Mustachian People Problems (just for fun)

[cosine88]

Got a co-signer to help me get a loan for my home, but I make the payments by renting out the other rooms. "House Hacking".

Just filed taxes. Turbotax says my debt-to-income ratio is "high" at 97%.

[marielle]

Just filed taxes. Turbotax says my debt-to-income ratio is "high" at 97%.

I hope you mean income-to-debt...

[Wile E. Coyote]

Just filed taxes. Turbotax says my debt-to-income ratio is "high" at 97%.

I hope you mean income-to-debt...

That would be worse, wouldn’t it?

[CptCool]

Just filed taxes. Turbotax says my debt-to-income ratio is "high" at 97%.

I hope you mean income-to-debt...

Think of a mortgage. If someone makes 100k/year and have a mortgage balance of 97k and that's their only debt, that's pretty darn good

[RWD]

Just filed taxes. Turbotax says my debt-to-income ratio is "high" at 97%.

I hope you mean income-to-debt...

Think of a mortgage. If someone makes 100k/year and have a mortgage balance of 97k and that's their only debt, that's pretty darn good

Isn't debt-to-income usually debt payments, not total debt? So for someone making $100k/year 97% debt-to-income would be more like a $1.7 million mortgage with payments of $8k/month.

[CptCool]

Just filed taxes. Turbotax says my debt-to-income ratio is "high" at 97%.

I hope you mean income-to-debt...

Think of a mortgage. If someone makes 100k/year and have a mortgage balance of 97k and that's their only debt, that's pretty darn good

Isn't debt-to-income usually debt payments, not total debt? So for someone making $100k/year 97% debt-to-income would be more like a $1.7 million mortgage with payments of $8k/month.

Yes that's true - it is the amount of debt payments. I stand corrected.

[cosine88]

Just filed taxes. Turbotax says my debt-to-income ratio is "high" at 97%.

I hope you mean income-to-debt...

Think of a mortgage. If someone makes 100k/year and have a mortgage balance of 97k and that's their only debt, that's pretty darn good

Isn't debt-to-income usually debt payments, not total debt? So for someone making $100k/year 97% debt-to-income would be more like a $1.7 million mortgage with payments of $8k/month.

Yes that's true - it is the amount of debt payments. I stand corrected.

Correct. Income(from my job) was only 2,965/month, my PITI payment is 2,877/month. I believe that comes out to 97% debt to income.

I am renting 3 rooms for $2,250, so my share of the PITI is $627, which is less than when I was renting($850/month), although I still have maintenance and capex.

Unless I am wrong, I don't have to declare income from renting rooms at my primary residence.

[marielle]

Just filed taxes. Turbotax says my debt-to-income ratio is "high" at 97%.

I hope you mean income-to-debt...

Think of a mortgage. If someone makes 100k/year and have a mortgage balance of 97k and that's their only debt, that's pretty darn good

Isn't debt-to-income usually debt payments, not total debt? So for someone making $100k/year 97% debt-to-income would be more like a $1.7 million mortgage with payments of $8k/month.

Yes that's true - it is the amount of debt payments. I stand corrected.

Correct. Income(from my job) was only 2,965/month, my PITI payment is 2,877/month. I believe that comes out to 97% debt to income.

I am renting 3 rooms for $2,250, so my share of the PITI is $627, which is less than when I was renting($850/month), although I still have maintenance and capex.

Unless I am wrong, I don't have to declare income from renting rooms at my primary residence.

Don't quote me on it, but when I did research on this concerning Airbnb I came to the conclusion that you have to declare the income if it's more than 14 days a year. However, you can deduct that portion of your home. If you're renting out three rooms that make up 50% of the house, you can deduct 50% of your mortgage.

[BTDretire]

That reminds me that I missed out on hundreds in class action settlements for LCD panels and Harbor Freight.  Don't be like me, check a site like http://www.classactionrebates.com/ every once in a while.  I often find settlements that I'm legitimately a part of but wasn't notified

Probably not this one.
http://www.classactionrebates.com/settlements/gang/

[jordanread]

That reminds me that I missed out on hundreds in class action settlements for LCD panels and Harbor Freight.  Don't be like me, check a site like http://www.classactionrebates.com/ every once in a while.  I often find settlements that I'm legitimately a part of but wasn't notified

Probably not this one.
http://www.classactionrebates.com/settlements/gang/

On the plus side, the injection can be removed from your record. Records have a lot more stuff these days, apparently.

