My first post since I’m still catching up on the MMM blog – I’m still back in 2013 and trying to catch-up.
Life Situation: Married (age 44 and 42) filing joint, no dependents. We’ve been trying to Mustache up for a while now.
After reading MMM and knowing my husband had been unhappy at work for a while we decided to take the big step. I became self-employed and started work from home in 2014. We were living in the NY metro-area (high taxes). Once we decided my husband would leave his job we purchased a smaller home in June of 2015 in upstate NY. We are tentatively scheduled to close on our NY metro area house on March 30th. This will give us an influx of approximately $350K after we pay down all of our debt.
I have ideas about what to do with that money but could use some advice as well.
So our major mustachian feat so far includes moving from 2,500 sq. feet and $12K per year in taxes to 800 sq. feet and $2k per year in taxes. Our new area is great. I can walk or bike to the post office which is a daily event with our side business. I can bike to the bank. The grocery store is a bit tougher. I need to get in better shape for that journey. There is lots of hiking nearby. We will be growing our first garden this year. Plus I can get gas in Massachusetts which is cheaper than NY!
Gross Salary – I will make $140,000 for 2016 for my primary job with no commute. We have a smaller side business that will gross maybe $30,000. The smaller side business is closer to our hearts and what my husband is working on growing. My company also pays $1,000 monthly rent to us as a home based business.
My monthly salary looks like this:
Gross $12,000
FICA $744
Mediacre $174
FWT $1,948
SMT $759
Net $8,374
Pre-Tax deductions – Not really applicable but we will be able to write off the HSA’s we opened in December since we buy high deductible health insurance on the exchange. I plan to add the max to each of our HSA’s (I think it’s $3,350 for 2016) once we finalize the sale of our home. We self-fund health insurance, so I think that is a deduction as well. I am also considering funding Roth IRA’s since our combined income will drop under $184K this year.
Assets:
IRA: $600,000 (mostly mutual funds).
Investments: $160,000 (mostly stocks).
Saving Account: $10,000
Pension – At 60 years of age my husband will receive ~$30k per year.
We have an $85,000 HELOC on the new house, so keeping a cash emergency fund is not a priority.
Expenses: This is the new budget for 2016 that I am working on. This will become effective April 1st after we close on our house and all of those extra expenses disappear.
Expense Monthly
Garbage Disposal $20.00
Grocery/Incidentals $300.00
Gas for Cars $100.00
Entertainment $300.00
Propane $12.50
Oil $300.00
Electric $100.00
Direct TV $62.00
AT&T $150.00
Netflix $8.00
Car Insurance $133.33
Car Registration $3.79
Motorcycle Insurance $25.00
Motorcycle Registrations $11.67
Homeowners Insurance $65.42
Life Insurance $51.25
Boat Insurance $14.58
Cat care $16.67
Health Insurance $600.00
Property/School taxes $166.67
TOTAL $2,440.88
Some things to note. The Netflix is for my mother in law. My AT&T bill is actually closer to $300 per month. I carry five lines (me, husband, my mom, my dad, my mother-in law) and a hot spot. My phone and hot spot make up about $150 of the bill which is reimbursed through my business. Internet and land line are also funded through the business. Our goal starting April 1st is to live on $36,000 per year as a starting point. This give us a $560 monthly cushion based on the above.
I know, having a boat is bad. It’s actually docked at my in-laws so the whole family uses it, but we tend to pay for most of it.
We also have too many motorcycles. Working on that. We do have two newer cars (2011 & 2012) with no loans. I think I need to shop around for cheaper insurance. My husband has a pickup truck which has been useful in our house move. I have a Ford Focus.
So of my $8,374 take home salary, all but $3,000 will go into our e-trade account.
Debt: NONE after March 30, 2016!!!!!
Questions:
1) I think our best bet with the money from the sale of our home is to continue to invest with strong companies that pay good dividends. This is our current portfolio of $160,000. Companies like AT&T, Verizon, Con Ed, Wisconsin Energy, Conagra, Microsoft, Apple, etc. We also go for the sin stocks – alcohol, tobacco, guns and food.
2) Or should we just find a couple of Vanguard funds?
3) While I work from home, I still work a lot, which is why I am only on 2013 of the MMM blog. I would also like to venture into early retirement. Are we in a good position to do so? I feel like we are. If we can grow the side business, which we don’t see as “work” plus we can start taking some dividends. Or I can work seasonally at the ski area (and then get free ski passes). But society has me nervous.
So, how am I doing?
Thanks for sticking with the long read an appreciate the advice.