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29 - Going Fast, Planning to go Faster
Old 06-26-2011, 03:06 PM   #1
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29 - Going Fast, Planning to go Faster

Figured I should probably introduce myself as I've been lurking on the board for about half a year and learned a lot. Sorry about the long winded post and excruciating detail, but I hope to re-visit this over the years and see how things have changed.


I'm a 29 y/o, working towards getting out of the rat race. I've had a job in one form or another since the age of 15 and don't intend to keep that up until I hit the grave. I'm not into extreme LBYM as I do like nice things but I'm still fairly thrifty. I've had some considerable income growth over the last 5 years and currently have a salary of about $100k. I don't expect much in the way of increases from here. I also receive $15k of rental income, but this property is cash-flow negative (see below). I tend to spend about $30k a year minus savings/debt repayment.


I have accumulated $150k in retirement assets and $25k in cash. No fixed assets worth discussing as I won't be selling them anyhow. Some of that $25k is going to be used for a wedding in the near future and I'm looking for her to tell me how much. I am maxing out my 401k, Roth IRA, and HSA. I don't know how many people view their HSA as 'retirement' but I keep enough in cash to cover my HDHP deductibles for 2-3 years and can't bring myself to pull anything out of it.


On the liabilities side, I have a $230k mortgage on the rental, $14k car loan, and $8k in student loans. As soon as I know what the wedding is going to cost, I'm going to once again start to aggressively pay off this debt. Depending on the random expenses/bonuses/ESPP, I can typically allocate $15-20k a year to this.


Housing wise, I bought a condo when I first started dating my fiancee in an ideal location for me. Near my family, in a good school district, ample access to parks, etc. Due to her work situation, she needed to get one closer as there's the bridge of doom between the two which can alter the daily commute by 1-2 hours. I wasn't exactly happy with my job at the time, found employment closer to hers, and moved in with her. I'm justifying holding onto it as I like to think we might move back into it in a couple years. For now, it's rented and the equity is building to where it hopefully won't be upside down.


About my fiancee, she's a MD currently in her residency. She has about a year to go at which point, she'll usurp me as the primary breadwinner. She'll be bringing a lot of debt (student loans + mortgage), no assests, and a large income. I've specifically excluded her financial info at the moment until we are hitched. She's not into personal finance like I am and trusts me to make these decisions so long as I let her know what's going on. Currently, we're of like minds when it comes to expenses and will hopefully stay that way after this large influx of additional income.

We get along with each others families although occasionally I get asked something random like “So, could you get a second job or overtime?” I take it light heartedly and retort that taking care of my fiancee is my second job and that there's plenty of unpaid overtime at my current job. They know less of my finances than anyone reading this post.


Being relatively young yet, there's going to be a lot of challenges. Once we get past the wedding, there's the question of kids. If we have kids, how do we raise them? Does one of us scale back our work, if so, who? Daycare? Co-opt the parents? Etc. Thanks to my sister, I have recently discovered that my parents are high conservative and strongly believe that the wife belongs home with the kids.


Although thankfully, my family seems to be doing pretty well, I've discussed concerns about my fiancee's family with her. Relatively, they're in poorer health and at first glance do not appear to be in good shape fiscally. She also has a few siblings that are not totally self-supporting. One in particular, I haven't met and won't meet for several more years due to his life choices. We've discussed plans for how we would handle various scenarios, but she has a big heart.


Thanks to anyone who actually made it this far for reading! I'm definitely looking for advice on how to best structure an after-tax portfolio, tax management in general, organizing my information for my soon to be spouse in case something were to happen to me, and learning from others about kids/life in general.
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Old 06-26-2011, 04:27 PM   #2
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Welcome. Sounds like you are in great shape, ready for some significant life changes in the next few years.

A few comments:

Investigate disability and life insurance needs for the both of you. Once married, the two of you will likely have a negative net worth. Covering expenses if one of you cannot work - and giving the survivor a clean financial start if one of you should die - are important things. It will take some research on the student debt terms to determine total life insurance needs, in particular. Both types of insurance are cheap at age 29.

