How would you proceed at age 29?

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millennial89
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Joined: Mon Feb 19, 2018 10:07 pm

How would you proceed at age 29?

Post by millennial89 » Mon Feb 19, 2018 11:08 pm

Hi Bogleheads,

Thanks for taking the time to read this post. I'm a relatively new lurker and I'm looking for wisdom from all of you.

I know there are many avenues that can be taken to wealth but I'm curious about different people's perspectives on my situation. A bit more about me:

- Turning 29 this year
- Currently engaged, will contribute <= 15k towards that wedding in 2019.
- I'm approaching my sixth year anniversary in the work force, currently earning $160,000/yr. I began at $65k in 2012.
- My 401k is ~$100k, I currently contribute 11% w/ a 2% match
- I have 10k in cash as a rainy day fund,
- I have a paltry Roth IRA of ~$3k, I am planning on maxing out an IRA from this year forward.
- My student loans are fully paid off as of this month (~$40k). My fiancee has north of 100k in debt :shock: and will probably enter the work force making ~$60k in 2020.
- I owe ~9k on a car loan, with minimum payments it will be paid off spring 2020.
- I closed on a two-family home last summer and currently owner occupy. It earns $1,100 in rent (slightly under market) and has $24k annually in expenses between mortgage, taxes, insurance, and utilities.
- The rough plan is for kids beginning in three years, having no more than 3.
- In general I'm a pretty frugal person but there has been some lifestyle creep over the years as my salary has increased. I cover ~60% of my fiancee's living expenses with her parents chipping in to cover the rest.

The last year has been spent building up my cash reserves after closing on my home and purchasing an engagement ring. My short-term plan is to buy another rental proerty with 3 or 4 units, hopefully this year, utilizing a low down payment option (3.5%). I also plan to start taxable investing this year. To this point being a landlord has been relatively pain free but I've read a ton of horror stories and I think I can handle it.

I currently work in tech and I wouldn't say I love my job. I do love the lifestyle it affords and many of the perks of working at a tech company. The work is definitely interesting but the downside is that I'm expected to react to off-hours issues and I feel like I'm always tied to my laptop. This may get better if I continue to climb the ladder, or if I switch jobs. In general the grass is always greener and I'm thankful I landed in an industry with seemingly endless opportunity.

My financial goal in life is to get to the point where I can freely choose what I want to do. I know that is vague, I'm not really sure what that is yet. I think it boils down to not working a "traditional" job where I"m doing a 40+ hours a week, or working for myself instead of someone else. I'd like to retire no later than 65.

The majority of people on this forum have way more life experience than I and have lived through both failures and triumphs. If you were to suddenly be placed in my situation, how would you proceed getting to that goal? I feel that taking the right path at this age will lead to greater benefits later in life.

Thanks for your time.
Last edited by millennial89 on Tue Feb 20, 2018 10:30 am, edited 1 time in total.

mhalley
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Re: How would you proceed at age 29?

Post by mhalley » Tue Feb 20, 2018 12:21 am

Sounds like you are off to a good start. I would focus on bumping your savings rate to max out the 401k and roths. The emergency fund seems light. You might be a candidate for a somewhat early retirement, but that would involve some cutbacks in your expenses. Once your fiance enters the workforce, you might consider throwing her salary at her student loan debt. Will she work once the babies start coming?

gotester2000
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Re: How would you proceed at age 29?

Post by gotester2000 » Tue Feb 20, 2018 12:31 am

You are doing good. Thinking that things will go linearly in life is not a good assumption. Working in tech after 40, is a challenge and the ride is roller coaster. Its like the hare in the hare-tortoise story.
Investing in rental with 3.5% down alongwith existing mortgage and your other goals is not a good idea. Dont try to do too many things at a time. Build up a strong foundation and just keep the process going - once you are married and have kids, your focus will shift to them - it is difficult to handle anything outside work and family.

