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Old 02-20-2011, 04:06 PM   #1
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Longtime lurker saying hello.

Hello all. I've been lurking for a year now and I'm ready to say hello. I'm a long time Dave Ramsey fan and belong to his Total Money Makeover Community forums. While I feel like a 8th grader over there doing ok by their standards and often give helpful advice to those in lesser grades.... Over here I'm more like a scared freshman, surrounded by really smart seniors hoping to be more like them.


When I spot someone with some serious potential to FIRE, I will recommend this site.

I'm going all in here and will give details on our situation....

We've been married 20 years this summer. I'm the DW, 40 and a SAHM. My DH is 39, active duty Air Force with 21 years of service. E-7, take home pay is 6k monthly.


We have one 17yo daughter about to graduate. She works part time and will pay for her own local community college costs for at least two years.

Also have a 13yo son. We have the post 911 GI Bill available to transfer to family members. We can split the costs between the two of them. No other college savings.


72k in Roth IRA's. 14K is in USAA's 2040 target retirement fund, 58k is in BP stock. We went in on BP in July, have made 18k so far and thinking about staying til it's about 55-60$. We aren't market savvy at all, it was office talk and our impulsiveness that made us jump in. We did the 2040 fund because of USAA financial advice. While we like the gains from BP, I'm aware we missed out on gains in the Dow by pulling 40k out in July.

We have one local rental property. Owe 150k worth 208k, 4.37% on a 15 year note with 14 years left. We pay 200$ extra monthly, payoff goal is December 2015.

Current principal residence is 224k with no equity. 4.25% 30 year fixed VA loan. 1500$ monthly payment.

Cash savings of 6k$, we recently refied and paid cash for a car so it's low, working on getting that to at least 10k.

Own a 1997 camry, 2004 Avalon, 2008 tundra and a 2007 airstream travel trailer, all with no debt

All debt is mortgage, nothing else.

That's it. Both DH and I are trying to be more financially smart. My weakness is real estate and we both enjoy a nice life style living in a nice home with nice vehicles. We spent the first 10 years living beyond our means and over the last few years have got that under control. There's always room for improvement.

DH is on tract to be promoted this year or next. All raises go to the rental debt. Best case we may pay it off by retirement or come close.

We max out the IRA's then put extras on the rental.

DH plans to stay in the military as long as he can to boost his pension. We are shooting for december of 2015 as the earliest retirement date. Pension would be about 41k. Our youngest will be 18 and in college. We would like to rent out the house and hit the road in the airstream.

Were currently thinking of selling the truck and trailer. We would net 50k that we would park in the bank then maybe later add to the rental. I'm also considering working part time. I love being home and DH normally flies a lot, staying home helps me keep my sanity when I parent two teens on my own. I'm very efficient at home and could handle part time work but nothing too important, probably make 5-800$ monthly max.

We both love the camping life. It's his joy and it would be hard to give up, we would take it up again later. I'm pushing the issue, I can't seem to get over the 50k that's they are worth. I just keep seeing $ signs. I also feel I overextended us on real-estate. So far so good but probably too much debt. While I'm willing to let it all go and downsize or buy later, I must be fair and say that when I let a dream house go 4 years ago, I've been chasing that "home" feeling ever since. This is our 3 rd house is 4 years. Shocking yes, he's a good man to put up with my house drama and I appreciate that. It's also made us money so that helps ease the pain.


So that's us in a nutshell. I feel we have potential to FIRE and will welcome any advice y'all have. I will admit I'm nervous throwing this all out there. I'm aware what my Dave community would tell me to do but not sure what I will get here. There are tons of smart people on this forum and I'm impressed with you all very much. Thanks for reading and thank you for your time.

Sandra
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Old 02-20-2011, 04:27 PM   #2
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Welcome.


My only advice would be to carefully figure out what you absolutely need to live on and what you would be comfortable living on. Then calculate how much you will need in investments to augment the pension and other income. Hopefully you have seen Firecalc (bottom of page).
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Old 02-20-2011, 06:05 PM   #3
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Great to have you here!
Please don't feel intimidated. There are some very smart folks on this board, but many of us only pretend we know what we're talking about.

I'm sure you've picked up on this, but the best thing you can do for yourself at this stage is to track your spending down to the dollar, by category. You can set up any budget categories you like, such as Groceries, Auto, Vacation, Insurance, etc., but I think 8-12 different categories would probably be a good start. You'll find yourself tweaking the category definitions after a while, so don't spend too much time initially when you set them up.

Then use either some financial software like Quicken, Mint.com, or even just a simple spreadsheet, and track every single expense on a weekly basis, then subtotal by month as you go.

That information will be so valuable to you as you get close to actual retirement that I can guarantee that you'll be very glad you started now.

Maybe you're already doing this. If so, I just proved my point that I only pretend to know what I'm talking about.

