Author Topic: Building House vs Retirement Fund  (Read 6056 times)

The Dutchman

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Building House vs Retirement Fund
« on: September 02, 2014, 11:39:45 AM »
I have debated posting this as I am sure many of you will want to reach through the screen and shake some sense into me.  However, there are too many brilliant people who post here to ignore their opinion/take/advice on things. 

It has been a lifelong dream of mine to design and build my own house.  I would like to do this in 5 years.  This will be my final house I will not move out of it till they carry me out feet first.  I will NEVER SELL THIS HOUSE. 

A little background to better inform your thought process.  I am 28, married, single income, 2 kids (1 and 3), just found out we are having another (very excited), and have a very supportive wife.  I make 94k a year. 

Now on to my question.   How do I save for this?  Do I forsake my retirement and save for the next five years (short term investments) to have as much cash on hand as possible?   Remembering that I will sink all I can into the house so I have a minor mortgage.    Attached is a pie chart of my spending (as you can see there is a piece of the pie for taxes so this is gross).  4% is the max I can put in for employer match in my 401k.  So basically I can continue what I am doing and put 14.1% (13k) to retirement accounts and 18.7% (17.5k) to savings goal (87.5k saved in 5 years).  The alternative is to put 4% (3.7k) to retirement and 28.8% (26.8k) to savings goal (134k saved in 5 years).  Obviously I could meet in the middle but I was just giving the extreme examples.   

Let me know what you think.

PS - Couple of notes on the account starting at 12 and going clockwise. 
"Main" is our account which we pay variable bills and general spending cash (gas, electric). 
"Wife" is our house account; that is what we spend on groceries, clothes, and home consumables. 
"Me" is literally my lunches and a dinner out with the wife. 
"House & Non Var" is our non-variable expenditures, house, cell phone, internet, gym, netflix, school loans, and gas (I have this one account further broken down into 10 more categories). 
"Gift Savings" is our account we use basically for weddings, birthdays, and Christmas, so we don't have any tough months (this is a hold over from leaner times; however, the wife really likes it so we keep it). 
"Tithing" is self explanatory. 
"Savings Goal" again is self explanatory; however, we basically use this to fund emergencies such as car repair, replacement, and other such items.  So while I say I am saving at 18.7% (17.5k) now it is deceiving as we will spend money from there so our saving on a good year may be 16k on a bad year it may be 12k. 
"Wife Roth IRA", "Me Roth IRA", and "401k" would be our investments.
"Taxes & Deductions" are what the Gub'ment garneshes from my wages.
"Healthcare" This is what my premiums are.  I am getting boned on these and will be changing next year.  Live and learn.
"(Over)/Under" is basically my cushion in the "main account" I have 3.2% for bills that come in higher, items that aren't necessarily emergencies (like the wasp exterminator we had to pay for), and other random acts. 

dandarc

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Re: Building House vs Retirement Fund
« Reply #1 on: September 02, 2014, 12:08:43 PM »
Need more info - questions I have:

1.  Do you currently own your home?  How much equity?  Going to keep it, or sell it when the house is built?

2.  How much house are you looking to build?  Roughly how much is this going to cost?  100K, 500K?

3.  You've mentioned you want to 'minimize the mortgage'?  What does that mean?  If you're looking to build a 100K house, no reason you can't save that up and have no mortgage from your numbers.  If you want a house that is going to cost 500K, you might have a big mortgage regardless.

4.  Interest rates on loans?

5.  How much income tax are you paying?  At 94K gross for a family of 4 (soon to be 5), you could be paying anywhere from 0 (even negative with credits) to quite a lot of money.  How much you put in various retirement vehicles impacts this greatly.  Stopping 401K contributions likely increases your taxes, so you'll have less to play with if that is where you cut.  You might switch to traditional IRAs if that will save current taxes compared to Roth - it may or may not in your case.

Percentage budget is nice, but raw dollar amounts are what we need here.  You don't have a long-enough time frame for compounding to be that big a factor - take a guess of how much this house is going to cost to build in 5 years, figure out how much of that you are comfortable borrowing - subtract and divide by 5.  If you can't save at least that much per year, adjust budget or expectations accordingly.

The Dutchman

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Re: Building House vs Retirement Fund
« Reply #2 on: September 02, 2014, 12:24:24 PM »
Need more info - questions I have:

1.  Do you currently own your home?  How much equity?  Going to keep it, or sell it when the house is built?

2.  How much house are you looking to build?  Roughly how much is this going to cost?  100K, 500K?

3.  You've mentioned you want to 'minimize the mortgage'?  What does that mean?  If you're looking to build a 100K house, no reason you can't save that up and have no mortgage from your numbers.  If you want a house that is going to cost 500K, you might have a big mortgage regardless.

