Anonymous wrote:

Anonymous wrote:
That's a myth. If you left your accounts alone and kept investing right on through the recession, you did just fine.

Sure. but you'd have done even better to have spent the time leading up to the recession paying off your debts instead of investing that money. Then, when you paid your debt off a couple of years later, you could have bought in while the market was low and been further ahead.

That sounds like market timing because it is. That's the whole point. We don't know the future, and you can't time the market. The fact that someone missed out on the last year of growth because he or she was instead paying down debt seems like a really good point right now, but it was over a small window and things could just as easily gone the other direction.

Anonymous wrote:

Anonymous wrote:My physical and mental health improved when my debt was eliminated. Some people--like me--are physically and emotionally burdened by debt and the worry that comes along with in ways you cannot imagine. Paying off my debt as a top priority was the right path for me.

These are emotional decisions, not financial decisions. If it makes you feel better, go for it, but don't pretend that you are following an effective strategy for maximizing wealth.

Anonymous wrote:

Anonymous wrote:My physical and mental health improved when my debt was eliminated. Some people--like me--are physically and emotionally burdened by debt and the worry that comes along with in ways you cannot imagine. Paying off my debt as a top priority was the right path for me.

These are emotional decisions, not financial decisions. If it makes you feel better, go for it, but don't pretend that you are following an effective strategy for maximizing wealth.

Anonymous wrote:Lawyer with law student loans.

I have a much higher net worth than I would with DR despite my loans because I:

1) ignored DR and took out $$$$ loans for a T10 law school which landed me biglaw despite median grades

2) ignored DR and bought a house despite still having tons of student debt

3) ignored DR and maxed out retirement saving $$$$$ on taxes given my double biglaw marriage

Honestly the market would have to get destroyed for me to not be better off having taken advantage of the tax savings given my tax rate.

Anonymous wrote:Lawyer with law student loans.

I have a much higher net worth than I would with DR despite my loans because I:

1) ignored DR and took out $$$$ loans for a T10 law school which landed me biglaw despite median grades

2) ignored DR and bought a house despite still having tons of student debt

3) ignored DR and maxed out retirement saving $$$$$ on taxes given my double biglaw marriage

Honestly the market would have to get destroyed for me to not be better off having taken advantage of the tax savings given my tax rate.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My physical and mental health improved when my debt was eliminated. Some people--like me--are physically and emotionally burdened by debt and the worry that comes along with in ways you cannot imagine. Paying off my debt as a top priority was the right path for me.

These are emotional decisions, not financial decisions. If it makes you feel better, go for it, but don't pretend that you are following an effective strategy for maximizing wealth.

Credit card interest can run as high as 20% or more it is wise to always pay off the credit card debt first and don’t forget we haven’t had a serious market downturn in almost a decade the markets do not always go up and you could lose a lot of money that could’ve gone toward that

Anonymous wrote:Lawyer with law student loans.

I have a much higher net worth than I would with DR despite my loans because I:

1) ignored DR and took out $$$$ loans for a T10 law school which landed me biglaw despite median grades

2) ignored DR and bought a house despite still having tons of student debt

3) ignored DR and maxed out retirement saving $$$$$ on taxes given my double biglaw marriage

Honestly the market would have to get destroyed for me to not be better off having taken advantage of the tax savings given my tax rate.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My physical and mental health improved when my debt was eliminated. Some people--like me--are physically and emotionally burdened by debt and the worry that comes along with in ways you cannot imagine. Paying off my debt as a top priority was the right path for me.

These are emotional decisions, not financial decisions. If it makes you feel better, go for it, but don't pretend that you are following an effective strategy for maximizing wealth.

Credit card interest can run as high as 20% or more it is wise to always pay off the credit card debt first and don’t forget we haven’t had a serious market downturn in almost a decade the markets do not always go up and you could lose a lot of money that could’ve gone toward that

Anonymous wrote:

Anonymous wrote:
The above scenario is false. Money invested in a total market index fund immediately before the crash would have returned an average of 8% annually. That's 10 years out from the worst market hit in a century and unless you have an insane interest rate you would still have been better off putting that money in the market. Things could not have "just as easily gone the other direction" - it's not inconceivable but past performance has shown it incredibly unlikely.

You're looking at a ten year window (though you should be looking at 12), in hindsight.

If you'd taken two years off to pay down your debt prior to the crash, you'd be in an even better position right now. You'd have avoided the investment hit, been out of debt, AND been able to enjoy the recovery. Your investment portfolio would not be quite as large, but that would be more than offset by the debt payoff.

For what it's worth, I would not count on ~8% annually. "Historical Returns" seem to mostly be based on the last 100-120 years or so, which have honestly done the U.S. a lot of favors. We've had a couple of industrial revolutions, economic growth from coal, oil, and other non-renewable resources, the rest of the world blown each other up TWICE in two world wars while leaving us relatively unscathed, we've been the leaders in the tech sector for the last few decades, and we enjoyed high population growth for most of that time.

That is not the normal course for human history.

Think about it this way: If your great-great-great-great grandfather had invested $1 in 1776, at 8% annual returns that would be about 125 million dollars today. Does that seem reasonable to you? By inflation, that should be around $30.

Anonymous wrote:

Anonymous wrote:My physical and mental health improved when my debt was eliminated. Some people--like me--are physically and emotionally burdened by debt and the worry that comes along with in ways you cannot imagine. Paying off my debt as a top priority was the right path for me.

These are emotional decisions, not financial decisions. If it makes you feel better, go for it, but don't pretend that you are following an effective strategy for maximizing wealth.

Anonymous wrote:
The above scenario is false. Money invested in a total market index fund immediately before the crash would have returned an average of 8% annually. That's 10 years out from the worst market hit in a century and unless you have an insane interest rate you would still have been better off putting that money in the market. Things could not have "just as easily gone the other direction" - it's not inconceivable but past performance has shown it incredibly unlikely.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
That's a myth. If you left your accounts alone and kept investing right on through the recession, you did just fine.

Sure. but you'd have done even better to have spent the time leading up to the recession paying off your debts instead of investing that money. Then, when you paid your debt off a couple of years later, you could have bought in while the market was low and been further ahead.

That sounds like market timing because it is. That's the whole point. We don't know the future, and you can't time the market. The fact that someone missed out on the last year of growth because he or she was instead paying down debt seems like a really good point right now, but it was over a small window and things could just as easily gone the other direction.

^^Applause for someone who actually GETS IT.

Anonymous wrote:

Anonymous wrote:
That's a myth. If you left your accounts alone and kept investing right on through the recession, you did just fine.

Sure. but you'd have done even better to have spent the time leading up to the recession paying off your debts instead of investing that money. Then, when you paid your debt off a couple of years later, you could have bought in while the market was low and been further ahead.

That sounds like market timing because it is. That's the whole point. We don't know the future, and you can't time the market. The fact that someone missed out on the last year of growth because he or she was instead paying down debt seems like a really good point right now, but it was over a small window and things could just as easily gone the other direction.