26. Mostly liquid assets. Thinking of going back to school.

[zoochadookdook]

Hey all,  26m (27 in may) here. i worked through college with a small llc pulling in around 30-35k/year.

I liquidated all of the inventory under the assumption I wouldn't have time to pursue it aside from weekends with a full time job. I now make $22/hour with no benefits (around 2900/month take home). Searching for another one in the mean time/considering going back to school and pursuing a engineering degree.

Life Situation: Filing single (for now). No kids. Michigan.


Adjusted Gross Income:  Previous years around 35k self employed. Just started a new job @22/hour (contractor/up for direct hire in 5 months if I stay) and hope to supplement another 4k/year. Puts me around 40k.  Currently looking for a more flexible position with benefits. One with flextime would be ideal as I could easily keep on the self employment hustle and net around 10-15k off the time annually.

Liquid/liquitable  assets: (I have around 1600 of this in stocks/bitcoin which I can sell whenever, 5000 is in unsold assets up for sale, the rest is cash in checking/savings)
--$63,250
Roth IRA (All Vanguard Target Date 2060)
--$26,300 (2200 contributed 2019, 3800 still to do)

Debts
--13200 in student loans that interest starts accumulating in july 4% (I plan on paying off with 3 credit cards and getting another 2400 off in reward cash back)
--$1500 2018 taxes (paid)

This puts me at around $50,000 cash/$26000 ira after all debts are paid down.

My living expenses:
$1200/month (mortgage,property taxes, insurance, utilities).
$200 Assorted, gas, food etc.
Roth ira contribution $580 or so

Specific Question(s):

I have several issues I need to address.

 One is refinancing my mortgage to a fixed rate. My income AGI the last few years has not been enough, but between 2018/2019 should be. Currently it is a private loan with a variable rate in line with the prime rate -.5% of so against my fathers 401k. I own around 110k total, purchase price was $141k, house is worth around 180-190k in the current market.

The next issue is health insurance. I was previously on Medicare, but now need to search out new HC. Any "more affordable" options out there? 

Obviously the issue of having 63k liquid is pretty bad. I don't have any huge purchases coming up but I'm still unsure of if I will take some time to travel and train (I teach wrestling and have thought of pursuing that for 6 months or so while i'm still young/trying to make some sort of work out of it), if i'll need a newer car in the next few years (old honda should last that long hopefully) etc. I'm trying to keep at lease some of it easier to liquidate/not inaccessible for xx years for these reasons. No idea how to allocate it currently though.

Last of all-I'm considering pursuing a engineering degree. I love being self employed-loved it through college as the hours were great but the consistency/scale to grow/benefits just weren't there. I figured if I went back to school pursuing a higher end degree than I currently hold (I have a BS in Management Information Systems)-I would have more time to work on a better business structure than I had previously. Worse case scenario I finish a highly sought after degree and am financially better off going forward. Best case scenario-I do find a niche of self employment and can do that full time (I previously resold apple products/gym equipment etc but was looking towards flipping houses/contractor project management as I have several friends in the business). Has anyone else had a period of exploring different industries in terms of self employment/similar and finding success/failure? Sitting at a desk 45 hours a week has shown me the light of the self employed schedule and I value that happiness. I also have passion for improving things/design and traveling-which seems to point to consulting work as a civil engineer hence that field. Basically I'm attempting to set myself up financially and mentally (work isn't work if you like it right?).


Any advice on allocations as they currently stand/other issues?

Thanks

[cincystache]

Book Recommendation: Set for Life by Scott Trench

Happy early birthday! It seems like you are kind of all over the place but I'll try to answer your questions at least...

1. Why don't you just sell the house? Just rent a super cheap place for a year or two, better yet, find a couple roommates. That keeps you ultra flexible and able to move for a job if/when you find something better. You borrowed money against your dad's 401k to buy a house? WTF? I'd get out of that situation ASAP.

2. Healthcare.gov or get a job with benefits like you are talking about.

3. 50k in liquid assets is not a bad thing, it gives you lots of options once you finally decide on something. Just stick it in an online savings account getting 2.2% and call it good for now. I would pay off your student loan today (side note: how are you planning to get 2,400 in cash back rewards by paying off 13,200 in student loans? That's 18% cash back. I also don't know how you are going to pay student loans with credit cards, most loan providers don't take credit cards or else people would just pay off their SL debt with a CC and file bankruptcy, I digress...).

4. I can't comment much on your engineering degree plan but I will say I work with a LOT of engineers that sit at a desk all day and are very far from "self-employed". Engineering is a good field but you don't sound like you have a huge passion for it at this point. Also, travel for work is cool when you're 27 and single but sucks if you ever have a wife and young kids back home IMO. I would give yourself a chance and try out a few business/career ideas on the cheap without sinking 10's of thousands into another bachelors degree, you already have one bachelors degree... Try the wrestling route if you love it and see if there is a way to monetize. Talk to some of your several friends that work in real estate and see what they do. Get on biggerpockets, join the forums, listen to the podcast and meet some real estate investors in your area, they have good books too. You sound like a good candidate for property management. You can use that experience and your liquid funds to buy a few rental properties and manage them yourself... That is pretty flexible, scale-able, and doesn't require sitting at a desk.