[NoraLenderbee]

Unless I am wrong, I don't have to declare income from renting rooms at my primary residence.

.

Lolwut? You certainly do have to declare the rent as income. Legally, you are a landlord, even if you live there too.

https://www.nolo.com/legal-encyclopedia/tax-issues-when-renting-out-room-your-house.html

See IRS pub 527

[Ladychips]

I want to post in my 'race to' thread (I might have reached the goal) but won't login to my accounts to check balances because I'm in a hotel.  I'm scared of hotel wireless security (or lack thereof).  I have to wait until tomorrow when I'm home.  :(

[Cherry Lane]

I want to post in my 'race to' thread (I might have reached the goal) but won't login to my accounts to check balances because I'm in a hotel.  I'm scared of hotel wireless security (or lack thereof).  I have to wait until tomorrow when I'm home.  :(

Unless you had a big deposit this week, markets alone likely won't have gotten you to your goal (if you weren't there on Friday). 

[LeRainDrop]

I hate having to wait until mid-February to receive my Vanguard brokerage account tax forms.  I just want to finish my tax returns and be done with them already!

[dragoncar]

That reminds me that I missed out on hundreds in class action settlements for LCD panels and Harbor Freight.  Don't be like me, check a site like http://www.classactionrebates.com/ every once in a while.  I often find settlements that I'm legitimately a part of but wasn't notified

Probably not this one.
http://www.classactionrebates.com/settlements/gang/

On the plus side, the injection can be removed from your record. Records have a lot more stuff these days, apparently.

LOL, I guess I should join a gang

[Ladychips]

I want to post in my 'race to' thread (I might have reached the goal) but won't login to my accounts to check balances because I'm in a hotel.  I'm scared of hotel wireless security (or lack thereof).  I have to wait until tomorrow when I'm home.  :(

Unless you had a big deposit this week, markets alone likely won't have gotten you to your goal (if you weren't there on Friday).

I was there on Friday...and my husband and I both get paid (make our retirement contributions) on the last working day of the month.  So I think I'm there...but can't know for sure!  Definitely a MPP.

[Dollar Slice]

MPP: Angsting over whether I should put some of my IRA money into an extended market fund to complement the S&P 500 fund I have in my 401(k). There's no good total market fund in my 401(k) so I settled for VFIAX. But if I buy it now in the correct ratio I won't have the minimum needed for admiral shares. And 100% of my buying is in the 401(k) right now and I'd have to sell something in my IRA to buy VEXAX to balance it and then I'll be unbalanced again because I sold something and... and... argh.

These simple three-fund portfolios are a lot harder to rebalance when you have four accounts to balance money between (401k, tIRA, Roth IRA, taxable).

[kaypinkHH]

MPP of the day: Got my big giant house sale cheque, went to update a race from X to X forum thread. Was $742 short of the goal. Feel all sad now.

[Cookie78]

MPP of the day: Got my big giant house sale cheque, went to update a race from X to X forum thread. Was $742 short of the goal. Feel all sad now.

:(

My condolences.

[chaskavitch]

MPP: Angsting over whether I should put some of my IRA money into an extended market fund to complement the S&P 500 fund I have in my 401(k). There's no good total market fund in my 401(k) so I settled for VFIAX. But if I buy it now in the correct ratio I won't have the minimum needed for admiral shares. And 100% of my buying is in the 401(k) right now and I'd have to sell something in my IRA to buy VEXAX to balance it and then I'll be unbalanced again because I sold something and... and... argh.

These simple three-fund portfolios are a lot harder to rebalance when you have four accounts to balance money between (401k, tIRA, Roth IRA, taxable).

