Hi,
I have been following the site for a while, and really enjoy it. Thanks to all the contributors!
Here is the short story: My wife and I decided to leave Colorado in 2011 and continue our careers as educators at an international school. The finances beforehand were scary with over 6 grand a month in bills, multiple car payments, a mortgage and a half plus $75,000 in student loans.
Here is our situation now:
2014-2015
Annual Combined Salary $176,000
Matching Pension Contribution -$21,120
Net Income $154,880
Monthly Income $13,002
Local Living Expenses -$1,000
U.S. Balance $12,002
Rental Income +$1,525
Net U.S. Income $13,527
Monthly Expenses
Tuition $0 (beginning in August 2015:$3300/month)
Rental Mortgage $1,047
Life Insurance $32
Credit Card $1,500
Car Insurance $93
Net Expenses $3,672
Vanguard Investment $1,000
Remaining $9,855
All debt except for the rental property is paid off. We owe $155,000@2.37% with 20 years left and are making about $450/month in profit. The market value is probably about $250,000.
We live overseas on less than $1000/month but that doesn't include travel expenses, which have been budgeted for in the monthly credit card payment and is paid off each month. The first $99,500 of income per person is tax-free. Our bills in the U.S. are currently less than $200/month. We are not paying college tuition but in the fall will be spending about $3300/month there. Our retirement savings at this point equals $255,000 (not counting the equity in the house). We are in our mid 40's and do not really want to work full time until we are 60 as one financial planner suggested we do.
As you can see, until the fall of 2015, we have nearly $10,000 USD a month to do something with. When the tuition kicks in it will drop to about $7000/month.
Here are the scenarios I have imagined:
1. Keep renting the house at a profit of approximately $450 for the next 20 years until it is paid off and invest net savings in the market
2. Pay off the house over the next 16 months and then begin making approximately $1500/ month and invest the net savings in the market
3. Sell the house in the spring of 2016 and buy a property west of Denver (when we are in the U.S. for about 9 weeks a year, we bounce around between family and friend's homes which we are tired of doing) and invest the net savings in the market. Also use this as a vacation rental
4. Stockpile the net savings until Spring of 2016, keep the rental and also buy a property west of Denver (with a smaller down payment that would still be greater than 20%) and invest less in the market. Also use this as a vacation rental.
Which is optimal? Is there something else you would suggest?
I feel that we finally have some options. Although we did not make the decision to expatriate based solely on finances, it has worked out nicely. The downside is that we are far away from family and old friends but we enjoy not being immersed in the consumerism of U.S. culture. Believe me, I had many sleepless nights worrying about finances (and occasionally still do) but if you are feeling trapped, make a plan, stick to it and hopefully it will work out.
My apologies for the formatting issues.
Thanks to any and all who reply to this post!
