Re: "What is 'your' definition of Debt-free? This is our situation, a financial quest
Direct living expenses (ie, mortgage or rent) are typically not counted as 'debt'. You are debt-free by the standards of most people.
However, I strongly agree with the above posters that 'debt' can be used to your advantage. For instance, you asked why anyone would want to buy a house in California. My family bought a house in the early 1980s in what was then being developed as a high-end LA community (Rolling Hills Estates). At the time it cost somewhere in the upper $300k. When it was sold two decades later, it sold for somewhere around 3 million.
Paying rent will never give you equity in anything. It will never increase your wealth. It is a very safe plan, but if you don't take risks, you won't increase your wealth.
I have been buying and selling properties for years. When I bought the first one (a 200+ acre farm), I had to borrow money. So I was not debt-free. But when I sold it, I made a ton of money and used that money to buy another property, which I also flipped for a profit and which I didn't have to finance.... and on and on.
I also don't pay my bills the second I receive them. You don't get extra credit (no pun intended) by doing that. As long as you pay it before it's due, you will get the same credit benefit and you will have your money to use for a longer period of time. I too pay off my credit cards in full every month, but I do it on the day before the payment is due (online).
It depends on what you want. People who are very risk-averse and conservative don't usually build much wealth. You might eventually want to consider buying a home of some sort to build equity, because at 30 years old you have a lot more years of rent to pay. As long as you are smart about where you are buying and what you are buying, you can have your place paid for in 20 or 30 years when you really need to stop thinking about paying rent.
One of the best things you could consider doing is to buy a duplex and finance it - live in half and rent the other half. Let someone else's rent pay off YOUR property.
Last edited by Hope Shimmers; 01-19-2017 at 06:31 PM.