When I first came to Japan I was pretty heavily in debt. I don't think I was any worse off than any of the other teachers around me were, but I I was the only person I know who treated my debt like an emergency. I was probably about $40,000ish in debt and making about $2,500 a month. The exchange rate wasn't so kind back then as the yen was trading about 117 yen to the dollar. Not nice.
I did my best however saving up about 1/3 or each paycheck to send back when the exchange rate seemed to move my way. It was tough but slowly the stars came into alignment. 2008 hit the US economy hard and the exchange rate opened up like a flood gate. I continued to send back money and use it to pay off my debts. I wasn't fully dedicated to the mustachian lifestyle yet so I was also spending on vacations, and gadgets.
One day in late December however I made my last payment on my student loans and that cleared all of my debt. If felt really good. The journey of climbing out of a pit of debt was not fun.
So what then? Well actually the really fun part started. Instead of using my money to pay interest and loans I now get to use my money to make me more money!
"But you still don't have that money! It's locked away in some company! It's just like when you were paying down your debts!" Say the spenders.
I don't agree with that. Sure the money that I put into investments every month is somewhat locked away but psychologically it is so much easier for me to put $2,000 a month into in investment that pays me dividends and will possibly go up 10%, 20%, or even 1000%. I'd come to the top of the mountain and the ride is all down hill from here.
My goal for this year is to invest $24,000. I'm at about $17,000 so far and should be able to hit my goal by December.
The other part about investing is that it seems so much easier than paying down debt. Although the processes are somewhat similar: make some capital, transfer it to another entity. But with my investments I really WANT to put my money in. Of course with debt you HAVE to put your money in (or you don't pay it and well...)
I'm surprised it took me 4 years to pay off $40,000 when in less than a year I have built up almost half of that. It's all about motivation and it's much easier to have on the down hill part of the journey.
Wow, kudos to you for making such tremendous progress! Being able to pay off $40,000 in debt is no small task.
ReplyDeleteI'm sure it took a ton of hard work, but what a turn of events! Now, instead of paying back debt and interest, you've completely turned the tables around, and now you get paid the interest instead!
This is very inspiring, and you've come such a long ways. The great thing is now you've got the momentum, and like you said, it's downhill from here (in a good way). Enjoy the ride!
p.s. I think it would be useful if you added a category next to "About Me" for us readers to track your investments/progress.
Best wishes!
Thanks as always for stopping by fifighter. Your comments give me more motivation! It was hard to pay off the debt but it also taught me how to live a cheap life.
DeleteI've been thinking of adding a portfolio page to the blog but so far I've been a bit wary of advertising how much it's worth. Part of it is security, and the other part is that it doesn't seem to grow as fast as some other investors. I'm starting to get over the security fear so I probably ought to just do it.