Author Topic: Investment Advice Sought - ~730k in assets  (Read 1583 times)

rhandler62

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Investment Advice Sought - ~730k in assets
« on: December 31, 2018, 12:18:28 AM »
Hi all,

I am 37 year old costal, no kids. I rent my apartment and make 195k per year + with ~15k bonus +45k stock.

Investments:
$430k Betterment 80% Stocks - 20% Bonds
$160k ROTH IRA - VANGUARD GROWTH INDEX INST
$45k my companies stock
$82k 401k - LifePathģ Index 2050 Fund N
$12k HSA Investment account - VANGUARD GROWTH INDEX INST

Liabilities:
~20k 0% Car loan to be paid over the next 4 years.

I am getting married next year and have started thinking about:
- Buying a house in (~$800-1M in this area)
- Starting to save for college/kids.
- I would like to have a plan where I didn't have to work anymore.
- Should I not buy here and focus on rental properties out of state.
- My partner is in school and plans to work, could earn my salary or more.
- I am guessing that childcare will cost a bunch.

So question for the MMM community.

What would you do in my shoes?
How would you manage the money?
What investments would you make?
Should I get a wealth manager?
How am I doing on retirement savings?





JAYSLOL

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Re: Investment Advice Sought - ~730k in assets
« Reply #1 on: December 31, 2018, 12:26:41 AM »
Welcome to the forum, I'll let US based forum members comment on where to invest/what to buy.  What do you actually save/year now and what do you plan to spend once retired?  That will determine how you are doing towards retirement.  Most here would not use a wealth manager. 

LAGuy

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Re: Investment Advice Sought - ~730k in assets
« Reply #2 on: December 31, 2018, 10:06:41 AM »
I think maybe you need to narrow your question down some, and otherwise research the forums some more. For example, if I were to answer your first question, what would I do if I were in your shoes. 1) Not have kids. 2) Don't buy a house. 3) Don't get married. 4) Retire in 3 years at age 40 in a lower cost of living area. Obviously, my answer is colored by my own experiences...I'm 44 and have already done all the things you are looking to do (except for the children) and for me, there's no there there.

tralfamadorian

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Re: Investment Advice Sought - ~730k in assets
« Reply #3 on: December 31, 2018, 01:50:27 PM »
I am getting married next year and have started thinking about:
- Buying a house in (~$800-1M in this area)
- Starting to save for college/kids.
- I would like to have a plan where I didn't have to work anymore.
- Should I not buy here and focus on rental properties out of state.
- My partner is in school and plans to work, could earn my salary or more.
- I am guessing that childcare will cost a bunch.

Congrats on your engagement!

How much would it cost to rent a comparable property to the $800k-$1m type of property you would purchase? And how long do you plan on living in that area? With that info, you can start to get educated suggestions on which would be more financially prudent.

Lots of us here invest in real estate in addition to or in substitution of stock market investing. It's a great way to get to FIRE but it does take more education and time than dumping 100% of your assets into VTSAX.

Quote

Should I get a wealth manager?

No!

Quote
What would you do in my shoes?
How would you manage the money?
What investments would you make?
How am I doing on retirement savings?

In your shoes I would have start having financial dates with my SO (with a bottle of wine- make it fun!) where we would discuss our goals for the future and how to steer ourselves financially to meet those goals.

Some ideas to get the ball rolling- Where do you all want to live in the near, medium and long term? Do you have any specific bucket list items? World travel? Hiking the PCT? Charity? When do you want to retire? What could retirement look like? You mentioned children- will one or both of you stay home with them or work part time? Do you all believe that you should fund 100% of full price college costs with all the bells and whistles for your child(ren)? Partially? Not at all?

Then after you have your wish list of all your goals, you can take your present financial picture (including your SO's!) and see how you two can get there.

leavesofgrass

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Re: Investment Advice Sought - ~730k in assets
« Reply #4 on: December 31, 2018, 02:33:20 PM »
I wouldn't consider buying a house at this point, especially not one in the $800K- $1M range. I don't think you should tie yourselves down, especially when your partner is just starting out with his/her career. Also, if your partner wants to stay at home with the kids, I think that much house will be a stretch on one salary.

