Bogleheads.org

Sax32

Take 9k of the 10k and pay off the IRS and almost the car, she'd only have 1k left on that. Then if there's a match on the 401k, make sure that's matched. I did the math on a 225k house with a dp of 20%. To not be house poor, I wouldn't suggest a mortgage on a 30 year term, with taxes and insurance to be no more then 25% of her net pay. She would be at 32%, so the house is a little high for her income. Hope this helps.

Sax32

After 3 different phone calls, I finally got someone that was very helpful. They suggested once I receive my distributions in my checking account, to call them back up and put the funds back into IRA as a roll over. Then I will fill out the "Excessive contributions form" or I can contribute those funds into a traditional Roth IRA and do a back door Roth IRA.

Sax32

retiredjg wrote: ↑Wed Mar 15, 2023 10:02 am
Sax32 wrote: ↑Wed Mar 15, 2023 9:16 am Well, I guess I'm learning the hard way, I found the Vanguard remove excess contributions form. Trying to figure out what to do since I already removed contributions from both my Roth and my wives. Do I contribute those amounts back into our Vanguard accounts and then fill out the form to remove excess contributions?
You say you "already removed contributions"...do you mean you had your custodian remove it as an excess contribution? Or you just took the money out yourself?

I took out my contributions myself, the exact amount I contributed in 2022. I found the "Vanguard remove excess contributions" form after the fact.

Sax32

Well, I guess I'm learning the hard way, I found the Vanguard remove excess contributions form. Trying to figure out what to do since I already removed contributions from both my Roth and my wives. Do I contribute those amounts back into our Vanguard accounts and then fill out the form to remove excess contributions?

Sax32

I'm dealing with this right now. We had a much higher income in 2022 due to the sale of our duplex and my tax accountant told me this past Monday that we were ineligable to contribute to our Roth IRA's in 2022. We had contributed $8000 for 2022. He told us to remove those contributions before April 15th and would make note of it on our taxes. Since we lost 20% in 2022, there were no earnings. Talking with Vanguard this triggered a 1099R form and when I asked about the process for removing excessive contributions, they simply said I should consult with a tax attorney, which I've done. So this was an interesting process to go through. You really should do this using their form so they code your 1099-R correctly. Also, how was your 1099 gener...

Sax32

I have two high school age kids. Both are strong students with a reasonable shot at top schools. We will not qualify for any need based aid. We could afford to put the through school from employment cash flow and/or savings in taxable. However, I want to create an incentive for them to take the cost of education seriously, including considering the excellent in-state schools where we live and applying for merit based and other scholarships. I would like to hear about your successful strategies for getting the kids to care about the costs of college. Thank you wise Bogleheads! If they are strong students, should they not be applying for tons of scholarships? My niece was in the same position, she was offered many scholarships to attend good...

Sax32

[Moved into a new thread from: Removing excess IRA contribution --admin LadyGeek]

I'm dealing with this right now. We had a much higher income in 2022 due to the sale of our duplex and my tax accountant told me this past Monday that we were ineligable to contribute to our Roth IRA's in 2022. We had contributed $8000 for 2022. He told us to remove those contributions before April 15th and would make note of it on our taxes. Since we lost 20% in 2022, there were no earnings. Talking with Vanguard this triggered a 1099R form and when I asked about the process for removing excessive contributions, they simply said I should consult with a tax attorney, which I've done. So this was an interesting process to go through.

Sax32

A separate question is why do you want to buy a house anyway? Hi, thanks for the response. I'm a first-generation immigrant and my family has faced a lot of difficulty getting established in the U.S. I want to buy a house because i'm tired of throwing my money away renting paying someone else's mortgage. I understand it's a big risk currently with such little cash on hand. However, i'm 32 and Dw 28. Our options are to continue to rent, move in with parents (not really an option we would like to take), or to buy a reasonably priced home in a low-moderate income area to qualify for the aid I outlined in OP. I have a nice salary and DW may be getting a masters but that will take some time and I will continue to be primary income earner for a ...

