# Debt Free



## Ware (Jan 28, 2017)

I made my last mortgage payment today. :beer:

This topic is to discuss becoming and staying debt free.


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## XLT_66 (Jul 17, 2018)

That's gotta be a nice feeling. I've got about 14 years left....assuming we don't move.


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## craigdt (Apr 21, 2018)

wow- awesome to hear. Can you tell us about your journey? Any pointers for the rest of us? :lol:


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## Ware (Jan 28, 2017)

craigdt said:


> wow- awesome to hear. Can you tell us about your journey? Any pointers for the rest of us? :lol:


Everyone's situation is a little different, but here are a few of our takeaways:


We wanted to be debt free - this was key. We ultimately paid off a 2.75% 15yr mortgage early - which many would argue is crazy, but our desire to be 100% debt free went beyond "the math" for us.

We live in less house than we could "afford". We opted for a 15yr mortgage to minimize interest and put at least 20% down to avoid PMI. These three things really gave us an advantage - I would say it put us on offense instead of defense.

We made an effort to manage our vehicle expenses. We admittedly didn't minimize this category as much as we probably could have (Dave Ramsey style), but definitely recognized that transportation is a large spending category for many people that can be reduced.

We threw extra money at the mortgage. We didn't throw all of our money at it, or even all of our extra money at it - but after we hit our marks for things like investing for retirement and the girls' 529 accounts we made a real effort to direct extra money toward the mortgage.

We would love to live in a larger home on more land, and our plan is to do that, but rather than continue to make payments to a bank we are now going to make payments to ourselves and build once we save up enough to pay cash. A hard look at the amortization schedule really sealed the deal on this decision - we estimated how long it would take us to save the money we will need (which with no debt is quicker than we expected) and then looked at how much we could save on interest during that period by delaying gratification and not taking out another loan.

All of these bullets start with "we". It would have been much more difficult, or impossible, if our financial goals were not aligned.


I'm sure I will think of more to add later. :thumbup:


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## Iceman (Jul 5, 2018)

Congratulations. That's awesome. We hope to be in the same position in 2 years (hopefully sooner). That would be 4 years early on a 15 year mortgage for us. Our goal was to be completely debt free by 40. The we part is very important


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## dfw_pilot (Jan 28, 2017)

Great news and excellent points.

It's been said that finance is 90% behavior and 10% math. I don't know anyone who has paid off their house early and regretted it.

With a similar loan, I can't bring myself to pay too much above and beyond. However, the best answer to invest or pay down debt is always: yes!

Cheers on slaying that dragon.


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## iFisch3224 (Jun 11, 2018)

Congratulations @ware and others! 

I'm 31, about to be 32, and 3 years into my mortgage. I had a career change this year, where I'm earning less then I was previously, but have more free time, to do and plan things on weekends. I've never routinely had a weekend off in my entire working career, until now, and I cherish it.

I've been debt free for about 4 years now, and plan to be, for as long as possible. I am doing this on one income - single, never been married, so I'm ultimately doing this for my freedom.

My income is now about 3.5x my mortgage, instead of about 6x my mortgage, but I also paid cash for my vehicle last year, and the only bills I have are utilities, cell phone, etc. During the summer I can swing double payments, then revert back to saving/paying once during the fall/winter when work slows down.

I'm on a 30 year note, but have already paid down $11,000 in my balance, and when in an equity position to do so, would like to sell my house in 5-8 years, use the equity and buy something a little smaller, with a little more property and pay cash through the equity in my house to be mortgage free. I should be ready to go before my 40th birthday, and have the next 10, 15, 20 years to sock away for retirement, and likely retire early (earlier) than expected.

The journey is real, and I can almost taste the end, the freedom.


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## jabopy (Nov 24, 2018)

Well done John, that takes a lot of doing! I've never had a job that would get me a mortgage.


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## Jacob_S (May 22, 2018)

That's awesome, and I totally read debt free in Dave Ramsey yell style HAHAHA. It's good to know there are other "crazy" people out there, this is a goal of mine too. My ex wasn't much help in getting there, now that I am on my own I am making progress in the right direction. Also My new lady is on board with little to no debt and save save save, it really helps to have like minded partner and one who is willing to work towards that end goal.


