Search found 32 matches

by Ace$
Wed Jan 18, 2017 5:22 pm
Forum: Personal Finance (Not Investing)
Topic: Never had a credit card, should I get one?
Replies: 70
Views: 5367

Re: Never had a credit card, should I get one?

At this point, I wouldn't.

Studies have shown that the dollar amount of purchases is greater when plastic is used (credit more than debit) vs. cash. The study cites the pain of parting with cash vs. the ease of swiping a plastic card as the primary reason. We do have a CC we use for online purchases and my business travel, but we primarily use electronic checks for bill paying and cash for most everything else except gas at the pump or groceries.
by Ace$
Wed Jan 18, 2017 5:14 pm
Forum: Personal Finance (Not Investing)
Topic: How much to spend on a house?
Replies: 29
Views: 6652

Re: How much to spend on a house?

We are both physicians and are relatively high earners but also have a lot of student loan debt to factor in to our monthly budgets. IIWY, I'd live like a broke college student and plow every extra dollar into paying off all the consumer debt. Buying a home while broke is a really horrible idea. I don't know if I would call student loans "consumer debt". Makes it sound like debt they went into to buy a new pool table and some fancy jewelry. Those student loans are the reasons they're likely making six figures and have the ability to buy a house. Call it "non-mortgage debt" then - it doesn't really matter to me. And I'm not knocking them for having debt, I'm advising on what I believe to be the best course of action to e...
by Ace$
Wed Jan 18, 2017 4:48 pm
Forum: Personal Finance (Not Investing)
Topic: Mortgage/Real Estate Questions
Replies: 2
Views: 560

Re: Mortgage/Real Estate Questions

I've bought/sold a home closing the same day twice - it's very stressful and those were both "local" moves.

I'd be tempted, in your case, to sell the CA house, move into temporary housing, and then possibly rent another 6-12 months beyond that. CA to TX is a major move not only physically but culturally. You really want to learn the area before buying a home in my opinion. It will also remove the stress of having (possibly) an unsold house in CA with a pending purchase in TX (unless the employer is eliminating that concern). Either way - I'm going to learn the area prior to buying.
by Ace$
Wed Jan 18, 2017 4:44 pm
Forum: Personal Finance (Not Investing)
Topic: Paying back college loan debt
Replies: 15
Views: 1894

Re: Paying back college loan debt

I follow The Total Money Make Over by Dave Ramsey principals when it comes to budgeting and debt. I just wish I was as young as you when I started. :D His steps are as follows: 1. Save $1k in a starter emergency fund to prevent any additional need for taking on debt 2. Payoff all non-mortgage debt as quickly as possible 3. Increase starter emergency fund to a fully funded emergency fund of 3-6 months expenses 4. Begin investing for retirement (15% of gross) 5. Begin saving (if applicable and desired) for college education (this is usually geared toward your children) 6. Payoff the mortgage early 7. Build wealth You probably have BS1 done, so that puts you into BS2. You should temporarily suspend BS4 contributions, dump every disposable doll...
by Ace$
Wed Jan 18, 2017 4:36 pm
Forum: Personal Finance (Not Investing)
Topic: How much to spend on a house?
Replies: 29
Views: 6652

Re: How much to spend on a house?

dcr1984 wrote: We are both physicians and are relatively high earners but also have a lot of student loan debt to factor in to our monthly budgets.
IIWY, I'd live like a broke college student and plow every extra dollar into paying off all the consumer debt. Buying a home while broke is a really horrible idea.
by Ace$
Wed Jan 18, 2017 4:35 pm
Forum: Personal Finance (Not Investing)
Topic: How much to spend on a house?
Replies: 29
Views: 6652

Re: How much to spend on a house?

