Author Topic: On the Right Path?  (Read 1720 times)

RunHappy

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On the Right Path?
« on: July 09, 2014, 08:27:41 PM »
I have been a long time follower and lurker.  My beginning story is similiar to most: lots of debt, wake up call, made a plan, got rid of debt, on an aggressive plan to "retire" early.

I think I am doing pretty well, but think my plan could use some "tweaking" and would appreciate any advice or insight.

Here is a basic run down of my situation:
401k (current company) - 30k  - I am now maxing out my contributions
401k (old company) - 30k - The stocks are still doing pretty well on this one, so I'm not sure if I should keep it or roll it into an IRA
Mutual Fund - 25k - I started it when I was right out of college and have been putting $150/month for over a decade.  Its not a great performer but it hasn't tanked either.  I look at it as a glorified savings account

Cash on Hand - $25k

Monthly bills (all numbers are rounded up):
Rent $1000
Cable: $90
Utilities: $100
Storage Unit: $65
Car 1: $400 (my leased car) 0%
Car 2: $250 (my fathers car) 1.5% $14k will be paid off in 12 months
Auto Insurance: $100

I've worked really hard over the past few years to reduce my living expenses.  In May of this year my annual expenses were 50% of my annual salary, now they total about 22% of my annual salary.  (YAY ME!)

My leased car was a mistake and I do not plan to "buy it out" when it comes up in October, mostly because I do not drive it a lot and $400 is a lot of money to park a car for long periods of time.  I plan to buy another car with cash that gets really good gas mileage and no car payment.

The second car was something I struggled with.  I didn't want to finance it, but I didn't want to deplete my savings buying my father a working (safer) car than he had.  I financed it for 5 years but plan to pay it completely off in 12 months or less.

The cable is something I never had until a year ago, when I moved closer to my family.  My father is retired and comes over to my house to check the mail, feed the cat, water the plants, and he hangs out there for a few hours everyday and watches the History Channel.  I figure a year ago I was paying $380/mo for housesitting services to a stranger, I can pay $89 for cable for my dad.

My goal is to get rid of the storage unit by the end of the year.  I downsized from a 3 bed 2 bath home to a 1 bedroom apartment.  The contents of the storage  unit are mostly Christmas decorations, pictures, and artwork I don't want to hang in a rental.

Lifestyle:
I travel for work, so most of my food, gas, etc, is reimbursable. 
My company pays my health care, cell phone, & travel expenses
I have no dependents (probably will in about 2 years)

My questions to all of you are:
1) I'm not crazy about my current investments but not sure what I should do. Open an IRA?
2) Should I bite the bullet and pay off my dad's car now and cut my savings by 56%?  I know I'm going to need to buy myself one in October
3) Now that I can pay everything with less than 1 paycheck, what should I be doing with my second paycheck?  Right now I'm just holding on to it in a savings account.  I like the idea of keeping cash on hand but not sure how much I need.  I was thinking about putting half of it into a CD, which the interest isn't great (1%) but better than a regular savings account.
4) What else should I be doing?


Thank you




desrever

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Re: On the Right Path?
« Reply #1 on: July 10, 2014, 10:19:52 AM »
My goal is to get rid of the storage unit by the end of the year.  I downsized from a 3 bed 2 bath home to a 1 bedroom apartment.  The contents of the storage  unit are mostly Christmas decorations, pictures, and artwork I don't want to hang in a rental.

This is a smaller one, but getting rid of the storage unit can be a one weekend job. You're spending $780/yr for a decoration budget, but you're not even getting to look at the artwork!? If it's stuff you love, put it up in your apartment ($780 should cover the cost of a few nail holes, and if space is a limitation, you can put a lot of images on one wall). If you don't love it, then a new owner is waiting for you on craigslist. Stuff you are sentimental about is much easier to sort through if you involve a friend who regards your objects as objects, not memories.