[quote=cvmom]Yeah but there is no feeling of freedom like being 100% debt free and having an F-U stash… Every day I go to work, I know I could quit if I want to. LOVE that feeling. Who knows what will happen (parents on East Coast get sick, kid needs major support time, etc.) Any of us could have some major bad news tomorrow.
So I vote for paying off all debt as soon as you can. But I think it is a very personal decision, depends on what you value.[/quote]
Yes, it really depends on how you “view” debt. Your situation can be viewed a different way however, but the good feelings you have is actually NOT because of being 100% debt free, but the f-u cash as you state above…
Say if you wanted to tell your boss to f-off or he fires you and you then want to start your own company, maybe doing the exact same thing to “show him”, you’ll probably need capital and unless you are excessively wealth which most people aren’t…closing out a low interest debt actually “limits” your flexibility since once you’re unemployed, no one will ever give you a loan…
I’m sure being self employed now and having had gaps in my employment I view things a certain way, but bottom line is having the cash allows you more flexibility.
Obviously, having it all with 100% debt free and a huge f-u stash is the best situation, but unless you are again, excessively wealthy, having the cash on hand is probably more flexible to deal with anything that happens or if it was 100% debt free and no cash vs. mortgage and huge cash pile, I’d say again to take the cash since it’s far more mobile (what if an earthquake knocks down your million dollar home or it got swallowed up by the ocean?) Deductible is 300k. Hope you “bought” earthquake insurance and still have the 300k cash as well.
The stash can ALWAYS pay your mortgage for many years and you can balance, say IRA withdrawals which are taxable to your mortgage deduction to have a 0 tax liability…etc…
If you had the mountain of cash, even with a mortgage, you can still “quit” as you say.
Oh well, people will do what they will, but consider some of the points above as well (the home getting destroyed sounds like a new good one to me).
