Hello fellow Mustachians,
I am a recent convert, and am trying to get started as an aspiring Mustachian. I would like some feedback on what I've changed so far and how I should move forward.
I am 30 years old, married with two young children, and my wife does not work. I bought my first home this summer (a townhouse for about 50k less than a comparable detached house in my area). I have a second mortgage because of the way I got 100% financing. I had zero retirement savings at the beginning of 2014. I had never really been one to live outside my means but I usually spent my whole paycheck.
So far-
I changed jobs in January, bringing my salary from 38k to 75k and my commute from 17 miles to 5.5 miles. I almost never drive to work; I'm riding my bike 50% of the time and taking the bus the other 50% and hope to be full time bike commuting very soon as my body adjusts. Our family has a 2001 Buick that was a cash purchase. I am trying to keep my cost of living where it was at my last job so I can save as much as possible.
Assets:
Townhome valued at 192k
Rollover IRA: 4.7k (invested in Schwab index ETFs and mutual funds, both US and international)
Roth IRA: 6.4k (invested in Schwab index ETFs and mutual funds, both US and international)
Taxable Brokerage Account: $101.47 (S&P 500 Schwab index fund, just getting started)
Prosper: 2k in P2P notes
Savings account: 1k
I maxed my Roth IRA last year and got some 401k funds from my old job moved over to a Rollover IRA.
Liabilities
1st Mortgage - 184k at 3.875%
2nd Mortgage - 6k at 6%
Student Loans - 4k at 5.6, 6k at 4.5%
15 year goal- I want to be able to cut my hours to part time or perhaps do IT contract work 6 months out of the year instead of working full time so I can have more time with my family without jeapoardizing my financial future or retirement. I don't think I want to fully retire for a while after that.
What's the best way for me to move towards this goal? I have a decent 401k at work that offers Vanguard index funds that I plan to use this year. Should I max out my 401k? Traditional or Roth contributions? I'll be in the 15% tax bracket. I was planning on continuing to max my Roth IRA. How much should I put into a taxable account?
How much should I prioritize getting my debts paid off? I plan to pay off my 2nd mortgage this year, but it seems to me like I might be better off maxing my 401k and IRA before worrying about the student loans.
Any feedback would be appreciated.