Another rule of thumb is mortgage no more than 25% of take home pay (pref after 20% down on a 15year fixed). I agree with this. But just to clarify I believe (I could be wrong) mhalley is referring to "monthly mortgage payment no more than 25% of monthly take home pay" In addition you should be debt free and have 3-6 months of expenses in an emergency fund before you are ready to purchase a house. It sounds like the members above are at least somewhat familiar with Dave Ramsey and The Total Money Make Over philosophy. First, you would need to be debt free - so all those SLs need to be paid off as well as any credit cards, auto payments, personal loans, medical debt, etc. Second, you would need 3-6 months of expenses in cash which...
by Ace$
Wed Jan 18, 2017 4:29 pm
Forum: Personal Finance (Not Investing)
Topic: term-life insurance
Replies: 3
Views: 519

Re: term-life insurance

I'd first evaluate if there is a need for life insurance. With no children or spouse dependent on his earning ability, he seemingly only needs enough to bury himself.
by Ace$
Sun Jan 15, 2017 9:37 am
Forum: Personal Investments
Topic: Roth 401k Withdrawl / Match Question - Home Down Payment
Replies: 10
Views: 1014

Re: Roth 401k Withdrawl / Match Question - Home Down Payment

pascal wrote:I am reasonably sure - raiding a 401k when you don't have to would be something Dave Ramesey would not advocate.
Agreed. Ramsey would not approve. Instead, he would suggest you just suspend contributions between now and when you close in order to hoard as much cash as possible and get back to the retirement/match post-closing.

IIWY, I'd just go with the 20%, keep retirement as is, and focus on paying off the mortgage (BS6) when you get there (which is probably immediately if you're already doing retirement investing).
by Ace$
Fri Jan 13, 2017 5:30 pm
Forum: Personal Investments
Topic: 65k Cash. 25 y/o. Best place to put this?
Replies: 25
Views: 2606

Re: 65k Cash. 25 y/o. Best place to put this?

Is it safe to assume you have no debt? If that assumption is correct, I'd park that cash right where it is and plan on using it to get through medical school to minimize any potential SL borrowing. Medical school runs $250k+ from what I've heard/read.
by Ace$
Fri Jan 13, 2017 5:22 pm
Forum: Personal Finance (Not Investing)
Topic: House downpayment and cashing in index funds?
Replies: 16
Views: 1621

Re: House downpayment and cashing in index funds?

I agree with the poster who said this is too much house given the income.

That said, if you're treating this as a 50/50 business transaction I would recommend handling the down payment in that fashion. That's the way the land purchase was handled, and I would handle expenses similarly to keep it clean.

But, again, this is too much house.
by Ace$
Thu Jan 12, 2017 11:13 pm
Forum: Personal Finance (Not Investing)
Topic: Car accident . Fix car or not ?
Replies: 28
Views: 3108

Re: Car accident . Fix car or not ?

I'd be shocked if this isn't a total loss, and I would not consider taking a lesser settlement in return for keeping this salvage. Once a car has a salvage title, it will always have a salvage title which makes the value even more questionable and the vehicle very difficult to get rid of later. I finally spoke to the adjuster at the insurance company today. He said they would have to send a field examiner due to the amount of damage. And there won't be one for another week. But he said that they would only consider it a total loss if the cost of the repair is greater than the value of the car. I asked about a hypothetical scenario with a car worth $6,000 and a repair $5,000 and he confirmed that in this case they would only pay to repair i...
by Ace$
Thu Jan 12, 2017 8:06 pm
Forum: Personal Consumer Issues
Topic: How much do you typically spend in a restaurant?
Replies: 171
Views: 19577

Re: How much do you typically spend in a restaurant?

Two of us in Denver will typically run about $25 at a mid-range sit-down restaurant we typically frequent - for food. Double that if we're drinking.

Drinks, whether it be alcohol or iced tea or soft drinks, are where the money is. I NEVER drink anything out unless it's a beer or cocktail. I get bent out of shape spending $2.99 for a glass of tea.
by Ace$
Thu Jan 12, 2017 5:45 pm
Forum: Personal Finance (Not Investing)
Topic: Car accident . Fix car or not ?
Replies: 28
Views: 3108

Re: Car accident . Fix car or not ?

