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Old 03-14-2016, 11:33 AM   #1
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Hi I am KmmFIdreamer

In my 50's I inherited money and am glad that I was mostly wise with it. I was already on a Dave Ramsey plan so I knew to just start applying it to Baby steps. I paid off all debt except my mortgage within a month. Established an Efund of 3-6 months. I earmarked a small amount for spending but it was stuff we really did absolutely need - a new mattress, a clothes dryer, replaced the old furnace and water heater in our house.

After that (about 9 months later) with a substantial amount of money left, I looked at what would improve my life that was more "luxurious". I bought a used vehicle that was 2 years old and low mileage. Since I am now "debt free" I started a car replacement/repair fund from a payroll withdrawal because that was the biggest thing that created debt for us in the first place. I also paid off about 25% of my mortgage in one lump sum, and got on a firm footing of prepaying my mortgage monthly to make it go away at a projected retirement age that I was comfortable with.

At that point I still had money left and it was a year later with less emotional attachment. I looked at what I should do with it and decided that rather than paying the mortgage off totally, I would invest in some vacation rental property to generate greater income for myself. (My entire 401(k) was already in stocks and I didn't want to risk putting all the inheritance there too...)

Two years later the "inheritance" is gone except for the Efund, but I am on a firm footing financially now that will benefit me the rest of my life. I am putting about 40% of income into retirement and savings vehicles and working that mortgage away as well. I have a paid off rental property that generates $1000+ dollars a month average profit and that will continue to provide me income into retirement (plus I can occasionally use it myself when it is not rented!) That was the hardest decision was whether to invest or do a mortgage payoff - I had to evaluate the value of the increased income for life against the time it would take to pay off the mortgage for where I live. Considering I might sell the house I live in anyway when I retire, I think that I made the right choice for me....

All in all, a step by step plan of what is most to least priority is the way to go. Then take your time doing what you need too. It doesn't hurt cash to sit into the bank for a while until you really decide what to do with it. (Everybody I work with said they would quit their job immediately, but they would have been broke and looking for work again in another 3-5 years. I had the vision to know that I would have an absolutely awesome retirement if I work past my minimum retirement age of 56, collect my pension & health insurance, and still retire early! My ultimate plan is age 57.5)
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Old 03-14-2016, 06:28 PM   #2
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Welcome to the forum!

I hope it's ok - I moved this post over to the introduction sub-forum.
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Old 03-14-2016, 06:33 PM   #3
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Welcome to the forum!

I hope it's ok - I moved this post over to the introduction sub-forum.
I have another thread posted too with more $$ details. I will welcome comments on both!!
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Old 03-14-2016, 06:37 PM   #4
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Welcome to the forum!
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Old 03-14-2016, 06:56 PM   #5
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FYI - the OP was posted in another (very old) thread. It was moved here.
In the meantime KmmFIdreamer did a more detailed introductory post here
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Old 03-14-2016, 07:01 PM   #6
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... Two years later the "inheritance" is gone except for the Efund, ...
Welcome!

Na, Gone means it is helping support a bunch of people in Las Vegas. I think you have done a great job of putting it to work for you.
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Old 03-14-2016, 07:28 PM   #7
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Old 03-15-2016, 08:20 PM   #8
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Welcome. The rental property sounds like it's bringing in some nice, steady income which is a good base for your retirement planning.
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Old 03-17-2016, 09:22 AM   #9
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Welcome!

Na, Gone means it is helping support a bunch of people in Las Vegas. I think you have done a great job of putting it to work for you.

The ironic thing is that the only real vacation I had last summer was a weekend trip the Vegas. ( I used some airline points and got a cheap hotel online.) I think I left all of $20 in the slot machines....

We actually went to see a show (thanks to 1/2 price tickets tonight) and try out a few restaurants. The trip reminded me why I haven't gone to Vegas in 10 years though. I doubt I will be back again soon. I way prefer to enjoy nature instead of a dirty, crowded city .......

----------
I am actually looking forward to a real 2 week vacation this Sept! Everyone in the family has been kicking in $50 a paycheck since last Oct and I am paying for bits and pieces as I go along, so I won't have any debt hangover after the trip.
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Old 03-20-2016, 09:47 PM   #10
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Debt hangover love it. Dave Ramsey special 😀


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Old 03-21-2016, 06:20 AM   #11
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Sounds like overall you are doing pretty well. You do not say exactly how far off your target is.
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Old 03-21-2016, 09:57 AM   #12
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Sounds like overall you are doing pretty well. You do not say exactly how far off your target is.

