3 votes

Looking for some advice from the DP

Hello DP,

I am looking for financial advice from the group of people I believe have it right the most.

Here is my situation:

I recently graduated from pharmacy school and recently got a job at a chain making 95K/yr. I have a wife who is an occupational therapist who makes approximately 70K/yr. We have 111K student loan debt from me and 70K student loan debt from her totaling 171K debt averaging about 5% interest rate. We currently live with her parents and pay rent (1k/month) to help them out (her dad lost his job recently). We own 2 cars (Honda Pilot and GMC Sierra) which are our only assets besides wedding rings and clothes and a little furniture. Her parents own a cabin on a lake in Minnesota that is almost paid off and is very nice but a tiny lot and not much room to garden. My family owns land in South GA (my grandpa is still living there) with a house and plenty of farmland.

Here is my thought process moving forward.

Scenario A:

Buy a nice home in a place we like (West Knoxville, TN) in a super nice country subdivision that should hold its purchasing power for ~350K and play the game with a low interest rate (4%), pay off loans over 10 years or so, pay the mortgage off in about 20 years, and have a tiny bit to buy some food store (rice, honey, salt, canned goods, coffee, liquor), a little silver (1/3 of savings), and a little cash (1/3 of savings). My chain matches 4% of 401K plus profit sharing up to another 4% on a good year (essentially 6-8K bonus that is stuck in 401K). I would probably do that if we stay with this plan but am open to suggestions. Pretty much live the (upper) middle class life and hope everything stays afloat...


Scenario B (The doomsday collapse preparation):

Pay off our debt as fast as possible, move up to Minnesota where we could live by ourselves most of the year, buy food stores, buy a bunch of silver and eventually move some of it to gold as silver piles up, have a good bit of cash stored in an immovable safe (heavy mofo), buy seed and gardening gear, fishing gear (including ice fishing - winters are HARSH up there), water distill, vitamins, etc. And if no collapse occurs, we eventually get comfortable enough to play the game as above.

My thoughts:

If we don't buy at these interest rates (Scenario A), we may never afford a house like this and may be pinching ourselves.

However, if a collapse happens, we will be pinching ourselves that we didn't set ourselves up for a sustainable living in a post collapse America (such as in Scenario B)

After my grandpa passes, we could move to South GA and set up a small farm in addition to jobs we commute (30+ minutes at least) to, but my wife wouldn't be nearly as happy down there. It is pretty dull and would be a warzone in a collapse I would imagine. We could do the whole migration thing after my grandpa passes but he is a hearty fella who may last another 20 years we hope lol.


What would you suggest? Is there a combination of the two that you see could work? What would you do? What questions should I be asking?

Thanks for the discussion, DP

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fireant's picture

Live frugal, get out of debt, and forget Gramp's place.

Make frugal a game. You will be amazed how cheap you can live if you work at it. You can have that debt paid in two years time. Then decide where you want to be and buy land with small or no house (and build small to start with design to add), and pay cash if you can, or pay it off as soon as you can. You'll be light years ahead, as opposed to going into debt now for that upper middle subdivision dream home, which will become an albatross (expensive to live in, maintain, and repair). I've construction experience, and no way would I buy any subdivision home. They are notorious for cutting corners, hiding mistakes, and making them look pretty.
And your grandfather may have to use his assets to pay for elder care. Never count on inheritance. If he leaves you something, it's a bonus.

Undo what Wilson did

Here's my advice

1. What does the wife want to do? Do that. (even if it doesn't work out for the best, your relationship will survive shf much better (and she can't blame you).

2. Seek ways to get the loan reduced, grants, if the loans come from the state, see if the state can reduce them. If the loans come from the fed gov., see what they have. If the loans come from a private source federal credit union.. and see what you can about shifting the loan, out of where it is, reducing it, into another, just think FLOW.. cash flow..

3. You may not want to hear this, but you could have the loan reduced or eliminated by elisting as a reserve in the military, or a contractor.. two years/ four years they could absorb the debt.

4. Don't count your on your grandparents place..


Here's my advice,

get rid of the debt and then start thinking about a house. If you work hard you should be able to pay that debt down pretty quickly. In the mean time, spend time at the cabin, visit Grandpa and West Knox to get an idea of where you'd like to live.

You also didn't mention children, that 350k mortgage will be hard to make on one income with a couple of extra little mouths to feed. If you haven't talked to your wife about children, it's a conversation you need to have.

Even if the shit doesn't hit the fan, life has a funny way of throwing you curve balls and being weighted down with debt is a recipe for disaster. In the 15 years we've been married we've seen our share of ups and downs but not having money problems made it much easier to rebound. Parents get sick (they live with us and siblings can't help, they can't even help themselves, why? Scenerio A), siblings (my brother and my husbands sister) have lost their homes and marriages (Scenario A) and landed here to get back on their feet, neighbors lost their jobs and we've fed them (Scenerio A)...
Frankly, I'm getting sick of picking up the pieces of Scenerio Aers - it's a very bad idea.

I guess my advice is pay off your debts, live beneath your means, keep the people you love close, invest wisely, learn to live off the land and keep a little stockpile. :-) Good luck and best wishes!

Don't buy a $350k house.

Buy 3 $120k houses over time instead, putting 40-50% down, and rent two of them out through a property management company. One rent check would pay the mortgage on all three.

Even in a total hyperinflation disaster, people still have to live somewhere. Even in Weimar Germany, landlords were in good shape the whole time since rent is inflation indexed but mortgages are not.

Buying a large house is an albatross around your neck; it reduces your options. With interest, you will be paying on it for a long time with no income resulting, and in shifting scenarios you want to be as flexible as possible. Property tax is likely to get heavy as well in coming days.

