Author Topic: Case study me PLEASE!!!! Tired of second guessing myself  (Read 9978 times)

crucialink

  • 5 O'Clock Shadow
  • *
  • Posts: 8
  • Age: 48
Case study me PLEASE!!!! Tired of second guessing myself
« on: February 11, 2015, 04:26:43 PM »
Hope I can get some guidance here. My dream is to hopefully move to Georgia in six years. Why six years? Both of my kids will be in college. I don't want to transplant them now. School is hard enough without being the new kid on the block.

I am 43 years old and cannot wait to reach FI. As you can see below I can pay off my mortgage tomorrow and then do something with the extra $1993 a month. Not sure if I will be shooting myself in the foot by not having a mortgage for tax purposes. I could stick the extra 1993 a month in my Vanguard account or I could use it to buy my house now in Georgia ($350,000 max budget) since housing is low right now down there (could make it a vacation rental). I also have no idea if I am loosing out on some other investments that I might not be aware of. I seem to always have all the answers in life for everyone else but always second guess my thoughts and actions for myself. I really don't want to kick myself in the a$$ later.

Income: 162,000 last year. Raised to $165,000 this year.
bonus: $40,000 - After taxes this is/will be used to pay off mortgage (see below)
stock incentive: $50,000. Every year I will get a certain amount that will vest. They stretch it for 5 years.

Current Expenses:
Mortgage: $1993 a month - approximately $22,000 left on mortgage - I have the $22,0000 to pay it off just not sure if I should do this yet (tax purposes?!?!). This was a 15 year loan that I can pay off early by 8 years.
Property/School Tax: $6955 a year (included in mortgage above)
Electric: $200 a month
Car 1: $507 a month @ .73% financing
Car 2: payed off a couple years ago
Kids College 529 plan (2 kids each with own account): $250 a month ($500 total a month)
Food: $800 a month
Oil: $1600 a year
pellets for pellet stoves: $600 a year
Car/house insurance: $187 a month
Cable bill: $65 a month
Garbage pickup: $31 a month

Cellphones, internet and gas are paid for by my side business.

Assets:
House worth $450,000 - 500,000
Me: 401k maxed contribution with company match 5% - $279,000 to date
Wife: 401k $165,000 (not working, not contributing) I know, roll it over into vanguard. Currently looking into doing this:
Vanguard account: $42,000 in a VTSAX fund
Vanguard: $400 a month - auto transfer to VTSAX fund
TD Ameritrade account: $21,0000
Cash in Bank: $30,000
Company stock todays value- $70,000 will vest in May. As of today another $62,000 will vest in 2016, $54,000 will best in 2017 and $78,000 in 2018 and after. Total value today is $264,493. If I leave my job I get half the total value.

Bracken_Joy

  • Walrus Stache
  • *******
  • Posts: 8926
  • Location: Oregon
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #1 on: February 11, 2015, 04:38:03 PM »
What type/age is car 1? $507/mon seems like a TON! Also, I didn't see gas or maintenance listed? With 2 cars, how much are you driving?

crucialink

  • 5 O'Clock Shadow
  • *
  • Posts: 8
  • Age: 48
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #2 on: February 11, 2015, 05:02:05 PM »
Car 1 is a 2010 mercedes ML350 SUV. Its 507 a month because I opted to do a 3 year loan. Yes I know its still expensive, but this SUV has my wife and children in it. I opt for safety/reliability.
Car 1 does only local driving, 6,000 miles a year.

Car 2 is mine 2008 mercedes c300. I drive 42 miles each way for work. 84 round trip.

Car #1 is under warranty so no maintenance. I do the oil changes.
Car #2 maintenance is done by me. Any major repairs are done by my buddy. Luckily no major repairs since warranty ended.

As for the gas. I did mention right under all the current expenses that I have a side business that takes care of the gas expenses for both cars.

marblejane

  • Bristles
  • ***
  • Posts: 364
  • Location: SF Bay Area
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #3 on: February 11, 2015, 05:41:39 PM »
It sounds like you need a more detailed plan for retirement, beyond just saying that you want to retire in 6 years to Georgia. What will be your monthly budget in retirement? Some stuff, like saving for the 529s, will go away, while other stuff, like health insurance, gas (will you continue your side business in retirement?) will be added in. Work out your target budget and from there you can determine the "number" (or maybe you've figured this out already, not clear from your post). Then you can figure out the best way to get there.

