Hello Mustachians!I've been reading the blog for about 2 years now but this is my first forum post. I would love to get some feedback since my wife (27) and I (25) are currently at a new stage in life: we just became debt free! For the past 2 years we've been aggressively tackling student loan debts that totaled about $100k. The total as of right now is $5500. Okay, so we're not technically debt-free but we've decided to hold onto the remaining loan balance because the interest is 2.9% and I've read that having a bit of installment debt can help your credit (is that true?).
We've learned a lot from MMM and for the past 2 years have been completely focused on getting rid of that debt. But now that we've reached our goal, we're not really sure what to do next. Invest? Buy a house? We live in Los Angeles and real estate is pretty high. Currently, we live in a small one-bedroom apartment and pay $1200/month. But after living in it for 4 years, we're looking to get move out in the next couple of years to somewhere with a bit more room and a nice quiet small yard. If we were to get an 2 bedroom apartment with a yard or a balcany, our rent would probably be around $1800-$2000/month.
The New York Times Rent vs. Buy calculator has been very helpful (
http://www.nytimes.com/interactive/business/buy-rent-calculator.html) but I guess I'm just looking for some more tailored advice and guidence on buying a house. The thought of buying a house and having a giant debt over my head again is kind of terrifying. Plus, I don't really know anything about buying a house. Is there a suggested price range we should be looking at? Most listings I've seen are $400,000+
We do plan on staying in Los Angeles for at least another 5 years, probably even longer. Although it's hard to say if our income will always be as high as it currently is. (We're currently DINK, but we're not sure if we'll always be that way)
Here's where we are right now:
INCOME (net): $10,000/month (because of our side job incomes, this number can flucuate. $10,000 is our monthly average from 2013).
Current expenses: $5000/month (monthly average from 2013) We currently are working to trim some of this fat. With smarter spending, I'm hoping to reduce our spending to $4000-$4500.
Assets: $53,500
Roth IRA (mine): $10,000 (we plan on maxing out our two Roths every year)
Roth IRA (wife's): $10,000
401k (mine): $2500 (we JUST started the 401ks but plan on maxing them out this year)
401k (wife's): $1000
Cash in savings account: $30,000
Liabilities: $5500 student loan debt. 2.9% interest.
Any help or suggestions would be much appreciated. Thank you!