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re: Which debt to tackle first?
Posted on 8/1/16 at 12:25 pm to LSUFanHouston
Posted on 8/1/16 at 12:25 pm to LSUFanHouston
Do you not know what the word "deferred" means? I would love trying to sell things to you.
2
Posted on 8/1/16 at 1:11 pm to TheHiddenFlask
Why were some posts deleted in this thread?
Posted on 8/1/16 at 1:18 pm to TheHiddenFlask
quote:
Do you not know what the word "deferred" means?
Umm yeah, I'm a CPA, I understand how the deferral feature of 401K plans work.
What point are you trying to make.
Note, I'm not saying I agree about suspending contributions... I'm just trying to provide accurate unbiased information to the OP.
Posted on 8/1/16 at 1:20 pm to LSUFanHouston
quote:
It's ok if you don't agree with Ramsey (many don't) but at least get right what he says. The idea is this: temporary turning off 401K contributions allows you to plow that money into paying off debt. Once the debt is paid off, you can turn back on contributions and even contribute more to "catch up". Also I don't think it's correct to look at it as a 25 percent return. It's more of a 25 percent discount to invest. Whereas, that 10 percent interest rate keeps going.
I'm well well aware of what Ramsey teaches, that is why I had 2 different paragraphs to break up 2 thoughts. The first was Ramsey says to pay off debts before investing.
You can look at the 401k pre tax all you want, but either way you have either 25% more to invest or 10% less due to interest. I'm not even advocating that anyway I'd agree more with Ramsey in paying off your debt after your company match. I was just disputing the fact that the 6% return of a 401k was less than the 10% interest, which is false because of the 25% tax deferral.
If done properly, the "tax Deferral" should never actually be paid on the principle as you should die with that money. It should grow into enough that you live off of the interest.
Posted on 8/1/16 at 1:28 pm to TheHiddenFlask
quote:
I swear if one more person asserts that debt on a depreciating asset is different than debt on an airplane predicting asset, I'm going to start an intellectual battle to send them back into the caves the my slithered out of.
Woah woah woah, I was simply making the point that paying a note on the trailer is really no different than renting.
Posted on 8/1/16 at 1:46 pm to Golfer
I just notice the autocorrect in that and I'm laughing to hard to be mad any more.
Posted on 8/1/16 at 1:48 pm to LSUFanHouston
Sorry. I replied to the wrong person. I meant to reply to the dude who just said that the tax deferral should be treated as a profit because you should die before you touch the principle in your retirement accounts. It's hard to tell if he's serious.
Posted on 8/1/16 at 2:58 pm to Athletix
Yes at that income you can handle your debt. But you have much less discretionary money to go towards vacations, purchases (sure not much of the furniture in your trailer will go into your house, and what does will not fill the house), and what about the unexpected? Last few years the wife and I have had medical issues pop up, and even with great insurance, we have had to come out of pocket about 6-8k each f the past couple of years. (I ruptured a bicep tendon, and wife had an elegiac reaction to a medicine, and both f us went the PT/OT).
and u can't count her income as I child can come in 2 years like u plan on happen next week.
Right now the only debt we have is our house and my student loan. We paid off both vehicles early. And only have $850 left on my student loan.
Havng discretionary money and saving took a lot of the pressure off when the unexpected hit. The last thing you want is to have to sell the truck when that emergency hits and you take pennies on the dollar for it.
You are 25, be patient, you have plenty of time to get the luxury items. Getting a cheaper truck means you could put the monthly truck note into your 401k or Roth....
and u can't count her income as I child can come in 2 years like u plan on happen next week.
Right now the only debt we have is our house and my student loan. We paid off both vehicles early. And only have $850 left on my student loan.
Havng discretionary money and saving took a lot of the pressure off when the unexpected hit. The last thing you want is to have to sell the truck when that emergency hits and you take pennies on the dollar for it.
You are 25, be patient, you have plenty of time to get the luxury items. Getting a cheaper truck means you could put the monthly truck note into your 401k or Roth....
Posted on 8/1/16 at 3:03 pm to Athletix
I did mine by paying off the one with lowest ratio of principal/payment. That will optimize your cash flow the quickest, and pay off the loans that are eating the most into your monthly budget.
Posted on 8/1/16 at 3:53 pm to TheHiddenFlask
quote:
airplane predicting asset
I'm definitely interested in learning more.
Please shoot me a PM when you have a second.
Posted on 8/1/16 at 9:16 pm to SLafourche07
It's part of my predictive text hedge fund.
Posted on 8/2/16 at 8:45 am to TheHiddenFlask
quote:
I was just disputing the fact that the 6% return of a 401k was less than the 10% interest, which is false
This is what I was pointing out to flask, but he didn't get it. It's ok.
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