The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: dreamliner on January 01, 2016, 12:28:47 PM

Title: Mayday Mayday
Post by: dreamliner on January 01, 2016, 12:28:47 PM
Hi all,

My first post here and i've a lot of questions to ask.
I'm 37 , married and i have 3 kids, 10, 8 and 7 and i'm based in South East Asia.
I make US$120k peryear and i have a stable job with a national airline. My wife is a housewife.

Due to my poor financial decisions and unbelievably crazy spending, i'm 7k in credit card debt with no emergency funds.
My wife is a housewife and i have little to no savings except for a company provident fund worth $100k.
Thankfully, i have seen the light and have made some big decisions ie got rid of 2 cars, 1 vespa and now we are a one-car family.
I have just started savings and plan to save initially 30% of my income and increase it slowly to a maximum of 70% in the next 5 years.

The only thing i have for me now is a house with 15 years left on the mortgage and takes up to 25% of my pay.
I also have 2 other rental properties:
1) Rental A has me losing $350 per month due to low rental but i have 7 years left on that mortgage.
2) Rental B has me making $327 per month.

Should i sell rental A and make $100k profit after fees and invest 80% of the profit into mutual funds?
I would like to be FI in 10 years time.

Title: Re: Mayday Mayday
Post by: ShoulderThingThatGoesUp on January 01, 2016, 12:31:32 PM
What happens to the other 13% of the profit from the sale, if 7% goes to the credit card debt?
Title: Re: Mayday Mayday
Post by: lbmustache on January 01, 2016, 12:34:47 PM
I would for sure sell Rental A. Rental B doesn't sound all that exciting either - how do you pay for things that break (water heater, etc., assuming you have those), is the $327 going towards a fund for those types of things or are you spending it all?
Title: Re: Mayday Mayday
Post by: dreamliner on January 01, 2016, 12:42:25 PM
Hi Shoulder,

I was thinking of making that my emergency fund since i'm pretty low on it. Is that a bit much or should i be investing the 13% and make it 93%?
I have 95k left on the mortgage and intend to put the Rental A on the market for $200k which is the current value. Fees are approximately 5k.

Hi Ibmustache,

Like i said, i've been pretty bad with my money and i usually dig into my salary for maintenance. I used to have a fund but i spent it all mostly on maintenance and couldnt save quick enough.
I am basically one of those High Income earners who has thinks tomorrow will never end. However, i've seen the light and plan to make amends.
Title: Re: Mayday Mayday
Post by: MayDay on January 01, 2016, 01:11:10 PM
You paged me?
Title: Re: Mayday Mayday
Post by: Fire2025 on January 01, 2016, 01:28:50 PM
You paged me?
I actually laughed out loud.  Fantastic!!
Title: Re: Mayday Mayday
Post by: dreamliner on January 01, 2016, 01:43:47 PM
Yes, where have you been? The plane is in a spiral and i need help to stop me from crashing. 😱
Title: Re: Mayday Mayday
Post by: Exflyboy on January 01, 2016, 02:04:41 PM
Your not in that bad of shape, so this not "Mayday" territory.. More like "Distress".. so you can rename you post "Pan-Pan".

Sorry all.. its an old pilot joke..:)
Title: Re: Mayday Mayday
Post by: Freckles on January 01, 2016, 02:20:58 PM
Poor Dreamliner.  Everyone's too busy being funny on his post to answer his question.  Keep it up!  :D
Title: Re: Mayday Mayday
Post by: brokescientist on January 02, 2016, 07:04:03 PM
Sorry about your situation dude, but I am EXTREMELY surprised that you cannot save a RIDICULOUS amount of money making 120k US in SEA.  What country are you in?  What the crap are you spending you money on?!!?!   I was living in SEA for 2 year making ~15,000 dollars a year and was able to save money a few thousand, travel to Vietnam, Hong Kong, Philippines, Laos, India, Nepal, and Thailand, bought a fancy camera, plane tickets, ate and drank like a champion, lived in a 22nd story penthouse apartment with two balconies.  I think you're pants are seriously in flames.
Title: Re: Mayday Mayday
Post by: brokescientist on January 02, 2016, 07:10:37 PM
To answer you questions.  I would not sell your rentals personally.  I think first you need to seriously reevaluate your spending habits.  120k in that area of the world you could be saving 70k-80k a year if you learn to live somewhat like a local and enjoy their foods and culture.  For me making 15k a year seemed like I was upper middle class.   Seriously think about what you are spending on and take it from there.

Also, living and learning local culture taught me valuable life lessons about what you want and need. How to make things last and how to value what you have.   

Title: Re: Mayday Mayday
Post by: dreamliner on January 07, 2016, 12:49:24 AM

Yes ,my pants are on fire! That's why i'm calling the Mayday.

I have been pretty abominable(disgraceful) with my spending and i've now made a 180 degree turn.

Sold my porsche and my motorcycles, we're now a one-car family,
cancelled the cable subscription,
i ride my bike more now on commutes within 3 miles,
i've stopped buying the gadgets,
cancelled the 2 golf club memberships( and i've also stopped playing golf),
i stay at home now and read books and personal finance sites like MMM & others learning about saving and investing,
we've stopped eating out and we're cooking at home more.
so in a nutshell i'm re-conditioning myself from being the ultimate spender/consumer to try and be a saving machine.

These are my debt:
House A(where i live)- $300k left (15 years remaining) paying 2k per mth
Rental A - $68k left (7 yrs remaining) , losing $3k per year due low rental, paying 1k per mth
Rental B - $157k left (17 yrs remaining), making $2.8k per year profit from rentals, paying $700 per mth.
Credit Card - $5k owed.
Personal loan - $22k owed.
The only car left(BMW X3) - $30k owed.

Note: All in US dollars as i had to convert from the currency here.

The plan is to:
- sell rental A.
- use profit to pay off personal loan and credit card.
- invest the rest.
- sell the BMW SUV and get a smaller used car. Public transport here is bad and we still need one car.

So you reckon i shouldn't sell my rentals?

Appreciate the comments and criticism, i deserve it for being fiscally irresponsible.

Title: Re: Mayday Mayday
Post by: Anatidae V on January 07, 2016, 01:23:19 AM
So, now that you've changed all these things, what does your budget look like? How much money from your income is going into savings? What are you still spending on? Can you put enough money into the rental to make it "work"? (I have no idea about real estate but I'm sure if you sat down with some numbers, maybe it makes more sense to do something else). People here have a hard time parsing your situation until you give some more numbers to play with :) Try the "Case Study" layout.