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## stepper (Jan 6, 2019)

My wife and I took the same principles to our student loans. Hers will be paid off before mine, then we can reallocate towards the house or my loans, whichever makes more sense. Once those are paid off, we'll go hard on the mortgage. All of this while expecting our first child in August. The plan might change, but hopefully not too much. Wishful thinking, perhaps.


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## w0lfe (Mar 19, 2018)

Congrats man! I've been completely debt free for 4 years now. I got everything paid off before I hit 30! It's, by far, one of the best feelings in the world.


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## ABC123 (Jul 14, 2017)

Congratulations!!


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## SGrabs33 (Feb 13, 2017)

Congrats @Ware. I'm sure that's a lot of weight off the family's shoulders :thumbup:


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## ericgautier (Apr 22, 2017)

Congrats @Ware ! Best feeling in the world.


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## daniel3507 (Jul 31, 2018)

Nice! My wife and I are working our way there. We only have our car and mortgage payments right now which is where we wanted to be at before the baby is due in May. We are now dumping our money into a high interest savings account to reach our 6 month emergency fund. Hopefully we will hit it within 12 months but hard to tell with a baby on the way. After that its the fun part, paying into 529 and retirement accounts and watching it grow!


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## Spammage (Apr 30, 2017)

My wife and I got our house paid off at the end of October last year. It felt so wonderful for about 3 weeks, and then we received notice that our property taxes were due at the low cost of $6000, right in the middle of the Christmas season. That was a rude slap in the face to bring us back to reality.


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## Ware (Jan 28, 2017)

Spammage said:


> My wife and I got our house paid off at the end of October last year. It felt so wonderful for about 3 weeks, and then we received notice that our property taxes were due at the low cost of $6000, right in the middle of the Christmas season. That was a rude slap in the face to bring us back to reality.


I bet! Our slap in the face was two sick daughters last night, so no, we didn't sleep better in a paid for home. :lol:

We didn't escrow our insurance or property taxes, so fortunately we are already accustomed to cash flowing those extra expenses.


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## NewLawnJon (Aug 3, 2018)

Very nice. I am similar in the my wife and I live well below our means, and one of our paychecks just goes right into savings.

I have thought about paying down the mortgage and student loans, but since those are 100% tax deductible for interest I am waiting until they are paid down enough to where I can't use the deductions anymore, and then I will make a lump sum payment to get rid of them.

I have 29 more years of mortgage payments on my current house that we built last year, so I am sure it will take some time to hit that threshold, and by then we might be looking to build again.


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## Cory (Aug 23, 2017)

@Ware That's awesome, congrats!

I can't even foresee that happening anytime soon, my wife and I have been together almost 20years and have moved 15 times :lol:


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## Ware (Jan 28, 2017)

NewLawnJon said:


> ...I have thought about paying down the mortgage and student loans, but since those are 100% tax deductible for interest I am waiting until they are paid down enough to where I can't use the deductions anymore, and then I will make a lump sum payment to get rid of them...


I do not buy into the idea of continuing to pay interest because it is tax deductible - I see that as a losing proposition. Here is a good example.


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## Spammage (Apr 30, 2017)

Ware said:


> NewLawnJon said:
> 
> 
> > ...I have thought about paying down the mortgage and student loans, but since those are 100% tax deductible for interest I am waiting until they are paid down enough to where I can't use the deductions anymore, and then I will make a lump sum payment to get rid of them...
> ...


I agree.


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## NewLawnJon (Aug 3, 2018)

Ware said:


> NewLawnJon said:
> 
> 
> > ...I have thought about paying down the mortgage and student loans, but since those are 100% tax deductible for interest I am waiting until they are paid down enough to where I can't use the deductions anymore, and then I will make a lump sum payment to get rid of them...
> ...


I agree with the Dave Ramsey method for most people since most people are not going to take the extra money and invest it. At the moment I get more interest from my investments than I pay on the mortgage from a percentage rate, so it financially makes more sense to invest (which most people wouldn't do).

Working in the financial industry I have done the same modeling for corporations (take on debt for stock buybacks and paying interest vs. using cash reserves that are invested and earning interest), and I apply the same principles to my own personal life.

Each person is in a different situation, and as a whole it is positive to pay off as much of your debt as possible, and invest in yourself.


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## pennstater2005 (Jul 17, 2017)

Congrats @Ware! That's huge. I did a 30 year fixed and hope to put more on it once our student loans are paid off.