Sax32

My parents (82 and 81) have been snowbirds in Mesa, AZ for the past 20 years and they love it. The bought a 2 bedroom 1 bath in a 55 and older community with all of the ammenities. They leave in October and come back in April. They fly back and forth to us kids all summer and even go on cruises throughout the year. Leaving for 1 or 2 months, I would just consider a long vacation, whether it be at an airbnb or vrbo.
If you ever plan on buying a property somewhere, it's a really good idea to rent in numerous locations to figure out exactly where you'd want to retire, instead of buying a property and then hating the location.

Sax32

Depends what you mean by a refund. My k1 schedules never come on time for my tax attorney to complete my taxes, so when I got that profit and loss statement for 2021, because that investment was a loss for the year, I finally got my refund in November of 2022 after filing an addendum. I also got my property tax refund in September of 2022. As for my 1040, I haven't had a refund from both state and federal in over 3 years. For 2021 I owed close to 4k. This year I'm sure I'll owe around that much due to our rental property we sold in 2022, so we had income, but ended up selling early 2022 and paid 50k in capital gains, depreciation payback and state tax. I'm ready for a year where my taxes are more predictable.

Sax32

What stands out to me the most is the mortgage contributes to 39% of your net income. That's pretty high. Housing values continue to drop or stagnant, so you have to make a choice. If your wife chooses to take a cut in salary by being a professor then you would I hope agree to cut costs somewhere and housing appears to be your largest expense. There's a house on every block, so you probably have to downsize. I heard a static that in the 40's, the average house size was a 3 bedroom, 1 bath, 1500 square feet while raising 3 to 4 kids. Today Americans want everything big, so the average size is a 4 bedroom, 3 bath, 3000 square foot home. We have convinced ourselves that more is better. Good luck! You need to look at home prices in the Bay are...

Sax32

What stands out to me the most is the mortgage contributes to 39% of your net income. That's pretty high. Housing values continue to drop or stagnant, so you have to make a choice. If your wife chooses to take a cut in salary by being a professor then you would I hope agree to cut costs somewhere and housing appears to be your largest expense. There's a house on every block, so you probably have to downsize. I heard a static that in the 40's, the average house size was a 3 bedroom, 1 bath, 1500 square feet while raising 3 to 4 kids. Today Americans want everything big, so the average size is a 4 bedroom, 3 bath, 3000 square foot home. We have convinced ourselves that more is better. Good luck!

Sax32

My entire family has been at a local credit union since the 70's. It's just easier for us to transfer money back and forth, easy to get loans because of our history and fairly good benefits. Although it's changed throughout the years and has been trending poorly. For example, there use to be an appreciation picnic, where they'd have a live band, free food and games. That's now gone away. There use to be only 2 branches, now they are trying scale and there are 6. They promote annuties and whole life insurance products, so that's not great. They use to have free checking, but that's gone. The only reason we stay is because there aren't any crazy fees and it's easy for me to get a loan for whatever I want and fast.

Sax32

Pay it off. What's the point of keeping it around, you'd still have 70k left for an EF and to invest. Take that $400 mortgage payment and invest it monthly into a pretax or tax deferred investment. Not sure of you age, but with compound interest it could be over a million in 25 years.

Sax32

...It does not in any way surprise me that people who invested in residential real estate over that period with leverage did well.... ...I speak from experience and have gotten to where I am because of hard work.... ...Of course that reflects my view that you have to start with a reasonable benchmark, which will vary by market and period for the reasons I previously stated. Sax32, I think you're missing the point in this great series of responses by NiceUnparticularMan. Even someone who doesn't have experience or put in hard work can make a killing in a bull market. It's no different than people who pick stocks during a bull market and brag about their success when they really did no better or perhaps worse than an index fund when adjusted...

Sax32

25% dp on a duplex is not sufficiently leveraged, it's a lot more conservative then someone who puts down nothing, 3% or 5%. Well, 4X leverage is still 4X leverage, even if it is less than 20X or 33X. But since most residential real estate did well between 2014 and 2022, it is not surprising it worked out for you. Of course if you had done 4X leveraged investments in S&P 500 over that time, then those would once again be way ahead (unless you have omitted more from your story). Generally, ultimately once you introduce leverage, you have to try to figure out what returns look like normalized to the same level of risk. How many times have you invested in real estate? Passively through REITs, many times. As a direct investor and landlord,...

