Income:
Me (31)- 195k Gross, 18k annual to 401k, 3.3k to HSA
Wife (29)- 55k Gross, 18k annual to 401k
Monthly net income- $11,500
Current expenses: $3,820
Mortgage- $1,940
Principal and Interest - $1,550
Property Tax - $260
Insurance - $130
HOA- $70
Groceries- $400
Car Insurance- $165
Commuting costs - $350
Utilities- $145
Life Insurance- $105
Restaurants, non-grocery food- $100
Any entertainment- $50
Internet- $70
Pets- $100
Everything else- $325
2015 monthly surplus = $7,680
Assets: $1,025,000
CDs- $45,000 earning 3-5%
I-Bonds- $10,000, currently earning ~1.5%
Savings, checking accounts- $48,000, 80% of funds earning 1%, 20% earning ~0%
Rollover IRA- $75,000
My 401k- $139,000
Wife's 401k- $153,000
HSA- $14,500
Vanguard brokerage- $5,500
House: $230,000 value; ~$73,000 equity
House: $55,000 value; ~$20,000 equity
Land: $200,000 value
Land: $50,000 value
Liabilities: $192,000
Mortgage at 2.875%- $157,000
Mortgage at 3.375%- $35,000
We own the house my father lives in, hence the second house and mortgage.
The large cash position is for a house I intend to build with my own hands in 2017, on the land we own valued at $50,000. I estimate an $80,000 to $120,000 build cost. I have yet to find a bank that will provide a construction loan if I'm literally building the house myself (no General Contractor). I've thought about putting that money into our current house and using a HELOC when it comes time to build the new house but the terms and rates on HELOCs might make this a bad idea since our incomes would be substantially reduced at that point.
The land valued at $200,000 is under contract to a developer. We expect to know by the end of this year if that contract will proceed. If it does, we will see ~$1.2 million after tax in 3-7 years. I can elaborate on this, if necessary, but I figured it was out of scope.
Once the house is built in 2017, I expect to do part-time gigs and my wife will continue working part-time because she likes what she does and it pays well ($30-40/hour as a 1099). We will be comfortable living on 35k-40k a year.
Two questions:
What to do with the "extra" this year? If the land contract proceeds (we have confidence it will), that money could best be utilized in the years leading up to the sale, allowing FIRE earlier. However, that time frame is short enough that I'm unsure if Vanguard index funds are the best place for that money.
and
Could I be doing something better with my cash position that still leaves it available in 2 years?
