More nonsense from MSN regarding how to retire Early

[cshaw]

http://www.msn.com/en-us/money/personalfinance/4-ways-to-set-yourself-up-for-early-retirement/ar-AAal2y7?li=AAajBHb

[arebelspy]

Ouch. That case study is quite an interesting picture.  The thing is, he wouldn't be doing half bad if they adopted a few Mustachian principles.

[cshaw]

My thoughts exactly: kick the savings rate into high gear and cut the expenses and he'd be able to retire much sooner than 55 with his income level.

[zephyr911]

Wait... the rentals are generating positive cash flow but they still advised him to sell?
WHAT THE ACTUAL FUCK, PAUL? YOU HAD ONE JOB.
Assuming those are financed rentals, anything above break-even (in immediate cash-flow terms) is a long-term moneymaker through equity accumulation and appreciation. And that small positive cash flow means he's probably in that Schedule E sweet spot where depreciation makes them a loss on paper, reducing the taxable portion of that six-figure income. The best thing to do if you're overextended there (but not badly so) is just tighten up and hang on.
Just the transactional costs alone on selling three properties could run tens of thousands between cosmetic repairs, commission, and capital gains taxes.

[arebelspy]

I doubt they are, but they do claim so from the information given.  Seems inconsistent.

[zephyr911]

I doubt they are, but they do claim so from the information given.  Seems inconsistent.

Yeah, net positive $338 a month or whatever, but racking up credit card bills for maintenance? I don't get it.

[AH013]

Well the good news is that all of his IRA money is 100% in Ford stock.  We all know it's going to return 20x over the next 10 years, so he's actually all set already and just doesn't know it.  Unfortunately he could have shaved another 5-8 years off his retirement date if he just took a little drive east to Vegas and put it all on Red 30...35x payoff right there, especially when you just know exactly which stock or number will be a winner and don't have to spread the risk.

[larmando]

"waiting to sell until they have trouble finding tenants", of course, because that's clearly the moment the properties have high value, right? (not saying that they will have such a moment, but if they do that's also correlated with low value)

[ash7962]

Well the good news is that all of his IRA money is 100% in Ford stock.  We all know it's going to return 20x over the next 10 years, so he's actually all set already and just doesn't know it.  Unfortunately he could have shaved another 5-8 years off his retirement date if he just took a little drive east to Vegas and put it all on Red 30...35x payoff right there, especially when you just know exactly which stock or number will be a winner and don't have to spread the risk.

How did that not get more attention?  Full on ford stock?  Without knowing all the facts, it kinda sounds like he was going for the get rich quick type of investments instead of researching a good strategy.  Also, did anyone notice that 3 months expenses was 21k?  Jeez that family is living on 7k/month or 84k/year.  I suppose they're in California which could mean high cost of living, but still 84k seems like a lot.

[zephyr911]

Well the good news is that all of his IRA money is 100% in Ford stock.  We all know it's going to return 20x over the next 10 years, so he's actually all set already and just doesn't know it.  Unfortunately he could have shaved another 5-8 years off his retirement date if he just took a little drive east to Vegas and put it all on Red 30...35x payoff right there, especially when you just know exactly which stock or number will be a winner and don't have to spread the risk.

How did that not get more attention?  Full on ford stock?  Without knowing all the facts, it kinda sounds like he was going for the get rich quick type of investments instead of researching a good strategy.  Also, did anyone notice that 3 months expenses was 21k?  Jeez that family is living on 7k/month or 84k/year.  I suppose they're in California which could mean high cost of living, but still 84k seems like a lot.

For fixed recurring expenses, yes... it's too much.
As for Ford, they were probably just afraid of appearing to bash the company itself, as opposed to the investment strategy.