Wife tired of saving...
Wife tired of saving...
Wife and I have had the same mindset since we meet and got married. Fast Forward 16 years and a net worth of 1.9m, she is tired of saving and not doing much with the money. We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home. The townhome is enough but every single person we know within our social circle have way bigger homes (with hefty property tax, around 15K to 20K, wherelse ours is $6K). They drive nice cars too obviously.
My wife' s sister + family also seem to enjoy their money and have told us few times that if they had our kinda money, they would have lived way better. To appease my wife somewhat, last year we changed one of our cars to a 2012 Lexus RX 350. Now she wants me to change our 2009 camry to a BMW. Honestly, all this will not even make a difference to the bottom line, but I feel she is tired and exhausted of seeing the nest egg being built with no 'current' enjoyment of it per say. I see her logic somewhat, but i think this is one of the warning signs of breaking away from the long term goal.
My question is, is what she is going thru the norm? What advice can be given to her? I really dont mind the bmw thingy, but the larger home I am dead against, mainly because of the property tax. Help?
PS: We take plenty of vacations. (if anyone was going to suggest that to please her). And she can buy whatever she wants, but she is the type that doesnt.
Edit: We are 39 and 38 years old
My wife' s sister + family also seem to enjoy their money and have told us few times that if they had our kinda money, they would have lived way better. To appease my wife somewhat, last year we changed one of our cars to a 2012 Lexus RX 350. Now she wants me to change our 2009 camry to a BMW. Honestly, all this will not even make a difference to the bottom line, but I feel she is tired and exhausted of seeing the nest egg being built with no 'current' enjoyment of it per say. I see her logic somewhat, but i think this is one of the warning signs of breaking away from the long term goal.
My question is, is what she is going thru the norm? What advice can be given to her? I really dont mind the bmw thingy, but the larger home I am dead against, mainly because of the property tax. Help?
PS: We take plenty of vacations. (if anyone was going to suggest that to please her). And she can buy whatever she wants, but she is the type that doesnt.
Edit: We are 39 and 38 years old
Re: Wife tired of saving...
We bought less as we got older.
Re: Wife tired of saving...
I don't really have much advice for you. But this line kinda irked me for some reason.pinhead wrote:My wife' s sister + family also seem to enjoy their money and have told us few times that if they had our kinda money, they would have lived way better.
Last edited by fanmail on Wed Mar 04, 2015 4:09 pm, edited 1 time in total.
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Re: Wife tired of saving...
We don't have all of the information, but ~= $2M is certainly a substantial sum for a couple < 40.
Rather than looking at specific expenditures, I suggest looking at your budget and savings rate. Many people do not save enough early and must increase their savings rate to significant levels later in life this is much harder.
Consider easing off of the accelerator a little bit and adding the difference to the family enjoyment. That is a much better idea than one off expenditures that can get out of control. If the expenditure fits within the new increased budget by all means.
I would be a little concerned that these desires are escalating and being driven by envy. Never a good sign. The big thing is too communicate whatever you are feeling and try to better understand her desires.
P.S. My opinion, is it is a big mistake to let siblings know your financial business. Nothing good can come out of that also. Its just me, but I have never given a thought to what my family or friends are doing. Personally, if I was going to increase my expenditures, it would by on the kid's or family's experiences. Memories go on forever and are the only investment that never goes down in value.
Rather than looking at specific expenditures, I suggest looking at your budget and savings rate. Many people do not save enough early and must increase their savings rate to significant levels later in life this is much harder.
Consider easing off of the accelerator a little bit and adding the difference to the family enjoyment. That is a much better idea than one off expenditures that can get out of control. If the expenditure fits within the new increased budget by all means.
I would be a little concerned that these desires are escalating and being driven by envy. Never a good sign. The big thing is too communicate whatever you are feeling and try to better understand her desires.
P.S. My opinion, is it is a big mistake to let siblings know your financial business. Nothing good can come out of that also. Its just me, but I have never given a thought to what my family or friends are doing. Personally, if I was going to increase my expenditures, it would by on the kid's or family's experiences. Memories go on forever and are the only investment that never goes down in value.
Last edited by Spirit Rider on Wed Mar 04, 2015 4:05 pm, edited 1 time in total.
- TheTimeLord
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Re: Wife tired of saving...
How many years until you retire? What do you think you $1.9 million will be worth by then if you never save another penny? What if your wife was to get cancer next year how would you feel about things, any regrets about the lifestyle you have choosen? If you get a bigger house will you still be able to save for the future? IMHO life is a balance we must all find, and personally giving up everything from say 20-55 so I can live well from 56-Death is a bit out of balance. To get a really good answer you probably need to give more details about your financial situation.
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Re: Wife tired of saving...
"Happy wife, happy life".
One a more serious note... You two are young a (bit older then my wife and I) and are already having some saving friction. Your savings are excellent for your ages. I would ease off the accelerator a bit and consider a compromise where both of you will be happy.
Maybe find a house that fits BOTH of what you two want, but also at the same time giving a little up of the perfect scenario. I am sure there are nice houses that don't have 20k property taxes.
The biggest concern I have is from your post it sounds like your wife is talking about the family finances with her sisters. I can tell you that NEVER end up well. Them wanting her to spend more is probably a bigger issue then her wanting to buy stuff.
I would caution you not to make it your way or the highway. That is not fair to your spouse since marriage is supposed to be a combined effort.
Good luck.
One a more serious note... You two are young a (bit older then my wife and I) and are already having some saving friction. Your savings are excellent for your ages. I would ease off the accelerator a bit and consider a compromise where both of you will be happy.
Maybe find a house that fits BOTH of what you two want, but also at the same time giving a little up of the perfect scenario. I am sure there are nice houses that don't have 20k property taxes.
The biggest concern I have is from your post it sounds like your wife is talking about the family finances with her sisters. I can tell you that NEVER end up well. Them wanting her to spend more is probably a bigger issue then her wanting to buy stuff.
I would caution you not to make it your way or the highway. That is not fair to your spouse since marriage is supposed to be a combined effort.
Good luck.
