NutterButter
Footballguy
What's "spending"? We talking everything we spend on now minus things like mortgage and anything for kids? I guess you'd have to add in or subtract the cost of healthcare depending on what that is going to amount to.
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I wanna be rich (1 Viewer)
- Thread starter Otis
- Start date
cstu
Footballguy
It depends if you plan to have your house paid off by then. You could subtract the kids but I imagine when you're retired there are other things you'll want to spend money on so it's probably wash.
Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
Last edited by a moderator:
mr roboto
Footballguy
Most people don't get rich working for someone else. Otis has one of the few jobs that you can work for someone else are get truly rich. But only if you don't spend it.
Most wealthy folks invested in assets that appreciate and generate income (businesses, real estate etc) or innovated/invented something. But a high priced attorney is actually one of the few professions where you can simply work and save and accumulate money to become wealthy.
Most wealthy folks invested in assets that appreciate and generate income (businesses, real estate etc) or innovated/invented something. But a high priced attorney is actually one of the few professions where you can simply work and save and accumulate money to become wealthy.
Otis
Footballguy
Actually helpful GB thanks. Congrats on being where you are.Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
Yes the house is a big money on my back and will be for years no question. Was actually talking to the wife about that yesterday. My primary goal is going to be paying it off as fast as humanly possible. I don't view it as a waste;it will be a great place to raise our family, and once paid off, is basically an asset that will likely only increase in value over time. Worst case we sell it and have a big pile of cash as a result. I'm comfortable with that. Still I haven't made the first mortgage payment and I already can't wait to make the last one.
We are working in small ways on some of it already. I think if we are really good we may be able to pay it off in 10 years. Maybe even less. We have for almost 3 years now carried on absurd lease on a luxury SUV. Waste. So mad about that, but we were younger and dumber then, and have since learned a great deal. We will replace that with a Honda CRV or pilot, either a lease or a CPO purchase. My car is nearing 8 years old, bought it cash, and I have no intention of upgrading anytime soon. I try to buy clothes on sale, but cheap when I can. We are leaning out as much as we can. And then my goal is going to be save whatever pennies we can and put them towards the mortgage. Maybe a huge extra payment at the end of each year. Rinse repeat.
It will take some discipline. We will need to eat out less, we have been bad about that, but with a nice kitchen, we will hopefully be more inclined to use it (our current kitchen is really terrible).
So good wisdom from you here, thanks. I focus on eliminating what will be our only debt, though a hefty one, we will get there eventually. Maybe in 10 years I then have the freedom to change jobs, or not, but at least have a choice. Without a mortgage I could cut my salary in a big way and we still would be OK (the only negative is the high taxes in my area, but that's a fact of life around here).
Zegras11
Footballguy
Otis, just figure out what the payment would be if it were ten years and make that payment each month. Much easier to make a smaller payment each month than try and save for a huge one once a year.Actually helpful GB thanks. Congrats on being where you are.Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
Yes the house is a big money on my back and will be for years no question. Was actually talking to the wife about that yesterday. My primary goal is going to be paying it off as fast as humanly possible. I don't view it as a waste;it will be a great place to raise our family, and once paid off, is basically an asset that will likely only increase in value over time. Worst case we sell it and have a big pile of cash as a result. I'm comfortable with that. Still I haven't made the first mortgage payment and I already can't wait to make the last one.
We are working in small ways on some of it already. I think if we are really good we may be able to pay it off in 10 years. Maybe even less. We have for almost 3 years now carried on absurd lease on a luxury SUV. Waste. So mad about that, but we were younger and dumber then, and have since learned a great deal. We will replace that with a Honda CRV or pilot, either a lease or a CPO purchase. My car is nearing 8 years old, bought it cash, and I have no intention of upgrading anytime soon. I try to buy clothes on sale, but cheap when I can. We are leaning out as much as we can. And then my goal is going to be save whatever pennies we can and put them towards the mortgage. Maybe a huge extra payment at the end of each year. Rinse repeat.
It will take some discipline. We will need to eat out less, we have been bad about that, but with a nice kitchen, we will hopefully be more inclined to use it (our current kitchen is really terrible).
So good wisdom from you here, thanks. I focus on eliminating what will be our only debt, though a hefty one, we will get there eventually. Maybe in 10 years I then have the freedom to change jobs, or not, but at least have a choice. Without a mortgage I could cut my salary in a big way and we still would be OK (the only negative is the high taxes in my area, but that's a fact of life around here).
