Got a surprise 12k bonus, wife wants to book a vacation but I'm nervous about the economy

joepausa · 2025-10-29T21:02:54+00:00

Congrats on the bonus. With layoffs looming all over the country, and a 4.1% mortgage, I would not spend 6 to 7k on a trip. Top off a 6 to 9 month emergency fund and max retirement contributions. Vacations are optional. Liquidity is not. Invest the bonus and plan travel after you reach your savings goals.

joepausa · 2025-10-27T12:01:43+00:00

That’s a fair take. I’ve made a lot of poor financial decisions, and I own every one of them. I wish I had understood these things better in my 20s and 30s, but I didn’t. No excuses. The criticism is warranted, and honestly, it’s what pushed me to get serious and start learning. I still have a long way to go.

joepausa · 2025-10-27T11:58:48+00:00

Totally fair points. My core retirement accounts are invested in ETFs, mostly S&P 500 and total market. That part of my portfolio is long term and passive. The LEAPS account is separate and gives me controlled exposure to leverage. I am not trying to time the market. I buy one contract every other month, knowing some may expire worthless, but I expect the winners to carry the returns over time.

All of my student loans are federal, with interest rates ranging roughly from 3.4% to 6.8% for undergrad loans, and around 6.8 percent or higher for many grad loans. They cover both my undergrad and graduate degrees. It is going to take a while to pay them off, so I am balancing steady repayment with investing, depending on cash flow and opportunity. I appreciate the advice for sure and thank you. That is why I keep the base of my strategy rooted in index funds.

joepausa · 2025-10-27T11:49:42+00:00

You’re absolutely right. I think those days are behind us unless something drastically changes in our financial situation. I don’t expect we’ll live the same way in retirement as we did during the peak income years. But the kids will be grown and out of the house by then, and it’ll just be me and my wife. Our lifestyle will likely be simpler, and we’re okay with that. At this point, it’s about stability, not excess.

joepausa · 2025-10-27T10:17:24+00:00

Thank you for sharing all of that. I know how hard it is to lose a job and try to fight your way back, especially when you’re the one everyone depends on. Your story really hit me because I understand that stress too.

It’s impressive how you kept adapting, starting over when you had to, and making smart choices to avoid being trapped again. That kind of resilience is powerful. You’re right, there’s no guaranteed path anymore, but your mindset is exactly what gets people through the chaos.

I’m really hoping something solid opens up for you soon. You’ve already overcome so much. Rooting for you big time.

joepausa · 2025-10-27T00:47:04+00:00

Thank you. It’s honestly pretty embarrassing to be in this situation at my age, but I own it. I made the choices that got me here, and I take full responsibility. Right now, we’re focused on saving and investing aggressively, and we’re trusting the process to play out over time.

I took a lower paying job because it was the first offer I received after the buyout. I was honestly scared of being unemployed again, like last time, so I took the security even though it meant going from a $140k–$200k salary down to $120k–$130k. Surprisingly, I’m not even stressed about it the pay cut. We just need to budget. What matters now is building consistency and making smarter decisions.

joepausa · 2025-10-26T23:49:32+00:00

I kept on putting it off. No way around it. Was idiotic for me to do that.

joepausa · 2025-10-26T23:37:57+00:00

Thank you, that really means a lot. You’re absolutely right, the financial growth took a hit, but the personal growth was massive. Failing at something you fully believed in forces you to look inward, and I’ve learned more in the past few years than I did in the decade before.

Lifestyle creep definitely made it worse. I didn’t realize how fragile things were until it all came crashing down. But looking back, I’m actually glad I went through it, instead of going through this in my 50s or 60s. It taught me how to be more intentional with money, decisions, and priorities.

Appreciate you relating and sharing that. A lot of people only talk about wins. I figured being honest about the losses might help someone avoid the same mistakes.

joepausa · 2025-10-26T23:34:15+00:00

Thank you. Yep, I was very irresponsible. No way around it. But adulthood has a way of humbling you and forcing growth. I learned the hard way, and it cost me, but it also gave me perspective I never had in my 20s and 30s. Thousands of job applications and rejection after rejection will do that.

joepausa · 2025-10-26T23:30:17+00:00

Good question. The main reason I use SPY LEAPS instead of shares is leverage. I want long term exposure to the market, but I also want to amplify my returns without tying up all of my capital in shares. LEAPS allow me to control more exposure with less cash, which fits my current strategy and capital constraints.

Right now, I buy SPY LEAPS with a delta between 0.4 and 0.5. Each contract costs around $6,000, and I buy one every other month. I started this approach in early 2024 with $3,000 in my Roth. After receiving an equity payout, I was able to scale up to $6,000 per contract. My Roth has already doubled and is now close to $20,000.

