Thoughts and advices on my current fiancial situation

[Envesty]

Hi All,

I am live outside of USA, I am from New Zealand.

I need some guidance and advice so that i know i am on the right track (pathway to retirement and been set for life).

My maths below:

Age: 30 years old
Salary: $72k (net income: $54k p.a. after tax)
House purchased last year October: $438k, The house is worth $520k, i will have $339k loan.
Repayments on $339k mortgage: Fortnightly repayment $1.5k  ( at this rate i am paying i should finish paying of the house in 11-13 year time)
Credit card debt $21k interest free
Student loan debt current balance $540 dollars.



Current Income (monthly):
Salary: $3.6k
Rental income: $1.5k

Out goings:
House expenses including insurance and rates: $600 dollars
Cars expenses plus gas on my car: $345 dollars
Mortgage repayments: $3k
Food: $160 dollars
Entertainment: $100 dollars

Surplus of $895 (monthly).

I know I have a credit card debt of $21k, i will start to pay it off $200 each month by month starting next month. At the moment is interest free.

Asset:
House equity of $181k
Car market value $20k
Silver Billions (silver eagles oz): $18k
Share market paper value: $9k
Investment: $6k


Given the above mentioned figures, my goal is to keep paying the house off and pay of the credit debt and live a simple life for the next 8-9 years, then look for another house to rent out and pay of that rental also.

I won't be starting a family anytime soon, another 3-4 years i will look into a family.

Do you guys think it will be wise to sell my car and poor that money into the credit card payment? buy a bomb car for $2-3k to drive around in for the next 5 years?

[lizzigee]

Hi Envesty,  How long is that credit card interest free for?  Id probably say sell the car anyway rather than have that much tied up in a vehicle, but I'm not sure that paying off the credit card is the best use of the funds. Also, what are silver billions, and what's the interest rate on the mortgage. I'm a kiwi too and I know our interest rates are still much higher than the States. Maybe you're better off investing some of the car money or paying some off your mortgage quicker. you can always use equity in your house later to fund a rental property

[NZBubble]

Hi envesty,

Firstly, congrats on owning a house on your own at 30. Although maybe you are posting two incomes and when you talk about a family you mean kids, rather than kids plus partner? Still, big ups.

NZ interest rates are slowly creeping back down, but at around 6% on average, IMO the quicker you get that mortgage down the better.

But......that credit card. Paying it off at $200 pm will take you 8.75 years. Even if the interest rate remains at 0%, which would be extremely surprising.

I too would sell the $20k car, but I would pay off that last bit of SL to get rid of it, and then pay the balance off the card, after spending 4-5k on a replacement. Then I would throw most of my money at the card until it's gone. Then I would start furiously paying down my mortgage.

I actually have a friend who has driven a series of $500 cars for 20 years. Generally sells the car for parts for $100 after they die. They have lasted anywhere from 18 months to 6 years. Her income has usually been a sickness benefit so expensive repairs see the car dumped and the next one bought.
She budgets $10 per week for repairs/ replacement car. But I would suggest looking at the car auctions for a replacement. You can get mechanical checks done before the auctions. 

[Envesty]

Hi envesty,

Firstly, congrats on owning a house on your own at 30. Although maybe you are posting two incomes and when you talk about a family you mean kids, rather than kids plus partner? Still, big ups.

NZ interest rates are slowly creeping back down, but at around 6% on average, IMO the quicker you get that mortgage down the better.

But......that credit card. Paying it off at $200 pm will take you 8.75 years. Even if the interest rate remains at 0%, which would be extremely surprising.

I too would sell the $20k car, but I would pay off that last bit of SL to get rid of it, and then pay the balance off the card, after spending 4-5k on a replacement. Then I would throw most of my money at the card until it's gone. Then I would start furiously paying down my mortgage.

I actually have a friend who has driven a series of $500 cars for 20 years. Generally sells the car for parts for $100 after they die. They have lasted anywhere from 18 months to 6 years. Her income has usually been a sickness benefit so expensive repairs see the car dumped and the next one bought.
She budgets $10 per week for repairs/ replacement car. But I would suggest looking at the car auctions for a replacement. You can get mechanical checks done before the auctions.

At the moment is only 1 income but have a GF she is staying with me but she doesn't help with any bills expect the groceries. She too has a personal loan of $3k to pay off she makes in the hand $2,200 a month.

Yes, that is what i am going to do sell the car and use the cash to pay of the SL and portion of the credit card debt.

I am up to my limits on paying more money towards the mortgage my mortgage interest rate is 5.79% lock until Oct 2016, minimum payment is $921 fortnightly but i am paying $1.5k.

[Envesty]

Hi Envesty,  How long is that credit card interest free for?  Id probably say sell the car anyway rather than have that much tied up in a vehicle, but I'm not sure that paying off the credit card is the best use of the funds. Also, what are silver billions, and what's the interest rate on the mortgage. I'm a kiwi too and I know our interest rates are still much higher than the States. Maybe you're better off investing some of the car money or paying some off your mortgage quicker. you can always use equity in your house later to fund a rental property

Interest free for 1 more than.

Silver billions is 99% pure silver coins, hopefully one day the fiat currency will crash and we will be trading with silver and golds again.

Int rate on the mortgage is at 5.79%


Another option is sell all my Silver coins, it will take me 2 months to sell it all on the market but i should get back $15-17k which i can dump into the mortgage.

I really cant wait to have a mortgage free home by the age of 41-42 years old, hopefully the house value will be $600-700k.