I live on the coast too, and I'll keep renting a below-market rental in Santa Monica for as long as possible. It allows a lot of financial freedom.

Definitely have a conversation with your partner now to make sure you are both on the same page financially.

COEE

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Re: Investment Advice Sought - ~730k in assets
« Reply #5 on: December 31, 2018, 07:44:11 PM »
What would you do in my shoes?  I wouldn't change a whole lot, your making good money and saving a good portion of it as well.  Start tracking your expenses - this will let you know how much more you need to save.  You generally need 25-33 times your expenses to be able to retire without having to work.  You can then adjust your savings rate to meet your desired retirement.

With your amount of assets I would insist on a prenuptial agreement to protect yourself.  If he/she is not agreeable ask yourself why.  Be truthful with yourself.

Also get a umbrella policy and establish a will if you haven't already.

How would you manage the money?   Establish a IPS and invest according to your AA.  If you don't know what your asset allocation should be then this book is a good place to start.

What investments would you make?  Low cost index funds.  Read up on investment order here

Should I get a wealth manager? No.

How am I doing on retirement savings?  Doing better than me and we're the same age.

MustacheAndaHalf

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Re: Investment Advice Sought - ~730k in assets
« Reply #6 on: January 01, 2019, 06:51:20 AM »
One approach is 3-6 months before you plan to buy a house, move the down payment 100% into cash.  If the market drops, you will still have your down payment and won't need to change your plans.  If it's 12 months away, and the stock market is down too much, you might have to delay your home purchase plans.

It really depends on how flexible you are about when you buy a house (waiting until 3 months before buying is risky, but if you can wait a few years for the market to recover, you can use this approach).  If you have a child on the way and the most important thing is a house when the child is born, you don't have that flexibility any more and should go into 100% cash.

(Cash means certificates of deposit, savings accounts, and other FDIC insured forms of holding money safely)

Overall the few expense ratios I checked seem fine, and the 20% allocation to bonds in taxable seems fine.  You should probably make sure those are tax-exempt bonds.  In a high cost state where you live, there's probably state tax.  You'll want to find a CA/NY specific tax-exempt bond fund to get the most benefit.  Vanguard has several, including other states.  (The fund buys 100% municipal bonds from that specific state)

rhandler62

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Re: Investment Advice Sought - ~730k in assets
« Reply #7 on: January 08, 2019, 12:47:38 AM »
First off, thank you all for contributing such great knowledge and questions.

Things I am now going to do:
- Have a financial goals planning date(s) with my fiance to explore the future more.
- Get a will & umbrella policy.
- If I am planning on buying a house, move the downpayment to cash 6 months before.


@JAYSLOL :
- What do you actually save/year now?
=> 70k
- What do you plan to spend once retired?
=> I don't really get this question, it seems that this is kind of arbitrary.  I am guessing 100k per year (assuming our house is paid off) would be more than enough.  How do you all calculate this answer? 

@LAGuy :
Fair enough.  As a child of 3 divorces, I get that all may not go to plan.  Thanks for keeping it real. I will take you up on the tip to look more on the forums and refine my questions. 

@tralfamadorian :
I am from the area so may stay for a long time.  Rent on a $800k-1M place is $3500-$4500.
Thanks for the financial date tip. That is gold.

@leavesofgrass
Re: Too much house for 1 salary -> Good point. After 401k and not including bonus/stock awards, the mortgage would be 1/2 my take-home pay. Thanks for the tip re looking at rent.

@COEE
Good point on expense tracking. My fiance and I are setting up YNAB.  I purchased the Schwab book.  Are there any good IPSs online that you agree with?

@MustacheAndaHalf
Thanks for the tip on the bonds that are optimized for my state.  I will look into that.




