First off thanks to all the contributors and moderators. I found the forum while Googling to try and understand VGSIX (I will post a specific question in a different thread) and have been reading almost solidly for the last two weeks. I am kinda surprised that I have so many interests in common with a retirement related forum as I have always loved to work and specific thoughts about retirement have always been beyond our planning horizon, so we are about 27 years later than a lot of folks on this forum :-(
It seems that an introduction is a good idea (except perhaps for MillionaireMoms), so here goes - apologies if it is haphazard, but that is pretty much our current financial state - definitely haphazard, patchily ignorant, but well-intentioned.
We both have EE degrees - though not strictly working as engineers. DH is software management and I am currently doing financial/telecommunications modeling from home.
I'm 48, DH is 50 w 3 kids 15, 17 and 18 (freshman at second tier college $46k/year + $19k merit scholarship).
DH good salary; lucked into good stock options, but expect that these will primarily fund college.
I cycle between self employed consulting at 1/3 time and 60+ hr/week employment in a start-up on about a 5 year cycle. Currently self-employed and find it hard to put me in a neat classification. I act like "I'm retired w part-time work", I'm definitely a stay at home Mom and I sometimes earn like a full-time job.
Property tax $11k, Mortgage interest $30k.
Owned a mortgaged house since married (23 years) but only started 401k about 10 years ago and since then have been contributing to DH max and about 20% for me.
Since October 2001 (when I started measuring) - 12/2009, our "portfolio" has returned just under 9% (inc our home) or just under 6% excluding it. Difficult to exclude house ($820k estimated equity) from "investment" as it is about 60% of net worth and has been a big $$$ sink. Otherwise, all 401k and almost all stock funds and 1 investment property.
As you could imagine - all stocks - no move to cash has been v.volatile. At 12/2009 we were about 16% off all time high (inc estimated primary residence drop)... 401k balances at all time-high due to 2009 contributions.
Up to this point we never invested (except 401k) and I was operating under the mistaken? assumption that long term stocks outperformed bonds so was happy to withstand volatility for extra return. Also for past 8 years any "spare" $$$ have been spent on improving home. However, recently inherited extra $450k which almost doubles our non-house $$$ so I figured I should get a clue before I move it from a CD.
I think I understand single family homes, but I believe they have only worked for me due to high leverage, so not easy to repeat return.
Above-mentioned house 2001 bought for $365k 100% leverage, by 2004 it jumped to $550k and hasn't changed much since then but we have put in about $130k so it is does not negative cashflow.
In 2009 used LOC to buy two REOs (not yet counted above as the one house pays interest for both at the moment):
One $235k (inc new roof) rents for $1900 and I will hold, other bought for $170k + $50k fixing to sell for $300k.
I think I have learned not to hold 2001 employee tech stocks (50% discount, how could that be a bad thing
) that could have been sold for $286, now a nice piece of paper could be a useful placement, but that would require further investment in lamination.
I know I should focus on reducing outgoings.
All the rest I think I have to learn