4.  Interest rates on loans?

5.  How much income tax are you paying?  At 94K gross for a family of 4 (soon to be 5), you could be paying anywhere from 0 (even negative with credits) to quite a lot of money.  How much you put in various retirement vehicles impacts this greatly.  Stopping 401K contributions likely increases your taxes, so you'll have less to play with if that is where you cut.  You might switch to traditional IRAs if that will save current taxes compared to Roth - it may or may not in your case.

Percentage budget is nice, but raw dollar amounts are what we need here.  You don't have a long-enough time frame for compounding to be that big a factor - take a guess of how much this house is going to cost to build in 5 years, figure out how much of that you are comfortable borrowing - subtract and divide by 5.  If you can't save at least that much per year, adjust budget or expectations accordingly.
Attached the numbers the pie chart is created off. 

1.  Currently "own" by that I mean it is worth 115k on the market now and I owe 88k.  I will be selling it. 

2.  Budget for the house and Land is 300k. 

3.  Minimize mortgage means that the more I put down the less my balance is.  Maybe this is a misguided view I am taking.  That is why I am asking.

4.  My current interest rate is 3.5% on the house I own.  No idea predicting the future.  However, I have no plans to murder my credit which is bordering excellent. 

5.  I will never stop the traditional 401k contribution as I have employer match of 50% on the dollar up to 4% of my pay.  I will need to check on the income tax as I don't recall and don't have access where I am. 

dandarc

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Re: Building House vs Retirement Fund
« Reply #3 on: September 02, 2014, 12:52:34 PM »
Good deal.

So the absolute reasonable minimum is likely $60K that you'll need to have just to be able to make this work - 20% down.  The more you save, the more likely you can get financing in 5 years when you need it.  You could take the 30K in equity you've got in the house and subtract, but selling the house prior to building is problematic, so lets just count that as 'will have some time after we move' money - this might be useful if it turns out you need to borrow more than you planned to get the deal done.  So you need to save at minimum 12k / year to get there.  Your current budget seems to get you well past that, so you should be OK - you're just forgoing any returns you might get from investing this elsewhere.

I doubt that you're going to be able to come up with the full 300K, so doing this entirely in cash is probably out of the question.  Might as well max your 401k, then take the surplus and put it into a fairly conservative investment vehicle - either online savings or CDs or maybe a bond fund.  You could go with some stocks, but 5 years is not that long a time-frame and you risk having to delay your house project due to market downturns.  You may want to review your tax situation and decide what to do regarding the IRAs.  You're probably in the 15% bracket - so if you did the 11K in traditional IRAs instead of Roths, you can get $1650 in tax savings (federal only) this year (which presumably would be stashed away for the house project).  Whether this is a good move or not depends on what you think your tax rates will be when you draw on that account.

I was more wondering about the rates on the student loans and any other debts that you may have - even with this 5-year goal, it may be wise to pay-off high-interest debt first.

Then you do have to consider the interest-rate speculation on the new house - how far is a 200K mortgage stretching you at today's rates?  In 5 years rates could be double or more what they are today - adjust plans as you approach the date based on the reality of your situation then.  So if you're close to your line today, you may want to scale-back plans, or plan on saving more to mitigate the risk.

Any way, hope this helps.

TL; DR: In this case, I think you can probably reach your goal without reducing 401K contributions, based on numbers presented.

The Dutchman

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Re: Building House vs Retirement Fund
« Reply #4 on: September 02, 2014, 01:19:16 PM »
....
I was more wondering about the rates on the student loans and any other debts that you may have - even with this 5-year goal, it may be wise to pay-off high-interest debt first.
....

TL; DR: In this case, I think you can probably reach your goal without reducing 401K contributions, based on numbers presented.

I paid of 16k of student loan in a year so the only remainder is 5k of loans that have 2.75% interest.  I will leave those to rot and pay off per plan. 

So it sounds like you are in the keep the status quo camp.  Basically save the 20% I will need for down payment (with additional cushion) and sock the remainder away in retirement accounts (401k/Roth/IRA). 

