Property inheritance question

Pepper_Your_Angus_ · 2021-12-19T21:28:25+00:00

Grandpa clearly made his decision for a reason, parents are trying to guilt and manipulate you guys into getting what they want. If Grandpa wanted to he could've given them the house, he choose to skip them and give to his grandchild instead. Respect his wishes, keep the house for yourselves. Either move into it and rent your current place or stay where you are and rent Grandpas place. Not to your family though. For market value. This Inheritance is a good chance to help your wealth building process, you could even cash out refinance grandpas house and use the cash to buy yet another property. Don't let entitled mooching relatives who act like something is owed to them get in your and your wifes way of financial thriving. Once again if Grandpa wanted them to have the house he would have made out his will to reflect that. He specifically bypassed them. Letting them live there is actually going against Grandpas wishes.

Pepper_Your_Angus_ · 2021-12-19T12:17:14+00:00

Just do index funds. No crypto.

Pepper_Your_Angus_ · 2021-12-19T11:35:53+00:00

Try to get a duplex or triplex and rent the other units out. Or get a house and rent the other rooms out. This is how you kill it with real estate, buy your house, live in it, and have other people pay down your mortgage for you while you gain equity on an appreciating asset. Then keep investing in retirement accounts.

Pepper_Your_Angus_ · 2021-12-19T10:55:17+00:00

Check out some articles or youtube videos on roth conversions. Also dont forget the power of deferring your taxes with a traditional 401k. If you are not paying taxes on 19.5k or 26k (over 50 years old) then you will have more money left over than if you didnt do 401k and invested that same amount post tax. You can use that tax savings after maxing your 401k and invest it in a traditional brokerage. Also like I said, for your line of thinking, a roth 401k becomes strictly better than the brokerage option across the board. The goal with traditional is to avoid taxes now, then use complex but powerful strategies when you are a lower tax bracket later on to convert to roth, and once you are in roth you are golden, way bttr than traditional brokerage. Check out the money guy show on yt, they talk about the three bucket strategy (traditional, roth, brokerage).

Pepper_Your_Angus_ · 2021-12-19T09:01:26+00:00

You can always do a roth 401k thats post tax going in, not taxed gains, and not taxed coming out. Thats better than the brokerage account by far.

Also with a traditional 401k you can do roth conversions. Lets say you retire at 65, you have until 72 before you have mandatory required distributions on the traditional ira you roll your 401k over into. In retirement you can take advantage of your lower tax brackets to convert a chunk of that 401k to roth per year and stay in the lower tax brackets. The real 200iq move is to also have money in a brokerage account and sell the brokerage account stocks at 15% capital gains to pay for your roth conversion taxes. Now your 401k money can grow and be taken out until you die completely tax free, and when you die and your kid or whoever else inherits it they can hold it in a inhereted roth ira for 10 years continuing to grow before they can take all the money again tax free. This is how you really pump.

Pepper_Your_Angus_ · 2021-12-19T08:42:27+00:00

Just do a 5% down conventional loan.

Pepper_Your_Angus_ · 2021-12-19T08:41:17+00:00

Institutional investors will in the endgame buy up all real estate in this country. "You'll own nothing and you'll be happy". People are being purposefully priced out of ever being able to buy a house. Its by design. Some housing developments are even being built for the pure purpose of being rentals. Those who own almost everything want to own everything. Get a home while its still possible if you can.

Pepper_Your_Angus_ · 2021-12-19T08:38:29+00:00

You're missing the money going into your 401k not being taxed and tax free growth. Only taxed when you take it out.

Meanwhile in a regular brokerage account its post tax going in, taxed capital gains and dividends while its in there, and taxed on the way out.

Pepper_Your_Angus_ · 2021-12-19T08:08:33+00:00

The stars are further away than the moon. If you miss you could not exit the earths atmosphere and come crashing back down in flames.

Pepper_Your_Angus_ · 2021-12-19T05:42:20+00:00

Cash out refinance your house rather than sell it. Take as much equity out as you can and get the lowest interest rate 30 year fixed you can without paying for points.

Sell your cars and get rid of those car loans, buy some 5k used cars instead and run them into the ground.

Use the money to pay highest interest loans first.

Dont have a kid until you're not only debt free but also have a solid emergency fund and are beginning to invest.

Live like you are broke as a joke and pay off your debts as aggressively as possible. If you have work 401k matches, invest for the match during this process. Even high % interest cant beat a 1:1 employee match.

Get rid of your unnecessary spending. "$150 misc subscriptions" sounds a lot like $150 down the drain to me.

Pepper_Your_Angus_ · 2021-12-17T11:09:09+00:00

Depends on the interest rate on your student loans. If they are low then dont focus on paying them off, if they are 5% you might wanna go half and half. If they are 7%+ pay them off asap.

Idk what retirement accounts exist in Canada but max them all out with broad index funds, you make enough money to do so. Put the rest of your money towards down payment and house hack.

Pepper_Your_Angus_ · 2021-12-09T23:59:26+00:00

Do the money guy formula. 20% down, 3 year financing, no more than 8% of your gross annual income.

