Hello everyone, my name is Djeayzonne, and I am a recovering consumer.
I first stumbled onto this site after finally getting to a point at which I could start thinking about the issue of investing vs. paying off the mortgage earlier.
I originally did an 80/15/5 setup to avoid PMI. I have always made at least small extra payments each month, but I decided a few months ago to treat the second mortgage (15-year note at 8%) as emergency debt. So, that will be my focus for the next 6-9 months. Afterwards, I will refinance the 30-year note to a 15-year note. Hopefully the interest rate will still be around 2.5% at that time. If that is the case, I have decided I am comfortable with just making the minimum payment (something I have never really done before) while I start focusing on investing.
So, onto how my situation may be unique. I only worked in the US for a few years before moving to Japan. I was really young at the time, and had no interest in a 401K, but I was saving for a 20% down payment on my first house. Ended up using that money to go to Japan, but anyway, the point is I have no 401K.
The struggles with establishing myself as a professional in Japan was difficult and time-consuming. Investing is not a thing there either, but I did manage to build up a nice amount of savings. I used most of that for the relocation/reestablishment back in the US after 10 years in Japan and the down payment on the house in which I now live. I don't really trust their attitude and therefore policies towards foreigners, so I just decided to receive a lump-sum for my contributions to their version of social security. I only worked for 2 years at a normal company after returning to the US, and as I was focused on reestablishing myself here and getting a house, I chose not to participate in 401K with an intent to start it after things settled down somewhat and getting a house was finished.
I was laid off just a few months after getting a house due to the company filing bankruptcy. I took my freelance side hustle and went full-time with it. It has been a struggle to get this business to a mildly successful state, but I am finally a break-even point. Meaning no real debt besides the mortgage, but no real investments either.
So, I don't think I can expect too much from social security when the time comes. At the moment, all I have is two Roth accounts, one for me and the wife, with Edward Jones; the total value of which is only 3,000 at the moment.
In addition, I have about 15K in cash; though part of that is just a hold-over in place of escrow to pay property taxes, which is ridiculously high for me living in Texas.
So, in a nut-shell, what should I do after I finish paying off the second mortgage and refinance the primary?
My goal is to get pretty aggressive and at least be able to semi-retire 7 years from now, which is to say, I bought the house in an area that I knew was about to explode, so I plan to sell after some of this commercial infrastructure finally gets built, and the huge gains in property values every year start to stabilize by which time my monthly property tax contributions will probably be just under the mortgage payment itself! Yikes.
At that point, I plan to leave Texas to somewhere with more reasonable property taxes and clear about 300 K from the sale of my house even after subtracting the funds to buy the next house in cash. Then, I basically plan to keep doing what I do now, just at a much reduced volume, say around 1/4 of the amount of work I do now, which should cover or nearly cover my actual living expenses (expecting that to be around 36K a year by that time).
Anyway, starting from next year after the refinance, I should be able to invest/do something with between 3-8 thousand a month with typical months being right around 5K as my income varies each month working for myself at home.
One other thing to mention though I don't know if that would really affect any strategy you might offer as advice, but my wife and I do plan to return to Japan eventually, or more likely, maintain a residence in both countries. Part of the reason for that is health insurance and costs of health care are certainly much better affairs over there. I am frankly worried about staying in the US after a certain age. Part of it is that we would both like to enjoy the positive aspects of both environments.
Sorry the long post, but when asked for advice, I know I always want as much information as possible before giving any, so this wall of text was written at least with good intentions.
Thanks and glad to be part of the community even though I am still struggling with some of the ideas and life-style choices.