Input please!

[abpa]

Hi!  I’ve been an on/off lurker for a long time.  Take a look at our numbers, if you don’t mind.

I’m 47 and DH is 49
My income: 90,900/yr
DH income: 62,000
I am starting a side hustle but may not see significant $ for a few months.  I’m hoping that this will replace my W4 job income within a year or two.

Mortgage: $937/mo PITI
                  4% interest
                  $129,343 balance
      We always round up the payment to $1000.

Debt:  Loan for solar panels $12,084
            payment $128
            5.6% interest
Credit Card: don’t carry a balance
No student loan Debt
We have been making extra monthly payments on both the solar loan ($200) and mortgage ($500).  Interest payments annoy me.

No car payments, DH drives company car.  I have an ’06 Prius that I bought used and paid for with cash.  I’d like to bike to work but all possible routes have huge safety risks.


Car insurance $63/mo (stupid fender bender which was totally my fault)
Fuel for the Prius: $20/mo
Groceries: $280/mo
Dining out: approximately $130/mo
Utilities:  Gas bill ranges from $45-90/mo
      Water ranges from $50-120/mo
       Electricity (even though we make 100% of our power, we still have to send the electric company $7/mo)
Cell phones: Currently on Virgin Mobile introductory plan for $1/mo/line.  This will increase to $10/mo/line.  I cover my daughter’s bill as well.
Internet: $75/mo
Cleaning Lady: (yes, I know… but I am working full time and starting a business.  I can mop or I can exercise/sleep/cook/have a life) $160/mo
Daughter’s car insurance (I’m helping her out while she goes back to college): $105/mo
Medication: $55/mo (thank goodness for GoodRX)

Total monthly expenses: $2637 (including extra debt payments)

Savings/Assets
Traditional IRA:  $128,798 ($422/mo)
VTSAX:  $17,431 (($752/mo)
403(b): $2227 (I haven’t been at this job long and haven’t been contributing as much as I should have been but am starting to work towards max contribution)
HSA: $2k
Cash: $10k ($1850/mo)
Home Equity: $60k

DH does not have a retirement account and has strange ideas about the stock market.  He’s super frugal, though, and has agreed to put his money towards acquiring a rental property.

I sort of fell off the saving/investing wagon for a couple of years and was helping my daughter with her tuition (no regrets but it put a serious dent in the savings).  She had a head injury and had to drop out for a while. Fortunately, she’s made a full recovery and is looking at a complete change in her career plan to something much more practical.  However, she will be covering her own education expenses from now on.  It sort of feels like we are starting over financially.

There are a few non-mustachian items but overall I think we’ve whittled our budget down as low as we can.  We’re planning to pay off the solar panels by the end of the year (we could probaby do it sooner but it would wipe out our cash cushion for a few months, which makes me uncomfortable). 

I'd like to retire in 7 years (sooner if possible) I’m not sure what else to do to maximize what we’ve got.  Any suggestions would be helpful.

[nurseart]

I'm rather new but happy to pop in with some feedback since clearly you guys are the coolest people ever (Prius + solar panels + GoodRx)

Since your deductions aren't in there I am not sure what you are netting each month precisely. But, it looks like you are spending about 2k a month.

http://engaging-data.com/freedom-calculator/#calendarupdate this calculator is pretty great at showing where you are developed by a MMM forum participant. IF your expenses don't go up in retirement and you keep spending about 2k a month that would mean you plan on spending 24k a year in FIRE (really? are you sure? what about health care?) If that was the case here is the output for you:

Your $160000 in savings gives you approximately 97 days of freedom per year (at your current spending level of $24000 per year).
This means that your savings could support you (without you having to work) through April 7 each and every year.
An additional day of freedom requires you to increase your savings by $1644.

I'm sure you have read this article http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/.

Seven years may or may not be a reasonable goal for you. From you budget, I personally think it looks okay and that you have prioritized spending on what is important to you. I'd suggest playing around with some of the calculators, thinking about where you really want to be financially and taking it from there. Are you ABLE to cut things from your budget? Of course. You don't have to dine out at all or pay for cleaning. I'm sure you have already done whatever tax credits and other local grants might be available in your area for the solar panels.

Best of luck, and stay safe biking!

