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Old 09-13-2016, 11:10 PM   #1
Confused about dryer sheets
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Hi, I'm

Brand new to the forum! Stumbled upon it recently and have been hooked ever since.

I'm looking for advice. Primarily advice on what threads would be best for me to read/catch up/gather more knowledge.

I'll be honest and to the point. Until very recently, I've put little to no effort into retirement as you'll see below.

My Details:

DW and I are both 28YO. Reside in CA

DW and I annual income approx. 195K

Primary residence worth 600K, mortgage balance 394K

Rental property worth 400K, mortgage balance 240K. Positive cash flow of 10K/year.

60K Cash on hand

35K in 401K (minimal % contributed over past 4 years since college)

40K in owned vehicles/toys

Debt:

30K DW car

Debts recently paid off:

50K in student loans


First plan of action moving forward is to max out 401K contributions.

Our goal is a work in progress. I am confident in that we need to cut out frivolous spending and significantly ramp up investing!
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Hi, I'm
Old 09-13-2016, 11:41 PM   #2
Recycles dryer sheets
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Hi, I'm

Welcome aboard sailor. My wife and I decided many years ago to max out our 457b's (similar to 401k's). Once we did we just adjusted our spending to match what our actual take home income was. It wasn't too difficult. Remember to LBYM especially at your young age. When you become older you will appreciate it.




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Old 09-14-2016, 06:07 AM   #3
Recycles dryer sheets
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28 years old is a GREAT time to be thinking about retirement- kudos to you for planning early! Welcome-
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Old 09-14-2016, 08:22 AM   #4
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Welcome boatguy!! Here are two places to start reading:

Some Important Questions to Answer Before Asking - Can I Retire?

and

Early Retirement FAQs - Early Retirement & Financial Independence Community

The Young Dreamers and FIRE and Money forums are probably the most relevant to you right now.

Congratulations on paying attention to retirement planning so early - we have plenty of folks who show up here in their late 50s or even 60s who haven't started planning yet. So you are already ahead of the game. Also congrats on paying off the student loans.

Unless the car is financed at 0%, most of us here would probably suggest paying that off as soon as you can, but after making sure you get your full 401K match. And start saving for the next vehicle so you don't have car loans again.

Finally, with $195K in salaries, even in pricey CA you should be able to save a lot more than just maxing out your 401Ks, so we'd suggest you start tracking your expenses in detail and look for opportunities to reduce them. "LBYM" is our motto around here!
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Old 09-14-2016, 12:32 PM   #5
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I'd second what MBAustin had to say, so I'm posting mainly to say welcome!
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Old 09-14-2016, 12:46 PM   #6
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Congrats on a great discovery with this forum. Folks are great..use it often!

Member imoldernu has a long running post HERE that's been viewed over 62,000 times... In case he misses your post, I thought I'd link it for you to read. A lot of life experience, common sense and good advice from imoldernu and those that posted.
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Old 09-14-2016, 01:39 PM   #7
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Welcome Boatguy!

You're doing a lot better than I was at your age - especially with your real estate equity in pricey California. Color me impressed.

I agree with the suggestion to max out the 401(k)s... Only caveat would be to temper this advice if the 401k offerings are high fee/high expense ratios. If you have a large employer, chances are they are lower fees. But some smaller employers have 401ks with high loads/fees... and in that case it might be good to only contribute to the match point, but put more savings in after tax accounts.

You've got great income and a great start towards financial independence.
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Old 09-14-2016, 06:09 PM   #8
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Welcome aboard
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Old 09-14-2016, 07:33 PM   #9
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Welcome boatguy, 28 is not at all too late to get going more serious on the retirement savings plan. Just keep in mind that power of compounding, so the more you can save and earlier you can save the best results you can get.

Good job on owning your residence and the rental with positive cash flow. As you probably know, Uncle Sam puts limits on your tax deductibility of rental loss at your combined income level. Although $10K in net positive sure helps offset that!

I agree on max out your 401k, LBYM, and get rid of any consumer debt you can. Do you have 401k match program at work? If so, for sure put the amount to get the max match from company.

Good job paying off the student loans, sounds like you already have good LBYM attitude. You are doing good, just hang around here and keep reading and soaking it up. You will soon be an expert among your peers, and far ahead of the avg person in financial knowledge.
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Old 09-14-2016, 08:35 PM   #10
Confused about dryer sheets
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Quote:
Originally Posted by MBAustin View Post
Welcome boatguy!! Here are two places to start reading:

Some Important Questions to Answer Before Asking - Can I Retire?

and

Early Retirement FAQs - Early Retirement & Financial Independence Community

The Young Dreamers and FIRE and Money forums are probably the most relevant to you right now.

Congratulations on paying attention to retirement planning so early - we have plenty of folks who show up here in their late 50s or even 60s who haven't started planning yet. So you are already ahead of the game. Also congrats on paying off the student loans.

Unless the car is financed at 0%, most of us here would probably suggest paying that off as soon as you can, but after making sure you get your full 401K match. And start saving for the next vehicle so you don't have car loans again.

Finally, with $195K in salaries, even in pricey CA you should be able to save a lot more than just maxing out your 401Ks, so we'd suggest you start tracking your expenses in detail and look for opportunities to reduce them. "LBYM" is our motto around here!


Thank you for the recommended reading MBAustin!
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Old 09-14-2016, 08:38 PM   #11
Confused about dryer sheets
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Quote:
Originally Posted by Tailgate View Post
Congrats on a great discovery with this forum. Folks are great..use it often!



Member imoldernu has a long running post HERE that's been viewed over 62,000 times... In case he misses your post, I thought I'd link it for you to read. A lot of life experience, common sense and good advice from imoldernu and those that posted.


That is a long running post. Packed with advice and I'm only a 1/4 way through it. Thanks!
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Old 09-14-2016, 08:41 PM   #12
Confused about dryer sheets
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Quote:
Originally Posted by rodi View Post
Welcome Boatguy!

You're doing a lot better than I was at your age - especially with your real estate equity in pricey California. Color me impressed.

I agree with the suggestion to max out the 401(k)s... Only caveat would be to temper this advice if the 401k offerings are high fee/high expense ratios. If you have a large employer, chances are they are lower fees. But some smaller employers have 401ks with high loads/fees... and in that case it might be good to only contribute to the match point, but put more savings in after tax accounts.

You've got great income and a great start towards financial independence.


Rodi, thank you for the advice. 401K has lower fees with limited employer match.

Putting more into after tax accounts is where I'm looking to gain more knowledge. Initial thought was Roth IRA, however I'm concerned my MAGI is over the limit....still learning.
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