I'd be shocked if this isn't a total loss, and I would not consider taking a lesser settlement in return for keeping this salvage. Once a car has a salvage title, it will always have a salvage title which makes the value even more questionable and the vehicle very difficult to get rid of later.
by Ace$
Thu Jan 12, 2017 5:41 pm
Forum: Personal Finance (Not Investing)
Topic: How to best approach saving for retirement/debt reduction
Replies: 15
Views: 1916

Re: How to best approach saving for retirement/debt reduction

I glad to see many have already made reference to The Total Money Make Over by Dave Ramsey. It is a very simple, don't confuse that with easy, plan that's primary claim to fame is getting households on the zero-based budget (eliminates overspending and/or not knowing where your money is going) and eliminating debt. With $1.5k of your discretionary income going towards debt, you're looking at over 3 years if nothing else goes wrong. That's too long. Obviously, if you did recover that $20k, this journey is cut down to under 2 years which is on average with those using the Ramsey approach. But I'm certainly not waiting around for that to get my financial house in order. Ramsey (TMMO) teaches the Baby Step approach: 1. $1k starter emergency fun...
by Ace$
Wed Jan 11, 2017 6:35 pm
Forum: Personal Finance (Not Investing)
Topic: Morgage Advice
Replies: 16
Views: 2357

Re: Morgage Advice

As far as securing a mortgage loan quickly, a short-term (15-year) loan with a strong down payment (20% or more) that results in an affordable payment (25-35% of take-home pay) would qualify you at most lenders that do manual underwriting. What exactly is manual underwriting? How exactly would I find a lender that does this? I am unfamiliar with pretty much all aspects of mortgages but in particular manual underwriting. I might struggle to make a down payment of 20% but I think that might be achieved quicker than a 640 credit score. You'll typically find this at a smaller local bank or credit union. Most underwriting is done by computer nowadays. Your application is plugged in, ratios calculated, a credit score pulled, and a decision made ...
by Ace$
Wed Jan 11, 2017 6:30 pm
Forum: Personal Investments
Topic: Home Advice
Replies: 9
Views: 1145

Re: Home Advice

I would recommend postponing the home purchase until you have all your consumer debt paid off and a healthy emergency fund in place. You may want to consider using some of these funds towards that purpose. Too many people buy a home while in debt with insufficient cash on hand and get into a jam when the new home needs things. But to your question, I would parrot the advice of just parking these monies in a savings/money market account and letting them sit there until it's time to close. Yeah Ace I agree with you and that is why we are not considering doing anything until we are debt free (which is really soon and we are excited about that). We have also made sure we have an emergency fund since we have both experience the huge stress reli...
by Ace$
Wed Jan 11, 2017 5:17 pm
Forum: Personal Investments
Topic: Help me decide if I should Invest or Payoff Loans?
Replies: 15
Views: 2236

Re: Help me decide if I should Invest or Payoff Loans?

bigred77 wrote:Pay off the car. Pay off the Student loans. Max out your Roth IRA contribution for 2016 (you have until April to do this). Max out your Roth IRA contribution for 2017. Go in and change your 401k contribution to 10% of salary. Then reassess.

Your cash will have dropped down to about 10k by doing this. How much do yo need for the commonly recommended 6 months of expenses? Save this amount back up and then consider increasing your 401k contributions even more.
Nailed it.

And I'd recommend against doing cash-out refinances going forward.
by Ace$
Wed Jan 11, 2017 5:11 pm
Forum: Personal Investments
Topic: Home Advice
Replies: 9
Views: 1145

Re: Home Advice

I would recommend postponing the home purchase until you have all your consumer debt paid off and a healthy emergency fund in place. You may want to consider using some of these funds towards that purpose. Too many people buy a home while in debt with insufficient cash on hand and get into a jam when the new home needs things.

But to your question, I would parrot the advice of just parking these monies in a savings/money market account and letting them sit there until it's time to close.
by Ace$
Wed Jan 11, 2017 4:29 pm
Forum: Personal Finance (Not Investing)
Topic: Tax Question on a Jointly Owned Property
Replies: 8
Views: 1009

Re: Tax Question on a Jointly Owned Property

MarkNYC wrote:
Ace$ wrote:I don't know if you're filing taxes correctly or not; however, I would also be asking your tax professional what happens if the other couple doesn't report/file/pay their half? That's an even larger concern in my opinion.
If the other couple does not report/file/pay their half, then the other couple is liable for the ramifications of failure to report income and potential failure to pay tax. Couple #1 is not responsible for the completeness and accuracy of the individual income tax return of couple #2.
Right. I'd be more concerned with some type of lien being placed on the jointly held properly if things really went sideways. It's unlikely it would get that far, but the potential exists I guess. RIght?
by Ace$
Wed Jan 11, 2017 4:09 pm
Forum: Personal Finance (Not Investing)
Topic: How to build passive income
Replies: 45
Views: 9935