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## Ware (Jan 28, 2017)

As dfw noted on page 1:



dfw_pilot said:


> ...the best answer to invest or pay down debt is always: yes!


What I disagreed with is the notion of continuing to pay interest to get an income tax deduction for it - which simply does not work out in favor of the borrower. Despite being "100% tax deductible", when it washes out the interest paid is more than the income tax saved - and there are arguably better ways (e.g. giving) to trade more money for less taxes. :thumbup:


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## NewLawnJon (Aug 3, 2018)

Ware said:


> As dfw noted on page 1:
> 
> 
> 
> ...


That is correct, and I didn't put that in initially that keeping debt just for a tax deduction doesn't make sense if you aren't doing something with the money other than sitting on it or spending it. You need to invest and make sure that they return a higher rate than you are paying.


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## HoosierLawnGnome (Sep 28, 2017)

With recent tax law changes increasing the standard deduction 2x for many, there is even less of a reason to carry a mortgage for tax purposes.

Once you pay that house off it is really eye opening how much we pay in taxes. Many people couldnt even afford the taxes if they had a huge house free and clear.


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## dfw_pilot (Jan 28, 2017)

NewLawnJon said:


> one of our paychecks just goes right into savings.


Living on Half is a winning formula.


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## rhanna (Jun 7, 2017)

NewLawnJon said:


> Very nice. I am similar in the my wife and I live well below our means, and one of our paychecks just goes right into savings.
> 
> I have thought about paying down the mortgage and student loans, but since those are 100% tax deductible for interest I am waiting until they are paid down enough to where I can't use the deductions anymore, and then I will make a lump sum payment to get rid of them.
> 
> I have 29 more years of mortgage payments on my current house that we built last year, so I am sure it will take some time to hit that threshold, and by then we might be looking to build again.


I'm surprised you are still itemizing. Plus, even though they are tax deductible, you are really only getting the benefit on the amount over the standard deduction


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## NewLawnJon (Aug 3, 2018)

rhanna said:


> NewLawnJon said:
> 
> 
> > Very nice. I am similar in the my wife and I live well below our means, and one of our paychecks just goes right into savings.
> ...


My interest on the home gets me to the threshold, then property taxes, student loan interest, and charitable giving.

I will say that my tax rate went up a lot this year due to the new tax laws. I miss having the persona and dependent exemptions.


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## Guest (Mar 7, 2019)

Congratulations Ware. Amazing milestone. Loved your July 4th video BTW.

Back to the subject, you made a great point about having the wife on board. There is a strong correlation between sharing and attacking financial goals with your spouse and financial success. This has been a key struggle for us but we are on the same page and I feel winning. I love Dave Ramsey, my wife loves Louis Vatton :lol: . We have to compromise and we budget together on the everydollar app. We work hard and play hard, on baby step 4 and 6, I really am delaying on 5. Sticking to the Dave Ramsey plan otherwise. Should have house paid in a few years. I already invest 15% into retirement, no need to do more than that until the house is paid IMO. Babystep 3 is actually my favorite step, it is where "financial peace" kind of starts to kick in. I am sure at baby step 6 it gets real peaceful. Just staying the course.


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## agillespie (May 1, 2018)

@Ware it made me very happy to see this post. When my wife and I first got married we dove hard into paying off some previous bad decisions, did awesome, and then stopped. After getting hurt this winter we had a wake up call, and are diving back in. Seeing someone I (somewhat)know being successful at getting completely free from debt is way more encouraging than a random person in a book or on a radio program. Thank you again for sharing.


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## Ware (Jan 28, 2017)

macdawg said:


> Congratulations Ware. Amazing milestone. Loved your July 4th video BTW.
> 
> Back to the subject, you made a great point about having the wife on board. There is a strong correlation between sharing and attacking financial goals with your spouse and financial success. This has been a key struggle for us but we are on the same page and I feel winning. I love Dave Ramsey, my wife loves Louis Vatton :lol: . We have to compromise and we budget together on the everydollar app. We work hard and play hard, on baby step 4 and 6, I really am delaying on 5. Sticking to the Dave Ramsey plan otherwise. Should have house paid in a few years. I already invest 15% into retirement, no need to do more than that until the house is paid IMO. Babystep 3 is actually my favorite step, it is where "financial peace" kind of starts to kick in. I am sure at baby step 6 it gets real peaceful. Just staying the course.


