Happy Monday, everyone! Today I have a debt-free story from Juan who is paying off a large amount of real estate debt! His passion to achieve financial independence is fueling his desire to become debt-free. Read and enjoy!
My wife and I are in our early 30’s. We’re both immigrants from Colombia and met in college. We’ve been married for 5 years and together for 8 years. I’m a manager at an insurance company and my wife is an accountant at an oil and gas company. We started investing in real estate in 2011. This month, we officially became millionaires!!!! 🙂
1. What kind of debt do you have? How much is it? How long have you been paying it off and when will you be debt free?
Most of our debt currently is debt from real estate. About half our debt is our primary residence, 40% are our rentals (we have 7 of them), and the remaining 10% are my car and a little bit of student loans. We’re currently at $480K in debt. When we started focusing on paying off debt in mid-2016, we had $645K of debt.
2. Why did you decide to pay off your debt?
We had been focusing so much on growing our rental real estate portfolio, and we used debt to acquire most of it. We decided to focus more on being organized with our finances and realized we were highly leveraged. Also, at this time we found out about financial independence and got really pumped to get there as soon as possible.
3. What strategies are you using to pay off your debt? What was the craziest thing you did to get out of debt?
We’re doing the debt avalanche (focusing on debt with highest interest rates). At this point, we’re able to just look at the math and don’t really need psychological boost from seeing the small debts being paid off to know we’re making progress.
I think the craziest thing we’ve done is I sold my BMW X5 that I loved to save us a few months off our debt-free goal. I now drive a Honda Accord, which is not my dream car, but it’ll do for now.
4. How do you stay motivated to pay off debt?
I’m literally looking at my Excel spreadsheet multiple times a day. I ran scenarios all the time to see when we’ll be done with our goals.
5. What’s the hardest part about getting out of debt?
The wait.
6. What are your goals once you’re debt free?
At that point, we’ll have more than enough passive income from our real estate investments to cover our lifestyle to be able to choose whether we work or not. We definitely want to travel the world and live in different cities for months at a time.
7. How do you think your life will change by being debt free?
We’ll have more freedom to pursue our passions and unlimited time to travel.