Thank you very much for you input... anyone else want to weigh in on my quandary?
« Last Edit: September 02, 2014, 01:23:34 PM by The Dutchman »

dandarc

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Re: Building House vs Retirement Fund
« Reply #5 on: September 02, 2014, 01:58:08 PM »
Yeah - and if you decide to go the Roth IRA route rather than traditional, keep in mind you can withdraw contributions at any time.  So money you put in those specific accounts could be considered house funds if needed down the road - some nice flexibility available there.

gecko10x

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Re: Building House vs Retirement Fund
« Reply #6 on: September 02, 2014, 06:16:57 PM »
Save as much in tax advantaged accounts as you think you need to to meet your retirement goals, then divert the remainder to the house fund. And save enough to pay cash for the house.

That is what I am planning to do (I have basically the same goal as you).

mulescent

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Re: Building House vs Retirement Fund
« Reply #7 on: September 02, 2014, 06:40:38 PM »
I think advice can be split into two categories:

1)  Moving from a 100k house to a 300k house incurs a huge cost in terms of FI.  From that standpoint, staying in the cheaper house is better.  Many would consider a custom-built house to be a ridiculous luxury, unless you're building it yourself.  I would want to know if you could obtain many of the desired features by purchasing a cheaper home and doing some customization rather than building from scratch.

2)  If you are going to build the house anyway, then it becomes an optimization problem.  Giving up the tax shelter and predicted market gains over 30+ years is way worse than having a larger mortgage at current rates.  So, I fall in the "figure out the minimum you need to save to make the house happen and divert the rest to tax sheltered retirement accounts," camp.  You can always kill the mortgage later, if you really decide that is the priority.

One twist that nobody has mentioned yet is that building a house is not the same as buying one.  Construction loans are typically much harder to obtain, have higher rates and can require a larger down payment.  Therefore, talking with some lenders to make sure you'll actually have the required cash when the time comes is a good idea. 

jasman18

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Re: Building House vs Retirement Fund
« Reply #8 on: September 02, 2014, 09:36:22 PM »
***WHAT DO YOU VALUE??????????***
If you care about a house more than your freedom, then go for it and don't stop until you get it.

Most people here have a logical approach. I myself don't understand having a nice house.....You work full time so you get to sleep in room 5 nights a week and spend 48hrs on your weekend in the house.
Other than that you spend much more time of your life OUTSIDE of that home working, driving, vacation, etc.
What good is having a nice home if YOU don't spend any time in it?

Rural

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Re: Building House vs Retirement Fund
« Reply #9 on: September 03, 2014, 06:08:38 AM »
We put off retirement saving for four years to build and pay off our home and land. The "pay off" came because our land loan was at 7.5%. The house we cash flowed at the same time as we paid off the land. The trick for us was that we're in a very low COL area, so all in cost for 25 acres and house was $130k. That's with almost all labor done by my father and husband, so it was a major, major hardship.


But now it's done. We could not have bought this place for $130k, more likely twice that, even here where everything is cheap. We did trade some time until retirement, though; we could have bought a house here for $20k, done 5k in repairs, and have been done with it. It has to depend on what you value. We could have retired earlier in the little $20k house, but we couldn't have retired happily there because it would have been in town. We'd both rather work a few years longer for a retirement we'll enjoy, but then we are also both in jobs we love and believe in.


This is really as much a question for you and your family about your values and preferences as it is a financial  question. Were I you, I'd continue to think about it but not make any irrevocable decisions until after the new baby comes; your life is changing again shortly as it is. Deal with one thing at a time and make this decision with your wife after the dust settles.

The Dutchman

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Re: Building House vs Retirement Fund
« Reply #10 on: September 03, 2014, 06:33:49 AM »
I think advice can be split into two categories:

1)  Moving from a 100k house to a 300k house incurs a huge cost in terms of FI.  From that standpoint, staying in the cheaper house is better.  Many would consider a custom-built house to be a ridiculous luxury, unless you're building it yourself.  I would want to know if you could obtain many of the desired features by purchasing a cheaper home and doing some customization rather than building from scratch.

....

One twist that nobody has mentioned yet is that building a house is not the same as buying one.  Construction loans are typically much harder to obtain, have higher rates and can require a larger down payment.  Therefore, talking with some lenders to make sure you'll actually have the required cash when the time comes is a good idea.

1 - I agree.  300k is my high end.  My goal is to do a good amount of it myself and try to get down to 200 or 250 but I want to plan for the worst. 

I agree I need to start talking to banks and make sure I have a good handle on what I am doing.  It can be challenging. 

***WHAT DO YOU VALUE??????????***
If you care about a house more than your freedom, then go for it and don't stop until you get it.

