In light of recent electoral events I'm trying to decide what our best option is for 2017. Here's the situation:
- $12,000 per month revenue after taxes, business expenses, and 401(k) ER
- $4,000 per month personal expenses (including debt service)
- $3,000 per month 401(k) EE
- = $5,000 per month margin
We have the following debts:
- $237,000 on mortgage at 3.75%
- $12,000 on car loan at 0.9%
- $7,000 on HELOC at 3.5%
I have a one year contract with 30 day cancellation period with my main revenue generator and if anything were to change with them it would be me going W2 instead of 1099. My wife works as our bookkeeper so we're able to max EE on her solo 401(k) as well. We have about a year of cash expenses saved, half of which is a dedicated job loss reserve and half is split between a number of different sinking funds.
I'm anxious about what's going to happen next year and especially in 2018 when presumably any changes to ACA will start taking effect. As I see it we have three options:
- Be exactly this aggressive. Stack the monthly margin into cash and debt. This is what we did for 2016 because we were having a baby, but the baby is here now and is perfectly fine and healthy.
- Be less aggressive and get rid of the non-mortgage debt (but pay more taxes).
- Be more aggressive and max out my mega backdoor Roth space (another $1,800/mo)
What say you, Mustachians?
