# What did you do when you became Debt Free?



## Westerncanada (Nov 11, 2013)

CMF

I am curious to know what you did (if anything) when you became Debt free? 

I have been debt free for just over a year now.. and I basically moved all my debt payments into my RRSP and TFSA funds.. but surely someone has done something more exciting then me? 

:smilet-digitalpoint


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## uptoolate (Oct 9, 2011)

Started the non-reg portfolio in earnest.


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## Video_Frank (Aug 2, 2013)

uptoolate said:


> Started the non-reg portfolio in earnest.


This, after topping up the RRSP / TFSA / kids' RESP.


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## Just a Guy (Mar 27, 2012)

Spent several years debt free...then went back into debt and invested in more real estate. Been in debt ever since, but it's a different kind of debt, none personal. 

The past few years, because there hasn't been a lot of opportunity in real estate, I've been running out of debt again...but I'm always working to try to get back into debt.


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## iherald (Apr 18, 2009)

When I got out of debt (including mortgage), I put aside money every paycheck into a "play" account. It wasn't much 10% of my income, but that money is meant to be spent on frivilous things that will bring me joy. So maybe I want to buy some expensive sporting equipment, as long as I have money in the play account, I do it and don't feel guilty. As a natural born saver, I could have the tendency to save everything, so this forces me to enjoy a little of it.


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## slacker (Mar 8, 2010)

Good strategy. I do the same.


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## Tawcan (Aug 3, 2012)

Use the payments for TFSA and RRSP. Once you top up these two, start investing in regular accounts.


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## My Own Advisor (Sep 24, 2012)

I'm still in debt unfortunately (mortgage) but as soon as we're debt free the mortgage payments will simply get shuffled into maxing out TFSAs every year (ASAP or faster each year than now), then maxing out RRSPs (until no room left), then filling up the non-reg. account as much as possible.


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## 1980z28 (Mar 4, 2010)

Westerncanada said:


> CMF
> 
> I am curious to know what you did (if anything) when you became Debt free?
> 
> ...


purchased 126 acres of land and second house plus retirement at 56,was free of debt in 1994,22 months to full retirement


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## daledegagne (Apr 6, 2015)

Just a Guy said:


> Spent several years debt free...then went back into debt and invested in more real estate. Been in debt ever since, but it's a different kind of debt, none personal.
> 
> The past few years, because there hasn't been a lot of opportunity in real estate, I've been running out of debt again...but I'm always working to try to get back into debt.


I did similar. Plowed my money towards building a real estate portfolio. Ramped that up in about 7 years. Quit my job. Live of the income. Travel the world. Hit all 7 continents. 26 countries and both poles. 

That's not to say I don't work. After 3 months of living off the assets (I was only 28 at the time) I got itchy. Life needs a purpose. So I started my part time business and my wife found the job of her dreams here in Thailand. Been here 3 years now.


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## Westerncanada (Nov 11, 2013)

iherald said:


> When I got out of debt (including mortgage), I put aside money every paycheck into a "play" account. It wasn't much 10% of my income, but that money is meant to be spent on frivilous things that will bring me joy. So maybe I want to buy some expensive sporting equipment, as long as I have money in the play account, I do it and don't feel guilty. As a natural born saver, I could have the tendency to save everything, so this forces me to enjoy a little of it.


This is exactly what I want to do.. have that money to spend set aside on absolutely wasteful items.. 

one day lol


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## Westerncanada (Nov 11, 2013)

daledegagne said:


> I did similar. Plowed my money towards building a real estate portfolio. Ramped that up in about 7 years. Quit my job. Live of the income. Travel the world. Hit all 7 continents. 26 countries and both poles.
> 
> That's not to say I don't work. After 3 months of living off the assets (I was only 28 at the time) I got itchy. Life needs a purpose. So I started my part time business and my wife found the job of her dreams here in Thailand. Been here 3 years now.



Wow.. how did you accumulate this much wealth by 28 to live off if ?


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## RBull (Jan 20, 2013)

It was 20 years ago last month. Continued on in life with much more freedom.


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## heyjude (May 16, 2009)

I went into debt in my early 30s to buy a modest home after saving up for a big down payment. I paid off that mortgage in 2 years. After that, I had 15 debt free years and saved like crazy in my RRSP and non tax sheltered accounts. In 2007 I went into debt again to start a rental property portfolio. My maximum debt was in 2010. I was able to continue saving during this period. My debt is now only 20% of the maximum and I expect to eliminate it within 5 years. As I am now retired, I do not plan on taking on any additional debt.


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## daledegagne (Apr 6, 2015)

Westerncanada said:


> Wow.. how did you accumulate this much wealth by 28 to live off if ?


3 Reasons:

First, I was young and single making a reasonable income and when I wanted to be "hardcore saver" I could plow about 60% towards a down payment on a new home. I started when I was 20 or 21 (can't remember lol).

Second, I bought at a good time. This was mainly luck. My first property gained 80% value in about 5 years. It's been stagnant since.

Third, I combined effort and knowledge with money and leverage. Most people invest unleveraged in the stock market by putting away a few hundred every month and then forgetting about it until it's time to meet with their advisor once a year (at best). I worked my full time job, then went and renovated an apartment for 6 hours every evening, or kept my books, or cut grass, or showed apartments. I leveraged my properties heavily at first (something I'm glad people can't do now because it's more dangerous than it is worth), and made sure I paid attention when hard knocks taught me a lesson. 


