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re: Financial Advice (Investment vs Debt) - My Situation
Posted on 4/15/18 at 8:39 am to GFunk
Posted on 4/15/18 at 8:39 am to GFunk
quote:
1.) Pay off student debt 2.) Pay off all CC’s 3.) Pay off cars 4.) Max out retirement contributions at work & with IRA/whatever (offset by no notes on autos/CC/student loans). 5.) Make plan for expected bonuses next year. 6.) Plan a badass vacay as a part of #5
This exact thing but for the cars I’d pay yours off with cash and the wife’s by doubling the monthly note. Then I’d build your cash back up to 60-120k and put it in multiple money markets. It sounds like you and your wife do really well but never underestimate volatility at some point will hit unless you have incredibly stable career paths which I’m not sure even exist. There will come a time when your going to need some cash if you change jobs or lose a job.
Lastly, once that’s done start investing in some income replacement type options. Duplex’s, rents houses etc.
0
Posted on 4/15/18 at 11:53 am to LSUisBetterthanU
I don't know why you got so many downvotes. I give you props for giving this some thought. These are the kinds of thread I enjoy reading. The way I see it, you can be on your way to healthy financial independence by your late 40s/very early 50s, worst case, if you choose to be.
Rid yourself of all the non-mortgage debt and live within a reasonable WRITTEN budget.
Although most all of them depreciate, IMO, you're not above your means/income as far as automobiles. But I'd start making these last a long time and don't overspend on future ones.
So yeah, mostly I'd just echo what others have said: eliminate the non-mortgage debt and max your 401Ks and HSAs (if applicable). Put a reasonable emergency fund of 4-6 months of expenses in place. And my addition: if you have the mentality and emotional fortitude, I'd use some of that discretionary income to build a war chest to buy some good income producing real estate. Whether you pay cash or get manageable 10-15 year mortgages, you'd have it paid off well before you hit 50. Nothing crazy. Maybe a couple of duplexes and a quad. Eight units is plenty for a non-full timer, with the help of a property manager.
Not counting what you have in retirement now, and assuming 7% compound growth in a balanced portfolio, you two could/should have an extra $700K+ on top of the cake in your 401Ks/IRAs. Throw in the then paid for rental real estate (using values in my area for reference) and that's another easy million. Without really killing yourselves, you two could be looking at a $2 million net worth by age 50 or so... and DEBT FREE.
Rid yourself of all the non-mortgage debt and live within a reasonable WRITTEN budget.
Although most all of them depreciate, IMO, you're not above your means/income as far as automobiles. But I'd start making these last a long time and don't overspend on future ones.
So yeah, mostly I'd just echo what others have said: eliminate the non-mortgage debt and max your 401Ks and HSAs (if applicable). Put a reasonable emergency fund of 4-6 months of expenses in place. And my addition: if you have the mentality and emotional fortitude, I'd use some of that discretionary income to build a war chest to buy some good income producing real estate. Whether you pay cash or get manageable 10-15 year mortgages, you'd have it paid off well before you hit 50. Nothing crazy. Maybe a couple of duplexes and a quad. Eight units is plenty for a non-full timer, with the help of a property manager.
Not counting what you have in retirement now, and assuming 7% compound growth in a balanced portfolio, you two could/should have an extra $700K+ on top of the cake in your 401Ks/IRAs. Throw in the then paid for rental real estate (using values in my area for reference) and that's another easy million. Without really killing yourselves, you two could be looking at a $2 million net worth by age 50 or so... and DEBT FREE.
Posted on 4/16/18 at 10:27 am to LSUisBetterthanU
quote:
In my early 30's.
quote:
Combined we make around 250K
quote:
My 401K is only worth about 50K. Wife's, around 60K.
quote:
I currently have about 80K in my savings account doing nothing.
How is that possible?
You need to figure out a way to get the 80k from savings into the tax free or tax deferred accounts.
And by that i mean you should be maxing out your 401k and Roth IRA for both of you and use the savings to cover any loss of cash flow you want to keep.
Posted on 4/16/18 at 10:32 am to LSUisBetterthanU
quote:
Current debts:
1. Student Loans - 12K $250/month 3 to 6% I'd pay off immediately IMO
2. Truck - 40K $750/month 5% -
3. Wife car - 30k $450/Mmonth 3%
I don't think this is as outrageous as other people but if you have the credit you claim, there is no reason these should be at 0-1% if you bought new.
4. Credit card / misc - 2K
5. Mortgage - 212K - $2,000 / Month 2.875% Interest rates are starting to climb but I always go with 30 year mortgages since they are at historic lows.
Posted on 4/17/18 at 5:39 am to barry
$80k sitting in savings is making you nothing. Unless you have a major purchase planned in the next year, I’d pay off both the cars. Yes those interest rates aren’t high but your probably only earning 1% max in the savings account.
Posted on 4/17/18 at 8:36 am to LSUisBetterthanU
This thread been through the ringer a little, but here's what I'd do...
1. Payoff student loans.
2. Payoff wife's car, rolling her payment into your payment.
That'd leave ~$38k in savings. I'd leave ~$20k in savings, and take that $18k and put it into the Vanguard account, or split it between the Vanguard and a ROTH.
1. Payoff student loans.
2. Payoff wife's car, rolling her payment into your payment.
That'd leave ~$38k in savings. I'd leave ~$20k in savings, and take that $18k and put it into the Vanguard account, or split it between the Vanguard and a ROTH.
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