Author Topic: Income allocation  (Read 1777 times)

gentmach

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Income allocation
« on: September 03, 2016, 11:28:30 AM »
Okay. I make 425 a week and put 100 in for investing, 100 for the building I own. The building needs a complete renovation though one part is being rented as an apartment.

So my question is do I focus on the building (I hope to turn parts into a workshop,) or investing in stocks for financial independence?

I have also considered putting the building into a corporation so that I can make it financially secure with other investments.

The point is I have worked myself into a knot and appreciate any help.

MustacheAndaHalf

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Re: Income allocation
« Reply #1 on: September 03, 2016, 03:16:41 PM »
Others might have more experience with building renovation and the like.  Can't make that call.

But if you plan on investing $5,200/year ($100/week), consider opening a Roth IRA.  You can contribute up to $5,500 / year into a Roth IRA, and the money doesn't get taxed again.  In bad times you can even raid the Roth IRA for the exact amount of cash you put in - but any growth has to stay until retirement age.

Roth IRA is an account type.  You still have to pick where to have the account, and what to buy.  Just starting out, I'd go with Vanguard and their S&P 500 fund.  The fees are very low and the S&P 500 covers 500 of the largest companies (Apple, Exxon, etc).

gentmach

  • Bristles
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Re: Income allocation
« Reply #2 on: September 03, 2016, 03:20:33 PM »
Crap, I knew I forgot something. I opened a Roth IRA this year. I doubt I will get it fully funded this year, (I had to buy a furnace and repay my savings,) but otherwise funding that will be easy.

Retire-Canada

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Re: Income allocation
« Reply #3 on: September 03, 2016, 05:13:26 PM »
How much do you figure the renovations will cost?

Classical_Liberal

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Re: Income allocation
« Reply #4 on: September 03, 2016, 07:21:10 PM »
How much do you figure the renovations will cost?

...and what will you do with it once it is done?  Are you renovating for personal use or as an investment to rent out?  How much will you save/earn once the renovation is done?  This is the only way to determine a return on your investment. 

gentmach

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Re: Income allocation
« Reply #5 on: September 04, 2016, 06:30:02 AM »
The place needs to be stripped to the studs and completely redone. I'm figuring 20,000 but I haven't done a renovation before so I may be off.

I hope to put a fabrication shop in there with some other projects. Even if I don't use it I could turn it into a namespace.

Retire-Canada

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Re: Income allocation
« Reply #6 on: September 05, 2016, 08:34:22 AM »
The place needs to be stripped to the studs and completely redone. I'm figuring 20,000 but I haven't done a renovation before so I may be off.

So that's about 4yrs of saving at your current savings rate. I can't really tell you what you should do. You need to wargame out the various scenarios. Depending on your age, when you want to retire and how much $$ you need a year to retire that should inform your options.

If you want to post more background info we could give you some more targeted feedback.