Author Topic: i turn 24 tomorrow, how are we doing>?  (Read 6779 times)

literalz

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i turn 24 tomorrow, how are we doing>?
« on: July 15, 2014, 11:15:35 PM »
hello all, i have been a lurker on this forum for quite awhile, though i'm poping my post cherry right now!

a little about my wife and i -

we're 24 years old
have a $333,000.00 mortgage (30year@3.7%), our home is apraised for $400,000.00 (feel confident we could sell at $395,000.00 very quickly). we don't pay PMI since it's a VA loan.

both my wife and my employers do NOT offer a 401k or equivlent so we have been staching money away in our roth IRA's and a taxable account.

our HHI is aprox $70,000.00 after taxes, though literally the only expenses we have are a $1700.00 mortgage payment - my wife and I each have a black card in which our parents flip the bill, basically expense accounts that our parents pay for everything, from car insurance to groceries, to internet - literally everything minus small things that come up like tolls, girl scout cookies, basically things we can't pay with a card. yes i know, we are extremely fortunate. My wife also has a revokable trust that has aprox $225,000.00, we have tried talking our motherinlaw to letting us have the money to throw in our vanguards accounts, though she is against the idea, so basically it's just sitting in a fidelity account generating a small amount of money and having rediculous fee's, at 30 my wife gets the money which will be nice. onto our personal finances...

currently we're saving everything minus our mortgage and small other things that come up, aprox. $4,000.00 a week.

Liquid cash:
$25,000.00

Taxable account:
Vanguards VTSAX $35,000.00
Vanguards VFWAX $10,000.00

Roth IRA's
Vanguards VBMFX $12,000.00

We both have paid off vehicles worth about $35,000.00

We were brought up in very different lives than we're living now, eating at 5 star resturants, wife buying channel purses.. we're definitely getting out of that life style, living within our means.

literalz

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #1 on: July 15, 2014, 11:16:52 PM »
also, no student loan debt at all. our only debt worth mentioning is our mortgage.

surfhb

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #2 on: July 15, 2014, 11:43:58 PM »
Ahh yeah....I'd say you're doing pretty good

Why do your parents support two grown people who have jobs is the question I'll ask?    Regardless, I'd pay off the mortgage early if this is your situation indefinitely.    Stash the rest investing in low cost index funds.  Hopefully someone will come by with some good advice on tax diversion strategies ?

Beyond that I guess my advice is be a good husband and son ;)

« Last Edit: July 15, 2014, 11:51:08 PM by surfhb »

mxt0133

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #3 on: July 15, 2014, 11:56:32 PM »
We were brought up in very different lives than we're living now, eating at 5 star resturants, wife buying channel purses.. we're definitely getting out of that life style, living within our means.

May I ask what exactly 'living within our means' entails?  Can you support your current lifestyle if you didn't have those black cards?  The only downside I see in your situation is if you become dependent on those black cards and cannot support yourselves without them.  But if you see little risk of those cards going way then user your savings to invest aggressively, start a business, invest in risky business with potential for high returns.  Take advantage of your situation while it lasts.

surfhb

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #4 on: July 16, 2014, 12:07:24 AM »
......Or perhaps provide a scholarship for people less fortunate ?

Btw....how much do your 2 black cards total each month?   


penguin456

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #5 on: July 16, 2014, 12:11:21 AM »
Do you and your wife not want to support yourselves on a day to day basis?  I would be really uncomfortable with this arrangement personally. Are there any strings to this support?  Do your parents feel they can weigh in on your life choices because they pay for everything you do?  When you have kids will they be supporting them too?

If this were my situation I would prefer to pay for my own expenses. Since graduating from school and getting my first job I have had the rule that i support myself. If my parents want to give me a financial gift, that is great, but i put it towards investments because it is important to me to say that i support myself on my own.

Would your parents be open to  giving you a financial gift once per year that you could put towards investments rather than paying for your gas and groceries?

You are doing well at saving your own money, but since you dont pay for anything other than a mortgage it is hard to tell if you are actually doing well in reducing your lifestyle. How do you even define living within your means if you dont pay for anything?

