The Debt Burden
According to various sources, the overall debt burden for many Canadians remains on the rise – compounded by ongoing costs of living. Prices over time, just keep going up.
In this post, I am curious to know from readers:
- What is your debt burden? or
- If you have no debt at all, when and how did you get rid of your debt burden?
The Debt Burden
Here are some recent selected articles on this subject:
From CMHC, fall 2024: @CMHC_ca
Mortgage debt: Canada’s mortgage debt reached $2.2 trillion as of July 2024, growing 3.5% year-over-year. Despite lower interest rates, high borrowing costs and elevated home prices continue to limit buyer activity.
Borrower behavior: Canadians are increasingly opting for shorter-term fixed-rate mortgages, with 3- to 4-year terms dominating the market. Five-year fixed mortgages account for only 12% of new loans.
Delinquency rates: Mortgage delinquency rates have risen slightly to 0.2%, though they remain below pre-pandemic levels. Auto loan delinquencies, at 2.42%, pose a risk for further increases.
Renewal challenges: Over 2.2 million Canadian homeowners face higher payments when their mortgages, signed during historically low rates, come up for renewal in 2025-2026.
From LoansCanada, summer 2024: @LoansCanada
Maybe not surprisingly, Canadians aged 35-44 who are busy establishing their careers; acquiring real estate to call home; potentially raising a family; carry the highest average debt burden in Canada: reaching a whopping $541,851.
Source/Attribution: https://loanscanada.ca/debt/average-debt-by-age-canada/
More recently, from February 2025, I read Canadians carry thousands in credit card debt: @MoneySense
“The average credit card balance for Canadians in the third quarter of 2024 was $4,562, according to TransUnion. This is up 6.97% from the previous year, putting credit card debt as the fastest-growing type of consumer debt….”
And…from CBC, February 2025:
“The number of Canadians in debt is on the rise across the country and, according to a new report, there’s a growing gap between those who have benefited from declining interest rates, and those who have fallen behind from the higher costs.”
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“Meanwhile, missed payments on credit cards, credit lines and auto loans are on the rise among non-homeowners who are young, lower-income, or renting or living with family.”
On a personal note, my debt burden existed until late-December 2023, after our final mortgage payment was confirmed in early January 2024 but that was a multi-year journey for sure.
We paid off over $350,000 in mortgage and borrowing costs.
Anyone struggling with debt could consider one or more of the following approaches:
- Take time to define your debt. Analyze who you owe, for what and by when, in detail.
- Take time to create and practice a budget. Analyze your income and expenses to create a realistic budget – where money needs to go; identify all needs vs. all wants.
- Explore financial management opportunities. Explore ways to a. increase your income and/or, b. cut back expenses and/or c. use debt consolidation approaches including access to professional help for guidance.
Curious, readers: what is your debt load? If so, how much do you have if you don’t mind me asking? If you are out of debt, when and how did you accomplish that? Have you gone back into debt since?
Could I help in any way via this site?
Mark
Related Reading:
Really enjoy reading everyone’s journey here. My husband and I are planning to retire at the end of this year (58 and 57) also debt-free. We’ve both worked full-time since our early 20s, my husband in the trades, and myself in the financial sector. We worked hard to pay off our principal residence in our early 40s. In the early years (with 2 kids) , there was little extra to put into RRSPs but we did what we could, always contributing something! Neither of us have a DB pension and so, in our 40s we purchased a rental income property (requiring considerable work which we DIY). We sold the property very recently and banked a good chunk. During the pandemic, we had considered investing in a property somewhere warm and sunny but instead, purchased a cottage in our beautiful home country! While we have a mortgage on that property, we’ll pay that off when it comes due this summer (we are making more on keeping the cash invested than the servicing cost on that mortgage so why would we pay it off early?). We downsized from our large family home about 3 yrs ago (Which was paid for!) and ensured those gains were directed towards any debt.
The one thing we haven’t leveraged is TFSAs which is now our focus this year!
We put our daughter through university and our son followed his father’s way and went into the trades. We are pretty proud that both are fully employed, out of our house (LOL) and both have purchased their first homes in the last 5 years. I guess we taught them something right! We manage credit cards monthly and love to travel. Also planning to purchase a newer vehicle ( we will continue with 2 vehicles, deft free for a while!).
