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re: Paying off debt strategy
Posted on 9/29/26 at 11:18 am to geauxtigers
Posted on 9/29/26 at 11:18 am to geauxtigers
Agreed, don't buy unnecessary depreciating assets you can't afford. Especially if you're early in accumulation phase it can really set you back. However, if you are buying out of necessity or even enjoyment within reason, there's no reason to avoid low interest debt.
For instance, I am fully invested. I WANT a Tesla. Why sell shares and realize 15% LTCG when I can borrow at 1.5% dealer incentive rate? Sure, I could wait and save cash but that would just be deferring further investment in appreciating assets. Instead, I'll benefit from the interest rate arbitrage.
For instance, I am fully invested. I WANT a Tesla. Why sell shares and realize 15% LTCG when I can borrow at 1.5% dealer incentive rate? Sure, I could wait and save cash but that would just be deferring further investment in appreciating assets. Instead, I'll benefit from the interest rate arbitrage.
Posted on 9/29/26 at 11:20 am to REB BEER
This episode?
If had seen his question on X, I would have been one of those rare replies that regret paying off mortgage. I aggressively paid down my first home at 5.5%. If I'd have invested it instead I'd be much better off. It easily cost me 6 figures in missed growth. Opportunity cost is a bitch.
If had seen his question on X, I would have been one of those rare replies that regret paying off mortgage. I aggressively paid down my first home at 5.5%. If I'd have invested it instead I'd be much better off. It easily cost me 6 figures in missed growth. Opportunity cost is a bitch.
This post was edited on 9/29/26 at 11:27 am
Posted on 9/29/26 at 12:01 pm to AUVet21
quote:
Paying off the truck will really only save $100 or so in interest since it so close to being paid off.
Putting it on the wife’s car will save around $1000 in interest over the life of the loan and make a good dent in overall principal.
If that is the case, I would pay off your truck. Then apply the money that was going to your car note and added to your wife's car note.
Posted on 9/29/26 at 12:19 pm to TorchtheFlyingTiger
Why sell shares and realize . never sell 
i have zero problem borrowing money @ a good rate . when I can borrow at 1.5% dealer incentive rate? 
i have zero problem borrowing money @ a good rate . when I can borrow at 1.5% dealer incentive rate? This post was edited on 9/29/26 at 12:21 pm
Posted on 9/29/26 at 12:31 pm to notsince98
quote:
Tons of studies coming out these days proving this to be true. Hell, even a bigtime finance guy on youtube who preached nothing but leveraging debt to build wealth has come around and is now preaching the benefits of paying off debt.
This is fake as hell unless he only means like car notes and credit cards
I would rather pay a mortgage and not know vs having to cut a check for insurance that isn’t good for anything and property tax for schools full of kids that belong in Angola
Posted on 9/29/26 at 12:38 pm to AUVet21
Highest interest rate first. /thread
Posted on 9/29/26 at 12:46 pm to Suntiger
quote:
Yep, snowball it. Pay off the truck and use any leftover to put towards car. Then take whatever you were paying on the truck and pay it towards the car. Once the car is paid off, keep making that payment towards a HYSA to pay as much as you can when you have to buy a new car.
This thread definitely started on the OT and not the MTB.
Posted on 9/29/26 at 12:55 pm to lynxcat
It was started here. And I don’t disagree with paying off the highest debt first. It’s probably what I would do.
But it sounds like it wouldn’t pay it all off and if you’re coming here to ask this question, you are probably better off snowballing.
But it sounds like it wouldn’t pay it all off and if you’re coming here to ask this question, you are probably better off snowballing.
Posted on 9/29/26 at 1:10 pm to Bard
quote:
Pay off the truck then roll those payments over to the car to pay it off faster. Having a vehicle paid off is a good feeling and relieves a lot of stress.
Winner winner.
Take this guys advice right now
Posted on 9/29/26 at 1:22 pm to Suntiger
quote:Eh, no thanks.
Yep, snowball it.
quote:Ahhh, OK, never mind.
Yep, snowball it. Pay off the truck and use any leftover to put towards car. Then take whatever you were paying on the truck and pay it towards the car. Once the car is paid off, keep making that payment towards a HYSA to pay as much as you can when you have to buy a new car.
Your terminology has a double entendre.
Posted on 9/30/26 at 2:25 pm to Popths
Not necessarily. It is still a personal decision that affects people differently. I still have a home mortgage, but put my extra money into investments that have earned a minimum of 4 times my mortgage interest.
Posted on 9/30/26 at 2:31 pm to soccerfüt
Harvard Business did a big study on debt payoff methods. Of course, snowball method comes out on top because behavior issues (spending problems) require behavior changing methods.
Harvard Business Study
Harvard Business Study
Posted on 9/30/26 at 3:54 pm to KTiger85
I went a step further and borrowed against my investment portfolio to fund my current home down payment.
At first I was paying down the loan balance and interest. Past couple years, I've just been letting interest accrue an not making any payments. Seeing those investments grow much faster than the loan balance hits different. (Plus heirs wont have to pay tax on all these gains) The first home we ever bought, we paid off early. It didnt feel this good.
At first I was paying down the loan balance and interest. Past couple years, I've just been letting interest accrue an not making any payments. Seeing those investments grow much faster than the loan balance hits different. (Plus heirs wont have to pay tax on all these gains) The first home we ever bought, we paid off early. It didnt feel this good.
Posted on 10/1/26 at 7:37 am to KTiger85
Being debt free to me is more than about the math. It’s the free form bondage feeling. Everyone is different. I’m at a point where that’s more important than trying to pinch pennies. I’m on cruise control now.
Posted on 10/1/26 at 7:53 am to KCRoyalBlue
quote:
Pay off your smallest debt. Roll that payment to the next smallest debt. Rinse and repeat.
One thing to consider before committing to the snowball. There is another method to it. It is called the debt avalanche where list all your debts and pay the ones with the highest interest rates first. That way if you got a Crapital One credit card with $5,000 dollar balance at a 24% interest rate, you might pay that off sooner than Citi Card that might be at 2,000 with promotional 0% rate if you just opened it.
I found a spreadsheet online that I downloaded that you can input all this information and it spits out the cost of the snowball and avalanche methods. You can even add additional payments and see into the future of how long it will take to pay off.
Posted on 10/1/26 at 9:40 am to Tarps99
As the harvard study showed, the avalanche method has a high failure rate. Visible progress is just too slow to keep people motivated.
Posted on 10/1/26 at 10:36 am to AUVet21
If your truck isn’t worth a ton of money, pay it off and drop full insurance coverage for liability only. If you aren’t in a financial position to do that, or don’t want to, pay off the highest interest rate.
Posted on 10/2/26 at 7:41 am to notsince98
quote:
As the harvard study showed, the avalanche method has a high failure rate. Visible progress is just too slow to keep people motivated.
I can understand that when people need to be motivated. But when you are a numbers person, you can see the difference. Now why people don’t see the interest piling up when they are racking the debt up is beyond me.
Posted on 10/2/26 at 7:44 am to Tarps99
quote:
I can understand that when people need to be motivated. But when you are a numbers person, you can see the difference. Now why people don’t see the interest piling up when they are racking the debt up is beyond me.
Think about how dumb the average person is…. And then remember half are dumber than that
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