Author Topic: reader case study: looking for suggestions/insight  (Read 1296 times)

pioneer

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reader case study: looking for suggestions/insight
« on: October 12, 2016, 07:23:27 PM »
Hey all....long time lurker that finally decided to join in.  I'm looking for any insight that anyone may have on my life/situation.....edited to fit the format of case studies


Life Situation: 34 yrs old, long term partner, single filing status, no dependents

Gross Salary/Wages: 54000

Pre-tax deductions: max ira 5500 and hsa 3350 every year

Other Ordinary Income: none

Qualified Dividends & Long Term Capital Gains: 800 yr

Rental Income, Actual Expenses, and Depreciation: none

Adjusted Gross Income: 45950

Taxes: Federal, state/local, and FICA.  10638

Current expenses:
2200 property taxes
2952 health ins
1500 car ins, umbrella, homeowners
1176 utilities
276 cell
150 internet
150 vehicle registration
1500 food
2200 gas

$12104 base expenses
$10000 cabin remodel
$5500 ira
$3350 hsa
$5150 taxable savings
$7258 vehicle maint, primary maint, travel, out to eat, anything that I "want" but don't "need"
$43362 net


Expected ER expenses:
500 Property tax (wisconsin has a homestead tax credit that can be used to lower prop tax burden  for low income.  cabin taxes currently 1050 without homestead credit.)
500 Health insurance (subsidized cost)
1200 insurance-cars, cabin, umbrella
400 utilities (cabin has wood burner and grid tied pv system
276 cell
300 int
150 vehicle reg
1500 food
1000 gasoline

5826 total base

5000 vehicle maint, house maint, out to eat, travel

10826 total



Assets:
75k primary residence
55K cabin (work in progress)
66K ira
25K hsa
37K taxable


Liabilities: none

Specific Question(s): would like opinions on how I'm doing....would like to sell primary residence and move to cabin property when remodel is complete. Working part time is ok with me in order to get outta the full time rut im currently in.  My boss is 74 yrs old, been with his company since I was 15 and is very vague about when he is going to retire.  I would like to stay with him until he pulls the plug, but that could very well be 6 years from now at the rate things are going.  My partner and I really would like to get homesteading on the cabin property in the next 1-2 yrs, but am torn on whether I should stick with my current employer even if it means postponing my own downshift of paid employment. My tentative budget numbers are with the understanding that my current primary will be sold and my partner and I will be living at cabin property.  Cabin is located approx 1/2 hr drive to 200k population, so part time employment is relatively close. Also, cabin property has been gutted and is remodel right now, so all systems will be new on that property.  Roof is new steel, outbuildings have new steel roofs, water heater, backup heating system, electrical, plumbing are all new.  Any thoughts to tweak/improve my situation are appreciated!


« Last Edit: October 13, 2016, 09:00:20 AM by pioneer »

Bracken_Joy

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Re: looking for suggestions/insight
« Reply #1 on: October 12, 2016, 07:28:02 PM »
I had a bit of a hard time following your case study numbers. It could help to do the standard case study format http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/, and clarify whether these are your proposed or actual expenses.

Re: can you quit and move. Is the $10k cabin remodel *if* you remodel to sell? Is it the work needed on the one you want to move to? In general, with RE numbers, this is a very good link: http://www.cfiresim.com/

Anyway, my answer is I'm not sure =) If you could clarify the post a bit, it would help me. Otherwise maybe another user will have an easier time reading through.

pioneer

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Re: looking for suggestions/insight
« Reply #2 on: October 12, 2016, 07:52:12 PM »
The 10K is to get the cabin into liveable condition....the numbers I posted in the budget were my current actual expenses.  I will re work it to make it more reader friendly tomorrow....thanks!

ooeei

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Re: looking for suggestions/insight
« Reply #3 on: October 13, 2016, 06:24:08 AM »
The 10K is to get the cabin into liveable condition....the numbers I posted in the budget were my current actual expenses.  I will re work it to make it more reader friendly tomorrow....thanks!

With your current expenses of ~12k+7k = 19k, you need $475,000 invested in order to satisfy the 4% rule.  Please make sure you read up on what the 4% rule is, and what it applies to.  You don't elaborate on what you're invested in, so it could be you need more than that.  How much is the primary residence you plan on selling worth?  If it's worth $500k, you're good to go most likely.  If it's worth $150k, you may not be.  You currently list $128k in assets. 

Also consider possible one off expenses in your budget. Maybe this year you didn't have any big house issues, but some year you will.  One year it's a new roof, another it's the A/C or some flooding.  For most people it's not an issue as they can just go back to work.  If you're moving out to a log cabin, going back to work or picking up a part time job may not be so easy.  Getting repairs done, or even parts for repairs, will be more expensive than for someone in a city or suburbs.