Debt Free

[Mich the Tester]

What if your non liquid assets are greater than your cash debt?

Ask EternalOptimist. He walks a mile every day to dump his non liquid assets in a local bog;
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[ChimpMaster]

What if your non liquid assets are greater than your cash debt?

Eg stocks and shares?

are you still technically debt free?

Assets can and will fall in value (as per 2008).

Your debt will only ever grow.

[Mich the Tester]

Assets can and will fall in value (as per 2008).

Your debt will only ever grow.

As I said somewhere else, 'equity' is an expensive weasel word for 'imaginary money'.

[scooby]

By just clearing your debts you might end up in a bit of a hole. Imagine you paid off the mortgage and then went out of work? With a bit of a war chest you could carry on as before.

Unless you feel more comfortable being mortgage free and living off the dole until you get work?

You have a v good point. I currently have approx 5mths in the war chest and adding to it mthly. the saved money will pay off cards and debts etc. once clear i plan to save as well as pay chunks off the mortgage. Mortgage is only smallish so no major issue.

I wouldnt be without a warchest... I'm not one to sign on the dole...

[EternalOptimist]

Ask EternalOptimist. He walks a mile every day to dump his non liquid assets in a local bog;
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watch it

[Doggy Styles]

I still find it strange when people separate mortgage from debt.

Perhaps that's why personal mortgage debt has sky-rocketed exponentially to over a trillion pounds.

[Platypus]

i expect all my debts except mortgage to be paid off by mid 09.

Well done !

I fear it's too late for me... seems probable I'll have to go BR this year

I think you can consider yourself debt free when the all debts except mortgage are paid, just like anyone renting their property. Having a mortgage is essentially just renting from the bank/building soc anyway IMO.

[EternalOptimist]

What if your non liquid assets are greater than your cash debt?

Eg stocks and shares?

are you still technically debt free?

No. the whole point is that debt is not just what you owe. It's also a cost, due to interest, and a saving due to inflation.


Like I said, knock a 'what if' spreadsheet, I did it 20 odd years ago and the direction you must take becomes crystal clear

[EternalOptimist]

Well done !

I fear it's too late for me... seems probable I'll have to go BR this year

I think you can consider yourself debt free when the all debts except mortgage are paid, just like anyone renting their property. Having a mortgage is essentially just renting from the bank/building soc anyway IMO.

[PM-Junkie]

Your debt will only ever grow.

Not true. When you factor in the value of money (ie inflation), the real value of debt reduces over time as inflation impacts it - so in real terms the value of that debt reduces.