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Re: Need advice on financial planning at age 40

Welcome to the forum. You mentioned retirement accounts in your last question but did not include any in your assets section. How much retirement savings do you have? This is my first question because this should be a primary financial concern at age 40. I would sell the house before your five-year ...
by NorCalDad
Sun Apr 20, 2014 10:49 am
 
Forum: Personal Finance (Not Investing)
Topic: Need advice on financial planning at age 40
Replies: 5
Views: 676

Re: Family Financial Health Check and Advice

I like your plan of attack, but your emergency fund seems too small in light of your overall situation. Because you have only one income, a mortgage and two children, I think you need an even bigger buffer than most families - like 6 months or more. After you contribute enough to get your maximum 40...
by NorCalDad
Sat Apr 19, 2014 8:40 pm
 
Forum: Personal Finance (Not Investing)
Topic: Family Financial Health Check and Advice
Replies: 14
Views: 1195

Re: *poor* Bogleheads

nebraskaman, I get where you're coming from. There are some very specific threads here that are inapplicable to us because we have less income, and there are some that are inapplicable because we have more income. But the basic themes about low-cost investing, developing an investment plan, saving f...
by NorCalDad
Fri Apr 18, 2014 10:48 am
 
Forum: Forum Issues and Administration
Topic: *poor* Bogleheads
Replies: 78
Views: 5217

Re: Life Insurance Policy Necessary for 25 year old?

I was in a similar situation, cashed out the life insurance and put it into my Roth. You don't currently need life insurance since your SO has her house in order and you have more than enough assets to cover any costs associated with your death. When you have a child, buy 20-year term. Don't rely on...
by NorCalDad
Tue Apr 15, 2014 11:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Life Insurance Policy Necessary for 25 year old?
Replies: 11
Views: 838

Re: How to maintain a good balance in financial outlook?

I think we recognize our priorities and feel free to spend money there. We also spend as little as possible on areas that are not priorities. For instance, our home, commute and kids' school are priorities, so we spent more to afford a good neighborhood close to work. But our cars are not a priority...
by NorCalDad
Mon Apr 14, 2014 11:17 am
 
Forum: Personal Finance (Not Investing)
Topic: Re: How to maintain a good balance in financial outlook?
Replies: 2
Views: 316

Re: IRA or Roth IRA and other decisions

Stick with the Vanguard Target Retirement funds in your 401k. You need diversification beyond small caps. Keep your IRAs at Vanguard. Once you get $10,000 in an account, you qualify for lower-cost admiral shares. Moving to one of those brokers will cost you much more in fees. I think your biggest wo...
by NorCalDad
Sun Apr 13, 2014 10:46 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA or Roth IRA and other decisions
Replies: 13
Views: 806

Re: IRA or Roth IRA and other decisions

1) Should I pay all cash for the house? 2) I am very happy with VSISX but should i diversify? More money will come so I guess I need to diversify. 3) IRA or Roth IRA? Baby is on the way, which one is better for him/her? Thanks 1) You need to catch up in retirement savings and more cash to raise a k...
by NorCalDad
Sat Apr 12, 2014 8:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: IRA or Roth IRA and other decisions
Replies: 13
Views: 806

Re: Help on Auto Loan vs. Student loan/Mortgage

Yes, this arbitrage strategy often gets recommended on this board. My only concern would be whether you have an emergency fund beyond the $14,000.
by NorCalDad
Sat Apr 12, 2014 7:39 pm
 
Forum: Personal Finance (Not Investing)
Topic: Help on Auto Loan vs. Student loan/Mortgage
Replies: 8
Views: 491

Re: Life in the Bay Area and housing costs

Again, outside of Norcal, I am 100% with you. I consider real estate to NOT be a 'investment' and more of a cost. But I would make exception for Norcal bay area. If the area doesn't even dip during the big recent housing recession, and actually INCREASES in price when the rest of the country is -20...
by NorCalDad
Fri Apr 11, 2014 11:07 am
 
Forum: Personal Consumer Issues
Topic: Life in the Bay Area and housing costs
Replies: 51
Views: 3121

Re: Life in the Bay Area and housing costs

Norcalkenny, there are many places in California outside the South Bay where government employees can buy a home and have a good life. For your profession, I don't see why you'd choose one of the highest COL areas in the state to work unless you have family there or really love the South Bay. You di...
by NorCalDad
Fri Apr 11, 2014 12:46 am
 
Forum: Personal Consumer Issues
Topic: Life in the Bay Area and housing costs
Replies: 51
Views: 3121

Re: California Taxes - Am I Missing Something?