Most people here have a logical approach. I myself don't understand having a nice house.....You work full time so you get to sleep in room 5 nights a week and spend 48hrs on your weekend in the house.
Other than that you spend much more time of your life OUTSIDE of that home working, driving, vacation, etc.
What good is having a nice home if YOU don't spend any time in it?

While I agree that by buying a larger more expensive house I am delaying my retirement; I disagree with your statement about spending time in the house.  I have a stay at home wife who spends 80% of her time at the house.  So I see this as putting off future comfort (retirement) for comfort today.  Also, I would love for my kids to grow up, for the most part of their childhood, in a home we built and they will come back to.  My parents live in the same home they built when I was 4 and it is great coming back there with our kids.  So many memories. 

We put off retirement saving for four years to build and pay off our home and land. The "pay off" came because our land loan was at 7.5%. The house we cash flowed at the same time as we paid off the land. The trick for us was that we're in a very low COL area, so all in cost for 25 acres and house was $130k. That's with almost all labor done by my father and husband, so it was a major, major hardship.

....

This is really as much a question for you and your family about your values and preferences as it is a financial  question. Were I you, I'd continue to think about it but not make any irrevocable decisions until after the new baby comes; your life is changing again shortly as it is. Deal with one thing at a time and make this decision with your wife after the dust settles.

130k for 25 acres and a house paid off is amazing.  I hope to be here at some point.  How much was the family able to do?

I agree with your last part, I will not be making any hasty decisions. 

johnhenry

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Re: Building House vs Retirement Fund
« Reply #11 on: September 03, 2014, 06:38:20 AM »
I agree with the advice you've already received.  Your decision to buy/build a new place is a mainly personal one.  But if that is what you decide you want, you should save enough for the 20% downpayment (or whatever is required) plus a little more for closing costs, etc.  And since this is a construction project, I'd have an extra amount of cash ready to go towards the house for unexpected items.  Even though there will be many unknowns at the beginning and changes along the way, you should talk now with lenders and builders to get the best idea you can.

I would certainly keep funding your tax advantaged retirement accounts to the fullest level you can while still meeting your savings goal to get the house bought.  As others have said, you can always decide to pay down the mortgage aggressively once you are in the house and see how your income, taxes, utilities, etc are looking.  But if you put too much in the house upfront you may wish you had some of it back.

Dicey

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Re: Building House vs Retirement Fund
« Reply #12 on: September 03, 2014, 08:37:47 AM »
I would certainly keep funding your tax advantaged retirement accounts to the fullest level you can while still meeting your savings goal to get the house bought.  As others have said, you can always decide to pay down the mortgage aggressively once you are in the house and see how your income, taxes, utilities, etc are looking.  But if you put too much in the house upfront you may wish you had some of it back.

This. To which I'll add that the earlier you invest money for retirement, the less you will have to save. Do both, even if it hurts.

Bateaux

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Re: Building House vs Retirement Fund
« Reply #13 on: September 03, 2014, 09:05:47 AM »
The house can wait.  Save, save and save more.  Fully fund the 401k(17,500) fully fund a Roth IRA both you (5,500) and your spouse(5,500).  Attack all debt with remaining funds including mortage with remaining funds.  When all debt including the mortage is paid off.  Starting building funds to build the new house.  Within a few years of paying off all debts you'll have saved enough to build the new home free and clear of debt.  Your savings rate and interest will far exceed any increase in inflation of home prices.  When the last nail is driven you will own your dream home and you will own your freedom.  FIRE will be soon waiting for you as payment for your patience.

The Dutchman

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Re: Building House vs Retirement Fund
« Reply #14 on: September 03, 2014, 10:52:26 AM »
The house can wait.  Save, save and save more.  Fully fund the 401k(17,500) fully fund a Roth IRA both you (5,500) and your spouse(5,500).  Attack all debt with remaining funds including mortage with remaining funds.  When all debt including the mortage is paid off.  Starting building funds to build the new house.  Within a few years of paying off all debts you'll have saved enough to build the new home free and clear of debt.  Your savings rate and interest will far exceed any increase in inflation of home prices.  When the last nail is driven you will own your dream home and you will own your freedom.  FIRE will be soon waiting for you as payment for your patience.

First off If I fully fund 2 IRAs and my 401k then I will have 3k to save toward the house or paying down a mortgage early. 

While this is a glorious idea it is not practical.  Say I can pay off the house in 5 years throwing everything I have at at during that time keeping my current contribution rates.  I then decide to pay for the house cash.  Lets assume the house is 250k.  I would need to save for 16 years to pay for it cash.  So by that time I will be 50 and my kids will be out of the house.   While it is nice to dream lets try to be more practical. 

