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Started By
Message
Need advice for my situation...
Posted on 4/7/13 at 3:30 pm
Posted on 4/7/13 at 3:30 pm
Here is my situation:
- I am 33 and my wife is 32
- Married w/4 year old twins (Both in private school at $5k/yr.)
- Wife is a stay at home wife and works with me every so often
- House paid for worth about $265k
- $275k in the bank
- Maxed out Roth IRA each year for both my wife and I
- $100k in the bank from previous job and current retirement
- Own my own business and pay myself anywhere between $120-$160k/yr.
- Looking at building a house that will cost in the $400k range and would like to pay cash, but will need to sell this house first in order to do that.
- No debt of any kind
Here is my questions...
1. Even though I am maxing out both my wife and I's Roth IRA (Through vanguard), I feel like I am not doing enough for retirement...What else should I look into doing?
2. What should I do for kids college planning? We live in Louisiana and I will pay an arm and a leg for them to go to private school...I assume they will either #1 Have scholarships when they graduate or #2 Be eligible for TOPS program.
3. I know most people would say get a low with such low rates for your house, but I have had great luck getting to this point by going the Dave Ramsey route. How many of you say pay cash for new house vs. going a different route?
Thanks so much for your input!
- I am 33 and my wife is 32
- Married w/4 year old twins (Both in private school at $5k/yr.)
- Wife is a stay at home wife and works with me every so often
- House paid for worth about $265k
- $275k in the bank
- Maxed out Roth IRA each year for both my wife and I
- $100k in the bank from previous job and current retirement
- Own my own business and pay myself anywhere between $120-$160k/yr.
- Looking at building a house that will cost in the $400k range and would like to pay cash, but will need to sell this house first in order to do that.
- No debt of any kind
Here is my questions...
1. Even though I am maxing out both my wife and I's Roth IRA (Through vanguard), I feel like I am not doing enough for retirement...What else should I look into doing?
2. What should I do for kids college planning? We live in Louisiana and I will pay an arm and a leg for them to go to private school...I assume they will either #1 Have scholarships when they graduate or #2 Be eligible for TOPS program.
3. I know most people would say get a low with such low rates for your house, but I have had great luck getting to this point by going the Dave Ramsey route. How many of you say pay cash for new house vs. going a different route?
Thanks so much for your input!
5
Posted on 4/7/13 at 3:34 pm to dallaslsufan
If you have had success following Dave Ramsey than why change now? Just curious.
Posted on 4/7/13 at 3:37 pm to RockyMtnTigerWDE
That is a great question...I guess I am always worried I am not being a good steward of my money.
Posted on 4/7/13 at 3:43 pm to dallaslsufan
Try rental properties, where I live in Texas with the oil boom, you can't hardly find places to rent for the oil field workers but you can find land. Build some smaller rental properties and rent.
Posted on 4/7/13 at 3:43 pm to dallaslsufan
quote:
- Wife is a stay at home wife and works with me every so often - House paid for worth about $265k - $275k in the bank - Maxed out Roth IRA each year for both my wife and I - $100k in the bank from previous job and current retirement - Own my own business and pay myself anywhere between $120-$160k/yr.
Doesn't sound like you need money advice. With current mortgage rates I see no need to pay cash for the new house. Just put the money from you old house into the new one and finance the rest.
Posted on 4/7/13 at 3:48 pm to dallaslsufan
You should probably sit down with a good CPA and financial planner and discuss your current circumstances and your goals for the short, intermediate and long terms. They will be able to develop a plan that addresses your goals that provides you with flexibility and tax savings currently while providing you the resources you require to meet your goals for th future.
There are ways to address all of your goals that will not hinder your desire to buy a new home, but you need to analyze them numerically to see if they make sense for you. And the CPA and financial planner can prepare the analyses for you with multiple scenarios for you to consider.
There are ways to address all of your goals that will not hinder your desire to buy a new home, but you need to analyze them numerically to see if they make sense for you. And the CPA and financial planner can prepare the analyses for you with multiple scenarios for you to consider.
Posted on 4/7/13 at 3:52 pm to Poodlebrain
I already have the meeting set up...Thanks for the advice...Would you suggest a fee based planner or a % guy?
Posted on 4/7/13 at 4:07 pm to dallaslsufan
Well your story depresses me....
Your net worth is 200K+ ahead of me and I'm 41 and wife and I work together. You have done very well for your self. Congrats.
Your net worth is 200K+ ahead of me and I'm 41 and wife and I work together. You have done very well for your self. Congrats.