As for saving, i would pay down the house and open ani HSA if available to you. Then you pay out of pocket for medical (or in your case perhaps your parents will) and the HSA grows like an IRA and can be used for anything after age 65.

literalz

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #6 on: July 16, 2014, 12:13:52 AM »
sorry, the black cards are not in our name - we're just authorized spenders with our own cards. we can support ourselfs without use of the black cards however we're absolutely taking advantage of them (hello loyal3 :):):)).

my parents however aren't living a very frugal lifestyle - they typically spend 15-20k a month on their card. i'm not sure what kind of damage my MIL does with hers, though both of our families have old money to support their lifestyle, we're just now getting out of the habbits we were born into.

literalz

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #7 on: July 16, 2014, 12:17:53 AM »
i mean, typical families that set up 529s and pay for their childrens college? if our parents can fund our life wouldnt the financially smart choice to make be to let them?

they don't judge us at all, they simply can afford it.

it's similar to inheritence? i'm sure a large percentage of americans crutch on receiving inheritence? we're able to take advantage of our parents wealth while they are alive!!

i'm so sorry for gramatical errors, very sleepy.

penguin456

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #8 on: July 16, 2014, 12:33:07 AM »
Paying for your child's college is very different than supporting them for their entire life. I think you are very wrong that a large % of americans have inheritances to rely on as a crutch. Certainly some people have inheritances that supplement income (a relatively small %, and may dont get this until they are retirement age themselves), but having an inheritance to fund someone's entire lifestyle is very unusual.

You will have to decide whether this degree of parental support is OK or not. It is very important to my husband and I that our children be independent financially when they grow up, as we see it as an important aspect of character. We do hope to pay for college and graduate school, but that is a means to making our children self supporting.

You are still very young. In 5 years it may start to seem a bit odd to you that your parents buy your underwear and gas for your car. Being financially independent (not just from a job but also from family support) is an incredible feeling that you might ultimately decide you want to experience. If not, you wouldnt be the first rich kids to live off of their parents money and there are certainly worse things.


Goldielocks

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #9 on: July 16, 2014, 01:06:11 AM »
I highly support the annual allowance suggestion.  Use lots of independent grown up self reliant reasons when you suggest it.   You will find out if there are any control strings OR expectations when you bring it up.

Inheritance...  Hmmm. I think I will be well over 60 when or if I see anything, all going well, and they may need a lot of private care money in the final years.  No counting on it here.  At 60+, if I have not covered myself I would be sunk, so to speak.

My SIL and family receive at least $10k per year from my MIL.  It may be more but I asked not to have money mentioned anymore years ago. . i was getting jealous.... And it is not my parent but my in-laws.

Now I am glad that we never received it too as she is not maturing well, if you know what I mean.  E.g. I suggest you read millionaire mind.  It may not apply to you, but forewarned of normal human (bad) behavior is forearmed.


GGNoob

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #10 on: July 16, 2014, 07:43:28 AM »
my wife and I each have a black card in which our parents flip the bill

I'm very jealous right now...

As long as you're family can afford you to continue to use the black cards, I don't see the harm in taking advantage of it. This allows you to save as much as possible so you and you're wife can have a secure financial future on your own.

Who's health insurance are you on? Are you eligible for an HSA? If so, or if you can get a high deductible health plan to become eligible, it may be worth getting so you can max out your HSA every year, especially since you don't have 401ks to contribute to.

I'm a big Betterment.com fan. Have you looked into it at all? With all of your money in IRAs and Vanguard taxable accounts, it could be worth looking into so that you could take advantage of the new tax loss harvesting. Just a thought...

hodedofome

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #11 on: July 16, 2014, 08:19:10 AM »
I have a few close friends with trust funds and family money. There's nothing wrong with receiving money and gifts from family members, although it is a mentality and a lifestyle foreign to most on this message board. My grandpa is a very shrewd investor and nobody in the family knows how much money he really has. He lives reasonably simple - still lives in the same 2400 sq ft ranch style home that he paid $25k for, drives Toyotas and wears old clothes. However he also just moved about a thousand acres of mineral-rich land (and at one time owned several thousand acres) into a family partnership and has a paid off beachhouse. He's happy to give his kids and grandkids money for education, helps with down payments on our first houses and he's paid a lot towards my down-syndrome cousin's care. Nobody knows if he will leave $$$ to the family after his death or give it to charity. Frankly I don't care, whatever he wants is fine by me.

You are doing well to keep your lifestyle simple and break away from your upbringings. The fact that both you and your wife are in agreement on this (I'm assuming ya'll are in agreement...) is even more incredible.

Most of the folks that I know with trust funds spend lavishly and make horrible investments in private businesses, private partnerships, and other stuff that they know nothing about. Get very educated and experienced before you ever start throwing real amounts of money at stuff beyond index funds and savings accounts. My friends could easily have 2-3x more money if they had just kept their investing simple.

In any case, max out all tax-free accounts first. Roth-IRA, traditional IRA, HSA. Start your kid's college funds if you'd like. I don't know that there's a pressing reason to try and pay off your house early, unless being debt-free allows your heart to be 'free.' 3.7% is a good interest rate and even if stocks only return the same amount over 30 years, you'd at least get some tax savings from deducting interest. Keep staching the extra money in index funds with an asset allocation that is pre-planned and executed according to your plan.