My other thread is more detailed on what assets that I actually have. The conclusion being that I still need to pile on the cash for a while longer. My minimum point to consider retirement is June 2019. That is when I reach the age/ service time requirements to collect enough pension to cover my health insurance premiums that I get to walk away from my job with.

I also need to sell the out of state house I inherited and apply that to the mortgage of where I live. I am getting closer to getting that done - next month I will be able to spend a whole week of vacation time down there working on the house. Having time is my big problem with that project at the moment. I have already had a minimum cash offer, so know what range to expect on that sale. Even if I sell it for that minimum price, my last mortgage payment on my house is June 1, 2019. I am hoping to get a higher offer when I actually get it ready for market this summer....

I still have a lot of work/research to do this summer on retirement. I also need to come up with more ways to make $$ to sock away over the next few years. I am still in the trimming expenses mode too. I cut the cable in January, trimmed the grocery bill about $100 month average this winter, and am trying to convince the family of the evils of eating out (maybe not as successfully as I would like). I even ditched my $20/month gym membership this fall in favor of going for walks outside or stair climbing (during my lunchtime at work) for free.

-----------------

My big downfall is the travel bug. I get a hankering for a "big vacation" every couple of years. I have been learning a lot though about travel hacking - I use frequent flyer points a lot - but just recently signed up for a couple of hotel loyalty programs. (I have never even stayed in a Hilton before, but I signed up for them recently and am getting a CC to get a couple of free nights on my trip this fall. I will pay my second half property taxes and a dentist bill in April with the card, pay the card with the cash in the bank that is already set aside, collect my bonus points, and then not use the card anymore for a while. It was even a no annual fee card, unlike my favorite airline card!)
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Old 03-21-2016, 10:09 AM   #13
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I read somewhere that you had bought a timeshare. Is that costing you a lot in maintenance fee?


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Old 03-21-2016, 11:21 AM   #14
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I read somewhere that you had bought a timeshare. Is that costing you a lot in maintenance fee?


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I have actually had that for about 7 or 8 years. It is slightly less than $700 a year in fees. With the exchange fee I figure about $120/night for my weeks use of a condo with kitchen. Since I can bank for 2 years with the exchange company I am not pressured to use it every year. It actually has an expiration of 2025, so when I bought it I knew that I wasn't stuck with it for "life".

So far I have done Tahoe (several times), Vail (off season), Florida, upcoming to Hawaii. (Note: We do the 2 day drive to Tahoe because it is cheaper than renting SUV to haul ski gear/shooting equipment etc. if we try and fly!) Vail happened to come on the exchange board at a time when I needed a local "cheap" vacation a couple of years ago - we mostly just watched movies, used the hot tub, did some local sightseeing for free, and tried out lots of craft beers with our home cooked meals.

To contrast the timeshare cost at $120/ night. I do VRBO and have gotten similar sized places for anywhere from $95 to $150/night,, so I think it is pretty in line with what I would rent. Remembering that with teenage boys over the last few years, if I would have stayed in a hotel I would have spent a fortune feeding them - so a kitchen has been a necessity when traveling.

I do notice I get a lot of bonus week offers for around $329 that I could use when retiring/having more free time. I don't do them now just for lack of time. Right now I get 3 weeks + 3 days paid vacation but in another year it will go to 4 weeks. That allows some flexibility in how I spend them, so it is easy to find a week that will fit my schedule. I usually do one winter ski trip with the boys, take a week in April or May, and a week or two in Sept. By rearranging/trading my regular days off I can usually make that paid week into a 10 - 12 days of actual time off work.
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Old 03-21-2016, 11:38 AM   #15
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Debt hangover love it. Dave Ramsey special 😀


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Sorry Dave, I haven't given up my airline affiliated CC yet! I do make sure that I sit down weekly and pay it off so that it never has a carryover balance......

I do listen to Dave a lot and can definitely testify to the benefit of being debt free. I am working on BS 6 - paying off mortgage!

I have had a car payment 2X in my life, but now I have a seperate savings account set up to do car replacement/repairs that I don't touch for any other purpose. Never again will I need to do a car payment....
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Old 03-21-2016, 02:56 PM   #16
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My big downfall is the travel bug. I get a hankering for a "big vacation" every couple of years.
That's no downfall if you ask me. I say that is what FIRE is for. DW and I take 2 "big vacations" every year and don't intend to stop. We will probably add small ones on to that.
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