Friday, January 2

Debt be Damned

I have a love-hate relationship with debt.  On the one hand, responsibly using debt as leverage to make investments can be really smart.  Most everyone takes a mortgage when they buy a house.  What a great use of debt since you get to live in a house you otherwise wouldn't be able to afford.

It's been nearly three years since I last posted about my total debt.  I've come a long way since then:

My Frugal Miser's Trail of Debts

  • 2009:  $507,000
  • 2010:  $469,000
  • 2011:  $446,000
  • 2012:  $397,000
  • 2013:  $351,000
  • 2014:  $299,000
I'm getting closer to what I think is a healthy level of debt.  There comes a point when it makes more sense to invest available cash rather than use it to pay down debt.  I'm not there yet, as both of my rental property mortgages have interest rates higher than 5%.  I'd rather pocket a guaranteed 5% return (somewhat less with tax benefits) than hope for something better in the stock market.  For now, I'll continue to grind away at this (now smaller!) mountain of debt.

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