DR 019: How to Get Out of Debt

This is the twelfth day in our 31-Day Money Challenge. Over 31 days we’ll publish 31 podcasts, each designed to help you move closer to financial freedom. Yesterday we had Maxine Sweet from Experian on the show to talk about improving your credit. In today’s podcast, we start a 3-day series on getting out of debt.

Sponsors: The 31-Day Money Podcast is sponsored by Betterment and Personal Capital. Betterment and Personal Capital are two tools I use to make investing easier, less expensive, and more effective.

Topics Covered

  • What is good debt and bad debt
  • What are some examples of good debt and bad debt, and why should we care about classifying debt
  • Why car loans should be avoided
  • How borrowing causes you to spend more and limits your choices
  • The 4 rules of getting out of debt
  • The getting out of debt plan

Resources

Listener Question

Q (Steve): Obviously, one would need some liquid assets to be able to retire early. I can see how it would work if you got started early in life and saved in retirement accounts as well as in taxable accounts but is there any hope of early retirement for us older folks who got a late start of even thinking about the idea of early retirement?

I do have more liquid taxable funds than ever before and I’ll continue to grow that which will help. Also, since I did get started late, 60 was the age I was thinking of as a retirement age goal and I guess I can start taking unpenalized distributions at that age. I guess the question boils down to what is the best plan of attack to address your income between the time of early retirement until your retirement funds are available to you without penalty?

One other question I have is about real-estate but I think you may be tackling that in the podcast series. Mainly, how important is it to have real-estate other than your house in your portfolio.

Day 13: The Debt Snowball

Published or Updated: July 29, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Art Copeland says:

    Rob, hey, I am really enjoying the podcast series, and appreciate all the time & effort you are putting into these. For the listner question about pulling from retirement accounts early, I was wondering about IRS Rule 72t and if that was applicable here? Thanks! Art.

    • Rob Berger says:

      Art, you are absolutely right! Great point. I put that out of my mind for some reason in answering his question. For others, here’s a link to the IRS page with additional info on 72t–http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Substantially-Equal-Periodic-Payments

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