It sounds like, based on some of your comments, you also need an Investment Policy Statement (http://www.bogleheads.org/wiki/Investment_policy_statement)

Regarding the house in Georgia, have you spend much time in the area? If not, you might want to delay buying until you actually move to the area and rent for a few months.

crucialink

  • 5 O'Clock Shadow
  • *
  • Posts: 8
  • Age: 48
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #4 on: February 11, 2015, 06:14:41 PM »
I didn't say retire in 6 years. Just move to GA in six years. Yes, my family loves the blue mountain ridge in GA. I am tired of NY and want a slower pace and less expensive state to live in. I picked GA also because it is very friendly towards retirees for the day when that happens. After my house is paid off I won't have major expenses so I don't need that super high paying job. Yes its nice, but getting paid a decent salary usually means you spend more time at work dealing with stress than enjoying life. I want to enjoy life in 6 years, part of enjoyment is not retirement. I like to work, just not as much and as crazy as I do now. I also have my side business selling items online that I would have more time for and can grow it larger.

As for a target budget. When I go to GA I would figure (and I am leaning towards the more expensive side)
Taxes: $2000 a year $167 a month
Electric: $100 a month
Food: $300-400 a month
Car/house insurance: for arguments sake lets just keep it a what I have today $187 a month
Cable bill: $65 a month
Heating: Pellet stove: $400 for the year $33 a month
Health Insurance: depends on what type of job I get or if I buy it

Remember, gas and cellphones are covered under the business.

So lets just round up and say $1000 a month in expenses.



MDM

  • Senior Mustachian
  • ********
  • Posts: 10090
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #5 on: February 11, 2015, 07:26:32 PM »
You might try www.cfiresim.com.  Prior to that it might help to check the Case Study spreadsheet in this post and organize your income/spending/savings/projections a little more than what is posted here.

Marian

  • 5 O'Clock Shadow
  • *
  • Posts: 33
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #6 on: February 11, 2015, 07:37:23 PM »
So why don't you move to Georgia sooner?  I know you said you don't want to transplant the kids... but from my view, it's not as much of a horrible thing as people make it out to be.  Full disclosure, I was a military brat, and I never lived anywhere longer than 4 years at a time.  My sister had the same deal, and even had to move completely across the country (MD to WA) in the middle of high school.  Moving and making new friends and all that can suck, but they'll get over it quickly enough.

As for the car you're still paying off, that's still a pretty expensive car!  And horrible gas milage- even if you aren't driving it that much.

If there's one thing the MMM blog hammers time and time again it's CARS!  Getting cheaper, more economical cars and reducing your commute to the absolute minimum.  Even if you are worried about safety and reliability, there are plenty of cars out there that have great safety ratings and reliable reputations that are much MUCH cheaper.  Even the better-MPG "commuter" you have would be highly frowned on by MMM (and that 84 mile commute- YIKES!)

I'm no expert here, but it sounds to me like there is plenty of slimming down you can easily do- and I don't know what you do for a living, but if it's at all possible to find something in Georgia, I would do so ASAP!  And read through some more of the MMM blog- if nothing else, it's good to have a refresher :)

http://www.mrmoneymustache.com/2012/03/19/top-10-cars-for-smart-people/
http://www.mrmoneymustache.com/2012/04/04/reader-case-study-working-a-crappy-job-for-nothing/
http://www.mrmoneymustache.com/2013/04/22/curing-your-clown-like-car-habit/

bacchi

  • Magnum Stache
  • ******
  • Posts: 4631
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #7 on: February 11, 2015, 08:09:52 PM »
Car 1 is a 2010 mercedes ML350 SUV. Its 507 a month because I opted to do a 3 year loan. Yes I know its still expensive, but this SUV has my wife and children in it. I opt for safety/reliability.

There are plenty of safe and reliable vehicles that aren't Mercedes (or SUVs). It's fine if you like the luxury and status of a Mercedes but be conscious about it.

escolegrove

  • Stubble
  • **
  • Posts: 164
    • Reluctant Landlord
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #8 on: February 12, 2015, 04:27:41 AM »
I'm bias because I love rentals and they are a very important part to our early retirement plan! That being said, are you comfortable with leverage. If so, what about buying your future house in Georgia as a rental now? This way you have 6 years of someone else paying off your principle, locking in a low mortgage and price rate?

