Steel Rain
Recycles dryer sheets
Second Post, great site here. I have reached sort of a milestone in my life. We paid off our house last month and are debt free. I am 47 and am looking at whats next and have some questions. A little bit about my situation, Im married with two kids 18 and 25, Household income is pretty high, a bit over 200k but we live in a high tax state (Illinois) . My wife works but only accounts for about 50k of that income. My job is not secure and never will be, the mega corp I work for has a nasty habit of layoffs, good times or bad.
I have two things that I am trying to achieve, 1) Retire Early, like 10 years from now 2) protect myself from mega corps random layoffs. I would not likely remain unemployed for very long, but i very much doubt I would ever see income like this again. So I view this as a race between me and my employer
My Current situation is about 350k in 401k assests between my wife and I, and putting in max every year. Both have 5% match. Neither of us has any pension nor will we ever, so its all on us. During the real estate bust, I was able to acquire 1/2 interest in 4 homes at fire sale prices, all are cash flow positive and yied me about $700 month in income. I have pretty much been a passive investor without much of a plan except to save as much as reasonably possible. I viewed the real estate meltdown as a once in a lifetime opportunity to buy into what i view as an inflation protected annunity very cheap. The houses provide some passive income now hence helping me to start offsetting my layoff risks.
Due to paying off my house, I have very little money at the moment but I have a very high cash flow, on the order of $4k/mo and I am now planning on a sprint for 10 years saving about that much. So i veiw my next steps as almost entirely in taxable accounts. I have looked at some model portfolios and have modified them to remove REITS and Bonds, but are still very highly diversified across the equity space.
Ok, if you have gotten though this wall of text, here are some questions and thoughts for comment.
Question 1. Is buy and hold still reasonable, especially if you invest in ETFs with reasonable dividend yields. The reason I ask this is that I think i will be only pouring money into this basket, not rebalacing since i want to minimize the taxable events. If i rebalace via contribuionis, can buy and hold work?
Question 2: I view my paid off home as a bond and given current interest rates, feel buying bonds now would end badly. Is this a reasonable view?
Question 3: Since my current asset allocation is very heavly slanted into physical real estate, does my thinking to avoid REITS make sense?
Final Question: You may have noticed that I do not have any IRA's, roth or conventional. At my income level, i can not invest in a roth ira, but could start putting money into a roth 401k at work if i chose to. I am hesitent to tie up cash in a regular IRA considering my Employment risk. But im really torn on this. Any thoughts would be welcome.
Thanks in advance all.
Steel
I have two things that I am trying to achieve, 1) Retire Early, like 10 years from now 2) protect myself from mega corps random layoffs. I would not likely remain unemployed for very long, but i very much doubt I would ever see income like this again. So I view this as a race between me and my employer
My Current situation is about 350k in 401k assests between my wife and I, and putting in max every year. Both have 5% match. Neither of us has any pension nor will we ever, so its all on us. During the real estate bust, I was able to acquire 1/2 interest in 4 homes at fire sale prices, all are cash flow positive and yied me about $700 month in income. I have pretty much been a passive investor without much of a plan except to save as much as reasonably possible. I viewed the real estate meltdown as a once in a lifetime opportunity to buy into what i view as an inflation protected annunity very cheap. The houses provide some passive income now hence helping me to start offsetting my layoff risks.
Due to paying off my house, I have very little money at the moment but I have a very high cash flow, on the order of $4k/mo and I am now planning on a sprint for 10 years saving about that much. So i veiw my next steps as almost entirely in taxable accounts. I have looked at some model portfolios and have modified them to remove REITS and Bonds, but are still very highly diversified across the equity space.
Ok, if you have gotten though this wall of text, here are some questions and thoughts for comment.
Question 1. Is buy and hold still reasonable, especially if you invest in ETFs with reasonable dividend yields. The reason I ask this is that I think i will be only pouring money into this basket, not rebalacing since i want to minimize the taxable events. If i rebalace via contribuionis, can buy and hold work?
Question 2: I view my paid off home as a bond and given current interest rates, feel buying bonds now would end badly. Is this a reasonable view?
Question 3: Since my current asset allocation is very heavly slanted into physical real estate, does my thinking to avoid REITS make sense?
Final Question: You may have noticed that I do not have any IRA's, roth or conventional. At my income level, i can not invest in a roth ira, but could start putting money into a roth 401k at work if i chose to. I am hesitent to tie up cash in a regular IRA considering my Employment risk. But im really torn on this. Any thoughts would be welcome.
Thanks in advance all.
Steel