Last edited by staythecourse on Wed Mar 04, 2015 4:02 pm, edited 1 time in total.
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Re: Wife tired of saving...
my dad always said, "spend a buck, save a buck". Going overboard in saving can make one feel cheated. Good to keep a balance on spending and saving. I try to follow that and even "schedule" money allotted for life improvements (home upgrades, furnishings, etc). It's been good advice, although I think he was more focused on the "saving" part.
Though I agree with you about the house. Isn't there any middle ground between the townhouse and the expensive single family home? A smaller/cheaper single family home?
Though I agree with you about the house. Isn't there any middle ground between the townhouse and the expensive single family home? A smaller/cheaper single family home?
- JDCarpenter
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Re: Wife tired of saving...
YMMV, but FWIW, this is based on my 30+ years with DW (our primary wage earner)pinhead wrote:Wife and I have had the same mindset since we meet and got married. Fast Forward 16 years and a net worth of 1.9m, she is tired of saving and not doing much with the money. We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home. The townhome is enough ...
... [Car purchase stuff.] Honestly, all this will not even make a difference to the bottom line, but I feel she is tired and exhausted of seeing the nest egg being built with no 'current' enjoyment of it per say. I see her logic somewhat, but i think this is one of the warning signs of breaking away from the long term goal.
My question is, is what she is going thru the norm? What advice can be given to her? I really dont mind the bmw thingy, but the larger home I am dead against, mainly because of the property tax. Help?
PS: We take plenty of vacations. (if anyone was going to suggest that to please her). And she can buy whatever she wants, but she is the type that doesnt.
Edit: We are 39 and 38 years old
You and DW need to sit down and have some heart-to-heart planning talks. This isn't just something that can be solved by "giving advice to her." What is the goal and what is your cash flow situation? Savings qua Savings doesn't do much. What is the end-desire for the two of you?
If the goal is retire in 16 years when Kid2 graduates HS, what happens if you "coast" on your 1.9 nest egg and spend your positive cash flow? Townhome may be good now, but when kids are 17 and 10, what will it be like? (Yeah, it is still more room than our grandparents had growing up, but....) Or, if you cut your savings rate in half, what is likely to happen? Maybe you can't afford to cut back and still meet your mutual goals, but you need to mutually agree on the game plan. I know that we are more willing to spend now than we were 20 years ago, as we can see the finish line and know that our portfolio is working for us so much more than our annual savings. That could easily be true for you with that nest egg.
PS__I second the above posters as well.
Our personal blog (no ads) of why we saved/invested: https://www.lisajtravels.com/
Re: Wife tired of saving...
You are winning the game. $1.9M at 39 is a large number.
A four person family in a town home is living a lower standard of life because you are overly concerned with money.
Reading between the lines, it sounds like a nice home is what your wife wants, and what you are dead set against.
I would strongly consider buying a new home. It has a much higher utility and life impact than a BMW.
There is such a thing as saving too much. I think you are skirting close to this line.
A four person family in a town home is living a lower standard of life because you are overly concerned with money.
Reading between the lines, it sounds like a nice home is what your wife wants, and what you are dead set against.
I would strongly consider buying a new home. It has a much higher utility and life impact than a BMW.
There is such a thing as saving too much. I think you are skirting close to this line.
Re: Wife tired of saving...
Can you retire? Wouldn't that be way better than spending money on cars?
- White Coat Investor
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Re: Wife tired of saving...
If you guys can find something that will make you happier if you purchase it, then purchase it. You can certainly afford it. You're essentially done saving for retirement unless you plan to retire in your 40s. It will apparently make your wife happier to sell the Camry and get a BMW. Sell the Camry and get the BMW. Then start working on a reasonable compromise into a larger home. It's cheaper to keep her. These two posts are for you, not her:pinhead wrote:Wife and I have had the same mindset since we meet and got married. Fast Forward 16 years and a net worth of 1.9m, she is tired of saving and not doing much with the money. We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home. The townhome is enough but every single person we know within our social circle have way bigger homes (with hefty property tax, around 15K to 20K, wherelse ours is $6K). They drive nice cars too obviously.
My wife' s sister + family also seem to enjoy their money and have told us few times that if they had our kinda money, they would have lived way better. To appease my wife somewhat, last year we changed one of our cars to a 2012 Lexus RX 350. Now she wants me to change our 2009 camry to a BMW. Honestly, all this will not even make a difference to the bottom line, but I feel she is tired and exhausted of seeing the nest egg being built with no 'current' enjoyment of it per say. I see her logic somewhat, but i think this is one of the warning signs of breaking away from the long term goal.
My question is, is what she is going thru the norm? What advice can be given to her? I really dont mind the bmw thingy, but the larger home I am dead against, mainly because of the property tax. Help?
PS: We take plenty of vacations. (if anyone was going to suggest that to please her). And she can buy whatever she wants, but she is the type that doesnt.
Edit: We are 39 and 38 years old
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Then sit and think "What am I saving for?" When you figure that out, you'll know how much you can loosen up now.
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Re: Wife tired of saving...
+1 - know thy self. My advice would be not to let them know what you have in the first place. I'd imagine it's these kinds of comments that have eroded, to some degree, your wife's perspective on saving. Maybe you can ease up a bit - what is the goal and have you already achieved it?fanmail wrote:I don't really have much advice for you. But this line kinda irked me for some reason.
Re: Wife tired of saving...
Don't forget to live your life in addition to saving for the future.
Enjoy some of it now with your young family. I'm not saying stop saving, but is it so terrible an idea to maybe not save quite as much and treat yourself every now and then?
Enjoy some of it now with your young family. I'm not saying stop saving, but is it so terrible an idea to maybe not save quite as much and treat yourself every now and then?
Re: Wife tired of saving...
Thanks for the advice so far...