Good luck!!!

jeffh19
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Re: How would you proceed

Post by jeffh19 » Tue Feb 20, 2018 2:56 am

Max your retirement accounts. At 160k no reason you can’t do this, especially now that you’re loans are paid off. Great job with that.
Depends on the interest rate, but at 9k left I’d probably just pay the car off
Take a long hard look at your expenses, knowing your wife is still in school and your income will go up later, so try to live frugally as possible now. It will get you in good habits and set you up to maximize your financial situation when she starts bringing home more money..... not to mention you’ll have kids in a few years which are $$$$$$.
Are you gonna have time and all to be a landlord with kids? Will it be worth it? Don’t over extend yourself. To me, renting isn’t worth it and I don’t know much about it, so everything goes to Vanguard.

You’re in a great situation, you just need some better structure or management with your finances.

I’m 32 with similar goals, wanting to retire early or be able to do whatever [deleted] I want. I still rent as I’m looking for a house, but I have a super cheap high MPG car I bought a few years ago that I still drive for free. This drives me totally crazy as I’m obsessed with cars and want 8 new cars at once, but I’m delaying pleasure and doing the Ramsey saying of “Live like no one else now so you can live like no one else later” I still spend money and do the things I want, as I spend a ton of money on concerts and events, but other than that I SAVE. A huge majority of each paycheck gets invested. That’s after all my retirement contributions. I have so much auto invested to vanguard every paycheck that my bank account never goes up, it’s usually just enough to pay off my monthly expenses.

So analyze your expenses and living style for now. Ask yourself do I really need this or do I really use/benefit much from this. If you do, great-keep it. Analyze your dining and grocery spending. This can and will kill you financially, I know more than anyone.

Explain to the wife your goals, hopefully she shares them 100% and gets totally on board. This is probably more important than anything.

Raise your rent next time some moves in, or lent the current tenant know at the beginning of next year/lease renewal rent will probably go up $100 or whatever

[Keep up the good work!]

[Edits by moderator oldcomputerguy]

raisinsaregrapes
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Re: How would you proceed at age 29?

Post by raisinsaregrapes » Tue Feb 20, 2018 7:35 am

Millenial1 wrote:
Mon Feb 19, 2018 11:08 pm
- I closed on a two-family home last summer and currently owner occupy. It earns $1,100 in rent (slightly under market) and has $24k annually in expenses between mortgage, taxes, insurance, and utilities.
Do you live in half of the 2-family home? If not then it is killling your cash flow.

nevermind...just read that again. :oops:

PlayingLife
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Re: How would you proceed

Post by PlayingLife » Tue Feb 20, 2018 8:15 am

jeffh19 wrote:
Tue Feb 20, 2018 2:56 am
Max your retirement accounts. At 160k no reason you can’t do this, especially now that you’re loans are paid off. Great job with that.
Depends on the interest rate, but at 9k left I’d probably just pay the car off
Take a long hard look at your expenses, knowing your wife is still in school and your income will go up later, so try to live frugally as possible now. It will get you in good habits and set you up to maximize your financial situation when she starts bringing home more money..... not to mention you’ll have kids in a few years which are $$$$$$.
Are you gonna have time and all to be a landlord with kids? Will it be worth it? Don’t over extend yourself. To me, renting isn’t worth it and I don’t know much about it, so everything goes to Vanguard.

You’re in a great situation, you just need some better structure or management with your finances.

I’m 32 with similar goals, wanting to retire early or be able to do whatever the hell I want. I still rent as I’m looking for a house, but I have a super cheap high MPG car I bought a few years ago that I still drive for free. This drives me totally crazy as I’m obsessed with cars and want 8 new cars at once, but I’m delaying pleasure and doing the Ramsey saying of “Live like no one else now so you can live like no one else later” I still spend money and do the things I want, as I spend a ton of money on concerts and events, but other than that I SAVE. A huge majority of each paycheck gets invested. That’s after all my retirement contributions. I have so much auto invested to vanguard every paycheck that my bank account never goes up, it’s usually just enough to pay off my monthly expenses.

So analyze your expenses and living style for now. Ask yourself do I really need this or do I really use/benefit much from this. If you do, great-keep it. Analyze your dining and grocery spending. This can and will kill you financially, I know more than anyone.

Explain to the wife your goals, hopefully she shares them 100% and gets totally on board. This is probably more important than anything.