[BarkyardBQ]

Billion: 1,000,000,000 of something, or 1 thousand million

Buillion: calculated and weighed quantities of precious metals

Bouillon: broth, stock, something for soups

[NZBubble]

Hi Envesty,  How long is that credit card interest free for?  Id probably say sell the car anyway rather than have that much tied up in a vehicle, but I'm not sure that paying off the credit card is the best use of the funds. Also, what are silver billions, and what's the interest rate on the mortgage. I'm a kiwi too and I know our interest rates are still much higher than the States. Maybe you're better off investing some of the car money or paying some off your mortgage quicker. you can always use equity in your house later to fund a rental property

Interest free for 1 more than.

Silver billions is 99% pure silver coins, hopefully one day the fiat currency will crash and we will be trading with silver and golds again.

Int rate on the mortgage is at 5.79%


Another option is sell all my Silver coins, it will take me 2 months to sell it all on the market but i should get back $15-17k which i can dump into the mortgage.

I really cant wait to have a mortgage free home by the age of 41-42 years old, hopefully the house value will be $600-700k.

Sorry, I didn't quite get how long the interest free period is? Did you mean one more year?

If only one more year, then you will be paying up to 21% on the remains credit card balance.
That would wipe out any gains you are making.
To me, it does not make any sense to have money invested in silver bullion ( but then TBH I don't know if these things have increased in value for you) and a debt looming at goodness knows what interest rate.

Personally, I would be dropping back my mortgage payments and downgrading my car, paying off that card just as fast as my little legs will let me. And the student loan although that is only $600ish?

Or I would keep my mortgage payments up and sell the bullion asap, using that to pay down the card.

But if silver bullion is your long term investment strategy and it has good returns so far, sell the car first.

[Envesty]

Hi Envesty,  How long is that credit card interest free for?  Id probably say sell the car anyway rather than have that much tied up in a vehicle, but I'm not sure that paying off the credit card is the best use of the funds. Also, what are silver billions, and what's the interest rate on the mortgage. I'm a kiwi too and I know our interest rates are still much higher than the States. Maybe you're better off investing some of the car money or paying some off your mortgage quicker. you can always use equity in your house later to fund a rental property

Interest free for 1 more than.

Silver billions is 99% pure silver coins, hopefully one day the fiat currency will crash and we will be trading with silver and golds again.

Int rate on the mortgage is at 5.79%


Another option is sell all my Silver coins, it will take me 2 months to sell it all on the market but i should get back $15-17k which i can dump into the mortgage.

I really cant wait to have a mortgage free home by the age of 41-42 years old, hopefully the house value will be $600-700k.

Sorry, I didn't quite get how long the interest free period is? Did you mean one more year?

If only one more year, then you will be paying up to 21% on the remains credit card balance.
That would wipe out any gains you are making.
To me, it does not make any sense to have money invested in silver bullion ( but then TBH I don't know if these things have increased in value for you) and a debt looming at goodness knows what interest rate.

Personally, I would be dropping back my mortgage payments and downgrading my car, paying off that card just as fast as my little legs will let me. And the student loan although that is only $600ish?

Or I would keep my mortgage payments up and sell the bullion asap, using that to pay down the card.

But if silver bullion is your long term investment strategy and it has good returns so far, sell the car first.

Thanks for your advice. I will be selling the car, using the proceeds to tackle my credit card debt.

The credit card debt was not for a spending spree, it was for a carport and a auto gate for the house.

[NZBubble]

I bet you've increased the value of your house with those additions :0)

Good luck on your journey!

[Envesty]

I bet you've increased the value of your house with those additions :0)

Good luck on your journey!

Yes i have, I bought the house in Auckland for $438k, last week the house agent said i can easily get around $530-540k

[NZBubble]

It's a good gain all right.

I think things might be slowing a little though. July Barfoot & Thompson report headline yesterday seemed to suggest prices dropped last month.

And a workmate sold her North Shore house at auction last weekend, it was actually passed in though, and only got sold by agent negotiations with the unsuccessful bidders. There was a lot of going backward and forward about small price changes. And 6 houses prior to hers didn't sell either.

They may go a little slower now but they're always rising overall, that's for sure.

[Envesty]

I will hold and ride the property wave cycle. Its my first house.

My credit card debt is climbing slowly its up to $23k now! I am very gutted and sad.

But i think the only way to solve this debt crisis problem is to sell the car and start all over again.

[lizzigee]

You've gotta stop using the card! (The usual what were you thinking, hair on fire emergency spiel.) And sell the silver and the car now, clear your card in full, then reduce the limit to a couple of grand, for REAL emergencies only. 

Without knowing anything about investing in it at all, I doubt you're going to get a 21% return on silver year in and year out, but your credit card debt will keep on incurring that interest once it kicks in and if you can't even reduce it while there's no interest accruing, then things aren't gonna be pretty once interest starts accumulating

[JJNL]

+1 on that. Stop using the card at all - lock it away, put it somewhere you can't see it, have a friend keep it for you if you need to, just stop using it! My personal opinion about investing in things like silver bullion is that it's total BS. Precious metals are never a reliable investment, and unlike what a lot of ranters on the internet are saying, we are NOT on the brink of total economic collapse or any other world event that would make it likely we'd start using them for currency again. Even if you disagree with that, can we at least agree that this is an uncertainty, and a big one, and that it is 100% certain that your credit card will not remain at 0% interest for long? Your hair is on fire, Envesty, and having silver bullion lying around 'just in case' is a luxury you cannot afford. Sell it now, while silver prices are booming anyway, pay off all your debts, and only after you are on financial dry land allow yourself to think about purchasing luxury items. The same goes for the expensive car.

[Envesty]

Today i took $4850 out on my credit card and jad a punt on tennis which i lost :(   hence why the credit card debt is to $24k now.  I said to myself with my head down after the lost punt that. I need to get my act together!

My dad will give me $16k cash for my car which gives remaining balace of $8k. Which I will slowly pay off $400 per month.

I dont want to sell the silver bullion just yet!