I feel ya.  I just increased my 401k contributions by a lot, but my 401k is where I have my bonds and international index funds, because they're SUPER low fee.  Everything in my Roth IRA/IRA is in VTSAX, but now they're going to increase so disproportionately I'll have to rebalance way more often :(

[Jakejake]

My husband's MPP: He found out if he works 30 years, he'll get a signed letter from Trump. But he's retiring in two months with 29 years and 3 months of service.

We aren't Trump fans (we were bernie people), but he wanted the letter as a weird joke thing. Stupid early retirement.

[PhrugalPhan]

My husband's MPP: He found out if he works 30 years, he'll get a signed letter from Trump. But he's retiring in two months with 29 years and 3 months of service.

We aren't Trump fans (we were bernie people), but he wanted the letter as a weird joke thing. Stupid early retirement.

Is this a Federal Government thing?  Just asking as my GF will have 30 years with them at the end of the year and will retire then.

[Jakejake]

Is this a Federal Government thing?  Just asking as my GF will have 30 years with them at the end of the year and will retire then.

Yes - he's a Defense Dept civilian.

[Lews Therin]

One of the people I worked with has a signed paper by the canadian prime minister for when he was recruited.... and his end of service paperwork was signed by the new one last year.... So he has 42 years of service, and two signatures from Father and Son, while they each were in charge of the country.

That's impressive timing.

[Greenback Reproduction Specialist]

Putting up with buzzing light bulb ballasts, its like the humming of taos new mexico.

[merula]

MPP: I have a very low-interest loan at 0.9% that will be paid off this year. For the last 6 months, every time I see the balance I'm like "I should just pay that off and save on the interest!", and every single time I have to remind myself that I'm earning more in my savings account than I'm paying.

I've probably had this internal debate a dozen times. So much thought power wasted!

[shelivesthedream]

You know the protocols around reserving books at the library and requesting that new ones be bought better than some of the librarians do, and have to awkwardly decide whether or not to explain it to them when they are unsure.

[marielle]

So I thought my company was going to get a 401k in March. Nope. We're getting an HSA instead. I am probably the only person upset and probably the only one wanting to tax shelter more than $3400...

Better than nothing I guess...and I can still contribute to the 2017 HSA I would assume. Problem is that I already filed my taxes so now I have to do an amended return. ugh!

Job hunting is looking a lot sweeter now.

[Sibley]

So I thought my company was going to get a 401k in March. Nope. We're getting an HSA instead. I am probably the only person upset and probably the only one wanting to tax shelter more than $3400...

Better than nothing I guess...and I can still contribute to the 2017 HSA I would assume. Problem is that I already filed my taxes so now I have to do an amended return. ugh!

Job hunting is looking a lot sweeter now.

I would double check that HSA thing. As far as I know, you can't contribute after the end of the year.

[Cherry Lane]

So I thought my company was going to get a 401k in March. Nope. We're getting an HSA instead. I am probably the only person upset and probably the only one wanting to tax shelter more than $3400...

Better than nothing I guess...and I can still contribute to the 2017 HSA I would assume. Problem is that I already filed my taxes so now I have to do an amended return. ugh!

Job hunting is looking a lot sweeter now.

I would double check that HSA thing. As far as I know, you can't contribute after the end of the year.

You can.  I just did so earlier this week.  On the HSA website they specifically asked which year I was contributing for. 

In this case, though, the thing to watch out for is if there's HSA eligibility for 2017.  I think it is odd phrasing that work just got an HSA, since HSA eligibility is dependent on the type of health plan (HDHP), not the employer.  Marielle needs to make sure her 2017 health plan was an HDHP.  More specifically, was she part of an HSA-eligible HDHP on 1 Dec 2017?  If not, then no retroactive contributions are allowed.  If marielle had a qualifying health plan on 1 December, but not for the whole year of 2017, she can contribute to an HSA for the whole year, but only if she maintains eligibility for an HSA for all of 2018.  If she had an HSA-eligible health plan for all of 2017, she can contribute up to the full amount with no requirement to maintain the plan through 2018.

More details are available in IRS Pub 969.

[pdxmonkey]

The company likely also just got an HDHP, which means OP would not be eligible to contribute to 2017. And also not for 2018 unless OP changes to the new healthcare plan. Its hard to tell whats going on based on the limited information posted.

