The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Sunshine007 on August 04, 2018, 08:38:01 AM
-
Age 47: Only debt: $140,000 on mortgage; cars all paid for
Income with recent raises: 180,000/yr
Morgage/ taxes: 1450/ month on a house worth maybe 280,000
Maxed employer match for 401 and 403
Maxed Roth
500/month into a SPindex
What next as we have a lot of cash doing nothing and we don't spend a lot. It was the fear that kept my other half hanging onto too much cash rather then investing it!
Expenses coming up: college in 2 years - we will pay for the books ( kids have a Coverdale)
1: should we max 401/403B beyond the match?
2. Thinking of buying a lake cabin or a rental property?
3. What else should we consider
4. We throw a few thousand a year on our mortgage (30 year at 4.15%, done in 2042)
-
1. Almost definitely yes.
2. This is a consumption decision. If you can meet your other goals (such as early retirement) and buy the lake house then go for it. I wouldn't - FI is too important to me for that. You should also consider whether you want to "have" to vacation at the same place all the time to make it worthwhile. For some people this fits their personality, others not so much. MMM's most recent post could give you a good way to think about it (cost per use and what else you could do with that money: http://www.mrmoneymustache.com/2018/07/25/the-twenty-dollar-swim/.
3. https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153
-
1. Absolutely.
2.Do you want to have a lake cabin? Do you want to be a landlord?
3.If you think real estate is the way to go, consider REIT's.
With all the "new" money you have, consider multiplying your index contribution by TEN.
Money in cash is great, if you have a plan for it. Without a plan, it is almost guaranteed to lose money after inflation. That should be your real fear.
Have you calculated your net worth? Your FIRE number? Your spending? What is your plan?
-
1. Yes, this is an absolute must at your income
2. Probably not. Depends on how it affects your other goals.
3. See the Investment Order post (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153) which is also linked above
4. Do not throw extra money at the mortgage (https://forum.mrmoneymustache.com/throw-down-the-gauntlet/dont-payoff-your-mortgage-club/).
-
Asking about paying off a mortgage can always lead to long and heated debate in the forums. So my take in what we know about your situation...
It only makes sense to pay off your mortgage if you're aiming to pay off before a particular event. By that I mean, for example, if you plan to retire or have a child with a SAHP in 5 years it could make sense to pay off your mortgage within 5 year and drop you expenses. However, paying a few random thousand dollars so that it's paid off in 15 years won't help you when your income drops in 5 years.
-
Thank you! Next steps in the process...Max 401ks!
Tackling spending next. We are good for the most part...Will get up a good case study soon for analysis.