Bottom line: knowing what you spend, what you really need to spend, what you'd like to spend, and where you can make adjustments in your spending will enable you to calculate and predict your retirement finances better than anything else.
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Old 02-20-2011, 07:03 PM   #4
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Welcome Sandra.
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Old 02-21-2011, 11:03 AM   #5
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Welcome! Just don't call us seniors.
There are some wonderful investment/retirement books recommended here. It is not rocket science and even if you prefer a financial adviser, you'll be an educated consumer.
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Old 02-21-2011, 12:00 PM   #6
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Welcome, Sandra!

I'm also a big Dave fan, but I never joined the forums over there. Just listened to the radio show and read the books and saw how liberating it would be to be debt free. I was also a SAHM until my kids were college age and I started a part-time job to finish my Social Security credits. DH is retired since last June and we would not have been able to do it if we had a mortgage or any other kind of debt.

You'll learn a lot here and laugh a lot, too.
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Old 02-21-2011, 08:34 PM   #7
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Originally Posted by Smhx4 View Post
DH is on tract to be promoted this year or next. All raises go to the rental debt. Best case we may pay it off by retirement or come close.
We max out the IRA's then put extras on the rental.
DH plans to stay in the military as long as he can to boost his pension. We are shooting for december of 2015 as the earliest retirement date. Pension would be about 41k. Our youngest will be 18 and in college. We would like to rent out the house and hit the road in the airstream.
Welcome to the board, Sandra.

Have you been reading about the Nielsons and the Wandering Wahls?
Retired at 40 - February 1, 2008

Wandering Wahls » About the Wandering Wahls Blog

Let me know if you have any military-related travel links to add to the blog:
Military Retirement & Financial Independence | Financial independence & early retirement for veterans
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Old 02-21-2011, 11:57 PM   #8
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Originally Posted by travelover View Post
Welcome.


My only advice would be to carefully figure out what you absolutely need to live on and what you would be comfortable living on. Then calculate how much you will need in investments to augment the pension and other income. Hopefully you have seen Firecalc (bottom of page).
Welcome. Agree with Travelover. How much more than the $41k pension would you need? How much would the rental properties generate once mortgage free? You are doing well congrats.
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Old 02-22-2011, 10:43 AM   #9
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Welcome to the boards! This part of your post was interesting:

Quote:
72k in Roth IRA's. 14K is in USAA's 2040 target retirement fund, 58k is in BP stock. We went in on BP in July, have made 18k so far and thinking about staying til it's about 55-60$. We aren't market savvy at all, it was office talk and our impulsiveness that made us jump in. We did the 2040 fund because of USAA financial advice. While we like the gains from BP, I'm aware we missed out on gains in the Dow by pulling 40k out in July.
You are super lucky about how this shift of what looks like 75 percent of your retirement savings into one stock has turned out so far (and I speak as someone who is also not market savvy ).
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Old 02-22-2011, 12:13 PM   #10
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Welcome aboard. There are all kinds here, and always will be, that's part of this sites appeal.

Your plans are your plans, no apologies necessary. You're executing your plan, may come to pass earlier than you expect, or it may be later - true for everyone. Just keep plugging away and you'll get there. "The question isn't at what age I want to retire, it's at what income." ~ George Foreman
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Old 02-22-2011, 09:48 PM   #11
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Old 02-22-2011, 11:49 PM   #12
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Welcome, longtimelurker.

Sounds like you two are well on your way to sucessful "seniordom"... Give DH my heartfelt thanks for his service to our great country; thanks to you for your support on the homefront as well.
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Old 02-23-2011, 01:02 PM   #13
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Quote:
Originally Posted by travelover View Post
Welcome.


My only advice would be to carefully figure out what you absolutely need to live on and what you would be comfortable living on. Then calculate how much you will need in investments to augment the pension and other income. Hopefully you have seen Firecalc (bottom of page).

I have played with it some. I'm not sure if I'm doing it right. We don't plan to touch the roths until were in our sixties and also plan to stop contributing in 5 years but not sure for how long. Therefore I'm confused as to what number I enter, how much we have now or what I think it will be on 20 years.
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Old 02-23-2011, 01:08 PM   #14
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Originally Posted by braumeister View Post
Great to have you here!
Please don't feel intimidated. There are some very smart folks on this board, but many of us only pretend we know what we're talking about.

I'm sure you've picked up on this, but the best thing you can do for yourself at this stage is to track your spending down to the dollar, by category. You can set up any budget categories you like, such as Groceries, Auto, Vacation, Insurance, etc., but I think 8-12 different categories would probably be a good start. You'll find yourself tweaking the category definitions after a while, so don't spend too much time initially when you set them up.

Then use either some financial software like Quicken, Mint.com, or even just a simple spreadsheet, and track every single expense on a weekly basis, then subtotal by month as you go.

That information will be so valuable to you as you get close to actual retirement that I can guarantee that you'll be very glad you started now.

Maybe you're already doing this. If so, I just proved my point that I only pretend to know what I'm talking about.

