Author Topic: Start Investing or fix things / live life?  (Read 3203 times)

PeachFuzzStacher

  • 5 O'Clock Shadow
  • *
  • Posts: 43
Start Investing or fix things / live life?
« on: September 05, 2013, 01:41:58 PM »
Hey all,
My wife and I recently bought a house, with a mortgage value slightly larger than mustachians would likely agree with (owe 307k in north NJ, 10% down conventional, got in at 3.6 before the increase).

Anyway, there's things that need to be done which would make our lives a bit better and the house a bit nicer, including adding a large shed (there is no garage) and digging/paving some more driveway space so we don't have to play musical cars every morning.  I also want to put up some retaining walls to increase the usable yard space a bit more.

I have no other debt and would like to get moving on some VTSMX investing, but really want to take care of some projects.  Does everyone here who invests have everything else covered in their lives already?

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 27779
  • Age: -999
  • Location: Traveling the World
Re: Start Investing or fix things / live life?
« Reply #1 on: September 05, 2013, 01:47:24 PM »
Does everyone here who invests have everything else covered in their lives already?

No.  Some things we put off until later.

You should try to figure out the best way for you to personally make those decisions.  One obvious possibility is calculate the amount of time it delays your FI and decide if it is worth it to you to have that thing now versus later.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Forcus

  • Pencil Stache
  • ****
  • Posts: 714
  • Location: Central Illinois
Re: Start Investing or fix things / live life?
« Reply #2 on: September 05, 2013, 02:30:32 PM »
The answer will be what your life goals are and how much you can spend and not delay / destroy them.

For example, If my goal is to retire by age 40, have 50 years of cash equivalent at a 4% withdrawal rate, including 3% inflation and an average 7% return on investment, that will define what I can do right now. If I can buy a new car, or put in a pool, or whatever, and not hurt that goal (and all supporting goals), then awesome. If not, I figure something else out.

Of course if you haven't gotten that far yet (I haven't), I look at it as can I justify the investment in my home. I can't speak for your area but a garage is a practical necessity to get serious interest in a house. If you spend $7.5k for a 2.5 car garage, and enjoy that utility for a number of years, and can get a reasonable amount of that investment back, I don't see a problem with that (but I also use my garage for lots of money saving activities so it's easy for me to justify).

On the other hand there is a laughable trend around here where people buy sheds for 5,6,8k. I mean, these are just things to store lawn mowers and potting soil. I don't know about you but everyone built their own sheds when I was a kid, having one dropped off at your house wasn't an option. Anyway, I don't think you'd get one dime of that investment back on a home sale.

sleepyguy

  • Pencil Stache
  • ****
  • Posts: 671
  • Location: Oakville, Ontario
Re: Start Investing or fix things / live life?
« Reply #3 on: September 06, 2013, 04:32:32 PM »
Personaly don't view house renos as "work"... think of it as putting some sweat equity into your  investments.  This way, you are more motivated to get things done.  Also don't do everything at once... wait for deals and clearance sales at stores and pick them up as you go along.  For example we got an as-is Tub and Vanity for about $200 total, new they were $350 each.  They both have been working fine for 3yrs, this was Homedepot so i could return if there were leaks, issues, etc.

Some things leave to the pros... either it is too dangerous for you to take, requires professional help or you require too expensive of tools to do the job right.  For example we got a pro to upgrade or electrical panel.

Anyway, enjoy your home!  youtube has alot of good vids for repairs.

jawisco

  • Stubble
  • **
  • Posts: 194
Re: Start Investing or fix things / live life?
« Reply #4 on: September 06, 2013, 07:15:41 PM »
I think the longer you live in your place, the better ideas you will have about what are the best ways to do renovations.  For me, I need to live in a place for a while before I make good decisions about changes and how important they are.  Resist the urge to make it perfect.

Frugally-raised

  • 5 O'Clock Shadow
  • *
  • Posts: 33
Re: Start Investing or fix things / live life?
« Reply #5 on: September 07, 2013, 09:09:05 AM »
I think there is no point waiting until your life is perfect (i.e., have "everything else covered") before investing. It will never be perfect. There is always one more household improvement that could be done, one more "upgrade" to make, etc.

The difficulty is that it is a trade-off. If you don't run the numbers, you will have to make an emotional decision. And emotional decisions can harm your financial lives, that's for sure!

So, how much will each of these cost? Don't guess, but really do a complete estimate (including maintenance). Then run the numbers to see what happens to your goal of financial independence if you spend those dollars instead of keeping them on the payroll (to use Mr. Money Mustache's terminology).

swiper

  • Bristles
  • ***
  • Posts: 254
  • Age: 38
  • Location: Ottawa (Gatineau)
  • swiping ottawa
Re: Start Investing or fix things / live life?
« Reply #6 on: September 07, 2013, 09:54:52 AM »
Struggle with this all the time. I group improvements into three categories and focus the majority of my efforts on the first two.

1. Repairs/improvements which if not done, endanger us (and our liability) or the value of the property: degraded roof, dangerous trees, bad electrical, water infiltration etc.

2. Repairs/improvements which will net a yearly savings or increase property value with age: Insulation, window fix/replacement, tree planting/pruning etc. My logic is to do these early so as to maximize the financial return.

3. Aesthetic improvements which contribute to my enjoyment of the property and potentially net a return when selling. (Kitchen, bathroom, flooring, lawn etc)

The last category can be fun to do and I do sneak in a project or two, but there will be plenty of time to do them myself when FI. Plus tastes do change!

Good luck.