We feel ready for retirement or at least semi retirement (we may pick up some part time work in our early retirement years). With about 1.5M in RSP and two fully paid properties (which we’ll sell at the right time) we believe we can reach retirement status but absolutely debt-free!
Impressive, MJ – so well done!!
I would say you are SET = about 1.5M in RRSP and two fully paid properties. Amazing.
I assume you eventually maxed out your RRSPs?
Smart: when you downsized; all gains were directed towards debt.
Yes, TFSAs are a gift of an account for retirement income planning!
If it helps at all, here is a good post. With > $1M in RRSPs at a traditional retirement age, 65, most couples are MORE than fine with decent spending needs = about $84,000 per year.
https://www.myownadvisor.ca/can-i-retire-with-1-million-in-our-rrsps/
Congrats on your success and thanks for the kind words!
Mark
Hi Mark,
Growing up poor, we learned to be very careful with our money from a young age. We were and are debt adverse. We worked in the summers during high school and university years and graduated debt free. We had relatively stable professional careers and decent pay through out our working years. We bought our first/current house within our budget. Due to our simple life style and luck (tuition and housing price not as expensive compared to today), we were able to pay off our house in our late 30’s. My wife (54) and I (56) left our full time jobs las summer. The main reason was work was consuming too much of our life and we wanted to slow down and figure out life. My wife loves her work so she now works from half-day to three half-days per week. It keeps her socially engaged. I miss the technical aspect of my work and colleagues with whom I still meet up and golf in the summer. I was offered part time work at my company but did not take up the offer. For now, I enjoy having the free time to help out our kids, visit my old high school teachers/friends and more ‘importantly’ (kidding) figuring out my golf swing so I can play better this summer. My wife and I feel very fortunate and grateful to be Canadian and living in Canada. I believe where and when one is born is a major contributing factor to one’s financial stability and having a normal life. Of course, hard work is mandatory in order to take advantage being able to live in a great counry like Canada and good timing. Today’s generation is not as fortunate due to high COL and house prices. I am not certain we would be debt free today if we had today’s tuition fee and housing prices duirng our time .
Great details, MQL.
Congrats on retirement/slowing down, and more re: wife (54) and you (56) left your full time jobs last summer.
Employer willing, I might consider 3-days per week for the coming year or so for sure. If not, that’s OK, I might find some other hobby work.
I also feel like I won a bit of the lottery being born and raised in Canada. It is my hope that we can continue to grow Canada into a welcoming, diverse, economic superpower. Many days, I have my doubts!!
Best wishes and I hope 2025 is a good year to your and your family.
Mark
Hi Mark.
My wife and I are credit card debt averse so have never carried a balance. We only use it for convenience. We have had car payments when I was working and receiving a taxable car allowance and deducting expenses.
We bought a house with a 30 year mortgage( to keep payments low), but paid it off in just 5 years, using annual lump sums and double monthly payments.( rrsps and TFSA were maxed out too)
Retired 3 years ago at 56, sold our house, sold both cars, sold every piece of furniture, and invested the money in VEQT. We won’t need that money for a couple of decades. Bought a used,( but high quality) motorhome to travel south in winter, and a used,( no such thing as high quality) fifth wheel travel trailer to spend our summers near family and the beach in NS.
Don’t need a house if we are never in it. No bills, property taxes, maintenance to go along with it. Very liberating.
Our motto is STUFF is STRESS. Less stuff=less stress.
We are not poor or miserly, but choose to spend our money on experiences instead of things. When we do buy things, we look for value but are willing to pay for quality. When we no longer need it, we sell it. Quality holds it value.
We are fortunate to never need debt in our lives ever again.
Good points and a cautionary tale for others: stuff = stress and stress can be caused by lots of stuff.
56 is a nice age to retire – seems “young enough” to enjoy many things including liquidating everything. 🙂
Must be a nice set-up to avoid a home. Good stuff and not needing debt ever again sounds pretty darn free.