I have always done this. Down the road, the extra equity has always created better opportunities for me down the road....
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jamny
Footballguy
yeah, we paid ours in 12 years. A little extra each month and one additional payment a year.
tommyGunZ
Footballguy
The key to being debt free isn't eating out less Oats. It's being happy and satisfied with not having the new, big, shiny thing every few years. Once you get past that part of your life (if you ever do), you'll be debt free extremely quickly.Actually helpful GB thanks. Congrats on being where you are.Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/PlanThe most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
Yes the house is a big money on my back and will be for years no question. Was actually talking to the wife about that yesterday. My primary goal is going to be paying it off as fast as humanly possible. I don't view it as a waste;it will be a great place to raise our family, and once paid off, is basically an asset that will likely only increase in value over time. Worst case we sell it and have a big pile of cash as a result. I'm comfortable with that. Still I haven't made the first mortgage payment and I already can't wait to make the last one.
We are working in small ways on some of it already. I think if we are really good we may be able to pay it off in 10 years. Maybe even less. We have for almost 3 years now carried on absurd lease on a luxury SUV. Waste. So mad about that, but we were younger and dumber then, and have since learned a great deal. We will replace that with a Honda CRV or pilot, either a lease or a CPO purchase. My car is nearing 8 years old, bought it cash, and I have no intention of upgrading anytime soon. I try to buy clothes on sale, but cheap when I can. We are leaning out as much as we can. And then my goal is going to be save whatever pennies we can and put them towards the mortgage. Maybe a huge extra payment at the end of each year. Rinse repeat.
It will take some discipline. We will need to eat out less, we have been bad about that, but with a nice kitchen, we will hopefully be more inclined to use it (our current kitchen is really terrible).
So good wisdom from you here, thanks. I focus on eliminating what will be our only debt, though a hefty one, we will get there eventually. Maybe in 10 years I then have the freedom to change jobs, or not, but at least have a choice. Without a mortgage I could cut my salary in a big way and we still would be OK (the only negative is the high taxes in my area, but that's a fact of life around here).
Actually helpful GB thanks. Congrats on being where you are.Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
Yes the house is a big money on my back and will be for years no question. Was actually talking to the wife about that yesterday. My primary goal is going to be paying it off as fast as humanly possible. I don't view it as a waste;it will be a great place to raise our family, and once paid off, is basically an asset that will likely only increase in value over time. Worst case we sell it and have a big pile of cash as a result. I'm comfortable with that. Still I haven't made the first mortgage payment and I already can't wait to make the last one.
We are working in small ways on some of it already. I think if we are really good we may be able to pay it off in 10 years. Maybe even less. We have for almost 3 years now carried on absurd lease on a luxury SUV. Waste. So mad about that, but we were younger and dumber then, and have since learned a great deal. We will replace that with a Honda CRV or pilot, either a lease or a CPO purchase. My car is nearing 8 years old, bought it cash, and I have no intention of upgrading anytime soon. I try to buy clothes on sale, but cheap when I can. We are leaning out as much as we can. And then my goal is going to be save whatever pennies we can and put them towards the mortgage. Maybe a huge extra payment at the end of each year. Rinse repeat.
It will take some discipline. We will need to eat out less, we have been bad about that, but with a nice kitchen, we will hopefully be more inclined to use it (our current kitchen is really terrible).
So good wisdom from you here, thanks. I focus on eliminating what will be our only debt, though a hefty one, we will get there eventually. Maybe in 10 years I then have the freedom to change jobs, or not, but at least have a choice. Without a mortgage I could cut my salary in a big way and we still would be OK (the only negative is the high taxes in my area, but that's a fact of life around here).
Glad you're making the right steps. It's not easy by any means.
Deja vu:Actually helpful GB thanks. Congrats on being where you are.Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/PlanThe most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
Yes the house is a big money on my back and will be for years no question. Was actually talking to the wife about that yesterday. My primary goal is going to be paying it off as fast as humanly possible. I don't view it as a waste;it will be a great place to raise our family, and once paid off, is basically an asset that will likely only increase in value over time. Worst case we sell it and have a big pile of cash as a result. I'm comfortable with that. Still I haven't made the first mortgage payment and I already can't wait to make the last one.