Setters-r-Better

  • Stubble
  • **
  • Posts: 110
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #9 on: February 12, 2015, 06:23:50 AM »
So about 1.1 million in assets if you liquidate home and stocks?  Is that how much you want?  I think set some goals with your wife, decide what you want your retirement picture to look like,  and then work together to get there. With your income and 6 year time table you can get lots done. I wouldn't move the kids either. 

Zoot

  • Bristles
  • ***
  • Posts: 421
  • Location: USA
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #10 on: February 12, 2015, 06:28:00 AM »
If you like the mountains, check out eastern Tennessee in addition to north Georgia.  TN has no state income tax, whereas GA does.
« Last Edit: August 16, 2017, 01:41:56 PM by Zoot »

Thegoblinchief

  • Guest
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #11 on: February 12, 2015, 07:56:14 AM »
Just a thought from a current resident of Georgia and native Tennesseean:  if you like the mountains, check out eastern Tennessee in addition to north Georgia.  TN has no state income tax, whereas GA does.

+1 I mean, it's all personal preference, but I've traveled a lot in that section of the country, and eastern TN is nicer than north Georgia. But NC is even nicer. No offense to the many Atlantians here, but I'd also want to stay as far away from that hellhole fine metropolis as I could ;)

Hope I can get some guidance here. My dream is to hopefully move to Georgia in six years. Why six years? Both of my kids will be in college. I don't want to transplant them now. School is hard enough without being the new kid on the block.

I really wouldn't worry about transplanting them. Kids are incredibly adaptable. What do you think is better for them: parent stuck in stressful, fast-paced job so they can stay in familiar school, or parent home or at least working less, and dealing with a new school?

But if you are waiting, and they may attend state college systems, read up on how that affects 'in-state' tuition.

Quote
Car 1: $507 a month @ .73% financing
Car 2: payed off a couple years ago

SUVs are dumb and wasteful. Minivans rock. But with two kids, a good sedan or wagon is even better. Just my $0.02.

Quote
Food: $800 a month --->This can be reduced. I spend $600/month for a family of 5, and we eat almost all organic, local, pastured, etc.
Oil: $1600 a year
pellets for pellet stoves: $600 a year --->$2200 a year for heating is a LOT. How big is the house? Any efficiency improvements which make sense even over your short 6 year timeline?

Assets:
House worth $450,000 - 500,000
Me: 401k maxed contribution with company match 5% - $279,000 to date
Wife: 401k $165,000 (not working, not contributing) I know, roll it over into vanguard. Currently looking into doing this:
Vanguard account: $42,000 in a VTSAX fund
Vanguard: $400 a month - auto transfer to VTSAX fund
TD Ameritrade account: $21,0000
Cash in Bank: $30,000
Company stock todays value- $70,000 will vest in May. As of today another $62,000 will vest in 2016, $54,000 will best in 2017 and $78,000 in 2018 and after. Total value today is $264,493. If I leave my job I get half the total value.

To give you a frame of reference, I would be FI (actually, almost 1.5x) TODAY with your asset sheet. Obviously, everyone's vision of retirement is different, but I'd start mocking up a retirement budget now.

Is your side hustle just for cash, or is it a fun pursuit? Because the way I see it, you're FI right now. If the side business is fun and something you want to continue in retirement, use that to cover part of the living expenses.

Maybe real estate down there has changed a bunch since I've traveled (been a few years), but you should be able to find a nice, modest house for far less than your $350K max budget.

Numbers Man

  • Guest
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #12 on: February 12, 2015, 08:16:46 AM »
I would move ASAP. The kids will have a friend base in Georgia since they would go to high school in Georgia. Plus the kids will most likely stay in Georgia after college. I did what you are contemplating and now realize that it would have been easier on the kids if we moved before high school.

FrugalSpendthrift

  • Stubble
  • **
  • Posts: 210
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #13 on: February 12, 2015, 08:34:49 AM »
Current Expenses:
Mortgage: $1993 a month - approximately $22,000 left on mortgage - I have the $22,0000 to pay it off just not sure if I should do this yet (tax purposes?!?!).
If this is what you are second guessing, then just calculate how much tax it saves each year.  With the balance being so low, you probably aren't paying much interest at all, so the amount that you are deducting is probably very minimal.  The simplicity and freedom of not having a mortgage might be more valuable than the tax deduction.

