It took me a while to make this decision.

I traded in my 2014 Altima 2.5SL for a 2016 Maxima SV. I have no remorse. I have no kids, not in a relationship. The last guy I dated wasn’t really even dating and he said he can’t pursue his relationship with God and act on his homosexuality. Blah. After seeing all the costs of home ownership it will be about 3 years before I can afford a house that I really like as opposed to a starter home that would need to be completely gutted. My rent is cheap at $800/mo and locked in until next year.

Do I feel hypocritical? Sure. I’m writing a blog about getting out of debt but now I’m getting into more debt.

Why did I get rid of the car I had?

1. The old one was slow. I really wanted a car that had some punch to it when I would floor it. Not a delay and hope it goes somewhere. After driving a 4 cylinder for 6 years before I thought I’d get used to it.
2. Black. Never ever. Again. Swirl marks, 5 minutes after I’d get it washed I’d see spots on it. No garage to put it in. Pollen galore.
3. Value. I knew I didn’t want to keep it long term and the longer I kept it the more it would depreciate.
4. Deals – Got a decent deal considering MSRP and financing at 1.9%.
5. I can afford it on my current salary. My payment is about 16% of my take home pay not including any bonuses. The old one was 7.5%…
6. The last point and this is a big one. *Motivation* – I need a big enough why to get me going. I have watched friends buy homes, 3 sets get engaged, go on trips, fancy restaurants, do a lot of traveling. I’m sure I will do more of that. I just haven’t lit the spark in my soul to want more. Paying the student loan off just felt like a chore. With little to show for it other than the paper.

   I rationalized doing nothing because I was comfortable. Comfortable people don’t try to learn new skills and make money on the side. They don’t have the desire to do their best job at work. They don’t network because they see themselves staying at a company for life or at least many many years. It’s time to get un-comfortable and start earning some extra money. Some people say when they have kids it helps inspire them to get on track. It’s a similar experience for me.

I can still budget, make my own meals, cut back in other areas I see fit.I will still be making student loan payments. Maybe not as much as a mortgage payment might be but the total is still going down. We’re looking at about 20 months till it’s gone paying just the minimums. I may start a new blog. More to come but it’s bedtime…

Navient $10,282
Car Loan – $11,454
Total Debt: $21,736

401k – $13,575
Roth IRA -$3,588
Total Retirement: $17,163

Making progress. I asked Scott Alan Turner a question and it got mentioned in Episode 51 of the Financial  Rock Star show. I changed the number of allowances on my W4 from 0 to 2 after listening to this episode. What does that mean? $82 more in my bank account with each paycheck. That makes it easier to drop a G each month on my debts.

12 Months ago. My student loan balance was $12k more, my car note was $3,632 more.

I had a thought the other day. Paying over 3x as much on my student loan each month as my car note. Most people have a car note way higher than I do. $280/mo doesn’t kill me. Gas is ridiculously inexpensive right now, around $1.60/gallon here.

My retirement accounts have been going up as a result of some upward momentum in the stock market and an employer match.

This week I had a phone interview with a recruiter. She approached me on LinkedIn. I knew nothing about the job, but long story short I wasn’t qualified for the position. Probably 2-3 times the amount of work and a week less of vacation time. Being a millennial I’m big on work / life balance. This company only had one good review and the other 7 were horrible. It’s been making me think about my future. Working for myself over the long term may be the best shot I have at long term wealth.

In the meantime, having little or no debt is really liberating in the grand scheme of things. So that will continue being my primary goal over

I don’t mind working hard but I’m not going backward for no reason.

This was completely unscripted and basically me talking to myself about getting out of debt. If it were scripted I would not use the word um 50 billion times.

Debt Free 32 – Podcast 0

One of the benefits offered by my company is a certain percentage of my gross salary is vested toward retirement. This is separate from the 3% company match. This year that number was about $1100. This boosts my 401k balance to over $12k.

I’m shifting more and more toward a retirement mindset and less from becoming debt free as I get closer to paying Navient off.

These are my loose plans and I honestly have no clue what the future holds for my career / earnings potential, living / relationship. numbers I came up with on my current salary, which for arguments sake say it’s close to the national average.

