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May 08, 2017


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This is a good advice...for most folks for sure. Although I approach it slightly differently. In spite of having cash, I took auto loan @1.94% for 5 years. The cash is invested in index funds at Vangaurd and growing at [email protected]%+ so far. For mortgage, I have 30 years fixed at 3.8%. Although I can pay it off in 15 or less years, I divert the extra payment (automated) to index funds as well. I don't have credit card debt because I pay in full each month. By using cards, I average about $1000+ per year in cash back. I don't have medical debt and have been saving full in HSA without using any of it. No student loan. 1st kid to go to college in 3 years. Will see if she needs support. I also have access to home equity at 4.5% currently and haven't used it yet. But plan to use it sparingly, mainly for any home repairs or improvements. Again, I will use the amount out of home equity only when equivalent cash is already accumulated, similar to what I did for auto loan. On mortgage front, I believe if we continue live in the current home, then the fixed payment will act as inflation hedge. So far, I am pretty disciplined fiscally, inspired by Mr. FMF. Have been reading his blogs for last several years. There was also an older gentleman from San Jose who had influenced my thinking a lot. I don't see him responding too often now. But please comment if I am too reckless. BTW, I focus on career improvement and have been growing my salary income at 6% compound year over year. I don't have much bandwidth left for any other endeavor such as real estate investments. Considering REITs in my IRA/401K brokerage.

6% gains are awesome!!!

Agreed! I know the mortgage part is sticky in many FIRE circles, but in our situation it's a better idea to focus on paying off the mortgage instead of focusing only on investments. The financial freedom of not having a mortgage is essential to retire worry-free.

Debt sucks and it can creep up on you fast. we recently purchased a home and budgeting is in full force. It's sometimes hard to say no to certain purchases or things but we try to keep in the end goal in mind. Great share!

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