To add on to my initial post:
All savings are in real estate (rental properties), CD's, cash and stocks. No retirement accounts. Basically our net worth is after tax. (why? Thats a different thread altogether)
We are both independent consultants and have reaped the fantastic economy from 2010 to now in terms of getting contracts. But that could change any moment. For the last 4 years, our combined household income was around $400K ++ per year. I would say this is not the norm. Probably $250K to $300K is the norm in a decent economy and $200K in a bad economy. But I want to prepare ourselves for if the [(stuff) -- admin LadyGeek] hits the fan scenario where both our skills are no more in demand and we can take it easy regardless, which can happen because mine is a very very specialized skill that 'is' in demand, but I see cheaper labor picking up on it and being able to do it efficiently.
Our townhome is $320K. A decent looking single family is around $450K (property tax $10 to 12K) and a very nice looking home is $650K to 700K (tax between $15K to $20K).
She feels the 450K homes dont look grand. And I agree...they look very basic. For a $150K more, u get a white house looking home. So to settle for a 450K home will not make either of us happy, to be honest.
To add on to my initial post:
All savings are in real estate (rental properties), CD's, cash and stocks. No retirement accounts. Basically our net worth is after tax. (why? Thats a different thread altogether)
We are both independent consultants and have reaped the fantastic economy from 2010 to now in terms of getting contracts. But that could change any moment. For the last 4 years, our combined household income was around $400K ++ per year. I would say this is not the norm. Probably $250K to $300K is the norm in a decent economy and $200K in a bad economy. But I want to prepare ourselves for if the [(stuff) -- admin LadyGeek] hits the fan scenario where both our skills are no more in demand and we can take it easy regardless, which can happen because mine is a very very specialized skill that 'is' in demand, but I see cheaper labor picking up on it and being able to do it efficiently.
Our townhome is $320K. A decent looking single family is around $450K (property tax $10 to 12K) and a very nice looking home is $650K to 700K (tax between $15K to $20K).
She feels the 450K homes dont look grand. And I agree...they look very basic. For a $150K more, u get a white house looking home. So to settle for a 450K home will not make either of us happy, to be honest.
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Re: Wife tired of saving...
Is your wife even a car person? One that enjoys the mechanics/features/specs/road-feel of a "nicer" car?
I pose to my friends a thought experiment. Say you are thinking about buying a BMW. Would you derive that much more enjoyment from it? What about 6 months later? Would it then become "just a car" to you?
What about 5 years later, when you (likely) take it to the garage a lot more than you would for a Camry. Even if the fixes are all covered by someone else (free), how would you feel about the hassle and time needed to bring the BMW to the garage? How would you feel when you get the property tax bill for the car (assuming that there is an auto property tax in your area)?
I have a similar thought experiment that I can pose for the house, but I'll hold off for now.
Spending more != a guarantee of happiness.
I pose to my friends a thought experiment. Say you are thinking about buying a BMW. Would you derive that much more enjoyment from it? What about 6 months later? Would it then become "just a car" to you?
What about 5 years later, when you (likely) take it to the garage a lot more than you would for a Camry. Even if the fixes are all covered by someone else (free), how would you feel about the hassle and time needed to bring the BMW to the garage? How would you feel when you get the property tax bill for the car (assuming that there is an auto property tax in your area)?
I have a similar thought experiment that I can pose for the house, but I'll hold off for now.
Spending more != a guarantee of happiness.
Re: Wife tired of saving...
Nothing wrong with spending a little
Nothing wrong with buying a nicer car or house. Cars are best to buy a year or two old. Or lease if you arent sure.
However, remember this - after a 5 year raging bull market, i think people get looser with money. I know I have also. I think it is important to consider that this is after a 5 year bull. Would you feel the same with a 30% loss in the market, and with a recession and jobs hard to find? Remember that we are in booms and busts. Nothing wrong with spending. A lot of expensive new cars on my street now, that werent there in 2009. People, including you, have done well.
Nothing wrong with buying a nicer car or house. Cars are best to buy a year or two old. Or lease if you arent sure.
However, remember this - after a 5 year raging bull market, i think people get looser with money. I know I have also. I think it is important to consider that this is after a 5 year bull. Would you feel the same with a 30% loss in the market, and with a recession and jobs hard to find? Remember that we are in booms and busts. Nothing wrong with spending. A lot of expensive new cars on my street now, that werent there in 2009. People, including you, have done well.
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Re: Wife tired of saving...
Sit down talk with DW. Late thirties, two children, life changes. DW could be experiencing premenapausal changes, just a thought. A lot cheaper talking, figuring out things, making some changes so that all are comfortable rather than waking up too late, regardless of the driving contributor/s. Again just a thought.
Re: Wife tired of saving...
I think that you both need to talk through this thoroughly. Talk about every aspect of it together. Once you have both admitted everything you think and feel about this subject, it should be easier to make a good decision.
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Re: Wife tired of saving...
I'm wondering how the heck did you get that kind of money south of 40, with kids.
The reason why that is important is to consider how much of that $1.9MM came through
one-time events like the lottery, inheritance, one-time stock vesting, plus the earnings on that amount.
If it came through savings/investing alone, and you feel you have stable employment and can reasonably
see yourself as financially independent soon, I would say you must have really been on the savings
accelerator, and can probably ease up.
If the majority came through one-time events, then that will not be repeated, so take that into consideration.
I'd sit down and discuss what your plans for the future are.
This is hard with kids, but before kids, my wife and I would some Saturday mornings we'd eat breakfast
at a pancake house and get a pot of coffee and just talk about the future. Some days we'd be there so long that
we would order lunch too. Actually, those are fond memories, just the two of us talking about our future together.
The reason why that is important is to consider how much of that $1.9MM came through
one-time events like the lottery, inheritance, one-time stock vesting, plus the earnings on that amount.
If it came through savings/investing alone, and you feel you have stable employment and can reasonably
see yourself as financially independent soon, I would say you must have really been on the savings
accelerator, and can probably ease up.
If the majority came through one-time events, then that will not be repeated, so take that into consideration.
I'd sit down and discuss what your plans for the future are.
This is hard with kids, but before kids, my wife and I would some Saturday mornings we'd eat breakfast
at a pancake house and get a pot of coffee and just talk about the future. Some days we'd be there so long that
we would order lunch too. Actually, those are fond memories, just the two of us talking about our future together.
Re: Wife tired of saving...
