Income:
- $3,700/mo (net of tax and $1,333 to 401k) from day job
- ~$300/mo avg from dividends (reinvested)
- ~$90/mo from P2P (Prosper-all reinvested)
- $1,220/mo - rental income
Total cash income = $4,920
Current expenses: (all are averages below, most variances are in the "Misc" category which is zero some months and much higher other times)
- Rent - $1,150 (includes parking)
- Utilities - $150 (blended fee for water/gas/power/internet--varies slightly)
- Groceries - $300 (mostly Trader Joe's)
- Food/eating out - $350 (lunch at work & out with friends)
- Health/Auto Ins. - $150
- Gas - $75
- Entertainment/shopping/stuff - $325
- Condo rental HOA/taxes/ins./maint. - $650
Total exp: ~$3,150
Assets:
- $12,000 in P2P (Prosper)
- $7,000 in 529 plan (maybe for kids, or grad school?)
- $21,000 in 401k
- $21,000 in Roth
- $58,000 in Brokerage (mostly stocks/ETFs)
- $12,000 in Cash (checking + savings)
- $15,000 family loan (to sibling)
Total: ~$134,000
*Does not include condo that is worth ~$125K (paid off late 2013).
Liabilities: No debt other than credit card (paid in full each month), condo rental is also paid off
Regular Investments (annual totals):
- 401k contributions: $16,000
- Roth contributions: $5,500
- P2P contributions: $2,500
- 529 plan contributions: $600
Total (per yr): ~$25,000 (does not include 401k match)
Net cash flows: ~$14,000 after living expenses and $25k invested in various places
Specific Question(s):
How would you proceed in allocation capital/investing? I have around $14K in extra cash flow for the year. I'd like to slowly increase my cash/liquid savings in case of an emergency/condo repairs/rental vacancy/etc. to around $20K cash. After that, a continued steady buildup for a second rental in the next 5 years perhaps.
I'm 25, single, and not sure what to focus on. A lot of investing is on auto pilot ($1,333/mo in 401k, $458/mo in Roth, $200/mo in Prosper, $50/mo in 529 plan).
I want to max out (or nearly max out) my 401k and Roth (while my income is low enough). Effective tax rate is ~30.5% (fed/SS/state/local).
Net worth, on Personal Capital, is $145K (all investments + cash - zero debt).
Gross income (day job) is $80K, Net rental income is ~$6.6K, Dividends ~$3.6K, P2P ~$1.2K.
Total expenses look to be around $30K/yr (maybe more if I take a vacation or make some sort of big purchase). My car is a '07 Acura TSX with 80k miles. A little pricey for what I need, but I own it outright and love it... and plan to keep it until 150K or it starts giving me expensive problems.
I work long hours, so another rental would definitely require a property manager.
My apt is expensive b/c I wanted to live close to work and in a safer area (it's definitely not a luxury place). It could probably drop my rent/util costs from $1.3K to 1.0K if I moved into a 2br with a roommate.
I feel a little lost since I'm just throwing money into investments, but have a good amount left over. I'm sure I'll get married in the next 5-10 yrs, maybe have a kid(s), a new house, perhaps go back to business school, but nothing is really certain.
Some of my numbers above probably don't agree exactly (monthly averages that I tried to give based on annual estimates... and rounding).
Readers, what goals are important for my age/income/stage of life?
**I will admit, I thought I could pick stocks like a genius early on, but have stopped after I realized my stock portfolio underperformed my 401k (all index funds). I still plan on occasional buys when something appears undervalued, but I want to avoid the temptation to buy/sell momentum names and rather try to buy and hold as much as possible.