Excluding DW-to-be's finances is certainly OK for a Hi-I-Am posting, but in real life you will both be making adjustments to the concept of household income and wealth. Take it a step at a time at the pace that works for the two of you, but know that transparency and mutual trust on financial matters is a key to a happy marriage. Set a goal to have a consolidated financial statement very early. (And keep a copy of that first statement - it will inspire you as you see how you are progressing. It will also be handy if a marital disaster strikes.)

“So, could you get a second job or overtime?” cracks me up. Sounds like you have your LBYM image polished up nicely! Be cautious of such expectations from friends and family, especially with a doctor in the family. Be prepared to answer this line of questioning for a long time.

Some of the threads on family members, neighbors and peers will give you some ideas on how to deal with questions about your finances. (See FUEGO's thread on a HELOC, for one dramatic example.) In general, I think the best response is to say something vague about investments tying up your money so you can't spend as freely as some. Those with financial sense will approve of the concept. Those without will assume that you must have blown your money on a get-rich-quick pork belly future scheme (like they would).
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Old 06-28-2011, 09:01 AM   #3
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Welcome. (I really enjoy reading these posts, so thanks for sharing).

I'm with Harry (and not to mince words) about bringing in "his and her's" assets together. There is an adjustment period.

And read the fine print of those student loans, most likely, if the person with loan kicks the bucket or is unable to work (not exactly as black and white as being dead) the loan is forgiven. make sure you understand the terms of the loan and adjust life insurance accordingly.
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Old 06-28-2011, 06:44 PM   #4
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Thanks for the responses! We really do view our assets as combined. The combined balance statement is pretty much mine - hers, so very simple to calculate. We've discussed which accounts to close and where things are going to go once we're offical. We just wouldn't want to get into a scenario where we've merged assets and one of us bites the dust before having that legal backing.

On the student loans - I'm glad they were brought up. All of mine are Federal and would be forgiven in the event of my death. Her's are private and follow a different set of rules. I wasn't totally aware of that. If she were to pass shortly after the wedding, my battleship would be sunk between that, picking up her mortgage, and picking up these loans. She should be interviewing soon. We'll have to review her benefits together and make sure that she insures appropriately as well.

Insurance wise, I have LTD/STD and 2.5x annual salary for life. Until kids enter the picture, she should be in good shape if I were to drop dead. She could immediately pay off the rental property and still have my savings to date.
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Old 06-28-2011, 07:09 PM   #5
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My LBYM image was very well aided by my family's history of high blood pressure. I try not to use salt at all if possible since it tends to come in just about everything anyhow. Since it never leaves the spice rack, we jury rigged a pair of salt/pepper shakers out of some empty spice containers - poking some small holes in the lid.

Well, we had a family get together at our house and someone asked for the salt and pepper. I got up, fetched our improv shakers and put them on the table. A few minutes later, they again asked where the salt and pepper was. I explained that those were the salt and pepper shakers. I don't think they were impressed.

The next week we received an anonymous gift of expensive crystal salt and pepper shakers. I felt bad because I know whomever provided them was less able to afford doing so than we were. That, and they have never left our spice rack since.
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Old 06-28-2011, 10:24 PM   #6
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Quote:
Originally Posted by FocusedInfinity View Post
...The next week we received an anonymous gift of expensive crystal salt and pepper shakers.
Great story. I think you'll fit in just fine here.
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Old 06-28-2011, 11:43 PM   #7
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curious how you get 2.5x salary for disability?? i am finishing up inking some private LTD insurance and the max I could get is 70% of my current salary (which 40% comes from my employers group policy).
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Old 06-29-2011, 11:15 AM   #8
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Sorry for the confusion there ronocnikral, the STD and LTD have similar limits.

The 2.5x annual salary is my life insurance benefit.
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