A Long way to go with little time to get there:


Confused about dryer sheets
Jan 24, 2004

ME AND MY FINANCIAL SITUATION: Chris, 32, single (never wants to marry), homeowner, only $20,000 in a 401k so far, $1,000 in saving, homeowner (not paid off), no credit card debt, no crazy fancy lifestyle, Army Reservist, and only make about 45k/yr. civilian and Army combined.

I joined this site after posting one thing as a guest and receiving wonderful/meaningful replies. I hope to learn much from coming here regularly. I don't really know too much of what I am doing with the finances thing. I just 'wing' it and do what seems safe at the time.

I know there has to be more and there has to be a better way to invest and obtain completely worry-free financial freedom.

So far, I plan to get rid of the mortgage payment by paying it off as soon as possible. I start in a month to religiously pay an extra $100 on my mortgage per month towards the principal. (Automatic payment=out of sight out of mind).

In addition, I will make an extra payment in February. I want my auto-payments paid ahead of the month instead of always behind it.

Hopefully, I can increase the amount I drop into the mortgage over time and get this paid off SOON!

I will continue to put away 10% of my pay into the 401k the whole time of course.

(Not much $ left over for fun, huh?)

After the house is paid, I want to invest the equivalent of the mortgage into SOMETHING or SOMETHINGS that accelerate into the financial status most of you enjoy.

Now that you know me, any and all advice is ALWAYS welcome!

Thank you!
You may already be doing this, but...


You mentioned a 401(k) but I can't tell if it's the military's TSP. You could max that out in an aggressive fund like "I" or "S".

Perhaps you've already followed the debate on another part of this board over whether it was better to take the lowest mortgage rates in 40 years and invest it, or to take the more conservative "sleep at night" route. You sound like you're at your comfort level on paying off the mortgage early.

Hopefully you're fully funding a conventional or Roth IRA. There are more debates about which is better for $45K income, although rising income tends to shift the benefits toward a Roth. Perhaps you're eligible for other tax-deferred investments that can also be maxed out before other investments.

If anything "accelerated" my retirement, it certainly wasn't being a brilliant investor-- it was minimizing my expenses, mostly prolonged sea duty with good income and nowhere to spend it. OTOH your MOS and your current overseas duty selections probably make that a non-starter.

The next step, if you're not already doing it, might be reducing your expenses even further. As a single homeowner you're in an incredibly flexible position to cut way back without facing a family mutiny. If you haven't already, you might want to read old standbys like "Your Money or Your Life" by Joe Dominguez or the Terhorst's book mentioned at http://www.geocities.com/TheTropics/Shores/5315/ . After that you could plow through the Dollar Stretcher website (http://www.stretcher.com) or Amy Dacyczyn's "Tightwad Gazette" book collection.

Since you claim "I don't really know too much of what I am doing with the finances thing" you could also read "Winning the Loser's Game" by Charles Ellis (http://www.amazon.com/exec/obidos/tg/detail/-/0071387676/102-2913243-3987332?v=glance), of course from your local library. It should be required reading before paying anything to any financial advisor.

But if the cash is burning a hole in your investment portfolio, try http://www.BerkshireHathaway.com and Sandman's indexed FAQs at http://www.geocities.com/sandman_kmr3/.

Hope this helps.

-- Nords
Re: A Long way to go with little time to get there

Chris, it sounds like you are on the right track. Some things to think about:

Rather than pay off the mortgage first, put your free dollars in your 401k or other retirement fund.

Keep looking for ways to increase your income and your retirement investment.

Learn to cook, make large meals and freeze the leftovers in single serving containers. Avoid restaurants.

Work on a low cost lifestyle.

Just a few thoughts!

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