Mark
We still carry substantial debt in retirement of about 275K. Monthly cost to service is about 1850 but 750 of that is mortgage principle so it’s a form of forced savings. Not ideal to be sure but not a concern either. Our focus was on generating cash flow that was sustainable and inflation protected and the decision was made to learn to manage the debt which actually reduced our stress levels vs trying to eliminate the debt. Even with the last interest rate spike we had lots of room in the budget to adjust spending.
Another focus was on asset to debt ratio. We have enough assets to eliminate our debt multiple times and still keep a high five figure income if we had no assets. We also carry some life insurance that would reduce the debt. There are several options available to us.
The debt is mainly held in potentially appreciating assets (mortgage), so despite the debt the net worth is still slowly climbing. As the assets appreciate, the impact of debt servicing is substantially reduced.
You don’t have to be debt free to achieve financial independence but you must learn to manage debt and be cash flow strong. That was an epiphany for us.
Good stuff, Gruff.
I think if your debt is manageable, all good. I just prefer to have $0 debt now as I enter some form of work on own terms.
I know some folks out there really struggling with debt – I feel for them.
I embrace your thinking: “You don’t have to be debt free to achieve financial independence….” but you have to manage debt before it manages you. No doubt.
Nice to hear from you,
Mark
We were mortgage free at age 44, and this was done with one income and 4 kids. I was told by a colleague that getting rid of the mortgage would relieve a burden off of our shoulders, but it would not provide that much more money. He was right as the kids’ expenses expanded with age.
We still managed to max out the RRSP and TFSA lines each year because my wife doesn’t save money – she takes it hostage. Buying used always saved on the auto expenses, and we are now on our 7th version of a Caravan – a loser cruiser as my one son calls it (but he borrows it regularly for his needs). My mechanic said that the minivans were reliable, parts were always available, and everyone knows how to fix them. Having 4 kids with all of their activities made it the transportation of choice, but it remains so for 2 seniors living and rambling from home.
We have no debt and have carried no balance on our credit cards other than 2 times in our 43 years of marriage (and my wife can tell you those dates and why). We provided our children with a great education on being savers and three listened and one was out of the room when those lessons were modelled.
We marvel at the debt load in the graph above for people our age. No debt, a defined benefit pension, and full TFSA and RRSPs are providing a balance that helps us sleep at night. However, the hardest part is to become spenders of this cushion. You can’t flip the switch easily, and my wife is willing – but still shops the flyers and won’t buy grapes because “have you seen the price!!”
Our approach was to take on debt for house and vehicles (only when necessary). Otherwise we couldn’t afford it. My wife made it that simple, and we have prospered because of it.
Mortgage free at 44 is impressive, Grampster.
Buying reliable cars is key – cars can be expensive servicing them all the time for expensive parts too.
I have no doubt based on what you wrote you did as much as you could for all kids = teachable moments for your children re: “We provided our children with a great education on being savers and three listened and one was out of the room when those lessons were modelled.”
Same: we have no debt, a small DB pension (lucky I know but I worked hard over the years); x2 full TFSAs and x2 full RRSPs.
It will be interesting to see how we flip from saving to spending – those days are coming up soon.
Congrats on your financial journey, sounds like overall a rewarding one.
Mark
Hi Mark and it’s about time! Congrats on your financial journey!
We are DINKS as one of your readers termed. Both self-employed. I, a service technician and she, a management consultant with a legal background. Over the years, we had a busy workload life with little to no time to manage our savings. First we started with the bank, then we moved to those well-known investment firms with account managers. We always seemed to stay just above the amount we initially gave them with little to no growth. Giving our savings to these fund managers with the assumed promise to make us money as they skimmed 2 to 3% off our investment accounts that seemed to go really ‘no-where-fast.’ We lost principle when the accounts were way down on two major market down turns and yet still had to pay the fund managers their percentages. After the second market downturn, once the accounts grew back up to their contributing principle which took years, we moved them (RRSP & TFSA) into term GICS. Understanding that this was the move to make for that time being in our life, because we had lost all trust in assigning our money over to other people to manage.
In our 50’s we downsized moving from the outskirts of the GTA to a modest home in cottage country. We did some very minor home upgrades and the usual repairs to our liking; not a vanity home and less expensive than living in the city. After that move, we gradually scaled-down the work hours and lived off some of the first home’s proceeds until 65, when we left the workforce and started drawing CPP and OAS.