Sax32

eldinerocheapo wrote: ↑Thu Feb 09, 2023 8:35 am No, I've been a landlord/real estate investor and it was a nightmare. Couldn't wait to sell and move on. The more you own, the more you have to take care of, and RE is no exception.

Not sure about your situation, but after I got all my systems into play and finished renovations, I rarely got calls for anything. In fact my short term rental was like a part time job, it kept me so busy. Long term if you do it right, it doesn't require a ton of time if you buy the right property, screen your tenants and do your due diligence.

Sax32

25% dp on a duplex is not sufficiently leveraged, it's a lot more conservative then someone who puts down nothing, 3% or 5%. Well, 4X leverage is still 4X leverage, even if it is less than 20X or 33X. But since most residential real estate did well between 2014 and 2022, it is not surprising it worked out for you. Of course if you had done 4X leveraged investments in S&P 500 over that time, then those would once again be way ahead (unless you have omitted more from your story). Generally, ultimately once you introduce leverage, you have to try to figure out what returns look like normalized to the same level of risk. How many times have you invested in real estate? I've been in the biz for 10 years and recently sold all my properties b...

Sax32

There is so much you're missing here I mean, we obviously only know what you tell us. But I am again happy to agree that many people who bought US residential properties in 2014, sold in 2022, and did it on a sufficiently leveraged basis may have outperformed an unleveraged investment in US stocks. As I noted before, though, leveraging increases risk. My example was in comparison to the S&P 500 which the majority of people invest in, not individual stocks. The points I made apply equally well to stock funds. The only tax advantage for someone investing in a Roth IRA in say an index fund, such as the one I am in (VTASX), the advantage is the tax free withdrawls which is awesome, but that's it. So investing in stocks (or stock funds) in ...

Sax32

In 2014, we put down $50k on the duplex, not 180k. The 200k we netted was in 2022, when the Dow lost 20%. If we would have taken that 50k in 2014 and instead invested in the S&P 500, we'd had a return of 10.58% and 121k. So we did much better in real estate on that investment. Also, you missed the fact that tenants paid the principal of the mortgage I have $50,000 in the S&P 500 at about $130.5K as of now, although I suppose it depends on when you invested in 2014: https://www.portfoliovisualizer.com/backtest-portfolio#analysisResults You also didn't mention any closing costs or other transaction costs for the initial purchase, which should be added to your hypothetical stock investment for comparison purposes. Like, for example, i...

Sax32

It matters where you choose to live with $1 million dollars. If you are in one of the top urban cities in US, $1 million doesn't go very far. Rent and home costs alone, would eat that alive. If you lived in a reasonable Midwest region, you could retire on that kind of money with a modest withdrawl rate of 4%. Personally, 1 million is just a milestone, I'd rater be in the 3-5 million area, so that I feel like I could travel, purchase new cars, live in a couple of homes (One south and one north) and not have to worry as much about medical and dental issues that arrive in retirement.

Sax32

If you bought $180,000 of S&P 500 in 2014, today it is worth about $470,000. Even back in September it was worth about $411,000: And the S&P 500 did not require any maintenance costs or property taxes, and you could sell it in portions, at zero transaction costs with the click of a button. You missed the point. In 2014, we put down $50k on the duplex, not 180k. The 200k we netted was in 2022, when the Dow lost 20%. If we would have taken that 50k in 2014 and instead invested in the S&P 500, we'd had a return of 10.58% and 121k. So we did much better in real estate on that investment. Also, you missed the fact that tenants paid the principal of the mortgage, taxes, insurance, repair, etc. Also we had interest tax benefits and de...

