re: Investing Advice

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Annual income around 115-120k
-13% into 401k, company matches 100% up to 3%
-35k in 401k -40k in savings, 10k in checking

Debt -200k mortgage @ 3.5% - $1,450 monthly, pay $1,700. Rent one room for $550
-22k in truck @ 1.0% - $525 monthly, pay $525
-14k in boat @ 4.0 % - $150 monthly, pay $250
-0 credit card debt

Looking to keep around 15-20k in the bank & invest the rest.. Have considered purchasing a rental property, couple acres in central tx or east tx. Splitting the cash between blue chip stocks..

Any ideas / suggestions would be appreciated.

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Max out your 401K. Hopefully your company offers a Roth option. I would take that, or put at least 50% of the contribution in the Roth option.

Open a Roth IRA. Your AGI should put you below the cutoff. If not, use a traditional and do a backdoor Roth.

If you're healthy and your company offers a high deductible health plan with an HSA, look at that option. That's another $3450 you can sock away in a tax advantaged account - plus some companies kick in a contribution.

Great job on not having any credit card debt.

You're in a volatile industry, so keeping 3-6 months of expenses in savings is smart.

Music to my ears that you're considering income producing real estate. Sounds like you're already getting a taste for it with your personal residence. Just as you seem to be thinking, you can use some of that $40K in savings to build a war chest to buy property. Are you looking for a duplex or a single family? If your goal is income, probably look at a duplex as a starter. If you're considering appreciation, probably look at a single family. But there's no rule there. You might find a nice single family that cash flows like crazy. Distressed situations (divorces, estates, etc.) are good places to look. They're out there - you just have to look.

I'm not taking a shot at anybody here. But you're not going to build wealth by beating inflation with a low interest car loan and investing the money. If you want to use leverage, then be smart about it. The payment on that debt will not impress the bank that you might use to buy your income producing property. It's just going to raise your debt-to-income ratio. Get the toys paid off as soon as you can. At some point, you'll want to establish a banking relationship with a lender. That's the person who'll see you as a sharp fellow who is going places, and not just a number. And he's the one who can hook you up with lines of credit and short term lending, should you need those for your investment borrowing needs. If he gets the impression that you care more about boats, cars, bikes and babes, you'll get no play. It's not that you can't have fun in life. But find a balance, and lean more toward being a man that's "about something". The cool sh## comes a bit later... trust me. Living within your means now means that you can raise your means later and live on that higher plane.

But you're well on your way, dude. You could easily have a couple of houses and/or duplexes paid off by the time you're in your early-mid 40's, and half a million or more in your retirement accounts. Sheeet, look at you go!

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Seriously, do y'all do anything fun? The dude makes more than 100k and is effectively paying like 500 bucks for his mortgage, if he wants a boat thats fine. And if he has a boat, he'll need a truck. I save or service debt with like 40-50% of my income, and I don't even make that much yet, but I'm not going to eat beans and rice and be miserable to save a little more money, especially at my age.

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I hear you loud and clear. The MTB can be extreme at times. The OP is in a great position and there isn't a reason for him to become an extreme saver unless he wants to retire at 40.

He's got good 'problems', especially at his age.

I hear ya! Fast cars have taken more from my wallet than fast women over the years. A weeekend at the track is my idea of fun. But like you said, there’s a time and a place.

This “gotta have it now, or I’ll die” mentality that’s infected our culture is the reason that so many people have their backs against the wall.

I could be wrong, but I don’t think the OP is that type. I’m hoping this pup makes it.

After dealing with so many younger people IRL who can’t/won’t get it done, even with opportunities galore, I’m pulling for you, sir.

Best of luck and keep us updated on your progress.

Well, I made the original post on this thread when I was offshore & bored, so here I am again bored offshore let's bump this & see if I can get anymore advice, plus it's cool to take a look back & see progress.

-33 still in Houston. Married with a 8 month old son
-Bring home 3,300 bi weekly. Rarely go offshore anymore. Annual income around 140k. Wife (30) completed her masters & should get a 30k bump. Her salary will start at 80k
- Max out 401k. Max out Roth IRA
- 170K in 401k
- 32k in ROTH Ira
- 80k in after tax stock accounts
- 70k in savings at 4.1%
- 10k in checking
- 1k 529

Debt
- 300k on a new house @ 3.25%
- No car payments
- No other debt (Sold the boat for 27k)


Looking back I created a net worth spreadsheet & it's been rewarding to see the progress month by month. Believe we just passed 515k net

I need to find somewhere else to park money besides the stock market. Obvious answer would be real estate just struggling to jump in with the interest rates right now.

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On the other hand, at 1%, if you know that you will weaken and just buy another truck because you "miss" the truck note, then a better yield would be to pay down on the house. I know the min/maxxers will quibble with this, but putting the money in your house is essentially a guaranteed yield of your interest rate for the rest of the time you hold the mortgage.

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This is absolutely abysmal advice. He has 30 year money borrowed at a negative real rate, and your advice is to pay it down? Ditto the car payment - at an even MORE negative real rate.

I hate CDs, but worst case, he could put the damned borrowed truck cash in a CD and make out better than what you're talking about, Paw Paw.

Don't pay ahead on low interest debt at least until you max tax advantaged investments. HSA, Roth then max 401k. After that, I still wouldn't pay ahead as long as you can earn more putting the extra in a high yield savings or CDs with no risk and access to the $ if needed. For taxable investments I prefer index funds but others will reccomend real estate. I've done both and prefer the access to $ if needed, ability to borrow against assets, and most importantly lack of stress carrying costs and tenant risk.

Haha - Yea I am unsure if others noticed this.

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Max out HSA and 401k.
Open Roth IRA or mega back door Roth and put as much as you can afford in there.

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And do this.