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Our Zig Zag Path to getting Debt Free9 min read

Getting out of debt has been an on and off thing for my wife and I for years. We have taken runs at it a few times and before we knew it we had slid right back into bad behaviors, and more debt. So when we finally embarked on the debt free train “for real” a few months ago, we had the conviction and commitment to follow through – and that is making all the different in the world.

What I learned looking back is that debt is a very slippery slope. Once you have ANY, it’s easy to decide that it’s OK to get more. If you have a payment mentality, what’s one more payment? If you have room in your budget, why not have that car you want, or the house, the boat, the whatever. The problem is that if you are always living in payment land, you have no real control over your life or your future. You are in BONDAGE (slavery) to the FUTURE. You have already taken hold of what you are not able to pay for, and have committed some future part of your life to do so.

So why do we do this? Well, because it’s just too easy. You can “sign and drive” your life away. Before you know it, there is no margin left and you are living “paycheck to paycheck”. I believe that we want the best life we can afford to have – or that we are ALLOWED to have. But sometimes we need to be disciplined enough to say no to something that feels good now for something that IS good later.

Lying to Yourself

For me, the problem is that as an entrepreneur I have always had the illusion that there is an endless supply of money to be made. I might think “I’ll buy this thing now, and the payments will be easy. I could probably even scrounge the money together to pay it off if I wanted to”. But I never do. In fact, I’ve thought that very thing and then added more payments on top of it. One thing leads to another, leads to another.

So Close! (But then so far away)

At one point we only owed money on our house. Our cars were paid for and we didn’t have any other debt. Just the house. Then, we decided that we wanted to live on land. We went looking for about 10 acres to build a house on, and ended up buying 82 acres. Then we had the house payment AND a land payment!

And then Deeper

After having the land a short while I realized that in order to navigate the land and be able to work on it I would need a truck. Not any truck would do – I needed a 4X4 F250! One payment later, I had the truck I “needed”.

And Deeper

A few months later: “Now I need a Bobcat so I can push down trees”.

And Deeper

Then we thought “we have this land now and we can’t even enjoy it. Let’s buy a camper and put out there!”

The next thing we knew, we had much more debt (and payments) than we had before. We decided that we wanted to get out of debt, so we started considering how to do that. We decided that we would buy a double wide mobile home, put it on the land, sell the house, and get debt free.

You Gotta Spend Money to Save Money!

We found a nice pre-owned doublewide, moved it to the land, added nice big porches on it, remodeled the inside making it nearly like a house, sodded the yard, put in a sprinkler system and landscaping, and on … and on … and on. We paid cash as we went, and probably spent more money than we should have to get it all setup like we wanted. A house could probably have been built for not much more! But, the house debt and payment was gone, we were living on the land (which is great), and no longer had a divided focus.

The End is in Sight!

We thought we were finally on our way. We had a plan in our minds to pay off the little bit I owed on my truck, and my wife’s SUV was already paid off. We were going to pay off the land as quickly as we could and build a house. 

So quick, turn and go the other way!

Her SUV went out of warranty. About a month later there was an issue that cost $3000 to repair. We had a scare right before the warranty ran out that WOULD have cost $10,000 if there hadn’t been a warranty. We decided to buy a newer SUV that was under warranty. One payment later, we had her a slightly used, but low miles and under warranty SUV.

Then, I decided that I was tired of my truck and ready for “another fast 4 door”. I had two Infiniti G35’s in the past and loved them. I was thinking that I would look at whatever the latest version of that car was (Which would have been the G37 at the time).

While at the office I was telling a couple car guys I worked with what I wanted to do. I asked them what they thought I should look at other than the G37 and they made a couple suggestions. First, they said the Mercedes E63 AMG. In order to stay within my $40,000 budget (which would have allowed me to sell my truck and pay cash) it would have needed to be about 4 or 5 years old. They also mentioned the BMW M5, but the same thing was true – it would have needed to be older to fit the budget.

One day I went online and found an E63 AMG for sale at a used dealer and went to check it out. I drove it (that car was nutso fast), and got back to the lot. I drove a 5 series BMW, which was nice. Then the guy put me in a newer BMW M5. It was $60,000 but he said I just needed to rule it out. I drove that car and FELL .. IN … LOVE. Everything about it was amazing. I got back to the dealer and said “This is the car”, and I bought it.

Well, so I went over budget by 20k. Certainly the wrong direction. To make matters worse, after owning the car for a year I started getting close to the warranty expiration. I loved the car and didn’t want to get rid of it, but there was no way I wanted to own that car out of warranty. I started looking at extended warranties and they were about $10,000. Then I thought to myself “Why not buy a newer M5, and the payment difference won’t be more than what that warranty would cost over 2 years – and that’s about as long as I keep a car anyway”. So I found a model 2 years newer that was still in warranty, and bought it. It was $86,000 and I financed $80,000 after my trade. (I loved that car, there is nothing like it.)

Oh look, a Beach House!

A year later we decided to buy a beach house. That was a big down payment (that could have been used for debt reduction)

And a Truck!

After owning the beach house just a few months it was hit by hurricane Matthew. Before a trip back up there to assess the damage I decided that I needed a truck, in case the roads were bad, and it needed to be a 4×4 to get over sand, etc. Plus, I had been wanting to buy another camper at some point so I thought this made sense. I went to the dealer, picked out the truck I liked – which happened to be a BRAND NEW F350 dually that was over $70,000, and you guessed it – financed it.

What have we done!?

When we finally came to our senses I had 150K in car/truck debt, we still owed 20K on her car, had two payments on the land we are on (one payment for a 10 acre piece and another for the 72 acres), a beach house, and probably a partridge in a pear tree somewhere – financed I am sure.

Getting Serious

So, we decided to really get serious. We have to get from under this bondage. To my wife’s shock, I said I was going to get rid of both my M5 and my F350, and buy “the fast 4 door” I set out for in the very beginning. I found a great deal on a Q50 sedan slightly used with a branded title, sold the M5, and sold the truck. 

I owed a little more than I sold the truck for, and a little less than what I sold the car for. They were a wash. I paid $35k for the Q50 and so I went from $150k in car debt to $35k in one phase. 

Then, I liquidated a stock account I had built up from credit card cash back and used that money to pay off the wife’s SUV and the 10 acres. Next, we cashed in a life insurance policy that we didn’t need in the first place that had that had a cash value. We used part of that cash to pay off my Q50. At that point we had NO debt except the 72 acres, and the beach house (which pays for itself to a large degree).

Not only did we slaughter a TON of debt, we eliminated a lot of payments which allows us to accelerate the elimination of the rest of the debt on our land. It’s shocking how far things have come in such a short period of time. Due to the Debt Reduction Account it is actually FUN to save money and see us able to transfer into that account. 

Right now we are building cash and contemplating a series of next steps to get the land paid off, and we believe we may be able to do that in 3 or 4 years.That would be ridiculously amazing. 

As Dave Ramsey has said – “If you will live like no one else, later you can live like no one else.”. I think we finally got committed completely and the end is in sight!



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