FIREontheMountain
Dryer sheet wannabe
- Joined
- Dec 3, 2013
- Messages
- 19
I’ve been lurking these forums for a few months now and have learned a LOT. Thanks for all of your time spent researching and posting solid information.
I’m looking for some advice on what the next priorities should be over the next 4 years in order to achieve our goal of semi-retiring by 50. We are recently married, both 30 and living in a low COL area with a 95 overall COL index. DW found out she loves chemistry in her 20s and is pursuing a PhD which she has 4ish years left on, hence the 4 year plan.
DW receives a $22k stipend, health insurance and free tuition. This will stay the same over the next 4 years. I expect my $70k income to grow around 10-15% CAGR over the next 4 years. We own our home and have 29.5 years left on our mortgage at 4.25% and a rental property which has an “all-in” -$100/mo cash flow on $1200/mo rent with about 11 years left on a 3.125% loan.
I max my t401k and tIRA contributions every year, DW’s stipend doesn’t qualify as earned income for an IRA (correct?)
Now I am wrestling with what to do next for our goal. I have ~50% of our $500k net worth in taxable accounts right now with about half of that value in capital gains (yippee!) so that is a low priority for us right now. I feel a bit over-leveraged as we only have ~25% equity in our home and a guaranteed 4.25% return on additional principal payments sounds pretty nice to me. On the other hand, I could try to save up some cash for either a down payment on a house if we have to move cities when DW graduates or another rental property if we can commit to our current city beyond 4 years. I do not want to sell either of my current properties if I can help it as my goal is to semi-retire with my job being landlord.
At the heart of the matter is how important liquidity will be for us and I am having a hard time with that. We currently spend about $3k/mo and have about $20k in emergency funds as we could easily cut back to $2k/mo if necessary. I am leaning towards the idea of putting away money at a guaranteed 4.25% return but am not as wise as the forum. Maybe there is another path I have not even considered? What advice would you have for us?
Please let me know if there is anything else I can provide in terms of goals, preferences or life situations. Thanks in advance for your reply.
I’m looking for some advice on what the next priorities should be over the next 4 years in order to achieve our goal of semi-retiring by 50. We are recently married, both 30 and living in a low COL area with a 95 overall COL index. DW found out she loves chemistry in her 20s and is pursuing a PhD which she has 4ish years left on, hence the 4 year plan.
DW receives a $22k stipend, health insurance and free tuition. This will stay the same over the next 4 years. I expect my $70k income to grow around 10-15% CAGR over the next 4 years. We own our home and have 29.5 years left on our mortgage at 4.25% and a rental property which has an “all-in” -$100/mo cash flow on $1200/mo rent with about 11 years left on a 3.125% loan.
I max my t401k and tIRA contributions every year, DW’s stipend doesn’t qualify as earned income for an IRA (correct?)
Now I am wrestling with what to do next for our goal. I have ~50% of our $500k net worth in taxable accounts right now with about half of that value in capital gains (yippee!) so that is a low priority for us right now. I feel a bit over-leveraged as we only have ~25% equity in our home and a guaranteed 4.25% return on additional principal payments sounds pretty nice to me. On the other hand, I could try to save up some cash for either a down payment on a house if we have to move cities when DW graduates or another rental property if we can commit to our current city beyond 4 years. I do not want to sell either of my current properties if I can help it as my goal is to semi-retire with my job being landlord.
At the heart of the matter is how important liquidity will be for us and I am having a hard time with that. We currently spend about $3k/mo and have about $20k in emergency funds as we could easily cut back to $2k/mo if necessary. I am leaning towards the idea of putting away money at a guaranteed 4.25% return but am not as wise as the forum. Maybe there is another path I have not even considered? What advice would you have for us?
Please let me know if there is anything else I can provide in terms of goals, preferences or life situations. Thanks in advance for your reply.