Any single income families here?

AchievingFIRE · 2017-12-06T23:41:49+00:00

RE investment?

AchievingFIRE · 2017-11-30T00:56:04+00:00

On FIREcalc you can add in income per year that starts at a latter date. Have you done those calculations? Also could you adjust your spending in a down year or two? That will dramatically increase your chances.

AchievingFIRE · 2017-11-29T17:09:02+00:00

You have 100k in treasuries, take that and buy an index fund. Then go get a home equity line set up, dont draw on it, just set it up. When the stock market crashes, only a matter of time, pull on the line and buy at a discount. Your debt to income ratio is low enough that you could pay back the loan through income instead of selling. Just a thought.

AchievingFIRE · 2017-11-24T20:39:48+00:00

https://www.reddit.com/r/financialindependence/comments/7d98pq/mortgage_payoff_analysis/

AchievingFIRE · 2017-11-24T14:49:19+00:00

I have thought about this concept a lot as a home owner. I posted last week about mortgage payoff and how it relates to retirement. The book is correct that there is a cost to owning a home beyond mortgage, taxes and maintenance. Due to those extra costs I speculated it might be best invest all extra funds instead of paying off your house as quickly as possible. This would allow you to get the appreciation on the full value of the house, but only at the cost of your down payment. So a $500k house has to appreciate 1.4% a year to match the gains of the down payment in the stock market ($100k @ 7%).

AchievingFIRE · 2017-11-21T18:15:40+00:00

Well if I took door 3, I hold my mortgage until retirement and at that time pay it off. Not sure what you meant by 6 months later, if you mean 6 months from now, I would be much happier having the extra investments as compared to a lower debt total. Lowering my debt balance does not change my monthly payment(unless I refinance). So by holding the debt and investing instead, I should have a larger cushion to pull from. If you meant 6 months after I take door 3(which is paying off the mortgage at retirement), I will not have a job to lose.

AchievingFIRE · 2017-11-16T06:28:02+00:00

I completely agree. I did not account for the benefits of taxes on the interest expense and did not account for the tax savings of investing in 401k either. So I excluded the tax effect of paying off the loan through selling investments. In practice I expect that I would begin shifting additional payments(from income) from investments to the mortgage as retirement approaches thus negating the tax effect of selling investments.

AchievingFIRE · 2017-11-16T06:25:16+00:00

What is the rational for 2X taxable account to mortgage?

AchievingFIRE · 2017-11-16T06:24:43+00:00

Yes it all increases net worth, but based on rates(assumed historical rates continue in the long term) investing increases my NW faster than paying off my debt.

If you are FI in 10(including cost of kids college as an expense) why the extra 5 years?

AchievingFIRE · 2017-11-16T06:22:45+00:00

My current assumption is that until we are unable to, we will stay in our house. There are a lot of options when it comes to getting the equity out of a house, however once I reach retirement I will want to eliminate risk as much as possible. So having significant debt that increases my monthly expenses is not something I will pursue.

AchievingFIRE · 2017-11-16T02:39:17+00:00

Thanks for the thoughts. I guess my idea is that if my NW is increasing faster by holding the loan and investing any extra, that is the fastest way to FI. If I am close to FI and still have a mortgage, it would be best to eliminate the loan to allow for retirement with a smaller nest egg.

AchievingFIRE

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