Sax32

02nz wrote: ↑Tue Feb 07, 2023 10:48 am
Sax32 wrote: ↑Tue Feb 07, 2023 10:20 am
02nz wrote: ↑Mon Jan 02, 2023 8:27 pm
alex123711 wrote: ↑Mon Jan 02, 2023 8:16 pm As it has gone up so much, a lot of areas are up well over 50%, some over 100% in the last 2-3 years, and due to leverage those cash on cash returns are even higher, much higher actually. Is there a case for real estate as an investment?

I have owned two investment properties. The "you have to be hands on and love doing it" is one heck of a massive qualifier!
Yes, because what I've learned as an investor, is that no one does a better job than me at taking care of my rentals. Management companies are reactive when it comes to forecasting problems, whereas I was in the until probably once every 3 months and could check on everything and be proactive.

Sax32

NiceUnparticularMan wrote: ↑Tue Feb 07, 2023 10:38 am

If you bought $180,000 of S&P 500 in 2014, today it is worth about $470,000. Even back in September it was worth about $411,000:

Moderators delete this post please, I'm not seeing a way to do this.

Sax32

As it has gone up so much, a lot of areas are up well over 50%, some over 100% in the last 2-3 years, and due to leverage those cash on cash returns are even higher, much higher actually. Is there a case for real estate as an investment? Real estate should be viewed as a consumption good. As an investment, it's not great - a single property (or even a collection of properties) is far riskier in some ways than the stock market (e.g., neighborhood goes bad, sinkhole develops in your yard ...). It's not very liquid and transaction costs are high. And overall it really only keeps up with inflation, even though individual locales can experience much higher growth. However, the reality is that many Americans can't / don't save except for the equ...

Sax32

Grt2bOutdoors wrote: ↑Sun Feb 05, 2023 3:51 pm Peers should be based on more than just age alone. A couple which earns $75k a year and accumulates $1 million has a much tougher hurdle or rather a set of hurdles to cross compared to a couple which earns $100k+. Wouldn’t you agree?

These polls really don’t mean much.

Exactly. Someone who earns 75k a year, but manages to put away $1 million versus another couple who earns $100k, but only has a net worth of 250k, the lower wage earners have done a much better job of stashing money away in investments. Per the book "The Millionaire Next Door", that book would call this person a PAW (Prodigious Accumulater of wealth) whereas the couple earning 100k, but not putting much away is a UAW (Underachiever accumulated of wealth).

Sax32

KlangFool wrote: ↑Fri Feb 03, 2023 7:42 am
Sax32 wrote: ↑Thu Feb 02, 2023 2:45 pm
I'll make this really easy on you. If you buy a house, make sure that the mortgage, taxes and insurance aren't more then 25% of your Gross take home pay or you will struggle to put money away in savings, invest and pay for furnishings, rehabs and maintenance of your home.

Sax32,

I disagreed.

I believe in "Pay Yourself First". Aka, save first and spend later. The person should decide the saving goal first before deciding how much that they can spend each year. Then, the housing expense need to fit inside that spending budget.

KlangFool

Ok, everyone has the right to their own opinion. My advice has worked great for my family and we have built wealth. Spending to much on a home makes you house poor.

Sax32

I'll make this really easy on you. If you buy a house, make sure that the mortgage, taxes and insurance aren't more then 25% of your Gross take home pay or you will struggle to put money away in savings, invest and pay for furnishings, rehabs and maintenance of your home.

Sax32

guppyguy wrote: ↑Thu Feb 02, 2023 12:14 pm
Sax32 wrote: ↑Thu Feb 02, 2023 11:32 am We used the envelope system to get out of debt, but once that was accomplished we keep a shared Excel document that is biweekly and we do a zero based budget, where we keep track of investments, mortgage, taxes, insurance, utlities, Groceries, allowances, etc. Whenever someone needs to add something to the budget, they have to take that money away from another category to keep from going in the red.
How do you import your transactions?
Thanks!

By hand. I keep the excel file in Dropbox and my wife and I can add or subtract categories. I'm the type of person that edits this doc pretty much everyday. I know it's excessive, but I enjoy knowing where every dollar goes.