MrThatsDifferent

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Re: Investment Advice Sought - ~730k in assets
« Reply #8 on: January 08, 2019, 01:21:06 AM »
What do you plan to spend when retired is the most important question, that tells you what your FIRE goal is.  You have to envision the life you want (will it involve travel, gardening, a lake house, etc) and create that budget. Maybe it looks similar to your current budget, maybe different? But create that budget and multiply that number by 25. So if you want to spend $100k a year, then you need $2.5 million invested so you can draw 4% for life. Thatís how it works. Read MMMís most popular blog posts to better understand this. And if you donít have 2.5m, you have two options: keep working until you do or reduce your expenses to what you do have 25x.

ericbonabike

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Re: Investment Advice Sought - ~730k in assets
« Reply #9 on: January 08, 2019, 08:09:19 AM »

Just curious, how did you come to have so much money in  your betterment account (assuming it's just a brokerage account (i.e. non-advantaged)) while so little in your tax-advantaged accounts?

430k in non-advantaged accounts
160+45+82+12 = 300k in advantaged accounts.
So, 41% of your wealth is in non tax-advantaged accounts. 


In comparison, my ~1.1 mill is   something like:   ~200k non-advantaged account, 900k IRA & 401k.    Less than 20% of my wealth is in non-tax advantaged.   I don't know which one is correct, but I would assume that my money would grow faster than yours because of the tax deferment.  So, maybe consider trying to max out 401k and IRA before putting money into non-advantaged accounts (if you're not already). Can you increase your contributions and reduce amount of money being saved in non tax-advantaged accounts?  19k a year into your 401k, plus $5500 into backdoor roth IRA. 
 
Other than that, if you are considering getting married, I would make sure to have a lot of lengthy discussions about finances prior to getting married.  Do you have similar spending habits, do you have similar saving habits, do you drive used cars and she drives brand new cars.   Is she gonna want a premium house overlooking cliffs of Malibu, etc?   Those kinds of "big" decisions can significantly affect wealth and savings. 

I would also suggest getting a prenup in place before you get married.  We all "think" we're marrying our forever spouse, but statistically 50% of marriages end in divorce.  You have a large amount of wealth, and divorce can be potentially devastating financially. It's better to have a prenup and not need it, than to need a prenup but not have it.

appleshampooid

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Re: Investment Advice Sought - ~730k in assets
« Reply #10 on: January 08, 2019, 08:41:20 AM »
I would also suggest getting a prenup in place before you get married.  We all "think" we're marrying our forever spouse, but statistically 50% of marriages end in divorce.  You have a large amount of wealth, and divorce can be potentially devastating financially. It's better to have a prenup and not need it, than to need a prenup but not have it.
I find this advice pretty fascinating, because while your hear it a lot and it logically makes sense, I can't see it EVER working out in the real world. For the simple fact that if you bring up a prenup, your partner is likely going to be offended/upset and think you aren't taking the marriage seriously. Potentially, I can imagine even bringing up the topic might end some relationships.

I would be interested to hear any stories about successful prenups. I logically should have gotten one, as when we got married I was worth several hundred thousand more than my wife. But I considered it a non-starter from a relationship perspective.

Celebrities/seriously rich and powerful are kind of an exception, as in that case I would imagine the prenup is less of a "we got what we came in with" vs. "you (less wealthy person) get a big chunk that will make you happy, but is still just a fraction of 50%."

ericbonabike

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Re: Investment Advice Sought - ~730k in assets
« Reply #11 on: January 08, 2019, 09:12:36 AM »
I would also suggest getting a prenup in place before you get married.  We all "think" we're marrying our forever spouse, but statistically 50% of marriages end in divorce.  You have a large amount of wealth, and divorce can be potentially devastating financially. It's better to have a prenup and not need it, than to need a prenup but not have it.
I find this advice pretty fascinating, because while your hear it a lot and it logically makes sense, I can't see it EVER working out in the real world. For the simple fact that if you bring up a prenup, your partner is likely going to be offended/upset and think you aren't taking the marriage seriously. Potentially, I can imagine even bringing up the topic might end some relationships.

