I can agree with that. Paid my house off 3 months ago and have a 60k cash reserve. Feels great. I should never need to borrow or owe any money ever again.

If I want a new car I'll wait until I have the cash. Want a new house, yep, I'll wait until I have enough cash less the value of my current house.

Same with a new plane. I'd really like an old O-1 bird dog and there is one in NC for sale right now that fits everything I want in that type of plane. But I'll have to go into my reserves or take a loan to make it happen so I'll just wait until I have up the rest of the cash which will be in 1.5 years.

I learned my lesson seeing guys after 911 selling everything. The boards in the crew rooms were filled with boats, planes, motorcycles, vacation home ect. I'm fortunate enough to now live on less than half my take home pay. I split the rest between and additional retirement fund, home improvement fund and a "Sam wants a bird dog" fund.

 

I agree with your plan for sure, however, I saved for my dream hangar house, built it, and promptly lost my medical. Please factor time into your schemes.

 

Yeah you're not the first to point that out. The thing is: I have everything I want. House, truck, moto, plane, mountain bikes etc - all paid for. Everything else I want is just an upgrade over what I have now. It's in the "would be nice to have but don't need right now" category. For example, I have a C140 which is fun. The bird dog would be nicer but the current bug smasher is fine - kind of like diminishing returns. Or my townhouse is fine, would I like a house with my own 4 walls? Yes, but the "want to have" isn't strong enough to out weigh financial independence IMO.

So I'm not in a rush. If I keel over tomorrow I won't be sad.

 

I've always been a fan of buying a new car and driving it a very long time. I know it doesn't fit into your debt free lifestyle, but it's another data point in the storm. I'd look at the overall cost of ownership and the knowledge that your wife has the reliable car when you're out on a trip.

 

Update: I was able secure the Mopar sensors I needed off of eBay. Jeep runs just fine now.

After much discussing, I think we will fix the head gaskets on the Subaru soon...getting another year or two out of the car. At that point we will look at something newer. When I say newer I just mean 3-5 years old with less than 25-35k miles.

Our dream is a boat right and in the long distance future (i.e. 10 years)would like to buy a small sail boat or trawler for cruising. I think if we save hard now it's totally doable. I just want to ensure our descions between now and then need to be solid.

 

End of thread.

Hondas and Toyotas are indestructible.

 

Fund your retirement accounts FULLY before you sink too much cash into real assets.

In the event of job loss or hardship leading to BK you keep the IRA/401k, but everything else is fair game for creditors (except a cheap house and a cheap car).

Remember you don't have to owe money to the bank but you WILL owe money every year to various levels of government. You should plan BK protection with that in mind.


Life is risky and lenders have their place in helping share that risk.

 

Why should he be concerned with bankruptcy? Given his wise decisions so far and intent to never borrow again (and assuming he has appropriate LTD and life insurances), he is well set. The only reason to file bankruptcy is to avoid paying creditors (and/or employees, even though you have billions in the bank - but I digress) - he's unlikely to ever have any creditors again if he stays disciplined.

 

Rick, define "fund your retirement accounts fully".

If I had enough money 3-4 mil to retire I probably would. But see as I don't I'll have to keep working.

Yes I contribute a very good amount to my retirement. Max out 401k, get 16% into the defined benefit fund and then about 900/month with my own after tax money (index funds -Vanguard). All together that totals about 4K/month to retirement.

If that's not enough in 22.5 years including the nest egg I have now then so be it. I know I'm save boatloads more than most in my age group.

 

Well said!! I also had a 140. Paid $4,500. Keep it for 7 years and sold it for $5,500. I fly with a FO that has max out his retirement accounts. He 52 now and need nothing not even a upgrade to Captain. He stays a FO because he is the number 1 FO. Picks anything he wants. I would say life is good for him.