Correct me if I’m wrong, but being debt-free seems like the best protection against staying in a job where you’re treated poorly.
No debt = more career options.
Imagine your Boss starts picking on you.
You’re debt-free.
I’d laugh 😂
Is being debt-free the ultimate protection against bad jobs?
byu/TacticalJock15 inpersonalfinance
Posted by TacticalJock15
28 Comments
Ultimate protection is to spend 4% (or less) of your net worth every year
Working is optional then
I never stopped living like a broke college student until my NW exceeded 25x my yearly spend. Then I slowly ramped up my expenditures
No, having a large nest egg (and ultimately being F.I.) are.
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We were out of debt with an emergency fund when my wife left her job. She had the cushion to not run into another bad situation.
obviously yeah get rid of your debt
It’s not being just debt-free, but having enough money where you can afford to quit. If you are debt-free and rent, for example, losing your job means you’re out of a place to live.
Ideally, your expenses aren’t covered by debt. Not being in debt protects you from the negative effects of debt, which are mainly a drag on your income from interest. Being debt free only protects you as far as you can cover expenses with new debt. You need money to be protected from loss of income.
No debt is step one.
Financially able to retire at any time is step two.
Then you have what is known as “F you” money.
No. Having an emergency fund is, at least in the short term.
Debt free with very low living expenses and a large savings account.
F-you money. One year ago this week my boss tried to tell me I was going to report to a lower level manager going forward. Since I have no debt, I was able to say “I’m not doing that. You guys go what you like, but I’m not playing”. Still at the company, still reporting to the C-level. This may be something that only works once, this remains to be seen.
My wife hated her low-paying job. Walked in to quit because we had enough savings to get by for a while. By the end of the day they offered her a promotion and a pay raise to stay, which she never would’ve gotten if we weren’t out of debt.
I mean it’s the first step towards being protected from bad jobs. Being debt free means you’re more likely to be able to build an emergency fund and start investing money.
Being debt free with a good emergency fund is the protection from bad jobs since you can afford to quit your job and look for another one. You don’t feel trapped in a job then. Debt free with no emergency fund can still make you feel trapped in a job because you have nothing to fall back onto if you want to quit tomorrow since well who else will pay your rent
Although the ultimate protection is really being financially independent where you can essentially afford to not work anymore. And of course that’s where being debt free hells because you can’t build a large nest egg if you’re riddled in debt
Technically cash flow but debt is definitely a related factor.
Owning your home + having enough $$ to live without working for at least a year = more options.
Of course, that might not be enough for some.
Debt-free is part of it, but also having a large savings. because living expenses are not debt, and you still need cash to live.
I somewhat view it the same way. If you pay cash for a house (as an example) you can view it as an annuity paying 2k a month to do with it as you want such as investing or live off between jobs.
Taxes and insurance arent free
Healthcare aint free
Food aint free
None of these are debt.
It is, and also having a partner with good pay, insurance etc. In the US your debt free status can do a 180 really fast if you don’t have health insurance (usually through your employer).
It probably makes the biggest difference if you are picking one thing.
I’ve found its the best protection against a lot of things.
I told my boss I didn’t t need the money. That I was just there for the benefits. You could see the power drain right out of him. As time went on by the struggle to hold something over me just got more embarrassing.
I keep what I call FU money 6 months worth of income and if they bs me I’m out !!!
Passive income is the ultimate protection. If you can make money without a job then you’re insulated.
Owning a rental property is the most accessible form of passive income. If you can get enough rentals that they are your primary income stream you may qualify for huge tax benefits.
While being debt free isn’t the magic pill, it *absolutely* is a major step in the right direction.
Being in debt means you’re working forever and have less options.
I have no debt but still work because COL is very high and constantly going higher.
Debt free, plus a decent emergency fund. If you know that you can easily go without a job for an extended period of time, then that gives you leverage. It will change your attitude. And with that change of attitude, people will pick up on it and treat you differently. Suddenly your job may not suck so much.
Eh, the best defense is really that you have enough savings to cover living expenses for however many months. If you aren’t truly financially independent, you’ll need to get a job at some point. However, if you can afford to quit and job hunt for a few months at need, then telling your boss to go fuck himself is a lot more reasonable.
That said, being debt free is one way of reducing your living expenses and making it easier to hit the “can afford to quit at need” savings.
It depends. If you are one of the many with an ultra low mortgage rate it doesn’t make any sense to pay that off.
Being debt-free doesn’t equal more career options, it only means its easier to survive through times of low employment.