35 yr old wake up call

[RISP]

Quote:

Originally Posted by Bert Cooper Current goal is paying off the 40k mortgage this year.

Hi Bert, welcome to the forum. Wouldn't it make more sense to attack the more expensive mortgage on your primary residence first?

[Meadbh]

Quote:

Originally Posted by RISP Hi Bert, welcome to the forum. Wouldn't it make more sense to attack the more expensive mortgage on your primary residence first?

I disagree. The $40K mortgage on the rental is a tiny amount compared to the mortgage on the residence. Paying off the $40K is achievable quickly and will have an immediate benefit on cash flow……which can then be directed towards paying down some of the much larger mortgage on the primary residence.

[RISP]

Quote:

Originally Posted by Meadbh I disagree. The $40K mortgage on the rental is a tiny amount compared to the mortgage on the residence. Paying off the $40K is achievable quickly and will have an immediate benefit on cash flow……which can then be directed towards paying down some of the much larger mortgage on the primary residence.

Why worry about cash flow with the kind of income Bert has? 1. The goal as I understand it is to increase NW. 2. One way to do that is to eliminate debt. 3. With that premise, it makes most sense to start with the debt with the highest interest rate, no?
Besides, lowering the mortgage balance on the residence will also reduce interest payments, which means more money can be used to pay down the mortgage, right?

[Bert Cooper]

Quote:

Originally Posted by papadad111 Dont be too discouraged about being out of the market. The fact that you have been paying down debt is a good thing and probably better than keeping money in the bank (under a mattress returns, basically have been the same in the past several years). 1. Live below your means. You are way too far into ego land and you'll never get there unless you ratchet down the spending and trying to impress others. 2. If you do lose your job, and say you hit the skids with one of your renters, that emergency fund will go pretty quickly with the sizeable mortgage payments that you have... probably be gone in 6 months or so on your level of spending 3. Ditch the fancy car... (guessing you have a sizeable car payment too...probably a 3-series BMW or c-class Mercedes)...

Agree on all accounts. My original post was from 6 mo ago. Lots of changes in habits since then.

My Roth still bugs me, I thought at the time that emerging markets and REITs were depressed, so I started there, they're barely above what I bought them for 6 years ago. Can't decide to switch them out for something else or just keep them. I'm not buying anymore REITs or emerging though.

I did have an awesome car, a 545i w/6-speed, paid off though. It was getting time to replace it this fall and I had a really, really hard time not replacing it in kind. Eventually, I broke free from the golden handcuffs and am now in a 25K VW. People around me have been very surprised by this as I've been extolling the virtues of my BMW for years, and still don't get the decision to go down market, but I don't care. The VW is still decent and it's inline with my FIRE goals.

[Bert Cooper]

Quote:

Originally Posted by RISP Hi Bert, welcome to the forum. Wouldn't it make more sense to attack the more expensive mortgage on your primary residence first?

Yeah, that was from 6 mo ago. I've switched gears a bit since then. I listened to what some were saying after I posted this and put off paying the rental mortgage off. I instead have focused on my portfolio. My goal was to hit 50K by the end of the year, but I barely hit 60K. I've still been making double payments on the rental mortgage still, but that's a lot less than I was.

My current goal is to hit 110K in the portfolio this year.

Also, this year, I'm looking at selling the big house and either moving into my old house (killing my rental income) or getting a centrally located condo that would be less than half the price of what I'm in, with half the commute and a fraction of the upkeep. I don't like the idea of killing my rental income, but I really, really like the idea of being mortgage-free.

[brewer12345]

Quote:

Originally Posted by Bert Cooper Agree on all accounts. My original post was from 6 mo ago. Lots of changes in habits since then. My Roth still bugs me, I thought at the time that emerging markets and REITs were depressed, so I started there, they're barely above what I bought them for 6 years ago. Can't decide to switch them out for something else or just keep them. I'm not buying anymore REITs or emerging though.

Do you have an investment policy statement or target asset allocation? If not this is all just shots in teh dark.

[daylatedollarshort]

Good for you Bert Cooper. We never had luxury cars but our next car with be a $10K cheaper, slightly used, better mileage sedan than the last car we bought for ourselves. We just never looked at the car cost in terms of a trade off with ER before, and now we would rather have the ER.

We are also right behind you on moving to a condo or townhouse half the price of where we live now, once the kids are out on their own, if not before.

[Bert Cooper]

Quote:

Originally Posted by brewer12345 Do you have an investment policy statement or target asset allocation? If not this is all just shots in teh dark.

Not yet, still getting my investment bearings. I have a rough idea of what I need to have, but the picture isn't totally clear yet, still lots of learning ahead. Reading the Bogleheads book now. I'm holding the REIT and EM for now for diversification, even though they've been no good for me. I haven't sold anything yet. I was way too heavy into them before. Working on fixing my AA through future investments, with the majority going to Total Stock Market in my taxable, and the Ssg S&P index in my 401k. Adding some good bond indexes in there, too.