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Hey yall! Im an elder millennial tired of corporate slavery
Old 12-27-2018, 05:45 PM   #1
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Hey yall! Im an elder millennial tired of corporate slavery

Did the smart things (I thought) early on, got the MBA, got the big job and climbed the ladder quickly. However, last few years what Im sure of is the more BS I put up with the higher I go. Letting it all go and doing something Different isnt a real option - 2 small kids and single mom. But what is an option is getting out of this mess through smart investing! Ive done pretty well all along but have a lot to learn. My portfolio is 70% stocks, 25% cash, 5% bonds. I mostly invest in Vangiard index funds and oh boy, do I suck at how to win the tax game. I will be writing a big check to Uncle Sam in 2019 due to an ISO sale. Look forward to learning more on this site from like-minded folks. Also very interested in how to generate rental income or smart investing in real estate.
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Old 12-27-2018, 06:31 PM   #2
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Originally Posted by court6449 View Post
oh boy, do I suck at how to win the tax game. I will be writing a big check to Uncle Sam in 2019 due to an ISO sale... Also very interested in how to generate rental income or smart investing in real estate.
Welcome to the forum! Do you do your own taxes? I do mine using TurboTax every year, but I understand the tax brackets, what's taxed, what isn't etc. I just did some tax loss harvesting today, to offset my dividend gains, which lowers my taxable income by $3K this year and next.

Smart investing in real estate can be tough, and a painful learning experienc. You can also get lucky, and make lots of $, with lots of tax implications. Have you ever bought or sold a house or condo? Been a landlord? Are you comfortable doing a home inspection yourself? Doing the repiars/renovations yourself, or at least knowing enough to oversee those doing them? There used to be a show called "House Flippers" or something to that effect. I learned a lot of what not to do by watching that show! My main recommendation is to budget 200% of what you think repairs/renovations will cost, then have about 12 months of 'carrying costs' saved up in case the tenant bails, or the value tanks. Carrying costs of unrented properties can inlcude property taxes, sewer/water, electricity, homeowners insurance, association fees, property management fees, ,mortgage, etc.

I once owned a rental condo, and when the tenant lost his job, I had to cover the carrying costs for about 8 months, at about $1500/mo. I almost ran out of cash, and almost ended up having to sell tax-deferred mutual funds to keep the place afloat. Learn from the mistakes of others, rather than making them all yourself!

Best wishes!
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Old 01-02-2019, 02:30 PM   #3
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Originally Posted by court6449 View Post
Did the smart things (I thought) early on, got the MBA, got the big job and climbed the ladder quickly. However, last few years what I’m sure of is the more BS I put up with the higher I go. Letting it all go and doing something Different isn’t a real option - 2 small kids and single mom. But what is an option is getting out of this mess through smart investing! I’ve done pretty well all along but have a lot to learn. My portfolio is 70% stocks, 25% cash, 5% bonds. I mostly invest in Vangiard index funds and oh boy, do I suck at how to win the tax game. I will be writing a big check to Uncle Sam in 2019 due to an ISO sale. Look forward to learning more on this site from like-minded folks. Also very interested in how to generate rental income or smart investing in real estate.

Nice w*rk putting in your MBA time and really in the $$ job. Still, I bet it's tough with 2 kids as a single mom with the pressures that often go with these j*bs. I went the technical route to avoid all the BS you mentioned above. Well, the BS caught up with me and I FIRE'd (retired early) in my 40's.


You mentioned about your portfolio and real estate, but didn't mention much about your overall financial picture and longer term goals. Here are a few thoughts, perhaps obvious, but often overlooked.


First protect what you've got (defense):
- Do you have an emergency fund? I suggest at least 3-6 months expenses in cash. Anything beyond this could be invested. Need to cover yourself and 2 kids if/when you lose your nice $ job. These jobs can be especially vulnerable because the politics become increasingly dangerous as you move up the food chain.


- Do you have enough life insurance and the legal paperwork to manage your young kids into adulthood if the unthinkable happens? Hate to be a wet blanket, but this would be foremost in my mind if I were a single parent. Many nice jobs offer a life insurance benefit, but is it enough and what if/when you lose your job? Strongly suggest heavy term life/disability insurance that is independent of where you w*rk.


Next, getting to a better future (offense)
- How much of your income are you saving? This is the most important number, more important than tax planning, or other tactical stuff like index funds vs real estate. If you are only savings the "recommended" 10-15% annually, you probably won't be fully financially independent until your 50's or 60's. If you want to escape with some confidence in your 50's or earlier, you probably should save much more, say 20-50% annually.



- What are your expenses? If you have 25X (4%) to 33x (3%) of your expenses saved and invested, you can be financially independent for decades, as a rough guideline. The point here is not the exact number, but the fact that this can be a very big number if you are spendy. Bottom line: if you want career options or the option to opt out of w*rk entirely, then you need to save big! This won't be easy...



I'm sure that all of us can provide more insight if you care to share a bit more about your situation and goals.