The 2 young children will probably necessitate a residential upgrade one of these days anyway. The risk is that your wife will never be satisfied, especially if she keeps exchanging confidences with her Yenta sister, whose finances - I'm sure - are in pristine condition.
Re: Wife tired of saving...
Another expression comes to mind: "If momma ain't happy, ain't nobody happy."
A house with a yard, a house your family loves, rather than a townhouse, is a nice nest for raising a family. There will be warm memories of the family home that mother loved and cared for. You can downsize when the family grows up.
A house with a yard, a house your family loves, rather than a townhouse, is a nice nest for raising a family. There will be warm memories of the family home that mother loved and cared for. You can downsize when the family grows up.
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Re: Wife tired of saving...
Any sense of what your wife is looking for in a "bigger" home? Living space sqft? Lot size? Extra floors? Single floor (no staircases) with more area? More bedrooms? More carspace? Nicer living room? Nicer kitchen? Nicer bathrooms? Newer construction? Better location?pinhead wrote:We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home. The townhome is enough but every single person we know within our social circle have way bigger homes (with hefty property tax, around 15K to 20K, wherelse ours is $6K).
Some things you could remodel. Those could add value to your house and end up as something not only tangible for your wife to see money being spent on but also hopefully something the whole family can enjoy and make use of.
If things can't be satisfied from the current house, at least you'll know what to look for and you could combine that with what you're looking for, e.g., low cost / taxes.
Last edited by harikaried on Wed Mar 04, 2015 4:33 pm, edited 1 time in total.
Re: Wife tired of saving...
If you're independent consultants, especially with less certain prospects and year-to-year variability that great in income, that probably demands a little more caution.
A more expensive home certainly looks financially feasible and not so bad at all, if that is more or less the end of things—it rarely is, and think about furniture and upkeep for a house like that on top of the property tax—with no further lifestyle creep.
I think this needs to be anchored by saving rates, expected retirement dates, how much you enjoy your work, and so on. If you're currently on pace for retirement at say 50 with 80x annual desired spending accrued, I certainly sympathize with your wife's position. Don't skimp on something as long as it will actually make you happy (personally, I don't know if a car would do that for me, but everyone's different...). If extra spending and a bigger house are going to significantly push back feasible retirement, and you're worried you won't be able to make as much money later, that's a different matter.
A more expensive home certainly looks financially feasible and not so bad at all, if that is more or less the end of things—it rarely is, and think about furniture and upkeep for a house like that on top of the property tax—with no further lifestyle creep.
I think this needs to be anchored by saving rates, expected retirement dates, how much you enjoy your work, and so on. If you're currently on pace for retirement at say 50 with 80x annual desired spending accrued, I certainly sympathize with your wife's position. Don't skimp on something as long as it will actually make you happy (personally, I don't know if a car would do that for me, but everyone's different...). If extra spending and a bigger house are going to significantly push back feasible retirement, and you're worried you won't be able to make as much money later, that's a different matter.
Re: Wife tired of saving...
Personally, I don’t blame her for wanting to live in a house (as opposed to a townhouse) when you have kids. This is assuming her reasons are “I want our own yard, I want more space, etc”. You’re saying your taxes are $6900 and you worry about them being $15-$20K, but is there nothing with $10-$12K in property taxes? I understand not wanting to go all mcmansion, but I don’t think it’s unreasonable to want to live in a house.
I don’t know, but I think the cars are more frivolous than the house. I would've kept the old cars and just moved into the house she wanted.
Is it possible that, while you say she is free to spend what she wants, that she feels pressure to keep spending low. In other words, she doesn’t really want to keep it that low, but feels like she is doing it more for you.
I don’t know, but I think the cars are more frivolous than the house. I would've kept the old cars and just moved into the house she wanted.
Is it possible that, while you say she is free to spend what she wants, that she feels pressure to keep spending low. In other words, she doesn’t really want to keep it that low, but feels like she is doing it more for you.
Re: Wife tired of saving...
If I can't buy my wife the car she wants when I have $2 million in the bank, then what is the point?
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Re: Wife tired of saving...
The issue in these decisions is that you deplete your current income producing assets in exchange for other assets that provide service or enjoyment to you, but also sometimes create additional, incremental expense, such as higher property taxes, more maintenance costs, etc.
Its simply a choice between the additional satisfaction of spending some or buying a larger home, vs. the additional capital position that you might have later.
I've always gotten a lot of satisfaction from larger numbers "in the bank", but its not everyone's cup of tea, and it is nice to live a little from time to time. Since there are two of you , you have to find a middle ground that works.
I'll also note that recently I've become aware of frugality as a form of "controlling behaviour" syndrome, where the over-riding need for frugality arises not just from financial prudence, but from a need of one individual to control other people. That's not healthy.
Its simply a choice between the additional satisfaction of spending some or buying a larger home, vs. the additional capital position that you might have later.
I've always gotten a lot of satisfaction from larger numbers "in the bank", but its not everyone's cup of tea, and it is nice to live a little from time to time. Since there are two of you , you have to find a middle ground that works.
I'll also note that recently I've become aware of frugality as a form of "controlling behaviour" syndrome, where the over-riding need for frugality arises not just from financial prudence, but from a need of one individual to control other people. That's not healthy.
Last edited by Boglegrappler on Wed Mar 04, 2015 4:46 pm, edited 1 time in total.
- TomatoTomahto
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Re: Wife tired of saving...
Bingo!8foot7 wrote:If I can't buy my wife the car she wants when I have $2 million in the bank, then what is the point?
I get the FI part but not the RE part of FIRE.
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Re: Wife tired of saving...
You mentioned 2 kids but didn't say if one of your goals was sending them to college. I look at a BMW as a year's college for one of my kids (but that's just me). I also have a goal of getting my kids through undergrad without any loans to them nor I (could cost $200K per child...).
However, I believe everyone deserves a luxury or two in life if you have worked hard and can afford it (I'm not a car guy, but do have some nice watches and other things).
Make sure your wife realizes that the problem with trying to keep up with the Joneses - is that the Joneses are really broke.