Sax32

I've owned two rental properties and was in the business for 10 years, but sold both properties recently, because of the outrageous offers we received to sell. Both were very successful. We bought our duplex for 180k in 2014 and total rents were $2400. There are many metrics to use to justify an investment and whether or not it will cash flow and the 1% rule is what most investors are using now, it use to be 2%, but the market is tough. A property that costs $100,000 should rent for at least $1,000 per month A property that costs $200,000 should rent for at least $2,000 per month A property that costs $300,000 should rent for at least $3,000 per month This is a general rule. So let's say you put 20% dp on a 30 year mortgage on 239k @ 6.33%,...

Sax32

We used the envelope system to get out of debt, but once that was accomplished we keep a shared Excel document that is biweekly and we do a zero based budget, where we keep track of investments, mortgage, taxes, insurance, utlities, Groceries, allowances, etc. Whenever someone needs to add something to the budget, they have to take that money away from another category to keep from going in the red.

Sax32

I think it depends. Based on your ages you have many years until you retire and you are in your aggressive investing years, so I would take full advantage of investing opportunities. Use compound interest as your friend. Are you interested in Real Estate, such as rentals, airbnb's? Have you thought about Reits? My wife and I are 52 and 44, so we are in a different stage of life where expiring our mortgage is our top priority right now, because we don't want to have payments anymore. It's not a math decision, it's a peace of mind decision. We have a networth of 1.35 million and we max our our Roth IRA's, we have pensions and 401k's. Once the house is paid off, we plan on getting back into Real Estate as a new business to wrap ourselves in wh...

Sax32

Man, that's tough. I have a life long friend that has been troubled his whole life and as soon as he gets money he blows it. He is an entrenpenuer and has a ton of good and bad ideas, always thinks he's gonna hit the next big idea, but at age 51 he is still poor and has called me recently for help in paying his rent. I told him, I don't loan money to anyone and that unless he is homeless, I could provide food and rent money, with some requirements. I pray for him, but I'm not sure his life will ever change. I think the only way to get through to someone is to let them crash and get to rock bottom. If you continue to subsidize their poor choices, nothing will change. I would write this person a letter, saying that after this 8k, there's no m...

Sax32

I understand your concerns about vehicle safety, I have two young boys, but I'm not convinced that of all the new and used cars I see people driving on the road everyday, the only car that is safe for kids is the Volvo. That would mean no one is safely driving their kids to school or to practice, I don't buy it. My wife drives a 2015 Honda Pilot and Consumer reports rated the vehicle highly in all categories. I drive a 2002 Chevy Tahoe with 210k on it and I feel very safe driving my kids around. Just make sure your not getting new car fever and making safety the excuse. There are plenty of used vehicles that are completely safe and affordable. Go to the library and check out the April 2022 Consumer reports magazine and it will show you the ...

Sax32

From my math your going to break even if not take a loss, after purchasing for 738k, 50k into upgrades and closing costs from selling and buying a new house even if you get in the 800's. If your ok with that to move to a safer neighborhood, that makes sense. Plus the interest rates have pretty much doubled, so your mortgage payment will be much higher.

Sax32

I'd say the stock market is a much better long-term investment than real estate. I think our impression of real estate returns is heavily influenced by the accumulation phase of the long-term debt cycle we've been in since the war. Real estate can't really outpace inflation over very long periods, without housing becoming unaffordable. And rents are capped by what people can afford. So I don't think you can get stock-market-like exponential long-term growth – once we factor in that, at some point, we have to mean revert. If we were always in an accumulation phase, real estate probably could return more. I think it has/had since the 80s, at least? Private equity healthcare. Certainly potential for very strong long-term profits with ageing d...

Sax32

Stinky wrote: ↑Wed Jan 25, 2023 2:50 pm
Sax32 wrote: ↑Wed Jan 25, 2023 2:36 pm In fact I'm been reading this book called "When to walk away". It talks about walking away from Toxic people. So this is what I've done now in regards to this person, but just wanted to know if anyone had some suggestions.
That’s generally wise advice.

I avoid talking with folks about politics, religion, and other contentious topics unless I’m highly confident that they share my beliefs. And even in the case that we seem to agree, I tread carefully.