Wife is autodactict and started studying finance at the onset of COVID-19 while we were both living a full-time life in cottage country homesteading.
The door she opened to the financial world began with her steadfast focus on DIY investment learning. She started with following Mark Seed, Mike Heroux and Twacan as well as individuals with, CPA and CFA designations including attending various financial summits. She absorbed this information like a sponge and developed a tactical plan of action and methodical approach suited to our needs. She took to her investment and tax planning studies like a fish in water, spending sometimes 30+ hours a week on it. As the GICS matured we moved them into DIY self-directed fund accounts.
Five years later now, she’s managed to double our NAV and we’re debt-free.
No one knows their own financial situation better than themselves. It’s not a difficult task to manage on your own either, it just takes time and proper planning. If the temptation to over spend can be tempered and the will to live a bit below or at one’s means can be achieved with a stable investment strategy paired to one’s life, then the rest can easily fit into a liveable lifestyle.That is our story.
Excellent story and details, thanks for the kind words to you and others.
Yes, DINKs here too with one cat at home who is aging.
I commend you for taking control of your finances, the ol’ adage applies: noboby cares more about your financial journey and money than you do!
Love reading that: “….door she opened to the financial world began with her steadfast focus on DIY investment learning. She started with following Mark Seed, Mike Heroux and Twacan as well as individuals with, CPA and CFA designations including attending various financial summits.”
Kudos on being debt-free = must feel great.
Any big plans for 2025? Travel? Retirement spending on other things?
So well done.
Mark
Mark, thank you for your interest. “Any big plans for 2025? Travel? Retirement spending on other things?”
Well, our lifestyle is our big plans for 2025. And travel, well the wife and I sometimes do lengthy two-night trip excursions exploring various towns and areas in the province over the Spring and Autumn. In the Winter, we enjoy being snowed-in this winter wonderland while doing one of our hobbies as we wait for the roads to be cleared to venture out for provisions. In the Summer, we usually go for daily swims, kayaking, hiking in the forest, or go for boat rides as we need to keep active to stay healthy. One couple we swim with is over 85. We also spend time with a few local retired friends in the area hosting dinners or going to their home for dinners, listen to music, watch and comment on movies or even go out to restaurants together. Given everyone of our retired friends has their own bucket list, we usually see them at different times over the year. Some have a seasonal home in the area or a second home in another country. You could say that for every season there’s a reason to catch up with and hang out with most of our friends before the year ends. Retirement keeps me and the wife busy with “Living” and it feels as if we are on vacation 12 months a year. We did lots of traveling when we were in our 20’s to late 40’s. Yet, we thought for retirement we wanted to be in an area that came close to traveling without – rushing to airports, the hustle n bustle and time wasting in travel, packing, and getting settled in, because we found the time to any one place was always too short and went too fast. The idea to buy a condo or a home in another country was not part of our budget and later hearing about some of the mishaps and horror stories of retired friends that did, convinced us that we made the correct decision not to. Residing full-time in cottage country now, we don’t really need to travel anymore to far away places, because we are lucky to experience 4 beautiful distinct seasons where we live, Winter if you don’t mind being in the Alps, Spring is much like the floral scent of Paris, Summer we have several beaches and lakes for various water activities, Autumn offers the harvest, great hikes and the colours on the deciduous trees; all within view or a short drive down the road. Work is our responsibilities that keep us busy (our daily and weekly chores, our hobbies, our 2 cats, time with our friends and minding the required vehicle and home maintenance). We sorta follow a seasonal schedule that we adhere to and switch it up depending on the weather conditions and how we feel.
Retirement spending on other things will be on unexpected necessities that pop up. I think that if you determine which keeps you happy, you mind your health, and surround yourself with the people and pets that are dear to you, you’ll be fulfilled and not need much more. Cheers, Stuart
Great stuff on the travel, wow.
Ya, we can relate. We like our day-trips/overnighters as well.
Nice: 🙂 “You could say that for every season there’s a reason to catch up with and hang out with most of our friends before the year ends.”
We considered buying a condo in another country, but just figure renting is easier when we travel. Less drama. More control over our time and money.
Sounds like an amazing lifestyle. Very cool.
