The other day ,The Simple Dollar asked, do you want to be rich?
Well, it would be nice not to have to work at all, but the most realistic thing I could think of is that it would be nice not to have any debt. We would still need to work, but we would have more freedom to pick what we do with our money. It made me run the numbers:
Currently, our outgoing expenses (excluding 401k retirement savings) are about 83% of total incoming (after tax) money. At this point, we are sending out more than that because we are trying to pay off debt as fast as possible. So, in a way, we have the freedom to pick what we do with only about 17% of our money. If we had no debt (no credit cards, student loans or mortgage, our outgoing expenses drop to about 35% of our total current incoming money. So we would be able to choose what to do with about 65% of our earnings.
We have made some progress. At some point in early 2008, just about 100% or more of our incoming money had already been spoken for before it got to our bank. Now more of that money is ours. We are learning to be frugal and paying off debt because we want more freedom to choose what we do with our time and money.