The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: PeachFuzzStacher on January 23, 2014, 12:16:38 PM
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Hey everyone,
I've grown up in North Jersey (Bergen County) and have only recently decided to stay. My wife and I just moved a bit further west to Morris County.
As you all are aware of the environment, we got some property tax relief going from an average 10k/year for a 3 br in Bergen to 6400/year in Morris by purchasing in Denville (love it!) ~340k house. Anyone outside the tri-state area would be right in thinking we're crazy.
Anyway, with the high cost of living in this area, how do you do it? I personally see a 20 year minimum to FI if I'm REALLY good. Rentals don't seem to check out here unless you own a 10 plex. Is there a secret, or am I just late to the game? (28, mortgage, no other debt).
Let me take off my complainy pants for a sec - they're itchy. I'm really just looking for some tips or philosophies that have worked for you, especially if you're in your 30's to 40's.
Thanks!
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I live in Jersey as well.
Short answer seems to be....make NYNJ salary then move to Florida, Texas, low COL area. Hard to be FI at a young age if you're paying 12k/yr in property taxes....you'd need several million saved.
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Agree with Jags4186. I grew up and still live in Bergen county. Almost all of my friends' parents commuted to NYC for their jobs and the only way I'm going to be FI by 30 is having a starting salary that's adjusted for NYC cost of living.
Also, have you considered buying a 2 family house? My landlord rents out both the first and second floor and lives in the basement of the first floor family house. The rental income he gets covers his property tax and mortgage payment.
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I live in south jersey. My property taxes are 3500 a year. I'm moving within a year.
Costs are too high here, and as a software engineer salaries are high everywhere.
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Thanks for the insights. Maybe I'll compromise and move to South Jersey once I'm sick of the North, but still want to be within a few hours of family. I do love the shore, sorry I mean, beach.
I have considered a 2 family house, but ended up purchasing a single family before I went mustachian. I've also found that 2-family houses tend to only be in certain areas, many which I'm not looking to move to, however cheap they are.
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Hey PeachFuzz,
I'm a fellow TriStater, NY just north of your old digs. I grew up here, went to school in upstate NY, have worked my entire career in NYC/NJ and have moved back to the area I grew up. We have family ties to the area and have no intentions of leaving.
My wife and I are both in our mid to late 30's with a net worth of about $1.5m, our only debt is our mortgage @ 3%, $9k student loan @ 2% and a car loan at 0%. The car loan just made sense at 0% could have paid cash (Our other 2 cars our fully paid for), the student loan is so cheap and small the $150 a month is not worth eliminating, so the mortgage is the only real debt of consequence and even that is kind of a joke, we have over 35% equity in our house we put 20% down 4 years ago. We have 2 children as well no where near college yet.
We could sell our house and move to many places in the country and be FI right now, however we love our life here so I deal with my crappy hour plus commute (for now), I will most likely transition to job closer to home for less pay in a few years and stop the city commute once the mortgage is closer to being eliminated.
I would not be considered a true Mustachian as we lead a far more luxurious and decadent life than MMM would condone, there are months where my spending can almost match his annual spending, yet before we bought our house we saved almost 80% of our income, now it is in the 30% to 40% range and we our still extremely frugal for our income, but most people on this blog/forum would not approve of our lifestyle and would laugh at the thought of use being frugal.
My name is appropriate :)
Anyway you just have to keep at it and choose what is important to you, if you like being in the NY/NJ area realize sucky commutes more years of work and larger nest eggs are part of the compromise, as MMM would say don't complain about it either make a change in your mindset about what FI is going to be based on your location or change your location, for me I know FI is further down the road as I am not changing my location.
-Mister Fancypants
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Telling it like it is, Mr. Fancypants. We're currently saving about 20%, but it doesn't feel that way when a bunch of it is held up in a 403b. I might just start doing up to only the max match amount.
Curious, do both you and your wife work? Do you have kids? We were thinking of having my wife stay home at least a few years when we start having kids, which would delay things further, but might be worth it.
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PeachFuzz... My Wife no longer works full time, she is home with the kids, she still has some earnings but they not what the used to be.
A decent percentage of our worth is tied up in home equity and retirement accounts neither of which is liquid which makes it a lot harder to retire early as neither generate passive income to live off of.
I know I will not accumulate enough in taxable accounts to match my salary in passive income so my goal is to keep padding the retirement accounts and reduce the mortgage (largest monthly expense) as quickly as possible. At the current rate I should have my mortgage paid off by the time I am 50, that gap between then and being able to access the retirement accounts should be small enough that that taxable accounts should suffice.
I plan on scaling work back by 45 at the latest and be completely done by 50.