[Dicey]

My MPP:

We have saved enough to buy our first house without additional loans, BUT now have to start saving all over again to FIRE. Break out the tiny violins, especially as saving will be faster with property than with the cheap house we rented. (Counting repayments of the principal as saving and only the interest part as an expense)

This makes no sense to me. What are you trying to say in the last sentence? Sounds like you might be shooting yourself in the foot. Where is @boarder42 when you need him...? Car42, where are you?

It makes sense. So if they were paying 2k to rent. And now pay 1500 to mortgage and 400 of that is principal. Previously the whole 2k was going out the door now they can say they are saving 900 more a month if you count house principal paydown as savings. That being said. Please don't party your mortgage down faster than the term bc investing will put you ahead of extra principal paydown

Thanks for your comments! As a first time home-owner and a novice to investing this is all very confusing. I'm sorry if I shared my confusion with you.
What I meant to say is that - like boarder42 said - I considered our rent to be money thrown out the window, whereas paying down the principal of our mortgage will be an accumulation of net worth. The interest of the mortgage is in my eyes money thrown at the bank. However, I have learned yesterday that it is better not to count property as part of the amount needed to FIRE, that it should only be (relatively) easily accessible funds. So you can basically ignore my previous post, sorry guys!

To further explain: I live in Europe and somehow I don't 'get' the 7% average on our investments. Maybe that is because I'm too conservative, and has nothing to do with geographical location and a difference in tax systems. Like I said, I'm a novice and I'm just finding out how much I don't know. Last year I managed 2.2% on my investments (ETFs and index funds) which is still way better than interest on savings. As our mortgage will have an interest rate of about 2.3% I'm finding it difficult to suppress the urge to throw all surplus money at the mortgage. My spreadsheet tells me that we will be paying the bank over 100k in interest and that makes me slightly nauseous.

The fact that you live in Europe changes everything. Lack of deductibility and shorter term mortgages are a whole different ballgame. I did not realize this when I commented. I hereby solemnly retract all input on this topic. I know nothing ;-)

[LennStar]

I had to pay a small invoice and could not decide from which account I pay. It was not a "living expenses" and not a "luxury spending".
So I ended up using the third account that is only a by-product of an investing account but had a sub-100€ left sitting there.

[SquashingDebt]

I now have enough money in my 401k ($11k or so) that this dip in the stock market actually noticeably affected the balance. 

[markbike528CBX]

I now have enough money in the stock market that this dip in the stock market actually is greater than my planned withdrawals for the remainder of the year.

[Linea_Norway]

I now have enough money in the stock market that this dip in the stock market actually is greater than my planned withdrawals for the remainder of the year.

DH still has quite a bit of cash on his bank account, waiting for a dip. (I know, stupid strategy, but he doesn't want to listen to me.) during the previous dip in September 2017 he didn't have access to his bank account for several weeks and could not buy stock. But I have asked him today to buy stock during the current dip.

[LeRainDrop]

I now have enough money in the stock market that this dip in the stock market actually is greater than my planned withdrawals for the remainder of the year.

I had a feeling a week ago that I should have withdrawn enough for at least a few months.  Hindsight, bleh.

[Goldielocks]

My MPP:

We have saved enough to buy our first house without additional loans, BUT now have to start saving all over again to FIRE. Break out the tiny violins, especially as saving will be faster with property than with the cheap house we rented. (Counting repayments of the principal as saving and only the interest part as an expense)

This makes no sense to me. What are you trying to say in the last sentence? Sounds like you might be shooting yourself in the foot. Where is @boarder42 when you need him...? Car42, where are you?

It makes sense. So if they were paying 2k to rent. And now pay 1500 to mortgage and 400 of that is principal. Previously the whole 2k was going out the door now they can say they are saving 900 more a month if you count house principal paydown as savings. That being said. Please don't party your mortgage down faster than the term bc investing will put you ahead of extra principal paydown

Thanks for your comments! As a first time home-owner and a novice to investing this is all very confusing. I'm sorry if I shared my confusion with you.
What I meant to say is that - like boarder42 said - I considered our rent to be money thrown out the window, whereas paying down the principal of our mortgage will be an accumulation of net worth. The interest of the mortgage is in my eyes money thrown at the bank. However, I have learned yesterday that it is better not to count property as part of the amount needed to FIRE, that it should only be (relatively) easily accessible funds. So you can basically ignore my previous post, sorry guys!

