Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Miguel and Michele Suarez
Old 11-28-2006, 05:41 PM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: Miguel and Michele Suarez

my son graduated law school in june and passed the new york state bar last week. my daughter graduates college in december and is going on to graduate school. we paid for college 100% but they are on their own for graduate school. we will help as much as we can but at this point its student loans for the bulk of it..

__________________

__________________
mathjak107 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Miguel and Michele Suarez
Old 11-28-2006, 06:27 PM   #22
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 2,951
Re: Miguel and Michele Suarez

Quote:
Originally Posted by FinanceDude
So, you think I should advise people to dramatically decrease their retirement portfolio, when $30 billion plus a year in financial aid is not applied for?? Interesting...........

Most people are lucky to even have an IRA....heck, I recently read that 30% of 20-somethings AREN'T EVEN contributing to a 401K.........and of those that do, 60% is in things like MMF and Stable Value...........

In theory, it is an option...........but if the average IRA in the US has under $25,000 in it, and that's a "nest egg" for somebody........how do you propose they replace those funds?? You're talking to late 30's-mid 40's folks who haven't planned enough for themselves, much less kids........
WoW! It seems I've touched a nerve here. Not sure how the average IRA statistics figure into this or whether a kid gets a scholarship. The FA in the example was advocating a reduction in the 401k contributions to fund a 529 plan, so it seems some planning to fund both needs was the objective. I certainly did not mean to imply that anyone would wreck thier retirement to pay for college, so I will settle for your comment that "In theory it is an option." As a matter of fact, it's working extremely well for me (so far!,) but i agree, its not for everyone.
__________________

__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 04:14 AM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: Miguel and Michele Suarez

if you think about it , my sons law school was 115,00.00 bucks. thats on top of 4 years of college.

he knew from the start that he would have to finance that thru loans but as he realized you are in a way buying a business with that 115,000.00.

there was no business he could ever buy for that amount of money at least here in new york that would generate over 100,000 dollars a year from the first day. he really didnt feel bad about having the loans to pay off
__________________
mathjak107 is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 04:19 AM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: Miguel and Michele Suarez

im a big believer in that you shouldnt even think about setting up college funding unless you are able to fund your retirement or are are at least on track funding it. the last thing you need to do is saddle your kids helping support you later on.

like i said there is hundreds of ways for kids to finance college at low monthly costs even spreading it out over 30 years, but i dont know one loan for retirement financing .
__________________
mathjak107 is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 08:59 AM   #25
Thinks s/he gets paid by the post
Jay_Gatsby's Avatar
 
Join Date: Oct 2004
Posts: 1,719
Re: Miguel and Michele Suarez

I'm not sure if anyone has said so in quite this way, but my perspective on saving for retirement versus your kid's college education is:

"They don't give loans to finance your retirement."
__________________
He had one of those rare smiles with a quality of eternal reassurance in it . . . It faced, or seemed to face, the whole external world for an instant and then concentrated on you with an irresistible prejudice in your favor. -- The Great Gatsby, F. Scott Fitzgerald
Jay_Gatsby is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 10:57 AM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Re: Miguel and Michele Suarez

Quote:
Originally Posted by Jay_Gatsby
I'm not sure if anyone has said so in quite this way, but my perspective on saving for retirement versus your kid's college education is:

"They don't give loans to finance your retirement."
Exactly...........

Oh wait.............there is one.............a REVERSE MORTGAGE............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 11:42 AM   #27
Recycles dryer sheets
 
Join Date: Oct 2006
Posts: 80
Re: Miguel and Michele Suarez

I certainly hope I don't get flamed (too badly), but in defense of the poor FA. As I recall this family was burning negative monthly and that the #1 objective of the mother was funding college ed. for kids. And that both parents realized how bleak the retirement picture looked because of this objective.

I believe the FA was suggesting temporarily suspending RE funding to get negative burn under control. And choosing funding 529s over ER because of mom.

