Originally Posted by
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If you are serious about cleaning up your finances you first need to see where you are spending your money. Check out a financial aggregator like Personal Capital (my favorite) as it will boil down where your spending goes each month/year.
What is interesting about this approach is it allows you to focus on where your money is going. If you want to become financially free you must do two things a) reduce overhead expenses and b) buy things that make you money, not cost you money.
The argument that a car is bad debt is superfluous. I would argue it can be good debt (if reasonable and reliable) AND bad debt (if you bought a luxury car). Same goes for a house. You have to live somewhere, but at some point a house really becomes a liability as it costs money to maintain, heat/cool, and pay taxes on. So clearly something larger and more expensive than needed (not wanted; two very different things) becomes a liability.
I have no idea what your background/working history/age is. But at the money we are making now as professional pilots, there is ZERO REASON to be struggling. And a 15% savings rate is absolutely horrendous.
In 2019 our net worth increased $600k (we are in our 30's). If I had decided to pay off mortgage debt instead of investing the money instead, it would've been a LOT less.
As an example, $250k would've returned $75k in the market last year. At 3% interest you would've "saved" under $10k in interest paying that down. You would've lost over $65k paying off your mortgage...in a single year...
Low interest debt is not a big deal as long as you are accumulating assets. It's leveraging up and buying the big house, $40k-$50k car, etc while having nothing to your name that gets people in trouble.
Things will turn for this profession. If it's not the economy it will be single pilot or autonomous vehicles. The getting is good right now. Stuff cash hand over fist into investments (SP500 fund 100% is my recommendation, nothing else needed beyond rentals if you want to expand your base after hitting a mil or so) and keep expenses low. Make hay while the sun is shining.
I think you hit the nail on the head with what I was thinking. I want to get while the getting is good but I also don't really want to tap into that 6 months of emergency fund savings. So its aggressively pay off car loan and then mortgage
or put some more money into investments.
I'm 45 - first career mechanic, second career short stint with Air Force, rolled into the Reserves and concurrently got my helicopter license, started at the airlines 2017 and still doing MIL stuff in Reserves. So looking at civilian 401k at Regional airline, 401k at Military and future pension from Military. All my previous retirement savings I cashed in to get my Helicopter license. Freshly divorced concurrently with the Regional Airline in 2017 so started all over from scratch. Bought a modest house and modest car in 2018. So I'm easily in the black even with car and house payment.