I would be interested to hear any stories about successful prenups. I logically should have gotten one, as when we got married I was worth several hundred thousand more than my wife. But I considered it a non-starter from a relationship perspective.

Celebrities/seriously rich and powerful are kind of an exception, as in that case I would imagine the prenup is less of a "we got what we came in with" vs. "you (less wealthy person) get a big chunk that will make you happy, but is still just a fraction of 50%."


I would submit that if a potential partner is unwilling to agree to a prenup prior to marriage, then you would be ill-advised to marry that person.   

my wife and I had this conversation:

"Hey wife to be, I love you, but we both know that 50% of marriages end in divorce right:
"yes"
"So, would you be opposed to declaring our assets that we are entering this marriage with so that if our marriage ends, we get to leave with those assets?  And would you mind deciding on how to split our joint marital assets that we acquire after we get married?  And, if we have children, can we go ahead and agree now how we will divide our time with them should we get divorced?"
she agreed and then we hashed out an agreement. and neither of us ever think about it now. 

I don't think anyone (and I mean anyone) should get married until you have that kind of conversation with your loved one. 

I made the mistake in my first marriage to not negotiate this until the marriage was ending.  By that time, the settlement had become punitive.  And that was unfair as my assets I entered the marriage with were divided in half.  I was young, but had started saving money prior to marriage.  But I could not prove that that money was mine prior to marriage. 

PharmaStache

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Re: Investment Advice Sought - ~730k in assets
« Reply #12 on: January 08, 2019, 09:23:19 AM »
Definitely keep renting until all of this is settled- wedding, finishing school & new job location for your partner.  And figure out your kid plan- how many?  Daycare or staying at home?  How much will daycare cost?  You will make a better home purchase once all of that is sorted out.  In the meantime I'd pile up some cash (maybe in a HISA) to get started on your downpayment. 

appleshampooid

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Re: Investment Advice Sought - ~730k in assets
« Reply #13 on: January 08, 2019, 09:28:55 AM »
I would also suggest getting a prenup in place before you get married.  We all "think" we're marrying our forever spouse, but statistically 50% of marriages end in divorce.  You have a large amount of wealth, and divorce can be potentially devastating financially. It's better to have a prenup and not need it, than to need a prenup but not have it.
I find this advice pretty fascinating, because while your hear it a lot and it logically makes sense, I can't see it EVER working out in the real world. For the simple fact that if you bring up a prenup, your partner is likely going to be offended/upset and think you aren't taking the marriage seriously. Potentially, I can imagine even bringing up the topic might end some relationships.

I would be interested to hear any stories about successful prenups. I logically should have gotten one, as when we got married I was worth several hundred thousand more than my wife. But I considered it a non-starter from a relationship perspective.

Celebrities/seriously rich and powerful are kind of an exception, as in that case I would imagine the prenup is less of a "we got what we came in with" vs. "you (less wealthy person) get a big chunk that will make you happy, but is still just a fraction of 50%."


I would submit that if a potential partner is unwilling to agree to a prenup prior to marriage, then you would be ill-advised to marry that person.   

my wife and I had this conversation:

"Hey wife to be, I love you, but we both know that 50% of marriages end in divorce right:
"yes"
"So, would you be opposed to declaring our assets that we are entering this marriage with so that if our marriage ends, we get to leave with those assets?  And would you mind deciding on how to split our joint marital assets that we acquire after we get married?  And, if we have children, can we go ahead and agree now how we will divide our time with them should we get divorced?"
she agreed and then we hashed out an agreement. and neither of us ever think about it now. 

I don't think anyone (and I mean anyone) should get married until you have that kind of conversation with your loved one. 

