45 and 43, 2 kids -16 and 14
gross income - $245,000 combined, this just went up this year. $150,000 has been average for last 6 yrs. average 17% tax rate.
Assets - $867,000. I haven't included this,but we did the prepaid college for both kids the yr they were born. Tuition only.
liabilities - none
OK these are our mistakes -
we got scared by 2008 and pulled back 401K contributions to match only. wife gets no retirement benefits through work.
Basically we have saved on our own, dabbled in real estate as we've gone along.
last yr we sold our house, put our savings and retirement into large land/ reg. house because our dream is to move there when kids go to college (4 yrs) and live simply/ see how self-sustainable we can get( we enjoy that) and rent out house while we lived in small cabin. we figure we would bring in $30,000 - $50,000/yr.
So as it stands we have only $67,000 in 401K(vanguard 2035 Target retirement fund), $90,000 cash, $17,000 Gold, everything else is in the land/house (just under $700,000) - I know freak out!! We could sell house for $775K - $800K minus 6% realtor fees.
The land/house is on vacation rental program (in beautiful area) but really coming out only slightly positive due to management fees/land maintenance (75 acres) during summer etc. Terrible rate on return, but we planned on being there full time in 4 yrs. I intended on working from property, same job hopefully, for another 5 yrs.
We are renting ($2200/mth, it's on lower end for area, but we will do better when this lease ends) and had just planned on saving until we move to our dream in 4 yrs.
We have just discovered MMM, so now are having major 2nd thoughts. Have we just made the biggest mistake ever? We have practically nothing in stock market. Reason - We are terrified that the stock market rise since 2008 is due to QE, negative rates/low rate, company buy backs, bond buying and massive debt held by pretty much every country - an unprecedented situation. How does it get resolved and back to normal - based on fundamentals? But are we cutting off our nose to spite our face?
We now have personalCapital and are keeping track of every expense. The plan (we just started Sept 1st) is to save $100,000/yr by max out all retirement accounts and saving in Vanguard index funds. We haven't switched over savings yet because we expect market downturn due to election - I know - don't market time.
BTW it is hard with teenagers: this month alone we finished paying for braces for 1,have homecoming for 2 kids and our son is getting driving license next month - insurance goes up by $1200/yr. We are purchasing my parents old car. They have school books/supplies/clothes/life. We are naturally not big spenders, but these things add up.
Please give advice. We are now thinking do we sell property and move all monies into Vanguard total stock index fund? (trust me, if we do this and the market will go to hell for 10 yrs, then we'll have Japan stagflation - ha, ha) and move to small apt when kids go to university and just save like crazy? Then reassess when we are 55?
Thank you for reading and any advise you can give us.