2017: $1000/mo -> +$12k -> $24,000
2018: $1200/mo -> +$14.4k -> $38,400
2019: $1500/mo (maxing out 401k) -> $56,400 (car will be paid off)
2020: $2000/mo -> $80,400
2021: $2000/mo – > $104,400
2022: $2000/mo -> $128,400
2023: $2000/mo -> 152,400 (the year I turn 40)
2024: $2000/mo -> $176,400
2025: $2000/mo -> $200,400
2026: $2000/mo -> $224,400 (age 43)

Using the 2020 numbers as an example with a future value of money calculator…

$80,400, adding $2,000 per month at age 37 @ 10% interest and continuing for 14 years. That makes me a millionaire and able to retire by age 51 assuming my income stays what it is and my cost of living doesn’t suddenly spike. If I take that $1,051,771 and don’t add anything to it, in 10 more years at 10% I’ll have $2,847,188 at 61. Is $2k a month a lot of money? To me in 2016 dollars on my current income yes. In 4 years assuming I get a 4% raise each year? Maybe not.

I don’t know what the future holds, but I do know this. If you want to have money when you’re older you need to start young. Maybe that means not buying the Mercedes or BMW but a more modest car instead. Or renting for a while and not sinking a ton of money into a house. I’m really seeing the light on how the poor stay poor and the rich get richer.

Last but not least, here’s another big kicker. There are people making $100k+/yr now who could easily speed this whole process up considerably and still have a decent life.

It’s late as I write this, but I just hope someone thinks about this before making a huge purchase that makes then a total slave to a job, bank or other financing company.

Student Loan Progress Month 46 – Navient $11,124

Car Loan Progress:

401k update:

401k balance update Feb 15, 2016

Betterment:

Brokerage Roth IRA:

Brokerage account. my apple stock is down whoa. Glad I’m diversified.

Got my tax refund back. It was a good chunk of cash. Split the money up about 50% between two debts, my student loan and credit card payment that has been lingering. Credit card should be paid off again come my next paycheck. Between last month and this month I’ve paid about $1721 down on my balance.

I officially owe *less* on my student loan than my car. It’s a good feeling. Now I’m basically starting a race. Race to the finish line. Can I pay off the student loan before 12/31/2016? I think so, god willing. I could stop my 401k contributions and def hit the mark but not giving up my match.

Betterment charges a higher fee if I don’t deposit a min of $100/mo to my Roth so just doing the minimum for now. Not pulling out of the market in a panic, not going 100% into bonds. I do think it will get worse before it gets better. I am optimistic it will bounce back though. Quantitative Easing on student loan debts is a topic that has come up in political debates. I’m against bailouts and for people accepting the consequences of their own actions.

More layoffs at my company. There were at least 15 people I have worked with personally in the last 3 months who were let go. Makes me think loyalty to a company is dead. While you’re there you try to be a linchpin and indispensable. However if your work doesn’t result in a promotion or even a decent raise it may be time to look elsewhere.

The idea of having a safe secure job is dead. Skills are everything. We are moving toward a society when a full time employer with great benefits is going the way of the dinosaur. People running their own businesses can allocate more money toward their retirement, in some cases are free to make their own schedules and will often work more hours than a typical 9 to 5 er. There are of course risks, some crash and burn miserably.

As I get closer to being debt free I think about more and more about the concept of f’you money. I see people driving brand new Porsche, Mercedes-Benz and Lexus cars. They buy fancy homes and put expensive items inside those homes. Then they work 60-80 hours a week to pay for these things.

Jacob Lund Fisker author of Early Retirement Extreme sums up this situation fairly well.

In real life, the prisoners of Plato’s Cave are those who are prisoners or slaves to their wages and their culture.  A wage slave is a wage earner who is entirely dependent on their wages.  While the wage slave is free to leave the current job, he is not free to leave the job market altogether and he can likely not imagine the possibility of doing so.  He is still entirely focused on the wall.

The wall shows other people not as who they are, but as what they own.  There goes a man in his new sports car, what is not seen is that the car is bought on credit and the man is stressed because he is having trouble making the payments.

Wage slaves have jobs where they can go and spend their most productive hours writing high powered memos so they can be more productive, while other people spend their time ignoring memos so they can be more productive too… … This endless working and playing is called “making a living”, yet people are so busy “making a living” that they have no time for living.  A wage slave is a person who is not only economically bound by mortgages, loans, and other obligations, but is also mentally bound by an inability to perceive that there are other options available. Like the prisoners in Plato’s cave.  Their chains are not physicals; the chains are mental, which in some sense makes them worse because it turns the prisoners into their own prison wardens.