However, I believe everyone deserves a luxury or two in life if you have worked hard and can afford it (I'm not a car guy, but do have some nice watches and other things).
Make sure your wife realizes that the problem with trying to keep up with the Joneses - is that the Joneses are really broke.
Re: Wife tired of saving...
So in the past 3 years, you had a 7-figure income. What did you do with all of it?
Re: Wife tired of saving...
We were in an exactly similar situation 2 years ago. Two kids and we are about same age as you. We were living in a townhouse, and it was enough house from my POV. But, DW wanted a bigger single family home in the same school district. DW is extremely frugal compared to me, but she didn't want to compromise on the house. We ended up buying a single family home and rented out the townhouse. Our mortgage+taxes almost doubled, but she has been extremely happy and very appreciative of the home purchase. Like another poster wrote above, "happy wife, happy life"
Re: Wife tired of saving...
I hear you... My wife & I are 33.5 years old, and no where close to your cash despite having saved aggressively. My wife wants an expensive overseas vacation, although she is OK with our 2-bed townhouse and car. I feel like I am somewhat on track to meet my retirement money, but am on a single income (wife is a homemaker) and our next biggest expense (after house) is still looming - sending junior to college. We might make an overseas vacation in next couple years, although not on the extravagant side.
(AGE minus 23%) Bonds | 5% REITs | Balance 80% US (75/25 TSM/SCV) + 20% International (80/20 Developed/Emerging)
Re: Wife tired of saving...
OP... It is a good problem to have.
If I have met your savings goal and there is budget left, I would go for it.
However, I wouldn't let others to influence our spending decision.
If I have met your savings goal and there is budget left, I would go for it.
However, I wouldn't let others to influence our spending decision.
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Re: Wife tired of saving...
Why are not contributing to retirement accounts when you have that type of income? If you both max out Solo 401k for 53K each, the tax savings would be 35-45K/yr, which goes a long way to pay for the BMW or another home that you'd both be happy with.pinhead wrote: All savings are in real estate (rental properties), CD's, cash and stocks. No retirement accounts. Basically our net worth is after tax. (why? Thats a different thread altogether)
We are both independent consultants and have reaped the fantastic economy from 2010 to now in terms of getting contracts. But that could change any moment. For the last 4 years, our combined household income was around $400K ++ per year. I would say this is not the norm. Probably $250K to $300K is the norm in a decent economy and $200K in a bad economy. But I want to prepare ourselves for if the [(stuff) -- admin LadyGeek] hits the fan scenario where both our skills are no more in demand and we can take it easy regardless, which can happen because mine is a very very specialized skill that 'is' in demand, but I see cheaper labor picking up on it and being able to do it efficiently.
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Re: Wife tired of saving...
With nearly 2M at 40, it is time to decide what victory looks like. I would take the following steps:
Define your spending today. No judgement, just figure out what cash input you would need to have to live your present life. I would suggest also modeling as if you had paid off the present home, and had cars like you presently have, repurchased at the rates you have done thus far. This is your baseline.
Determine what you would cut if "things hit the fan", such as both of you being unemployed, or a serious disability. This is your floor, and what you want to protect. Since 2% is the forever rate, you need 38k plus whatever you can get from pick-up work to cover this number. (Our uh-oh number is a quarter of our actual expenses, and SSDI would cover it.)
Then discuss aspirations. Go ahead and put fancy vacations, cars, houses, gold coins, watches, cameras, and whatever else suits your fancy. You can likely afford anything, but not everything, so this is your chance to discuss openly what things you have been wanted. Do a bit of introspection, and figure out which of these things are real, and go ahead and make separate lists. This is where you put in the very expensive house.
I would also spend a moment discussing the things you both agree you would not do. If a world cruise followed by first class Emirates tickets is not your thing, get that out. You might be surprised at what is not on that list.
From the aspiration list, you can probably figure out where your areas of contention lie. I bet you are going to discover some very serious disagreements, and I would be surprised if it is all the in-laws fault. You have been saving a great deal, and it sounds like you are not on the same page about spending on property. Time for negotiation.
With 400k coming in, perhaps 200k post taxes, you are likely to be socking away perhaps 100k+ in a year.
If it turns out, for example, that your uh-oh number is well under 38k, you may be able to cover the extra taxes without a problem, as long as you buy the house in cash. If it takes a year or two to sock away the extra house cost, start looking. It will take that long to find a place you like.
If, on the other hand, 38k is near your current uh-oh number, you might need both 250k in cash for the new house, plus enough surplus to bump the "things hit the fan" budget up by 12k more a year. Saving 250k for the house, and adding 600k to the nest egg to cover taxes in the worst case scenario will take perhaps eight years of savings.
Very few people have 400k of combined income, or even 200k, and a 1.9M portfolio at 40. You are in a good position with a lot of options.
Define your spending today. No judgement, just figure out what cash input you would need to have to live your present life. I would suggest also modeling as if you had paid off the present home, and had cars like you presently have, repurchased at the rates you have done thus far. This is your baseline.
Determine what you would cut if "things hit the fan", such as both of you being unemployed, or a serious disability. This is your floor, and what you want to protect. Since 2% is the forever rate, you need 38k plus whatever you can get from pick-up work to cover this number. (Our uh-oh number is a quarter of our actual expenses, and SSDI would cover it.)
Then discuss aspirations. Go ahead and put fancy vacations, cars, houses, gold coins, watches, cameras, and whatever else suits your fancy. You can likely afford anything, but not everything, so this is your chance to discuss openly what things you have been wanted. Do a bit of introspection, and figure out which of these things are real, and go ahead and make separate lists. This is where you put in the very expensive house.
I would also spend a moment discussing the things you both agree you would not do. If a world cruise followed by first class Emirates tickets is not your thing, get that out. You might be surprised at what is not on that list.
From the aspiration list, you can probably figure out where your areas of contention lie. I bet you are going to discover some very serious disagreements, and I would be surprised if it is all the in-laws fault. You have been saving a great deal, and it sounds like you are not on the same page about spending on property. Time for negotiation.
With 400k coming in, perhaps 200k post taxes, you are likely to be socking away perhaps 100k+ in a year.
