Comments on: Debt Makes Me Sick http://www.canajunfinances.com/2008/06/11/debt-makes-me-sick/ Personal Finances and Consumer Concerns, essays, stories, examples and how to articles with a distinctly Canadian Point of View Wed, 19 Nov 2008 15:43:34 +0000 http://wordpress.org/?v=2.6.3 By: make money online http://www.canajunfinances.com/2008/06/11/debt-makes-me-sick/#comment-1842 make money online Mon, 30 Jun 2008 10:45:31 +0000 http://www.canajunfinances.com/?p=917#comment-1842 <strong>make money online...</strong> Thanks for the great post! Looking forward to many more. B>)... make money online…

Thanks for the great post! Looking forward to many more. B>)…

]]> By: Gordonzo http://www.canajunfinances.com/2008/06/11/debt-makes-me-sick/#comment-1717 Gordonzo Wed, 11 Jun 2008 18:46:29 +0000 http://www.canajunfinances.com/?p=917#comment-1717 Good points Al. After reading The Richest Man In Babylon, i was inspired and started focusing all new money on debt reduction to alleviate stress and risk. Good points Al. After reading The Richest Man In Babylon, i was inspired and started focusing all new money on debt reduction to alleviate stress and risk.

]]> By: Al http://www.canajunfinances.com/2008/06/11/debt-makes-me-sick/#comment-1716 Al Wed, 11 Jun 2008 16:37:51 +0000 http://www.canajunfinances.com/?p=917#comment-1716 I'm all for paying off debt too, and it's not just an emotional response. Here's why: 1) As you mentioned, it's a gauranteed rate of return. 2) Leverage is risky. Paying it off eliminates risk. 3) Alternative investments to paying off debt are getting poorer and poorer. Fixed income is at ridiculous lows, and then gets taxed unless it is sheltered in an RRSP. Equities are risky, and can involve alot of fees. 4) The numbers that are used by the 'start investing early' crowd are questionable. Compounding rates at 8 or 10%. Sure, maybe if you cherry pick your data points. They're also provided by people that make money both when you invest (fees) and carry debt (interest). I do have investments because my debt load is getting minimal, but my debt load is minimal because I put a priority on paying it off. And of course I have more free cash flow to invest because I'm not throwing away money paying interest. I’m all for paying off debt too, and it’s not just an emotional response. Here’s why:

1) As you mentioned, it’s a gauranteed rate of return.

2) Leverage is risky. Paying it off eliminates risk.

3) Alternative investments to paying off debt are getting poorer and poorer. Fixed income is at ridiculous lows, and then gets taxed unless it is sheltered in an RRSP. Equities are risky, and can involve alot of fees.

4) The numbers that are used by the ’start investing early’ crowd are questionable. Compounding rates at 8 or 10%. Sure, maybe if you cherry pick your data points. They’re also provided by people that make money both when you invest (fees) and carry debt (interest).

I do have investments because my debt load is getting minimal, but my debt load is minimal because I put a priority on paying it off. And of course I have more free cash flow to invest because I’m not throwing away money paying interest.

]]> By: Gordonzo http://www.canajunfinances.com/2008/06/11/debt-makes-me-sick/#comment-1715 Gordonzo Wed, 11 Jun 2008 13:13:51 +0000 http://www.canajunfinances.com/?p=917#comment-1715 That's the crazy think about money. You can analyze, calculate numbers till your blue in the face, but if you have an emotional disconnect to the outcome, it can be very detrimental. I have made several investing mistakes myself and the best decision I ever made was purchasing Manulife's whole life policy several years ago. As a broker it may seem odd but I wanted something that would make a steady return (7-8%) and I can't stop investing, make ill timed investment decisions. The policy is going to be my personal pension and this peace of mind allows me to have more enjoyment emotionally with my investments that I invest as the pressure is off to always be right. It's always easy to say buy term and invest the rest, but much harder to implement without fail over 30 years. My decision will probably not make sense to most of your readers but it is one that has improved my emotional and physical health. That’s the crazy think about money. You can analyze, calculate numbers till your blue in the face, but if you have an emotional disconnect to the outcome, it can be very detrimental. I have made several investing mistakes myself and the best decision I ever made was purchasing Manulife’s whole life policy several years ago. As a broker it may seem odd but I wanted something that would make a steady return (7-8%) and I can’t stop investing, make ill timed investment decisions. The policy is going to be my personal pension and this peace of mind allows me to have more enjoyment emotionally with my investments that I invest as the pressure is off to always be right. It’s always easy to say buy term and invest the rest, but much harder to implement without fail over 30 years. My decision will probably not make sense to most of your readers but it is one that has improved my emotional and physical health.

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