Pretty Sure We’re Never Retiring...Need Advice

[Amethyst]

I didn't intend to pick on your post at all. It just happened to be near the quote button There were far "stronger" messages than yours.

Funny out of all the strongly worded posts you picked mine to quote.

I think you read into my post something that wasn’t there.

Rephrased:

It’s a shame the OP hasn’t been back to participate.

Maybe she just wanted to vent.

 

[Amethyst]

There are no words. Am amazed you are able to think about other people's problems and try to help them, with this on your shoulders.

To the OP my apologies. Ive been irritable lately. Sisters stage 4 now progressed from Colin and liver to lungs and lymph. Sorta pounding sand behind the keyboard. See the cancer sucks thread for more.

 

[Retired Expat]

So you think we scared her off?

 

[Walt34]

I know you can learn to fly on the cheap because when younger DH did chores at an airport in exchange for flying lessons, which cost him his time but no money.

I did some of the same when I earned my private license, it did save me a good portion of the cost.

Oh, and more recently I ordered a brand-new airplane that I will take possession of tomorrow!

https://www.horizonhobby.com/umx-turbo-timber-bnf-basic-p-eflu6950?clickpath=HOME_rot2_02132020

 

[Kelor]

I did some of the same when I earned my private license, it did save me a good portion of the cost.

Oh, and more recently I ordered a brand-new airplane that I will take possession of tomorrow!

https://www.horizonhobby.com/umx-turbo-timber-bnf-basic-p-eflu6950?clickpath=HOME_rot2_02132020

You're going to be a little cramped in that plane

When I became a private pilot, I had grandiose ideas of flying to the cabin each weekend. What I soon discovered is it takes more time to fly 150 miles than to drive. I also was obsessive about practicing by myself in the worst weather possible, as I wanted my family as safe as possible. Being a GOOD private pilot is a ton of work, time, and money.

Now on rare occasion, I'll pay to have an instructor take me up - just for fun. It's cheaper and satisfies the urge.

 

[Rambler]

Hi there. I’m looking for some anonymous advice from people who have given much more thought to money and retirement than my husband and I have. I’m to receive about $45k in a small inheritance soon, and I have so many options of where to apply it that I’m just...stuck.

I now have about $200k in my 401k at 48 years old. Three years ago, I took out $100k to pay for a sweet piece of property; 5 acres with a 1/2 acre pond that we built our home on. The land is worth at least $130k. We have a $400k mortgage at 4.75 interest for another 27 years, with approximately $150k - $200k in equity. My husband has never saved and only last year began contributing to a 401k; he has a total of $12k at 50 years of age.

We owe the IRS $750 a month (current balance is $25k), have $11k in credit card debt, a personal loan for $12k (12%i) that I don’t remember why we needed, another loan for $20k that holds my SUV as collateral at 8%, a loan for the top of the line appliances that my husband wanted in the home with a remaining balance of $22k at 9% interest (we couldn’t include it in the mortgage without having to bump up to a jumbo loan). We have a tractor with a balance of $15k. We also purchased a vacation club membership for $25k (like a timeshare).

To top all this craziness off, I was laid off from my job in December which paid me $150k/ a year. My husband, who didn’t earn much income at all for our first 6 years of marriage, is the sole provider now, thankfully making $118k/year. Our mortgage is $2720. However, he is obsessed with getting his pilot’s license (~$11k) and ultimately, would like to build his own GA plane ($200+) in the shop he built on our property (value = $35k; cost was less than $5k). I don’t want to squash his dreams, but I think saving for retirement is more important.

I’ve gotten to the final round of interviews a few times already but landing a job is taking much longer than it has in the past. We have two elementary aged children and all of this has me thinking, we are on the brink of disaster at all times. I grew up quite poor (so did my husband) and do not want to live paycheck to paycheck again.

So, what would you do with the $45k? It’s not going to make much difference I think...Very depressing.

I didn’t see any mention of an emergency fund. You don’t have a job currently...what would happen if he lost his? If you don’t have one, that’s what I’d do with it.

 

[Mdlerth]

Maybe they are using really small volts because it's a small plane

Oh, and more recently I ordered a brand-new airplane that I will take possession of tomorrow!

https://www.horizonhobby.com/umx-turbo-timber-bnf-basic-p-eflu6950?clickpath=HOME_rot2_02132020

The spec sheet says "3400Kv motor". I have difficulty believing that means thirty four hundred kilovolts. Airplane weight: 4.8 oz. Weight of all the Bakelite insulators needed to contain 3.4 million volts: 87 pounds.

Translation, please?

 

[Supermint]

OP - Update

I was not just 'venting'...I'm a busy woman who is not on social media on a daily basis I'm looking for jobs, had to go to a funeral in Dallas (miles, $0), and am back to mountains of laundry, etc....

Thank you (well, most of you) for the positive recommendations and advice I will read the books mentioned; I have read the Millionaire Next Door years ago.

We do not live in OK; Duncan is a small town outside of Greenville, SC but we are in the Charlotte NC area now, for the better job prospects.

