Author Topic: Tell me what I should do , cash flux and time poor  (Read 2627 times)

Gray_ghost

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Tell me what I should do , cash flux and time poor
« on: August 29, 2017, 09:19:58 AM »
I need some help , and the web has led me here.  I'm 36 this year and have been working in the Automotive business since age 20 . I've over spent and under saved as much as the next guy/girl but I've had some great experiences . Now , I think its time to start planning a change that will give me far more time to do what I really enjoy . I am NOT investment savvy ( as you'll see below ).

My home
Market Value: $165,000
Original Purchase price: $131,000
Original Mortgage Amount: $129,000
Interest Rate:  3.75%
Mortgage Term: 30
Term remaining:  22
Amount remaining on mortgage: $108,000
Gross Rents: My neighborhood typically brings $1400/mo
Principal and Interest (the P&I of your PITI - should match with the above info): $600/mo
Taxes and Insurance (the T&I of your PITI): $214/mo
HOA costs: $188/yr
Deferred maintenance notes:


Savings Account earning next to nothing $160,000
401k $58,000
Vanguard POSKX $4,980

4 paid off motorcycles that I thoroughly enjoy , Mercedes Sprinter van that has been converted to an RV Paid off , Prius paid off

Thoughts from head have been travel 5-6 years in the Van as a midlife retirement while leasing out my home , Buying a second property of similar values and rents with my savings and leasing both for a longer term solution , Buying a handful of rental mobile homes here in MS with the $160k savings .  Any ideas/advice from the Mustachians?

J.

Want specific info related to your situation?

Please use the following guidelines/format as applicable to your situation to ensure we have ALL the information we need to help.

Topic Title: Reader Case Study - your question here

Life Situation: IRS filing status ( Single No Dependents, number & ages of dependents, and anything else (state/country of residence, age, etc.) you are comfortable sharing. Jackson, MS although I'd like to spend more time than not in North Carolina , Asheville area.

Gross Salary/Wages: Before any deductions $10k/Mo

Individual amounts of each Pre-tax deductions 401k, HSA, FSA, IRA, insurance, etc. - whatever you have 8% into a standard 401k with 4% match from employer .

Other Ordinary Income: Provide sources and any relevant details, the more the better

Qualified Dividends & Long Term Capital Gains: If these are significant for you

Rental Income, Actual Expenses, and Depreciation: If these are significant for you

Adjusted Gross Income: This should equal the additions and subtractions above.

Taxes: Federal, state/local, and FICA.  These should be consistent with your AGI and Life Situation.  For non-U.S. posters, we’ll have to take your word for these. $3800/mo federal taxes, med, ssi. around $1200/mo in state taxes

Current expenses: Provide breakdown and relevant details.  Aim to have “Miscellaneous” somewhere ~2.5%.  Much lower and you may be providing too much detail, much higher and you have an obvious problem of not understanding your spending.  Food $500/mo , fuel $80/mo , Vehicle insurances $278/mo , Health Insurance $210/mo , Utilities $188/mo , Cell $86/mo , Mortgage $814/mo ( $600 P&I , $214 T&I) .

For mortgage payments, separate the P&I (which stop when the mortgage is paid) from the T&I (and anything else) which continue as long as you own the property.

Expected ER expenses: (optional, if relevant)

Assets: Amount & description - include current asset allocation plan if you have one
Definition of assets: Any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, real estate, a car, and other property.

Liabilities: Description, original loan amount, rate, original length, and monthly payment (which should be consistent with a spreadsheet PMT calculation).  Add current balance and time remaining if close to final payment.  Mortgage only , no debt other than that.

Specific Question(s): Providing a detailed breakdown is important, so is asking for specific information so we know what kind of help/advice you are looking for.
« Last Edit: August 29, 2017, 10:04:00 AM by Gray_ghost »

Bracken_Joy

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Re: Tell me what I should do , cash flux and time poor
« Reply #1 on: August 29, 2017, 09:29:47 AM »
Writing a full case study will help you to get answers =) http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/

Especially:
-Include your expenses
-Include clear and specific questions

Thanks!

Cwadda

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Re: Tell me what I should do , cash flux and time poor
« Reply #2 on: August 29, 2017, 09:33:32 AM »
+1 to Bracken_Joy's recommendations. This guy/gal helps out a lot with Case Studies.

MsSindy

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Re: Tell me what I should do , cash flux and time poor
« Reply #3 on: August 29, 2017, 09:35:17 AM »
You really need to define what you want to do, and then we can make suggestions to help you get there.  Are you 'thinking' of traveling in the van, or is that your stated goal and you're wondering how you should fund it?  Be clear about your question.

Before you consider being a landlord, start to read up on what that really means, and is that what you want to take on.  Some people enjoy it, I would find it to be dreadful - I'd rather invest my money and let it do the work, but everyone is different.

KungfuRabbit

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Re: Tell me what I should do , cash flux and time poor
« Reply #4 on: August 29, 2017, 09:40:29 AM »
I don't agree with your opening statement. Being 36 with a net worth of about $300,000 puts you leaps and bounds ahead of most of the country that is simply in debt up to their ass.  Good start !!

Most of your net worth is in cash, which is silly.  Put those $$s to work.  Either stock market or rentals.

If you want to get into property management and travel you could sell your motorcycles and use that and the $160,000 cash to buy one or two more rental properties, and make a decent income renting them while living out of your van.