Bottom line: knowing what you spend, what you really need to spend, what you'd like to spend, and where you can make adjustments in your spending will enable you to calculate and predict your retirement finances better than anything else.
Thanks. I only tell our money where to go then I toss the budget. However on this board and the Dave boards I was a bit jealous when everyone was able to post what they spent during the year. Since we saved and didn't add any new debt I thought that was good enough. I have saved all budgets so far and am going to make some categories and track January and February then stay on track for a yearly total.

I use pencil paper only so far. While I enjoy numbers I can't grasp programs and excel etc. Time to learn.
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Old 02-23-2011, 01:11 PM   #15
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Originally Posted by walkinwood View Post
Welcome! Just don't call us seniors.
There are some wonderful investment/retirement books recommended here. It is not rocket science and even if you prefer a financial adviser, you'll be an educated consumer.

Thanks for the welcome and by seniors I meant high school and I was a new freshman. After all this is an early retirement board, I won't dare call anyone old.....after all I'm no spring chicken at 40.
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Old 02-23-2011, 01:17 PM   #16
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Originally Posted by Sue J View Post
Welcome, Sandra!

I'm also a big Dave fan, but I never joined the forums over there. Just listened to the radio show and read the books and saw how liberating it would be to be debt free. I was also a SAHM until my kids were college age and I started a part-time job to finish my Social Security credits. DH is retired since last June and we would not have been able to do it if we had a mortgage or any other kind of debt.

You'll learn a lot here and laugh a lot, too.
Thanks Sue. I also think I will wait til my last out of HS before I work at all. I'm just too good at what I do now and don't want to rock the boat

I'm sure we will be carrying the primary home mortgage into retirement but not the rental. The values are close so we could always sell one to pay off the other if need be, but one will be debt free for sure.

According to my SS statement I earned enough credits, not for SS disability though. I worked some before the kids then did home day care which they were young. I think I'm good there but will double check, DH just got a new statement last week, I'm sure one is on the way for me soon.
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Old 02-23-2011, 01:19 PM   #17
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Welcome! Just don't call us seniors.
Exactly; call us old pharts (well, at least me )...

BYW, if you want to get a SS statement at any time, you can use:

http://www.ssa.gov/estimator/ which uses your actual earnings from SS records. You don't have to wait for the mail.

Welcome...
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Old 02-23-2011, 01:33 PM   #18
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Originally Posted by Nords View Post
Welcome to the board, Sandra.

Have you been reading about the Nielsons and the Wandering Wahls?
Retired at 40 - February 1, 2008

Wandering Wahls » About the Wandering Wahls Blog

Let me know if you have any military-related travel links to add to the blog:
Military Retirement & Financial Independence | Financial independence & early retirement for veterans
Thanks. Yes I have seen those stories, very inspired by the first one since its were near STL also. DH would be retired if I had not been a SAHM and was military also. He will make up for that by staying in longer and also rental income.

I also "discovered" you on that money article. I'm a little slow sometimes and it took me forever to match you on these boards to that same article. I also follow your blog and will get a few of your books when it's finished. I know we have inspired one other couple to retire after the military. Or our airstream inspired them, they bought one after seeing ours and we told them our plans to travel and retire young and I think they will do something similar. Anyway they are dual military with one recently retiring as a 24 year E-7 and the other soon as a E-9 with 30 years so they will be fine.

It was 6 years ago that I showed my DH a retirement calculator. He had planned on getting out at 20 then starting a new career. I showed him the pension increase each year and it certainly made sense to stay another 4 to get about 900$ a month for life. Now I have him convinced to stay as long as he can. He realizes we have decent potential to FIRE and he can hang it up for good while in his 40's if we stay on track. While I'm not the active duty member, I'm certainly grateful for whatever time he can do while keeping his sanity and enjoying his working years. We'll see what happens.


But thanks for what you do. As you know most military move onto other jobs, I have found our plans are pretty weird and not many understand.
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Old 02-23-2011, 01:44 PM   #19
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Welcome. Agree with Travelover. How much more than the $41k pension would you need? How much would the rental properties generate once mortgage free? You are doing well congrats.
We could do the 41k and travel just fine. But to have both the stick house and the house with axles, which is what I want, we'll need the income from the rental or we dump them both and have a paid for house. When its mortgage free it would generate 1100$ a month, after all fees and a little to a maintenance fund. It's a 200k property. I'm just learning thats about a 5-6% return which is crappy for a rental. I could move to a 130k property and get about 8% but that's a whole new game. Current home is only 2 years old in a new neighborhood, a cheaper one would be a old home and the return is higher but less income. I could add another rental but I think two homes is enough. By the time we could afford another, I would probably be ready to dump the rental and have only one home. Here's me thinking too much again....
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Old 02-23-2011, 01:53 PM   #20
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Welcome to the boards! This part of your post was interesting:



You are super lucky about how this shift of what looks like 75 percent of your retirement savings into one stock has turned out so far (and I speak as someone who is also not market savvy ).

Super lucky for sure. I'm getting closer to being ready to go back into the mutual fund. I'm not going to do this again, it's too risky especially if we want to retire early.
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