Wednesday, November 17, 2010

Retired and Debt Free

There has been lots of conversation on the web, in RV forums and blogs, about full-time RVing and debt. At least for people who are retired, I can't imagine going full-time without being debt free. That doesn't mean everybody agrees. One of the first full-timing couples we met had been on the road for years. They were ready to hang up their keys and move into a stick house. But they owed more on their motor home than it was worth. We wonder how long it took them to sell it.

Early in our marriage, we would accumulate a balance on our credit card, then pay it off each year with our tax refund. But then we left the world of paychecks and tax withholding, moving to business ownership and quarterly estimate payments--meaning no refunds. That first year we struggled to pay off the credit card balance. Then, going forward, we paid the credit card bill in full each month. I imagine since the late 1970s we haven't paid more than $2 or $3 in credit card interest.

Our accountant when we owned the business recommended we always save ahead and pay cash for any automobiles we purchased. That wasn't possible for another 10 years or so. But it has been our way of doing business since then.

After selling the business, we did have home mortgages for many years. But in 2000, when we received an inheritance, we paid off our mortgage--against the advice of two different financial advisers. Even though we lost out on the mortgage interest deduction, ending up with no mortgage made it possible for us to travel extensively for several years after retirement. Then we decided to go on the road full-time. We also had to buy a new RV. We could have paid cash, but this was September 2008 when the stock market and the economy was going into the tank. Instead of losing money by selling investments to buy the RV, we got a loan--and paid it off in less than 18 months, rather than the 30 years the loan was for. Those 30-year loans for RVs that probably won't last 10 years are part of the debt problem full-timers face.

As I said, we went full-time as the economy and real estate market went downhill. It certainly wasn't the time to sell our house. So we decided to rent it. Since we didn't have a mortgage, it didn't matter if the house sat empty for several months--after all, we had traveled six to eight months a year in the past and it sat empty. And once the house was rented, it provides a nice additional income stream.

Although we aren't wealthy, we certainly feel secure. We have no loan payments to meet and we don't have to worry about what the economy does. That has made our retirement and our full-time lifestyle relaxed and carefree. We are grateful for our pre-planning and feel very fortunate.


  1. I admire your "conservative" method of your finances. It is the way the depression generation of my parents operated regularly. I remember my parents saying that you only take on a debt for a house,(and then you put down 25%) and possibly a car (although we did not have a car for many years in spite of living in a rural area.) Do you remember, "lay-away" plans before credit cards. I was taught to save for what I wanted and pay cash. When credit card appeared the conviction was to pay it off each month. Not able to do so was a warning sign.

    Living on credit has gotten way out of hand for individuals and governments. Your government under Bush paid for two wars on "credit card" debt to China. What were they thinking! I thought it was a conservative principle to "pay as you go". There should have been a special tax or surcharge on income tax levied to pay for the wars at the beginning. It is hard to understand American's aversion to paying taxes. I was taught it was a privilege to pay taxes to pay for all the government services we enjoy and the privilege of living in such a wonderful country. All this conservative talk from me, a socialist.

  2. We hope to do the exact same thing as you. Go into full timing debt free. Good for you.

  3. I always appreciate people that do what they REALLY want to do,living the dream, and you certainly are doing it.
    We live in Israel and RV 4-5 months every summer since 2002 without RE-TRACKING,each trip to new States/Provinces.
    Wish you to do all the things you did not do till now and still want to do them...