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[isellsunshine]

Hi all!

Dave Ramsey transplant here.
Curious what you all think of our situation.

We met/married in 2007 after a lot of years of stupid and found ourselves in serious debit.
Not the good kind either - we had pretty much nothing to show for it.

Here's our numbers: (sorry if this isn't the best format, I'm new and don't know all the nomenclature yet).

Ages: 47
Debt paid off to date: $176,000 (hurts to type that)
Debt left: $5,000 to my dad from loan in 2008. We make $500 month payment to him at his request (he doesn't want lump sum in other words).
Cars: 1984 Toyota Tercel, 2007 Dodge Caliber, 2002 Dodge Truck (all paid for). (combined I don't think the cars are worth $5,000)
Rental house: 2011 mortgage including taxes and insurance: $650, Rent: $800. Worth ~$150,000, Owe: ~$82,000
RV: 2007 Big Horn: Paid off. Worth ~$12,000. We live in this full time in a park in Arizona. Yearly lot rent $2,200 - includes water, gas, heated pool, and gym
Cash reserve: $15,000 (high, real estate can be a little feast/famine and just haven't figured out what to do with the funds yet).
Retirement Savings: $1,300. Just opened an eTrade account this month. No idea how/where to invest. Husband will get a small pension with his work for the city and he puts additional $100 a month into a 403b.

Income: Husband $1,000 a month, but has 8 weeks off in summer so $10,000 per year.  (his work gets us health insurance since I work for myself)
I'm a Realtor but started a side business to help pay off debt helping entrepreneurs write lead generation books.
$24,000 Book income
$40,000 Real estate (often higher).
Plan is to live on the book income and invest the rest as that income is stable/consistent and year long.

Reluctant to just ship the savings to retirement as may have larger tax bill from 2015.

Living in the RV is awesome btw. No yard maintenance, and I can't remember when cleaning took more than 20 minutes of my time.
I highly recommend it, weather permitting of course.

Don't know when our FIRE date is, as I'm just learning about it.
I *think* our number is $600,000 from what I can tell but that's based on napkin numbers.

We've spend so much focus last few years focusing on paying down the debt and reducing expenses that I honestly have no clue what comes next.
Looking for some advice on where to go/focus on from here.

[Bracken_Joy]

Welcome! You included a lot of great info, but you may learn even more playing with the spreadsheet here: http://forum.mrmoneymustache.com/ask-a-mustachian/how-to-write-a-'case-study'-topic/

That will help you get a lot of info about possible FIRE date, etc.

It sounds to me like the big step now is to start your retirement saving! Where are you in terms of knowing about retirement account types (traditional vs roth IRA, 401ks, etc) and how to invest within them? That info will certainly help with advice on that front.

And if you haven't read it, this is a cornerstone of the FIRE idea: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

[Bracken_Joy]

Another tool people love on here to estimate FIRE dates, #s required, etc: http://www.cfiresim.com/

[isellsunshine]

Awesome! Thanks...off to plug in our numbers.

[isellsunshine]

Welcome and glad you have found the light at the end of the debt-ridden tunnel. 

Seems like you have a big issue with a lack of retirement savings, as far as that, why not sell the house and pocket the difference and start a retirement fund with that?

You say you only pay $2200 yearly for the lot and that includes water, gas and other amenities. If that's your ultimate/final living place, why have a house only make you $150 a month?  It just seems like its not worth it.

If I was you, without knowing the rest of the details, I would sell the house. Keep a reserve of $15k in the bank and another $5k cash, and would start a retirement account through Vanguard. 

Your RV is paid for. The lot only costs <$200 a month. Bills, besides electricity(?) are included - which is insanely cheap - so why have the mortgage hanging over you?

I'm sure others, a lot more knowledgeable, will chime in with their help, but that's just my main thing. Sell the house and live a cheap cost of living life on the RV and save $$.

You make a very valid point re: the house.
We always thought it would be nice to have a paid off house waiting for us in retirement to then sell or live off the income and to get someone else to pay off the mortgage for us seemed like a smart idea.

Trying to be open to a better way however.

Could someone help us see what $50,000 in an investment account could be worth in 10 years and 20 years? I honestly don't know how to figure that out.

In general how do people decide when to keep a rental vs. selling it and investing the proceeds? Is there a formula of sorts?

[FrugalZony]

Welcome from a fellow AZ wannbe FIREee ;)
Congratulations on making some major changes and progress!!

Living in the RV is awesome btw. No yard maintenance, and I can't remember when cleaning took more than 20 minutes of my time.
I highly recommend it, weather permitting of course.

+1  on all of these accounts!
Sold the McMansion in the North East Valley and now live full time in an RV and LOVING it!!
Your lot rent is a super deal considering all the amenities.
Mind me asking where abouts you are located? You don't have to answer if you are not comfortable with this.
We have some infrequent get togethers here, none planned at the moment, unfortunately, but watch this thread in case you are interested:
http://forum.mrmoneymustache.com/meetups-and-social-events/any-phoenicians-here/msg901302/#msg901302
I bet we'd have a lot to chat about!

There were quite a few people with alternative living arrangements at the last one (living on a boat, in a van etc. so an RV feels incredibly spacious in comparison) so you'll fit right in ;)

[isellsunshine]

Welcome from a fellow AZ wannbe FIREee ;)
Congratulations on making some major changes and progress!!

