Debt Repayment

Firstly, thank you everyone for your prayers, patience, and understanding as we navigated the death of my father in June. It was a beautiful time to spend with family as we remembered the life and love of Jerry Martinek.

Secondly, I am focusing on debt repayment for this month’s newsletter. Let’s say you owe $50K and you happen to have $50K in the bank. Should you pay off the debt? That depends on the interest rate: how expensive is it to finance the debt? Many people turn to the total amount paid in interest as their guide, but most of that interest is overly-inflated with future value dollars.

Instead, use a time value of money (TVM) calculation on the future payments to determine what the net present value (NPV) is as a better guide of assessing the expense of financing the debt. I regularly run this calculation for my clients.

In short, the real cost to debt depends on the inflation rate which is an unknown variable. Given the latest interest rates, I consider debt with less than a 5% interest rate to be relatively inexpensive. Anything less than 3% is down right cheap! Debt in excess of 5% should be paid off in earnest.

  • Read: This is something that is not often considered, but is truly the right way to analyze what debt you may have: the time value of money (or TVM). Read more here from Investopedia.
  • Read: This article from Financial Mentor provides a deeper understanding on net present value (or NPV), as well as an NPV calculator.
  • Watch: While this brief video from Harvard Business Review focuses on the net present value (NPV) for investments, the same principle can be applied for debt repayment.

If you find the information provided valuable, please pass this email along to your family and friends! Better yet, recommend them to subscribe to this monthly newsletter by signing up on our website!

You can click on the links below to access this month’s resources.

Thanks for reading, listening, and watching!

Related Posts

Bonnie Martinek

Administrative Assistant
Bonnie (Ben’s mom!) is a mother of 9 and a grandmother of 17. She has lived in rural Indiana her whole life and has a master’s degree in Special Education. In her own words, she’s done a little bit of everything but is a master of none (teaching, construction, manager of a corn maze, CNA, farm work, cashier, auto bodywork, and the list goes on!). Widowed in 2019, she is reinventing herself through her work in the day-to-day operations of Bona Fide Finance and client relations. Bonnie loves getting to know our clients and is happy to serve them well!

Deb Martinek

Relationships Specialist

Deb has been with Bona Fide Finance since its inception in 2015 and long before that with her support of Ben studying for the CFP designation and the dream of starting the business of helping individuals and families meet their financial goals.

She fills the Relationships Specialist role – Deb is typically the first encounter our new clients have as she walks them through our service offerings and introduces them to the map of financial literacy.

She has a bachelor’s degree from Ball State University and a master’s degree from the Franciscan University of Steubenville. Deb lives in Bismarck with Ben and their two young daughters, is a card-carrying member of the CDL club (read more about those adventures here) and is happiest reading an epic novel, solving a 1000-piece jigsaw puzzle, or working in her kitchen where she can serve love to the people in her life through quality food (clients enjoy her holiday shipment of homemade goodies each December!).

Ben Martinek

CFP®, EA, CSLP®, RICP®, Founder and Advisor

Ben Martinek, CFP®, EA, CSLP®, RICP®, is the founder and lead advisor at Bona Fide Finance, an independent, fee-only firm dedicated to helping doctors, young professionals, and growing families take control of their financial future. With a deep understanding of student loan debt—having tackled his own—Ben specializes in guiding clients through debt repayment strategies, smart investing, and comprehensive financial planning so they can build wealth with confidence. Ben’s passion for financial planning comes from his desire to provide honest, objective advice tailored to each client’s unique situation. He loves seeing the impact of his work, whether it’s helping a family pay off student loans years ahead of schedule, setting up an early retiree for financial freedom, or giving clients the peace that comes from knowing their finances are in order. His clients appreciate his thoughtful, high-touch approach, often saying that working with him has changed their lives.

Before launching Bona Fide Finance in 2015, Ben’s career path was anything but conventional. The fourth of nine children, he grew up in rural Indiana and initially pursued a path in academia, earning a B.A. in philosophy and classical languages, followed by a master’s degree in philosophy. Along the way, he explored careers in construction and truck driving—logging over 600,000 miles across the U.S. with his wife, Deb—before finding his true calling in financial planning.

Now based in Bismarck, North Dakota, Ben and Deb stay busy raising their two daughters, Edith and Virginia. Since their truck-driving days, Ben is happiest on a long road trip—preferably behind the wheel of his TDI Volkswagen Jetta. He enjoys sailing on Lake Sakakawea, camping in their vintage ’90s pop-up camper, and smoking a pipe by the grill. A lover of strategy board games, he favors Clans of Caledonia (mostly because Deb refuses to play Risk with him). When he’s not working with clients, he can be found smoking meat, gardening, hiking, or diving into The Lord of the Rings or Dune. Ben also serves on the school board for his daughters’ Montessori school and is actively involved in pre-marriage ministry in the Bismarck Diocese.