Mark
Mark. Thanks for running this site. i find it very inspirational.
We started with $302000 principle mortgage debt in October 2019 and we now sit at $86000 principle mortgage debt. I’m 54 and my wife is 52. We are dinks (double income no kids) but we do have two cats to take care of. Our mortgage debt is the only debt we have. Our monthly credit cards (cash back) are paid on time monthly.
Most of our purchase planning as far as weekly goods and services is done by my wife. She finds ways to get items free or on sale and we stock up on non-perishable goods when prices are set to increase.
I’m projecting, if all goes well, in August 2027 – roughly around that time we will be very close to debt free. Roughly $20000 remaining on the mortgage principle. At that time, we will likely make several large sum payments to knock that amount down close to zero. The 1 year interest rates for mortgages is very steep, so I don’t intend to deal with that for long.
We try to maintain $60000 in funds that are fairly liquid – combination of GIC, high interest savings. So far, we’re maintaining that target, while continuing to invest monthly in registered accounts.
Our strategy seems to be working so far, so I don’t have the desire to change much at this point. It is possible we will go to Ireland at some point in the next year or so and that of course may reduce our savings. To compensate, I may adjust our monthly investment contributions downward slightly and or reduce other expenses.
Good stuff, Christopher. Very similar.
DINKs here, used to have two cats, lost one to old age, now have just the one.
Having no debt in a few years will feel good – trust me. There. 🙂
We also keep a growing cash/cash equivalents balance – biased – but I think that is smart.
Ireland is on our travel list. Been to Scotland twice.
Any big investing plans for 2025?
Mark
Hi Mark.
I continue to look at CCL-B as being a value stock. Priced at an attractive value. They are the global leader in what they do and what they specialize in, with products spread across several key segments including plastic packaging, labeling, bank notes, avery, and retail security, they are diverse and wide moat. I can’t see plastics packaging being replaced any time soon, although they may manufacture more sustainable packaging as time goes on. I really like having WCN and WM as anchors for stability in our portfolio. Our focus is on paying off the mortgage so that we can gradually retire. We want to build our TFSA portfolio and mostly leave alone the RRSP. If there is an attractive price and we have the dividends built up in the RRSP account we’ll try to purchase MSFT stock likely with Norberts’ Gambit. I’m more risk averse as I age so my choices are mostly leaning toward diversification, safety, and stability of funds.
Christopher
I also like these stocks, biased, in that I own WCN, WM and WMT as defensive portfolio anchors. Otherwise these days, beyond some tech, most of my portfolio is in XAW for ex-Canada growth and many other Canadian dividend paying stocks beyond WCN for dividend income.
I’m also getting risk adverse as I age and welcome the ability to have a cash wedge for 2026 or 2027 spending. I’ll share more details in the coming weeks.
Mark
We have about $270k left on our mortgage, at 1.94% until September, on track to have it done in about 5 years. We also have $17k left on a car loan, at 0%. No other debt of any kind. We are in our 50s, with retirement well funded and ahead of schedule. We travel a lot and spend more than we should, but our plan is working and life is short, right?
You’re trending, Ross.
I think once your mortgage is dead that will be a huge weight off your shoulders.
If you are OK with working and spending, all good too. Life is precious and meant to be enjoyed. Money is just one tool for that.
Mark
Hi Mark,
I have quite a lot of mortgage debt, and I’m approaching retirement (at 65), but I’m ok with it. As you state in your comments earlier, I will restructure it when I finally stop tapping a keyboard into something that makes sense (a big part of that mortgage is down to rental properties).
The car question is always an amusing one. I love cars, but frankly they are always an ongoing cost (purchase with interest, fuel, insurance, maintenance), so even though I want a top of the range Audi or Lexus, I’m currently running a 10 year old Dodge Caravan (adapted for my daughters wheelchair) and a five year old Mazda 3. Many’s the time I’ve wandered into a dealership with money burning a hole in my pocket – but I can’t bring myself to put the cash on the table!
Thanks for sharing, Chris.
I’ve had a few clients/readers at Cashflows & Portolios whereby I’ve done some projections reports for them and they carry a small mortgage in retirement. The challenge I continue to see with that, which can be done, is they are now not employed and they are forced to use some of their retirement money to pay other people first. The good news is, most in that position can afford it and that mortgage is also only temporary in retirement.