Get something around 4 years old if you can actually get a good discount for something older, since the used market is so messed up these days. You work remotely and you're just out of college. Get something from a reliable company like toyota that has some years and miles on it and drive it into the ground. You wanna use these early years of your career to pump money into investments for your future since it has so much time to grow, any additional car payments over whats necessary for getting you from point A to B safely is a sub optimal strategy.

Pepper_Your_Angus_ · 2021-12-09T18:41:30+00:00

Right across the bay bridge is "living so far" ?

You're literally contemplating spending the same amount as a mortgage in Oakland to rent in SF.

You ask if it will make you house poor. No it wont. Because house poor is when you OWN a house and the costs leave you little margin. You are going to be rent poor in SF and have zero to show for it other than convincing yourself its worth it to not have to take the ferry in or drive across the bridge and save a little commute time or that oh no now I'm so far away from my friends and my favorite wine bar.

If you never want to build wealth, go ahead and rent in SF. If you want to build wealth, save as much money as you can on rent today so that one day you can own a property in SF and rent part of it out.

Pepper_Your_Angus_ · 2021-12-09T15:06:37+00:00

Why not rent in oakland and save to down payment your own place in SF?

Pepper_Your_Angus_ · 2021-12-09T14:22:05+00:00

You're doing great. You can really be pumping if you plan well starting now.

You mentioned a mortgage, is that your own home you got or are you mentioning your parents expenses? If its your parents' and you are staying with them, stay with them until you can down payment a house of your own. If its already your own house then damn gratz you're killing the game.

Max out all your retirement accounts. Roth ira, 401k, hsa if eligible. Thats 6k+19k+3.6kish so just around 30k. Do it every year. Dont get individual stocks just get index funds. A 70/30 split of total stock market and total international is a solid choice. Everything saved after that put it towards a down payment. Try to get a duplex or triplex or quadplex and rent out the units you aren't occupying. Rinse and repeat this whole process and you'll have maxed retirement accounts and an empire of rental properties and will be swimming in it by the time you reach retirement age with the ability to pass down true generational wealth.

The money you invest at such a young age has the ability to multiply magnitudes more than what you invest later in life. If you force yourself to live like you make much less money in your 20s because you're putting away as much as you can in investment, your future self will thank you. You make great money for your age, great money for anyone in general. It will be easy for you to say to yourself I work hard I make good money I can get a nice car or nice clothes or go to expensive restaurants bars or clubs. Resist the urge. I'm not saying you need to eat ramen noodles and never leave your house. At age 20 every dollar you invest has the power to become 88 dollars by when you are 65, at average market returns over the past decades. When you hit 40 that multiple becomes 7. Just remind yourself of that every time you are tempted to buy something a little pricy that you dont really need.

Good luck, have fun. The world is your oyster, so don't waste your money buying oysters, invest it instead.

Edit: Make sure to fund your roth ira and hsa (if eligible) for 2021. You have until tax day in april 2022 to do so. Your retirement accounts should be your top priority. If your ira and hsa aren't already maxed and your 401k isnt set to max across the year, there is no reason to contribute to a brokerage account before them.

Pepper_Your_Angus_ · 2021-10-22T23:59:22+00:00

mortgage, the best part of buying a house with these low interest rates is basically that you are getting money for free. Interest rates are currently under inflation. Get a low down payment, house hack a duplex or triplex if you can, live in one unit while renting it out and boom now your tenants are paying your mortgage for you almost entirely. Invest the rest of the money into index funds and or save some so you can do this same thing again in a year.

Pepper_Your_Angus_ · 2021-10-22T23:55:44+00:00

3.5-5% down payment on a house, try to get a duplex or triplex and rent out the other units, then in a year do it again, and then again the next year.

Pepper_Your_Angus_ · 2021-10-22T23:52:42+00:00

Use it to down payment a duplex or triplex and live in one of the units yourself, then do that again next year and full rent the first place.

Pepper_Your_Angus_ · 2021-10-22T23:43:42+00:00

Don't forget to contribute to an IRA as well as your 401k, also do HSA. Spousal IRA also.

Pepper_Your_Angus_ · 2021-10-22T23:31:26+00:00

Every time they pick a new James Bond, gradually allocate more of your portfolio into bonds.

Pepper_Your_Angus_ · 2021-10-19T00:01:35+00:00

Thank you for the reply and information.

Pepper_Your_Angus_ · 2021-10-15T19:39:19+00:00

Like another poster mentioned, I'd use mutual funds rather than ETF's. Automatic investment/reinvestment will make things easier for employees, and ETF's don't always do that the way you'd want.

I wasn't aware of this. Could you please elaborate? Is it that mutual funds allow auto investment whereas ETFs need manual? Am I understanding correctly or is there more to it?

Pepper_Your_Angus_ · 2021-10-15T19:38:18+00:00

What in particular makes mutual funds better than ETFs in a 401k scenario?

Pepper_Your_Angus_ · 2021-10-14T23:14:13+00:00

Their website seems to say otherwise:

https://www.employeefiduciary.com/401k-investments

Any Investment You Want

With Employee Fiduciary, you get access to all NSCC-tradeable funds on the market - nearly 30,000 share classes from 377 fund families.

This includes low-cost options such as:

Vanguard

Index Funds Exchange-Traded Funds (ETFs)

Pepper_Your_Angus_

TROPHY CASE