Raise your rent next time some moves in, or lent the current tenant know at the beginning of next year/lease renewal rent will probably go up $100 or whatever

Keep kicking ass!
I really like this post, and some comments made from others. Here is my 2 cents:

*Avoid the second rental property as others alluded to
*Max those retirement accounts and pay that car off as quickly as possible
*Make sure you know the answer to this question --> "Will my wife work once we have children?" This determines whether or not you have access to two retirement plans and how important it may be for your own personal income to go up. Keep in mind there is a huge benefit to whichever choice is made but either way it's a personal choice
*Start figuring out your attack plan on the student loans and ensure both of your opinions on personal finance are aligned

I suggest you get the basic plan lined up, and then focus on the next 5 years of your career. I'm mid thirties...it comes quick and I'm already starting to see how a lot of people's careers can become stagnant by the time they hit 40's. Is there personal development such as an MBA or something you should be considering? What do you have to do to ensure you are a highly attractive employee for the next 20 years? Do the two of you have a current path that will hit your financial objectives, or do you have to work towards certain achievements to gain the money and lifestyle you crave?

Finally, enjoy life. I'm seeing a lot these days that is reminding me of what's really important. Good luck and congratulations!

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Top99%
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Re: How would you proceed at age 29?

Post by Top99% » Tue Feb 20, 2018 8:36 am

First of all congratulations for taking the time to think seriously about personal finance in your late 20s. There is some great advice in this thread.
I spent 32 years in tech (I am now part time at 56 years old) so my advice is:
1) Keep your skills marketable especially as your age gets north of 40. I suggest keeping tabs on which skills will be in demand and acquiring them before most of your coworkers do. Skate where the puck is going. For example, cyber security skills (which apply to many tech fields) will become increasingly valuable.
2) Assume that you will get laid off at some point. Focusing on 1) can help but there is a lot of luck involved in avoiding getting laid off. I know many people more skilled than I who got laid off because they were in the wrong place at the wrong time.
3) You allude that if you climb the ladder you may get less busy. I am afraid you have that backwards. Also, I would avoid going into management unless you a) have acquired a big nest egg or b) are confident in the stability if your employer. In my experience, it is much easier to find another job as an engineer with marketable skills than as a manager. This especially applies to middle management. Only go into middle management if you are confident in your ability to get to the director/VP level fairly quickly afterwards because middle management is a very dangerous place to be when the lay-offs come.
Adapt or perish

Topic Author
millennial89
Posts: 5
Joined: Mon Feb 19, 2018 10:07 pm

Re: How would you proceed at age 29?

Post by millennial89 » Tue Feb 20, 2018 9:10 am

Thanks for the replies so far!
mhalley wrote:
Tue Feb 20, 2018 12:21 am
Once your fiance enters the workforce, you might consider throwing her salary at her student loan debt. Will she work once the babies start coming?
The plan is to throw her entire salary at her loans and have then paid off in a few years. It seems pretty daunting but if we're responsible I think we'll be able to do it. We haven't answered the question of her working once we have kids. We've talked about her working part time when the kids are really young and we're both open to it. I think it boils down to the cost of child care vs. her take home pay.
gotester2000 wrote:
Tue Feb 20, 2018 12:31 am
Working in tech after 40, is a challenge and the ride is roller coaster. Its like the hare in the hare-tortoise story.
I naively thought this would be less of an issue over time as the breadth of tech opportunities seems to be larger now than ever before. As a hiring manager I've found it super hard to find well-qualified applicants and I know that I'm a strong candidate which gives me confidence in my ability to continue to land roles. I should look into how this is playing out in today's market.