Keep in mind, if you own five houses outright, you can retire. Live in one and the four rent checks pay for your living expenses.

Author of Shades of Thomas Paine, a common sense blog with a Libertarian slant.


Also author of Stick it to the Man!


Your debt must be dealt with first.

For as long as you ARE in debt, you will have no freedom to even think about your future. A debt basically means that you are a slave to your debtor, and anything bought with that debt is not yours, but theirs.

After you are free from your debt, stay debt-free. Never take out a loan, nor use a credit card, nor use any financial instrument that inflates your true worth, ever again. Never ever play with the IDEA of a loan. Run away from the loan game as fast as you can. As long as you do, you can be absolutely sure and proud that you are the private owner of everything that is yours - that you have earned the full amount of what you have worked for.

No compromises.

I believe in the freedom to be what we choose to be.


I'm not licensed to give financial advice, but I can say what I'd do if I were in your shoes for the sake of discussion...

I would stay where I am right now and pay off debt as fast as possible. I'd try to save as much as possible and live frugally, despite the nice double income. I'd save precious metals, if possible.

I'd head up to the cabin and enjoy the outdoors. I'd learn some skills, improve existing ones, and have fun. I'd try and make like minded friends who are close by. Reinforce relationships with family. Stash a stockpile at camp in you case you need to stay there unexpectedly for a while.

All you have to do is wait. Keep working. Save money. Some day the real estate will drop in your lap and you'll have no debt and lots of liquidity. When the day comes that you inherit property, you can either move there or sell it and buy land closer to where you're at now.

The best prep is community. Couples and loners stand zero chance, despite how much stuff they have.

the first thing you need to do is

Give your in laws more in rent! Geez you make 165,000 and your basically living for free. If you go with #1, do you plan on taking then in? Your loans were to get good jobs, live like paupers and pay off the loans. If the SHTF the house you are looking at will drop like a rock....then buy, you know it will....it's just a matter of time. Gets about 3 to 6 months of supplies to out last the shockwave. Bullets, bread and burning wood and keep your head down.

Pay Off The Debt

Save your money and buy some land..ok..a lot of land..make sure you have a good supply of water under ground on the property.Pay cash for the land.Put a shed you can live in on the property. Make your garden..eat and can up what you can..sell the rest. (A 2ac garden would be nice to start)
Make a root cellar to store your food. Build a smoke house.
Start saving again and start buying up things you need to build a house. Learn how to do as much as you can yourself..and what you cant do..hire out..pay all cash.
Ever seen the show Mountain Men on History Channel? I love it myself. There are men that will teach you how to live that life if you seek them out. But be warned..you will work your ass off to learn..but once you do..you'll never forget it.

I believe in Hope & Change..I Hope the government will Change
Spindale-Rutherford County-North Carolina

Avoid using a mortgage to

Avoid using a mortgage to purchase a house at all costs. Do the math on the compound interest. It's a lesson I learned the hard way. Well, I knew it in advance but I chose to do it anyway because I was young and foolish. I don't care what everyone else thinks. Most people follow the herd. The single best thing you can do for yourself and your family is to get out of debt and then stay that way. It's much harder to do that once you have a mortgage.

This is a tough one. In all

This is a tough one. In all probability, the sh1t won't hit the fan for a 15-25 years.

But if you choose route one, you won't have the chance to choose route 2 later on if you feel locked in with your jobs, home, friends, etc.

Also, route 2 sounds attractive in its own right, with or without any catastrophic collapse.

You guys should choose the life that you think will make you the most happy, regardless of whether or not SHTF.

Also, a lot of your prep ideas for SHTF aren't entirely practical. What importance is there in paying off student debt in a collapse scenario. The government will hardly be able to collect it, and inflation would wipe it away. Severe deflation, if allowed, would end up with mass debt write offs for unpayable student debts.

The stores and the property are a great idea, with or without collapse, I guess. Assuming you'd be happy managing stores.

Gold and silver will be of limited value in a full blown collapse, much more value in a generalized severe inflation or dollar collapse.

Food stores might be forced under severe price controls in a scenario of high inflation but still stable government control.

You seem to be debating: maximize skilled specialization and income, and take immediate advantage of low interest rates and relatively low property costs.

Or, prepare for a collapse in the value of high specialization and ties to corporations and currency wages, and focus on more economic autonomy in property in goods, in a more remote region.

The odds are so tough to figure. Could you perhaps head toward the region you imagine ti be safer, pursue your respective high wage, high specialized careers for the next 10-15 years, keeping your eye on the world situation, and saving up in real assets and property, like in plan B?

In neither scenario do I see a tremendous urgency is worrying about the student debts, which seems to be a pretty big aspect of your question. Because trying to pay it off all immediately (basically throwing money into US govt blackhole) means forgoing other investments and assets.

Property ownership is good in either scenario. What about a pharmacy and general store combo up in the plan B region? With a close enough urban-ish area for your wife's practice?

Its hard to imagine any investments that will truly protect you in a full blown apocalypse, because at that point even a farm will just be an invitation to government requisition and unwanted company. In a true collapse 90% of us are probably doomed no matter what we do.

I think its more realistic to prepare for bad times in terms of eventually high inflation and declining standard of living. A mix of cash, metals, property, and some necessities and decent stable businesses (or specialized skills) will do well in a stable, prosperous future or a highly unstable and not so prosperous future.

What happens with your

What happens with your finances in a few days when every market collapses all at once? I'm sure you have the brain power to imagine that image. After all, you do post on The Daily Paul.

I would pay off debt. The economy can't be trusted, it's crooked

It's harder to go wrong with "cash and carry".


I graduated HS 1972. Got married in 1975


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