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Anybody else come over here from WristTwisters?
Old 03-20-2012, 12:00 AM   #1
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Anybody else come over here from WristTwisters?



Dirty details:

Just turned 34, married, oldest kid is 3.75, youngest two are 15 months each. I work a 12 hour a day job, salary, and it's burning me up, so I'm looking for available options and opportunities to retire early.

I currently make right at $60k a year, live in a low COL state, and usually get a yearly bonus of 15% (have gotten between 9-15% every year). We currently have $70k in our Roth 401K, company matches 6%, we currently drop in 4%.

Still have $17k in student loans looming, however I locked those in at probably a historic low of 1.1375%. My total interest on that loan over 20 years is about $1800, so that's the LEAST of my worries.

Kids were expensive. The first one was emergency C-Section and was around $15k that we were half paid for when the twins came. The second pregnancy was even worse. My wife was air-lifted to another state for medical care and almost didn't make it; hospital was also OON, so our expenses were soon billed in the triple digits. I fought it all the way down to about $33k, (which considering she was in three different ICU units for almost 3 weeks, with two surgeries in between and who knows how many different tests and blood transfusions/dialysis and was transferred in both a fixed and rotary wing) wasn't a bad deal. So needless to say, we emptied our savings, emptied our hard earned HSA, and put about $8k of what was left on a low interest CC.

Those med bills are the primary reason we only put in 4% right now, we just need a bit more discretionary until we get over the debt payoff. We are taking all of this year's tax return and the work bonus (about $8k) to put down on just the medical bills and other bills accumulated around that time frame. We will probably do the same with next year's taxes as well. But the bonus from there on out will go straight into the company Roth 401K (with 6% match). I have NEVER touched the bonus (hence the 70k already in the 401k) until last year and this, but I think getting the debt paid off has higher precedence until we are back on track.

Current Roth layout is pretty much 90% stock in Vanguard Retirement funds 2040, 2045, 2050, and a Janus fund I can't remember the name of and a EuroPacific fund. I lean heavy towards risk; that's something I'll have to throttle back on in later years, but for now, I'm all about aggressive growth.

Currently own a house at ~225k owing 218 (that's current appraisal, not when it was worth 260 6 years ago ) sitting at 4.25%. We just re-fied and would have probably gotten a better rate were it not for our CC debt due to medical costs.

Kid-carrying swagger wagon at 17k and 3.5%. Three other vehicles owned outright.

Some questions I have:

1) Should I worry about paying off the student loans any faster considering the ultra-low interest? Of course this would come after CC, cars, or any other regular-term interest charging account are paid off. Would it be better to put it into the house?

2) I'm dabbling more with stocks with some discretionary income, which will become more serious after the CC debt is paid off. Any input in which direction to learn more? I have 4 trading accounts currently open.

3) I've considered P2P lending, I.E. LendingClub.com. They seem quite popular and a bit less risky than some other solutions. Seems like it would be fun to at least learn about it. Anybody have any experience with this type of investment?

As far as early retirement goes, I haven't really set a goal in mind yet. Mostly due to the hiccup we had in childbirth expenses. We might consider adopting as well (won't chance having more naturally) and so if that happens, my retirement date gets pushed out. But I would really like to retire at 50, 55, about the time my kids get the boot.

Things I know I need to do:

1). Get the debt paid off first.
2). Open IRA's for myself and the DW.
3). Get College savings started for the wee ones (we put $10/month per/kid in just online savings. It isn't much, but it's all we can do right now).

What else am I missing?


Oh, and I am a moderator over at WristTwisters.com, so if I liken everything to motorcycles, you'll know why .

Looking forward to a great learning opportunity from y'all!

Shout out to Janet H!
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Old 03-20-2012, 01:06 AM   #2
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Welcome to a fellow Idahoan!

One thing you'll notice is that a lot of folks here don't own individual stocks, and don't do much trading. Instead they invest via low cost index funds. If you're curious, you might also check out www.bogleheads.org
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Old 03-20-2012, 01:21 AM   #3
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Originally Posted by g00gl3it View Post

Kids were expensive. The first one was emergency C-Section and was around $15k that we were half paid for when the twins came. The second pregnancy was even worse. My wife was air-lifted to another state for medical care and almost didn't make it; hospital was also OON, so our expenses were soon billed in the triple digits. I fought it all the way down to about $33k, (which considering she was in three different ICU units for almost 3 weeks, with two surgeries in between and who knows how many different tests and blood transfusions/dialysis and was transferred in both a fixed and rotary wing) wasn't a bad deal. So needless to say, we emptied our savings, emptied our hard earned HSA, and put about $8k of what was left on a low interest CC.
Welcome to the forum! Wow, your parenting experiences (especially DW's) have been a bit too exciting! I'm glad she made it safely. I'm going to share your story with some of my Canadian perinatal patients who complain about the cost of hospital parking!
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Old 03-20-2012, 05:56 AM   #4
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Welcome to the site.
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Old 03-20-2012, 06:24 AM   #5
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Hi g00g. Looks like you have a lot going on. The health challenges and financial impact is something I can identify with - by the time our oldest was 11 health care costs for the three of them had consumed 100% of everything we had saved and left us in debt as well despite a by high savings rate. Hard though it may seem, it can get better and hopefully it will for you.

