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Looking For Way to Consolidate Debt

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Looking For Way to Consolidate Debt

Old 07-26-17, 03:19 PM
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Re: Looking For Way to Consolidate Debt

I work with computers and nerds all day, but I read it basically as don't drop your 401k for 10 years if it's going to take that long to pay off all your debt, but for 10-14 months its not so bad if you're focused solely on that debt because it helps put things in perspective and might help drive you.
Old 07-26-17, 03:42 PM
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Re: Looking For Way to Consolidate Debt

Originally Posted by LurkerDan View Post
I read the sentence, and in fact the whole quote. Maybe he means what you say he does, I don't listen to the guy, and I'll admit that his wording is a little confusing. But I work with language and the meaning of words every day, it is my job, and there is no other way to interpret "I would not suggest you lose your match". It is separate from the rest of the sentence because the rest applies to all people with a 401k, including those who have no match. For me, who has no match, he is saying "don't contribute to the 401k for a short period of time while you pound debt." But what does "I would not suggest you lose your match" mean in the context of the quote, if it doesn't mean "contribute to the match amount, but other than that don't contribute to the 401k for a short period of time while you pound debt." If he is saying here that you should suspend even the matching amount, then what does it mean to say "I would not suggest you lose your match"? Are you honestly saying that means "I would not suggest you lose your match but I'm suggesting you lose your match"?

Again, I am not going by what he says on his radio show or anywhere else. So I cannot speculate on what he might have intended with this statement, just going by what it says. And while it is a little convoluted on the subject, it seems to say not to lose your match, but do all the other stuff. But maybe that is not what he meant.
Just remember, you can't have too much in your 401(k).
Old 07-26-17, 04:05 PM
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Re: Looking For Way to Consolidate Debt

Originally Posted by nemein View Post
It's been awhile since I've gone through Dave's course but I don't recall the stopping the 401K thing. As mentioned especially when there is an employer match it doesn't make sense to stop it.

Also speaking of 401Ks taking a loan against that is one of the worst things you can do IMHO. Not only are you losing out on the compounding interest effect, but if you leave your job for any reason you are going to have to pay that back.
Payback depends on your investment company and your company's policy. I left my company and kept making payments, drawn automatically from my checking once a month. Checked that I could do this long before I left.

IMO it's better to lose out on 5-10% investment income vs keep paying 24% interest or whatever.

I whacked most of our debt with a 401k loan earlier this year. The trick is not putting money on the credit cards again. There's a risk you just end up in double the debt. There's also risk you end up unemployed and it turns into a 401k withdrawal (with a big tax hit). So there's some risk associated with doing it.
Old 07-26-17, 07:21 PM
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Re: Looking For Way to Consolidate Debt

Originally Posted by LurkerDan View Post
I read the sentence, and in fact the whole quote. Maybe he means what you say he does, I don't listen to the guy, and I'll admit that his wording is a little confusing.


Originally Posted by LurkerDan View Post
there is no other way to interpret "I would not suggest you lose your match". It is separate from the rest of the sentence
There is another way if you weren't ignoring the second half of a sentence.

"I would not suggest you lose your match and not put money in your 401(k) for 10 years."

It's exactly like nemein bolded. You can't break it up because if you don't put money in your 401k then there is no match anyway. As for the wording, it's probably a transcript from an on-air question.

This should clarify it definitively. This 3 min. audio clip addresses the 401k & match specifically and why he says to stop ALL investing temporarily:

From the horses mouth.
Old 07-28-17, 05:55 PM
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Re: Looking For Way to Consolidate Debt

Lurker Dan is to Dave Ramsey as Abob Teff is to Monty Hall.

Except for the fact that I am right and Lurker Dan is wrong.
Old 07-28-17, 08:27 PM
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Re: Looking For Way to Consolidate Debt

Old 01-31-20, 01:18 PM
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Re: Looking For Way to Consolidate Debt

I will update this and say that I had it under control with Dave Ramsey until some unexpected expenses with a water unit breaking, the AC unit breaking later, and then some pet care costs along with about a week of lost wages due to Hurricane Dorian. I have spoken with Navicore who was recommended by one of the creditors and while they seem the most legit, they aren't giving me a very good monthly option rate. . I have also spoken to Freedom Debt Relief who is "#1" in most polls and offers a cheaper rate, but most of the reviews seem like they could be made up or fake ones. On the upside , my home equity is now up to over $150K(because I've had to replace a lot of stuff in it), which would cover my debt at several times over. Only issue is due to a recent credit score hit and debt to income ratio, it has become inaccessible. I also have about $60K in a CD and vested 401k, but can't tap into that without penalties. I have been wanting to sell my home for a while, but I'm only interested in doing that for a job that pays more. Living in Florida is fun, but I have found a lot of the jobs in my immediate area either pay what I already make or less. Thinking about tapping one of the two investments for some start up money and going Dave Ramsey again, but the cost of living down here keeps going up and wages aren't.
Old 01-31-20, 05:26 PM
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Re: Looking For Way to Consolidate Debt