I'd also recommend reading investing books on a regular basis. You have the potential to have a lot of $$$ come your way in your lifetime, and with that a lot of people who will give you advice on what you should do with it. Some of these people are just there to part you from your money. Others have good intentions but are idiots. Some give good advice but charge a lot of $$$ for it. Very few give good advice from a wealth of knowledge and experience and don't want something from you. If you already know what you would do with a certain amount of $$$, then you can easily cut through the noise and stick to your plan. Have fun, and never forget how extremely fortunate you are.

cbr shadow

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #12 on: July 16, 2014, 09:16:50 AM »
I find it weird that the black card thing is such an issue with people here.. maybe some jealousy?  I'm jealous!
I don't see any reason for you to get rid of that as long as you're not putting financial strain on your parents by doing it.  Sounds like they're very well off so it's not an issue.  It also sounds like you're not abusing it at all, considering you've found this website and are posting about it.

How is that so different than some of the posts I see on here about inheritance?  If I post that I inherited $1M and am retiring early because of it I would have very few critics here.. How about if my family gave me a high paying job at the family business making far more than I could elsewhere? 


Cromacster

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #13 on: July 16, 2014, 09:39:21 AM »
I find it weird that the black card thing is such an issue with people here.. maybe some jealousy?  I'm jealous!
I don't see any reason for you to get rid of that as long as you're not putting financial strain on your parents by doing it.  Sounds like they're very well off so it's not an issue.  It also sounds like you're not abusing it at all, considering you've found this website and are posting about it.

Yea there probably jealousy.  But I think the main issue is the mentality behind it.

sorry, the black cards are not in our name - we're just authorized spenders with our own cards. we can support ourselfs without use of the black cards however we're absolutely taking advantage of them (hello loyal3 :):):)).

Two large tenets of this blog and forums are self sufficiency and low consumption.  From what the OP has said I do not get the impression of self sufficiency or low consumption.

Overall I feel this is a troll.

Quote
We have a trust and unlimited spending black card covered by our parents.  We're 24 do you think we're doing alright?

House, most likely facepunch, but don't know location

Cars, facepunch.

Spending, most likely facepunch with unlimited black card.

Overall opinion.  No you aren't doing alright if you dropped the family support.  From a mustachian perspective.

« Last Edit: July 16, 2014, 09:41:58 AM by Cromacster »

waltworks

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #14 on: July 16, 2014, 10:06:32 AM »
You're doing great for trustfunder kids!

Seriously, I'd tell my folks to donate my black card allowance to a deserving charity, pay my own way, and take pride in being a grownup.

-W

biffwhipster

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #15 on: July 16, 2014, 10:30:16 AM »
In 5 years it may start to seem a bit odd to you that your parents buy your underwear

I had a good laugh at this one. Then I remembered that my mother still buys me goofy print boxers on different holidays.

Jags4186

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #16 on: July 16, 2014, 12:15:15 PM »
I for one am incredibly jelly.


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Melf

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #17 on: July 16, 2014, 02:47:44 PM »
My first thought was "WTF?" and then some jealousy after that.  If this is on the up and up then I'd say you're doing pretty well.  It's hard to go wrong if you two are indeed saving and investing almost $4000 a week at this young age.  If you're doing that and plan to embrace a mustachian lifestyle as well, then all should be golden considering your family situations.  As to the comment about most people getting inheritances.......not that I'm aware of.

sirdoug007

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #18 on: July 16, 2014, 03:41:53 PM »
That must be a typo.  He said his household income after taxes was $70k.  Subtract $20k for the mortgage payments and you have right around $4k per month.

Shor

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Re: i turn 24 tomorrow, how are we doing>?
« Reply #19 on: July 16, 2014, 04:09:59 PM »
I'm jealous.. I think.. not sure..

It's hard to gauge how low your expenses are or how great your income is when there's no base line to judge it off of.
As it is, this post simply says: all expenses are not in the expenses sheet. All of the income goes towards investments. Obviously it's fantastic. You can set up and accumulate your stache much faster than the typical worker ever could.

What you need to determine now is what your actual expenses are, and at what point will you no longer need to rely on the external parental fund to bankroll all of your expenses. Once you have your actual monthly expenses in front of you can you truly make a judgement on what you really need to be spending your money on.

Your current listed assets seem mid range average, which a person making your salary could afford without their parental cards, and still be stashing an okay amount for retirement.  With that in mind, figure out your savings rate based on your actual expenses to determine how well you're actually doing, and how much is simply being covered up with the black cards.

Be wary of justifying non-useful or wasteful expenses simply because it's not coming directly out of your pocket. Consider your whole family as one unit with multiple incomes and multiple outflows. The game is of course to minimize the wasteful spending on your end. Let us know what the expense reports come out to. Should be interesting, at least.