gotester2000 wrote:
Tue Feb 20, 2018 12:31 am
Investing in rental with 3.5% down along with existing mortgage and your other goals is not a good idea. Dont try to do too many things at a time. Build up a strong foundation and just keep the process going - once you are married and have kids, your focus will shift to them - it is difficult to handle anything outside work and family.
Is the concern here that there is a possibility that all of my units could be vacant at once requiring that I carry both mortgages without any help? I think if I were to conservatively approach these scenarios I could somewhat insulate myself from the possibility. E.g. building up a large enough vacancy fund to hedge off the possibility of that scenario.
jeffh19 wrote:
Tue Feb 20, 2018 2:56 am
Max your retirement accounts. At 160k no reason you can’t do this, especially now that you’re loans are paid off. Great job with that.
That is definitely the plan. I didn't realize that 18.5 was the 2018 limit, I'll raise my % accordingly. IRA will definitely be maxed this year. I was making significantly less money at the beginning of last year but I'm now at a place where there's no reason I can't max both.
jeffh19 wrote:
Tue Feb 20, 2018 2:56 am
Depends on the interest rate, but at 9k left I’d probably just pay the car off
This is at 2.14%, I'd like the piece of mind of not having that debt but I think investing that money elsewhere is more optimal.
jeffh19 wrote:
Tue Feb 20, 2018 2:56 am
Are you gonna have time and all to be a landlord with kids? Will it be worth it? Don’t over extend yourself. To me, renting isn’t worth it and I don’t know much about it, so everything goes to Vanguard.
So far it has been great and not a huge time sink. It helps that I live in the house so that I can easily tend to any issues. If I buy another rental it will likely be less than 5 minutes from where I Currently live.
jeffh19 wrote:
Tue Feb 20, 2018 2:56 am
So analyze your expenses and living style for now. Ask yourself do I really need this or do I really use/benefit much from this. If you do, great-keep it. Analyze your dining and grocery spending. This can and will kill you financially, I know more than anyone.
I spent $4,119.94 in the last 12 months on dining out. This is definitely a lot but it's something that my fiancee and I both really enjoy. It is basically a car payment though. Groceries sit at $5,015.52, so another pretty big car payment.
PlayingLife wrote:
Tue Feb 20, 2018 8:15 am

I suggest you get the basic plan lined up, and then focus on the next 5 years of your career. I'm mid thirties...it comes quick and I'm already starting to see how a lot of people's careers can become stagnant by the time they hit 40's. Is there personal development such as an MBA or something you should be considering? What do you have to do to ensure you are a highly attractive employee for the next 20 years? Do the two of you have a current path that will hit your financial objectives, or do you have to work towards certain achievements to gain the money and lifestyle you crave?

Finally, enjoy life. I'm seeing a lot these days that is reminding me of what's really important. Good luck and congratulations!
To this point I haven't considered another degree like a masters. My view (again, probably naive) is that a bachelors in CS is more than enough given the current market, but that is no guarantee about the future. I feel like my resume stands out as it shows a lot of career growth in 6 years, but if that stagnates then it looks a lot less appealing.
Top99% wrote:
Tue Feb 20, 2018 8:36 am
First of all congratulations for taking the time to think seriously about personal finance in your late 20s. There is some great advice in this thread.
I spent 32 years in tech (I am now part time at 56 years old) so my advice is:
1) Keep your skills marketable especially as your age gets north of 40. I suggest keeping tabs on which skills will be in demand and acquiring them before most of your coworkers do. Skate where the puck is going. For example, cyber security skills (which apply to many tech fields) will become increasingly valuable.
2) Assume that you will get laid off at some point. Focusing on 1) can help but there is a lot of luck involved in avoiding getting laid off. I know many people more skilled than I who got laid off because they were in the wrong place at the wrong time.
3) You allude that if you climb the ladder you may get less busy. I am afraid you have that backwards. Also, I would avoid going into management unless you a) have acquired a big nest egg or b) are confident in the stability if your employer. In my experience, it is much easier to find another job as an engineer with marketable skills than as a manager. This especially applies to middle management. Only go into middle management if you are confident in your ability to get to the director/VP level fairly quickly afterwards because middle management is a very dangerous place to be when the lay-offs come.
I definitely get staying up-to-date on the latest and greatest. Part of my role now includes making decisions on what tech we should be adopting so hopefully I'm on the right path there.

2) I hadn't really though about much because I've only ever experienced a healthy market. I think I should probably do some sort of passive-income side project as it likely achieves both 1) and could provide supplemental income in the event of 2).

3) I have intentionally avoided having "manager" thrown into my title on two occasions. I do manage a team but I also write a lot of code and I think that "Lead Developer" sounds a lot better than "Manager of ..."
Last edited by millennial89 on Tue Feb 20, 2018 10:31 am, edited 1 time in total.

