29 years old, single, needing the expertise of fellow Mustachians with much more knowledge than what I have already learned. I tried to give as much detail as possible so everyone/anyone can chime in with their area of expertise.
Edit: Added AGI
2014 – As of right now, if I max out my 401k contributions, I will be at roughly $118,794. Hopefully I can take another "loss" on my properties based on the work that needed to be done/depreciation/etc.
2013 – $129,423 (4 houses, same job) Took a 3871 loss on rental properties.
2012 – $108,817 (2 houses, same job) Took a 3570 loss on rental properties.
2011 – $107,636 (1 house, same job)
2010 – $95,191 (1 house, switched to higher paying job in Oct)
Monthly Income:
Job - $7607 (take home after all deductions)
Average 401k contributions $700, not including employee matching
Military disability - $258
Rent - $5800 (from 3 houses)
Total income – $13,665
Current expenses:
Principle/Taxes/Interest - $4982 (4 houses)
HOA fees - $613 (4 houses)
Truck - $587 (ends Oct 2016)
Power - $83
Water - $18
Home insurance - $190 (4 houses)
Umbrella insurance - $23 (needed additional protection due to nature of business)
Truck insurance - $72
Gas - $200
Food - $250
Internet - $85
Cell - $88
Misc - $927
Total expenses - $8018
Assets:
Company 401k
$76k, average return 16%
Portfolio
Total $82k, average monthly increase $1043
VHIAX- Total value $16,159, front-end load 5.25%, expense 1.26%
IAAAX – Total value $35,593, front-end load 5.5%, expense 1.45%
MLZEP - Total value $30,441, SX5E STEPUP ISSUER CS, STEP 20.00% SV 3,070.91, DUE 01/05/16
Roth IRA
Total - $17.5k, average monthly increase $190
IAAAX – Total value $17,066, front-end load 5.5%, expense 1.45%
Cash - $470
Total Retirement Accounts – $175,000
Properties
House 1 – Market Value $475,000 – minus outstanding mortgage – minus selling fees – Net $90k
Produces $230 additional rent after all bills paid
In 13 months, it’s been vacant for 3 days and 7 days. 1.5 years left on lease
House 2 – Market Value $220,000 – minus outstanding mortgage – minus selling fees – Net $44k
Produces $441 additional rent after all bills paid
In 2 years, it was vacant for 45 days.
House 3 – Market Value $220,000 – minus outstanding mortgage – minus selling fees – Net $75k
Currently live in, could produce $417 additional rent after all bills paid
Never rented
House 4 – Market Value $220,000 – minus outstanding mortgage – minus selling fees – Net $88k
Produces $418 additional rent after all bills paid
Had for 1 year, had tenant on closing date, have a tenant moving in on previous tenants move out date for unspecified time frame (should be 1-2 years)
House 5 – On the way, set to close in September, principle $40,000
Should produce additional $340 a month (not accounted for in total or rent below)
Total = $297,000
Rent = $1100 extra a month
Principle increases (as of Aug 2014)
House 1 – $615 (VA loan, minimal closing costs)
House 2 – $250
House 3 – $200
House 4 – $160
House 5 – $100 (Projected if we ever reach the closing table, gotta love short sales)
Total not including house 5 = $1225
Total Potential Assets = $472,000
Liabilities:
Mortgages – accounted above
Truck – $587, ends Oct 2016, needed for houses and lifestyle (used paid off jetskis and snowboarding)
Variables:
The housing prices are relatively modest since I live near a major base that is benefiting largely from the BRAC program. I could potentially see an additional $120-160k in market value.
My contract could end Oct 2015 and I am not looking forward to taking on another cubicle style job. I could sell all the houses and based on my projections from the previous few years, I should have roughly $290k in retirement accounts, $297k in principle, for a total of $587k, using the 4% rule having $1956 a month. I figure the taxes paid on the monthly distributions would be covered by the military disability.
Being that I will only be 30 years old in a year, “being retired” generally will be looked down upon and seeing how I have so much time left to live, I will need a job to occupy my time, and obviously something that I will love besides chasing the money. I figure I spend about $1500 a month not including a house payment. So as long as my new job can cover the difference between the mortgage minus the 4% rule, I am set.
Specific Question(s):
1) Obviously dump the two stocks that are killing me in fees (IAAAX and VHIAX). Probably a mix of Vanguard funds and stocks. This is what happens when you give money to financial advisers who aren’t looking out for your best interests. Any suggestions on mix percentage? (50% Vanguard funds, 50% stocks in strong companies with dividend payments or 100% in Vanguard funds?)
2) I can’t account for cost of children, healthcare, marriage, etc without having any of those. The way I figure it, those “additional costs would be passed onto the spouse” while I cover all the knowns (ie. house, electricity, water, internet, etc). Or is this assumption dead wrong?
3) Is there anything in there that blatantly stands out as red flags?