All Forum Posts by: Jameson Wildwood

In my head, debt falls somewhere on a scale of Bad to Good, based on a couple different factors.

0-Really bad - Payday loans
2-3 Most Credit Card Debt
5- Somewhere in the Middle (I see car loans like this)
7 - Student Loans (invest in education!)
10 - Good - Loans on income producing investments

Why do I see car loans as somewhere in the middle?
1) They are necessities in much of the country
2) They are depreciating assets, so either you pay opportunity cost of deploying the capital, or you pay interest. You are loosing money either way.
3) For some people their vehicle is a business asset (like a pickup for a construction guy, or a nice SUV for a Realtor) that earns money

I look at it this way, I get a house for 20k down that will pay me $200/month cash flow in perpetuity, and when that loan is paid off I have the house that has appreciated.

I pay only 1-2k for transaction costs to buy a (20k) car and pay ~$300/month loan payment. Net cash out $100/month.

At the end of my 5 year period, I have a car worth say $12000 for easy numbers, that I've only paid (100*12*5+1.5) $7500 for. And I have a house I've built equity in.

(And you might even be able to get it under the RE business so you are paying pre-tax, not post-tax dollars for added benefit)

Now CC debt for "doodads" is a totally different story. I would rate those a 2-3 depending on what the "doodad" was or if it was really necessary or not.

Whether you feel psychologically inclined to pay that down or not, the numbers work less in the favor of paying off your car loan than perhaps other debt types. My personal take is that once I get my CCs down, I plan on buying a house that will fund a new car loan, and have that car in the business to pay pre-tax money for it.

Wow I posted this back in February. Now it's May, time really flies.

In the last month I've started using www.readyforzero.com It's a little like Mint, but geared totally towards debt reduction. I really like the interface and it auto loads my accounts and shows progression graphs. Definitely recommended if you are in a similar position to me.

I'm now at $17,324 in Credit Card Debt. Down from $23k in February.

I also re-read Rich Dad and am working through pieces of The Millionaire Real Estate Investor. I'm thinking about ways to earn a little more money on the side here or there using some of my other skills and weekend gigs of various sorts to help pay down the debt.

It's an interesting psychological thing, it's getting exciting to see those balances shrinking, and thinking about how much MORE money I'll have to invest when I finish making payments on past "Doodads".

I've also been thinking of using this experience and teaching others what I've learned about finances and wealth and beliefs about possessions through this process. It could be another source of income...

[Edit] Re-reading my original post I had this concern: "- I'm concerned that if I pay off my CC debt that old habits will put me right back into it"

I now highly doubt this will happen, I'm realizing now that I'm about 1/5th into this payoff journey that 1)It's a lot of work, 2) it's rewarding to be CC debt free.

I doubt this will be an issue now that I'm walking down this long tunnel seeing a pinprick of light at the end. It's a long journey, and I'm not likely to want to re-enter the tunnel.

The BEST way to find out rents is go to Craigslist and look for similar houses to the ones you're looking at around the area you are looking at.

There is no other liquid market for rentals like Craigslist.

If you're buying a 3/2, look for other 3/2's 3/1's 4/2's, hardwood/carpet, size etc.

I have a small team in KCMO, a great realtor and a great PM.

The realtor's Name is

Dan Goodwin under KellerWilliams, http://www.kw.com/kw/agent/dangoodwin

Tell him Jameson sent you, he sends me a little Starbucks gift car for referrals.

Dan has a minimum commission of 3k (whatever the seller pays gets taken out of that) But Kiyosaki says pay good people good money when they make you money, and Dan's worth it, he knows what investors want.

Realtor.com is a great starting point. Don't use Zillow, it will be out of date quickly and the estimates there are an interesting starting point, but unreliable, especially for rental numbers.

Also, there comes quickly a point when you need to talk to a local agent and have some discussions on the phone about what you are doing. Nothing better than someone on your team who gets paid to get you properties.

I hate to tell you, but you aren't looking very hard if you can't find these deals. I primarily invest in Kansas City, there are a lot of houses for sale in the 50-60k range that will rent for 800+/month ( I bought two last year, going back for more this year)

I'm also interested.

Have you thought about creating a free mailing list at something like MailChimp so you can keep track of all the interested people?

I'm down to 19k now in CC debt!

I've definitely decided to whack down the CC debt and am putting a lot of money into doing so. It feel like it's slowly lifting some weight off my shoulders when I do, so I think psychologically its the much better way to go even if the math returns aren't optimized. Also I know my loan officers for the SFHs I'm considering are happier without the CC debt on the books and it makes my credit rating stronger.

Also the extra $1k per month that I'm spending on CC repayments will make a big difference when it becomes saving/spending money!

Sounds like its time to foreclose

@Ratho R.

Thank you for replying. Yes the $23k is definitely more than just a few emergency expenses, it's years of buying just a hair more than I can afford. Of not really thinking too hard about the $40-$50 purchases I make for little things off of Amazon.com. Or taking a trip that costs a several hundred without really saving for it first. It's really surprising how quickly that number can add up.

One way I used to use to justify carrying a balance was that I had liquid assets to cover it well in excess of my debts. Since I bought real estate those liquid assets have been sunk into illiquid RE, and now I don't have the cash that I could just buy off the credit cards in a day or two. So all of a sudden its feeling a lot more restrictive.

I'm definitely onboard with paying back the Credit Cards. It just feels like it's going to take so long to do it.