Thanks!

I enjoy listening to Dave Ramsey to hear the success stories. I think the babystep plan works/helps a lot of people, and have even gifted Financial Peace University to some friends/family, but I would be lying if I said we followed it to a T.

We use a credit card for most of our transactions, replaced a 14 year old vehicle with a new one several years ago, invested >15% in our retirement accounts throughout the process, and hold some taxable investments that could have been used to pay off the mortgage sooner.

I think Dave Ramsey would probably snarl at all of those decisions, but there are many roads to Dallas, and I think the key is to just do something - set some goals, make a plan, do our best to stick to it, and then make adjustments as needed. Sort of the same way we take care of our lawns! :thumbup:


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## daniel3507 (Jul 31, 2018)

I really enjoy seeing how many people are on their own path here. Some of us might be getting there a little slower, but its still nice to see.

I agree with Dave Ramsey when it comes to getting out of debt. I don't agree with some of his other recommendations.

For example, we strictly use credit cards for all transactions. We make sure and pay it all off before we get hit with interest though and still get the benefits of the security and cash back/points.

He also seems to be very against car payments. Public transportation is not an option where I live and the peace of mind of having my wife in a reliable car with full warranty is worth the low interest rate.

The biggest issue I had though reading the book was not investing in retirement while paying off debts. No thanks. I would rather not turn down the free money you get from 401K match.


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## wardconnor (Mar 25, 2017)

Congrats John I can not wait until I am there. Hopefully that comes soon.


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## Ware (Jan 28, 2017)

agillespie said:


> Ware it made me very happy to see this post. When my wife and I first got married we dove hard into paying off some previous bad decisions, did awesome, and then stopped. After getting hurt this winter we had a wake up call, and are diving back in. Seeing someone I (somewhat)know being successful at getting completely free from debt is way more encouraging than a random person in a book or on a radio program. Thank you again for sharing.


I'm glad sharing this milestone was helpful. To be honest, I was on the fence about posting it.

I would say our "wake-up call" was a few years ago when the company I work for was put up for sale. There was a lot of uncertainty and we were ultimately purchased by a company that was about the same size, so there was inevitably some duplication of roles. I came out alright, but I saw some good people lose their jobs. We were already doing pretty well with our finances, and I could find another job if I needed to, but it was the catalyst we needed to finish what we started. As you can imagine, our monthly expenses are now minimal, so our emergency fund will stretch even further should we ever need it. It's a great feeling. :thumbup:


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## iFisch3224 (Jun 11, 2018)

daniel3507 said:


> I really enjoy seeing how many people are on their own path here. Some of us might be getting there a little slower, but its still nice to see.
> 
> I agree with Dave Ramsey when it comes to getting out of debt. I don't agree with some of his other recommendations.
> 
> ...


The key to success here; is YOU pay the CC in full every month - 98% of the population does NOT. As do I - I have the financial discipline and have for years. I only use a debit card for cash withdrawals - and yes I use cash a lot locally - harder to spend physical paper - easier to just swipe and go and not take into account what you actually spent.

But I'm very young, and quite experienced in this field.

I believe the standard rate on car loans now is 6.7% with the average loan at 66 or 68 months. In the next 1-3 years, 75 months and 84 months will be the average car note, with the cost of vehicles skyrocketing. I don't foresee the rates dropping anytime soon, especially with longer, and longer car notes being written. I've sold quite a few 84 month loans @ Ford while I worked there.

Furthermore, the average American spends like $575/month on car payments. I just can't afford that on a single income. My little 14 year old Lincoln keeps purring and spitting out the miles. I'm sure the peace of mind is worth something if I were married, or in a serious relationship, but I'm in neither - and right now, this journey to freedom is my choice. If "she" comes into my life, if, or whenever that happens, at least I'll be in a good position financially, and for my future. I hope to contribute to this thread a few years down the line, and celebrate being mortgage and debt free for the 30, 40, 50 years I have left.


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## Guest (Mar 9, 2019)

> Furthermore, the average American spends like $575/month on car payments.


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## SCGrassMan (Dec 17, 2017)

We're just beginning our journey with this - this is one of several "random pings" on this subject, seemingly unrelated, that have popped up lately.