To further explain: I live in Europe and somehow I don't 'get' the 7% average on our investments. Maybe that is because I'm too conservative, and has nothing to do with geographical location and a difference in tax systems. Like I said, I'm a novice and I'm just finding out how much I don't know. Last year I managed 2.2% on my investments (ETFs and index funds) which is still way better than interest on savings. As our mortgage will have an interest rate of about 2.3% I'm finding it difficult to suppress the urge to throw all surplus money at the mortgage. My spreadsheet tells me that we will be paying the bank over 100k in interest and that makes me slightly nauseous.

The fact that you live in Europe changes everything. Lack of deductibility and shorter term mortgages are a whole different ballgame. I did not realize this when I commented. I hereby solemnly retract all input on this topic. I know nothing ;-)

IDK.   I live with short term (5 year) mortgages, and a lack of deductability, and it is still not a huge difference in the decision process.   First, because in high cost areas in the USA, the property taxes (or not itemizing) completely chews up any deductability savings.  I mean, $10k for property taxes for an "average / small" family home?   

The 5 year terms only impacts you if your income significantly changes during the term (one person loses a job, for example).   But 5 years also means very little upfront fees when you renew, instead, you get penalties if you break before the 5 years is up (here).  Therefore the key pressure is to create a non-registered account to grow your money, that you can use to pay off your mortgage eventually, if needed.

[Hirondelle]

MPP: I have a very low-interest loan at 0.9% that will be paid off this year. For the last 6 months, every time I see the balance I'm like "I should just pay that off and save on the interest!", and every single time I have to remind myself that I'm earning more in my savings account than I'm paying.

I've probably had this internal debate a dozen times. So much thought power wasted!

I lost this debate with myself with never taking out any student loans (interest rate is 0.1% or so). In the early days of my studies the interest on savings account was still 2% so I could've made quite a few bucks taking out some student loans and leaving it in a savings account for 5+ years. My brother is still a student but somehow we're so debt-averse that he doesn't take out any loans either.

[BeautifulDay]

I hate having to wait until mid-February to receive my Vanguard brokerage account tax forms.  I just want to finish my tax returns and be done with them already!

+1

[RWD]

I now have enough money in my 401k ($11k or so) that this dip in the stock market actually noticeably affected the balance.

I now have enough money in the stock market that this dip in the stock market actually is greater than my planned withdrawals for the remainder of the year.

We are somewhere in between you two. The stock market dip was equivalent to a whole month of our contributions.

[shelivesthedream]

MPP: I have a very low-interest loan at 0.9% that will be paid off this year. For the last 6 months, every time I see the balance I'm like "I should just pay that off and save on the interest!", and every single time I have to remind myself that I'm earning more in my savings account than I'm paying.

I've probably had this internal debate a dozen times. So much thought power wasted!

I lost this debate with myself with never taking out any student loans (interest rate is 0.1% or so). In the early days of my studies the interest on savings account was still 2% so I could've made quite a few bucks taking out some student loans and leaving it in a savings account for 5+ years. My brother is still a student but somehow we're so debt-averse that he doesn't take out any loans either.

This was suggested to me when I started university - that I take out the maximum in (UK government) loans and put it in a bank account to make some money then pay it all off. I did take out loans for tuition fees but not for maintenance. I understood the maths but could not get over the emotional hump of SO MUCH DEBT, even with enough cash around to pay it off.

[Miss Piggy]

$#@%!!!

I just found out I over-contributed to my 401(k)s for 2017 by over $1,300. Left one job mid-year and started another, and my calculation was off (because I assumed two paychecks/month rather than a paycheck every two weeks, among other things). 

