The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Rosa_Oliveira on October 27, 2013, 08:41:28 AM
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Me:
- 29-year-old woman from the U.S., married to a 38-year-old Brazilian.
- No kids yet.
- Living in Salvador (northeastern Brazil)
Income:
~ $1000/mo = Web content development at $27/hr, approx. 10 hr/wk
The client is my former full-time employer. I have a ton of leeway and can adjust the number of my hours up or down as I wish
~ $2500/mo = Semi-passive online income from educational business, approx. 15 hr/wk to maintain. This is net (after expenses). Has doubled in the past 12 months.
I qualify for the foreign earned income exclusion, but need to set aside 15.3% for self-employment tax, so my total monthly income ends up around $3000.
Current expenses - Fixed
Rent/Utils/Internet - $180
Husband's tuition - $160
My student loan - $105
Capoeira class (for both of us) - $65
Current expenses - Variable
Groceries/Household stuff - $360
Entertainment - $70
Misc. other expenses - $260
Total expenses = $1200
Assets:
- $5,000 in emergency savings account
- $1,000 in checking account
- $17,700 in retirement account
- No house
- No car
Liabilities:
- $7,800 remaining on student loan
Specific Question(s):
1) How to divide up the $1800 monthly surplus?
Between...
- - Contributing to retirement account
- - Funding my just-opened-yesterday Vanguard investment account
- - Adding to savings account (necessary? or not? We plan to have kids within the next two years)
- - Husband wants to buy a place to rent out within the next 3 years. (A $70K 2-BR apartment can be rented out for about $600/mo, that's an upper-middle-class type of place)
- - Health insurance. Though not strictly necessary, Brazilian public healthcare leaves a lot to be desired.
2) Where to increase my hours?
I only work about 25 hrs/wk and would like to bump this up to get the most out of this time before we have kids.
If I increase the client work, that's a guaranteed extra $27/hr.
If I increase the time spent on my business, that has the potential to accelerate its growth, thus earning me more both now and in the future - but it's not guaranteed, and the relationship between hours invested and $$ earned is not as linear.
Your thoughts and suggestions appreciated - I tried to keep this simple, but please let me know if there's any info I've left out!
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What's the interest rate on your student loans?
You mentioned your husband's tuition - does that mean he's going to college? If so, what are his employment prospects like when he graduates, and when will that be?
You mentioned that your online business income doubled in the past year - what are your prospects for future growth? And is it the kind of thing that's going to take you almost the same amount of time to maintain if your business doubles again?
It would be great to save a big nest egg while you can - but once you have kids, you won't probably want to work 40 hours a week, so it would be great to have a semi-passive income coming in. Can you split your efforts? Add 5 hours a week to your $27/hr job with your old employer, and spend another extra 5 hours a week working on increasing your online business?
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The interest rate is locked in at 1.875%.
Husband graduates in December 2014 and will probably make about $800/month to start.
If the business doubles again, it will take me virtually the same amount of time to maintain. I sell self-study courses, and the purchase and delivery is all automatic. The only reason I'm still putting in 15 hr/wk is because I'm still creating new courses, but once my catalog is finished, then that amount of time should reduce, and all I'll need to do is keep marketing them.
If the business were to increase by, say, ten-fold, then I might need to hire an assistant to help me with customer service and interaction, but my customers tend to be incredibly low-maintenance. Or maybe I'd take on someone to do the marketing. In any case - it has plenty of room to grow without increasing my personal time commitment.
Splitting the extra time is a logical solution. Eventually I'd like to drop the old employer job, but not before creating another income stream or two!