This Atlantic blog post examines the COL issues we're discussing here: http://www.theatlanticcities.com/housing/2014/04/search-affordable-housing-pushing-middle-class-exurbs/8816/ A young middle-class family that wants to build wealth in the Bay Area would probably have to live in areas that are les...
by NorCalDad
Wed Apr 09, 2014 11:21 am
 
Forum: Personal Finance (Not Investing)
Topic: California Taxes - Am I Missing Something?
Replies: 142
Views: 8108

Re: California Taxes - Am I Missing Something?

Can anyone explain to me how someone with a 2nd quartile income (let's say $50-80K) can actually pay California real estate prices and actually save enough money to call themselves a Boglehead? It seems impossible to me. I see houses in California listed at $2 Million that would go for $200K in Ari...
by NorCalDad
Tue Apr 08, 2014 1:16 pm
 
Forum: Personal Finance (Not Investing)
Topic: California Taxes - Am I Missing Something?
Replies: 142
Views: 8108

Re: California Taxes - Am I Missing Something?

This might not apply to the OP, but I wish California had a 529 income tax deduction.
by NorCalDad
Mon Apr 07, 2014 4:06 pm
 
Forum: Personal Finance (Not Investing)
Topic: California Taxes - Am I Missing Something?
Replies: 142
Views: 8108

Re: Why pay off your house?

If a person lost their income, had a mortgage to pay, and all their investments were in tax advantaged accounts, they would be in TROUBLE. Pulling out these investments with taxes and penalties would be awful. I know that Roth contributions can be withdrawn without penalty, but not everyone has Rot...
by NorCalDad
Sun Apr 06, 2014 10:50 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8519

Re: Why pay off your house?

IMD801 wrote:Assuming all tax advantaged space is filled:

Prepay mortgage (4.5%) or fund taxable account?

How long do you plan to hold the taxable investments? How risk averse are you?
by NorCalDad
Sun Apr 06, 2014 5:26 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8519

Re: Why pay off your house?

Isn't housing a life-long cost? IF you factor it as a constant cost into retirement, do you need to rush to pay it off now? If yes, what about the loss of a tax deduction? Don't you want your money more liquid than dependent on the real estate market? Confused..... It is a simple financial calculat...
by NorCalDad
Sun Apr 06, 2014 12:21 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8519

Re: Why pay off your house?

This debate gets played out regularly here. As with most cases, I think it depends on your situation. Our priority right now, with 25 years to retirement, is to take advantage of tax-advantaged accounts and have our money compound in the stock market. Paying off our very-low interest rate mortgage i...
by NorCalDad
Sat Apr 05, 2014 1:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Why pay off your house?
Replies: 119
Views: 8519

Re: Student Loans -- a surcharge on your job?

In this rate environment, 7.5% is a very high interest rate, and especially so if you can't deduct it due to income phase-out (not sure whether this applies to you or not). I can understand psychologically why you might feel better about your student loan debt than consumer debt, but to me, debt is ...
by NorCalDad
Sat Apr 05, 2014 1:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Student Loans -- a surcharge on your job?
Replies: 26
Views: 1601

Re: 401(k) loan for down payment

I think it depends on your situation. How much do you have in your 401ks? How much do you have in overall savings? One concern would be changing your asset allocation by having to liquidate stock funds equal to the size of your loan. Would you have enough cash left for an emergency fund if you buy t...
by NorCalDad
Fri Apr 04, 2014 8:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: 401(k) loan for down payment
Replies: 15
Views: 925

Re: How Ignorant am I? 5yr on Job, No 401k. 100K collecting

Yea, in reality even if I do 15% downpayment, I want to feel good knowing that I gave only let's say 50% of my total capital (not counting retirement funds), so I still want that 100k+ savings to grow. Therefore I am thinking to do a bit less saving in IRA and maybe in year 3, 4, 5 of 401K maybe no...
by NorCalDad
Fri Apr 04, 2014 7:02 pm
 
Forum: Investing - Help with Personal Investments
Topic: How Ignorant am I? 5yr on Job, No 401k. 100K collecting dust
Replies: 36
Views: 3605

Re: How Ignorant am I? 5yr on Job, No 401k. 100K collecting

While you made mistakes, you could have done much worse. At least you saved. How big a priority is buying a home? If you live in high-cost New Jersey, you'll probably need much of that money for down payment, taxes, moving costs, furnishings, emergency fund. I might direct $11,000 toward IRA 2013 + ...
by NorCalDad
Fri Apr 04, 2014 3:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: How Ignorant am I? 5yr on Job, No 401k. 100K collecting dust
Replies: 36
Views: 3605

Re: Maintenance $$'s spent over the lifetime on your Car

Without knowing more about whether you can comfortably afford a new car, I also see no reason to get rid of it, just in anticipation that something could go wrong. While maintenance will be an issue on the old car, don't forget that insurance costs are typically lower.
by NorCalDad
Tue Apr 01, 2014 9:42 am
 
Forum: Personal Finance (Not Investing)
Topic: Maintenance $$'s spent over the lifetime on your Car
Replies: 38
Views: 2352

Re: Mr. Money Mustache: Hero or Foolish?