We are working in small ways on some of it already. I think if we are really good we may be able to pay it off in 10 years. Maybe even less. We have for almost 3 years now carried on absurd lease on a luxury SUV. Waste. So mad about that, but we were younger and dumber then, and have since learned a great deal. We will replace that with a Honda CRV or pilot, either a lease or a CPO purchase. My car is nearing 8 years old, bought it cash, and I have no intention of upgrading anytime soon. I try to buy clothes on sale, but cheap when I can. We are leaning out as much as we can. And then my goal is going to be save whatever pennies we can and put them towards the mortgage. Maybe a huge extra payment at the end of each year. Rinse repeat.
It will take some discipline. We will need to eat out less, we have been bad about that, but with a nice kitchen, we will hopefully be more inclined to use it (our current kitchen is really terrible).
So good wisdom from you here, thanks. I focus on eliminating what will be our only debt, though a hefty one, we will get there eventually. Maybe in 10 years I then have the freedom to change jobs, or not, but at least have a choice. Without a mortgage I could cut my salary in a big way and we still would be OK (the only negative is the high taxes in my area, but that's a fact of life around here).
Otis said:
Fennis
Footballguy
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cstu
Footballguy
You mean if you decide to not pay it instead of selling it?
A house is an investment that you get to live in. How many other investments can a person make where a bank will lend them $1M with only 20% down and is unlikely to down over the long-term?
With interest rates so low and being able to deduct interest off your taxes someone will a house the price of Otis' is living there practically for the cost of upkeep. Instead of paying more than your mortgage amount you can put your money in a safe preferred stock and come out at least 3% ahead even after the dividend taxes.
cstu
Footballguy
Philosophically I don't consider an investment to be a debt. Debt to me is money you've already spent and are required to pay off.
Fennis
Footballguy
fair enough. either way we are in agreement on not paying it off and using that money towards other investments.
NewlyRetired
Footballguy
I have also heard people say your primary residence should not be considered an investment.Many different ways to look at it and a lot depends on what your goals are.
For me personally, removing the mortgage liability was key in retiring early.
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Mark Davis
Footballguy
Mark Davis
Footballguy
Great post. One thing I want to throw out that someone else mentioned is that often times you get rich off some sort of investment you hold or a business idea. Many times that comes from having the freedom TF mentioned here. I attained most of what I have from a business idea. However, I invested more heavily in it when I did because my mortgage had been paid down quite a bit. I felt the freedom to take a bigger stake in business holdings because my mortgage debt had been lowered. Business opportunities aren't always screaming at you when they present themselves. Many times I've found they are marginal looking ideas that you develop into something more. For me to commit to what I did, I needed to mentally be comfortable with risking that. In my case, that took peace of mind knowing my mortgage debt had been reduced and that if I had failed I had a much lesser future debt due to my work toward my mortgage.Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
The whole paying your mortgage off debate has a lot of different angles to look at it from. I always looked at it from a strict balance sheet approach. I worked hard to pay my starter home mortgage down by paying extra every month. Some people thought I was crazy, but much of this was going on around 1999 and 2000 for me. At the time a lot of people were investing in tech funds, larger growth, higher return. Go chart QQQ from January 2000 until now. For 15 years that money is dead money. Instead of parking it there, I chose to pay off that mortgage. Granted I've moved now but had I simply stayed, even had I refinanced to a lower rate, imagine 5-7%+ compounded over those years while my QQQ's simply were underwater and just now becoming even. Even if you take the S&P 500 index, I use VFINX for my investments in that, chart that fund from January 2000 to now. Your simple interest on paying off your mortgage debt would have you ahead.
I'm not saying that more times than not putting it in a mutual fund won't work out to your favor over paying your mortgage. Obviously those of us kind of starting out in that early 2000 era had a unique experience to what most do. What I am saying is that there is a risk/reward tradeoff to not paying your mortgage down and investing it instead. Paying your mortgage is the old one in the hand versus two in the bush thing. You may come out ahead investing or you may not, your mortgage paydown is a sure thing. If you go for the investment side, you best hope your idea works out in business or you aren't investing at the wrong point in the cycle. If you were making this decision in January 2000 when I was, look at where you would be.
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eurotrashman
Footballguy
Where does gambling fit into your equation? Is that part of the budget of living below your means?Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
jamny
Footballguy
Henry Ford
Footballguy
He probably doesn't spend more than $1-2K a year on lottery tickets.Where does gambling fit into your equation? Is that part of the budget of living below your means?Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
Mr. Pickles
Footballguy
I could make you rich, Oat. I've offered to be your personal financial adviser for years. PM inbox remains empty.
Yes. Nowhere did I say we save every single penny and don't do anything fun. My wife and I have agreed to X amount of money that we can each do whatever we want with. My gambling comes out of this money.Where does gambling fit into your equation? Is that part of the budget of living below your means?Oat,
Have wanted to reply to this for awhile, but was on vacation and work, etc...but anyway.
