Am I sinking, swimming, or above it all?

[travelover]

Quote:

Originally Posted by startingover .............I then have about $1,500 a month to save in other areas - 401k, ROTH IRA, Mutual Funds, etc. I struggle there with what to do what that $1,500 each month. .............

You can get some good suggestions on where to invest that $1500 over at Bogleheads. They have a standard format for asking portfolio questions that really cuts to the chase.

Bogleheads :: View topic - Asking Portfolio Questions

[Milton]

Quote:

Originally Posted by startingover I am not selling the car. It's paid for, is 10 years old, has 9,000 miles on it and is driven very rarely. While I see what you would be getting at, it's a toy I earned, paid for and costs me nothing more than two tanks a gas a year and the insurance. If it were other than that, it would be gone.

There is certainly no urgent need to sell it. However, you might be well advised to do so, considering that it is a depreciating asset that you very rarely use (the cost of renting a new sports car for a few days a year is probably less than the cost of the insurance).

While we all like our toys, if you are serious about growing your investment capital you should ask yourself whether this particular toy provides sufficient pleasure to warrant tying up >5% of your modest net worth unproductively.

All that said, please yourself ... it was just a suggestion, and no one is under any compulsion to justify their financial decisions here (all of us are at least a tiny bit irrational in our own ways).

[startingover]

Quote:

Originally Posted by Milton There is certainly no urgent need to sell it. However, you might be well advised to do so, considering that it is a depreciating asset that you very rarely use (the cost of renting a new sports car for a few days a year is probably less than the cost of the insurance). While we all like our toys, if you are serious about growing your investment capital you should ask yourself whether this particular toy provides sufficient pleasure to warrant tying up >5% of your modest net worth unproductively. All that said, please yourself ... it was just a suggestion, and no one is under any compulsion to justify their financial decisions here (all of us are at least a tiny bit irrational in our own ways).

I think this is very well put. It doesn't make sense on paper, but the enjoyment it brings sure it clear as day to me. I suppose we all have a splurge here and there...

[Walt34]

Welcome to the board.

At age 33 I was also going through a divorce. I was lucky, it was about as amicable as any I've heard of and no kids. When the dust settled on it I had ~$7,500 in cash and everything I owned fit in the back of a small U-haul truck. One guy I knew was ordered to pay more than his net income in child support and alimony! That's a horror story.

So you're way ahead of where I was. On the plus side I have a COLA'd DB pension and health insurance from my former employer of 29 years (law enforcement) and that's rare anymore.

I'd say keep the car. Everyone has to splurge on a toy once in a while just for the enjoyment of it and in the long run it's not going to make a huge difference since you otherwise have your financial ducks in a row.

And you're planning ahead now. That's the big issue.

[startingover]

Quote:

Originally Posted by Walt34 Welcome to the board. At age 33 I was also going through a divorce. I was lucky, it was about as amicable as any I've heard of and no kids. When the dust settled on it I had ~$7,500 in cash and everything I owned fit in the back of a small U-haul truck. One guy I knew was ordered to pay more than his net income in child support and alimony! That's a horror story. So you're way ahead of where I was. On the plus side I have a COLA'd DB pension and health insurance from my former employer of 29 years (law enforcement) and that's rare anymore. I'd say keep the car. Everyone has to splurge on a toy once in a while just for the enjoyment of it and in the long run it's not going to make a huge difference since you otherwise have your financial ducks in a row. And you're planning ahead now. That's the big issue.

Mine sounds very similar; no kids, and what I had fit in the back of a 12' Uhaul truck. It was also very straight forward, we spent around $500 to have the divorce "processed." Yes, financially, I feel fortunate.

I agree with the car, too. I could raise another $15k, yes. In the grand scheme of things, I just don't see it to make THAT much of a difference over the next 20-25 years. I hope I am "right!"

Thanks for the input!

[ronocnikral]

welcome. i would just like to reiterate that you are financially in good shape after a divorce. my wife's ex was stuck paying alimony for almost 7 years, but he had to have known trying to keep a wife on each side of country was an expensive habit.

one thing i'm curious about is the practice of paying interest only on the house? i guess my thought is, with interest rates so low and our future plans fairly uncertain, why not pay it down a little? just curious. it seems like you have plenty of room in the budget...don't feel obligated to share if you don't want to.

welcome again.

[startingover]

Quote:

Originally Posted by ronocnikral welcome. i would just like to reiterate that you are financially in good shape after a divorce. my wife's ex was stuck paying alimony for almost 7 years, but he had to have known trying to keep a wife on each side of country was an expensive habit. one thing i'm curious about is the practice of paying interest only on the house? i guess my thought is, with interest rates so low and our future plans fairly uncertain, why not pay it down a little? just curious. it seems like you have plenty of room in the budget...don't feel obligated to share if you don't want to. welcome again.

The deal on the house is that there is a decent spread b/t what I owe and what it would/should sell for. Further, I feel strongly that it's at the bottom end of the value - put another way, it's certainly not at the peak! Even if it sells for 10% less, I stand to make money. Because I don't plan to be there for more than a year or two, I felt like my money was better placed in my 401k, ROTH IRA, etc. If the spread were closer relative to what I owe and it's worth, I would be more inclined to pay some principal. Or, if I were staying longer, I certain would be.

Thanks for your input!

[Milton]

I don't know much about 'interest-only' mortgages - well, nothing, really.

Wouldn't renting be a lot simpler?

[startingover]

Quote:

Originally Posted by Milton I don't know much about 'interest-only' mortgages - well, nothing, really. Wouldn't renting be a lot simpler?

I don't think so. I'd have no equity and be flushing my money down the toilet by renting. Basically, I have the ability to pay interest only for 5 years. I still pay property taxes, obviously, but I also have them to write off. The only way I feel it could harm me is if the value of the house dipped below my balance. Since there appears to be at least a $45-50k "gap" b/t those two figures, I feel comfortable.

[hakuna matata]

Hey Startingover
Glad you made it over here. I think you will find this board much better for your financial questions. When I saw your post on that other board I knew you would fit in here! Welcome. Good luck and as I mentioned over there I think you are in great shape.

Hakuna Matata