Author Topic: Not sure where to start?  (Read 472 times)

CletusVanDamme

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Not sure where to start?
« on: October 11, 2018, 11:14:48 AM »
Hello All,
Thank you in advance for any help and/or advice.  I have been lurking and I am interested in FIRE and I believe I have convinced my better half.  I have two challenges that I need help with:

1.) I don't know what to do
2.) I am a financial idiot

Let me set the stage for you all.  At a high level, my wife and I have been blessed (and work our butts off) with some success with our careers.  Our current net worth is ~$2.2M and we are in our mid forties (don't tell her I said that).  We have no debt except for our house which we keep on purpose (Home is worth $1.4 million and we don't want to sink all of our cash into it yet...basically treating our mortgage like rent).  We live in NJ and have very high taxes (we pay ~$34K per year in real estate taxes for example) and will most likely want to move in the next couple of years to a smaller house and use the equity to roll into that house to avoid any capital gains. 

In terms of our net worth, it is split between home equity, IRA's, market investments (managed by our money guy), maxed out company 401K's, college savings and cash.  We have done angel investing in 3 companies but we treat that money like it doesn't exist since it is high risk.  Anyway,  my issue at the moment is that my cash ($340K) is sitting in a savings account when it could be out there working hard for me.  Problem is I just don't know where to put it at the moment.  Now with that said, my objective is to start to create some income stream(s) where I can start to live off of it when we downsize our house and budget with a goal of being FIRE in next five years.  The two areas of investment for this cash I have been contemplating are index funds or a rental property.  But I am open to other ideas.

So...if you were me, where would you invest?

Thank you
CVD

Louisville

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Re: Not sure where to start?
« Reply #1 on: October 11, 2018, 11:55:56 AM »
Go to the Case Study thread, do the worksheet. Post there.

FLBiker

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Re: Not sure where to start?
« Reply #2 on: October 11, 2018, 12:43:15 PM »
Personally, I'd do index funds.  Rental properties seem like work to me.  If you're handy and enjoy that kind of stuff, though, they can be a good way to earn income.

MDM

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Re: Not sure where to start?
« Reply #3 on: October 11, 2018, 01:43:22 PM »
So...if you were me, where would you invest?
Seems you are pretty much following the usually suggested Investment Order, but you could review that.

In terms of specific investment choices, start with Getting started - Bogleheads and in particular consider Three-fund portfolio - Bogleheads and perhaps Tax-efficient fund placement - Bogleheads.

ShoulderThingThatGoesUp

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Re: Not sure where to start?
« Reply #4 on: October 11, 2018, 02:05:53 PM »
Just want to compliment you on the name. Donít tell her about the storage unit.

Fishindude

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Re: Not sure where to start?
« Reply #5 on: October 11, 2018, 02:06:59 PM »
I won't gripe about my real estate taxes anymore.   Your taxes are insane.

CletusVanDamme

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Re: Not sure where to start?
« Reply #6 on: October 12, 2018, 08:09:53 AM »
Just want to compliment you on the name. Donít tell her about the storage unit.
HA!   Glad you caught the reference.