I believe we are all worked up because we are applying his advice to our common objective of ER. I'm certain the FA advice would be different of mom wanted ER as #1 objective.
__________________
HelpMeRhonda is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 11:55 AM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Re: Miguel and Michele Suarez

Quote:
Originally Posted by HelpMeRhonda
I certainly hope I don't get flamed (too badly), but in defense of the poor FA. As I recall this family was burning negative monthly and that the #1 objective of the mother was funding college ed. for kids. And that both parents realized how bleak the retirement picture looked because of this objective.

I believe the FA was suggesting temporarily suspending RE funding to get negative burn under control. And choosing funding 529s over ER because of mom.

I believe we are all worked up because we are applying his advice to our common objective of ER. I'm certain the FA advice would be different of mom wanted ER as #1 objective.
Agree..............but I haven't read the article. Did the FA suggest or plan a budget for them to meet all their goals?? Because "negative burn" is common in the US.......and unfortunately she will neither get to ER OR be able to pay for college for her kids if negative burn continues...........sounds to me like she needs to revisit spending habits and things.............but on a happier note, there's probably a big screen plasma in the house..............
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 01:56 PM   #29
Dryer sheet wannabe
 
Join Date: Nov 2006
Posts: 17
Re: Miguel and Michele Suarez

Quote:
Originally Posted by MooreBonds
I remember one young (early-mid 30s) couple in California that had a house worth $1MM, with maybe $500k-$700k in equity. The 'professional' recommendation? Take out a home equity line of credit/2nd mortgage and invest the money in the stock market.
MooreBonds, can you explain why this is bad advice? If the 2nd mortgage has a relatively low fixed rate and they can afford it, this seems like excellent advice to me.
__________________
furpants is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 05:55 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: Miguel and Michele Suarez

Quote:
Originally Posted by FinanceDude
Exactly...........

Oh wait.............there is one.............a REVERSE MORTGAGE............

they are financing your house not your retirement. try it without the asset of a house.
__________________
mathjak107 is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 10:43 PM   #31
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Miguel and Michele Suarez

Quote:
Originally Posted by mathjak107
my son graduated law school in june and passed the new york state bar last week. my daughter graduates college in december and is going on to graduate school. we paid for college 100% but they are on their own for graduate school. we will help as much as we can but at this point its student loans for the bulk of it..
Grad school is free for anyone who can break 1000 on a GRE, and has a bit of proactive in them. That's easy to do, btw.
__________________
azanon is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 10:45 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Miguel and Michele Suarez

Quote:
Originally Posted by mathjak107
im a big believer in that you shouldnt even think about setting up college funding unless you are able to fund your retirement or are are at least on track funding it. the last thing you need to do is saddle your kids helping support you later on.
I'm a big believer in the fact that if one cant afford to do both, your in a serious financial crisis and one's budget needs a major overhaul.
__________________
azanon is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 10:47 PM   #33
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Miguel and Michele Suarez

Quote:
Originally Posted by Jay_Gatsby
I'm not sure if anyone has said so in quite this way, but my perspective on saving for retirement versus your kid's college education is:

"They don't give loans to finance your retirement."
You can (usually) delay retirement, but your kid has to do something after graduation. No one who's completely behind the success of their kid is going to have a money issue for their education. Certainly not anyone that hangs out here. Ive seen the net worth polls; dont make me dig them up.
__________________
azanon is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 10:54 PM   #34
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Miguel and Michele Suarez

Quote:
Originally Posted by FinanceDude
Exactly...........

Oh wait.............there is one.............a REVERSE MORTGAGE............
Is that really a loan? I'd call that (slowly) selling the house you own to the bank for cash. To me, a loan is when someone gives you something for nothing in return, other than a promise to pay them back at a later date with interest.

Maybe i'm splitting hairs, but i just dont think of equity conversion as a loan.
__________________
azanon is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 10:59 PM   #35
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Miguel and Michele Suarez

Quote:
Originally Posted by HelpMeRhonda
I certainly hope I don't get flamed (too badly), but in defense of the poor FA. As I recall this family was burning negative monthly and that the #1 objective of the mother was funding college ed. for kids. And that both parents realized how bleak the retirement picture looked because of this objective.

I believe the FA was suggesting temporarily suspending RE funding to get negative burn under control. And choosing funding 529s over ER because of mom.