In your very first post you write: " Just enough to never have to go to a job again out of obligation".
About 4-5 years ago, I was in the exact same boat....did a bunch of reading of various blogs, books, etc and posts in here. Here's what I did (at 3 very high level steps)...there's a lot involved in each of these. But if I can make one overarching statement, it's "live way below your means".
Step One - The Goal/Plan
The most important thing IMO is to lay out a final goal and get Mrs. Otis to be aligned with whatever the goal is. This will by far be the biggest hurdle. From there, start mapping out a plan...again, alignment is key. Expect arguments, fights, negotiating, etc.
Step Two - Eliminate Debt
The biggest first step in this plan is to commit to paying off all of your debt ASAP. If you look at the core of the definition of "debt", it's you owing something to someone. If you have none of this, you're on your own terms. Now I realize you're getting ready to get a house at double the mortgage, so you're already behind the 8-ball there.
Now typically when I mention this, I'll have a bunch of people start attacking me....."why would you pay off debt at 4% when you can get 7-8% returns in the market"...yada yada yada. In short, my answers are "Freedom, Security, removing my biggest single monthly payment for the rest of my life". As I'm only 6 months away from this happening, it's absolutely liberating knowing how much free cash I'll have every year to literally do whatever I want with (add more to retirement, invest in businesses, real estate, travel, etc).
FWIW, I was putting 35% of my take home salary towards paying off debt. (i.e. I live way below my means)
Step Three - Figure out minimum costs you need to live
This is obviously different for everyone, but once you've eliminated debt, you can probably get a good idea of what you need to live off of. Also, this # goes down once kids are out of the house. From there, work backwards, and that will tell you what sort of income you need to retain to keep the lifestyle that you want. Then, you can figure out how to obtain that income however you wish.
It's that easy!
You're a smart guy, I don't think I'm telling you anything that you probably don't already know; but I could be wrong here, but I imagine that you're the type of guy that needs to see it laid out in black and white by people who have done what you want to do. I'm like that alot.
It's an absolute amazing feeling knowing that I basically have all of these different options in front of me.
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In addition to the thread I linked above, here's another good discussion on the merits of paying or not paying off your mortgage.
http://forums.footballguys.com/forum/index.php?showtopic=639118
http://forums.footballguys.com/forum/index.php?showtopic=639118
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Otis
Footballguy
Fennis
Footballguy
Yes, there are scenarios where it makes sense to pay off the mortgage early. IMO the best way to do that would be to pay it off lump sum with your investments when you want to remove the liability, not paying it down monthly.NewlyRetired said:
But then again you did what many of are trying to do and haven’t accomplished yet, so whatever you did worked.
NewlyRetired
Footballguy
We did a bit of both. We cashed in some stock options to pay off a bulk of it and also chipped away at it monthly.
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Otis
Footballguy
Your lovehate for me is a little weird and obsessive. Admit it.Starting the same thread every year or so? I agree.Otis said:Borders on creepy.Tiger Fan said:
Solid notebook
Doesn't really have anything to do with love or hate. Search function finds your repetitive threads quite easily.Your lovehate for me is a little weird and obsessive. Admit it.Starting the same thread every year or so? I agree.Otis said:Borders on creepy.Tiger Fan said:
Solid notebook
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Otis
Footballguy
You honestly have nothing better to do with your time?Doesn't really have anything to do with love or hate. Search function finds your repetitive threads quite easily.Your lovehate for me is a little weird and obsessive. Admit it.Starting the same thread every year or so? I agree.Otis said:Borders on creepy.Tiger Fan said:
Solid notebook
fatguyinalittlecoat
Footballguy
Always fun when somebody asks this in the FFA. Especially great when it's somebody like Otis with 50,000 posts.
You honestly have nothing better to do with your time?Doesn't really have anything to do with love or hate. Search function finds your repetitive threads quite easily.Your lovehate for me is a little weird and obsessive. Admit it.Starting the same thread every year or so? I agree.Otis said:Borders on creepy.Tiger Fan said:
Solid notebook
Better than using my time to post another look-at-me thread. It took less than two minutes anyways. Why do you care what I do while watching Netflix?
The_Man
Footballguy
Not hearing much college talk in here. My oldest kid is about to start his junior year of high school and college costs are staring down the gun barrel at me.