If it turns out, for example, that your uh-oh number is well under 38k, you may be able to cover the extra taxes without a problem, as long as you buy the house in cash. If it takes a year or two to sock away the extra house cost, start looking. It will take that long to find a place you like.
If, on the other hand, 38k is near your current uh-oh number, you might need both 250k in cash for the new house, plus enough surplus to bump the "things hit the fan" budget up by 12k more a year. Saving 250k for the house, and adding 600k to the nest egg to cover taxes in the worst case scenario will take perhaps eight years of savings.
Very few people have 400k of combined income, or even 200k, and a 1.9M portfolio at 40. You are in a good position with a lot of options.
Re: Wife tired of saving...
Several of the best points already made are:
-$1.9mil at less than 40 is hard to evaluate, maybe even for OP, I edited since a further post gave more detail but still 'uncertain' year to year is one thing, whether a career has staying power or is somehow a complete flash in the pan is another. Sounds like a pretty high income is likely in the future, but it's a key question.
-one has to take some of the responsibility for the unwise move of telling anyone but their spouse how much money they make or have. I never told my parents how well I was doing while they were alive, not in any detail, let alone siblings.
-a happy spouse is a high priority for wise people, though of course it doesn't trump all other considerations always, especially if it's something that might generate short term happiness and long term regret.
My personal experience was similar in that wife wanted out of a condo and into a house, much higher prop tax (it's ~$20k now, wasn't that high then but still much higher than the condo). Our NW and ages were in same ballpark (though our house is worth around 4 times what it was then, CPI ~60% higher, of course that differential couldn't have been foreseen and is no gtee of the future). I accepted that the condo was too small after third kid but pushed for less expensive house choices, she pushed for more expensive. She got her way and it turned out well. We didn't start w/ luxury cars till somewhat later on; we got our first new 'regular' car the year before the house. But in general my natural spend/save tendency is cheap (though I can't compete with some of the world class cheap skates around here ), hers is more average, we've generally met somewhere in the middle but closer to her side on the big things, and it's worked out fine. But since things continued to go well for us income wise after that point, we'd have had to go really crazy with spending for things not to work out fine, and we didn't go crazy.
-$1.9mil at less than 40 is hard to evaluate, maybe even for OP, I edited since a further post gave more detail but still 'uncertain' year to year is one thing, whether a career has staying power or is somehow a complete flash in the pan is another. Sounds like a pretty high income is likely in the future, but it's a key question.
-one has to take some of the responsibility for the unwise move of telling anyone but their spouse how much money they make or have. I never told my parents how well I was doing while they were alive, not in any detail, let alone siblings.
-a happy spouse is a high priority for wise people, though of course it doesn't trump all other considerations always, especially if it's something that might generate short term happiness and long term regret.
My personal experience was similar in that wife wanted out of a condo and into a house, much higher prop tax (it's ~$20k now, wasn't that high then but still much higher than the condo). Our NW and ages were in same ballpark (though our house is worth around 4 times what it was then, CPI ~60% higher, of course that differential couldn't have been foreseen and is no gtee of the future). I accepted that the condo was too small after third kid but pushed for less expensive house choices, she pushed for more expensive. She got her way and it turned out well. We didn't start w/ luxury cars till somewhat later on; we got our first new 'regular' car the year before the house. But in general my natural spend/save tendency is cheap (though I can't compete with some of the world class cheap skates around here ), hers is more average, we've generally met somewhere in the middle but closer to her side on the big things, and it's worked out fine. But since things continued to go well for us income wise after that point, we'd have had to go really crazy with spending for things not to work out fine, and we didn't go crazy.
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Re: Wife tired of saving...
Good, better, best. If you have money, you can spend it in good ways, better ways, and the best ways. I prioritize according to what brings happiness for the longest amount of time. It is good to buy stuff (sometimes -- as long as it doesn't make you a slave to your stuff). It is better to go on vacations and have experiences that you can carry with you your whole life. But I think the best way to spend money is to help others. I think happiness comes from philanthropy. Charitably giving money is better than cars, houses, vacations, etc. Retire early, and spend some time in Mozambique helping with the vaccination programs. Give a large donation to your favorite charity annually -- or better yet, get involved and bring your money with you.
Of course, don't do anything that'll put you in the poor house. You have to have money to help people. The more money, the more people you can help. I think doing this "best" stuff will help you and your wife be happy.
Of course, don't do anything that'll put you in the poor house. You have to have money to help people. The more money, the more people you can help. I think doing this "best" stuff will help you and your wife be happy.
- FelixTheCat
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- Joined: Sat Sep 24, 2011 12:39 am
Re: Wife tired of saving...
2mm at 40 is an extraordinary feat for most. Buy a decent house but don't go overboard. Keep wife happy or you may have 1 mm + payments.
Felix is a wonderful, wonderful cat.
Re: Wife tired of saving...
Buying new cars is the worst way to enjoy your money... Go on some really nice vacations instead... That's what my wife and I did once we broke $1 million and realized we were well on-track to meet our retirement goals...pinhead wrote:Wife and I have had the same mindset since we meet and got married. Fast Forward 16 years and a net worth of 1.9m, she is tired of saving and not doing much with the money. We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home. The townhome is enough but every single person we know within our social circle have way bigger homes (with hefty property tax, around 15K to 20K, wherelse ours is $6K). They drive nice cars too obviously.
My wife' s sister + family also seem to enjoy their money and have told us few times that if they had our kinda money, they would have lived way better. To appease my wife somewhat, last year we changed one of our cars to a 2012 Lexus RX 350. Now she wants me to change our 2009 camry to a BMW. Honestly, all this will not even make a difference to the bottom line, but I feel she is tired and exhausted of seeing the nest egg being built with no 'current' enjoyment of it per say. I see her logic somewhat, but i think this is one of the warning signs of breaking away from the long term goal.
My question is, is what she is going thru the norm? What advice can be given to her? I really dont mind the bmw thingy, but the larger home I am dead against, mainly because of the property tax. Help?
PS: We take plenty of vacations. (if anyone was going to suggest that to please her). And she can buy whatever she wants, but she is the type that doesnt.
