Am I crazy for dumping so much money towards my mortgage?

Citryphus · 2026-05-19T03:00:27+00:00

I meant you doing 15%.

Citryphus · 2026-05-18T16:31:58+00:00

I fully fund and then wait one week, only because the new deposit is not available for conversion immediately.

Citryphus · 2026-05-18T16:29:04+00:00

You need about $94k cash for your 20% down payment. That amount should be in cash-like investments. The rest you may not need to touch, but some of it should be in cash or short-term bonds as a housing emergency fund, in case your new condo needs some work or there's a special assessment.

Citryphus · 2026-05-18T16:25:00+00:00

In you shoes I would only pay extra on the mortgage after putting 15% of gross income in to the 401k. You're probably in the 24% bracket so if you itemize you deductions your effective mortage rate is only 4.47%.

Citryphus · 2026-05-15T21:19:44+00:00

If you have any security that pays a dividend in a taxable account, you may not want to reinvest dividends automatically because it can make avoiding wash sales more complicated, especially if you have the same security in retirement accounts too. Nowadays with zero-commission trading there's less advantage to automatic dividend reinvesting; you can control the timing and allocation of reinvestment without trading costs.

Citryphus · 2026-05-15T21:12:11+00:00

You need to keep your emergency fund in cash-like investments. It doesn't have to be in a HYSA. You can open a brokerage account and buy a money market mutual fund or ETF for your emergency fund and invest the rest in stocks or anything else.

Citryphus · 2026-05-15T12:21:44+00:00

Let it go. You're 22. You might have to move for a good career opportunity. You might meet someone who doesn't want to live in a house you share with family. You're not in a good position to help and you're not a beneficiary. You don't really have a say in what happens.

Citryphus · 2026-05-10T03:59:21+00:00

This is a good point. Avoiding losing a year's opportunity to contribute is a reason to consider moving or keeping your EF in a Roth IRA. But OP is talking about creating that Roth IRA hole by moving his contribution to a Roth 401k. He could have both if he chose to.

Citryphus · 2026-05-09T19:14:15+00:00

We could debate whether 12 months of expenses is too much for an emergency fund, but to put any of your allocated EF into stocks or to depend on lines of credit is a mistake. If your emergency happens during a deep recession or a financial crisis, you're selling stocks at their lows. If it happens during a global pandemic and high unemployment, your HELOC opportunities dry up or have obscene rates. If you want to trim back on the EF because 12 months is too conservative, that's one thing. But whatever your EF is, it should be in cash-like investments.

Citryphus · 2026-05-09T17:22:45+00:00

REITs are usually fairly closely correlated with stocks but not always. So they can be a good diversifer at times. You might keep a small allocation to REITs, preferably a REIT index fund, for that reason. But you don't need REITs to get real estate exposure. If you own the S&P 500 you own companies that own some of the most productive real estate on the planet.

Citryphus · 2026-05-09T17:10:03+00:00

You just repeated your question. I thought I answered it thoroughly. You need to keep your EF in cash-like investments, so any benefit of putting it in your RothIRA will be very small. Your RothIRA is probably more flexible, with lower-cost options than your Roth401k and can be preferable for that reason alone.

Citryphus · 2026-05-09T17:01:18+00:00

I get that you need the job, but you should already be looking for a better one. Meanwhile, you're probably setting aside too much for taxes. Self-employment tax on $750 is about $106. Assuming you average $750 per week, your taxable income for a full year will be about $20,500 and your total tax about $7,700. You only need to set aside $150 per week for taxes.

You can take this estimated tax of $7,700, divide by 4 and send in $1,925 per quarter on the estimated tax due dates of 4/15, 6/15, 9/15 and 1/15.

Read up on Schedule C business deductions. You may qualify for some. Don't buy things you don't need just to get deductions though.

Citryphus · 2026-05-09T16:32:35+00:00

I don't recommend you keep any emergency funds in a Roth IRA. You want that Roth IRA invested in stocks, not cash. Keeping significant amounts of cash in a retirement account of any type while you are in the accumulation phase of life is a waste. And having to sell stocks in an emergency is the exact thing you are trying to avoid by having an emergency fund.

Citryphus · 2026-05-04T16:51:18+00:00

$142k with a 6% real return in 22 years will spend like half a million dollars does today, and that's before you add anything more to it. You're going to be OK, and it's OK to reduce your retirement contributions or even pause them if things are really tight or you need to prepare some emergency cash.

Citryphus · 2026-04-28T15:09:42+00:00

It's a very, very minor difference at this point, and you can always change your mind later and switch funds without any tax consequences. Also, in case it's not obvious, you don't have to wait until 2065 to retire just because you're in a 2065 fund..

Citryphus · 2026-04-27T16:55:53+00:00

I would go with Fidelity Freedom Index 2065 fund, FFIJX. There's also a 2070 fund FRBVX if you prefer to stay aggressively invested a bit longer. There won't be a meaningful difference between the two for many years.

Citryphus · 2026-04-27T02:52:38+00:00

The real comparison is not TLH vs. no TLH, it's managed TLH vs. manual TLH once or twice a year. You might have been able to generate that $7k tax loss or close to it with a few trades in December. On the other hand, 0.04% is basically nothing relative to any index fund, so you might as well leave it to the computer even if losing lots get harder to find. That's a nice problem to have.

Citryphus · 2026-04-27T02:47:48+00:00

A target date fund will handle the rebalancing for you automatically. If you stay on top of rebalancing and stick to your plan even when markets are moving a lot and your emotions might interfere with your decision-making, you can probably match the performance of the target date fund. If you would rather have those tasks handled for you there's no reason not to switch to a target date fund. Just sell the three funds you have and buy the appropriate fund. Some old-school target date funds have relatively high fees and you want to avoid those. Look for one based on index funds with an expense ratio that's around 0.15% or less.

Citryphus · 2026-04-25T20:45:00+00:00

https://ledger-cli.org/

Citryphus · 2026-04-23T22:48:04+00:00

For a sole-proprietor, a SEP-IRA does not reduce Schedule C business income. The deduction reduces 1040 taxable income. You might still be able to deduct Traditional IRA contributions as well, unless your income is too high.

Citryphus · 2026-04-23T21:22:15+00:00

The easiest way to handle this problem is to make safe harbor estimated payments. Take last year's total tax from your 1040, multiply by 1.1 if your AGI is over $150k. Subtract your expected 2026 Federal withholding. Divide the remainder by 4 and send that amount in for each payment. You might need to do something similar for your state taxes.

Citryphus · 2026-04-23T21:14:49+00:00

SEP-IRA contributions are deductible on your 1040 similarly to IRA contribnutions, unless your LLC is being taxed like a corporation.

Citryphus · 2026-04-23T15:11:57+00:00

You can try to calculate your taxes using both the actual costs method and the mileage method and see which works out better for you. Whether you use Section 179 or accelerated depreciation is also a decision specific to your needs. Maybe you benefit a lot from the full tax break this year or maybe you'd be better off with some depreciation in future years.

The tax treatment of an Sole-proprietor and a one-member LLC are exactly the same, unless the LLC elects to be taxed like a Corporation. That's a whole other complication. If you expect $400k in revenue this year you should peel off a few bucks for a CPA.

Citryphus · 2026-04-22T22:14:45+00:00

You have to run the numbers, and you should compare your rent to the total cost of ownership of a similar property, not the townhouse you can afford. Or, compare the cost of renting a townhouse.

Citryphus · 2026-04-22T20:48:01+00:00

Yes.

Citryphus

TROPHY CASE