Divorced and Old, Request Face-Punches

[RetireOrDieTrying]

Howdy, all. Some folks *might* recognize me from another forum, from whence I was almost immediately pointed to MMM. After trolling the back articles, I dig it muchly, because it's a more holistic approach - health, wealth, prudence, charity, all being sides to the same thing, and happiness coming from internal optimism. This very much is congruent with my personal posture on these things.

I'm gonna do a brief backstory/intro, then segue into the current case study, culminating in requests for general as well as specific feedback on certain points.

Intro: I'm 53 years old, XY chromosome, 3.5 years into a recovery from divorce. Former Mrs. was utterly undisciplined about money (and I was as well, just not in her league).

Coming out of divorce, the good:

• $117k/yr. very stable income
• Good health
• Break was clean - no kids, no alimony - nuttin'

The bad:

• $25 in savings (not a typo)
• $400 in checking (not a typo)
• No vehicle of any kind to drive
• No saleable assets (I'm not being coy here - I had my clothes and one bicycle, PERIOD.)

The hideous:

• New-ish motor home in which to live, upside-down on $200k loan; 29 years left on 30 year 8.99%*
• (cough, cough) $115k credit card debt

*for additional horror, the quarter-million-dollar motor home was purchased with the down payment entirely on credit cards.

This gut-wrenching event turned out to yield an incredible silver lining, in that I finally swiveled my focus to the predicament I was in, dug in my heels, and embarked upon a different path.

My brother gave me an old GMC Yukon he had extra. Ugly as sin, but quiet, reliable, comfortable. Thankfully, it's 4WD, so I can flat-tow it behind the motor home. I was (and remain) enormously grateful for his generosity when I needed it most.

Then I buckled down, living on hot dogs and ramen (not recommended; I didn't account for good nutrition) to focus on ownership of the hole I was in. No new clothes. No paid TV. No drinking of any kind, ever. No eating out. No going out. No entertainment. No new smartphones/gadgets. Cut cell plan to the bone. Shopped vehicle/RV insurance. Along the way (just under 2 years ago) I was fortunate to get a replacement job with more income.

I did get one piece of guidance from a friend, and that was because of my age to begin maximizing my advantaged buckets, even if I had to readjust my debt reduction schedule.

Current (savings numbers go up twice per month, so this is just today's):

• $220k/yr. income
• 1.5 years ago MH refinanced from 30y to 10y, 8.99% to 3.69%. Payment nearly the same, about $428k chopped off the repayment. Current balance: $160k
• No other debt whatsoever
• $30k emergency fund
• $85k 401(k)
• $23k Roth IRA
• $8k HSA (never, EVER touched, nor will it be)
• I still drive the now-28-year-old Yukon, and am happy to do so. I did get it inexpensively painted and now it looks very nice. Repairs and maintenance are averaging about $110/mo. Driven maybe 6k mi./yr.
• Fully remote job - no commute whatsoever
• IRS filing status S-0. Likely to be fine-tuned as I evidently gave Uncle Sam an interest-free $3,164 loan last year
• Dependents: just moi
• Legal domicile: Texas, so no state income tax whatsoever
• Taxes are running about 18% of gross
• Health insurance $64/mo.
• My living expenses are about 21% of gross (largely due to the RV payment/ins. I'm including in this number)
• Savings rate is roundabout 61%
• 401k is maxed, including catch-up. I front-load it to my employer's maximum allowed 25% of gross, so it hits the ceiling about mid-year
• HSA maxed
• IRA->Roth IRA conversion max-out done on New Year's Day, at 12:01 Eastern Time (I stay up for this, not for confetti), including catch-up

Solicited feedback item #1: The GMC. I'm totally happy with it, even though it's utterly, preposterously more than I need. It was free, it can be towed, it's driven little. At 6k miles/yr., 16-ish mpg, the fuel savings of buying something else is never gonna amortize the cost of another vehicle. The GMC isn't worth enough to sell and buy something else, *especially* something that can be towed. For those of you who are puzzled why I keep mentioning that - only certain cars/trucks can be flat-towed behind a motor home. There are VERY few to choose from on the market, and most of them (*cough*Jeep Wrangler*cough*) have stratospheric prices married to terrible mpg and high insurance. Am I missing anything with the conclusion to keep driving this thing until I'm dead?

Solicited feedback item #2: I've run out of advantaged buckets. I'm looking for opinions on next steps. I've considered both index funds and Target Retirement funds. Since I have SO LITTLE time left to get my ducks in a row for retirement whilst I'm still productive, I have a healthy risk appetite. Not crypto kinda risk, but you get the drift.

Solicited feedback item #3: This one is odd. I am driven absolutely, stark-raving insane at the amount of trash generated by shopping. I'll go to the store and carry out two kitchen-sized bags of trash, full of wrappers, single-use plastic containers, cardboard boxes, blister packs, zip ties, twist ties, single-use bags, shrink wrap, and the list goes on. I carry reusable shopping bags, but other than that - does anyone have any sensible, non-ridiculous input on how I can reduce this ghastly (to me, anyway) footprint? I'm not exactly an environmentalist - I have NO problem taking what I need from the earth, but.... I don't need this. I can't imagine that anyone does. Drive-through dining is even worse (which I easily sidestep by simply not doing it).

