Author Topic: How to protect/invest half of my income  (Read 2088 times)

leighb

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How to protect/invest half of my income
« on: July 30, 2015, 02:01:31 PM »
I have recently paid off 90% my mortgage. This brings my living expenses down to about 1350 a month. Which means I can invest the remaining 1350, which had been going to the mortgage. I would like to find a way to invest this money pre-taxed.

Larger Financial Picture: We are a family of 3. Typical total income is 50,000-80,000. Debt is limited to the remaining mortgage.  I work for a charter school therefore I have a public employee's retirement account. I have maxed out my Roth for the last 3 years and will continue to do so. I have invested in rental properties (11 doors) and have a good amount invested in a regular stock account. Emergency fund taken care of.

Here's my question: Should I be convincing my school to start a 403B or something else? Is there a better way to invest my paycheck pre-taxed? Any advice is welcome.

Thanks for all your wisdom
« Last Edit: August 01, 2015, 07:25:52 PM by leighb »

marty998

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Re: How to protect/invest the half of my income
« Reply #1 on: July 30, 2015, 04:04:24 PM »
Sounds like you already know the answer to your question.

What does your partner think? Are the 2 of you on the same page about this?

MDM

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Re: How to protect/invest the half of my income
« Reply #2 on: July 30, 2015, 04:31:52 PM »
...I would like to find a way to invest this money pre-taxed.

Larger Financial Picture: ...I work for a charter school therefore I have a public employee's retirement account. I have maxed out my Roth for the last 3 years and will continue to do so.

Here's my question: Should I be convincing my school to start a 403B or something else? Is there a better way to invest my paycheck pre-taxed?

1) If you are classified as a public employee you may already have access to a 403b or 457 through the school district or other organization that includes the charter school.  If not, as marty998 said, the answer is in your question: yes, persuade the school admin to give you those options.

2) If you really want pre-tax savings immediately, you could do traditional IRAs instead of Roths.

Money Badger

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Re: How to protect/invest the half of my income
« Reply #3 on: July 31, 2015, 06:00:05 PM »
Ideas...

Incorporate an LLC with 1 or more of the rental properties that you want some further liability protection.   The corporate entity could sustain a 401K plan and be a write off.   

Another idea, is focus on tax exempt CEFs that generate income from your state's municipal obligations.  Totally tax free, and the threat (or soon reality) of rising interest rates is making "Mr. Market" become irrational with some CEFs near 2009/2010 levels.   Dollar cost invest your new-found monthly income stream in them, set the payments to reinvest and let it ride tax free after that and avoid the whole mania over 401Ks.    My accountant marvelled at how much people focus on not paying taxes when they can work the game to their favor without limits.

Go, invest, win, FIRE!

leighb

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Re: How to protect/invest the half of my income
« Reply #4 on: August 01, 2015, 06:43:05 PM »

What does your partner think? Are the 2 of you on the same page about this?

He doesn't much like to talk about money and finance. I think it's fun and I like learning about it. I honestly haven't thought to ask him about it... There I just asked him. He likes the idea.


Incorporate an LLC with 1 or more of the rental properties that you want some further liability protection.   The corporate entity could sustain a 401K plan and be a write off.   
Another idea, is focus on tax exempt CEFs...


I have an LLC setup for the properties. They are not doing a very good job of making money, yet. So I haven't worried too much about how to invest from that pool. But that's not a bad idea.
This might be a silly question but can I use a 401K plan setup in my LLC to invest excess paycheck from my teaching job?

I don't know anything about CEFs I'll look into them.