Friday, April 4, 2008

Weird for having no debt? Not so much.

I just did my latest round of net worth entries over at networthiq. Although my cash reserves are a little down after the recent trip to Cuba, my stocks continue to accumulate (contributions plus a recent rise in RCI.B mean 26.6% more just in the past month) ...

... and my credit cards are all paid off. In fact, one's overpaid by $66, 'cuz we had to get a refund for one of the Cuba excursions.

All in all, I'm all assets and no liabilities. Again. As usual. I have no debt.

Is that so strange?

Squawkfox wonders the same thing on her Personal Finance blog:

I must be weird. I don't have lines of credit, maxed-out credit cards, and most of my paycheck goes directly into savings. I do have nice things though. I purchased new furniture this year, I participate in an expensive sport, and I have a stunning diamond ring. So why am I worth six-figures while others shuffle debt?
Do I have a lucrative job? Nope. I make an average salary for my age group, according to the November 2007 issue of MoneySense Magazine.
Did I win the lottery or inherit buckets of money? Nope. I've never played the lottery, and my family is alive and well. Although I have been promised a pretty set of china tea cups from my grandmother.
Did I play the stock market and strike it rich on a flashy investment? Nope. I've invested small portions of money slowly over time. I invest in index funds and ETFs. I'm pretty boring about investing, actually.
Do I own a house, condo, or other real estate? Nope. I am a renter and have been renting for well over a decade.

Wonder how it can happen? Check out her entry. It makes a lot of sense.

Having no debt is a nice feeling. I'm sure it'll be a nice feeling to have a house, too, but for now, having no lingering financial obligations is pretty sweet. I don't feel like my life is lacking in luxury. I don't feel like I'm missing out. I'm getting a kick out of seeing my personal net worth climb, as our combined savings grows and our combined chequing account stays floating without overdraft.

Is it weird? Am I weird? I've never shied away from such a label, but in this case, I think it's something to be proud of, instead of resigned to.


  1. See Mom, I told you that he didn't squander all his money on magic beans!

  2. Well, I did lose some money on beans in Cuba ... I bought a souvenir for my bestest friend back in Toronto ... and the eyes of the particular carving were made of some kind of poisonous bean, so they seized it at Canadian customs. Boo-urns! :(

  3. Welcome to my weirdness Scott and thank you so much for the link! I agree, having no debt is a REALLY nice feeling. :)

  4. I've known the joy of no credit card debt for a coupla months now. nice feeling. the student loan however, is uber-low interest. I'm not too worried about it, but maybe this post will inspire me to follow your suggestion of "snowballing" it.

  5. I've made too many mistakes to tell you whether you are doing bad or great. I do know, having worked in finance, that a little revolving consumer debt is *not* a bad thing as it demonstrates you can manage payments which is key when lenders look at your FICO score which helps when trying to obtain unsecured loans like a mortgage. Chad and I always carry a little debt to income ratio.
    However, your plans for retirement are splendid. You are very good at managing money and living within your means. The problem with our demographic is instant gratification. No one I know actually saves for anything any more.

  6. I'll probably write another article about how I/we do what we do, but yeah, saving is important.
    It's not that I don't use my credit cards -- I do ... I buy stuff. My Amex has something on it every month, since I bill my Blackberry service to it. I always seem to be putting online purchases on my MC -- just bought another gig of memory for the HTPC last night, for example.
    Difference is, I use my credit cards as convenience cards, not credit cards. I pay them off in full, every month, always.
    So, the credit I have is being used. I just don't use it to the max.

    And Jason -- I've heard the experts explain that student loans fall in the "good debt" category ... that is, a loan on something that appreciates in value. An education presumably enables you to make more money, so paying it off over a long time at a low interest rate is kind of a bargain.