I made the mistake in my first marriage to not negotiate this until the marriage was ending.  By that time, the settlement had become punitive.  And that was unfair as my assets I entered the marriage with were divided in half.  I was young, but had started saving money prior to marriage.  But I could not prove that that money was mine prior to marriage.
Good for you. I think you and your current wife are probably in the minority (I don't have any data on this). Was there a big discrepancy in your assets when you got married? The disparity of assets definitely adds context to this discussion.


ericbonabike

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Re: Investment Advice Sought - ~730k in assets
« Reply #14 on: January 08, 2019, 09:52:31 AM »
I would also suggest getting a prenup in place before you get married.  We all "think" we're marrying our forever spouse, but statistically 50% of marriages end in divorce.  You have a large amount of wealth, and divorce can be potentially devastating financially. It's better to have a prenup and not need it, than to need a prenup but not have it.
I find this advice pretty fascinating, because while your hear it a lot and it logically makes sense, I can't see it EVER working out in the real world. For the simple fact that if you bring up a prenup, your partner is likely going to be offended/upset and think you aren't taking the marriage seriously. Potentially, I can imagine even bringing up the topic might end some relationships.

I would be interested to hear any stories about successful prenups. I logically should have gotten one, as when we got married I was worth several hundred thousand more than my wife. But I considered it a non-starter from a relationship perspective.

Celebrities/seriously rich and powerful are kind of an exception, as in that case I would imagine the prenup is less of a "we got what we came in with" vs. "you (less wealthy person) get a big chunk that will make you happy, but is still just a fraction of 50%."


I would submit that if a potential partner is unwilling to agree to a prenup prior to marriage, then you would be ill-advised to marry that person.   

my wife and I had this conversation:

"Hey wife to be, I love you, but we both know that 50% of marriages end in divorce right:
"yes"
"So, would you be opposed to declaring our assets that we are entering this marriage with so that if our marriage ends, we get to leave with those assets?  And would you mind deciding on how to split our joint marital assets that we acquire after we get married?  And, if we have children, can we go ahead and agree now how we will divide our time with them should we get divorced?"
she agreed and then we hashed out an agreement. and neither of us ever think about it now. 

I don't think anyone (and I mean anyone) should get married until you have that kind of conversation with your loved one. 

I made the mistake in my first marriage to not negotiate this until the marriage was ending.  By that time, the settlement had become punitive.  And that was unfair as my assets I entered the marriage with were divided in half.  I was young, but had started saving money prior to marriage.  But I could not prove that that money was mine prior to marriage.
Good for you. I think you and your current wife are probably in the minority (I don't have any data on this). Was there a big discrepancy in your assets when you got married? The disparity of assets definitely adds context to this discussion.

Yeah,
When I remarried, my current wife had about 200k and I had about a million. Which is a pretty wide difference. 



GUNDERSON

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Re: Investment Advice Sought - ~730k in assets
« Reply #15 on: January 08, 2019, 11:54:58 AM »
I think that a good way to discuss a prenup is this:

It's not that we don't trust each other, or that we expect things to go south. We're in this for the long haul, but we are also rational adults who understand that people change and the future is unknown. Given that, why not go ahead and determine what we would want a split to look like, now while we're both certain of our goodwill and trust toward the other person?  Then, in case of a split, financial disagreements won't add to the stress or the fighting, and we have a better chance of ending up somewhere relatively positive.

rhandler62

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Re: Investment Advice Sought - ~730k in assets
« Reply #16 on: January 08, 2019, 12:43:59 PM »

Just curious, how did you come to have so much money in  your betterment account (assuming it's just a brokerage account (i.e. non-advantaged)) while so little in your tax-advantaged accounts?


I got an inheritance and then just put it in Betterment and it has appreciated over time.
Re 401k I have only had a company job for 3 years and before that, I hadn't contributed to a 401k.
I haven't been doing the back door Roth IRA as I have don't have a sense of if I should as it may be better to keep the money in an account that I can use for a downpayment or other pre-retirement expense/investment.

