Sometimes I wonder how much more I could do by using the leverage (debt). But then, I realize that ‘the borrower is always a slave to the lender’. And, I refuse to be that slave. Living without borrowing money and being in debt helps me sleep well at night.
Here are more details about my family’s approach to borrowing money:
A. Short-term debt
In the short-term, the only temporary debt that we have on monthly basis are credit cards. We only have very little credit card debt every month which we always pay back in full and on time, every single month.
My wife mainly uses her credit cards for online shopping for groceries and baby products. We have one credit card denominated in Chinese RMB for shopping within China, and another credit card denominated in USD for shopping outside China.
Not much will change here.
B. Long-term debt
In the long-term, we do not have (and do not want to have) any long-term bank loans or a mortgage. We neither had to nor wanted to borrow money from banks. Our apartment which is our primary residence was paid in full in cash.
Not much will change here either. Unless we decided to take a mortgage to purchase another property at some point in the future, but this is very unlikely.
We have never had any loans like student loans or car loans in the past either.
We have been completely debt-free for years. And thanks to this, we are on the way to financial independence as early as in 2024. I will be 36-years-old and my wife will be 35-years-old when that happens.
In summary, we have never taken any external long-term debt. We have no other short-term debt except tiny credit card debt which we always pay back in full and on time. We are, and have always been, completely debt free.
