My No Dept Pledge

by RJ

in Money Management


My wife and I despise debt. We agreed that our current home will the last debt of our life. If we can’t afford something, we will not buy it.

This is a personal choice and not a calculated financial choice. I see both advantages and disadvantages of being debt free.

Many people have achieved extraordinary amounts of wealth through leveraging money. If I borrow  at 6% and earn 12%, would I be forgoing a great opportunity?

The question isn’t as easy as it may seem. If my main goal was to accumulate millions of dollars, I would be missing an opportunity. However, extraordinary wealth isn’t my sole goal in life.

My goal in life is to do what I want, where I want, when I want. Going into debt for something that isn’t that important to me wouldn’t get me closer to my goals.

I also enjoy that I have to think a little outside the box. For example, come November, I hope to have completed the CFP Exam The next  step to continue my education would be a MBA. But physically attending school, studying information from another textbook and having $100,000 in debt doesn’t sound very appealing.

Instead of going the traditional route, my wife and I plan on getting our Personal MBA’s. A Personal MBA costs us a lot less, allows us a lot more freedom, and if done correctly, can be just as good or even better than getting a MBA.

For many, going into debt will be a great financial and personal choice. There is nothing wrong with obtaining debt for the right reasons.

I just went into debt by buying a home. After moving from place to place for six years, my wife and I both decided that we wanted a real home. We did our homework, found a great house, and bought it.

As for the debt, we plan to pay it off as fast as we can. While the debt restricts our freedom now, ultimately, it will allow us to live the lifestyle we want.

Stop and think the next time you go to bank and ask for a loan. Will buying a car, going to college, or buying a house give you the lifestyle that you want?


Q: How will I buy a home or car?

A: My current home will be the last debt of my life. Someday, my wife and I plan to build a home, which we will save up to pay the entire cost. As for a car, if we can’t afford to pay for a car in full, we won’t buy it.

Q: Will I cut up my credit cards?

A: I still see an advantage to using credit cards. Currently, it takes me time and money to get cash. Second, I enjoy the rewards I receive from my credit card. Last, paying off the cards on time each month improves my credit rating (your credit rating still matters, even if you don’t have any debt). Since I have the self-discipline to pay off my statement each month, I don’t  benefit from cutting up credit cards.

Q: Won’t a true MBA help increase earning power?

A: For some, especially, if you work in an environment that rewards you for obtaining a title. I don’t see where going into debt, adding a title to my name, and delaying a lot of my plans, would make my life better. My boss, which happens to by myself, sees a lot better return on investment from a Personal MBA.

Ask the readers…

Which debts have been worth the investment? Which debts haven’t been worth the investment?

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Josh KaufmanNo Gravatar August 2, 2009 at 2:44 pm

Best wishes with your PMBA, RJ – if there’s anything I can do to help, let me know! :-)

Mom 2 2No Gravatar March 3, 2010 at 10:45 am

Credit cards will get you…eventually. Debit cards give you all the convenience of a credit card and all the responsibility of using cash.

I used to think like you but then I found Dave Ramsey and got out of debt!

RJNo Gravatar March 4, 2010 at 11:27 am

I wouldn’t say debit cards have all the convenience of credit cards. I got back about $2,000 from my credit card company once because my wedding photographer didn’t fulfill his contract. I couldn’t have done this if I purchased this on a debit card.

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