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greg24
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Re: How would you proceed at age 29?

Post by greg24 » Tue Feb 20, 2018 9:19 am

Making 160k, you are getting killed on taxes. You need to maximize your 401k withholding, and do it TODAY.

Topic Author
millennial89
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Re: How would you proceed at age 29?

Post by millennial89 » Tue Feb 20, 2018 10:26 am

greg24 wrote:
Tue Feb 20, 2018 9:19 am
Making 160k, you are getting killed on taxes. You need to maximize your 401k withholding, and do it TODAY.
I was at 11% prior and I bumped to 12%:

.11 * 160000 = 17,600
.12 * 160000 = 19,200

I was only about $900 short of max before the bump, I was under impression max was 17.5.

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Watty
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Re: How would you proceed at age 29?

Post by Watty » Tue Feb 20, 2018 10:45 am

mhalley wrote:
Tue Feb 20, 2018 12:21 am
Sounds like you are off to a good start.
+1
Millenial1 wrote:
Mon Feb 19, 2018 11:08 pm
- In general I'm a pretty frugal person but there has been some lifestyle creep over the years as my salary has increased.
One thing I did when I was a bit older than you was that I committed to myself to save half of any pay raises. I was pretty much able to stick to that for a long time and that allowed me to get to the point where I was saving a high percentage of my income. This also allow me a reasonable amount of lifestyle creep.
Millenial1 wrote:
Mon Feb 19, 2018 11:08 pm
- I owe ~9k on a car loan, with minimum payments it will be paid off spring 2020.
Once it is paid off then keep saving your "car payment" to yourself so you can pay cash for your next car.

I have found that by paying cash for cars you not only save some interest but I tend to buy less expensive cars since writing a check for thousands of dollars extra really makes you think if the leather seats are really worth it or not.
Millenial1 wrote:
Mon Feb 19, 2018 11:08 pm
I currently work in tech and I wouldn't say I love my job. I do love the lifestyle it affords and many of the perks of working at a tech company. The work is definitely interesting but the downside is that I'm expected to react to off-hours issues and I feel like I'm always tied to my laptop. This may get better if I continue to climb the ladder, or if I switch jobs. In general the grass is always greener and I'm thankful I landed in an industry with seemingly endless opportunity.
I retired out of IT a few years ago.

Part of that goes with the nature of the job but it varies a lot with the company so there may be a limit on what you can do without changing jobs since some companies are just like that. At your phase of your career you should be cautious about staying at the same company too long anyway to be sure to look at the culture of any job you interview for. Some industries are less prone to after hours problems too if the facilities don't run 24/7

That said I have often seen people in IT get into situations where a lot of the pain is self inflicted and not always necessary. You have to pick your battles carefully but you can't be afraid to set boundaries and occasionally say "no".

For example at one point I was "on call" getting calls in the middle of the night for problems so I ended up basically telling my manager that when that happen I would be sleeping in and I would be in late in the morning. She did not like that since that caused some meetings to need to be rescheduled and gave more visibility to the problems we were having. The end result though was that the problems that were happening in the middle of the night got addressed and the time was spent to actually prevent them so they did not happen instead of calling someone to handle it manually in the middle of the night. We rotated being "on call" and none of the other people were willing object to getting those calls when the problem was fixable with some work.

I also had situations where I was pulled off a project for two days to work on something more urgent, when I went back to the original project I would try to get the schedule pushed back two days because I had been taken off the project for two days, and that was usually OK or I would get some help to stay on schedule. Some of my coworkers were afraid to ask for that and instead would work all sorts of overtime and weekends to get caught up with the original schedule. Working extra hours in a real crunch is part of the job and often necessary so I am fine with that but you have to be careful about going into crunch mode when it is an artificial deadline.

