

I am so fortunate to have so little debt, my current truck loan of $7500 at 4.25% fixed. I owe no monetary debts for school, credit cards, or housing, and have been able to put away 20% of my salary into retirement vehicles over the past few years without having to pay down interest and maintenance costs for real estate. Certainly I cannot call myself a home owner, but with the sky high prices in California I think I’ll ride this one out and still come out on top.

So Daniel, all we have to do is convince people that a FICO score above 700 is ultra rare, but ULTRA SEXY!

By: Daniel Hoang

Daniel Hoang — Fri, 05 Sep 2008 02:53:06 +0000

@ Jessica – Thanks Jessica. The problem with having such a great social life, and not conservative with debt is that eventually, your debt will be so great that all your money goes to debt, rather than the pleasures of life. Debt free and social fun are not mutually exclusive. However, your point is well taken. I’m going out for a nice dinner now.

@ Julie – I actually am paying off a car loan and some student loans right now, as well as saving for a huge down payment for my first home. Like my comments to Jessica above, being debt free doesn’t mean you can’t have fun.

By: Julie

Julie — Thu, 04 Sep 2008 18:35:30 +0000

Hi, Daniel: The two statements you put in large text are key, I think. And it’s good to remember there is more than one kind of wealth. For instance, if we have freed ourselves from the mental stresses associated with acquiring and then clearing our debt (over and over again) then we’re able to enjoy doing what we truly want to do. We do work we love (fostering financial gain in the process), we stop wanting all the new things “the Joneses” just got, and we put more time into our social lives. All’s good. So now I’m back to your two key statements. Thanks for the solid reminder!

By: Jessica

Jessica — Tue, 05 Aug 2008 22:10:55 +0000

I have used the snowball method and it worked for me, but I know that it doesn’t for all. I think that have some debt is okay, as long as it isn’t out of control. For example being in college and spending ‘future income’ in terms of credit cards and student loans. One could work two jobs on top or school or work the debt down, but at the cost of grades and overall well being. What’s the point in having no debt and being wealthy if you have no social life. Its about finding balance, if possible.