debt free

Hoa Lo (Hanoi Hilton) Cell

I can’t remember how many times I’ve seen the comment “I’m debt free except for the mortgage/student loan/last car note/etc.”.
It’s like saying you’re drug free except for the heroin habit. I’ve been guilty of this, too – I frequently say I have no debt but my mortgage. That mortgage was over $300K, so it wasn’t exactly a small debt, eh?

Now I’m debt free. My net worth is heavy on the plus side and…well, nil on the minus side. Everything is gravy. I have nothing but upside, right?


I wrote a long time ago that net worth was somewhat irrelevant. It is. I’ve got a solid net worth now but every month it is slowly inching downwards, because I can’t scrape together quite enough income to offset our frugal expenses. Funny how you can’t do that when you aren’t working and you haven’t managed to get your side businesses generating enough income. I’ve gotten close – we are teetering around the break-even point sometimes – but cash flow remains, for the most part, in the red.

Don’t think that being debt free is enough. And don’t think that high cash flow is enough, either. Making money and leveraging yourself in a sensible way to buy important things – homes, etc. – is critical. Saving some money and making sure you earn more than you spend makes life easier, too. Debt is ugly, and I won’t lie – I feel a tremendous freedom living without a mortgage or any other form of debt. But I’d feel better having some debt AND some cash flow, rather than no debt and no cash flow.

photo credit: Erik Charlton