----

However, this did get me thinking.  I could pay down the house in five years.  Then I could sell or re-mortgage to get the cash for the down payment.  Again my current balance is 88k, the value is about 110k, and it is 3.5% interest.  Is this a good idea?  I am not sure how to calc that one out. 

4alpacas

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Re: Building House vs Retirement Fund
« Reply #15 on: September 03, 2014, 11:34:48 AM »
The house can wait.  Save, save and save more.  Fully fund the 401k(17,500) fully fund a Roth IRA both you (5,500) and your spouse(5,500).  Attack all debt with remaining funds including mortage with remaining funds.  When all debt including the mortage is paid off.  Starting building funds to build the new house.  Within a few years of paying off all debts you'll have saved enough to build the new home free and clear of debt.  Your savings rate and interest will far exceed any increase in inflation of home prices.  When the last nail is driven you will own your dream home and you will own your freedom.  FIRE will be soon waiting for you as payment for your patience.

First off If I fully fund 2 IRAs and my 401k then I will have 3k to save toward the house or paying down a mortgage early. 


With your current budget.  Think about optimizing your spending. 

If I were in your shoes, I would max my 401k ($17,500).  I would max out Roth IRAs for both spouses ($11k/year).  I would optimize my budget, so I could save more than $3k/year for my "dream house."  The contributions for Roth IRAs can be withdrawn for a house purchase.  While I wouldn't consider the Roth IRA part of my home buying plan, I would have a back-up available if the perfect situation popped up.

With a mortgage at 3.5%, I would opt to put my house savings into an index fund.  When you get closer to the build date, remove the money from the market. 

The Dutchman

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Re: Building House vs Retirement Fund
« Reply #16 on: September 03, 2014, 11:57:00 AM »
With your current budget.  Think about optimizing your spending.....

....With a mortgage at 3.5%, I would opt to put my house savings into an index fund.  When you get closer to the build date, remove the money from the market.

I have optimized.  I have been a MMM reader for about 3 years.  There is always room for improvement but I took a swipe at all my spending about a 2 years ago and have it down to where I think ti should be.  I could always go lower but at what cost? 

I agree I will likely be looking at index funds for my house savings. 

jasman18

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Re: Building House vs Retirement Fund
« Reply #17 on: September 03, 2014, 12:47:19 PM »
I re-read your original post.
You dont mention how much you already have in retirement and brokerage accounts.
You must make sure you have enough first of all before talking about going into MASSIVE DEBT.
This is a great table:


Basically you and your wife should both have around 80-100k in your 401k's based upon your age. for a total of 160-200k.
Your Roths should also have a healthy amount in them.
If you and her retirement accounts are underfunded then that should be fixed before talking about dream homes.


Also it looks like your wife is not working right now. There is MAJOR untapped potential right there. If she was working it would supercharge your savings rate allowing you to build this house a lot faster. It would also allow you to spend more time with your children instead of just her once your reach your RE point.


I feel for you man. I am in the exact same boat and I'm still in my first house and I would LOVE to move into a place that I want.
But its the great advice I receive here that keeps me going down the correct path....I will buy it when I can afford it.
Knowing that in 10 years I will be free is what keeps me motivated.
A new house or car with payments adds risk that is much more harmful to my families future than the benefit that it might provide.

The Dutchman

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Re: Building House vs Retirement Fund
« Reply #18 on: September 03, 2014, 01:27:05 PM »
I re-read your original post.
You dont mention how much you already have in retirement and brokerage accounts.
You must make sure you have enough first of all before talking about going into MASSIVE DEBT.

Removed the Chart

Basically you and your wife should both have around 80-100k in your 401k's based upon your age. for a total of 160-200k.
Your Roths should also have a healthy amount in them.
If you and her retirement accounts are underfunded then that should be fixed before talking about dream homes.


Also it looks like your wife is not working right now. There is MAJOR untapped potential right there. If she was working it would supercharge your savings rate allowing you to build this house a lot faster. It would also allow you to spend more time with your children instead of just her once your reach your RE point.


I feel for you man. I am in the exact same boat and I'm still in my first house and I would LOVE to move into a place that I want.
But its the great advice I receive here that keeps me going down the correct path....I will buy it when I can afford it.
Knowing that in 10 years I will be free is what keeps me motivated.
A new house or car with payments adds risk that is much more harmful to my families future than the benefit that it might provide.

