SmartMoney, it is time for us to break up. I got you last year in an Amazon special for $5/year. You weren't even worth that.
Usually you talked about margin trading at Ameritrade, Vanguard's South Korean portfolio manager--you know all those things that the Boglehead book told me to ignore. But in August, your headline was "Living Debt-Free." I was inspired.
SmartMoney, you are not very smart. Now, I was expecting something like why your mortgage is important in the AMT bracket, how you can leverage your awesome credit to get 0% financing on anything, etc. But no. This article was not only for the poor, it was for the dumb. And it was not even about living debt free. This "article" is a chart. The chart had four columns.
UNDER 40 (15 other productive years? HELLO?)
target debt load at 40: 1.5 times annual income
"You are probably buying a home and minivan, so get rid of credit card balances. When shopping for a mortgage and student loan consolidation, leave enough cash flow the save about 12% of your income." Who the heck is reading this magazine about minutiae in mutual funds and has to think about whether they can save 12% AT 40!!!!
40-49
target debt load at 49: equal to annual income
Get your student loan and mortgage to manageable rates, and dont upsize your home. "Try to drive your car for one year after it is paid off, and then apply that payment to the highest interest debt." TRY TO DRIVE YOUR CAR ONE YEAR WHEN YOU HIT 40??? WORST ADVICE EVER. And your "debt-free" student loan is still kicking around at 50?
50-59
target debt load at 59: half annual income
Pay off your home-equity line of credit (guess you needed that for your new cars every year) plan to get rid of the mortgage, you may need to downsize (about time!). Don't help your kids with college unless your savings are plentiful.
Well, I'm glad that new car worked out so great.
60+
target debt load at retirement: debt free
Pay off your mortgage and other debt. Think about extending your mortgage for lower payments if your savings are low. (WANT TO LOSE THE HOUSE AT 80?).
So, now SmartMoney my subscription is expiring, and I can't say I'm sad. SmartMoney, you are just not smart enough for me. Sorry.
Sunday, January 27, 2008
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3 comments:
psst, someone asked a question several posts back. do you normally answer questions or do you blow them off?
I answer some questions. I email answers to some. I post whole posts on some.
The ones I don't answer usually ask for more personal information than I'm ready to give, that's all.
I agree that this article sounds utterly ridiculous, but I suspect you misinterpreted the guidance on cars. I read,"Try to drive your car for one year after it is paid off, and then apply that payment to the highest interest debt," as pay off your car over the course of how ever many years and then drive it for an additional year. Admittedly, it would be better to drive it a lot longer than that, or, better still, buy a car using savings rather than financing, but it never occurs to some people that they could live without making car payments for a year.
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