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48 with 10 year horizon! hopefully... And an idea for retirment home!
02-12-2012, 05:22 PM
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#1
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Dryer sheet aficionado
Join Date: Jul 2011
Location: St. Louis
Posts: 38
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48 with 10 year horizon! hopefully... And an idea for retirment home!
But - wanting to retire at 58 (when the last of my college bills will be paid).
Current retirement savings in liquid / retirement accounts - 900,000.00.
Investment property $1 million (with debt of 400,000).
College savings - $200,000.00. First kid goes to school couple years, then the next follows, then the third three years later. This will likely be completely depleted by college costs.
Small business value - $6,700,000.00 ($500,000,000 revenue business I own a part of). It's liquid as the buy sell agreement purchases over 5 year period. Can sell at any time. Have sold $1,000,000 already.
My idea is that instead of spending 1-2 million on a retirement home... Why not keep the primary residence and just rent a home in the mountains and a home on the beach for 3 months at a time. Keep the 1 million invested to return 5% a year... Then rent a like property for 6-8k per month (48 k per year for six months living)... Have rooms enough for kids families and visitors, have a great location, but have NO property tax, upkeep, real estate risk, etc.
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02-12-2012, 08:52 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: St. Louis
Posts: 2,179
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Quote:
Originally Posted by Months.in.Wyoming
My idea is that instead of spending 1-2 million on a retirement home... Why not keep the primary residence and just rent a home in the mountains and a home on the beach for 3 months at a time. Keep the 1 million invested to return 5% a year... Then rent a like property for 6-8k per month (48 k per year for six months living)... Have rooms enough for kids families and visitors, have a great location, but have NO property tax, upkeep, real estate risk, etc.
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Welcome to the board - from a fellow citizen of the city with the best pizza and frozen custard!
While I'm 13 years behind you on the calendar (and a little farther back on the balance sheet status), I'd always strongly recommend pursuing renting a second/third place for a short stay instead of outright buying it. There are so many additional headaches and expenses with having 2 or 3 places to keep track of, instead of simply showing up, enjoying the place for 4 months, then packing the bags and leaving your worries at the doorstep...real estate taxes, utilities, yard maintenance, constant worry of someone breaking in, insurance costs...and not to mention furnishing a 2nd or even 3rd place! And you can even try out different areas each time if you want, or even try a completely different idea (like a trip/cruise one year) if you wish.
Of course, if you WERE going to buy a place, the current real estate market would be the right time to make that decision - but, unless you happened upon a situation where you could get a home for 10-20 cents on the dollar, it probably wouldn't be that advantageous once you add in all of the expenses and opportunity costs of not investing the money.
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Dryer sheets Schmyer sheets
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02-13-2012, 06:30 AM
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#3
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Recycles dryer sheets
Join Date: Jun 2007
Location: Oklahoma City
Posts: 338
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With that amount of $$ you can do almost anything you desire and make several mistakes along the way! Congratulations! Remember the little people :-)
__________________
USAF Veteran -- Retired Air National Guard -- OSW -- ONW -- OIF
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02-13-2012, 09:15 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,303
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Welcome aboard, sounds like a great plan!
Our plans are a little more modest, but we've also decided to buy a modest retirement home (much less than we can afford) in an overall effort to keep our fixed expense spending low. If the economy/returns do well or even as we conservatively plan for, our variable expense spending will be pretty high - maybe renting or extended vacations with very nice accomodations.
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No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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02-13-2012, 07:16 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Dec 2010
Location: USA
Posts: 1,050
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Sounds like a good plan! Welcome to the forum!
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03-09-2012, 06:43 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Feb 2011
Posts: 1,797
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After having a 2nd place for a few yrs, and more recently crunching numbers again for myself, gotta agree with MooreBonds. A 2nd home makes no $$ sense for most situations. FWIW- My DW's parents lived in their Midwest home at retirement but visited same area in SW for 2-3mo/yr for 15+yrs. Over the yrs they developed a whole group of "SW friends" & enjoyed much of the social benefit of 2nd home without the financial & bureaucratic hassle.
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