Hello - been lurking here for atleast a year now ... learning quite a bit but can always use some additional insight from those of us who have been down the untraveled road and exited unscathed on the other side
Have been involved in network engineering/consulting my entire career and am coming up on 23 years of w*rking both independent consulting as well as full-time. Went through the dot.com boom and bust and maintained my path to investing (with the inevitable ups and downs, mostly downs during early 2000's) and was largely out of the markets during the financial crisis and became active again in 2011 but am once again largely in Cash holdings over the past couple of weeks after giving back a lot of paper gains to Mr. Market and being quite skittish to remain long the market at this point for obvious reasons.
Instead of being in the market during the 2005-2011 period, i was actively investing in NYC real estate. Purchased a mixed use (residential and store) building in 2005 for $1.26M with 900k debt , have been cash flow positive since 2007, refinanced it for $1.8M in 2013 with a current market value of $4.5M (pulled out ~$650k cash) , that continues to throw off approx $5k per month in income. Also 33% partner on another 24 unit building in Chinatown, NYC that does not currently cash flow but has appreciated significantly. Pulled out our original investment during a recent refinance as well .
Joined a networking firm in 2002 that very recently received a large private equity investment - i was holding shares in the company that were bought out by the private equity investors, ; received $2.35M cash as part of this transaction , of which i need to pay long term capital gains taxes in 2015. Should net $1.65M when all is said and done.
Still currently employed with same firm, however , i have requested to step down from my mgmt position to more of an individual contributor role - trying to reduce stress while i figure out what i want to do from here on ... salary + bonus has been approx $300k / pa for last 6 years but with new private equity investors things are bound to change (unknown right now) plus i need to deal with my new position reporting to an individual who was formally my direct report that i swapped spots with
I do not want to retire to not work -- i am ambitious to invest in deals as they present themselves to me - whether in the markets or real estate or other opportunities that i can now pay some attention to (franchise, new biz opportunity , etc). But my question for the group here is : If no new income generating opportunities came together quickly to provide additional passive income/cash flow ; are we going to be OK?
Largest expenses on the horizon is obviously college for the kids....and our monthly expenses are high.
Here's my financial situation:
Primary Residence: $1.7M ($800k owed @ 2.875% interest)
Vacation Residence: $900k (no debt)
Cash Holdings: $3.2M ( 270k within an IRA) and after taxes paid
Stocks: $270k in various 401(k) accounts
Real Estate Investment Equity: $4M (after debt) on 2 NYC properties if i were to sell.
Rental Income (Currently): $5-6k / month
I could always rent vacation property for $4-5k/month if necessary but not very interested in doing so if it is not absolutely needed.
I know the cash is not paying any divs sitting in cash, but this bull market seems long in the tooth and better prices should be on the horizon over the next 6-12 months.
Expenses:
Home Mortgage: $5559/mo
Property Taxes (aggregate): $3666/mo
HOA Fees: $1500/mo
Utilities , insurance and misc: $1300/mo
Groceries / shopping, travel: $5000/mo
Let's call is $17k/mo without a need to change of current lifestyle. ($200k/year)
Thoughts?
Have been involved in network engineering/consulting my entire career and am coming up on 23 years of w*rking both independent consulting as well as full-time. Went through the dot.com boom and bust and maintained my path to investing (with the inevitable ups and downs, mostly downs during early 2000's) and was largely out of the markets during the financial crisis and became active again in 2011 but am once again largely in Cash holdings over the past couple of weeks after giving back a lot of paper gains to Mr. Market and being quite skittish to remain long the market at this point for obvious reasons.
Instead of being in the market during the 2005-2011 period, i was actively investing in NYC real estate. Purchased a mixed use (residential and store) building in 2005 for $1.26M with 900k debt , have been cash flow positive since 2007, refinanced it for $1.8M in 2013 with a current market value of $4.5M (pulled out ~$650k cash) , that continues to throw off approx $5k per month in income. Also 33% partner on another 24 unit building in Chinatown, NYC that does not currently cash flow but has appreciated significantly. Pulled out our original investment during a recent refinance as well .
Joined a networking firm in 2002 that very recently received a large private equity investment - i was holding shares in the company that were bought out by the private equity investors, ; received $2.35M cash as part of this transaction , of which i need to pay long term capital gains taxes in 2015. Should net $1.65M when all is said and done.
Still currently employed with same firm, however , i have requested to step down from my mgmt position to more of an individual contributor role - trying to reduce stress while i figure out what i want to do from here on ... salary + bonus has been approx $300k / pa for last 6 years but with new private equity investors things are bound to change (unknown right now) plus i need to deal with my new position reporting to an individual who was formally my direct report that i swapped spots with
I do not want to retire to not work -- i am ambitious to invest in deals as they present themselves to me - whether in the markets or real estate or other opportunities that i can now pay some attention to (franchise, new biz opportunity , etc). But my question for the group here is : If no new income generating opportunities came together quickly to provide additional passive income/cash flow ; are we going to be OK?
Largest expenses on the horizon is obviously college for the kids....and our monthly expenses are high.
Here's my financial situation:
Primary Residence: $1.7M ($800k owed @ 2.875% interest)
Vacation Residence: $900k (no debt)
Cash Holdings: $3.2M ( 270k within an IRA) and after taxes paid
Stocks: $270k in various 401(k) accounts
Real Estate Investment Equity: $4M (after debt) on 2 NYC properties if i were to sell.
Rental Income (Currently): $5-6k / month
I could always rent vacation property for $4-5k/month if necessary but not very interested in doing so if it is not absolutely needed.
I know the cash is not paying any divs sitting in cash, but this bull market seems long in the tooth and better prices should be on the horizon over the next 6-12 months.
Expenses:
Home Mortgage: $5559/mo
Property Taxes (aggregate): $3666/mo
HOA Fees: $1500/mo
Utilities , insurance and misc: $1300/mo
Groceries / shopping, travel: $5000/mo
Let's call is $17k/mo without a need to change of current lifestyle. ($200k/year)
Thoughts?