That said, it's a good thing my wife and I started working again because shortly after, our living expenses changed. At 28 years old I may have had the foresight to invest early and put in the energy...but I didn't have the smarts to realize how life changes and along with it, so do your expenses 

If I could go back and do it again, I wouldn't consider myself "financially free" until I had at least 25% more income than expenses plus enough to keep my investments growing on top of that (so closer to 50% more income than expenses)


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## daledegagne (Apr 6, 2015)

heyjude said:


> I went into debt in my early 30s to buy a modest home after saving up for a big down payment. I paid off that mortgage in 2 years. After that, I had 15 debt free years and saved like crazy in my RRSP and non tax sheltered accounts. In 2007 I went into debt again to start a rental property portfolio. My maximum debt was in 2010. I was able to continue saving during this period. My debt is now only 20% of the maximum and I expect to eliminate it within 5 years. As I am now retired, I do not plan on taking on any additional debt.


Well done Heyjude!

You don't happen to do anything in the Victoria Area of BC do you?


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## heyjude (May 16, 2009)

daledegagne said:


> Well done Heyjude!
> 
> You don't happen to do anything in the Victoria Area of BC do you?


No.


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## gardner (Feb 13, 2014)

Westerncanada said:


> I want to [...] have that money to spend set aside on absolutely wasteful items.


I have found that this doesn't work for me. Eventually the "play money" account has real money in it, and I couldn't bring myself to do anything remotely frivolous with it. Eventually it became FTS and BCE shares and my truck is still a beat up rattletrap.


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## My Own Advisor (Sep 24, 2012)

RBull said:


> It was 20 years ago last month. Continued on in life with much more freedom.


+1 I can't wait for that feeling.


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## agent99 (Sep 11, 2013)

We sold our boat to pay off our home mortgage. Then used the extra cash to buy a smaller boat  After that, I don't recall, but our savings did grow.


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## digitalatlas (Jun 6, 2015)

daledegagne said:


> 3 Reasons:
> 
> Second, I bought at a good time. This was mainly luck. My first property gained 80% value in about 5 years. It's been stagnant since.


lots of respect to you here for acknowledging the vital role that luck played. i've talked to people who have benefited from luck, but dress it up as skill. i've made some decent money on some real estate in the past, and while i put some hard work into the whole thing, there was definitely luck involved. i'm sure you also worked hard (it sounds like you did) but kudos for acknowledging the luck factor


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## Just a Guy (Mar 27, 2012)

Before you pass it off as luck, I'd acknowledge the fact that he actually took action in the first place. Sure, an increase of 80% in 5 years is lucky as it's not typical, but it wasn't luck which had him buy in he first place.

Too many times, I hear people downplay success as being lucky. This has people believe that it's okay that they never tried it themselves, so they continue to sit on the sidelines and avoid the "risks" of investing.

Sure, not every property is going to increase 80%, heck, I'm the first to tell people when they are looking at a bad investment but, as Gretzky is credited with saying something along the lines of...

"Not every shot you take is guaranteed to go in, but I can guarantee you'll never score 100% of the time if you never take the shot in the first place". 

I remember a lot of people crediting gretsky's success to luck when he played.


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## Eclectic12 (Oct 20, 2010)

Just a Guy said:


> Before you pass it off as luck, I'd acknowledge the fact that he actually took action in the first place. Sure, an increase of 80% in 5 years is lucky as it's not typical, but it wasn't luck which had him buy in he first place.
> 
> Too many times, I hear people downplay success as being lucky. This has people believe that it's okay that they never tried it themselves, so they continue to sit on the sidelines and avoid the "risks" of investing.


+1 ... recognising an opportunity and acting on it without taking on catastrophic risk tilts the board in one's favour.


Cheers


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## RBull (Jan 20, 2013)

My Own Advisor said:


> +1 I can't wait for that feeling.




Not too long for you now at the rate you're going.


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## Islenska (May 4, 2011)

Debt free so bought a case of Molson Canadian and listened to Beatles tunes,

No actually recall our family went out for a posh meal,,,,,not really a big deal but a good feeling and another step along the road........


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## daledegagne (Apr 6, 2015)

Eclectic12 said:


> +1 ... recognising an opportunity and acting on it without taking on catastrophic risk tilts the board in one's favour.
> 
> 
> Cheers


This.

To clarify, my "luck".

I was dead set on investing in Real Estate. I didn't know anything about the economy or conditions that would set the stage for high growth. I just did it. 

True, I wasn't like my friends who didn't approach it like a business that sells housing (ie. my tenants are my clients and high quality apartments attracts high quality tenants), and so avoiding bad tenants, and picking profitable places, yes that was skill. 

But, I could have had that same skill, in Florida, in 2009 and I would have been sunk. That was what I meant by luck.


In the end, we make the best financial decisions we can, and sometimes, life still shits on us. Doesn't mean it was a bad decision though. Just a bad outcome.


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## dorian01 (Dec 29, 2014)

When I became debt free except the mortgage - paid more into the mortgage. Since I have paid off the mortgage, I have been maxing out TFSA's and RRSP's...


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