Author Topic: $100,000 windfall part II: More details  (Read 2455 times)

onemorebike

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$100,000 windfall part II: More details
« on: August 16, 2014, 05:48:44 PM »
Let's try this again:

My wife and I each make about 50,000 a year, she has about 9,000 remaining in student loans (we've paid off 41,000 in three years!) and we have a 189,000 debt on our current mortgage on a CO home worth about 250,000-275,000. We have two young daughters that have been in full time daycare for years now at around 1500-1800 a month for the both of them. We have just sold our rental property for about 105,000 in profits and are in the process of seriously considering a move home to MN in the next 9 months. We have two cars that we paid cash for (but I'd love to knock down to one) and 6 bikes that are high end, but serve various purposes that I would prefer not to argue about. We also have money in our 503bs that probably aren't relevant to this conversation.

Anyway, both of us are interested in working part time gigs and spending more time with our children in their younger years (not to mention finding some time to ourselves too.). We are considering the possibilities on how we can take the money made from the first home sale ($105,000), possibly sell the second home  (~$35,00-$75,000 gain) and move back to MN (where my family is located = more time with grandparents, cousins, uncles, aunts and long time friends) where the girls would be transitioning to public school (yay, $1500-$1800 savings a month!) to a smaller, more affordable home/apartment/whatever and land a better balance of work life and personal life.

We are looking at buying a small fixer upper for mostly cash, possibly selling one of the cars and some of our excess stuff OR renting a two bedroom apartment or renting a house. I'm curious if anyone here has some ideas for how we might move this money around to best serve our emotional desires but also taking into consideration our long term financial desires. (we are more interested in living a fulfilling, free time full life right now than staching away as much cash as possible for early retirement)

Emotionally, I wonder should we pay off her loan (4%)?
Should we buy a house to eliminate the cost of a mortgage (or most of it at least?)?
Are we going to be as bike commuting as easily in MN? (I've lived there throughout early life and biked plenty then, but never with children.)
What is the best approach to balance our desire to work less, be with our children and maintain a financial safety net?

thanks for any advice!

onemorebike

dragoncar

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Re: $100,000 windfall part II: More details
« Reply #1 on: August 18, 2014, 10:00:24 AM »
Seems like you need to do more research on MN.  Have you run the NY times rent v. buy calculator for properties out there?  I'd highly suspect buying is the way to go, but I don't have any data.  Couldn't your family tell you pretty easily if biking is an option?

TrulyStashin

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Re: $100,000 windfall part II: More details
« Reply #2 on: August 18, 2014, 10:12:36 AM »
This might help you figure out how your current income translates.  http://money.cnn.com/calculator/pf/cost-of-living/

Can you afford to pay cash for a single-family home that will serve your needs for next 10 - 12 years (good schools, etc)?  I think it would be incredibly comforting to have a paid-for house that you knew would go the distance for the next decade.   

Without a  mortgage and no daycare costs, you can crush the last $9k  in student loan debt easily enough.  I wouldn't worry about that too much.

greenmimama

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Re: $100,000 windfall part II: More details
« Reply #3 on: August 18, 2014, 10:40:53 AM »
What kind of income can you make working part time? Seems that would answer a lot of your questions.

I think it sounds fabulous, but we are right their with you we have 3 young boys and I know the time flies.

yddeyma

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Re: $100,000 windfall part II: More details
« Reply #4 on: August 18, 2014, 12:21:17 PM »
You don't have quite enough info in your post.  What are you expenses in MN going to be?  And what would your part time income be?  If that balances, you're good to go.

For what its worth, if we got rid of our mortgage and daycare costs we can easily live on one income or two part time incomes.  Easily.

If you'll be in an area with lots of renters you may consider buying a home with a rent-able space (i.e. basement apartment) to offset your costs even more. 

It's hard to plan for things for an area you're not as familiar with.  If you're not even sure if you can bike or not, I'd say keep you cash handy for the first year and don't lock yourself into anything until you learn the area a bit better.  That may me renting or buying a home you intend to rent out later vs. trying to find your "forever" home first time out.  Cash on hand will give you flexibility.  Once you've better defined your new needs for MN then you can put that cash to use.