Hello mustachians, first time / long time!
About me: 31 y/o, married, living just outside of Philadelphia (Conshohocken). I'm excluding wife's situation until she finishes paying off student loans. My short term goal is to use savings + Roth IRA to purchase a 2nd home, so I can rent out my current house, and hopefully snowball that into a passive income stream to achieve FI. The current house would cash flow ~$800 in rent, and the Roth IRA is not transferable to my 401k :( This was from a past job that did not offer a retirement solution.
Income:
- Gross: $4,450 / mo ($60k / yr) + $10k bonus
- Net: $3,150 (see deductions below)
Deductions & Tax:
- Taxes = $940
- Health Insurance (high deductible) = $100
- Roth 401k Contribution = $220
- HSA = $30
Expenses:
- Mortgage (PITI @4%) = $890
- Utilities = $350
- Car Insurance = $150
- Phone = $60
- Staple expenses* = $200
- Discretionary expenses** = $700
Total Monthly Expenses = $2,275
*Staple expenses include: gas, groceries, work lunches, car maintenance, & toiletries
** Discretionary expenses include: home improvement, entertainment, vacation, gifts, clothes, and misc.
Assets:
- House = $225,000
- $401k = $28,000
- Roth IRA = $30,000
- Car = $10,000
- Savings = $9,000
- Checking = $4,500
- HSA = $4,000
- Brokerage = $2,000
Liabilities:
- Mortgage = $140,000
Additional comments:
- I've seriously considered getting an e-bike to commute to work during fair weather days, but the prices seem to outweigh the benefits for the 15 mile each way commute I have. Would love to pursue that further if e-bikes come down in price!
- The home repair expenses will come down significantly in a few years, but in the mean time are necessary to attract future renters (it's a fixer).
- By renting out my house, my savings rate would jump from ~33% to about 45%, and higher depending on how quickly I can snowball additional rental properties.
Is my plan feasible?!
Thanks fellow mustachians!!
Ryan