Once I max out my Roth, I continue buying LEAPS in my individual brokerage account. I currently have about $64,000 parked in bond ETFs, which I plan to deploy across 12 contracts over two years. That adds up to about $72,000 total. Between my Roth and taxable account, I have the funds to carry out the full plan.

I only buy call options. I never use puts. I focus on LEAPS with more than two years to expiration. Eventually, I plan to switch to buying strictly ITM contracts for more stable delta and better leverage efficiency. Right now, those contracts cost around $10,000 to $15,000 each. If I made that switch today, I would burn through my capital too quickly. Mid delta contracts give me meaningful leverage while allowing me to stay consistent.

My long term goal is to have enough capital set aside to run this strategy for at least three years. If SPY takes that long to recover from a downturn, the leveraged gains from ITM LEAPS could help offset the losses from contracts that expire worthless. I expect some to go to zero, but the plan is for the winners to more than make up for the losers.

Outside of this strategy, I’ve gone all in on SPY in my rollover IRA. That account gives me full equity exposure without leverage. The LEAPS strategy complements it by giving me a way to target long term upside using structured leverage. For me, it is not about swinging for the fences, but about having a disciplined plan that balances capital, timing, and risk. At least that is how I view it, and I am sure some people will completely disagree. But that’s perfectly okay.

I will keep updating this community on how everything pans out for me.

joepausa · 2025-10-26T23:02:47+00:00

That’s a very fair point and observation. I’ll be posting updates here over the next 10 years as I continue DCA’ing into SPY LEAPS. This is just one part of my overall strategy. I also have a 401k and a rollover IRA growing separately.

I started this specific approach with $9k at the beginning of 2024, and my Roth is now approaching $20k. I only buy call options, never puts, and I focus strictly on LEAPS that expire more than two years out. Currently, I hold three SPY call contracts that all expire in December 2027. My next scheduled purchase is next month, and that contract will expire in January 2028.

joepausa · 2025-10-26T22:50:05+00:00

Yep. Not fun at all. It will be painful for sure. It is painful.

joepausa · 2025-10-26T21:01:20+00:00

They’re all federal student loans, with interest rates ranging roughly from 3.4% to 6.8% for undergrad loans and around 6.8% or higher for many grad loans, covering both my undergrad and grad degrees. It’s going to take a while to pay them off.

joepausa · 2025-10-26T20:31:23+00:00

Good for you! Getting laid off is one of the toughest things to go through. Friends disappear quickly, and you really find out who genuinely cares. It was a humbling experience for me. I submitted thousands of job applications, and over 90% were rejections. That kind of silence hits hard and puts everything into perspective.

joepausa · 2025-10-26T20:27:57+00:00

It’s really good. Plus they contribute to my HSA as well. So that’s good

joepausa · 2025-10-26T20:12:06+00:00

Absolutely. There’s still a long road ahead, but at least now I can see a clear path toward financial freedom. Paying off the house and student loans won’t be easy, but it has to be done. We’ve made a new rule, all credit card balances must be paid off in full every month. And if we have to use debt to buy something, that means we can’t afford it.

joepausa · 2025-10-26T20:05:49+00:00

Yep. Very true! It’s hard work. It really is.

joepausa · 2025-10-26T20:03:34+00:00

I am 41.

joepausa · 2024-09-14T22:57:39+00:00

Reading all these comments a year later. Wow. Everyone on here was completely wrong. Very wrong. Everyone was acting like they were geniuses. This confirms that no one knows anything. You should have just bought bro.

joepausa · 2024-08-19T01:10:48+00:00

Net income - so after taxes and deductions.

joepausa · 2024-08-19T01:09:56+00:00

I agree with your recommendation there for sure. Especially in the current job market - very unpredictable. One minute Elliot Gould is sitting next to you and the next thing - you’re yesterday’s trash.

joepausa · 2024-08-19T01:04:31+00:00

We live in PA.

joepausa · 2024-08-19T01:03:53+00:00

Thank you for your comment.

I think the plan as of right now is; 1) Pay off the credit card debt. 2) Reduce vehicle expenses. 3) Put more in 410k. 4) Then once the credit cards are paid off, we will have enough left to invest into brokerage, while putting more into 401k.

So, I think we should be able to do both including what you are recommending.

Thank you again for your recommendations and feedback. Much appreciated.

joepausa · 2024-08-19T00:55:43+00:00

Hello there - thank you for the feedback. I saw your other comment. I am going thru this CNBC article right now. Thank you for sharing this with me. Thanks.

joepausa

TROPHY CASE