Debt: the elephant in the room


Everybody has it, nobody wants to talk about it.

I know I don’t … Unfortunately, though, I’ve reached a point where I just can’t ignore it anymore. Instead of sticking a band-aid on the wound month after month after month – something I’ve pretty much done ever since I started pouring money into my investment account – I’m going to actually take steps to heal it for good.

I actually already have: I sold my entire portfolio. Every last share of all 150 companies in my Dividend Farm. I didn’t do it because the plan wasn’t working. It was … I was up more than 15%. I didn’t do it because I got tired of the grind. I live for it … other than my wife and kids, friends, job, etc., investing was one of the many reasons I rolled out of bed everyday.

It was because it had to be done.

Without getting into all the details, my revelation came last week. I just wrapped up a blog post about crossing the $1,000 mark in forward annual dividend income and, well, figured I should go ahead and make some of the payments I knock out at the beginning of each month. Credit cards are one of those payments. The mortgage is another. I get those out of the way early so I know what kind of cash flow I have for the rest of the month.

Well, most of my debt is on one card. I’ve used the piece of faded plastic for all kinds of things for a long, long time. I’ve used it to pay medical bills when all three of my boys were born, I’ve thrown a few splurges on there and, well, tons of general purchases as well (gas, groceries, etc.). I always make the payments on time, but never in full (like you’re supposed to do) and the balance has fluctuated throughout the last decade or so.

Currently, it’s right around $16,000 … mostly because I’ve been investing so much and pretty much ignoring the debt.

That number’s not the one that scared me, though. I generally just make a payment (min. is $452) and move on. The interest … that’s what scared me. At my current balance, I’m getting charged close to $300 … per month!

Ridiculous, right? Yeah, that’s pretty ridiculous. So, after comparing the $80 or so a month my portfolio was generating and the $300 or so in finance charges my credit card was accruing each month, the decision was easy.

I have to get that debt out from underneath me.

I originally planned to cash out just enough to cover the payoff, but I thought to myself, “self, what else can you pay off?”

Needless to say, I came up with some other things.

Yeah, my portfolio is non-existent at this point, but once the funds settle, I cash out and pay off a good chunk of debt (minus the mortgage, of course), I’ll have a lot more money to build another portfolio with. A bigger, better portfolio than the one I had before. On top of that, I won’t have the interest weighing me down.

Cash flow will be an added bonus as well. I mean, getting rid of the credit card debt alone will free up close to $500 more a month.

It was a hard decision because I’ve gotten really, really attached to my Dividend Farm over the last year and a half. Based on the numbers, though, it shouldn’t have been a hard decision at all. It’s a decision I should have made a long time ago.

I’m back at square one, but it’s not the end of the world. Financially, I’m actually in a much better spot and can’t wait to get going again.

Give me some time to get everything settled and look for a post about my initial step in my second march toward a $1,000,000 portfolio. This isn’t the end of my march … it’s just another beginning.

As always, thanks for following along and I hope you stick around for March 2.0.

Keep investing … but pay off your high-interest debt if you have any.

March on!

10 Responses to “Debt: the elephant in the room

  • When starting building your portfolio again, have you considered selling put options on the shares you want to buy?
    You get paid money for nothing, and worst case you have to buy the shares at a certain price, which you wanted to do anyway from the start. Worst case, you don’t buy any shares but get some money for that. Just a though.

  • Much respect to you! Good luck. Debt is the elephant that goes ignored. Unfortunately we are taught debt is the ‘American Way’. No it’s not. Being debt free and having peace of mind it. Take care!

  • I’m sure that was a tough decision but in the long run it will be worth it and debt free investing is much less stressful!. Now that you’ve given it a go I’m excited to see how you tackle starting over with all the knowledge you’ve gained from your first experience. I enjoy following your journey and I’m happy to see you know your priorities. Good luck!

    • You said it. In the back of my mind, I always had a little voice saying I should be putting my money toward debt rather than investing. Sometimes it was a little stressful for sure. Now I won’t have that voice bothering me anymore. Thanks for following along! Means a lot.

  • Dividend Farmer
    11 months ago

    I’m proud of you Ben. That was a hard decision, but when you do the math, you know it was the right decision.

    • I really appreciate it. The decision was hard, or at least seemed hard. Now that it’s been made, though, I know it was the right one. You can never go wrong with eliminating debt. Simplified everything and opens up even more potential.

  • Catalina
    10 months ago

    Hey Ben,

    Thanks for sharing your experiences with investing and debt so candidly. I’m reaching out because the company I work for, M1 Finance, is looking for influential content producers for a partnership opportunity. We’d love to have you on board when you’re ready to start your March 2.0.

    Let me know if you’re interested and I can send you more details!


  • Ooo. Didn’t realize you were sitting on debt like that – eating away at you. It was a wise move. I used to borrow money to invest – don’t do that. It isn’t worth it if you can’t stomach it over time. It can go south on you really quick if luck turns on you. I don’t borrow money anymore to invest. I pay off the credit cards in full each month. As for my mortgage – I have a plan currently in play for that mortgage o’ mine. Some people think I’m crazy though. But, I had to tweak it in order to invest towards retirement as that is just as important.

  • … and your journey begins again

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