I hear ya. I have a group of 4 friends and we all share the same political leaning, but it's shocking how diverse our beliefs are.

Sax32

EddyB wrote: ↑Wed Jan 25, 2023 2:44 pm There’s a dog walker in my neighborhood who believes that “the megahertz” are causing ADHD in children, among other things that—true or not—are outside my control and beyond my ability to address. We are amicable enough; I don’t try to talk him out of his beliefs, but I don’t lose sleep over the possibility that they’re true. I think I’d treat your friend the same way.

Thanks that's good advice.

Sax32

MattB wrote: ↑Wed Jan 25, 2023 2:40 pm
Sax32 wrote: ↑Wed Jan 25, 2023 2:36 pm So how would you handle someone like this that speaks in what if's not what is reality?
You're both speculating, as neither of you knows the future with any degree of certainty. I suggest you avoid talking about the future with people you disagree with about the future, if that disagreement is bothersome to you, or if the people you're talking to are bothersome to you.

Yep, as you see in my last two sentences, I have stopped talking about these topics with him.

Sax32

I'm 52 and my wife is 44. We have built a net worth of 1.35 million using many avenues. We have built our Roth IRA's for the past 20 years using Vanguard Index funds (VTASX primarily) maxing out our contributions in almost all years, except a couple. My wife has a 401k through her employee and receives a match. I have a pension through MSRS, which will be a steady income during retirement. We have 50k in 529s using the Utah Educational Savings plans, our children are 6 and 11 and we hope that it will cover half of their tuition/room and board for two years. We have also bought and sold two rental properties, one a lake front short term rental through Airbnb and a duplex that was purchased for 180k and sold for 375k. We paid all of the capit...

Sax32

Our son has been accepted into an Ivy League school. The expenses are estimated to be $80,000 per year, with an additional 4% inflation each year. We saved up $100,000 in his 529 plan over the last couple of years. I had invested his money in a conservative portfolio, which unfortunately lost around 6% last year. He may also qualify for a loan of $15,000 per year. To cover the remaining costs, we will need to pay approximately $3,750 per month from my after-tax paycheck for the next four years. Would it be wise to invest his 529 plan money at this time or to continue making contributions to a conservative fund? Even conservative portfolios lost money last year. I am willing to take risks after my bad performance last year. Any ideas to imp...

Sax32

I just bought a new 2023 Sienna and the dealer quoted a 6 yr/75k warranty at $3.5k. I know extended warranties are a bad deal at the usual dealer pricing and never buy them. However, I reached out to some other dealers online that are known for selling them much closer to cost. I now have quotes for a 6 yr/75k for ~$1k (roughly 1/3 of the price from my local dealer) and 10 yr/100k for $1.9k. At what point does Bogleheads think an extended warranty makes sense? Obviously it's worth something and it does seem that this is much closer to Toyota's cost, but I still struggle to get my head around spending $1.9k on a 10yr warranty. From the math I've seen, is that if you can cover expenses with cash because you are doing well with money, then it...

Sax32

Need to get a new car after my previous car died and repairs cost more than the car is worth. Looking for advice on whether I should get an auto loan or a private loan instead and also use some of the loan money to pay off high interest rate credit card debt? First of all, I want to say thank you in advance for any advice on my situation. I am having a very hard time deciding what to do. I will try and keep it as short and to the point as I can. My current car is a 2011 Lincoln MKZ 3.5L V6 with 267,920 miles on it and is undrivable, it needs a new water pump and also needs the head gasket replaced as well as other minor repairs but those are the two that make it unreasonable to pay to get it fixed. Kelly Blue Book values the car in "f...

Sax32

We have been thinking about this for awhile and are now looking for properties in Florida. Since our only grandchild is there it’s tough to be 1,000 miles away. Anyhow, we are planning to keep our home in Minnesota and purchase another home in Florida. Obviously we would make Florida our primary residence to save on taxes. A quick run of my numbers puts an extra $1k in our pocket every month. For those who have done this if we purchase a home, open a local bank account, switch our drivers license, register to vote, spend 183 days in Florida per year we should be good. Or is there more to this ? Sure, you may save $1k/month on taxes each year, but you now also have to pay for owning two homes, pay for maintenance on two homes, and deal with...