As a side note, along this journey a very unexpected thing happened - I genuinely stopped wanting stuff. I wasn't trying to do this, but after several years of "do I REALLY need this more than I want to put the dough toward debt?" it simply became habit. Bizarrely, I'm happier now than I've ever been, without all the stuff which owns me (wording deliberate).

Side note 2: I pay attention to nutrition, sleep, and health now. My fondest wish is that I'd begun this part sooner, because the cost/reward is so favorable.

Thanks, all - I look forward to some robustly Mustachian feedback covering any aspect of what I've shared, even if it comes in the form of a needed face-punch somewhere.

[MDM]

RetireOrDieTrying, welcome to the forum.

Where do you see yourself relative to the suggested steps in the Investment Order post?

[RetireOrDieTrying]

RetireOrDieTrying, welcome to the forum.

Where do you see yourself relative to the suggested steps in the Investment Order post?

Thanks! Step 8 (6 isn't currently an option with my employer's plan).

[MDM]

Thanks! Step 8 (6 isn't currently an option with my employer's plan).

In that case, "Keep up the good work!" seems apt!

Going through Getting started - Bogleheads and then Tax-efficient fund placement - Bogleheads might be worthwhile.  Good luck!

[Villanelle]

There are several stores near me (in a large urban area and associated suburbs) that allow you to bring containers to fill with beans, grains, nuts, and other dry goods.  So basically no waste.

If you area has a Buy Nothing group on Facebook or via the app, join immediately.  Whenever you need something, post an ask.  Also be sure to gift items so you aren't just taking  It's an amazing way to avoid waste both buy getting your items used, and by finding new life for your unused items.  Groups vary greatly, but in mine I see people give away pretty incredible (as in, generous) things.  Someone buys a food item and doesn't like it?  Gift the rest of the packets.  Someone upgraded their TV or outgrew their pants or switched the color of their comforter?  Gifts.  Any manner of things appear. 

[former player]

Congratulations on the turn-around.

Reducing packaging waste is hard.  For grocery shopping, buy single ingredients rather than highly processed foods. Meat and fish are usually highly packaged, so reduce purchases of those.  Buy fruit and vegetables loose rather than in packages, take your own bags to put them in.  Check what packaging is recyclable and where you can recycle it - some stores take back packaging, or allow you to discard excessive packaging before you leave.  Try farmers' markets and specialist food shops, although these can be more expensive than supermarkets - I particularly dislike having to pay more in order to reduce waste but do it to a certain extent.  Places selling ethnic foods are often a good bet for cheaper ingredients and basic packaging.  Villanelle is right about looking for stores that will weigh ingredients to put into your own containers.

Soap, shampoo and conditioner can all come as bars rather than in plastic containers.  Limit the number of different cleaners you use - fabric softener is a con.  A toothbrush with a wooden handle seems made to last longer than the plastic sort, although the bristles are still plastic they are better quality.  Toothpicks rather than floss is a possibility.

[zolotiyeruki]

Wow, that's quite a turnaround from where you were before!  Congrats on making some solid strides.  In 3.5 years, you've increased your net worth by something close to $200k.  That is super impressive.

Here are a few thoughts:
Item #1:  You are wise to consider the lifetime costs of the vehicle, and not just the gas mileage.  You're spending more on maintaining it than you are fueling it, so I wouldn't sweat the bad gas mileage right now.  I'm a little puzzled by the high maintenance/repair costs.  Are you seeing a lot of those?  And if you're currently paying a mechanic to service it, have you considered learning to do your own repairs?
Item #2:   You're at a glorious point where you've plucked the low-hanging fruit in terms of best practices.  Do you plan to do charitable giving once you retire?  If so, you may consider a Donor Advised Fund, which will allow you to take the tax deduction now (when you're in a higher marginal bracket), and send the money to the various charities later (when you'll presumably be in a lower bracket).  Other than that, I'd suggest you simply plow it into index funds and stop worrying about it.
Item #3:  I don't have a lot to suggest here.  How often do you go shopping, and have the two trash bags of packaging?  Could you buy in bulk and store the excess?

[Zamboni]

Quite impressive what you have completed already!

#1 I would keep it until it truly expires.
#2 The Target Date retirement funds all have higher fees than buying the exact same mixture of funds individually. On Vanguard you can click on the retirement date funds and see what blends of funds they hold. If you have the inclination, you can replicate on your own by buying the individual index funds separately. Usually the Target Retirement funds are a pretty simple blend . . . pick one to replicate that has a Target date further out if you have a higher risk tolerance. What I mean is the advisor would probably say you should be in the 2035 fund . . . so picking the 2045 fund to replicate would be slightly higher risk, if that makes sense.
#3 The packaging thing is even harder when you are shopping for one . . . I get that. Since you live in an RV, you having limited storage area. You probably don't have a chest freezer to buy an entire butchered cow or something like that. You probably don't have space for a 50 pound bag of rice, which is what I buy. So my solution to your packaging dilemma is to sell your RV, take the hit on being under water now, and find a more permanent homestead with better storage for bulk food. I'm sure the RV living is something you have gone through a gazillion times already, and you've decided to stay living in it for <insert reasons>, so please feel welcome to just ignore my thoughts on this.

