Author Topic: ONE THREAD - My Financial Path  (Read 4406 times)

heybro

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ONE THREAD - My Financial Path
« on: October 07, 2014, 05:22:55 PM »
under construction
« Last Edit: October 11, 2014, 12:39:03 AM by heybro »

GGNoob

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Re: ONE THREAD - My Financial Path
« Reply #1 on: October 07, 2014, 07:14:30 PM »
What is your annual income?

How much money do you have each month that is available to save or pay extra to the mortgage (take home pay minus expenses)?

What is the interest rate on the mortgage? Have you considered only paying the minimum and investing that money instead?

I'm confused, what is an Employer Roth IRA? Do you mean Roth 401k? Any other retirement options available from your employer?

You can open your taxable account at Fidelity if you want to stick with them. Any reason you want to go part-time instead of full-time to put more towards savings?


LordSquidworth

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Re: ONE THREAD - My Financial Path
« Reply #2 on: October 07, 2014, 07:32:05 PM »
Once my house is paid for, I want to amass, I'm thinking $100,000 in non-retirement funds.  That way, I think I can confidently start working part-time and know that if I ever need to move, I have some wiggle room for buying another place, or if I want to take a trip or something, I can do that.  I'll need a good place for this $100,000.  Other than that, I'll need to contribute to my Fidelity non-work roth IRA so I know I am secure for retirement.

Thank You!

I'd max the Roth IRA every year, even if it meant delaying building your non-retirement funds. You can access what you put into a Roth IRA penalty free, so you'll always have that emergency fund there.

not_a_trex

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Re: ONE THREAD - My Financial Path
« Reply #3 on: October 07, 2014, 11:23:32 PM »
Have you considered only paying the minimum and investing that money instead?
No, I need my mortgage GONE.  It is a weight on my shoulders.  I hate it.  I want freedom.  Having a mortgage for life is not freedom.  Even if you guarantee me good stock returns, I refuse.

Any reason you want to go part-time instead of full-time to put more towards savings?
Freedom.

Are you really free if you have to continue to work for "freedom"? Through your multiple recent threads there have been a lot of suggestions that, if you take on some debt, will help you achieve financial independence sooner. I think you should do a quick internet search for good debt vs bad debt. A mortgage, for example, can be good debt since it can be a hedge against inflation.
« Last Edit: October 07, 2014, 11:32:20 PM by not_a_trex »

matchewed

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Re: ONE THREAD - My Financial Path
« Reply #4 on: October 08, 2014, 05:56:08 AM »
So what are your questions? Could you be more concise and direct? Asking for books is direct but there is no indication of what kind of books.

GGNoob

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Re: ONE THREAD - My Financial Path
« Reply #5 on: October 08, 2014, 07:08:18 AM »
Two Points:

1. Paying the mortgage down versus investing that money is not a sound argument.  For one, If I know I will have a mortgage forever, my spending will increase.  Part of the reason my spending is so low currently is because I want my mortgage gone so badly.

2. My goal in life is not to amass as much money as possible so that I can be financially independent.  My goal in life is to get this monkey (mortgage) off my back so that I may start living, my young years, in the moment.  Explore options that I cannot explore by having a set monthly payment.

I guess I don't understand. If your goal is #2, then #1 doesn't make sense. You should want to keep the mortgage, keep your spending low, AND keep working full-time so that you can put as much money as possible into savings. Then once you've saved 25 times your annual spending, you can quit your job and be free.

Otherwise you can just come up with a middle ground...my wife and I are NOT mustachian. We drive new cars, have shopping budgets for each of us, we eat out all the time, and we have a rather large vacation budget. But we rarely pay full price for anything and try to save money wherever possible on the things we want. With that said, we are still saving nearly 40% of our income. My estimates are that within the next 3-4 years after paying off a business loan and a few more pay raises, we will be saving over 50% of our income. So if we can save over 50% of our income while not being mustachian with our spending, I'd say we are doing pretty good. Then in 20 years or less, we'll have enough to retire if we'd like to. Otherwise we keep working while continuing to add to our retirement. The point of my story is that you can either keep your spending as low as possible while saving as much as possible or meet in the middle allowing yourself to enjoy the money a bit now while also making sure you don't have to work into your 60s.

You still haven't mentioned your income, but increasing your income may be a great way to allow you to get to where you want.

matchewed

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Re: ONE THREAD - My Financial Path
« Reply #6 on: October 08, 2014, 07:52:33 AM »
I also have to chime in with the mentality that life doesn't begin until you pay off your mortgage. Life is still happening to you. It hasn't stopped because you're in debt. Part of this whole thing (Mustachianism) is to realize that you can optimize your life in what brings value to you. Paying off your mortgage may provide a value to you but that doesn't mean you can't start living. Don't put your living to sometime in the future or you'll never get there.

waltworks

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Re: ONE THREAD - My Financial Path
« Reply #7 on: October 08, 2014, 11:59:44 PM »
Dude, you gotta read the how-to-post-a-case-study sticky. There is no way anyone can help you without a lot more detailed information.

-W

Joel

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Re: ONE THREAD - My Financial Path
« Reply #8 on: October 09, 2014, 12:49:32 AM »
Dude, you gotta read the how-to-post-a-case-study sticky. There is no way anyone can help you without a lot more detailed information.

-W

Yup. I am glad you posted everything in one thread though. I can see paying down your mortgage to get rid of pmi, but I would likely not pay it down faster than that with current rates. Not until I was maximizing all my retirement accounts first at a minimum.

matchewed

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Re: ONE THREAD - My Financial Path
« Reply #9 on: October 09, 2014, 09:16:52 AM »
My question is, does my asset mix make sense or no?

So your question is whether your asset allocation makes sense. The only problem is that the question is only one you can answer. Given your level of knowledge, tolerance of risk, and expected returns you craft an asset allocation that meets your needs/criteria. What you need to do is increase your level of knowledge to one that you're comfortable with. I'd recommend doing a search for investment books and/or reading this thread. Write an Investment Policy Statement. Understand risks. Review as necessary.