Discovered the site earlier this year and have been lurking on the forum for the past few months. it's been tremendously helpful to read and absorb all the valuable investment knowledge/information here. It's amazing folks who's been through boom/bust cycles are willing to share their wisdom about the market and shed light on the pitfalls/missteps of conventional investment traps etc, all for free!. For those are who are willing to listen and execute, these are essentially advice/guidance that would help younger generations like myself better manage/plan our finances and stay years ahead of the curve. So I'm thankful a community like this exists and appreciate all your generosity and contribution. I certainly look forward to being engaged with the community going forward and actively contributing to its on-going success!
Now, let's talk about personal investments and before i get to my questions, below is a quick scan of our financial picture per forum guidance:
Emergency funds: Three months of expenses in checking acct.
- Student Loan: We paid off the $100K bschool loan i had since 2014 earlier this year. DW went through her phd debt free.
- Mortgage: $720k, 7/1 ARM at 3%. We have 29 yrs and 8 months left on the mortgage. Monthly payment (PITI) around $4k.
- CC/Car Debt: paid off car and CC balance paid off full every month
Tax Rate: 32% Federal, 0% State
State of Residence: WA
Age: both 28
Desired Asset allocation: 100% stocks / 0% bonds
Desired International allocation: 0% of stocks
Current Investable Assets (combined):
- 401K: $25k in VFFSX (Vanguard 500 Index Fund Institutional). Both our 401k plan have the same fund.
- IRAs: $0
- Vanguard Joint: $55k in VFIAX (Vanguard 500 Index Fund Admiral)
- Company RSUs: $180k granted and vesting at 4-yr schedule
- Private Equity: $120k at the latest valuation..i will get back to this one shortly
- 401K: We are currently maxing out both of ours starting in 2018 and planning to do so for as long as we have our W-2 jobs. Previously we didn't contribute due to student loan and saving for house downpayment
- IRAs: $0 due to phase-out limit
- Vanguard Joint: $6k/month in VFIAX (Vanguard 500 Index Fund Admiral)
Our total expenses, excluding mortgage, have averaged $2k-$2.5k/month since beginning of 2018. I only started tracking this after paying off my student loans. I expect expenses go up once we have our first kid in 1-2 years time frame but DW and I are both frugal in nature so we intend not to let our random expenses creep into our savings during the wealth accumulation stage of our life.
1. Any criticisms/comments/suggestions on our current investment strategy and overall financial health? My main objective is to ensure i'm having the right mindset and blueprint towards managing our finances that will set my family up for long-term success.
2. The long-term vision we have is to FI as soon as we reasonably could so we both could focus on family, health and entrepreneurial endeavors. We are working hard to try to achieve investable assets of 25x - 30x living expenses in 7-10yr timeline so we could get out of the corporate grind ASAP and embark on entrepreneurship while relying on our portfolio to cover basic needs. My personal career objective is to either take over a small-cap business ($10M-$100M in EBIDA) or start my own VC-backed tech business so having a safety net so my family don't end up living on the street and starve while i take that risk is essential to me. Having this context in mind, do you think if we are on the right track or whatever would you do differently to optimize our finances?
3. I invested $25k back in 2015 in a private deal and the business has been doing well and recently raised a healthy amount of institutional capital and prominent angels (household names) that valued my stake at $120k, ish. I plan to liquid some if not all of them and the objective is to use the proceeds to purchase income-generating RE or index funds. However, the caveat is that the nature of PE/VC stake is highly illiquid and it's not like i can push a button and sell it on the open market! So, i was hoping if any BHs have experience selling private shares before a public exit, and any suggestion on how to think about it overall. Should i talk to a broker that specialize in secondary transaction or possibly reach out to other existing investors and see if they are interested in picking up the shares? Any guidance would be immensely appreciated. Thanks.
Again, thanks in advance for any guidance. I look forward to any comments and also engaging with the community going forward! Thanks.