With your 80% in 401k or IRA - do you plan to use any of that money before you turn 65? (And can take it out tax-free)


rhandler62

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Re: Investment Advice Sought - ~730k in assets
« Reply #17 on: January 08, 2019, 12:47:58 PM »
You have to envision the life you want (will it involve travel, gardening, a lake house, etc) and create that budget. Maybe it looks similar to your current budget, maybe different? But create that budget and multiply that number by 25. So if you want to spend $100k a year, then you need $2.5 million invested so you can draw 4% for life.

Thanks! I will take this one on. 

rhandler62

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Re: Investment Advice Sought - ~730k in assets
« Reply #18 on: January 08, 2019, 12:55:22 PM »
I think that a good way to discuss a prenup is this:

It's not that we don't trust each other, or that we expect things to go south. We're in this for the long haul, but we are also rational adults who understand that people change and the future is unknown. Given that, why not go ahead and determine what we would want a split to look like, now while we're both certain of our goodwill and trust toward the other person?  Then, in case of a split, financial disagreements won't add to the stress or the fighting, and we have a better chance of ending up somewhere relatively positive.

It is interesting.  For my situation, I have about $750k and she has around $250k saved.  We have been together for 5 years and we already share finances (She is in graduate school and I am paying the bills). Her coaching and support has been the real reason why I didn't blow my inheritance (I had sold a company before and made 100k. It was gone in a year.).  She supported me in getting a really high paying job and then getting interested in saving.  So I am actually okay if we get divorced and we each come out with the same amount.

Is there something that I am missing. I guess if we got divorced and she got 100% of our combined assets, that would suck.

 

rhandler62

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Re: Investment Advice Sought - ~730k in assets
« Reply #19 on: January 08, 2019, 01:13:32 PM »
Definitely keep renting until all of this is settled- wedding, finishing school & new job location for your partner.  And figure out your kid plan- how many?  Daycare or staying at home?  How much will daycare cost?  You will make a better home purchase once all of that is sorted out.  In the meantime I'd pile up some cash (maybe in a HISA) to get started on your downpayment.

Thanks for the advice.  I agree on renting until we get the plan worked out.  You mentioned HISA, what does that acronym mean?  (I googled it with no luck)

Finallyunderstand

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Re: Investment Advice Sought - ~730k in assets
« Reply #20 on: January 08, 2019, 02:38:19 PM »
Definitely keep renting until all of this is settled- wedding, finishing school & new job location for your partner.  And figure out your kid plan- how many?  Daycare or staying at home?  How much will daycare cost?  You will make a better home purchase once all of that is sorted out.  In the meantime I'd pile up some cash (maybe in a HISA) to get started on your downpayment.

Thanks for the advice.  I agree on renting until we get the plan worked out.  You mentioned HISA, what does that acronym mean?  (I googled it with no luck)

High Interest Savings Account.

JAYSLOL

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Re: Investment Advice Sought - ~730k in assets
« Reply #21 on: January 08, 2019, 03:01:23 PM »
Ok, so if you do settle on 100k/year needed in retirement/FIRE and assuming you want to follow the 4% rule (which is most commonly accepted around here) as the other poster stated you need invested assets worth 2.5M.  If your savings of 70k/year stays the same it'll take roughly 10 years to hit that number and reach FIRE.  Except it won't, because you are on the MMM boards and are going to be kicking up your savings rate through some badassity (right?) and are soon to be married to someone with an equally kick-ass income.  Do this right and you could be financially independent in 5 years or less. 
« Last Edit: January 08, 2019, 03:13:13 PM by JAYSLOL »

BicycleB

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Re: Investment Advice Sought - ~730k in assets
« Reply #22 on: January 08, 2019, 03:08:09 PM »

- What do you plan to spend once retired?
=> I don't really get this question, it seems that this is kind of arbitrary.  I am guessing 100k per year (assuming our house is paid off) would be more than enough.  How do you all calculate this answer? 


The standard approach is develop a contented cost-efficient lifestyle while working, then assume your expense in retirement will be the same.

Modify this by known variances. For example, if your mortgage will be paid off next year, that's a known variance. If you plan to take up sailing, arguably that's known, but also arguably it's a money sink of unknown proportions because you haven't done it yet.