Bracken_Joy

  • Walrus Stache
  • *******
  • Posts: 8926
  • Location: Oregon
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #14 on: February 12, 2015, 08:44:37 AM »
I would move ASAP. The kids will have a friend base in Georgia since they would go to high school in Georgia. Plus the kids will most likely stay in Georgia after college. I did what you are contemplating and now realize that it would have been easier on the kids if we moved before high school.

This. My parents waited to move until we all graduated. Now they're annoyed we all stayed in our home state, and they complain about never seeing kids/grandkids. People tend to stay where they go to college, so consider where you want your kids/grandkids to be.

Gone Fishing

  • Magnum Stache
  • ******
  • Posts: 2801
  • So Close went fishing on April 1, 2016
    • Journal
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #15 on: February 12, 2015, 08:45:35 AM »
Based on your stated income you are probably in the 28% bracket.  You need to manage your taxes as much as you can, this includes taking advantage of the mortgage interest deduction.  You didn't mention the rate, but if you are like most folks it is probably in the 4-5% range.  Based on your tax bracket, you are effectively getting a 28% discount (plus anything you might get from the state) on your rate reducing your rate to somewhere around 3-4%, or just a hair over inflation. Keep the mortgage. 
 
Other things to consider:

What is this side business?  You need to check and see if you can open another retirement account assocated with the side gig.  You are close but you might also be able to contribute something to a ROTH for you and your wife. Does your company offer a deferred compensation plan?  An HSA may also be a good option if your family is healthy. 

waffle

  • Bristles
  • ***
  • Posts: 286
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #16 on: February 12, 2015, 08:52:29 AM »
Current Expenses:
Mortgage: $1993 a month - approximately $22,000 left on mortgage - I have the $22,0000 to pay it off just not sure if I should do this yet (tax purposes?!?!).
If this is what you are second guessing, then just calculate how much tax it saves each year.  With the balance being so low, you probably aren't paying much interest at all, so the amount that you are deducting is probably very minimal.  The simplicity and freedom of not having a mortgage might be more valuable than the tax deduction.

Plus with the amount you would normally be paying every month on the mortgage you will probably have it pretty much paid off this year anyway.

4alpacas

  • Handlebar Stache
  • *****
  • Posts: 1898
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #17 on: February 12, 2015, 09:38:39 AM »
I'm not sure of your complete tax situation, but I would highly recommend contributing to a Roth IRA.   You'll have to do a backdoor Roth. 

catccc

  • Handlebar Stache
  • *****
  • Posts: 1683
  • Location: SE PA
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #18 on: February 12, 2015, 10:51:05 AM »
Car 1 is a 2010 mercedes ML350 SUV. Its 507 a month because I opted to do a 3 year loan. Yes I know its still expensive, but this SUV has my wife and children in it. I opt for safety/reliability.

There are plenty of safe and reliable vehicles that aren't Mercedes (or SUVs). It's fine if you like the luxury and status of a Mercedes but be conscious about it.

this.  Plenty of safety and reliability in other makes, for sure.

johnny847

  • Magnum Stache
  • ******
  • Posts: 3192
    • My Blog
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #19 on: February 12, 2015, 11:06:16 AM »
You've gotten a lot of good advice here, and I think most if not all of the key points have been covered already (or they soon will be).

I did want to mention one thing for your information, OP, for your tax planning. Because you want to retire in GA, you should keep in mind that a large portion of your income in retirement can be excluded from GA tax:
$35k of income is excluded when you are 62-64, or less than 62 and permanently disabled to the extent that you can't be gainfully employed
$65k of income is excluded when you are at least 65

Up to $4k of the max exclusion can be earned income (this includes rental income subject to FICA)
Other income sources that can be excluded: interest, dividend, alimony, capital gains/losses, taxable IRA distributions, taxable pensions, and rental income that is not subject to FICA.
So most source of income, excluding lotteries, and gambling.

MishMash

  • Pencil Stache
  • ****
  • Posts: 712
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #20 on: February 12, 2015, 11:43:09 AM »
Gonna toss out a biggie here for moving to GA now.  HOPE scholarship, your kids, provided they have and maintain a certain GPA (if I recall it was a B average), will get 100% FREE tuition to an instate public university such as UGA.  FREE COLLEGE!  I believe there is a residency requirement of X years to be eligible for it, you'd have to look it up.

That said I lived in GA for years, I hated the place but to each his own.  That electric bill, if you plan on the atlanta area may be low.  It's been about 8 years since I've lived there but 100 bucks pretty much only covered the access fees each month.