No, the $100k I took out for the land purchase was not a loan; this is why I withheld an additional $20k out. The property had 3 dilapidated mobile homes on it and one cannot get a mortgage with a property with technically 3 homes on it. Thus it was a foreclosure and although I was quite nervous to do so, buying the land for our 'forever home' was a good investment for our family and for our future. The area is growing very nicely and property values are appreciating accordingly.

I'm giving a lot of thought to so many of you saying that we have a spending problem. Maybe we do, but we do not buy a lot of 'things' or clothes, or whatever people spend their money on. In fact, we didn't have much consumer debt at all until we built this home and most of the money has gone toward this endeavor... $2500 for a pond pump (the pond was green and slimy!), $6k for concrete at the shop, $10k in extra closing costs, $6k to pay one of the vendors outside the mortgage, another $3k for a new well pump, $7k for shop materials and $7k for window coverings (THAT's a good business to be in!! Geez; the windows on the back half of our house are still naked!). If asked, I would have said that we may spend more on eating out at times (though we try to find 'kids eat free' places), but we just don't buy to be buying. It doesn't make me feel good to buy stuff and in fact, I despise shopping. But, here we are with lots of debt so we MUST have a spending problem right??

I may mention that I have been dealing with a health issue for about 4 years that had me focused on just getting through the days and nights, and I hadn't 'looked up' so to speak until fairly recently. Corticosteroids (like hydrocortisone but stronger) are bad news, but that's for another post.

I'm thinking we just took on too much of the house-related debt too fast. It will all be gone in the next 3 years, if not sooner, and then we will have only the mortgage and possibly one car. I've driven the same car for 7 years and have no plans to replace it.

It's interesting to me that many here have also jumped to the conclusion that my husband and I are on rocky ground with our marriage. We really are happily married and he is committed to getting out of debt as well. He will not building a plane any time soon, if at all. He's very focused on getting his pilot's license, but not until I'm working, our debt is paid off (save for the house) and he's agreed to max out his retirement savings. Only then will he pursue his license. Neither of us would make a decision that would jeopardize our marriage, and we are both committed to never getting into this situation again.

If we are making over $250k again soon, there is no reason to think that we can get on track with our finances soon. I'm struggling with the question of 'do we build the pool' or what exactly to do with our back yard, as it still looks like a construction site... Yes, it's easy to say NO Don't Do it...but we want to live life as well and our kids would love it. We are very close with our kids btw - someone mentioned we should spend more time with them. I guess they thought we were too busy out shopping or something...LOL.

Anyway, thank you for your thoughts on all of this!! I can't stand the debt so saving that money isn't going to work I think... I want to get rid of the credit card debt entirely, and pay off the personal loan and then for the rest, either the appliance loan or the IRS. They're both over $700/mo.

 

[Go-NoGo]

The spec sheet says "3400Kv motor". I have difficulty believing that means thirty four hundred kilovolts. Airplane weight: 4.8 oz. Weight of all the Bakelite insulators needed to contain 3.4 million volts: 87 pounds.

Translation, please?

In this case 3400Kv motor means that the motor will turn 3400 rpm (in a no load condition) per Volt supplied to it. If a 10V battery is attached across this motor it would turn at 34,000 rpm.

https://www.rotordronepro.com/understanding-kv-ratings/

 

[Dtail]

Thanks for the update Supermint.
Even though it might not sound like it on every post, the folks on this forum are behind you and want you and your family to succeed.
Good luck in moving forward.

 

[MrsHaloFIRE]

I just about blacked out when you said 7k on window treatments. THats a lot of money on curtains when you owe so many other places so much money. I just did 4 rooms for like $500. Wherever youre buying them, stop doing that.

 

[daylatedollarshort]

I'm giving a lot of thought to so many of you saying that we have a spending problem. Maybe we do, but we do not buy a lot of 'things' or clothes, or whatever people spend their money on. I

One exercise I found helpful in lowering our expenses was to put our budget in the same categories as the Consumer Expenditure Survey. We looked at our expenses vs. the averages, and could see some easy changes where our expenses were pretty high of bounds initially, like groceries and hair salons.

If you reread The Millionaire Next Door the authors have some quick calculations on how much your net worth should be for your age and income and also some quick tests if you are income affluent only or balance sheet affluent as well. You may have some extenuating circumstances if your combined incomes haven't been $268K a year for very long, but the calculations should give you some food for thought of where your new worth should ideally be at.

 

[nvestysly]

Two words... "Delayed Gratification" give it some thought, see how you can work it into your life.

It's almost as if you live in a parallel universe from DW and me. You're thinking of a pool? Maybe I misunderstood, but a pool should be the last thing you're thinking about!

I wish you well. There have been lots of interesting/useful discussions here, some misguided perhaps because we may have misunderstood your original comments. You (and your family) have to begin the journey to the universe where Living Below Your Means is second nature, not a foreign concept.

 

[RobbieB]

Things can be upgraded. Cheap appliances can be replaced when funds allow. Want a pool? Go get one. A fifteen hundred dollar above ground that will last you ten years and then you can do the fifteen thousand dollar in ground later.