You'll get lots of advice here and there are lots of old threads to review in your free time, if you have any. As to your questions, I would pay off the CC debt first regardless of the interest rates because too many things can go wrong with that type of debt. The student debt at almost 1% is so low it doesn't make sense to pay early. Here's a recent thread on P2P Is Prosper.com a Good Investment?
As for trading, 4 trading accounts sounds like a lot for someone with three small children. I'd work at trying to simplify things and keep expenses down.
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Old 03-20-2012, 07:44 AM   #6
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Congratulations to the OP for enduring and managing some pretty tough stuff and keeping your head above water! Looks like you have the persistence needed to work through the debt and continue to gr$$ner pastures in the future.
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Old 03-20-2012, 08:19 AM   #7
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I see you are only working 12 hours a day. Why so little? With children, surely you wish to get away from home so you can avoid the complications of raising them. I suggest you boost your workload to at least 14hours a day. Leave 2 for eating, 2 for doing household chores, and 6 for sleeping.

OK, Seriously. When I was young we were told that technology would bring in the 32 hour work week. More leisure time for the working man and woman. What happened to that? I guess I should add, I also work more thant the 40 hour week, but usually not quite as much as you. That is why I am retiring. Good luck,
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Old 03-20-2012, 10:00 AM   #8
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welcome googleit from your neighbor to the south.

One thing you may want to think about is stashing together a grand or two as a cushion (aka emergency fund) if you haven't already done so. Also, I noticed you had 3 vehicles paid for over the $17k loan. You may want to think about divesting what isn't needed at this point to reduce expenses and get some cash to get you out of the hole. While I assume some may be a motorcycle or two, it may be better to set your passion aside for a while until you get out from under the responsibility of having kids. There was a family in one of my neighborhoods growing up where the mother died in a car accident and the father couldn't work b/c he hurt his back in a motorcycle accident. As a teenager, I felt sympathy for them, as most people did, and my father said, "when you have 5 kids, you need to think about other things than riding a motorcycle." Which brings up another point, hopefully you have adequate life insurance and disability insurance.
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Old 03-20-2012, 10:11 AM   #9
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I am much impressed at you and your DW's ability to work through some serious adversity. I am also very impressed that you are such a hard worker. Just a few thoughts. Working smart is often better than working hard. You do not say what kind of work you do. 60K is a nice income in a low COL location. Having to work 60 hours a week for it is not so great. You may eventually get REAL tired of it. For a 34 year old you have a good LBYM save and invest mentality but it may be better for you to invest a little less in the market and more in yourself. We live in a rapidly changing world. I think it is important for everyone to get the education that will make them competitive if something happens so that they cannot work so hard or in their current field and need to make a good income and possibly work fewer hours. What happens to you and your family if your current job just goes away for whatever reason? This is especially important to consider for a family with a stay at home mom and only one person bringing home all the bacon. I do think that staying at home to take care of kids, especially when they are little is a great thing. My wife stayed at home when our kids were little. She went back to college when our youngest started grade school. I went back to college at age 40 after retiring from the army and got a degree in nursing so that I could make good money and not have to work so many hours for it like I had done while in the army. Three other vehicles owned outright? Motorcycles are dangerous. Please be careful!
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Old 03-20-2012, 11:31 AM   #10
Confused about dryer sheets
 
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Thanks for all the replies and advice! Some more info to quell some fears:

1) Yes, I have MASSIVE amounts of life insurance and disability. My wife would have everything paid off and enough to live off the interest only should I pass away or become seriously disabled. And yes, motorcycles are dangerous but even more so are the people in cars who don't see them or don't respect their road space as a valid vehicle. I was riding a motorbike before a pedal bike; it's a passion I just can't give up. Even my wife has her endorsement . Wife also has life insurance, as do the kids.

2) DW also has a degree - she was a teacher for a couple of years but is just home now taking care of the kids. She might go back once they are all in school, but it would be part-time only. We are centering our finances on the fact that we won't EVER rely on that income, so if that day comes, that will be treated as bonu$. This is also important to us should, again, anything happen to me.

3) I have a management degree in Computer Information Systems and worked in IT for about 8 years. Due to corporate downsizing, I side-shifted to another position to avoid being outsourced and eventually losing my job (which did happen to those that stayed, unfortunately). Right now I'm the "go-to" guy for application support. And there are only 5 of us in this position across the entire US for a major US insurance company. Needless to say, we are always in high demand, but I can't complain much at the salary.