Edit: We are 39 and 38 years old
A nicer house isn't a terrible idea either after 16 years and two kids...
Of course, I'm assuming you're in your 40s, and need $2-$3 million to retire, even if you upgrade your lifestyle a bit... If you're 60, and need $5 million to retire, then you better keep your spending under-check...
But I think you can loosen the purse-strings a bit... But TWO new cars? Yuck... What a waste...
Re: Wife tired of saving...
If they lived way better, they wouldn't have that kind of money.fanmail wrote:I don't really have much advice for you. But this line kinda irked me for some reason.pinhead wrote:My wife' s sister + family also seem to enjoy their money and have told us few times that if they had our kinda money, they would have lived way better.
Re: Wife tired of saving...
We take 5 to 6 weeks off in a year and live overseas. We take more vacations than the average person. (For example last year, we went to Frankfurt, Hong kong, Singapore, Malaysia etc). We love spending on experience., thats for sure because even when u do that, it never breaks the bank.Buying new cars is the worst way to enjoy your money... Go on some really nice vacations instead... That's what my wife and I did once we broke $1 million and realized
But I think you can loosen the purse-strings a bit... But TWO new cars? Yuck... What a waste...
2 cars because both travel to client site. (Where we live, trains only go towards downtown, not any other directions suburb to suburb etc.)
2 cars are an absolute must. No 2 ways around this.
Last edited by pinhead on Wed Mar 04, 2015 5:44 pm, edited 2 times in total.
Re: Wife tired of saving...
So who is driving the Camry? If she has the Lexus and you have the Camry, it does sound like keeping up with the Jones - or her sisters. However, the fact that you started out with 'to appease my wife" raises a few red flags for me along with your comments below on the house vs. townhouse question. You should be making spending decisions and doing long range financial planning jointly. It isn't clear that that is happening from your OP.pinhead wrote: To appease my wife somewhat, last year we changed one of our cars to a 2012 Lexus RX 350. Now she wants me to change our 2009 camry to a BMW.
That is a huge difference in property taxes and hence home values. So maybe your townhouse isn't "enough" for your family - it certainly sounds like your wife doesn't agree with your assessment. Having neighbors right on top of you isn't for everyone - especially families with kids. But that doesn't mean you need to triple your home price either.pinhead wrote: We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home. The townhome is enough but every single person we know within our social circle have way bigger homes (with hefty property tax, around 15K to 20K, wherelse ours is $6K).
...
I really dont mind the bmw thingy, but the larger home I am dead against, mainly because of the property tax.
Re: Wife tired of saving...
Townhome is 2000 sq feet. Its an end unit. Its a townhome, not a condo or a coachhome. And its a end unit with land, if that matters and with no one above us.cherijoh wrote:So who is driving the Camry? If she has the Lexus and you have the Camry, it does sound like keeping up with the Jones - or her sisters. However, the fact that you started out with 'to appease my wife" raises a few red flags for me along with your comments below on the house vs. townhouse question. You should be making spending decisions and doing long range financial planning jointly. It isn't clear that that is happening from your OP.pinhead wrote: To appease my wife somewhat, last year we changed one of our cars to a 2012 Lexus RX 350. Now she wants me to change our 2009 camry to a BMW.
That is a huge difference in property taxes and hence home values. So maybe your townhouse isn't "enough" for your family - it certainly sounds like your wife doesn't agree with your assessment. Having neighbors right on top of you isn't for everyone - especially families with kids. But that doesn't mean you need to triple your home price either.pinhead wrote: We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home. The townhome is enough but every single person we know within our social circle have way bigger homes (with hefty property tax, around 15K to 20K, wherelse ours is $6K).
...
I really dont mind the bmw thingy, but the larger home I am dead against, mainly because of the property tax.
As for the cars, there is no hers or my car. Whoever gets a contract/client that is further, that person takes the more economical car because of gas mileage. Right now she drives 80 miles daily, therefore she takes the camry. And I currently work from home.
Thanks for the feedback so far folks. Its an eye opener.
- tylerdurden
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- Location: Austin, TX
Re: Wife tired of saving...
After reading your initial post, I would agree with several other members who stated to let off the accelerator a bit. But after reading you second post where you mention current and possible income, I think you may be better off just evaluating your overall savings rate and where your current expenses are. I think that will give a clearer picture for both of you on what your perceived standard of living may be compared to reality.
Overall though, I think one should not get too caught up in the savings game (I'm guilty of it at times). Our future is unknown, so there needs to be balance between enjoying now and saving for the future.
Overall though, I think one should not get too caught up in the savings game (I'm guilty of it at times). Our future is unknown, so there needs to be balance between enjoying now and saving for the future.
"The things you own end up owning you." -TD
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Re: Wife tired of saving...
OP,
No advice here, but I'm very interested how this turns out.
You're not alone. We're in the early-to-mid 30's and we look very similar to a younger you:
-We're renting -- DW "hates" it
-I just started first real job after a long residency/grad school
-We're savings 30% in 401(k) plus a 9.5% match (nearing hitting the mega-backdoor ROTH limits) plus 2 ROTHs IRA
-Wife is raising the kid and not employment at the moment
-Student loans almost gone (~$6k left)
-Our rental is progressing well
DW is on board for saving for retirement, but wants to buy a "big" house (x5-x6 income ... California RE), private school for the kiddo, and a few more kids. I'd love to run at this saving rate for another decade before increasing up to our lifestyle. I see the struggle coming.
Please update how you and the DW come to a resolution.
No advice here, but I'm very interested how this turns out.
You're not alone. We're in the early-to-mid 30's and we look very similar to a younger you:
-We're renting -- DW "hates" it
-I just started first real job after a long residency/grad school
-We're savings 30% in 401(k) plus a 9.5% match (nearing hitting the mega-backdoor ROTH limits) plus 2 ROTHs IRA
-Wife is raising the kid and not employment at the moment
-Student loans almost gone (~$6k left)
-Our rental is progressing well
DW is on board for saving for retirement, but wants to buy a "big" house (x5-x6 income ... California RE), private school for the kiddo, and a few more kids. I'd love to run at this saving rate for another decade before increasing up to our lifestyle. I see the struggle coming.