As the car, I used to have a Mazda Protege for 17 years. Was very happy with it until it rusted out. Nothing wrong with older cars is what I am saying – they get you from A to B just like an expensive car. 🙂
Continued financial success to you.
Mark
Hi Mark. I still have a small amount of debt (house), currently sitting at $22,000. The interest each month is around $120. I could pay the amount off by selling some of the stocks I have in my TFSA, but I make $420 a month in dividends plus whatever I make on selling covered calls. So instead of selling off the stocks I am keeping them at the moment and just aggressively paying off my debt. I take a look at how much I will have after paying all my bills each month and use the rest to pay down the debt. I am in the 55 – 64 category so in much better shape than what is shown in the graph. I have no other debt. 2024 was my first full year not working, as I prefer to say, I didn’t retire I just decided I didn’t want to work for someone else anymore. I am too young to collect CPP so I am living off my investments. I draw money from my LIF and RIF each month. I get paid on the 15th of each month just like people who are still doing the 9 to 5. As a single person I draw just over $4,200 a month after tax, all covered by dividend paying stocks and ETFs. Without looking at my records I would say my regular on-going expenses are around $1,000. This would include my utilities, food, gas for my car, phone, and internet. Some months I will have one off payments such as property taxes, house insurance, and car insurance. Other than those the rest of the money is mine to do as I wish although I do have to watch out for any big one time expenses such as a house repair or major appliance replacement. Last year I went on three trips and I have another planned in a couple weeks. I almost went to your next of the woods this week but the prices for the Senators game against the Avalanche was more than I was willing to pay, maybe another time.
Ya, that’s small debt and seems very manageable for you. Thanks for sharing your story.
I was surprised by the debt math in that cohort. Seems very high but it is what it is…
Like you, I am far too young to collect CPP so we will be living off our investments in the coming years.
That’s good planning and income: “As a single person I draw just over $4,200 a month after tax, all covered by dividend paying stocks and ETFs.”
I will be at the Sens game in a few weeks. Been a few times this year. Ya, some of the ticket prices are high for the premier teams like Colorado. Any ideas who wins The Cup this year?
Mark
Our Mortgage was paid off in my early 40s by downsizing early to a smaller house: smallest house on a nice street. Now I m 71. My husband and I, never having big salaries but always working, have a strong net worth. We contributed max to our RRSP and TFSAs annually. I am debt adverse because of history and being debt free early has helped me mentally and financially. (My father’s ( farmer) loan in early 70s was called when a run of bad yields weather related and low beef prices had him have ask for more time but he had to deal with a new, ruthless young Bank of Montreal manager trying to be a big shot with no heart. I witnessed the meeting through the glass office window at the bank. Terrible person. And the person he reported to must have been heartless too. My Mom was a teacher & they had us 5 kids; we were 11-19years old at the time. We lost the farm and my father was destroyed.)
The only exception I have about debt is autos. We lease quality cars; buy them out and keep for 15,18 years. Did this with an Audi, and a SAAB. Currently on a Lexus. After warranty is up we find specialized independent mechanic(s) for the model and it’s worked out great so far.
Love these stories, Mary.
Smart: contributed max to RRSP and TFSAs annually.
I’m sorry to hear that about your father – must have been very hard. But, in a positive light, seems you have take those lessons learned and made a wonderful life.
As for the cars, smart stuff and finding a good mechanic is gold.
Continued financial success to you,
Mark
Hi Mark.
We had some debt for the first 10 years of our marriage with poor choices of auto purchases and sales along with financing we carried through from schooling. Once we both had steady jobs and moved up the property ladder in the next 5 years we paid down our loans and we had mortgage debt. At that point we began investing in rental property. We purchased two properties and kept them for eight years successfully rented the whole time. Upon selling the first property we paid off the second and banked some funds. Two years later the rental income and our salaries helped us to use accelerated payments to lower our mortgage as fast as we could. Two years later we sold the last rental and paid off our home and banked some more for retirement. That was two years ago now. We now live debt free and simply enjoy the ridiculous cost of telephone, cable TV, property taxes etc.