I don't go 'too' overboard in spending on my motorcycles ($1500/year for parts/upgrades). They are all paid off, I have way cheap insurance (as in the cost, not coverage) and do all my own work on them. The only vehicle we are paying for is the minivan, which, we would not have splurged for had we not had twins. Once we realized twins were on the way, we had to completely re-think the vehicle upgrade. We will drop back down to a mid-size once the car seats and strollers are gone and we don't need so much space.

4) The reason behind the multiple trading accounts was just because of securities I was chasing that were only available at certain brokers. I don't actively trade ATM (no time) but I would really like to get good at it. I made a couple $$ a few years back and had a blast at it.

And I will definitely keep reading on some other threads. The general feel of this board is much like WristTwisters; some level-headed folks on here who are more than willing to lend a hand. Can't get any better than that.
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Old 03-20-2012, 11:33 AM   #11
Confused about dryer sheets
 
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5) I forgot to add, I also own an LLC with two other IT guys (friends) and we do some side work as well. So we currently service about 15 businesses in town with their computer needs.

6) I also do computer cleaning and repair/building/networking, younameit, for friends and family for a nominal fee, and that's helps pay the bills, too. Usually a couple computers a week at $50-$100 a pop.

So yes. I'm very very busy . I live on 4 hours of sleep a night. But I know that won't last long and need to balance out the work life.


Anybody have any open IT jobs in Idaho/Utah?
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Old 03-20-2012, 12:02 PM   #12
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Originally Posted by g00gl3it View Post



Looking forward to a great learning opportunity from y'all!

Shout out to Janet H!

Hey there - welcome to the forum

Hang out here long enough and your world view about how much money and stuff you need in your life will change. Check out the FAQs forum as a good starting place
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Old 03-21-2012, 01:48 AM   #13
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Hi and welcome. Congratulations on being in the black, that's a barrier I see a lot of people having trouble overcoming.
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Old 03-21-2012, 04:23 AM   #14
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Hi g00g.. Personally I think you're in a pretty good position to start with.. The cool thing is that your your debts are at low interest rates which is super cool.. Just like you said I'd probably start off with the CC's, but something you may want to consider is investing into your business... I'm in CA and there is an organization called score - they're basically a bunch of old execs with not much to do but mentor someone and show them the ropes.. The cool thing is that it's free so hopefully you have something similar in Idaho.. If not you may want to look at getting a mentor that did b2b services as well, cool thing is that the higher-ups have created systems of freedom so the usually have the most free time and are pretty serious about "passing on their legacy" so hopefully that helps. That would help you with immediate flow and depending on how strong your acquisition skills are possibly afford you to 1099 other people or preferably people under other corps to subcontract under you, then you and your partners can focus on driving business in the door - the #1 asset of any for profit business. The only reason why I say this is because when I saw the Lending club link you put up and didn't know if you were on the investor side or the party borrowing money.. From personal experience leveraging money is awesome but when used in the right context. borrowing money to leverage it in an open non-tangible (non-tangible meaning the only thing you get is a piece of paper vs. a tangible - ie- gold, RE, private placement where you can reach out put your hands on something as say - this is mine! =) ) investment is just a little scary to me. Not only that building a business and learning the cash flow patterns and growth sequences makes investing much easier - kinda a like learning how to walk to eventually run when comparing it with putting money into other businesses (private placements or stock) simply because you know what it really takes. One of my personal mentors simply takes what he's experienced in the growth and sustainability of his business and overlaps it with what he sees as market manipulation and uses that influence his trades. It's super powerful because he's lived it so looking for it comes natural and he's doing pretty well and he mainly works with options. Not only that if you can grow your business it'll cause you to leverage your partners as well - which is leveraging much more that just money - huge.. =)

One type of investment you may want to consider is forex, I only say this for 3 main reasons:
1. I lost my cheeks going with a "big name firm promising good diversification" - crap. There are only 2 types of real investments intangible and tangible. Cool thing is you're already involved in both
2. The stock market is awesome but a little too subjective for me. it's too easy to break ceilings and floors with stock where in forex it's a lot harder because you have a country'
s economy at stake - which is good because when I noticed you were looking for aggressive growth- because the barriers are so hard to breech it allows you to consider stronger leveraging tools such as options so you can still harness the same power with less risk of something flying off track - it's all risk but anything you can do always helps.. =)
3. I found forex gives me the same income potential because it has the same relative swings that stocks do.. The only difference is that you're holding onto money so it's a little more simplistic. It's still basically stock but the stock is a country's money..

btw- awesome to see another rider.. I want a bike again but am holding out because of my wife and kids for now..
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