Posted on 4/7/13 at 4:21 pm to MoreOrLes
Thanks MoreOrLess...Not a competition, but I appreciate it...God has blessed our labor and hard work...
Posted on 4/7/13 at 4:28 pm to dallaslsufan
Dude you're a Rockstar, congrats on your success. Keep doing what you're doing, it's working. As far as college planning is concerned, have you looked into 529 savings plans?
Posted on 4/7/13 at 4:51 pm to dallaslsufan
quote:
3. I know most people would say get a low with such low rates for your house, but I have had great luck getting to this point by going the Dave Ramsey route.
Be aware that Ramsey's advice makes more sense when your interest rate is higher. But not really now.
Let's assume you are in the 25% tax bracket. That means if you get a mortgage at 3.5%, your equivalent after-tax rate is only 2 5/8%. For 30 years. Do you believe inflation will stay that low for 30 years? If not (and most don't) then a mortgage is financially smart. Note that a 15 year note for a lower rate is not as good b/c you are paying extra for a negative real ROI.
FWIW I got a 30 year at 3.25% and have no intention of ever prepaying for this reason. It would actually be a zero or negative real return on equity to do so.
Posted on 4/7/13 at 5:43 pm to Vols&Shaft83
I looked at the 529 plan, but you loose it if the kids don't take advantage of it. That was my concern...We are getting them a great education and I would assume they would get scholarships...That is the hope.
Posted on 4/7/13 at 6:02 pm to dallaslsufan
Well, LA has TOPS ... who knows if it'll be around when your kids are in need of it though. And yes, they're getting a good education but I've found that schools are getting stingy with scholarships (I have a senior at LSU .. and fyi, ULL was WAY more generous than LSU with an offer).
We have a 529 and haven't used a penny yet for this first kid. He did well and had random small scholarships that helped and we've just paid the rest out of our normal money. #2 will probably need a good bit of it but by the time #3 comes, she'll be the only 1 left and our home will be paid for so I'm not as worried.
You're self employed? So are we. We max out the ROTH every year and put money into a SEP the years that we qualify. We max that out in qualifying years.
(eta: qualified expenses for 529 I'm understanding = tuition, fees, books, room/board, I was even told laptops (?)
We have a 529 and haven't used a penny yet for this first kid. He did well and had random small scholarships that helped and we've just paid the rest out of our normal money. #2 will probably need a good bit of it but by the time #3 comes, she'll be the only 1 left and our home will be paid for so I'm not as worried.
You're self employed? So are we. We max out the ROTH every year and put money into a SEP the years that we qualify. We max that out in qualifying years.
(eta: qualified expenses for 529 I'm understanding = tuition, fees, books, room/board, I was even told laptops (?)
This post was edited on 4/7/13 at 6:03 pm
Posted on 4/7/13 at 6:17 pm to dallaslsufan
That was my hesitation too. I took one for my nephew because I don't trust my sister to plan ahead. 
Posted on 4/7/13 at 6:31 pm to tiger91
I am self employed...I own a small construction business with 10 employee's...I am 33% partner....I was kind of pushed into a 512i plan at work and it turned out to be a rough option...I am switching over to a 401 offering this month...Working on that now actually...I will be maxing out what I can put in there as well.
Posted on 4/7/13 at 7:16 pm to dallaslsufan
I'm doing a Roth, SEP, and rental real estate. The goal is to have them out earning me in the next 5 years. you're so close to that tipping point and you're only 33. you're kicking arse man.
Posted on 4/7/13 at 7:48 pm to dallaslsufan
Your house is paid off and you are 33? That's incredible. Congrats man.
I'd maybe suggest selling your home, putting half down to build a new one, and letting the rest of the cash from the home sale work for you in whatever avenue you choose.
Good problem to have.
I'd maybe suggest selling your home, putting half down to build a new one, and letting the rest of the cash from the home sale work for you in whatever avenue you choose.
Good problem to have.
Posted on 4/8/13 at 12:08 pm to FredSecunda
quote:
You have done very well for your self. Congrats.
Posted on 4/8/13 at 12:49 pm to dallaslsufan
quote:
dallaslsufan
True OT baller...I am 38 and single and no where near where you are just on my income.
Posted on 4/8/13 at 2:49 pm to dallaslsufan
Scholarships don't pay for everything. The money from a 529 plan can be used for rent, books, fees, etc. La start savings 529 will also match folks with high income 2%.
If your beneficiary doesn't use it, you don't lose your money, you lose your money's tax exempt status.
If your beneficiary doesn't use it, you don't lose your money, you lose your money's tax exempt status.
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