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## cglarsen (Dec 28, 2018)

So your next youtube video is your debt-free scream, am I right?

Well done, sir; well done.


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## ctrav (Aug 18, 2018)

Ware said:


> I made my last mortgage payment today. :beer:
> 
> This topic is to discuss becoming and staying debt free.


CONGRATS!!


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## RayTL (Jun 4, 2018)

Ware said:


> I made my last mortgage payment today. :beer:
> 
> This topic is to discuss becoming and staying debt free.


Congrats @Ware !! I dream of this day! :thumbup:


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## RayTL (Jun 4, 2018)

Ware said:


> I made my last mortgage payment today. :beer:
> 
> This topic is to discuss becoming and staying debt free.


Congrats @Ware !! I dream of this day! :thumbup:


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## SCGrassMan (Dec 17, 2017)

So one of my current projects is getting out of the payment on two iPhones I had signed up for employees of mine. Long story short they're gone but the payment is here to stay.

And how Verizon works is I can't cancel the line without paying for the phone in full, or have somebody take over the payments.

So for two lines I'm paying:
55x2
43x2 phone payment
13x2 insurance

Or $220 some odd dollars a month EXTRA.

So I have an ad up to let somebody else take over the payments just to get out of it. I have one person interested in one phone, and a 12 year old kid ask me if I would just give him one so his friends won't make fun of him any more. &#128580;


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## 440mag (Jan 29, 2018)

Ware said:


> [*]All of these bullets start with "we". It would have been much more difficult, or impossible, if our financial goals were not aligned.





iFisch3224 said:


> I'm 31, about to be 32, and ... I've been debt free for about 4 years now, and plan to be, for as long as possible. I am doing this on one income - single, never been married, so I'm ultimately doing this for my freedom.
> My income is now about 3.5x my mortgage, instead of about 6x my mortgage, but I also paid cash for my vehicle last year, and the only bills I have are utilities, cell phone, etc. During the summer I can swing double payments, then revert back to saving/paying once during the fall/winter when work slows down.
> 
> I'm on a 30 year note, but have already paid down $11,000 in my balance, and ,,, have the next 10, 15, 20 years to sock away for retirement, and likely retire early (earlier) than expected.
> ...


Both of your posts struck a chord with me because, as so many I encountered during my 30 years in law enforcement found out the hard way, THE SINGLE BIGGEST ATTRIBUTE - or DEVASTATION - to financial independence is whether or not, - AND THEN WHO - one takes on as "a partner in life"

Fisch, you sound sooooooo much like me, it is eerie (in a good way) but, I will tell you that, growing up between Baltimore, MD and DC it took years of gals I was friends with referring to me as "the bowling pin" before I asked one of 'em, "What's up with that?"

I'll never forget the gal who finally warned me, "_*Honey, you don't know it but, you have a BIG 'OL TARGET ON YOUR BACK!* You have no children, no alimony from prior mistakes of passion, you're earning good money, saving, - you are what about 3 out of 5 gals, especially single moms like me, look at as, a Free Ticket out of life that has turned out to be less than they wanted life to be!"_

Long story short, I didn't father any children and waited 40 years to get my oats sewed before settling down with a woman only after I was dee-double lickety split positive, beyond any scintilla of doubt, that she was even more financially disciplined and responsible than I was / am.

Keep up the great work (but, don't ever think you don't *HAVE A TARGET ON YOUR BACK, ALSO!* :thumbup:

Now, back to our good natured and mutual revelry and back-slappin'! :thumbup:


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## massgrass (Aug 17, 2017)

I've never been debt averse like the Dave Ramsey folks, but the tax law changes have started to push me in this direction too. We're about halfway through our 15 year mortgage and are now taking the standard deduction, so not much help with our effective rate of borrowing. We're in great shape with regard to retirement and college saving/investing, so there isn't really much reason to keep it unless I can get my hands on a 5% CD.  We could pay it off now if we wanted to, but I'll likely work on it over the next 2-3 years with occasional lump sum payments.

I don't buy new cars very often, but have had luck with interest rate arbitrage since it's some of the cheapest money you can borrow. I refinanced my wife's car @ 1.49% while I had cash sitting in a 3% CD and refinanced my car @ 1.99% and now have cash sitting in a 3.5% CD. I'm in no rush to pay the remaining loan off at this point though.


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