[use2betrix]

I work with tons and tons of engineers. I do not consider it as a being a profession geared towards self employment hardly at all. Maybe if you get your P.E. And work as a contractor basis or something.

Have you tried to look for employment related to your MIS degree? I know several very, very successful people who have utilized their MIS degree’s to get there.

[zoochadookdook]

Book Recommendation: Set for Life by Scott Trench

Happy early birthday! It seems like you are kind of all over the place but I'll try to answer your questions at least...

1. Why don't you just sell the house? Just rent a super cheap place for a year or two, better yet, find a couple roommates. That keeps you ultra flexible and able to move for a job if/when you find something better. You borrowed money against your dad's 401k to buy a house? WTF? I'd get out of that situation ASAP.

*The girlfriend is pretty attached to it and it really isn't too expensive to own-I'm not against selling it but it is local and the housing market is good in my area right now (high rent is rampant). Technically he borrowed it and i've been paying it-but I'm looking to refinance fixed on my own mortgage with this current job qualifying me by may.

2. Healthcare.gov or get a job with benefits like you are talking about.

*Great will be paroozing for it this week.

3. 50k in liquid assets is not a bad thing, it gives you lots of options once you finally decide on something. Just stick it in an online savings account getting 2.2% and call it good for now. I would pay off your student loan today (side note: how are you planning to get 2,400 in cash back rewards by paying off 13,200 in student loans? That's 18% cash back. I also don't know how you are going to pay student loans with credit cards, most loan providers don't take credit cards or else people would just pay off their SL debt with a CC and file bankruptcy, I digress...).

*You can't pay with CC for mortgages/SL's, etc-but you can pay with a check. A checking service called plastiq charges like 2.5% to convert a CC payment to a check sent to a payment of your choice. You get 1% back with most cards so it's taking that 1.5% fee. It used to code back as 3% back on the chase ink preferred cards until some dork bought a Tesla lol. Anyways the CIP cards offer 80k UR points plus a 20k bonus for a refferal when 5k is spent in 3 months. I can get 2 of those and that'll kick back 2000 from 10k. I'm also getting the 60k points from a saffire reserve card bonus. You have to stagger applications and reduce credit limits in between but it can be lucrative if the spending was planned anyways.

4. I can't comment much on your engineering degree plan but I will say I work with a LOT of engineers that sit at a desk all day and are very far from "self-employed". Engineering is a good field but you don't sound like you have a huge passion for it at this point. Also, travel for work is cool when you're 27 and single but sucks if you ever have a wife and young kids back home IMO. I would give yourself a chance and try out a few business/career ideas on the cheap without sinking 10's of thousands into another bachelors degree, you already have one bachelors degree... Try the wrestling route if you love it and see if there is a way to monetize. Talk to some of your several friends that work in real estate and see what they do. Get on biggerpockets, join the forums, listen to the podcast and meet some real estate investors in your area, they have good books too. You sound like a good candidate for property management. You can use that experience and your liquid funds to buy a few rental properties and manage them yourself... That is pretty flexible, scale-able, and doesn't require sitting at a desk.

*right on. I'm eyeballing the rental market and will be talking with my father after I secure a new mortgage on this property. That frees up his capital and he's interested in pursuing property rental as a potential partner which would be great. Thanks for the advice.

[The Gecko]

I work with tons and tons of engineers. I do not consider it as a being a profession geared towards self employment hardly at all. Maybe if you get your P.E. And work as a contractor basis or something.

Have you tried to look for employment related to your MIS degree? I know several very, very successful people who have utilized their MIS degree’s to get there.

As a partner in a smallish engineering firm, I can confirm this statement. Depending on your client base, you will need expensive liability and errors and omission insurance which increases as your billings go up. Pretty much every state in the country requires you to have a PE if you are going to sell engineering services, and may also require you to have a Certificate of Authorization for your company. More fees to pay yearly for renewals.

The catch with engineering is the big multinationals who pay the best, only want to deal with firms that can meet all of their requirements, and they rarely hire mom and pop operations, unless you are highly specialized or have an "in" to sponsor you or your company.

To get a PE you need to work for at least 4 years (sometimes more if the experience is not in design) under a PE, pass two 8 hour exams (FE and PE) and then complete each state's application which usually requires a law exam of some kind, 5 references (3 PEs), and a fee of course.

Civil engineering may give you opportunities to be in the field especially if you go towards construction management/field engineering but there is still a lot of desk time.