When there was an after hours problem we usually had a call tracking ticket. Most of the people would just do what it took to get past the problem and then close the ticket since that was the easiest thing to do. I would fix the immediate problem, but when possible I would leave the ticket open until there was a fix to prevent the problem from happening again. After a while the parts of the system I worked on became very stable.
greg24 wrote:
Tue Feb 20, 2018 9:19 am
Making 160k, you are getting killed on taxes. You need to maximize your 401k withholding, and do it TODAY.
Millenial1 wrote:
Mon Feb 19, 2018 11:08 pm
Currently engaged, will contribute <= 15k towards that wedding in 2019.
+1

You would not want to rush things and there are social considerations but if you got married in December you might save enough in taxes to pretty much pay for your wedding, especially if you have high state taxes too. He or she might then might be able to get on your work health insurance which might save you more money.

More than one couple has had an early wedding at the city hall for financial or other reasons then had the formal wedding latter.

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greg24
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Re: How would you proceed at age 29?

Post by greg24 » Tue Feb 20, 2018 10:51 am

Millenial1 wrote:
Tue Feb 20, 2018 10:26 am
greg24 wrote:
Tue Feb 20, 2018 9:19 am
Making 160k, you are getting killed on taxes. You need to maximize your 401k withholding, and do it TODAY.
I was at 11% prior and I bumped to 12%:

.11 * 160000 = 17,600
.12 * 160000 = 19,200

I was only about $900 short of max before the bump, I was under impression max was 17.5.
D'oh. I didn't realize the joys of making enough money that 11% maximizes your contribution. :oops:

You are correct, the max is $18.5k for 2018. :sharebeer

riverguy
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Re: How would you proceed at age 29?

Post by riverguy » Tue Feb 20, 2018 10:55 am

How are you planning on buying a 3-4 family unit with only 3.5% down?

eer_no_evil
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Re: How would you proceed at age 29?

Post by eer_no_evil » Tue Feb 20, 2018 11:19 am

Hey,

My 2cents...from a fellow millennial.

You're doing really well- like others have said, with that salary, I'd prioritize the boost to savings- max 401k, backdoor roth, and mega backdoor after tax 401k to Roth if your plan allows.

Other than that, my apologies if this comes off as taboo or smug, but you might consider a pre-nup.

:sharebeer

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Watty
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Re: How would you proceed at age 29?

Post by Watty » Tue Feb 20, 2018 11:31 am

greg24 wrote:
Tue Feb 20, 2018 10:51 am
Millenial1 wrote:
Tue Feb 20, 2018 10:26 am
greg24 wrote:
Tue Feb 20, 2018 9:19 am
Making 160k, you are getting killed on taxes. You need to maximize your 401k withholding, and do it TODAY.
I was at 11% prior and I bumped to 12%:

.11 * 160000 = 17,600
.12 * 160000 = 19,200

I was only about $900 short of max before the bump, I was under impression max was 17.5.
D'oh. I didn't realize the joys of making enough money that 11% maximizes your contribution. :oops:

You are correct, the max is $18.5k for 2018. :sharebeer
Just FYI,

I am pretty sure that most if not employers will stop the 401k contributions when you hit the max but you should check on that since a few employers will allow after tax contributions to a 401k. There are situation where you might want that but if it happen unintentionally then it will complicate your paperwork for a long time.

You need to also check with your employer on how they calculate any employer match. Some of them do it by pay check so if you max out your 401k contributions before your last 2018 paycheck you might miss out on one paychecks employer match. Other employers will figure it out at the end of the year and give you a seperate match. You may need to juggle your contributions for the last few paychecks of the year to make sure that you get the entire match.

gotester2000
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Re: How would you proceed at age 29?

Post by gotester2000 » Tue Feb 20, 2018 1:23 pm

gotester2000 wrote:
Tue Feb 20, 2018 12:31 am
Working in tech after 40, is a challenge and the ride is roller coaster. Its like the hare in the hare-tortoise story.
I naively thought this would be less of an issue over time as the breadth of tech opportunities seems to be larger now than ever before. As a hiring manager I've found it super hard to find well-qualified applicants and I know that I'm a strong candidate which gives me confidence in my ability to continue to land roles. I should look into how this is playing out in today's market.
gotester2000 wrote:
Tue Feb 20, 2018 12:31 am
Investing in rental with 3.5% down along with existing mortgage and your other goals is not a good idea. Dont try to do too many things at a time. Build up a strong foundation and just keep the process going - once you are married and have kids, your focus will shift to them - it is difficult to handle anything outside work and family.
Is the concern here that there is a possibility that all of my units could be vacant at once requiring that I carry both mortgages without any help? I think if I were to conservatively approach these scenarios I could somewhat insulate myself from the possibility. E.g. building up a large enough vacancy fund to hedge off the possibility of that scenario.
Other than being well qualified, you need great self motivation to keep on working for decades, especially in tech roles.