Oats, by the time your little nippers are ready for college, private colleges will run $80-100k per year. So be sure to set aside a million or so for that.
Oats, by the time your little nippers are ready for college, private colleges will run $80-100k per year. So be sure to set aside a million or so for that.
TenTimes
Backhoe Operator
NCCommish
Footballguy
Sarnoff
Footballguy
The way you ask for advice and then don't take it is approaching Woz-like levels.You honestly have nothing better to do with your time?Doesn't really have anything to do with love or hate. Search function finds your repetitive threads quite easily.Your lovehate for me is a little weird and obsessive. Admit it.Starting the same thread every year or so? I agree.Otis said:Borders on creepy.Tiger Fan said:
Solid notebook
Otis
Footballguy
I've just never understood the guys who follow other posters here so closely. I'm not sure what your beef is or why you care about me so much, but it's just a little weird. Flattering, but still weird.You honestly have nothing better to do with your time?Doesn't really have anything to do with love or hate. Search function finds your repetitive threads quite easily.Your lovehate for me is a little weird and obsessive. Admit it.Starting the same thread every year or so? I agree.Otis said:Borders on creepy.Tiger Fan said:
Solid notebook
Better than using my time to post another look-at-me thread. It took less than two minutes anyways. Why do you care what I do while watching Netflix?
Otis
Footballguy
This sounds awful.
A guy I know recently advised me that you shouldn't stock up too much for college (i.e., in a 529). His view is that you can always borrow for college tuition; you can't borrow for your retirement. In any event, I've got 529s locked and loaded and on auto pilot.
NewlyRetired
Footballguy
There is an old rough rule of thumb that states you should save 20% of your household gross income towards retirement before saving for college. The 20% is a very rough number and could be lowered if you are expecting a pension.
NCCommish
Footballguy
Not really my fight but as a guy who has had a "follower" or two I do have an opinion to offer. To be fair when it comes to O you do come off a bit stalkerish at times. And sometimes I want to ask if he stole your lunch money in school or something as you seem to have an axe to grind with him. And to turn the question back a bit what do you care what he does while he is watching Netflix? Do you have to read his posts? Send us a coded message and we'll send the cops to free you.You honestly have nothing better to do with your time?Doesn't really have anything to do with love or hate. Search function finds your repetitive threads quite easily.Your lovehate for me is a little weird and obsessive. Admit it.Starting the same thread every year or so? I agree.Otis said:Borders on creepy.Tiger Fan said:
Solid notebook
Better than using my time to post another look-at-me thread. It took less than two minutes anyways. Why do you care what I do while watching Netflix?
The_Man
Footballguy
Almost any kind of college savings seems almost like a pipe dream anyway. Let's say your HHI is $120,000 and following your rule of thumb, you're putting aside $24,000 for retirement (which is pretty ambitious for most folks). Now you've got $96,000. Take off another $20,000 (roughly) for taxes and you're at $76K. Following another rule of thumb in this thread, and devote 25% of your take home pay to housing - that's $19K, so now you've got $57,000 left. That's for an entire year for everything else - food, car, utilities, vacation, clothes, you name it.
The idea - that on that income - you can save any kind of appreciable money toward college tuition costs nearing $50k per year is not reasonable.
Personal finance and diet threads are ones I always read, regardless of original poster. They offer good insight from other FBGs. You don't really see me "stalking" Otis on any other numerous topics he posts in, because I'm not interested in those topics.Not really my fight but as a guy who has had a "follower" or two I do have an opinion to offer. To be fair when it comes to O you do come off a bit stalkerish at times. And sometimes I want to ask if he stole your lunch money in school or something as you seem to have an axe to grind with him. And to turn the question back a bit what do you care what he does while he is watching Netflix? Do you have to read his posts? Send us a coded message and we'll send the cops to free you.You honestly have nothing better to do with your time?Doesn't really have anything to do with love or hate. Search function finds your repetitive threads quite easily.Your lovehate for me is a little weird and obsessive. Admit it.Starting the same thread every year or so? I agree.Otis said:Borders on creepy.Tiger Fan said:
Solid notebook
Better than using my time to post another look-at-me thread. It took less than two minutes anyways. Why do you care what I do while watching Netflix?
I'm not going to pretend not to remember past threads here. There is no axe to grind with Otis specifically, I'm merely pointing out someone making the same posts and mistakes over and over again.
$57K is a lot of money for food, cars, clothing, etc. I think saving a couple grand per kid each year is definitely doable on these numbers. Besides even if you don't have college fully funded, any little bit helps.
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