 

[Calico]

....I'm giving a lot of thought to so many of you saying that we have a spending problem. Maybe we do,
but we do not buy a lot of 'things' or clothes, or whatever people spend their money on....

I'm struggling with the question of 'do we build the pool' or what exactly to do with our back yard, as it still looks like a construction site....Yes, it's easy to say NO Don't Do it...but we want to live life as well and our kids would love it.....

Oh for goodness' sake. A pool? These posts strike me as a variation on the old "Yes, But" game identified by Eric Berne decades ago.

Specifically:

Yes, but we don't spend money on things other people spend money on.
Yes, but I've been sick and haven't been paying attention.
Yes, but we want to "live" and the kids would love it. (a twofer)
Yes, but soon we'll be making the same amount as we used to, and all the debt will go "poof".

In my 64 years of experience in life, people who play this game usually don't want to change.

YMMV

 

[aja8888]

Things can be upgraded. Cheap appliances can be replaced when funds allow. Want a pool? Go get one. A fifteen hundred dollar above ground that will last you ten years and then you can do the fifteen thousand dollar in ground later.

My emphasis above. You can't even dig the hole and put in the rebar for $15K for a pool anymore. Think $50K without too many extras.

 

[ivinsfan]

I'm not going to blackout but I'm going to say, you aren't there yet. You're too defensive. And yes you do have a spending problem. Keep reading and I wish you well in finding a new job.

 

[Sunset]

No, the $100k I took out for the land purchase was not a loan; this is why I withheld an additional $20k out. ...

Too bad, if it had been a loan, you wound not have paid any taxes on it.

I'm giving a lot of thought to so many of you saying that we have a spending problem. Maybe we do, .....

......But, here we are with lots of debt so we MUST have a spending problem right??
.....

There is NO question about it, Yes you (both) do have a spending problem.

Even without the house purchase, you (both) still had a spending problem as seen by how little money you (both) together saved for retirement (or just saved).

Where did the money go, you (both) don't know.

You (both) definitely need to track your daily spending each day to the penny.

I use Spending Tracker (its free) on my smart phone. But you can use paper and pen, or a spreadsheet.
Then you will be able to see how you overspend on certain things.

 

[Gumby]

Anyway, thank you for your thoughts on all of this!! I can't stand the debt so saving that money isn't going to work I think...

Supermint: I apologize if my response to you seemed harsh. The recommendations I made seem logical to me and I would do them in your situation. But I am not you and I don't fully understand your situation, so my recommendations may not be suitable. Just know that I am pulling for you, as I believe are the vast majority of those who have posted so far. Most people really are here to help. I hope that you will keep us posted as to how things are working out. We love a success story.

 

[38Chevy454]

I'm not going to blackout but I'm going to say, you aren't there yet. You're too defensive. And yes you do have a spending problem. Keep reading and I wish you well in finding a new job.

Completely agree. There are too many qualifiers for why the spending is OK. The spending is NOT OK. That is the root of OP's problem. You can't treat symptoms of a problem and expect it to be resolved. True corrective actions require identification of the root cause - in OP's case it is quite easy to see that is excess spending.
I also think that while the house may be very nice, it is living above your means. Without all the other debt, you could afford that, but as it is now, the house is one source of your spending problem. You have to get the spending reduced. Concur with using the $45K for debt reduction, that should help get out from under some of the debt load on your shoulders.
Sorry it sounds harsh and judgmental, but it seems you need a dose of tough love type reality about your situation.

 

[Kelor]

I'm starting to think this is a shtick.

 

[travelover]

Round two.

 

[WyomingLife]

I'm starting to think this is a shtick.

Seconded.

The discussion about tiny aircraft motors was cool, however. Back when I was a kid I used to have one of those pre-RC model planes with a gas-powered engine that had two notable aspects. First, the spring-loaded starting mechanism for the prop was such that if you messed up the starting sequence, one seemingly could have lost a digit (presumably wouldn’t have passed CPSC standards today). Second, the controls were connected to one’s hand by strings, so you had to stand in one spot and spin, thereby inducing vertigo.

Wow, I’m old.

 

[Bryan Barnfellow]

Here it is without any sugar coating:

You both are unable to control your impulses to spend. Get help.
Yes, it is likely you will never retire. It's blindingly obvious.
Time to start adulting, as the youngsters like to say.

Sorry, but you asked for advice. Blunt force is the best I and others can, and should, apply here.

 

[ivinsfan]

Here it is without any sugar coating:

You both are unable to control your impulses to spend. Get help.
Yes, it is likely you will never retire. It's blindingly obvious.
Time to start adulting, as the youngsters like to say.

Sorry, but you asked for advice. Blunt force is the best I and others can, and should, apply here.

Now technically the OP only asked for advice about the 45K they inherited. But then they provided enough detail to springboard the rest of the advice posted here. But what else can we do, we would have had to sit on our hands to stop posting our pearls of wisdom.