MrsPete

  • Magnum Stache
  • ******
  • Posts: 3514
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #21 on: February 12, 2015, 12:05:26 PM »
I think you have an awful lot of money tied up in your house and cars.  Yes, I see that you have a high income, but you can be quite comfortable for less money.  Selling a house and moving -- especially with kids -- isn't a walk in the park, so I'd consider sticking it out for now . . . but when you move to Georgia, I'd look into downsizing significantly, especially since the kids'll be out of the house.  Georgia is a place with "highs and lows" in terms of housing, so choose your area carefully.  You can spend $$$$ on a house in a prestigious area, or you can live quite well in a middle class area for $$. 

About the kids -- do I understand that neither is in college YET, but in six years your youngest will finish high school and will go to college?  If I've grasped that correctly, I'm not sure that waiting will serve you well:

- If you move NOW, you set yourself up for paying in-state tuition in Georgia. 
- If you wait, you set yourself up for a potentially difficult situation:  Do your kids apply to school where you are now . . . or do they apply to schools in Georgia?  Do you want them to be far from you at age 18? 
- Georgia has a good state scholarship -- is it called Bright Futures or Hope or something like that?  It might benefit you financially to make a move now so they'd qualify for it in a few years.  I don't think it's based upon need -- just grades. 


ninjaneer

  • 5 O'Clock Shadow
  • *
  • Posts: 30
  • Location: Central Texas
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #22 on: February 12, 2015, 12:06:56 PM »
I don't understand why anyone would say that the mortgage interest deduction is useful at all.  Unless you are paying 100% or more in tax, it's always better to not pay the interest.  You only get a partial tax break on money you're giving someone else anyway.

Pay bank $10k in interest
Get 28% of $10k = $2.8k in tax savings

Still out $7.2k in interest to the bank, right?  No mortgage means no interest payment, so you come out ahead.  That said, your interest payments are going to be very small on such a small principal balance anyway, that there are very little tax savings to be had.

The only reason not to pay off the mortgage in my mind is if you could invest that money better for the long run.  I like the idea of no mortgage, though, so I'm opting to pay it off sooner myself (at least by retirement time).

Awesome job on the savings!  I'd trade down those vehicles, though.

Catbert

  • Handlebar Stache
  • *****
  • Posts: 1817
  • Location: Southern California
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #23 on: February 12, 2015, 12:19:00 PM »
I was going to initially say not to pay off your mortgage (7% you might get from stock market beats 3-4% your likely paying on mortgage).  Then I saw you owed only 22K.  I was in a similar mortgage situation last year (owed 24K on a 900K house) and paid it off for the basic nuisance value of making monthly payments.  You won't be losing much of a deduction on such a low balance.  For me it was only a couple of thousand interest over 3 years.

crucialink

  • 5 O'Clock Shadow
  • *
  • Posts: 8
  • Age: 48
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #24 on: February 12, 2015, 06:16:53 PM »
I just wanted to start off by saying thank you all for taking the time to give my your advice. First off I have read MMM articles back to front and yes, I knew about how MMM felt about cars. But I already had both with one paid off. Yes I knew I would catch some criticism, but wow I must say, MMM really taught you guys well. You just don't let up on me. I figured after reading the article about cars that the damage was done already. But you guys have shown me the light. I will ditch the ML350 for something more economical.

As for the commute. Well that is just life folks. I live in NY. I moved upstate to escape the HIGH taxes and shitty schools for my kids. My taxes are a fraction of most peoples. If I move close to my job. Well I would not only NOT be able to afford a house in that area, I would definitely not pay those taxes.

Now as for the 6 year wait. Im also waiting six years because I want to put myself in a better place financially for FI. Every year, for six years I will get two things from my job, a cash bonus and stock incentive. Each year I will get at least $40,000 cash and $50,000 in stock. If I leave now I will be walking away from $240,000 in cash and $300,000 in stock incentive. If I pay my mortgage off I will also be able to contribute at least $3,500 a month to my vanguard account. Over six years that would be $252,000 I will contribute to my vanguard. So, if I leave now, I will be walking away from at least $792,000. And no, I will not find a job in GA that would could come close to paying me this. Yes I stepped in a big huge pile of dog poop when I got hired at this job. But again, I could use the extra cash from paying my mortgage off to buy the house in GA now, but if I put it into the Vanguard it will GROW. But if I wait the prices in GA for a home will go up. See the dilemma

Escolegrove
I'm bias because I love rentals and they are a very important part to our early retirement plan! That being said, are you comfortable with leverage. If so, what about buying your future house in Georgia as a rental now? This way you have 6 years of someone else paying off your principle, locking in a low mortgage and price rate?
Thats exactly what I was wondering. But then could I make MORE money by putting this cash into my Vanguard account or buying another home?