Agree with others - his is a refreshing voice in a sea of consumerism. I take what I can use from his site, though I don't wish to live as frugally as he does nor leave my profession as early as he did. He uses his money not as a scorecard but as a means to enjoy life on his own terms.
by NorCalDad
Mon Mar 31, 2014 11:29 am
 
Forum: Investing - Theory, News & General
Topic: Mr. Money Mustache: Hero or Foolish?
Replies: 227
Views: 24489

Re: Any experience pricing yourself out of a neighborhood?

We were in a similar position and chose to buy a bigger house. Not only did an addition fail to pencil out, but there would have been inconveniences related to construction that we didn't want to deal with. Agree with Watty - you have plenty of time to get a bigger house. At least until the second k...
by NorCalDad
Sun Mar 23, 2014 10:57 am
 
Forum: Personal Finance (Not Investing)
Topic: Any experience pricing yourself out of a neighborhood?
Replies: 15
Views: 2644

Re: POLL: Do you have a financial advisor?

I feel bad for the guy reading this who has the 4 - figure portfolio. I'm not sure I'd agree. I know I have seen posts here from teenagers or early 20-somethings who were asking advice on where to invest their Roth IRA. I wish the Bogleheads had ben around when I had a 4-figure portfolio! Who knows...
by NorCalDad
Fri Mar 21, 2014 5:38 pm
 
Forum: Personal Finance (Not Investing)
Topic: POLL: Do you have a financial advisor?
Replies: 37
Views: 1983

Re: 529 Plan [Help with funding college education]

I'd want to know more about what catching up you have to do on retirement, but otherwise you seem like a good candidate for a 529. Does your state give you a tax deduction on 529 contributions?
by NorCalDad
Thu Mar 20, 2014 11:04 pm
 
Forum: Investing - Help with Personal Investments
Topic: 529 Plan [Help with funding college education]
Replies: 2
Views: 210

Re: Assessment of finances

assuming $150/mo of PMI vs. $1,500/mo rent, I can't see how renting will save me money. PMI goes away once LTV reaches 80% if I'm not mistaken. say 5k is paid off principal a year, 30k to get to 80%, that's 6 years of PMI or 11k, vs 18k minimum a year in rent. What am I missing? You're paying $11,0...
by NorCalDad
Thu Mar 20, 2014 1:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: Assessment of finances
Replies: 12
Views: 1357

Re: 529 Account in California

The Scholarshare plans are decent, but there is no particular reason to go with Scholarshare as opposed to Nevada's Vanguard plan given that California offers no tax break. That said, I believe you should consider a 529 only after filling your retirement space unless you have a pension or otherwise ...
by NorCalDad
Thu Mar 20, 2014 12:04 am
 
Forum: Investing - Help with Personal Investments
Topic: 529 Account in California
Replies: 11
Views: 589

Re: Assessment of finances

Since you're bringing in factors that involve your fiancee, do these numbers represent your financial situation alone or do they represent your combined situation? I would start thinking about what is most advantageous for your combined finances. Posting extensive financial details as indicated in t...
by NorCalDad
Wed Mar 19, 2014 11:56 pm
 
Forum: Investing - Help with Personal Investments
Topic: Assessment of finances
Replies: 12
Views: 1357

Re: Your thoughts on vacation home or second home

As much as we'd like a vacation home along the coast, this has always seemed to me a luxury item comparable to a boat or fancy car that one might keep idle in the garage except for use on the weekends. Which is to say, if you can afford it, it might be nice to have. Most of us can't afford it. The o...
by NorCalDad
Wed Mar 19, 2014 1:32 pm
 
Forum: Personal Finance (Not Investing)
Topic: Your thoughts on vacation home or second home
Replies: 61
Views: 3605

Re: Single Income Family with 4 Children (so far)

I think you are doing better than most Americans and still have time to get your retirement corrected. That said, you need to get moving on savings, with a goal of maxing out your 401k and maxing out IRAs for each of you. If I'm reading this correctly and you've consolidated your high-interest stude...
by NorCalDad
Tue Mar 18, 2014 11:13 am
 
Forum: Investing - Help with Personal Investments
Topic: Single Income Family with 4 Children (so far)
Replies: 69
Views: 4679

Re: Have to pay PMI even after dropping below 80 LTV?

