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Iowa | Not sure I follow all of your post, but my thoughts in general:
Work on paying off stuff that is depreciating (in real value, not tax depr) first.
1) Pay stuff off until it hurts. This assumes you have a "rainy day fund" or some form of emergency $$.
a) you can do without some stuff if you have to and you've reduced your debt
b) If it doesn't hurt a bit, you may spend that extra money on something you don't need, and you still then have more debt than necessary.
c) you can always borrow a little bit more operating later on if you need to.
2) FIX THE RATES. Can you afford an extra point or point and a half now? (fixed rates are currently a bit higher than variable) I'd bet you can. Can you afford your payments to double? I bet you can't, or at least it would be a real hardship that could have been avoided.
3) Of course pay off the higher rate loans first, or re-finance them. FIX THE RATE.
4) paying stuff off as fast as you can, even if it hurts, gets you closer to your goals, and is in essence a forced savings account- when you make a double farm payment, you don't have money left for a new pickup, WHICH IS GOOD.
5) Staying in debt, or going into debt, because interest rates are cheap is counter-productive and foolish. A time may come when even the PRINCIPLE is hard to pay back.
6) Drag stuff out because interest is cheap, and debt and payments linger, and you delay the really good times you could have had. You can REALLY make $$ and get ahead when most things are paid off- now they're paying YOU, You're not paying (on) THEM.
7) Your balance sheet is bulletproofed when stuff is paid off. You're ready for opportunity when stuff is paid off. And sleep comes MUCH MUCH easier. | |
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Paying off Long Term Loans? Your Thoughts.
