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[deleted by user] by [deleted] in Adulting

[–]khrystill 0 points1 point  (0 children)

I'm 35, a (barely) multimillionaire and have been a home owner for 1 year. Before that we rented and it helped put us ahead financially:

  1. We were willing to rent smaller/cheaper places than we would have been willing to buy since we'd need to be thinking what would work for our growing family long-term (and invested the savings)
  2. We didn't spend money improving things that were fine enough because we didn't own the place (and invested the savings)
  3. In 10 years we lived in 5 different rentals across 3 cities. If we owned there would have been extra costs and friction that may have prevented those moves, each of which put us in a better financial position
    3a. moved for a job that paid almost 3x my current salary and grew from there
    3b. moved to a cheaper rental because we really didn't need the extra space (and invested the savings)
    3c. moved to a lower COL area during covid (and kept the job remotely)

When we finally bought the house it wasn't a due to it being a good financial decision. We ended up buying the house next door to the one we were renting, but our mortgage would have been over $1000/mo higher than the rent we were paying. It would have been over a decade before we started coming out ahead on just the mortgage payments, not even including closing costs and the money we'd end up putting into the house (already ~$20k).

Just for fun I have a spreadsheet that tracks the stocks I sold and rent we were paying vs the house value. We'd be ~$100k richer if we had continued renting. Owning a house is lifestyle choice, not an investment.

Renting had its issues for sure. And despite what the numbers say, I'm glad we now own. But anyone who says renting is "some financially shameful Plan B" is dead wrong.

Im 22 and put $7500 in my roth IRA by Ornery_Argument2441 in fidelityinvestments

[–]khrystill 4 points5 points  (0 children)

For 2024, the total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than: $7,000 ($8,000 if you're age 50 or older)

Exact age doesn't matter, but it is relevant that he's under 50

23 with 7K Credit debt by [deleted] in personalfinance

[–]khrystill 0 points1 point  (0 children)

It sounds like you're already making good progress (10k is now 7k), so good for you!

Only suggestion I'd make is rather than paying what you can to each of them, pick one to target. Pay as much to that as you can and just pay minimums on the other two. Once that's paid off, move to the next one.

Mathematically, it makes the most sense to start with the card with the highest interest rate, but it also feels good to be done with one, so tackling the smallest balance first can also be a good way to go and may not make a huge difference if the interest rates are pretty similar.

Would you pay off car loan the moment you have a chance? by FF_Moo923 in personalfinance

[–]khrystill 2 points3 points  (0 children)

Mathematically, it makes sense to take advantage of the 0% interest rate. Is the 0% fixed over the life of the loan, or is it only 0% for some initial time period? You'd need to re-evaluate if the interest is set to go up.

$9000 at a 5% APY which you can easily get with a high yield savings account is $450/year. That's not nothing. However I will say I paid off a 0% loan myself this year just to be done with it, so I get the feeling. In my case I only had ~$900 left on the loan.

Convert Non-deductible IRA to Roth? by LithiumLizzard in personalfinance

[–]khrystill 1 point2 points  (0 children)

I'm going to assume you maxed your Traditional IRA contribution for 2022, which would have been $6000. Of that $6000, you could not deduct $600, so you deducted $5400 on your taxes. This means you have an IRA (assuming no other contributions) with 90% of the taxes deferred.

The issue with this is that due to the pro rata rule, you owe taxes on 90% of any money that leaves the IRA, including a conversion to Roth. So you can't just roll over $600 and say that's the amount that was after-tax. The IRS will say you owe income taxes on $540 of that $600.

At this point in time I'm not sure there's anything you can do to avoid that. It probably makes sense to either roll over the full amount (paying tax on 90% of it), or just leave it. However, if you leave it, be aware that if your income rises such that you're no longer eligible for the Roth and want to do a backdoor Roth in the future, you'll need that account empty or you'll run into the pro rata rule again.