[letired]

I'm sure you've seen the link before, but I like spending some time with the Investment Order writeup. I'm not great at these things, but it seems likely there is some optimization you could be doing around debt payoff and pre-tax savings that might help keep you on your desired timeline. Personally I would switch most or all of your extra debt payments toward the higher interest solar loan, but there are also good debt payoff calculators to help you make those kind of choices.

Secondly, regarding your timeline, there are a few good tools out there to help you.
 - https://networthify.com/calculator/earlyretirement
 - https://lab.madfientist.com/
 - http://www.cfiresim.com/
 - https://www.firecalc.com/

[Ben Kurtz]

Not much to quibble with here.

I would suggest putting all extra payments into the solar panel loan first, rather than splitting it with the mortgage, as the solar panel loan has a higher rate.

It actually is possible to purchase investment real estate through an IRA. You need a "self-directed IRA" from a niche custodian, and the paperwork can be a bit of a pain, but the reason I bring it up is that your family can reap the tax advantages of your husband contributing to an IRA or 401k even if the ultimate goal is to buy real estate: Contribute, get the tax deduction, invest in a relatively stable bond fund or whatever else doesn't offend your husband's odd views of the stock market, and when the nest egg is big enough roll everything into a self-directed IRA and buy your investment property. (Most 401k plans these days allow in-service rollovers whenever you like, but worth checking before trapping cash where you don't want it.) At your income levels the tax benefits probably make it worth the effort.

[Lews Therin]

+1 to Ben Kurtz, you should stop paying into the mortgage (apart from the minimum) and put everything on the solar panels, since it will be 1.6% extra for you. Depending on how safe your paychecks are, I`d even think about using a bit of the cash to payoff the solar debt quicker.

[abpa]

Thanks for chiming in!  I've been throwing around the solar panel v mortgage pay-down for a couple of months.  It should have been a totally logical decision but I got hung up on seeing the mortgage balance going down.

DH works for a small biz that doesn't offer benefits of any kind (they let him work from home while we were in Africa for two years, so he's pretty loyal).  I've been thinking about just opening an IRA for him through Vanguard so that at least he has SOMETHING.  He grew up in Eastern Europe and doesn't trust anything he can't see/hear/touch.

I'm a Physician Assistant and am full time faculty at a PA program so my job is pretty secure (even if something happened, I wouldn't be unemployed long). 

I checked on ACA plans for my area last fall and even the high deductible plans were crazy expensive and who knows what will happen in the next few years.  As crappy as our current plan is, it's the most affordable option for us currently.  My plan is to have the house paid off so that the expense of healthcare takes the place of the cost of the mortgage (if that makes sense).

[Lews Therin]

Then I recommend using a portion of your cash fund, which you can refill every paycheck. 10k is a substancial amount for someone with a steady paycheck!

[marty998]

Your daughter is a student. Which means she has all the time in the world.

She can learn how to mop, and save you $40 a week. Think of it as her paying board.

I would also take most of the cash and pay off your solar loan. You'll very quickly rebuild your cash buffer @ $2000 a month.

[fuzzy math]

You're a professor at a PA school? Your salary is about $20-40k low for the field if you wanted to go back to care... Could you pick up 1-2 weekend days month at an urgent care to moonlight? One PA I know teaches 4 days a week and does her old job on Fridays.

Does you employer have a 457? That would be better than taxable...

[abpa]

My daughter lives out of state, it's not really practical for her to come to mop for us. 

I'm in the process of starting a practice, so will make up that $20k with that income (hopefully more).  It would take a really special situation for me to practice medicine for another organization.  I took a break from clinical practice because I was burned to a crisp and am just now ready to get back in after a year in academics.  The university has a 403(b).

[abpa]

Hey there, I have an update!  We've paid off the solar panels, which were our only outstanding debt besides the mortgage!  Thanks for helping me get my priorities focused!

I also sold a short article to a gardening website (which convinced me that writing with the sole purpose of getting that SEO hit is a soul sucking proposition).  Yay me!

[freya]

Congratulations!!!  Excellent move.

You're running a very tight ship, and your trajectory to FIRE is set.  Apart from increasing income, the only significant improvements you could make are minimizing the tax bite by taking full advantage of tax advantaged accounts, and setting a reasonable investment scheme for the retirement accounts.  Check out the bogleheads wiki and portfoliocharts.com, if that would help your husband to get comfortable with a passive, balanced approach to investing that is probably very different from what he thinks of as traditional stock investing.  Keeping your money working for you in tax-advantaged accounts is very powerful and you shouldn't give that up