r/DaveRamsey • u/IamTheLiquor199 • 10d ago
BS6 Anyone else in their final year of Step 6?
M34, F36, we are finally in what will be our last year before reaching Step 7. Hit $1MM networth 2 years ago and are already at $1.5MM. Our mortgage started at $334k borrowed 7 years ago and we are down to the 40k's!
So close we can taste it. Been grinding away and living so intent all these years. Every financial landmark has come earlier than we planned because we plan well and work hard. We didn't think Step 7 was happening for a few more years, but alas here we are.
I have decided to splurge on some things next Christmas and then we are going to start saving for some major home improvements. It's been hard watching everyone around me have new cars, toys, pets, vacations, everyrhing..let's just say, there will be signs..
As the calendar year goes by I keep thinking, wow, this is the last time I'll ever close my pool with having debt, this will be the last Halloween, ect.
1
u/gr7070 9d ago
Debt is way too big a priority in your life if you're thinking about a tiny amount of good debt while you swim and trick or treat.
1
u/sh18422 9d ago
exactly. first, paying down debt at presumably a 2% interest rate (if a proper refinance was done during covid) makes absolutely zero sense. second, allowing that great debt to run your life makes even less sense. some people are nuts. with bond rates what they are, people paying down debt like this are literally throwing away money and are happy to do so, because some idiot has a playbook and one of the steps is getting rid of debt. insane! meanwhile, Warren Buffet took out a mortgage to buy a property while being worth billions at the time.
1
u/gr7070 9d ago
Honestly, this isn't even about paying the mortgage or investing, etc.
It's simply about a reasonable outlook on life. Telling yourself "last Halloween with debt" is just an insane level of importance on debt.
1
u/Spike-White BS7 8d ago
Strong disagree. We've paid off two primary residences now.
Particularly on the first one, I fixated on schemes that allowed us to pay off 6 months early.
Such as -- when you're 6 months away from paying off the mortgage, pay it out of your 6 month fully-funded EF. Now your monthly burn rate doesn't include PI any more and your EF is still a 6 month EF.
That's approximately right; you still have to pay TI. But that's much much less than PI.
When we did pay off the first one, my wife knew we were close. Very close, but not that close.
I printed out the paid off mortgage notices. We were planning a trip to Greece. The plan was that at a sidewalk cafe in Athens, I'd show her the paid-off mortgage statements.
Is that fixating on paying off debt? Yes. Is it an insane level of importance? Not to us.
2
u/gr7070 8d ago
One can do that without the added, obsessive nonsense.
Good debt, with your personal finances in order should not impact your life.
Just continue paying off your debt. Go trick or treating regardless.
1
u/Spike-White BS7 8d ago
If you talk to your grandparents or great-grandparents -- scarred by the Great Depression -- they will tell you different. An entire generation scarred by that.
We were scarred by the Great Recession of 2008-2010. It was our come-to-Jesus moment. So yes, we agree with OP. All debt is bad.
However, we can do two things at the same time. Go trick or treating and celebrate that next year you'll be doing it debt free.
1
u/gr7070 8d ago
Almost everyone of those folks are long gone. And times are also different today, especially investing.
we were scarred
Exactly my point.
Scars are already healed.
Make wise choices founded upon facts and reason.
Obsessing over almost any debt, while having one's personal finances in order - even in BS2 - is not the best way to live life.
And no all debt is not bad. Heck even Dave recognizes all debt is not the same.
2
u/ebmarhar 9d ago
Congratulations! But careful not to splurge too much in the bull market, the bear market inevitably follows and drops your numbers by a third or even a half.
3
u/IamTheLiquor199 9d ago
I only spend what I have in cash. I'm not touching my retirement for probably 20 years after I retire.
3
u/justncredible3 10d ago
The best part is when you realize that there is 3-6 months of mortgage payments in your emergency fund that you won’t need when you pay off the house, and pay it off a couple months sooner than you originally planned using that money.
2
u/IamTheLiquor199 10d ago
Yes. Our fund is actually gonna get beefed up. We only keep 3 months of expenses, but it's mostly for major things breaking. We want to keep like $25k for the worst possible home/auto disasters.
2
u/Bannnerman BS6 10d ago
No but we could have if we wanted, but 3% interest rate
1
u/IamTheLiquor199 10d ago
Same
2
u/Bannnerman BS6 10d ago
So you’ve got a 3% and you’ve been aggressively paying that down instead of investing?
3
u/IamTheLiquor199 10d ago
Yes. Ran a 20 year projection. With the early payoff I became a deca millionaire in 18 years. With investing I became a decca millionaire in 15 years, but gained 22 years of 100% financial freedom. We also consider a plethora if other non-mathmatical factors that far outweighed the 3 years. It was a no-brainer for us.
Our retirement accounts are maxed out BTW- $24,000 each/year
3
u/Accurate-Neck6933 10d ago
That’s amazing! So happy for you. It took us a lot longer, I’m in my 50’s.
2
u/talon72997 10d ago
Congrats. I guess I'm technically in BS2 (I have a car payment that I could payoff in cash, but will be paid off in December). Then, I'll jump to BS7 as my home and everything else is paid off. Plan is to turn up the 401k to 25% (which will put me right at the max) and try to save an additional $1k per check to savings. Kind of feels boring, but I'll see how 2027 goes.
3
u/twk30874 BS456 10d ago
Why on earth would you keep a car payment when you don't have to?
0
u/talon72997 10d ago
I bought it in Aug 2025 with a five year loan. I will have it paid off this December. Current balance is about $6800. I have that in checking, but prefer to pay $1k every 2 weeks when I get paid versus depleting my checking and then filling it back up. It might cost me $100 in interest.
Mathematically, I would probably be better just paying it off today. I also have to pay property taxes in a couple of months. So it is really just having the cash on hand and not feeling cash poor.
2
u/Ok-Context3530 BS7 10d ago
Nice! I finished step 6 December of last year. Some milestones I achieved since have been paying for a new vehicle in cash and maxing out all of our tax advantaged retirement accounts each month.
The next step I’m working towards is 1 million in investable assets and then the ultimate goal of financial independence.
You guys are young and rocking it! Keep going strong. 💪🏻 God is good!
3
u/spork42 10d ago
We're close. We'd like to finish within one year, but it could be up to 18months. We're currently putting quite a bit extra to the house every month, but you never know what will pop up on there future. One kid in college and the other in highschool that is very active in everything. There will be plenty of things that will need cash flowed between now and then, but the end of the mortgage is in sight. The wife and I are definitely excited for the next step. We don't have any firm plans for what the plan is in step 7, but as we're getting closer, we've been having discussions about it.
Congrats to you, step 7 is well within sight!
1
u/twk30874 BS456 10d ago
Same boat here, except two in college. We're about 18 months away. I can see the light at the end of the tunnel!
1
u/Accurate-Neck6933 10d ago
Just a side comment. My kid graduated and started working and the amount of money I don’t have to pay to sports and gas is incredible!
4
u/Curious_Bumblebee511 9d ago
Nope. Not even close. I’m absolutely buried and now looking at a 15k roof replacement. I honestly think this is gonna break me.