[quote=AN][quote=cvmom]I tend to agree with CAR. My husband and I are relatively risk-averse, have a paid-off house and enough in the bank that we could both retire tomorrow if needed, plus fund the kids’ educations. And we got that way by getting somewhat lucky in our real estate purchases, but mostly by spending much less than we earn.

However, I think our peer group (and perhaps CAR’s peer group) has a different definition of success. I think Early’s financial position is WAY different/better than ours, if I had to guess. So I think the smart risk-taking when young is probably the way to go, if you can. It just never appealed to me, so I think second best (for those of us with maybe fewer smarts or cojones) is definitely the spend-less-than-you-earn-and-avoid-debt route.[/quote]Thanks for proving my point. Key point is, you got there by being lucky with your real estate purchases. I assume you didn’t pay cash for those.

Just because you leverage doesn’t mean you have to spend more than you earn. I’ve discuss spending many times before and I’m sure I underspend even compare to most on here. How else would I have the capital need to leverage? Even if I save 100% of my gross income, I still would not be able to reach my goal of $5M by the time I’m 50-55 if I don’t use leverage. It seems like you got to your number by leveraging as well. If you rushed to pay off your 1st home, would you have the cash needed to buy your second home without needing to sell your 1st home?[/quote]

Good point, we did do mortgages on our first few homes. Then moved around the country with work, selling one and moving up to another. Only recently did we feel comfortable enough with our financial cushion to pay off the mortgage completely.

Judicious use of minimal mortgage debt, as several others have mentioned. But no car debt, student debt, credit card debt, etc…