Life Situation:
Married, Filing Joint - 37/34. Children - 7/3. Live in Indiana
I optimize the budget and mind my GAP. I began planning finances around 2012 after growing disillusioned with the American Dream and have been tweaking that plan since. A number of the savings below have been accelerated due to paying off higher interest silly debts incurred when I was but a child. I have found that minimalism provides so much more joy than materialism.
Wifey is a teacher who carries a few thousand in credit card debt. Her $ responsibilities are Health Insurance, Hygiene costs, children clothes, most children extracurriculars, private school, her clothes. She has no savings and about 10K in the Indiana Teachers retirement/pension/annuity from following the advice of fellow teachers. I cover all housing, food, transportation, cellular, deductibles, etc.
Outside of Health Insurance & Toiletries, my Wife has separate finances from I. This is, for us, critically required.
Gross Salary/Wages:
96K/year - 8,000/month Base
Plus 12-40K/Year Commission range (not in numbers below)
Wife’s - sadly not in scope of planning
Individual amounts of each Pre-tax deductions/month:
FSA: 100
401k: 160 (to max match of 2%)
Total: 260
Taxes/month:
Fed: 802
SocialSec: 492
Medicaid: 116
State: 252
County: 74
Tax 1736
Current expenses:
Mortgage/
Mortgage (P&I) 1061 @3.875% fixed
Mortgage MIP 90 *drops off March 2020, then to TOD
Estate Taxes 242
Insurance 73
Total 1466 *195 of 245K
Loan/
Student Loan 285 @5.01% fixed
Loan Extra 165 Extra paid to eliminate loan in 10 years
Total 450 *42 of 105K
Monthly Outflow/
Sewer/Water/Power 400
H20 Insurance 3
Dual Cell Service 78
Internet 60
vpn 4 *enabled when banking/shopping
crashplan 10
Auto Insurance 119
Auto Fuel Max 150 *extra to TOD
Grocery Max 600 *extra to TOD
Restaurants 60
Other R&R 30
Term & AD&D 38
Spine DR 86
YMCA 72 *Family Pool and Wife cardio
Martial Arts 65 *Eldest Child
Gym near office 145 *Only feasible way for me to lift heavy currently (long story here)
pandora 5
Netflix 29
Amz Prime 10
Consumer Reports 3
Grass Care 36
Trash Pickup 15
Total 2018
To Ally at 2.2%/
Personal Play Money 50 *Clothes, tech, etc
B-Day Dinners 15 *for the 3 ladies
Wife Gift 30
Kid Gifts 10
Zoo 10
Pet Maint 85
Auto Maint 50
Home Maint 200
Emerg 100 *small pre-Roth padding. Interest rolls into this bucket
Total 550
Remaining Capital 1520
ROTH IRA 500
TOD Brokerage 720 *VTI
Fundrise 300
Total 1520
Base Monthly Investments including employer Match: 1,840 (or 22,080/year)
Note that all Commissions are now used to fund Taxable + Fundrise at 7:3 split.
So… I will expect to contribute between 33K - 50K / year into the seeds.
Assets:
Home 242,000
Cash 8,310 *includes ally funds. Some BIG hits in 18 depleted reserves
401K 13,900 *expensive funds, limited selection
Fundrise 2,318
Taxable 4,682
Roth IRA 62,649 *Main Emergency Savings pool
IRA 24,344
Total 358,203
Liabilities:
Checked yearly for potential refi savings.
A reduction in fixed rate that results in a monthly payment will usually be sought.
Mortgage 2009
Original Loan of 245K
Balance of 195K
Fixed Rate 3.875%
Monthly 1466 *Payoff 2058
Student Loan 2005
Original Loan of 105K
Balance of 42K
Fixed Rate 5.01%
Monthly 285 *Payoff 2039
Extra Monthly 165 *Payoff 2028
Specific Question(s):
My goal is to in 10 years be able to sell my house, which assuming a static value post fees, for 81K net cash - and have at least 800K in investment seeds. Given the current optimizations, does anyone note any glaring issues or commentary?
With an 8% return I would expect to see 750K - 1MM in 10 years worth of investments.
Our basic living costs post children/pets sans living/travel appear to be covered (at a 4% out) with 500K.
I will pull out my ROTH contribution with the home equity and buy 2 quads. 1 for my eldest daughter to live in and begin managing 3 tennents and 1 for us to do the same. The eldest daughter will be paid for the management of the 3 tennents during those 4 years. After 4 years of 6 tennents worth of income I want to gift the 1st quad to my eldest daughter, move out of the second quad and repeat the process for my youngest daughter. At this point I would like to grow into a roll of traveling author and artist.
As a side note, I’ve been crafting a book series to pass on these life lessons as a gift to my children and plan on providing these books for others’ education.
Our house is not expensive for our area. We choose to live near our office/schools so that travel time is under 10 minutes. In addition we have excellent parks and community entertainments. My car is a 2002 220K mile honda accord - my wife’s car is a 2006 105K mile mazda 3 --- both are well maintained and kept free of cancer.
Thanks ‘Stachers!