Author Topic: Debt Free... what next?  (Read 570 times)

kasterborus

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Debt Free... what next?
« on: August 07, 2018, 06:02:13 AM »
Short version:

  • 48 years old.
  • Debt free
  • Using Mint to determine my budget and what leftover income I have each month.
  • Not sure what to do next

Right now, Mint is showing me that I have about $3-4K in leftover income each month. Over time I will probably get this up to a consistent $4K. I only have about 10K in my emergency fund, with a target of $25K. I also need to save about $50K over 8 years for my daughter's college. I have a 6% match on my 401K, with an additional 4% from my employer.

I am struggling to figure out what to do next, nothing I can come up with really seems to make a great deal of financial difference, and I am not really able to let go of the day job. It's not totally soul-destroying, but it's corporate (finance) and not exactly making me happy.

I traveled when I was younger, not really interested in doing that at the moment.

I have run some numbers on getting a HELOC and buying a rental property, and looking at other investment vehicles, but nothing really seems to be able to lift me out of the situation I am currently in.

I would like to do more meaningful work - woodworking, electronics*, and not worry too much about a drop in income.
I think my current expenses are around 2-2.5K.

I am looking for suggestions on what to explore next.
Thanks.



*yeah, I know that sounds weird, but I few years ago I quite successful in designing some electronic devices, which I sold.

Fishindude

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Re: Debt Free... what next?
« Reply #1 on: August 07, 2018, 07:43:56 AM »
Congrats !
Build up your emergency fund, get some college savings going for kid(s), max your 401K and get some investment(s) going outside of your 401K so not all eggs are in one basket.
Also, enjoy being debt free, not many people your age can say this.

RWD

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Re: Debt Free... what next?
« Reply #2 on: August 07, 2018, 07:48:09 AM »
Investment Order

How much do you have invested already? You'll need $600k-750k to sustain your current expenses. If you're close to that then it may make sense to pursue a passion that results in an income drop. If you still have a ways to go then you should probably focus on the income side of the equation.

kasterborus

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Re: Debt Free... what next?
« Reply #3 on: August 07, 2018, 08:31:41 AM »
Thanks for the reply,

I forgot to mention, I also have 30k in Mutual funds in Fidelity.
And 70K in a business account (still active, but only part time work - which has kind of dried up lately)

Right now I have 240K in the 401K.

My plan is to continue with the match + contribution for 5 months, till I have the emergency fund back in place.
Then take what I would be paying in mortgage and add that to the 401K as well, this puts me well over the allowance (with the match), but I think I can probably jam in a few more bucks to take me up to the allowance.

Not sure what to do with the business $$$, I have been issuing myself loans (at market rate) to buy cars etc... but pay that back pretty quick.

I guess my issue is, I really don't want to be dependent on my job forever, would be nice to not have to work so much. So the 401K is the only thing keeping me there, oh and the health insurance, yeah... don't get me started on the cost of healthcare. ;)

It's also worth mentioning that by Payscale.com I am OVERpaid by about 20% - so that keeps me stuck at the same job too.
I don't really like the idea of being so dependent on my employer for my situation. I was hoping things would change once I cleared my debt, but so far it's just been a period of self-reflection.