That is a great chart.  Like many on this forum I wish I found MMM later than I would have wished.  Had I found this when I started working I would be in the right range.  The wife and I made some horrible mistakes which we fixed in the last 3 years (35k of debt paid off in the last 2 years).  I am sitting at 50k combined between Roths and 401k.  Woof that is hard to look at next to that graph.   Funny I would be right on track if I didn't screw around early on. 

On a positive note I have been keeping my net worth on a simple excel table quarterly for the last 2 years and I have it spit out a graph.  Once I have the graph I add a trend line which basically takes historical data to project out the future.  Not an exact science but I am making up for lost time right now and if I project out to when I am 35 I will be in the lower 3rd at 260k. 

The wife will not be going back to work.  She has an associate in Early Childhood Development.  We have looked at it previously.  After you have paid for two kids in daycare (if she were working) she would probably be able to take in like $100-200 per month.  The Juice isn't worth the squeeze. 

I agree it does add risk.  I know this opulence flies in the face of the MMM standards.

Rural

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Re: Building House vs Retirement Fund
« Reply #19 on: September 03, 2014, 06:15:26 PM »

We put off retirement saving for four years to build and pay off our home and land. The "pay off" came because our land loan was at 7.5%. The house we cash flowed at the same time as we paid off the land. The trick for us was that we're in a very low COL area, so all in cost for 25 acres and house was $130k. That's with almost all labor done by my father and husband, so it was a major, major hardship.

....

This is really as much a question for you and your family about your values and preferences as it is a financial  question. Were I you, I'd continue to think about it but not make any irrevocable decisions until after the new baby comes; your life is changing again shortly as it is. Deal with one thing at a time and make this decision with your wife after the dust settles.

130k for 25 acres and a house paid off is amazing.  I hope to be here at some point.  How much was the family able to do?



I did make a mistake -- the 130k was for house and 19 acres; we've since bought an adjacent 6 acres which  cost another $15k. The initial cost was 50k for the land (we put down 12k and financed the rest) and another 80k spread out over the four years for building supplies, tools, and what just may be the world's oldest functioning backhoe.



The three of us (and mostly the two of them), did absolutely everything except the concrete pour, spray foam insulation, septic tank install, and, at the end when we got impatient to move in, the drywall. Everything from building the road in and clearing the site and digging the foundation to framing, roofing, wiring, plumbing, trim (what there is so far...). Even the blueprint -- that was my husband. The power company laid in the buried power line, of course, but we paid for it, and that's included in the cost. The phone line (I need high-speed Internet for my side gig and cable isn't available) was laid by the phone company for free (which was a real shock).  We also benefited from a week of my brother's hard-earned vacation and a week from an uncle of mine who'd recently retired.

Editing to add: since you're considering doing much of the work yourself, you need to read this (long) post I made recently in response to someone else considering that. It's about what building your own house is like, view from the trenches.

http://forum.mrmoneymustache.com/ask-a-mustachian/more-badass-to-buy-land-and-build-or-buy-an-existing-(cheaper)-house/msg356251/#msg356251

« Last Edit: September 03, 2014, 06:35:39 PM by Rural »

Bateaux

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Re: Building House vs Retirement Fund
« Reply #20 on: September 03, 2014, 10:40:33 PM »
Looks like we may not be able to talk him out of this.  He wants that 300k house.  Thats almost 6 times what I paid for mine so maybe I'm out of my league here.

jasman18

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Re: Building House vs Retirement Fund
« Reply #21 on: September 04, 2014, 09:53:52 AM »
A large house is not necessarily opulence to all people here.
Based upon the underfunded retirement accounts and brokerage accounts, the house cannot be afforded. Its just simple math in this situation.
If you use logic and remove emotions when talking to the spouse its a lot easier talking to them about it.
I know plenty of people who waited until they were in their late 30's until building because they couldn't afford it until then. Everything comes with time

A house is not a blessing when you don't have enough saved to provide a good foundation.
If you want to build upon a shaky foundation, only you can make that call.
« Last Edit: September 04, 2014, 12:40:40 PM by jasman18 »

Bateaux

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Re: Building House vs Retirement Fund
« Reply #22 on: September 04, 2014, 12:43:43 PM »
I re-read your original post.
You dont mention how much you already have in retirement and brokerage accounts.
You must make sure you have enough first of all before talking about going into MASSIVE DEBT.
This is a great table:


Happily kicking this table's ass.  Both age and years worked.
Whup! Whup!