Is spending the most productive years of your life chained to the job market to collect a lot of rarely used stuff that gathers dust in the closet or takes up space in junkyards a wise choice?  Were you really born just to die, leaving a large pile of discarded consumer goods? I realize that not wanting a house full of things makes me look weird and even “unpatriotic”.  After all, more is better and who does not want to be better?   But perhaps conformity is not the only way to live.  In fact, by taking the other end of the bargain, saving as much as other people are spending on wants, it is possible to retire and live on invested savings after just 5 years of full time work.  Rather than increasing the amount of work to acquire more stuff, reducing this superficial need reduces the amount of necessary work.  It is possible to reduce the amount of work all the way down to zero: financial independence.  Indeed, playing the shadow game for five years provides a permanent way out of the cave!  Alternatively it is also possible to return to the cave for a few months every year to earn money for the next adventure out of the cave.

I see people with fancy titles big homes and hair turning white in their 30s.  That and looking stressed out all the time. Is it really worth it?
Is all this stuff we buy to impress people we don’t really like worth it?
Have we not learned from the overconsumption of the Baby Boomers & Generation X?  Is lifestyle inflation something we’re just come to accept as the baseline?

I don’t want to be a slave to money or things that will just lose value over time. Not every one gets it, but a few do. It’s a movement, and it’s growing. 🙂

I listen to a bunch of podcasts on money depending on my mood. Or not at all.

One I didn’t include here is Scott Alan Turner’s – Financial Rock Star – No not because he also live in Dallas, but because he’s very straightforward, informational and entertaining. 🙂 The interview posted today Episode 42 –  Broke, Busted, and Disgusted – The Student Loan Crisis with Adam Carroll was very much relatable. I also liked 41- How the Rich Get Richer and The Broke Stay Broke and 21 – 27: The Deadily Sins of Financial Freedom. Each episode is short enough for me to listen to a few back to back while I clean my house or go for a walk.

I emailed Scott about a month ago and he was kind enough to reply. I know I produce content here on my blog but it still amazes me that others care and reply to me individually. Podcasts help me realize I’m not writing or merely talking to myself… 🙂

What are your favorite go-tos on the subject of money for that added motivation?

Month 45 – Making Progress

Skipped last month and spent a ton of money on things. Some I needed, some maybe were more luxury in nature.

Credit card balance has been blowing up. I sold my bike earlier this month for $260 and put all of that toward it. Still almost $2k

Navient is down to $12,845. Haven’t been able to pay as much I want to on account of the CC but I have been setting aside $250/wk for either bill.

NMAC – Finally under $12k on my car $11,733.55 to be exact. I hate having a car note. I look at cars to buy daily on the used market. The deals suck though. Between financing, maintenance, the fear of buying someone else’s headache or dishonest dealersI don’t think it’s worth it. Only to save $5k or so and in some cases add 100k miles. It’s almost encouraging me not to sell / trade in. This thing can make it to 120k easy.

401k – Switched over future contributions to a Roth 401k. I still have decades left until retirement and don’t want to pay taxes on any appreciation. Taken a bit of a nosedive with the market the way it is, but I’m diversified and look long-term.

Roth – Contributions still on hold and still dropping. Numbers will go up so I’m only mildly concerned.

I semi completed my tax paperwork. Looks like I’ll be getting a refund of close to $2k. Waiting on some HSA files to come in the mail. May be able to get the student loan to $10k by March?

I have been feeling out of balance spiritually and emotionally. Maybe that’s the result of 4 days straight without having a meal with someone (dog doesn’t count) and being single / frustrated. I haven’t set foot in a place of worship other than to attend the wedding of someone who didn’t like me at all. I’ll have one good day where I see people and the rest will be crappy. I’ve faced worse challenges in life but the friends things seems to linger year after year since moving to Dallas in 2011. Kinda feel stuck… Made some plans this week / next week so it will get better soon at least.

I’m gonna keep this short, but…

Since I started this blog I’ve paid over $29k not including interest on my student loans. Sort of like with compounding interest, I will see the biggest improvement in my later years. In 2010 and 2011 I paid either 0 or a portion of interest as part of the income based repayment program.

Been a tough road, but I can do this. I am doing it. The finish line is getting closer and closer.

And for my car… Down $4,749 from my original loan balance of $16,762. If you’re going to not be smart and buy a slightly used but more depreciated value vehicle. Doing what I did, negotiating down, getting a good deal on a trade (or selling it separately) getting a 0% financing option is the next best thing. When every payment goes to principal the outstanding balance drops pretty quickly.

I repeat myself a lot on this blog. Habits are everything  and repetition is the mother of skill.