What about earnings and potential earnings? So, many offered the advice of...
Selling off all assets in order to pay off debt and then re-buy assets.
Selling the houses in a stagnant market that doesn't really go up or down would basically mean selling at a loss and then trying to re-buy them later as they are money making assets vs stocks or retirement which doesn't really make $$$. Now, if you said take a leverage your IRA for a reduced interest rate that might make sense but I don't have enough in those IRAs to make it worth doing.
The homes are a life insurance policy that my family would be ok if they had to go and return to a home and I died. They would have money coming in for life that would ultimately cover the bills. So, to sell them would give no piece of mind. The life insurance would more than pay the bills and what's owed and they would be ok.
The goal in going through all of this is to think about earnings as a 1099 and where the $$ go. I may not have $200K in student loans but $100K in credit cards is pretty bad but not Rock Bottom as someone mentioned. I say that because I have never been at the point that I can not pay the bills.
There are some slow months that came in at about $10K for the month and having 2-3 of those months and not actively paying down the debt is what caused me the point of freaking out a little. As a locum though, I know that if I'm willing to travel and work hard with a plan... I can wipe out most of this debt over the coming 6 months. So, that is what I'm writing about. I'm tired of not wondering if I can pay my bills... I'm just tired of having the bill altogether.
I figured out the payment of the bills comes to just under 7K/month with the house-payment, rental payments and income not included as those are a long term play. That doesn't include paying extra or paying much in taxes. Sounds like a ton to those not sitting in the position that I can work hard and pay down over 100K in just about 6 months and be much more healthy from a balance sheet perspective.
I have a monthly running total of debts and will be updating all of this over the coming week. That said, I have paid in 9K to my Sep IRA this month, 10K in tax payments and 10K toward credit card debt. That is substantial for being 2 weeks into the month. As I continue down this path to financial independence... I don't expect it to be easy. I don't expect to be blowing 10K here and there but making a concerted and real effort to be more responsible.
With that said. We are holding off on baby number 2. This process will have to start over in 6 months as it is a 2 year process each time we do it. We started the process and made a valliant effort with our surrogate without the agency fees etcetra. However, that attempt failed twice. Had we been successful the $50K would have been well worth it. Unfortunately, we did not have success and that means we have to stop, regroup, re-fund that savings. We are not rushing into this and we are not trying to our detriment. We knew that this was possible but we also discussed that had we failed we would have to take the time before starting over.
I took the truck to car max and offered to sell it back but they took blue book value and slashed 20% off of that value and then offered that for the truck which would have put us at zero for the truck. Then when I went back to wanting a truck I would have been paying carmax more for a truck in 6 months than I would have saved in truck payments and that they had offered for a smaller less equipped truck and so it was a better option to keep the truck and just continue the plan to pay it off after the credit cards.
The house in Virginia. We like the home and need a place to be. We have friends in the area and it is central with good community and school for Elizabeth in the coming years. It's not perfect and hindsight being 20/20.... I'd have done that differently but there isn't a way to sell the house and just go down the street. We could rent it in a year or two and be just fine or at least break even but the family is happy there and I can hopefully get credentialing done and start locums in the future ... in that area. Had the credentialing not been delayed for 5 months by ... I don't know exactly whom, I wouldn't have to be traveling away from family so much.
So, maybe this helps with some insight into the thinking. Honestly, this is so all can see the flexibility and ability to pay down significantly utilizing locums to do so. This also will show how in the future that debt pay down can then be used to advance my rentals and our savings to a more comfortable place and the same locum job used to bust my butt working.... can become an opportunity to slow down and be with the family as we grow the family.
Have an amazing weekend and enjoy the journey! I know we are :)