Re: How to build passive income

As an alternative to your traditional rental property, what about buying vacant land that can generate income from grazing cattle, allowing harvesting of hay or timber, keeping of horses, etc. It seems there would be minimal upkeep, low taxes, and land is a finite resource. I thought that the following article made some good points http://retipster.com/truthaboutlandinvesting/ Not mentioned but the first thing that I thought of - unless you can actually see your property out of your window with a pair of binoculars how do you keep other people from grazing cattle, harvesting timber, or bringing in a trailer without bothering to inform you about it? Fantastic article - thanks for the link. I would be partial to owning rental property of any...
by Ace$
Wed Jan 11, 2017 3:27 pm
Forum: Personal Finance (Not Investing)
Topic: How to build passive income
Replies: 45
Views: 9935

Re: How to build passive income

As an alternative to your traditional rental property, what about buying vacant land that can generate income from grazing cattle, allowing harvesting of hay or timber, keeping of horses, etc. It seems there would be minimal upkeep, low taxes, and land is a finite resource.
by Ace$
Wed Jan 11, 2017 3:17 pm
Forum: Personal Finance (Not Investing)
Topic: Help with paying off debt
Replies: 56
Views: 6739

Re: Help with paying off debt

Ace$- Thank you for the advice. I will definitely take this into consideration. As far as refinancing, I would want to refinance to a 15 year loan and not start back up at 30. We have been in our house for about 2.5 years now so I am unsure if the value of our house has gone up enough to avoid the PMI. When I refinance, the LTV has to be 80%, correct? Is there a way to refinance down to a 15 year mortgage and get rid of PMI even if the LTV may still be above 80%? You're welcome. I don't disagree with going the 15-year route; that's the max I've done in recent years since embracing the Ramsey teachings. The LTV will need to be 80% in my experience (it's been several years since I was in mortgage lending or took out a mortgage loan). Whether...
by Ace$
Wed Jan 11, 2017 1:56 pm
Forum: Personal Finance (Not Investing)
Topic: Auto Loan [vs. investing]
Replies: 41
Views: 5443

Re: Auto Loan [vs. investing]

There is nothing special about having a depreciating asset and financing it, unless you are considering the possibility of default . You are fully exposed to the asset's loss in value whether you finance it or pay cash. That is exactly what I am doing. That potential exists despite our best intentions. Well if we're talking about a depreciating asset, this is actually a benefit . In a default, a depreciating asset securing a loan will be worth less than an appreciating asset. So unless I'm missing something, the logic is completely backwards. I'd prefer to liquidate the asset rather than default which is harder to do when said asset is depreciating (often more quickly) than the loan balance is declining (especially earlier in the loan; esp...
by Ace$
Wed Jan 11, 2017 1:49 pm
Forum: Personal Finance (Not Investing)
Topic: Auto Loan [vs. investing]
Replies: 41
Views: 5443

Re: Auto Loan [vs. investing]

I wouldn't finance a depreciating asset. Pay cash. There is nothing special about having a depreciating asset and financing it, unless you are considering the possibility of default . You are fully exposed to the asset's loss in value whether you finance it or pay cash. That is exactly what I am doing. That potential exists despite our best intentions. Well if we're talking about a depreciating asset, this is actually a benefit . In a default, a depreciating asset securing a loan will be worth less than an appreciating asset. So unless I'm missing something, the logic is completely backwards. I'd prefer to liquidate the asset rather than default which is harder to do when said asset is depreciating (often more quickly) than the loan balanc...
by Ace$
Wed Jan 11, 2017 1:36 pm
Forum: Personal Finance (Not Investing)
Topic: Auto Loan [vs. investing]
Replies: 41
Views: 5443

Re: Auto Loan [vs. investing]

Ketawa wrote:
Ace$ wrote:I wouldn't finance a depreciating asset. Pay cash.
There is nothing special about having a depreciating asset and financing it, unless you are considering the possibility of default. You are fully exposed to the asset's loss in value whether you finance it or pay cash.
That is exactly what I am doing. That potential exists despite our best intentions.
by Ace$
Wed Jan 11, 2017 11:30 am
Forum: Personal Finance (Not Investing)
Topic: 2017 Goals...What should we do?
Replies: 15
Views: 2316

Re: 2017 Goals...What should we do?