Living in the RV is awesome btw. No yard maintenance, and I can't remember when cleaning took more than 20 minutes of my time.
I highly recommend it, weather permitting of course.

+1  on all of these accounts!
Sold the McMansion in the North East Valley and now live full time in an RV and LOVING it!!
Your lot rent is a super deal considering all the amenities.
Mind me asking where abouts you are located? You don't have to answer if you are not comfortable with this.
We have some infrequent get togethers here, none planned at the moment, unfortunately, but watch this thread in case you are interested:
http://forum.mrmoneymustache.com/meetups-and-social-events/any-phoenicians-here/msg901302/#msg901302
I bet we'd have a lot to chat about!

There were quite a few people with alternative living arrangements at the last one (living on a boat, in a van etc. so an RV feels incredibly spacious in comparison) so you'll fit right in ;)

We live in west Mesa - actually the location couldn't be more awesome imo. 1 minute from the 202 and 4 minutes from the 101.
The park is called Seyenna Vistas located at 625 W. McKellips Road, Mesa.  It's gated with a clubhouse, 2 pools, security guards at night. It's 50% mobile homes and 50% RVs.

Our lot rent doesn't include electric (i wish!), but the pools are heated and the RVers's have their own private work out gym. #spoiled.

All my friends frown at our lifestyle. I just smile and say it's not for everyone.
We have soooo much more free time now.
We spend about 30 hours a week (no joke) playing game boards at various peoples houses/meetup groups.
When we had the mortgage, car payments, etc, we were too exhausted to do anything than work, eat, tv, sleep, repeat.

Would love to meet up with you guys at your next get together.
Now that the weather is warming up....hint, hint.

[Bracken_Joy]

Welcome and glad you have found the light at the end of the debt-ridden tunnel. 

Seems like you have a big issue with a lack of retirement savings, as far as that, why not sell the house and pocket the difference and start a retirement fund with that?

You say you only pay $2200 yearly for the lot and that includes water, gas and other amenities. If that's your ultimate/final living place, why have a house only make you $150 a month?  It just seems like its not worth it.

If I was you, without knowing the rest of the details, I would sell the house. Keep a reserve of $15k in the bank and another $5k cash, and would start a retirement account through Vanguard. 

Your RV is paid for. The lot only costs <$200 a month. Bills, besides electricity(?) are included - which is insanely cheap - so why have the mortgage hanging over you?

I'm sure others, a lot more knowledgeable, will chime in with their help, but that's just my main thing. Sell the house and live a cheap cost of living life on the RV and save $$.

You make a very valid point re: the house.
We always thought it would be nice to have a paid off house waiting for us in retirement to then sell or live off the income and to get someone else to pay off the mortgage for us seemed like a smart idea.

Trying to be open to a better way however.

Could someone help us see what $50,000 in an investment account could be worth in 10 years and 20 years? I honestly don't know how to figure that out.

In general how do people decide when to keep a rental vs. selling it and investing the proceeds? Is there a formula of sorts?

I generally use this: http://www.timevalue.com/products/tcalc-financial-calculators/future-value-calculator.aspx

There are fancier ones, but I find it's the easiest interface for me.

[FrugalZony]

We live in west Mesa - actually the location couldn't be more awesome imo. 1 minute from the 202 and 4 minutes from the 101.
The park is called Seyenna Vistas located at 625 W. McKellips Road, Mesa.  It's gated with a clubhouse, 2 pools, security guards at night. It's 50% mobile homes and 50% RVs.

Our lot rent doesn't include electric (i wish!), but the pools are heated and the RVers's have their own private work out gym. #spoiled.

All my friends frown at our lifestyle. I just smile and say it's not for everyone.
We have soooo much more free time now.
We spend about 30 hours a week (no joke) playing game boards at various peoples houses/meetup groups.
When we had the mortgage, car payments, etc, we were too exhausted to do anything than work, eat, tv, sleep, repeat.

Would love to meet up with you guys at your next get together.
Now that the weather is warming up....hint, hint.

Thanks for the info, we'll look into this! I believe that's the one the folks moved to, from whom we bought our RV.
We cannot commit to a year though, our spot right now is close to everything, also in Mesa, but is more expensive than yours
with less amenities.

And yes, some of my friends frown on this as well, but hey let them pay off the big houses and the cars and all the stuff!
I have never been happier!

It's a bit ironic though that you sell real estate and prefer living in an RV yourself ;)


I agree with what others have said that you have a bit of catching up to do as far as retirement savings are concerned,
but you have definitely come a long way and have the right mindset.

I am not a tax specialist, so I'll let the pros chime in on this, but is there any way to divert more of your husbands income into his 403?
Even if that means you'll net close to zero after healthcare and retirement accounts, you are planning to live on your income anyways.

[MDM]

Could someone help us see what $50,000 in an investment account could be worth in 10 years and 20 years? I honestly don't know how to figure that out.

In general how do people decide when to keep a rental vs. selling it and investing the proceeds? Is there a formula of sorts?

For the $50K growth, you can go to the 'Misc. calcs' tab of the spreadsheet Bracken_Joy mentioned.  E.g., enter the first six numbers below and Excel calculates the number you want at the bottom.  Of course, knowing the correct rate of return for the next 10 years (7% in the example below) is another question....

PV   50000
PMT   0
i   7.000%
n   10
freq   12
type   0
FV   $100,483


For the rent vs. buy, see http://www.mrmoneymustache.com/2015/07/27/rent-vs-buy/ and the NY Times web site linked therein.