Sax32

hxmpeachy wrote: ↑Mon Jan 23, 2023 2:56 pm I’m 47, good Job 200k / yr, index funds are are not in retirement accounts. Mortgage interest is 3.75%.at this point mortgage interest is minimal. I have no other loans. Retirement is funded to maximum possible every year. This year will have a college bound kid….

Gotta pay that care off, that's an anchor on your finances, especially when you have a college bound kid soon. I love the idea of paying off your mortgage, but it's only 48 months or so right? Don't touch the index funds, just keep growing your portfolio. Did you mention what your portfolio looks like, I don't recall? If that's taken care of and your putting away at least 20%, then focus on the mortgage or your kids college.

Sax32

hxmpeachy wrote: ↑Sun Jan 22, 2023 10:24 pm I have a 34k mortgage left with about 2k principal payment per month and a car loan of 42k at 4.99% for 48 months just starting out. I have 37k cash and another 26k in index funds. Should I pay off the Loans now or keep cash and or increase position in index funds…..TIA

Before I could make a wise reply to your situation, I would want to know your age. No matter your age, I would put 35k towards your depreciating asset which is the car loan. Then work to pay that off. Don't ever touch your index funds, it's primary purpose is for retirement, you will end up paying huge taxes should you withdrawl the earnings. I mostly agree that your mortgage can wait, because your getting close to finishing that debt.

Good luck!

Sax32

I have a lot to say about this, because Airbnb is a business that I've run successfully in the past and have interest of getting back into the business of at a different level. We have been avid campers for years down in South Minnesota and thought it would be fun to invest in a lake home. In 2018 we bought a single family home on a lake in South west Minnesota with the thought of renting it out and using it for vacation time. We found that we rarely used the lake home ourselves, because we missed the variety of camping at all sorts of campgrounds around the state. So what we did was turn it into an Airbnb property pretty much full time. We live an hour away from this property, so we looked into management, but found out that the fees would...

Sax32

I will be putting some money into 529's for my kids. Currently no 529 money at all. I plan to put in about 20k total. My question is which state to do the 529 and when. NC resident. Approx 150k income Idaho income approx 40k Likely permanently moving to CO in 2024 (I would say 80% chance) NC does not give out state tax deductions for 529s. Idaho does and I should qualify, but the fees are higher than say NV or UT 529s. Also, if I take a tax deduction with ID, my NC taxes will increase the exact same as they decreased in ID as I receive a NC tax credit for ID taxes paid. So effectively I get no tax deduction in terms of my out of pocket. 1. Should I wait until 2024 and contribute to CO if I do in fact move there since CO gives state tax ded...

Sax32

Before I get laughed out of the room, let me explain the context. Wife and I are in our mid 30s with two daycare age kids. We are both high earners, saving $250k per year (when the kids age out of daycare this will rise to $300k per year). Our tax bracket for corporate bond interest is 48%. We have $1.7M in investments and the AA is roughly 90/10. We'd both like to FIRE in 10 years time, and so we need to start moving more assets into fixed income now to lower sequence of returns risk. Right now we're only putting $40k per year into fixed income via I and EE bonds. I'd like to supplement this with another $20k per year into fixed income. As I see it I have three options: 1. Internally shift my existing tax-deferred space (roughly $0.6M of ...

Sax32

The easy, rule of thumb is that you need to get 1% of the property value in monthly rent. That would, of course be $3250 per month. If you can't get that as a minimum, it's a bad rental property and should be sold. But then you say that if you sold it, you could get $220k. Does that mean this is what you'd get after paying the mortgage plus selling cost plus tax? I am not in rental investments but I am curious. Does this rule change in HCOL areas? I think I heard about it on dough roller podcast a while back (although they could have said > 1%, cant remember for sure). It's very interesting to watch how this rule of thumb has changed over the last approximately two decades. Brandon Turner from Bigger Pockets, use to comment on their podcas...

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