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Originally Posted by gar1976
Don't forget the taxes deferred on your 401(k) contributions.
On a side note - sounds like you're spending as much as you can, on "stuff." Motorcycles? Car debt? Mortgages? And now student loans? Maybe you should re-assess your living and spending styles.
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I respect your comment, and your opinion. I'd like to "correct" what you noted though. I feel I just have to.
Morotcycle. One. Not "s" as in many. We own it now, so there is no payment on it. Also, very painfully to me personally, I haven't ridden it this year. We chose not to spend the extra money insuring and registering it this year.
Car debt: You have a valid point, I suppose. Instead of two cars, one 1 year old, and one 3 years old, we could have one paid for, and one on loan. Or even two beaters that are paid for (and have the associated higher maint. and inconvieance costs associated with older high mileage cars).
The 3 year old car was my first new car ever (my Lancer, at all of $16k, is not what most people consider a luxury car), and I did get a very nice, low rate loan on it. Before we bought her new car, we owned paid-for '90 Crown Vic until we'd saved up the 25% down payment we put on her car. Yes, I said 25% down. Not too many people do that. Our interest rate on that loan is very low also.
Mortgage. Again, singular. Owning our home is cost equavalent to renting, and a much smarter use of the monies involved. Our APR is 5.25%. That's awfully hard to beat, especially for 26 year olds.
Yes, student loans. Unfortunately, we're unable to pay roughly $6000 per semester for the two of us. It will cost us roughly $55,000 for our three degrees. (I'm improving on my AS by getting a BS and a MS, she's getting her MS) Our earning potential will rise by a sickening % with the education we're getting. Hardly money poorly spent.
Overall, and yes, I am bragging (shoot me), our FICO scores are both over 800. We're 25 and 26 years old. I think we're doing something right.
More to the point of the topic though, I think you're all right about the idea. It wouldn't be worth our while to suspend investment to save on interest. It's taken us 5 years to get to this point, and I suppose I'm getting impatient. We're both tired of having unsecured debt. Credit cards are stupid, and we're anxious to have none. I was just trying to hurry up the process, but you're right, it't not worth it.