![]() |
|
|
|
#1 |
|
Dryer sheet wannabe
![]() ![]() Join Date: Sep 2007
Posts: 14
|
Need some guidance
Hi,
I have been reading these forums from 1 week and now i am really tensed about our retirement and other financial aspects. DW and myself have saved about 150k in taxable and around 70k in various tax defered accounts. I am self employed and hence 401k is less and taxable income is more. I am 28 yrs and DW is 25 yrs old. We have a mortgage on our house which we bought last year in the 500k range. Nowdays that is the norm. I am not sure when we will have a positive networth bcs its going to be a long time to have one with the current market. How did other ppl manage to get a positive networth before 33 if someone graduates in the 25 yrs range . I cant seem to understand that and that is keeping me awake big time. thanks honkydonk |
|
|
|
|
|
#2 |
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ... ![]() ![]() ![]() ![]() ![]() ![]() ![]() Join Date: Mar 2003
Posts: 9,044
|
Unless your house is worth zero or you have some kind of massive non-mortgage debt you arent telling us about, it sounds like you already have positive net worth (and have done very well). The mortgage amount is offset by what the house is worth in the calculation of net worth.
__________________
"When caught between two evils I generally pick the one I haven't tried before." - Mae West |
|
|
|
|
|
#3 |
|
Dryer sheet wannabe
![]() ![]() Join Date: Sep 2007
Posts: 14
|
Hi,
Thanks for replying. The issue i am having is that the house was bought in the last 2 years and as we now know the house prices are decreasing rather than increasing so there is no equity built except for the 25% that has been put down. I am not sure how i have a positive nw unless i am missing something. |
|
|
|
|
|
#4 |
|
Thinks s/he gets paid by the post
![]() ![]() ![]() ![]() ![]() ![]() Join Date: Jun 2006
Location: Boise
Posts: 1,276
|
honydonk,
If we assume your house was worth $500K when you bought it and is still worth $500K and you put down 25%, your net worth would look like this: Assets House -- $500K Taxable savings -- $150K Tax-deferred savings -- $70K Total Assets --- $720K Liabilities Mortgage -- $375K Total liabilities -- $375K Net worth ---- $345K which is actually a fabulous position to be in at your age. 2Cor521
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire. |
|
|
|
|
|
#5 |
|
Dryer sheet wannabe
![]() ![]() Join Date: Sep 2007
Posts: 14
|
thanks for explaining
Hi,
Thanks for explaining this. I didnt know how to compute networth and since right now if I sell the house i wouldnt make a dime i didnt consider it part of my networth. Atleast now i can concentrate on getting to a better position faster. thanks amit *** lets get to dublin faster than others ![]() |
|
|
|
|
|
#6 | |
|
Thinks s/he gets paid by the post
![]() ![]() ![]() ![]() ![]() ![]() Join Date: Jun 2005
Posts: 2,395
|
Quote:
On the issue of age, there are a lot of engineers, computer science, etc. folks on these boards...I am an engineer and certainly graduated with a degree before age 25....I am also in the midwest where housing is considerable cheaper and 150-200k gets a pretty decent place... |
|
|
|
|
|
|
#7 |
|
Recycles dryer sheets
![]() ![]() ![]() ![]() Join Date: Aug 2007
Posts: 373
|
Your doing fine. Keep doing whatever you have been to save what you have so far and the 25% downpayment and you will be in great shape at age 33 or beyond.
DD |
|
|
|
|
|
#8 |
|
Thinks s/he gets paid by the post
![]() ![]() ![]() ![]() ![]() ![]() Join Date: May 2004
Posts: 2,529
|
Are you eligible to use a Solo 401K? That can allow you to stash a way quite a bit money before taxes, but you have to have no other employees (except for a spouse).
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein |
|
|
|
|
|
#9 |
|
Full time employment: Posting here.
![]() ![]() ![]() ![]() ![]() Join Date: Jun 2007
Posts: 760
|
It is tough to get ahead in the first few years but as has been pointed out, you are doing well. Hopefully the house will bounce back and you'll have some positive equity in that soon.