If you're about to get married, you both expect high incomes and you personally want to retire, this finance discussion with the fiancee is super important. I am FIRE with a smaller stash than you already have. If you were already comfortable living on 20k (any amount under 28k, applying the 4% rule to your stated assets) and she either fits into that budget or brings her own $, you yourself could retire right this very second!! So whether to buy the expensive house is not the first thing to decide. The first thing to decide is whether you and your spouse want time freedom, and if so what you are willing to trade for it (smaller house, less fancy house, etc). An alternate approach is define what makes you happy, figure out the cheapest way to achieve it, add a safety margin, then work to that point. In any case, the big variable for people with high income(s) is spending decisions and insight about what makes you happy. So start from the idea that work going forward is optional, but that the tradeoff of work vs spend should be jointly agreed, and start finding the areas of agreement. Design your ideal life, starting now. And don't buy someone else's $800k prefabricated vision of your life - that's almost certain to be profitable for them but non-optimal for you.

-From my quiet cozy FIRE house where I live on about $20k net

PS. The OP says you are a 37 y.o. "costal." What is that? Costar? Coastal? Costallion?   :)
« Last Edit: January 08, 2019, 03:13:43 PM by BicycleB »

rhandler62

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Re: Investment Advice Sought - ~730k in assets
« Reply #23 on: January 08, 2019, 06:18:45 PM »

- What do you plan to spend once retired?
=> I don't really get this question, it seems that this is kind of arbitrary.  I am guessing 100k per year (assuming our house is paid off) would be more than enough.  How do you all calculate this answer? 


I am FIRE with a smaller stash than you already have. If you were already comfortable living on 20k (any amount under 28k, applying the 4% rule to your stated assets) and she either fits into that budget or brings her own $, you yourself could retire right this very second!! So whether to buy the expensive house is not the first thing to decide. The first thing to decide is whether you and your spouse want time freedom, and if so what you are willing to trade for it (smaller house, less fancy house, etc). An alternate approach is define what makes you happy, figure out the cheapest way to achieve it, add a safety margin, then work to that point. In any case, the big variable for people with high income(s) is spending decisions and insight about what makes you happy. So start from the idea that work going forward is optional, but that the tradeoff of work vs spend should be jointly agreed, and start finding the areas of agreement. Design your ideal life, starting now. And don't buy someone else's $800k prefabricated vision of your life - that's almost certain to be profitable for them but non-optimal for you.

-From my quiet cozy FIRE house where I live on about $20k net

PS. The OP says you are a 37 y.o. "costal." What is that? Costar? Coastal? Costallion?   :)

Damn! You are dropping the Knowledge. :) This forum really does kick it up a notch :)

Costal == Living in the expensive areas of the coast == I live in Palo Alto currently.

Good points on deciding the life we want.

powskier

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Re: Investment Advice Sought - ~730k in assets
« Reply #24 on: January 08, 2019, 08:31:53 PM »

Just curious, how did you come to have so much money in  your betterment account (assuming it's just a brokerage account (i.e. non-advantaged)) while so little in your tax-advantaged accounts?

430k in non-advantaged accounts
160+45+82+12 = 300k in advantaged accounts.
So, 41% of your wealth is in non tax-advantaged accounts. 


In comparison, my ~1.1 mill is   something like:   ~200k non-advantaged account, 900k IRA & 401k.    Less than 20% of my wealth is in non-tax advantaged.   I don't know which one is correct, but I would assume that my money would grow faster than yours because of the tax deferment.  So, maybe consider trying to max out 401k and IRA before putting money into non-advantaged accounts (if you're not already). Can you increase your contributions and reduce amount of money being saved in non tax-advantaged accounts?  19k a year into your 401k, plus $5500 into backdoor roth IRA. 


FYI many of us do not have access to a 401k, so once the IRA is maxed the rest goes into taxable. Yes it sucks. I really think Congress should allow folks without access to a 401k to put an extra 19k into a trad IRA, it would seem logical/fair.