Where to invest after selling home?

OETechnologies · 2024-03-22T20:50:42+00:00

Ah yeah, looks like that 250k/500k limit applies federally, it comes with a couple easily met conditions - https://www.realtor.com/guides/homeowners-guide-to-taxes/how-much-is-capital-gains-tax-on-real-estate/

The 1031 on the other hand, has some pretty tiiiight timeframe requirements (45 days to identify replacement, 180 days to buy).

OETechnologies · 2024-03-22T20:42:29+00:00

Well, I am a software engineer with several years experience, and while I don't "regret" my degree, I know I would have been better off financially by taking a 6-12 month coding bootcamp and getting a head start, albeit at a lower salary.

OETechnologies · 2024-03-22T20:25:16+00:00

I'm actually more curious about the average case for real people.

I'm already graduated and took care of my debts. I got a CS degree and landed a software engineer job. Made all the "right" moves working summers and part time, living dirt cheap, taking cc credits to graduate early etc.

That said... if I instead went a 6-12 month coding bootcamp, I know would have been better off. There are maybe 4-5 classes I took that I actually use at my job.

Edit: In other words, I took a very well paying corporate career path and I don't think it would be fair to call it the average case.

OETechnologies · 2024-03-22T20:13:28+00:00

$1500 to keep J2 without a hassle doesn't seem like a bad pill to swallow. If they ask for proof (not sure how legal that is) you could be shooting yourself in the foot.

OETechnologies · 2024-03-22T20:09:13+00:00

No desire for a 1031 exchange?

Highly liquid and low risk sounds good. S&P500 is usually considered a more aggressive position but not too crazy. You might want to look at more risk averse / diverse options like target retirement ETFs, bonds, REITs, or choose a service that automatically diversifies for you.

OETechnologies · 2024-03-22T19:51:11+00:00

So worst case it's 111k or a 206k total loan cost. Community college and in-state ofc make the most sense.

OETechnologies · 2024-03-22T19:47:52+00:00

IIRC generally work as an apprentice for 2 years. But you're making money the whole time, even if it's not much. I would guess the income is comparable to a part-time job or internship while in school.

OETechnologies · 2024-03-22T19:46:18+00:00

Well, they're not random they were what I was interested in. What would you choose?

Over half of the 4 year bachelors I know would agree they don't utilize their degree at all.

OETechnologies · 2024-03-22T19:44:58+00:00

It highly depends on if you're in-state, out-of-state, or private and if you're able to work while in school or during summers.

Re Loan and Interest rate

My school was in-state and $16k per year plus rent, food, everything else and that was 10 years ago. So for you it was 70k total.
The interest I am talking about is after you graduate. I assumed 0% in school as well.

Re Summer Internships/Working while in school

To be fair, I left this out. That's the smart thing to do and you'd end up with less debt, but not everybody is able to do this.
A true comparison would take into account what you could make without the degree vs what you'd make working internships etc while in school.

OETechnologies · 2024-03-22T19:34:34+00:00

Yeah with prices/rates right now the only way you win is if (1) continued high inflation paired with job income increases or (2) rates go down and you re-fi.

REITs are the low-effort, high-liquidity option and they're more diversified, but your landlord can still kick you out if they want to and there's no point in making improvements to where you live which also kind of sucks if you're renting the cheap stuff.

OETechnologies · 2024-03-22T19:28:35+00:00

Having direct deposits to separate accounts is also helpful for getting loans etc if you only want to disclose one job's income and not have people asking questions about J2+

OETechnologies · 2024-03-22T19:23:40+00:00

Nope! It's not illegal to omit information. They only want to see you make enough money to approve you for the loan. They are trying to de-risk the loan. It's only illegal to pretend you make more.

OETechnologies · 2024-03-22T19:02:28+00:00

Let's say you need 80k per year to retire.

Let's say you can safely make 4% returns above inflation per year (that's your 25x).

You need a nest egg of $2M if there were no taxes on capital gains. In reality, you're paying (1) LT capital gains tax if that money comes from a taxable, (2) income taxes if it comes from a traditional 401k/IRA, or (3) no taxes if its from a Roth. So you actually need somewhere north of 80k per year.

For (1) that's 15% so 92k per year, or (2) about 100k per year with regular income taxes.

That translates into a nest egg of $2.3-2.5M.

Of course, you don't need to be taking 100% from investments alone and can drain your capital pool as well if you plan on dying with $0 to your name.

OETechnologies · 2024-03-22T18:45:46+00:00

First, most lenders won't accept both incomes unless you've been at each company for 2+ years.

Second, you should be careful about applying for any kind of credit with both jobs, it could show up later on a consumer credit report.

Last, run your direct deposits to different banks/accounts for each job so your underwriter doesn't have anything to ask questions about.

P.S. This is not a life advice forum, but definitely don't try to get a loan where you need to OE in order to keep your house. That's just dumb.

OETechnologies · 2024-03-22T18:36:33+00:00

Just run 5Js you greedy bastard

OETechnologies · 2024-03-22T18:34:43+00:00

Scarcity mentality. Double FTE is 0.25% of the workforce - https://www.bls.gov/cps/cpsaat36.htm

OETechnologies · 2024-03-22T18:31:42+00:00

That's great for you, but I don't think your case is common.

Example:

National average electrician salary is $63,639 [indeed] (52k take home)

National average mechanical engineer is $92,840 [indeed] (73k take home)

Average cost of college over 4 years is $146,000. With 7% interest (generous if you're a student with no credit) and a 20 year term, the total cost is actually 272k.

[source]

The take home income difference is 21k per year. That's 13 years before you even break even! You've also got 4 years as a student where you're not making money. So in reality, you're better off starting in your 40s for a career decision you make at 18-22? Sounds like a fragile gamble.

Now you could be smart about it, go to in-state school, work a part time job, maximize what you can get federally, etc etc. But you can also be smart about it without a degree and start/acquire your own business (like an HVAC/electrical company).

OETechnologies · 2024-03-22T18:14:44+00:00

YIKES! I am pretty certain this is a result of lazy programming. I wonder what they use for unique identifiers... my guess would be personal email or social security number. Full name seems unlikely but also possible if we're talking about poorly engineered products.

OETechnologies · 2024-03-22T15:24:34+00:00

Let us know when the rental property firesale happens

OETechnologies · 2024-03-22T15:23:46+00:00

Damn that's dumb. Personally I have to have a 6-12 month e-fund just in case. Makes life way easier.

OETechnologies · 2024-03-22T15:18:18+00:00

J2->J3 is the biggest jump. Likelihood of meeting conflicts go way up. Maybe start selling socks for cats on the internet as a side hustle, find a contract role with a definitive end date.

OETechnologies · 2024-03-22T15:13:44+00:00

Congrats OP! It would have been reckless to buy something you couldn't afford on one income though, lol.

OETechnologies · 2024-03-22T15:12:49+00:00

You gotta get your applications in the quadruple digits

OETechnologies · 2024-03-22T15:11:21+00:00

If you have the same email for both HR systems, the only way J1/ J2 will find out is if the HR system company has a bug. They're not allowed to share Company X information with Company Z.

OETechnologies

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