[Josiecat22222]

I'd first like to echo all of the positive feedback above.  You've done a great job with reducing expenses and dramatically increasing your net worth over 3.5 years and are on a path to success.

Some thoughts:

You have a fully remote job, which means you can live *ANYWHERE*.  The motorhome is already underwater and will likely remain even more so as they depreciate fairly quickly.  The "facepunch" is this :sell the albatross.  Sell it now.  It will never be worth more than it is today.  Move to a studio apartment (you are already comfortable living in a small space).  Move to a place where you can bicycle to the store, library, etc and ditch the car, too.  While you don't drive much, you are still paying for insurance, maintenance, etc. 

Why are you doing Roth conversions?  It is being taxed at your current marginal rate which is likely high given your income.  Your 401k should be accessible to you in 6 years (age 59.5) so this may not be in your best interests.

As always, these are just one person's thoughts.  I hope these thoughts are helpful to you and I wish you the best in moving forward.

 

[Dicey]

Where do you park your motorhome? Are you a DIY type who can do your own maintenance as the rig ages?

[RetireOrDieTrying]

Where do you park your motorhome? Are you a DIY type who can do your own maintenance as the rig ages?

I stay for free, mostly. I have family all over America who have installed RV hookups to encourage me to visit. Aside from that, lots of government land and Elks lodges.

I'm very experienced mechanically.

[Dicey]

Where do you park your motorhome? Are you a DIY type who can do your own maintenance as the rig ages?

I stay for free, mostly. I have family all over America who have installed RV hookups to encourage me to visit. Aside from that, lots of government land and Elks lodges.

I'm very experienced mechanically.

Yeah, I don't think I'd necessarily encourage you to sell it then. Keep writing, tell us more. Asking for a friend.

[Dicey]

Where do you park your motorhome? Are you a DIY type who can do your own maintenance as the rig ages?

I stay for free, mostly. I have family all over America who have installed RV hookups to encourage me to visit. Aside from that, lots of government land and Elks lodges.

I'm very experienced mechanically.

Yeah, I don't think I'd necessarily encourage you to sell it then. Keep writing, tell us more. Asking for a friend.

I don't know as it still might be much cheaper to sell the underwater RV and rent a small apt (or share a place with someone) than it would to continue to pay 9% loan on $200k plus whatever percent his $115k CC loan for the down payment would be. Probably depends on how far underwater he is now (not counting future depreciation on the RV plus maintenance and repair costs, insurance, fuel, registration, etc). But if he could rent a place for $1000/month or less all inclusive he might way better off in the long run. OP have you done the math to compare?

Also living in a small apt or room rental will reduce your environmental footprint compared to the RV. If you can ditch the RV and the vehicle you will likely see both a financial gain as well as an environmental one. As a minimalist who currently lives in a 500 sf ADU and doesn't own a car I use very little in the way of resources and don't generate much, if any, non-recyclable trash/waste.

Sparty, I know you read the forum on your phone. I think somewhere in that wall'o print, OP mentions that he refi-d to a sub 4% loan.

[maisymouser]

Quite impressive what you have completed already!

#1 I would keep it until it truly expires.
#2 The Target Date retirement funds all have higher fees than buying the exact same mixture of funds individually. On Vanguard you can click on the retirement date funds and see what blends of funds they hold. If you have the inclination, you can replicate on your own by buying the individual index funds separately. Usually the Target Retirement funds are a pretty simple blend . . . pick one to replicate that has a Target date further out if you have a higher risk tolerance. What I mean is the advisor would probably say you should be in the 2035 fund . . . so picking the 2045 fund to replicate would be slightly higher risk, if that makes sense.
#3 The packaging thing is even harder when you are shopping for one . . . I get that. Since you live in an RV, you having limited storage area. You probably don't have a chest freezer to buy an entire butchered cow or something like that. You probably don't have space for a 50 pound bag of rice, which is what I buy. So my solution to your packaging dilemma is to sell your RV, take the hit on being under water now, and find a more permanent homestead with better storage for bulk food. I'm sure the RV living is something you have gone through a gazillion times already, and you've decided to stay living in it for <insert reasons>, so please feel welcome to just ignore my thoughts on this.

Didn't Vanguard target retirement funds being held in taxable accounts get like, seriously hammered last year? That scared me off them but perhaps that's a once-in-a-lifetime type of event. Not to mention Zamboni's point about them typically being a bit more expensive than managing funds yourself.

https://www.cnbc.com/2022/03/15/vanguard-created-big-tax-bills-for-target-date-fund-investors-lawsuit-claims.html