Word to the wise though, if you are a landlord and don't live locally be prepared to hire someone to deal with boat loads of small issues, which could destroy your profits.  Fixing that leaky sink or changing that light bulb that you'd do yourself could cost you $300 to hire out. 

Gray_ghost

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Re: Tell me what I should do , cash flux and time poor
« Reply #5 on: August 29, 2017, 10:06:13 AM »
Writing a full case study will help you to get answers =) http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/

Especially:
-Include your expenses
-Include clear and specific questions

Thanks!


Thank you for taking the time to respond, I edited my original post with that information. On the subject of the specific question, I wish I knew enough to ask that. I'm basically looking for investment advice that will allow me to if not retire within 5 years , at least take a long 5+ year mid life retirement before starting this work grind again for another 10+years .

Bracken_Joy

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Re: Tell me what I should do , cash flux and time poor
« Reply #6 on: August 29, 2017, 10:18:52 AM »
Okay. So a key part of what you're asking about is the "Shockingly Simple Math". Here's that post: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

A couple things you need to know to answer "can I FIRE in 5 years?".
-Are those your REAL expenses? A picture of what you have ACTUALLY spent, as a rolling average is vital. Example, I don't see entertainment, or clothing, or car repair, or gas, or... so many things not listed in your expenses. What do you ACTUALLY spend each month/year? Services like Mint or YNAB can help you answer this question.
 If your numbers are the total picture (does not seem like it) then you bring home ~$10k, and spend about $2k? You can calculate savings rate and such from this post: http://www.mrmoneymustache.com/2015/01/26/calculating-net-worth/

A lot of early retirement ideas are based on the concept of the "Safe Withdrawal Rate" or SWR. For this to hold, your money needs to be invested. And it's based on average market returns for given periods, so my understanding is it only applies if you're invested in broad index funds.

What % of your income are you putting into your 401k? What is the money in your 401k invested in? Do you have money going into an IRA? What's your tax picture like?

Sorry, but "can I FIRE" requires a lot of hard numbers!

Gray_ghost

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Re: Tell me what I should do , cash flux and time poor
« Reply #7 on: August 29, 2017, 11:55:47 AM »
I listed my taxes , after them I bring home closer to $6000/month. I do spend approx $2000/month . If I add in everything I buy (clothes , concerts , items for said motorcycles and vehicles , etc . it may push to $3000/month , no more.  To clarify , I'm not so much asking about retiring completely but more what should I do with my assets now , so that I will be marching toward that goal rather than just letting my pennies hang out in savings.


Bracken_Joy

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Re: Tell me what I should do , cash flux and time poor
« Reply #8 on: August 29, 2017, 11:58:23 AM »
I listed my taxes , after them I bring home closer to $6000/month. I do spend approx $2000/month . If I add in everything I buy (clothes , concerts , items for said motorcycles and vehicles , etc . it may push to $3000/month , no more.  To clarify , I'm not so much asking about retiring completely but more what should I do with my assets now , so that I will be marching toward that goal rather than just letting my pennies hang out in savings.

Ah! Thank you for the clarification. Okay, what to do with assets now:
https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153
http://jlcollinsnh.com/stock-series/

Hopefully those two links will get you off on the right foot! Let me know if you still have questions beyond those.

Playing with Fire UK

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Re: Tell me what I should do , cash flux and time poor
« Reply #9 on: August 30, 2017, 05:16:13 AM »
I listed my taxes , after them I bring home closer to $6000/month. I do spend approx $2000/month . If I add in everything I buy (clothes , concerts , items for said motorcycles and vehicles , etc . it may push to $3000/month , no more. 

If you are spending $2k, it should take 10 years to get from 0 to FI. If you are spending $3k it should take 17 years.

Tracking and controlling spending is a major factor in getting to your goal quickly.

An interim goal for you might be to be "done saving" for old age retirement. That would then allow you to take mini-retirements as needed and you'd only need to generate enough income to be self sufficient. Or you could consider your spending in a number of phases, so you might have low spending while you are in your RV, then higher spending once you want to be in a stationary house again.

Be aware that going in for RE generally requires more learning, research and input than investing. It might be a great option for you, especially if you have DIY skills and experience, but if you think it will be easier than investing you are setting yourself up for a world of pain.

Raenia

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Re: Tell me what I should do , cash flux and time poor
« Reply #10 on: August 30, 2017, 07:13:05 AM »
For investment advice, Bracken_Joy's links are the way to go.  Let us know if you have any specific questions about what you read there and we'll be happy to help clarify.

In the interest of being able to take a semi-retirement within 5 years, I think you would benefit from keeping more careful track of your expenses.  Is it actually 3k/mo, on average, or is that just an off-the-cuff estimate?  How long it will take you to save up for your mini-retirement depends on what exactly you are spending.

Also, do you really need 4 motorcycles?  Could you get almost as much enjoyment from one or two and sell the others?

Gray_ghost

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Re: Tell me what I should do , cash flux and time poor
« Reply #11 on: August 30, 2017, 07:22:03 AM »
For investment advice, Bracken_Joy's links are the way to go.  Let us know if you have any specific questions about what you read there and we'll be happy to help clarify.

In the interest of being able to take a semi-retirement within 5 years, I think you would benefit from keeping more careful track of your expenses.  Is it actually 3k/mo, on average, or is that just an off-the-cuff estimate?  How long it will take you to save up for your mini-retirement depends on what exactly you are spending.

Also, do you really need 4 motorcycles?  Could you get almost as much enjoyment from one or two and sell the others?


Thank you, I will research those links and revisit this at a later (more informed) date.