Keeping it real. Ha. Financial debt is part of life and civilization. Breathe in and accept it. Live well and prosper.
Old 01-31-20, 06:24 PM
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Re: Looking For Way to Consolidate Debt

Originally Posted by Dr. DVD View Post
I will update this and say that I had it under control with Dave Ramsey until some unexpected expenses with a water unit breaking, the AC unit breaking later, and then some pet care costs along with about a week of lost wages due to Hurricane Dorian.
Bummer. Did you have your starter $1k emergency fund before starting the debt snowball? Sounds like your emergencies might have been more than that though. Can you pull from the CD? That probably has a shitty return rate anyway. Use that to pay off your debt and then invest the rest in mutual funds with a better rate of return.

Originally Posted by Troy Stiffler View Post
Financial debt is part of life and civilization. Breathe in and accept it. Live well and prosper.
Hard to prosper with a mountain of debt. Dr. DVD, don't listen to this guy.

I've been debt free (except for the mortgage) going on 3 years. I'm never going back. It's so freeing to not owe shit every month. There's more planning involved in making purchases (especially larger ones) vs swiping a credit card for every impulse, but life is much better this way.

After paying off all the other debt, I've grown to hate my mortgage over the last 3 years. Finally investing and seeing the account grow makes me want this sucker paid off sooner than later. I have a 30y mortgage with about 25 left. I've started paying it like a 15 year mortgage(bumped my payment by $300/mo) and will also have another full payment going right to principle at the end of each year based on how I set up my payments.
Old 02-01-20, 12:30 PM
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Re: Looking For Way to Consolidate Debt

Yeah, I paid off all my debt just under 2 years ago and it is liberating. My wife and I may be taking on some debt (HELOC) for an extensive backyard remodel, but I'm happy to pay toward that for something that I will enjoy and use, rather than just paying it to a company to get out of debt.
Old 02-01-20, 05:04 PM
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Re: Looking For Way to Consolidate Debt

I recently started a thread on balance transfer credit cards and got some good suggestions. After reviewing quite a fee I settled on a Bank of America card that offered very competitive interest rates, 15 months of interest free on balance transfers and purchases and a $0 and zero percent transfer fee, and no annual fees. I applied online and got approved within 24 hours. I would certainly recommend looking into it as sure it will help
Old 02-03-20, 01:59 PM
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Re: Looking For Way to Consolidate Debt

Originally Posted by Michael Corvin View Post
After paying off all the other debt, I've grown to hate my mortgage over the last 3 years. Finally investing and seeing the account grow makes me want this sucker paid off sooner than later. I have a 30y mortgage with about 25 left. I've started paying it like a 15 year mortgage(bumped my payment by $300/mo) and will also have another full payment going right to principle at the end of each year based on how I set up my payments.
If your investments are growing at a faster rate than your mortgage interest rate, you're better off pumping money into your investments instead of making prepayments on your mortgage.
Old 02-03-20, 04:33 PM
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Re: Looking For Way to Consolidate Debt

I'm not making prepayments. I'm paying down the principle. Those are two different things.

Also the house is an investment as well so taking money out of my left hand to move it to my right isn't really appealing. Also you're ignoring risk. Sure my investments are doing great right now but I'm playing the long game.

​​​​
Old 02-04-20, 10:40 AM
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Re: Looking For Way to Consolidate Debt

Paying my mortgage off early was one of the few times I went with my heart over my head. I may not be as wealthy as I would have been investing instead, but I know I'm far more at peace having no debt.
Old 02-04-20, 12:54 PM
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Re: Looking For Way to Consolidate Debt

Originally Posted by Michael Corvin View Post
I'm not making prepayments. I'm paying down the principle. Those are two different things.
They both mean the same thing.
Originally Posted by Michael Corvin View Post
Also the house is an investment as well so taking money out of my left hand to move it to my right isn't really appealing. Also you're ignoring risk. Sure my investments are doing great right now but I'm playing the long game.
​​​​
Your investments should be for the long haul as well but even real estate has risks. Can you guarantee that your area won't be in a downcycle when you need cash and want to sell? I'm guessing your mortgage rate is in the 4% range which is very low. If your investments aren't doing better than that, for example, if we were in a recession and the stock market was generating negative returns, then, yeah, you're better off making prepayments. Looking at it another way, lets say you prepaid $5000 on your mortgage last year. Had you invested in the stock market instead, that $5000 would be worth almost $6500 (assuming you invested in an S&P 500 index fund which returned 30% last year). You could've then sold $5000 worth and used it to prepay your mortgage and net $1500. Rinse and repeat. Granted this year probably won't be like last year but the S&P has historically averaged 10% gains per year and if your mortgage rate is 4% or less, you're better off investing first and then prepaying the mortgage later. Or you could let your investments ride and use compounding to increase the value faster. Just an idea.

Last edited by GMan2819; 02-04-20 at 01:07 PM.

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