My biggest surprise/disappointment was that I thought once the mortgage was paid that we’d have bags of cash for the rest of our lives. I’d lost track of how much all of the other bills, other than the mortgage, actually added up to.
We’re fine and living the life we enjoy thanks to some good investments and planning along the way. No debt is a peace of mind that is worth the wait after all of the years of payments. It took 30 years married to go from $60k in debt to mortgage free and retirement funded. Phew!
Hey Paul,
Your journey seems familar to many readers and emails I have rec’d over the years.
1. Steady jobs – can afford a home.
2. Higher salaries, can afford rentals as you wish.
3. Over time, if property management is not right for you, then sell and deploy capital elsewhere.
Some of the most successful DIY investors I know didn’t always get out of debt, quickly, but instead used it as a tool to be used wisely to grow assets and not let debt run their lives.
Like you, it’s nice to not have any debt to worry about and I don’t care much any longer what mortgage rates are/are not unless I’m trying to help others. 🙂
Thanks for your comment and sharing your story,
Mark
Hi Mark,
I retired at age 62 in 2022. We were able to do this because of a couple of reasons.
1) when my wife started making really good money we put it into investments (now, 15 years later, we have about $500k in investments).
2) when the market was at it’s high in 2022, we sold our big house in the city for $188k more than we paid 4 years earlier.
We have set ourselves up to manage on about $4,100 or so a month after taxes. Our home in a senior’s complex is paid for. Our truck and travel trailer are paid for and we don’t splurge on much. It’s a comfortable living so long as our investments don’t tank (moderate conservative).
I really wish I’d started investing in myself when I started making decent money in my mid-thirties. Fortunately we were able to catch up.
We pay off our credit card every month and claim 1% cash back on it. Every little bit helps.
Debt free is the way to go if you can manage it. Good luck to everyone.
I enjoyed reading your journey, Tom.
If you can live off about $4k per month, comfortably, that’s great!! I know some folks living off about $3k per month but they are single, debt-free and own their home. I find that impressive. I’m more of a spender. Ha.
Yes, woulda, coulda, shoulda – we all have those thoughts from time to time. I know I do.
Continued success to you,
Mark
Good day Mark:
Very good points. Love your investment tips. I wanted to tell you my experience with buying a new truck. Back in 2007, I leased a new Toyota Tundra for 4 years. Those 4 years were great so I decided to buy the lease out and borrowed money for a loan for another 4 years. Again , these next 4 years went great with no unexpected repair bills. Yes it took me 8 years to pay but as an independent contractor I was able to write off these monthly payments for the total of 8 years. I still have this truck today, 18 years later and with just regular maintenance , it still runs great. I believe because this truck had one owner, it has lasted this long. So a $50,000 truck has got me 18 years of great service.
So buying a new vehicle is not always bad as I keep reading this over and over again.
Thanks
Jamie
Fair points, Jamie. If you are getting good value for your car/truck, and can afford the payments, then I don’t think this is a huge deal. My only stressing point is always have a car loan, to buy and spend money on a depreciating asset can be one way to cut back if you are in debt.
What people spend their money on, get from value from, I totally get it. 🙂
I suspect your ability to “…write off these monthly payments for the total of 8 years” is likely part of the reason why you made this decision?
Great points.
Mark
I hate debt and have zero. I am 52 married with 2 kids (one is now out of the house). Mortgage paid off around 5-6 years ago. We stayed in our modest home rather than move up as salaries rose which was a great decision as we didn’t add debt to what would have been a vanity purchase. My wife always teased me about paying extra on the mortgage, but she is pretty happy now. We have invested well and now have a seasonal spot and take 2 to 3 trips per year. We will be retiring in around 2 years without government or defined benefit pensions; strictly from no debt, high savings rate, and intelligent self directed investments.
Excellent: “Mortgage paid off around 5-6 years ago.”
Nice to have a seasonal spot, too, Rocky. Well done.
You sound like some others on my site and comments. Given they focused on killing debt while paying themselves first for a few decades, they are now in a DIY investing position to retire and meet their spending goals. It also helped they avoided financial piranhas in an expensive assets under management model!
Great stuff,
Mark