Setters-rBetter
So about 1.1 million in assets if you liquidate home and stocks?  Is that how much you want?  I think set some goals with your wife, decide what you want your retirement picture to look like,  and then work together to get there. With your income and 6 year time table you can get lots done. I wouldn't move the kids either.
Im not sure how much I want. More I guess. Im a graphic designer, I'm creative but  I suck at numbers. I figure get at least $500,000 into my Vanguard account for FI and I should be good then with all the other money when I retire.

ZootsTwin
Just a thought from a current resident of Georgia and native Tennesseean:  if you like the mountains, check out eastern Tennessee in addition to north Georgia.  TN has no state income tax, whereas GA does.
Never been to TN. We love the Blue Mountains but might have to make a trip to check it out.

Thegoblinchief
NC is too far from FL. We have family in FL that we visit and in GA it would't be too far of a drive. Also any state I move to MUST be a shall issue state. I am full believer of your first second Amendment Right.

I will have to check int the state college systems.

You say you spend $600 a month. I don't know where you live but NY is an expensive state. And yes we eat almost all organic. We even have chickens.

The heating cost this year and last year have been high. Last year and this year are wicked cold. We are well below average. This Saturday we will be -10 without the windchill and -20 to -30 with the windchill. I just put new windows in last February which are helping alot this year. I am definitely not burning through pellets as much as last year. My house is 3200 square feet. I have done alot of work (myself) on my home. New windows, new efficient boiler, solar panels (just put in last June).

Quote
To give you a frame of reference, I would be FI (actually, almost 1.5x) TODAY with your asset sheet. Obviously, everyone's vision of retirement is different, but I'd start mocking up a retirement budget now.

Is your side hustle just for cash, or is it a fun pursuit? Because the way I see it, you're FI right now. If the side business is fun and something you want to continue in retirement, use that to cover part of the living expenses.

Maybe real estate down there has changed a bunch since I've traveled (been a few years), but you should be able to find a nice, modest house for far less than your $350K max budget.

How do you figure that!?!?! How could you be FI on what I have today.

My side business is not cash. Its online and is Inc. I am currently working on expanding the business so I will have more income going forward, when I reach FI and when I retire. I recently started selling on Amazon and so far it is growing very nicely.

The homes I have looked at are new homes. I have done my share of renovations. I did alot to the house I own and the next one I just want finished. Must be in the mountains with views. Like I said $350,000 was my max.

Numbers Man
Im not worried about the kids staying in NY. My kids HATE cold and LOVE the ocean. As mentioned above, we have family in FL and both of my kids want to go their. Both kids want to become marine biologists (now you know whey I need to save so much) and FL has alot of marine animals.

FrugalSpendthift
Current Expenses:
Mortgage: $1993 a month - approximately $22,000 left on mortgage - I have the $22,0000 to pay it off just not sure if I should do this yet (tax purposes?!?!).
If this is what you are second guessing, then just calculate how much tax it saves each year.  With the balance being so low, you probably aren't paying much interest at all, so the amount that you are deducting is probably very minimal.  The simplicity and freedom of not having a mortgage might be more valuable than the tax deduction.
Thats what I thougt. I used an online calc but now Im confused because of what "So Close" stated.

So Close
My rate is 4.5%

The side business is tattoo aftercare products. I think if I did a Roth it  would have to be a backdoor Roth. No my company does not offer a deferred compensation plan. I read about the HSA on either this site or Jlcollins site. Yes, thank god we are all healthy.

4alpacs
I'm not sure of your complete tax situation, but I would highly recommend contributing to a Roth IRA.   You'll have to do a backdoor Roth.

yes that is what I was thinking. I have to look into it.


MishMash
Holy sh@$t. I did not know that. That is very very tempting. But again, if I leave now I will be walking away from at least $792,000.