Please update how you and the DW come to a resolution.
- JDCarpenter
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Re: Wife tired of saving...
From a pure financial standpoint, it would be best to start having "his and her" cars. The difference in gas mileage between the camry and Lexus will never come to equal the price (and ownership costs) of trading the Camry in for a BMW. Particularly if you are cool with the Toyota as your car....pinhead wrote:...
...
As for the cars, there is no hers or my car. Whoever gets a contract/client that is further, that person takes the more economical car because of gas mileage. Right now she drives 80 miles daily, therefore she takes the camry. And I currently work from home.
....
Our personal blog (no ads) of why we saved/invested: https://www.lisajtravels.com/
Re: Wife tired of saving...
I think you and your wife should have the same mindset and for the next 16 years, build up your savings in a house and back off on the financial accounts. You can enjoy the house while you are living in it and build equity in it as the mortgage is paid off. In exchange, sell off the townhome and put the cash into your investment accounts.pinhead wrote:Wife and I have had the same mindset since we meet and got married. Fast Forward 16 years and a net worth of 1.9m, she is tired of saving and not doing much with the money. We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home.
In other words, your net worth is currently heavily skewed towards stocks and bonds, I imagine, and the real estate portion could be increased.
Life is about more than money.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
Re: Wife tired of saving...
celia wrote:I think you and your wife should have the same mindset and for the next 16 years, build up your savings in a house and back off on the financial accounts. You can enjoy the house while you are living in it and build equity in it as the mortgage is paid off. In exchange, sell off the townhome and put the cash into your investment accounts.pinhead wrote:Wife and I have had the same mindset since we meet and got married. Fast Forward 16 years and a net worth of 1.9m, she is tired of saving and not doing much with the money. We have 2 kids (9 and 2) and live in a townhome but now she wants to move to a larger home.
In other words, your net worth is currently heavily skewed towards stocks and bonds, I imagine, and the real estate portion could be increased.
Life is about more than money.
Clarifications: $1m in real estate (home plus rental properties), 750K in cash and CDs, 150K in stocks.
Re: Wife tired of saving...
3 thoughts.
First, ignore what the in-laws say. It you life. Don't let other people's jealousies and “keeping up with the jones” influence you. Be happy with what you want, not what other people want. If you let other people set your standards you will never be rich enough.
Second, a expense is a expense. Spending money on a fancy car is no different then spending more money on property taxes. Would you be willing to take fewer vacations in exchange for a nicer home? Personally, I would keep the smaller home and take more vacations but that is a question of personal preference. That is going to be a difficult conversation with your wife. However, that is a different (but interlocking) conversation than how much you save / spend. Try to keep them separate. If not you are just going to end up in a quagmire.
Third, when I heard “real-estate”, “we are consultants” and “no retirement savings”, you portfolio changed from “nice” to “interesting”. These are high risk flags. Managing this could be tricky which would imply a conservative approach. Much depends on how solid your jobs are and what your future goals are. My gut would be to cut the expected earnings from work and investments by 1/3 when constructing a budget to see if I could afford a new house.
[edit] I just saw that the majority of assets are in real-estate. That is, in a non-diversified assets. Rule of thumb says cut value by 10 to 20%. Illiquid. Rule of thumb says cut value by 10 to 20%. Are the assets leveraged, that is, are they mortgaged? Short term or long term leases? etc. Maybe cut estimates by 40%, not 1/3. For real-estate and consulting there can be long dry patches. Make sure you have sufficient provisions to last.
First, ignore what the in-laws say. It you life. Don't let other people's jealousies and “keeping up with the jones” influence you. Be happy with what you want, not what other people want. If you let other people set your standards you will never be rich enough.
Second, a expense is a expense. Spending money on a fancy car is no different then spending more money on property taxes. Would you be willing to take fewer vacations in exchange for a nicer home? Personally, I would keep the smaller home and take more vacations but that is a question of personal preference. That is going to be a difficult conversation with your wife. However, that is a different (but interlocking) conversation than how much you save / spend. Try to keep them separate. If not you are just going to end up in a quagmire.
Third, when I heard “real-estate”, “we are consultants” and “no retirement savings”, you portfolio changed from “nice” to “interesting”. These are high risk flags. Managing this could be tricky which would imply a conservative approach. Much depends on how solid your jobs are and what your future goals are. My gut would be to cut the expected earnings from work and investments by 1/3 when constructing a budget to see if I could afford a new house.
[edit] I just saw that the majority of assets are in real-estate. That is, in a non-diversified assets. Rule of thumb says cut value by 10 to 20%. Illiquid. Rule of thumb says cut value by 10 to 20%. Are the assets leveraged, that is, are they mortgaged? Short term or long term leases? etc. Maybe cut estimates by 40%, not 1/3. For real-estate and consulting there can be long dry patches. Make sure you have sufficient provisions to last.
Last edited by alex_686 on Wed Mar 04, 2015 6:10 pm, edited 1 time in total.
Former brokerage operations & mutual fund accountant. I hate risk, which is why I study and embrace it.
Re: Wife tired of saving...
I've seen families with teens move to a house or add-on only to be left with an empty nest 5 years later. Why not enjoy the space for most of their childhood, not just the teen years (when teens aren't at home as much anyways).DVMResident wrote:DW is on board for saving for retirement, but wants to buy a "big" house (x5-x6 income ... California RE), private school for the kiddo, and a few more kids. I'd love to run at this saving rate for another decade before increasing up to our lifestyle. I see the struggle coming.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.
Re: Wife tired of saving...
So you own real estate that you let others live in, while your own family has to share living spaces with other townhouse owners? I hope none of the rentals are bigger than your townhouse. (I agree with DW.)pinhead wrote:Clarifications: $1m in real estate (home plus rental properties), 750K in cash and CDs, 150K in stocks.
A dollar in Roth is worth more than a dollar in a taxable account. A dollar in taxable is worth more than a dollar in a tax-deferred account.