The TMMO plan of Ramsey's has served our family well for over 8 years now. We're debt free including the house after learning the program and applying it's principals. That said, a common sticking point is that starter emergency fund of $1k. Why not payoff the $12.2k car, keep the remaining $7.8k in the EF, then payoff the remaining car out of cash flow? It's amazing how many more options you have when you have no consumer debt payments?
by Ace$
Wed Jan 11, 2017 11:12 am
Forum: Personal Finance (Not Investing)
Topic: Auto Loan [vs. investing]
Replies: 41
Views: 5443

Re: Auto Loan [vs. investing]

I wouldn't finance a depreciating asset. Pay cash.
by Ace$
Wed Jan 11, 2017 11:10 am
Forum: Personal Finance (Not Investing)
Topic: Morgage Advice
Replies: 16
Views: 2357

Re: Morgage Advice

We haven't borrowed money in a number of years now, but we do keep a Discover Card which I use for business travel, online purchases, and recurring monthly charges which we payoff bi-weekly. I chose this card because it provides our FICO score on-demand. You could possibly get that car and your credit score will steadily increase over time.

As far as securing a mortgage loan quickly, a short-term (15-year) loan with a strong down payment (20% or more) that results in an affordable payment (25-35% of take-home pay) would qualify you at most lenders that do manual underwriting.

But, to be direct, I would probably recommend you get a full year on the job and a full year living in the area to make sure a home purchase is the right decision.
by Ace$
Wed Jan 11, 2017 11:03 am
Forum: Personal Finance (Not Investing)
Topic: student loan with 6.375% interest rate
Replies: 3
Views: 712

Re: student loan with 6.375% interest rate

Those are pretty nastly loan terms. I would reconsider how this loan is prioritized.
by Ace$
Wed Jan 11, 2017 11:01 am
Forum: Personal Finance (Not Investing)
Topic: Tax Question on a Jointly Owned Property
Replies: 8
Views: 1009

Re: Tax Question on a Jointly Owned Property

I don't know if you're filing taxes correctly or not; however, I would also be asking your tax professional what happens if the other couple doesn't report/file/pay their half? That's an even larger concern in my opinion.
by Ace$
Wed Jan 11, 2017 10:29 am
Forum: Personal Finance (Not Investing)
Topic: Where do you keep your emergency fund?
Replies: 93
Views: 13169

Re: Where do you keep your emergency fund?

brad.clarkston wrote:Ally 1% account + a local bank account.

My philosophy is a EF fund is for emergency's not money making especially in this no interest period.
I've actually had to use my EF a few times for real emergencies so I'm more risk averse that someone that hasn't.
I agree. I keep the lion's share of it in an online account; however, I have a few thousand at my local bank so I can have physical access if necessary. EF are savings accounts not investment accounts meaning they serve a much different purpose. Access is the most important thing.
by Ace$
Wed Jan 11, 2017 10:26 am
Forum: Personal Finance (Not Investing)
Topic: Help with paying off debt
Replies: 56
Views: 6739

Re: Help with paying off debt

I'm a Dave Ramsey guy like some here. While not necessarily optimum in terms of dollars and cents, those that only make the math argument typically forget to mention risk. Debt = Risk regardless of interest rate, payment amount, or something being "good" debt. They also neglect to mention that debt payments destroy your greatest wealth-building tool -- your income. This is why Ramsey teaches to eliminate all consumer debt payments (quickly - the typical follower is done within 18-24 months), then build the emergency fund to 3-6 months worth of expenses, then begin investing for retirement, saving for college (if applicable), and paying off the mortgage simultaneously. Money success comes from good financial behavior which is why h...