MrsPete,
Cars yes, my house, not at all. My home is my investment. The value of $450,000 to $500,000 is the market value. I am being modest with the cost. I know if I go to sell it I would get alot more. I did all the work in my house but it has ALL custom moulding throughout, built-ins, two trex decks, completely finished basement with full bathroom and brazilian coa hardwood floors. Many people invest in the stock market, since I suck with numbers but am very talented wood and home improvements I got a great deal on my home and improved it so when I sell it I would be able to by my retirement home and have cash left over. By the way, I live in upstate NY, I live in a middle class area. The prestige area is 2 miles away. Those homes start at 1.2 million.

You are correct. The kids are not in college. The little one will start college in six years. My kids go to school in NY. Part of the reason we choose the part of NY we are in is because of the low tax and exceptional schools. The school my kids are in are in the top 5 best schools in the country. Like I mentioned above, I really like the sound of a scholorship. Both my kids have an A average, but again I would be walking away from at least $792,000.


Ninjaneer
Thank you, I have been saving like a crazyman paying down my mortgage. Gonna get rid of the ML but gonna keep the c-class. Its been paid for, it has AWD which I need in the winter and my buddy is a merc mechanic. Anything does wrong he fixes it for me. I know I know, get an economy car for the gas saving.


Mary W
Again, that is what i was thinking.


« Last Edit: February 12, 2015, 07:33:42 PM by crucialink »

crucialink

  • 5 O'Clock Shadow
  • *
  • Posts: 8
  • Age: 48
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #25 on: February 12, 2015, 06:25:43 PM »
Forgot one thing. When I retire. I figured $27,000 a year would be great.

johnny847

  • Magnum Stache
  • ******
  • Posts: 3192
    • My Blog
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #26 on: February 12, 2015, 06:55:35 PM »
Also any state I move to MUST be a shall issue state. I am full believer of your first Amendment Right.
For such a firm believer in gun rights, it's amusing that you're not aware of which amendment is the basis for all gun rights.

crucialink

  • 5 O'Clock Shadow
  • *
  • Posts: 8
  • Age: 48
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #27 on: February 12, 2015, 07:32:44 PM »
Also any state I move to MUST be a shall issue state. I am full believer of your first Amendment Right.
For such a firm believer in gun rights, it's amusing that you're not aware of which amendment is the basis for all gun rights.

LOL ... Im a firm believer of freedom of speech too. Long day with alot of writing make me do stupid mistakes. my bad.
« Last Edit: February 12, 2015, 07:34:54 PM by crucialink »

MrsPotts

  • Stubble
  • **
  • Posts: 133
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #28 on: February 12, 2015, 11:25:33 PM »
I don't know anything, but $250 monthly per spawn in a 529 seems a bit low to me.  My daughter started college in 2008; I had been putting 250 a month in her 529 for a over a decade and it barely covered her books, room, and board for 4 years...and college expenses are really rising.

Thegoblinchief

  • Guest
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #29 on: February 13, 2015, 06:12:53 AM »
So what if you're walking away from $729K? Most early retirees walk away at their peak earnings potential. They do this (often happily, often with mixed enough emotions they end up doing PT work).

If you don't have enough for your vision, that's fine. But at least consider what's enough. For me, we're not funding college for the kids (I will be quite happy if they pursue a non-college path), and if a farm transition we're in early negotiations over goes through, we'll end up doing a very bare bones 'retirement', decamping with just enough that we can float indefinitely on passive income and provide everything else via the land, slowly ramping up our lifestyle with farm income as I mold it to my vision.

But if that doesn't go through, our current lifestyle with a paid off house would be luxuriously funded at $650K with a 4% SWR. If we end up needing to buy land, we'll have to save up more. We'll cross that bridge later.

Hopefully food for thought. For a very good discussion of "enough", read the book Your Money or Your Life (preferably the 2008 reprint, not the original, and ignore the investment chapter in the back in either version).

tracylayton

  • Guest
Re: Case study me PLEASE!!!! Tired of second guessing myself
« Reply #30 on: February 13, 2015, 06:59:55 AM »
My parents moved us a lot...7 schools in 10 years. I always made the transition pretty easily, until age 14. All the clique groups were formed and the only good friend I made had just moved there as well (still best friends 36 years later). I don't know what I would have done, if there hadn't been another new kid to bond with. I really wish my parents hadn't moved us that last move, so I commend you for thinking of your kids' best interests. On the other hand, I would encourage them to go to college in Georgia to avoid having to visit them in another state the rest of your lives (as another poster mentioned).