The risk is high as you will have to deal on 3 fronts for a long period - work, family and landlording alongwith 2 mortgages - a life/financial event not going per plan may put massive stress on you - try to reduce risk as much as possible if you want to go ahead with this - also analyze whether the returns are worth the risk.

khangaroo
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Re: How would you proceed at age 29?

Post by khangaroo » Tue Feb 20, 2018 3:35 pm

Great job OP! +1 to all other replies. Some things I would consider:

1. Is it worthwhile to get a graduate degree? Perhaps an MBA if you're potentially looking into going the management route. Your company might even pay for the entire thing and it's always easier to do it before you get swamped with kids. More education usually never hurts, especially if you can get it for free.

2. Looks like your fiancee is going to be bringing a lot of debt into your relationship. Make sure you are 100% comfortable with this and align yourselves on what the plan is moving forward i.e., are you going to try to pay it off rapidly, just pay off the minimum, or even do a loan forgiveness program? I would highly encourage you to go through Financial Peace University together by Dave Ramsey to help align your financial goals.

Topic Author
millennial89
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Re: How would you proceed at age 29?

Post by millennial89 » Tue Feb 20, 2018 8:41 pm

riverguy wrote:
Tue Feb 20, 2018 10:55 am
How are you planning on buying a 3-4 family unit with only 3.5% down?
I think I could go for an FHA mortgage for this. The two family I'm currently in is financed using a conventional mortgage. I think I'd have to do some justifying about outgrowing the footprint of my current home. The PMI would eat into my returns a bit.
eer_no_evil wrote:
Tue Feb 20, 2018 11:19 am

You're doing really well- like others have said, with that salary, I'd prioritize the boost to savings- max 401k, backdoor roth, and mega backdoor after tax 401k to Roth if your plan allows.
I'll look into the backdoor roth and mega backdoor options, thanks!
Watty wrote:
Tue Feb 20, 2018 11:31 am


I am pretty sure that most if not employers will stop the 401k contributions when you hit the max but you should check on that since a few employers will allow after tax contributions to a 401k. There are situation where you might want that but if it happen unintentionally then it will complicate your paperwork for a long time.
They will cut it off, I maxed out a couple of years ago but then reduced my contribution :oops:
Watty wrote:
Tue Feb 20, 2018 11:31 am
You need to also check with your employer on how they calculate any employer match. Some of them do it by pay check so if you max out your 401k contributions before your last 2018 paycheck you might miss out on one paychecks employer match. Other employers will figure it out at the end of the year and give you a seperate match. You may need to juggle your contributions for the last few paychecks of the year to make sure that you get the entire match.
Good to know, I'll ask!
gotester2000 wrote:
Tue Feb 20, 2018 1:23 pm

The risk is high as you will have to deal on 3 fronts for a long period - work, family and landlording alongwith 2 mortgages - a life/financial event not going per plan may put massive stress on you - try to reduce risk as much as possible if you want to go ahead with this - also analyze whether the returns are worth the risk.
I'm probably grossly underestimating the cost and time investment of kids. A quick Google suggests that kids cost around $233k from the time they're born until the age of 18 (so not including college). That's pretty nuts! I wonder if frugal folks tend to spend less? I wouldn't want to cheap out on my children the way I do on myself though
khangaroo wrote:
Tue Feb 20, 2018 3:35 pm
2. Looks like your fiancee is going to be bringing a lot of debt into your relationship. Make sure you are 100% comfortable with this and align yourselves on what the plan is moving forward i.e., are you going to try to pay it off rapidly, just pay off the minimum, or even do a loan forgiveness program? I would highly encourage you to go through Financial Peace University together by Dave Ramsey to help align your financial goals.
The plan is to do it rapidly, basically throwing nearly all of her income towards it. I'll look into the Dave Ramsey thing, sounds like a good idea.

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