The law is specific to two situations in which the loan servicer must cancel PMI. First, when the loan amortization schedule shows the borrower has reached 78% LTV based on the original value, as was the case in that other thread. Second, when the principal balance reaches 80% LTV of the original v...
by NorCalDad
Tue Mar 18, 2014 1:08 am
 
Forum: Personal Finance (Not Investing)
Topic: Have to pay PMI even after dropping below 80 LTV?
Replies: 8
Views: 887

Re: Have to pay PMI even after dropping below 80 LTV?

The law is specific to two situations in which the loan servicer must cancel PMI. First, when the loan amortization schedule shows the borrower has reached 78% LTV based on the original value, as was the case in that other thread. Second, when the principal balance reaches 80% LTV of the original va...
by NorCalDad
Tue Mar 18, 2014 12:52 am
 
Forum: Personal Finance (Not Investing)
Topic: Have to pay PMI even after dropping below 80 LTV?
Replies: 8
Views: 887

Re: Bogleheads Stance on Home Buying

I think the salary rule is outdated because of the interest rate variable, as Watty said. But I also agree with Caduceus' point that the best rule is to buy as little house as you need for your situation. Our rules checklist was: 1) 20% down. 2) Must still be able to max 401ks and Roths; 3) Neighbor...
by NorCalDad
Mon Mar 17, 2014 9:45 am
 
Forum: Personal Finance (Not Investing)
Topic: Bogleheads Stance on Home Buying
Replies: 61
Views: 4585

Re: Bad time to open new fund in Roth?

It's natural to feel the way you do. What makes me feel better is knowing that in the long run this will be such a small part of your overall portfolio that the timing will eventually feel insignificant.
by NorCalDad
Sun Mar 16, 2014 5:55 pm
 
Forum: Investing - Help with Personal Investments
Topic: Bad time to open new fund in Roth?
Replies: 19
Views: 1655

Re: Can I beat 2.75% guaranteed via mortgage paydown?

Agree that no one should prepay a mortgage ahead of maxing retirement accounts. I think age is a factor here, too. I do not know the OP's age, but I think it is less advisable for someone in his 20s or 30s to prepay a mortgage at today's rates than for someone in his 50s. I do not know this to be tr...
by NorCalDad
Sun Mar 16, 2014 5:06 pm
 
Forum: Investing - Theory, News & General
Topic: Can I beat 2.75% guaranteed via mortgage paydown?
Replies: 73
Views: 4522

Re: Was frugality a mistake? The downsides of saving too mu

I have zero interest in spending time with anyone who would "pass me over" because of the kind of car I drive, those are not the kinds of people that I wish to associate with. I couldn't care less about how society views me, and see no reason to have flashy items that "reflect my wea...
by NorCalDad
Sat Mar 15, 2014 8:52 pm
 
Forum: Personal Consumer Issues
Topic: Was frugality a mistake? The downsides of saving too much.
Replies: 115
Views: 8789

Re: Was frugality a mistake? The downsides of saving too mu

I don't understand that flaunt is the opposite of frugal. That makes no sense. Living below your means has always what I thought of the bogglehead philosophy. My means are different than yours, so how I live might not appear frugal at all. Yet, it is relative to my means. I agree with this. I don't...
by NorCalDad
Sat Mar 15, 2014 5:53 pm
 
Forum: Personal Consumer Issues
Topic: Was frugality a mistake? The downsides of saving too much.
Replies: 115
Views: 8789

Re: Was frugality a mistake? The downsides of saving too mu

I'm with IMD. I don't understand the worldview that money equals women, cars and clothes. To me, money equals stored time (as in early retirement or reduced work hours) and experiences with family and friends. Maybe driving your luxury car every day to work can be counted as an experience. I'd rathe...
by NorCalDad
Sat Mar 15, 2014 5:06 pm
 
Forum: Personal Consumer Issues
Topic: Was frugality a mistake? The downsides of saving too much.
Replies: 115
Views: 8789

Re: 529s and overfunding

I agree with letsgobobby except for one thing: A family in the 25% tax bracket that has been maxing out retirement plan contributions all along and has all their assets in their home and retirement plans will not get any financial aid unless they are retired. The reason is that the educational inst...
by NorCalDad
Sat Mar 15, 2014 11:40 am
 
Forum: Investing - Help with Personal Investments
Topic: 529s and overfunding
Replies: 23
Views: 1322

Re: 529s and overfunding

Given everything you said, I would reduce your 529 contributions, increase your 401k contributions and treat your Roths as a versatile college/retirement fund. The reduction in 529 contributions assures you won't overfund for college. To address worries about not having enough for college, you can p...
by NorCalDad
Sat Mar 15, 2014 10:03 am
 
Forum: Investing - Help with Personal Investments
Topic: 529s and overfunding
Replies: 23
Views: 1322

Re: Maxed out.. what is next.?