[Imma]

MPP: I have a very low-interest loan at 0.9% that will be paid off this year. For the last 6 months, every time I see the balance I'm like "I should just pay that off and save on the interest!", and every single time I have to remind myself that I'm earning more in my savings account than I'm paying.

I've probably had this internal debate a dozen times. So much thought power wasted!

I lost this debate with myself with never taking out any student loans (interest rate is 0.1% or so). In the early days of my studies the interest on savings account was still 2% so I could've made quite a few bucks taking out some student loans and leaving it in a savings account for 5+ years. My brother is still a student but somehow we're so debt-averse that he doesn't take out any loans either.

Same for me. I was advised that it was a bad idea in case you wanted a mortgage after your studies, but 1. if you put the money in a savings account you can pay off the entire loan at once if it's necessary and 2. no one ever asked me if I had any student debt when I applied for a mortgage, and it's not registered anywhere.

[secondcor521]

Same for me. I was advised that it was a bad idea in case you wanted a mortgage after your studies, but 1. if you put the money in a savings account you can pay off the entire loan at once if it's necessary and 2. no one ever asked me if I had any student debt when I applied for a mortgage, and it's not registered anywhere.

My student loans showed up on my credit report, but I live in the US.  May be (probably is?) different in Europe.

[Freedomin5]

When we were less Mustachian and less financially solid, we had a really good reason for turning down interesting volunteer opportunities - namely, we had to work full-time and so could not take off for a month or two at a time to work on worthwhile projects on the other side of the world. Also, I had to limit my employment choices to well-paying gigs.

Now that we no longer have that as a valid reason, I’m getting stressed because there are So Many worthwhile and fascinating projects out there! Train people in rural China? Yes! Create an evaluation programme in Cambodia? Sure! Work with orphans in Myanmar? Why not? Too many choices and needs! Not enough time! 😝

[Imma]

Same for me. I was advised that it was a bad idea in case you wanted a mortgage after your studies, but 1. if you put the money in a savings account you can pay off the entire loan at once if it's necessary and 2. no one ever asked me if I had any student debt when I applied for a mortgage, and it's not registered anywhere.

My student loans showed up on my credit report, but I live in the US.  May be (probably is?) different in Europe.

It's different in my country, but I'm sure it will happen some time in the future. We used to get grants from the government instead of a loan. When they changed the law to abolish the grants, the government promised the loans would not show up on credit reports so they would not have an impact on your future ability to take out a mortgage. Fast forward a few years and mortgage lenders aren't too happy with that. They are putting pressure on the government to change it. Many lenders now ask you to sign statements confirming you don't have student loans you didn't declare to them.   

[Anon in Alaska]

I now have enough money in the stock market that this dip in the stock market actually is greater than my income for the month.

[Miss Piggy]

Now that we no longer have that as a valid reason, I’m getting stressed because there are So Many worthwhile and fascinating projects out there! Train people in rural China? Yes! Create an evaluation programme in Cambodia? Sure! Work with orphans in Myanmar? Why not? Too many choices and needs! Not enough time! 😝

I would be inclined to pick two types of volunteer projects:
1. Those that help animals long-term (such as cleaning up the oceans)
2. Those that "teach people how to fish" rather than doing everything for them, then leaving

Good problem to have!

[Hirondelle]

Now that we no longer have that as a valid reason, I’m getting stressed because there are So Many worthwhile and fascinating projects out there! Train people in rural China? Yes! Create an evaluation programme in Cambodia? Sure! Work with orphans in Myanmar? Why not? Too many choices and needs! Not enough time! 😝

I would be inclined to pick two types of volunteer projects:
1. Those that help animals long-term (such as cleaning up the oceans)
2. Those that "teach people how to fish" rather than doing everything for them, then leaving

Good problem to have!

Be very very very carful with orphanages. Many of the kids there aren't orphans and should be home with their parents. I totally agree with Miss Piggy's suggestions. Other good ones IMO are skilled projects. Good with carpentry? Go build something. Teacher at home? Go teach elsewhere (but preferably only if you can stay longer and not with very young kids), nurse or another medical profession? Plenty of people to train that would love to get more skilled. Sustainable farming is also a worthwhile one.