Also keep in mind that presumably your income will increase through the years, usually faster than your expenses go up especially with a fixed rate mortgage assuming you don't keep upgrading homes and mortgages. Any time you make more money (salary increase for us who are not self-employed), put a lot of that towards your investments. Finished paying off a car? Put the car payment amount away in savings, so when you replace that car you can put a considerable amount of cash down on it and eventually don't even need to take out car loans. And of course keep credit card debt away. If you keep add it, in another 5-10 years you will find yourself in a lot better shape, as you have less debt, are saving more, and your home and investments appreciate. Right now you want to position yourself for this. |
|
|
|
|
|
#10 |
|
Thinks s/he gets paid by the post
![]() ![]() ![]() ![]() ![]() ![]() Join Date: Apr 2004
Location: South Texas~29N/98W
Posts: 2,187
|
If you have over $200K already saved, you are way ahead of your peers.
My advice is to live below your means for the next few decades and continue to increase your savings in both taxable and nontaxable accounts as you see fit and you and DW will be in fine shape and ready for ER in a timely manner.
__________________
Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx In dire need of: faster horses, younger woman, older whiskey, more money. |
|
|
|
|
|
#11 | |
|
Recycles dryer sheets
![]() ![]() ![]() ![]() Join Date: Sep 2002
Posts: 201
|
Quote:
It will sneak up on you. Tomcat98 |
|
|
|
|
|
|
#12 |
|
Dryer sheet wannabe
![]() ![]() Join Date: Sep 2007
Posts: 14
|
thanks for encouragement
Hi,
Wanted to thank everybody here for the support and kind words. I jumped into the housing market at the wrong time but i am sure everything will work out in time. Lot of commercial buildings coming near by so when the market recovers i am expecting a lot but lets c. I am aiming to save a lot more and we LBYM , DW doesnt like it but if we need enjoy later we need to struggle now. I am looking to reach the 200k mark by year end and that is definitely doable I hope. We dont have any other debt . thanks honydonk |
|
|
|
|
|
#13 |
|
Thinks s/he gets paid by the post
![]() ![]() ![]() ![]() ![]() ![]() Join Date: Feb 2006
Posts: 2,380
|
Heck, if you are even thinking about this stuff at 28 you are ahead of your peers.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson |
|
|
|
|
|
#14 | |
|
Give me a museum and I'll fill it. (Picasso)
Give me a forum ... ![]() ![]() ![]() ![]() ![]() ![]() ![]() Join Date: Aug 2006
Posts: 6,237
|
Quote:
![]()
__________________
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).......:) My American Funds can Beat Up Your Vanguard Funds........:) |
|
|
|
|
|
|
#15 |
|
Dryer sheet aficionado
![]() ![]() ![]() Join Date: Sep 2007
Posts: 44
|
Very true. Kids in their twenties are a generation of spenders with no looking into the future. I wonder what their retirements will look like?
|
|
|
|
|
|
#16 |
|
Dryer sheet wannabe
![]() ![]() Join Date: Sep 2007
Posts: 14
|
kind words
Hi,
Wanted to thank for the kind words and encouragement. Can someone show me a calculator that based on a retirement figure and a return of 7% how much of principal do we need to putting into the market . That would give a very good figure to aim for and based on the market condition we may need to increase the principal. thanks |
|
|
|
|
|
#17 |
|
Dryer sheet aficionado
![]() ![]() ![]() Join Date: Mar 2007
Posts: 26
|
I love playing with this calc: Retirement savings calculator -- How much money can I save in my 401(k) plan?
Congrats on the savings so far, you have time on your side, you may be surprised to see the numbers that the above calculator will toss out. It makes LBYM all that more enjoyable! |
|
|
|
|
|
#18 |
|
Full time employment: Posting here.
![]() ![]() ![]() ![]() ![]() Join Date: Mar 2007
Posts: 867
|
I like the Fidelity free calculators, but they are one of many (search Google "retirement calculator ")
__________________
Feral Engineer |
|
|
|
![]() |
| Currently Active Users Viewing This Thread: 1 (0 members and 1 guests) | |
| Thread Tools | Search this Thread |
| Display Modes | |
|
|
Similar Threads
|
||||
| Thread | Thread Starter | Forum | Replies | Last Post |
| Seeking guidance on 401k rollover to Vanguard, please! | Achiever51 | FIRE and Money | 7 | 03-15-2007 09:30 AM |
| New Here - Looking for Guidance | arthurb999 | Hi, I am... | 11 | 07-25-2006 07:13 AM |
| Hello - Guidance Needed | Hope2Retire | Hi, I am... | 4 | 07-23-2006 07:25 AM |
| Need Guidance From The Pros | trailblazer | Young Dreamers | 5 | 09-16-2004 12:57 PM |