my situation and your advice/thoughts

[Joseph]

luckbeatsme wrote:

My taxable investments are all in individual stocks.

Click to expand...

162k here while 132k in cars.

That is a major dilemma.

Fire your advisor.

[NaOH]

.

[Slav4ikMD]

Guys, c'mon the person is making 500k, presumably is saving 20+% of income, why can't she spend what's left over on the cars she enjoys?  To each her own.

 

BTW had no idea a Jeep costs that much!!

[Joseph]

Slav4ikMD wrote:

why can’t she spend what’s left over on the cars she enjoys?

Click to expand...

Do you see any debts listed?

That is why.

Buying cars with cash is fine.

I understand the income level, trust me.

[luckbeatsme]

I've learned my lesson.  I am a big car person, but like I said in the original post, it is what it is now.  In the future, yes, no loans for cars.  My advisor gave me permission to get the cars, as he knows it brings me joy.  Either way, extra funds will now go to loans and i'll be smarter as I learn more from this site and you all.

And wranglers normally don't cost that much...I had lots of upgrades done for off road stuff

[nyu04]

For what it's worth, I'm a big car fan as well so I understand where you're coming from.  Like everyone said, get rid of the car/student loans.  You make a ton of money - adjust course a bit and you will be well on your way to financial success/freedom.

P.S. - nice choice on the P85, love that car!

[scbunker]

Posting isn't working right for me. See attached for a reply.

[scbunker]

And one more: my reply to the original topic.

[Ivy]

You're looking for advice and plenty of people here, myself included, are happy to oblige.  

Congrats on the excellent income!  You're WAY ahead of me when I was your age.  Enough people have beat you up about the cars; I think they're right, but no sense in piling on.  Keep the cars for a long time and the cost/year ownership goes way down.  If that's the worst financial mistake you ever make, your doing pretty ************************ good.

What would I do in your situation?

1. Keep your current emergency fund.  Your taxable account could be used if things get desperate.  They won't, but it's nice to know that it's there.


2. Max out all your retirement and HSA contributions.


3. Fire the advisor, move your IRA to Vanguard, then roll the 401k into the Vanguard account.  Low cost index funds.  Plenty of articles on this site on which funds.  Keep it relatively simple.


4. Start the 529s for the kids.


5. Knock out the credit card debt.  Dave Ramsey 'debt snowball' style would be my choice.  You make enough money that it probably doesn't matter what order you do it, as long as you do it as fast as possible.  All debt is bad, but credit card debt is IMO the worst.


6. Attack the student loan debt.  This is undoubtedly the hardest part.  That's A LOT of student loan debt!  It's going to painful, but the more pain you can tolerate (within reason) the faster that monster goes away!  You could use your taxable account to knock out most of the debt, but I wouldn't.  I think the pain of going through the payback process will help you in the future.  I'm not saying it's wrong.  I just wouldn't do it that way.


7. Attack the car loans.  They probably will be relatively small amounts by this point, because you haven't bought another set of expensive cars, right?  Right?!


8. Save enough cash to convert the Vanguard IRA to a Roth IRA.  The tax hit is going to sting, so save up for it ahead of time.


9. Start funding a backdoor Roth for you and your wife.


10. Save at least 20% of your pretax income.


11. Pay off the house.  Many folks like the tax deduction, as it's one of the few deductions high-income earners still get.  However, I can tell you having no mortgage is one of the most freeing feelings of my life!  No debt at all, great income, and you're on easy street!

Honestly, you're doing pretty well already.  Keep up the good work!

[luckbeatsme]

Correct, no other expensive cars  Thanks for the encouraging words/advice!

[Ivy]

Definitely more new and/or expensive cars in your future!  AFTER you're out of debt and can pay cash for them.  

I neglected to address life insurance. I'd probably bump up another 1 (maybe even 2) more million for the next 10 years or so.  20-25 years from now you probably will have enough money you won't need any life insurance.

[noraz123]

Congrats on the soon increasing family!

A few thoughts:

 

• Max out your tax deferred accounts as much as possible. This means max out your 401k. You have 1099 income, and are using a SEP IRA.  That is great. But consider moving current SEP IRA and future contribution to a solo 401k.  You will likely have more room for investing, and the solo 401K will allow you to do a backdoor Roth.  I would recommend a low cost provider for the solo 401k, such as Vanguard or Fidelity.


• Consider dumping the Variable Life Insurance Policy.  These are notoriously bad investments, with high (yet hidden) fees. Read this site's blog article, "How to Dump Your Life Insurance Policy".  If you need more assistance, checkout EvaluateLifeInsurance.Org, a website highly regarded by Bogleheads, and recommended in the comments in the above mentioned blog article.


• Consider dumping your financial advisor. If your financial advisor sold you a variable life insurance policy, s/he wasn't a good advisor. The majority of the really good advisors don't charge a % of assets, but rather charge by the hour.  Don't be scared by a high hourly rate.


• Consider going it alone (no financial advisor).  Chances are you don't need an advisor.  Read the Bogleheads website wiki, this site, and check out If You Can - https://www.etf.com/docs/IfYouCan.pdf.


• 
  
  And last, this is just me being judgmental, get tens of thousands of dollars of enjoyment from your cars, or buy more affordable ones.

You are doing well, and way ahead of many others.  Keep reading this site, and you'll be in great shape in no time.

[noraz123]

Congrats on the soon increasing family!

A few thoughts:

• Max out your tax deferred accounts as much as possible. This means max out your 401k. You have 1099 income, and are using a SEP IRA.  That is great. But consider moving current SEP IRA and future contribution to a solo 401k.  You will likely have more room for investing, and the solo 401K will allow you to do a backdoor Roth.  I would recommend a low cost provider for the solo 401k, such as Vanguard or Fidelity.


• Consider dumping the Variable Life Insurance Policy.  These are notoriously bad investments, with high (yet hidden) fees. Read this site's blog article, "How to Dump Your Life Insurance Policy".  If you need more assistance, checkout EvaluateLifeInsurance.Org, a website highly regarded by Bogleheads, and recommended in the comments in the above mentioned blog article.


• Consider dumping your financial advisor. If your financial advisor sold you a variable life insurance policy, s/he wasn't a good advisor. The majority of the really good advisors don't charge a % of assets, but rather charge by the hour.  Don't be scared by a high hourly rate.


• Consider going it alone (no financial advisor).  Chances are you don't need an advisor.  Read the Bogleheads website wiki, this site, and check out If You Can - https://www.etf.com/docs/IfYouCan.pdf.


• 
  
  And last, this is just me being judgmental, get tens of thousands of dollars of enjoyment from your cars, or buy more affordable ones.

You are doing well, and way ahead of many others.  Keep reading this site, and you'll be in great shape in no time.

[scbunker]

Joseph wrote:

162k here while 132k in cars. That is a major dilemma. Fire your advisor.

Click to expand...

Translation: It seems obvious to us here that you should use your taxable investment monies to pay off loans. But your adviser has conflict of interest. If he recommends you pay off loans, then he removes $133K+ from his management, which reduces his AUM fee.

[jfoxcpacfp]

@luckbeatsme - see the attached. Having trouble posting.