I believe we are all worked up because we are applying his advice to our common objective of ER. I'm certain the FA advice would be different of mom wanted ER as #1 objective.
I have no quarrel with solving the problem for the kid's education. I just think they're going about it the wrong way. There's more than one way to skin a cat, and surely a decent FA can find an alternative to cutting an already modest retirement contribution rate.
__________________
azanon is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-29-2006, 11:25 PM   #36
Thinks s/he gets paid by the post
MooreBonds's Avatar
 
Join Date: Aug 2004
Location: St. Louis
Posts: 2,091
Re: Miguel and Michele Suarez

Quote:
Originally Posted by furpants
"I remember one young (early-mid 30s) couple in California that had a house worth $1MM, with maybe $500k-$700k in equity. The 'professional' recommendation? Take out a home equity line of credit/2nd mortgage and invest the money in the stock market."

MooreBonds, can you explain why this is bad advice? If the 2nd mortgage has a relatively low fixed rate and they can afford it, this seems like excellent advice to me.
The net worth of the couple was lopsided by the home equity....IIRC, about 3/4 of their entire net worth was tied up in the house equity. If you take out a secondary loan against your house for $500k and take out 90% of your equity, you'd be left with $1MM in home with $900k in loans.

If When the California housing market subsides and their prices settle, they'd possibly get their home equity wiped out (or even be upside down on their house). Add in some volatility in their equity investments, and add in the interest they pay on their loan, and you could very easily be in a situation of having a zero (even possibly negative) net worth and paying interest on a $900k loan ($500k of that would likely be at 8%-9%+). Not quite the leveraged situation I'd want to be in, and I would (humbly) suggest that my understanding, knowledge and approach to the financial markets would be greater than the average Joe Schmoe that would go to a financial schiester adviser.

Gambling like that with $50k when your net worth is $1MM is one thing...a couple in their 30s with a good chunk of equity in their house in CA, subject to a decent decline, and probably not the greatest handle on financial markets, playing some dangerous odds with $500k (basically 80%+ of their net worth) is not what I would suggest.
__________________
Dryer sheets Schmyer sheets
MooreBonds is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-30-2006, 01:18 AM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Re: Miguel and Michele Suarez

Quote:
Originally Posted by Azanon
Grad school is free for anyone who can break 1000 on a GRE, and has a bit of proactive in them. That's easy to do, btw.
So I can go to University of Chicago for free? Send me the link, because my GRE score was way over that, and I didn't get in........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-30-2006, 05:01 AM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,414
Re: Miguel and Michele Suarez

Quote:
Originally Posted by Azanon
Is that really a loan? I'd call that (slowly) selling the house you own to the bank for cash. To me, a loan is when someone gives you something for nothing in return, other than a promise to pay them back at a later date with interest.

Maybe i'm splitting hairs, but i just dont think of equity conversion as a loan.
its a balloon payment loan thats due either when you die or sell the house
__________________
mathjak107 is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-30-2006, 07:14 AM   #39
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Miguel and Michele Suarez

Quote:
Originally Posted by FinanceDude
So I can go to University of Chicago for free? Send me the link, because my GRE score was way over that, and I didn't get in........
I didn't say any grad school, but you can get into grad school with that and get it paid for. I know breaking 1000* got me full tuition remission at Baylor University, and Baylor U is no slouch school. I got well over that too, but they made it clear that was the magic number.

* that score excludes the analytical score. I'm not sure if its customary to do that all across the US but it is where I live.
__________________
azanon is offline   Reply With Quote
Re: Miguel and Michele Suarez
Old 11-30-2006, 07:17 AM   #40
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Miguel and Michele Suarez

Quote:
Originally Posted by mathjak107
its a balloon payment loan thats due either when you die or sell the house
Fair enough, but my only point is that its one thing to have nothing and need a couple hundred thousand to pay for retirement, and quite another to actually own something worth a couple hundred thousand and simply convert/liquidate that asset to cash.

No one will just loan you 200K for nothing, but they will pay you 200K for a house; including a bank. I see a difference there.
__________________

__________________
azanon is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 06:40 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.