Definitely 529s unless you have plans to eventually buy a house.
by NorCalDad
Sat Mar 15, 2014 12:16 am
 
Forum: Investing - Help with Personal Investments
Topic: Maxed out.. what is next.?
Replies: 6
Views: 793

Re: Tax time! 403(b) or IRA

NorCalDad Thanks so much for that writeup - I truly appreciate it. Going with the scenario you laid out in order of those priorities, my tax bill would increase by about $5,000 if not double that. So if you were me, you would be ok with giving that much more money to the government so that you coul...
by NorCalDad
Fri Mar 14, 2014 7:28 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax time! 403(b) or IRA
Replies: 11
Views: 573

Re: Tax time! 403(b) or IRA

I don't think there's a wrong answer, except if you were not to save at all. If the tax benefit today of the traditional IRA is significant enough that it will compel you to save more today, you should do that. The downsides are as mentioned - inconvenience of maintaining separate Roth and tradition...
by NorCalDad
Fri Mar 14, 2014 3:48 pm
 
Forum: Investing - Help with Personal Investments
Topic: Tax time! 403(b) or IRA
Replies: 11
Views: 573

Re: Tax time! 403(b) or IRA

It would be helpful if you could give us a rundown of your financial situation as suggested here: http://www.bogleheads.org/forum/viewtopic.php?t=6212 You should always get the maximum employer match, which you are doing. My initial reaction after that is that you are paying a large expense ratio of...
by NorCalDad
Fri Mar 14, 2014 9:33 am
 
Forum: Investing - Help with Personal Investments
Topic: Tax time! 403(b) or IRA
Replies: 11
Views: 573

Re: Renting vs. Buying a Home

If your time frame is only 4-5 years and this seems like a coin flip for you, I vote for renting. You have enough other financial headwinds between huge school debt and expensive daycare costs that it doesn't seem worth the risks of homeownership for a short duration. The commissions on the sale in ...
by NorCalDad
Fri Mar 14, 2014 12:38 am
 
Forum: Personal Finance (Not Investing)
Topic: Renting vs. Buying a Home
Replies: 15
Views: 1499

Re: Amazon Prime Increase

Yeah, we've had Amazon Prime for a few years now. For a long time, Amazon was significantly cheaper on almost every product. Also, the reviews are so helpful, the stuff just shows up at your doorstep, and they are great with customer service. But over the past couple years, prices have definitely i...
by NorCalDad
Thu Mar 13, 2014 11:05 am
 
Forum: Personal Consumer Issues
Topic: Amazon Prime Increase
Replies: 185
Views: 7630

Re: Will we be ok?

I don't think you can contribute to the Roths - or if so, at a reduced amount - due to you income, so make sure you know what amount, if any, you can contribute. If that HHI is a gross amount and you are maxing out 401ks, you should be fine contributing to Roths without a backdoor. Our gross income...
by NorCalDad
Wed Mar 12, 2014 1:00 pm
 
Forum: Personal Finance (Not Investing)
Topic: Will we be ok?
Replies: 45
Views: 4216

Re: Stay or move is the financial question.

People make sacrifices to live in the Bay Area. If a greater share of income has to go to housing and transportation, it means that much less for saving, dining out and vacations. Housing is just one part of the equation; you will also pay income taxes in California, which could consume much of that...
by NorCalDad
Wed Mar 12, 2014 10:11 am
 
Forum: Personal Finance (Not Investing)
Topic: Stay or move is the financial question.
Replies: 21
Views: 1563

Re: Stay or move is the financial question.

We can’t afford San Francisco or San Jose housing therefore we will have to find something that under 400K, small home with a lot of land. Commuting isn’t a problem since I can work from home and my husband job is driving around from Sacramento to the bay area. Stockton, Merced or Modesto isn’t an ...
by NorCalDad
Wed Mar 12, 2014 12:02 am
 
Forum: Personal Finance (Not Investing)
Topic: Stay or move is the financial question.
Replies: 21
Views: 1563
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