FB
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Old 01-02-2019, 02:58 PM   #4
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Originally Posted by court6449 View Post
Did the smart things (I thought) early on, got the MBA, got the big job and climbed the ladder quickly. However, last few years what Im sure of is the more BS I put up with the higher I go. Letting it all go and doing something Different isnt a real option - 2 small kids and single mom. But what is an option is getting out of this mess through smart investing! Ive done pretty well all along but have a lot to learn. My portfolio is 70% stocks, 25% cash, 5% bonds. I mostly invest in Vangiard index funds and oh boy, do I suck at how to win the tax game. I will be writing a big check to Uncle Sam in 2019 due to an ISO sale. Look forward to learning more on this site from like-minded folks. Also very interested in how to generate rental income or smart investing in real estate.
If you are interested in exploring real estate investing, visit Www.biggerpockets.com. It is a free forum with a massive amount of information for both, newbies and experts
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Old 01-02-2019, 03:08 PM   #5
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Originally Posted by court6449 View Post
My portfolio is 70% stocks, 25% cash, 5% bonds. I mostly invest in Vangiard index funds and oh boy, do I suck at how to win the tax game. I will be writing a big check to Uncle Sam in 2019 due to an ISO sale.
I don't know your Health Care situation, but many of us are on the ACA. It's important to watch the MAGI for the subsidies offered (at least while the ACA exists). We've not started WD from portfolio (plan to in @ 3 years). Using saved cash, I bonds and DH has small consulting on the side for living expenses. I'm also concerned about the correct way to WD from portfolio for the least tax consequences.

I consider us FIRE, because we make our own schedule and live happily removed from the Megacorp world. After 25 years, good riddance.

Welcome to the forum, so much to read and learn here.
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Old 01-02-2019, 06:15 PM   #6
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Hi, thanks for reply. I’m still learning the kind of info that you need to post here in order to get the most beneficial answers

Overall goal: get out of the stressful MegaCorp job as soon as possible. This is honestly why I was asking about real estate. Always had an interest but what I need is an additional revenue stream to make that early retirement goal happen, and it doesn’t have to make as much as I do now. Now, I’m 36 and can retire with full pension and benefits at my work if I stay until I’m 52 given how long I have already been there/put up with BS. Most people think I’m crazy to think about not sticking around for that but I’m not sure I have another 16 years of it in me. Life is short and never know what’s going to happen. My other option is marrying rich �� kidding. Sorta.

Ok so I feel life insurance for kids is good; I perhaps made it sound too ominous before - I am a single mom but their Dad is an involved/great parent and helps support them too. I am not “alone” there. I feel that part is covered.

Emergency fund - covered and then some. I know I probably hold onto too much cash honestly - more than I should. But it goes a little along with my Type A personality - always feel I need to be prepared for whatever (illness, layoff, zombie apocalypse, etc)

To get a better idea of some of the investing dilemmas I face, here is a better breakdown below. Questions I know I have but unsure of best direction:
1) the 70%stocks and 5% bonds is spread among 5 different investment mediums. Aside from the 401K I have been wondering if it’s best to combine them all:
- approx $200K in 401K spread across various risks stock finds mostly global and US
- $22K in professionally managed funds -
Mostly Amcap class C and a lesser amount growth funds
- $25K in a 529 plan for kids college in
2) $25K- I bought these myself but last year: about $5K in all these VSEQX VYM MKG VNQ VTI. Since the recent market shenanigans I’m losing in all these.
3) $20K directly in stocks I know what they are and actually believe in (amazon, Coke, wayfair). I’ve made about 8% return (not great)
4) company stock $4500
5) cash $50K

I have no debt except the house. House is worth about $280K; I owe $215K but paying extra every month.

I’m saving 25% and could honestly save up to 50%. That’s one of the decisions I struggle with - I can be disciplined enough to save the money but where to put it? More 401K - random index funds in small amounts or one giant amount in one fund?

Suggestions on how to invest better are welcome as are additional revenue streams. I understand very much that time matters the most on investing and I can stick out my investments but not sure of the best strategy to follow really based on my goals.
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Old 01-02-2019, 07:01 PM   #7
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At your age I was 100% stocks and was in it for the long term. Still keep pretty high equities allocation. Almost none in cash, I just sell when I need some.


I like simple and so i consolidated all my 401k/403b from employers into a single rollover IRA, and I have everything with Fidelity. I also prefer fewer funds with bigger amounts, although I will and do have some smaller specialized sector type funds.


I have done the rental property in the past. It is a part time job, and as long as you consider that it will take your time and some money, that is fine. You can do well if you are in a good market with rising values and good stable tenants. It can also be bad with dropping values and bad tenants. Like any investment, it has risks. It does have good tax advantages that can help at your income level. At this stage in my life I just have my Fidelity accounts and only thing close to real estate is some REIT type investments.


Save as much as you can pre-tax, up to the limit for IRS and to get the max company match I assume your company provides? After that, and figuring your tax rate is high enough that all Roth does not make much sense, I would do some Roth, some after-tax regular old brokerage type account, and probably more in the kids 529. Invest in widely held funds to have good diversification. It's OK to have fewer funds with larger amounts if that meets your risk tolerance and investment goals for timing.


The more you save now, the earlier you can retire. Get rid of all those advisors and different brokerages, go self directed and consolidate under one (Fidellity, Vanguard, Schwab are all good). Read a lot on her and educate yourself. You can do it, and save that advisor fees into your own pocket rather than theirs!
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Old 01-02-2019, 07:04 PM   #8
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Greetings!
You’re doing well. Keep educating yourself, stay disciplined, and take the hard days one at a time.
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