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  • Won the game. Now what!?

    2 docs (43,45) 2 kids (9,11) VHCOL area. Gross income 620K.

    My wife and I were both from very poor families and didn't get started on our wealth journey till our 30's due to educations. As a result we're really conservative investors and decided 5 years back to prioritize paying off our mortgages with the idea that we wanted to be financially stable on 1 income.
    With hindsight this decision was completely wrong given the markets (inexplicable) rise, but here we are, free and clear with 1Mil primary, a 500K rental (4% net), 200K in retirement 50K cash and 110K in brokerage.

    Now with everything paid and retirement max'ed we still have 15K a month spare. We're wondering how to invest wisely for kiddos colleges. With current valuations, half the country prevented from working, and the endless printing for COVID stimulus we're convinced we'll lose money in the markets over the next 10 years

    So acknowledging we've been wrong all this time, and could've got here sooner, any advice for not screwing up the next 5 years allocations very much appreciated đź‘Ť

  • #2
    You need to start putting money in the market. Congrats on paying off your homes! That is amazing, especially in a VHCOL area (although $1Mil property in a VHCOLA area is usually a shack.... or you live in just a HCOLA.) Please please just start investing. You do not know what will happen, put it in and don't look. Automate it. It will grow... and especially since you don't need it now and probably (by your kids ages) not for another 15+ years, you will be fine.

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    • #3
      With all due respect, none of us have a clue what the markets will be doing over the next 10 years. Search posts from this march if you need to be convinced. So- throw that extra 15k into low e/r passive index funds- VTSAX or whatever your asset allocation is. Do that steadily each month over the next 10 years and I guarantee you wont be disappointed, even if some of that period of time was "losing" money- which also means you were "buying on sale". Try to time the market instead, and chances are you will be disappointed.

      can also do some 529 for the kids, but the plan stays the same.

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      • #4
        Originally posted by Medica8ed View Post
        2 docs (43,45) 2 kids (9,11) VHCOL area. Gross income 620K.

        My wife and I were both from very poor families and didn't get started on our wealth journey till our 30's due to educations. As a result we're really conservative investors and decided 5 years back to prioritize paying off our mortgages with the idea that we wanted to be financially stable on 1 income.
        With hindsight this decision was completely wrong given the markets (inexplicable) rise, but here we are, free and clear with 1Mil primary, a 500K rental (4% net), 200K in retirement 50K cash and 110K in brokerage.

        Now with everything paid and retirement max'ed we still have 15K a month spare. We're wondering how to invest wisely for kiddos colleges. With current valuations, half the country prevented from working, and the endless printing for COVID stimulus we're convinced we'll lose money in the markets over the next 10 years

        So acknowledging we've been wrong all this time, and could've got here sooner, any advice for not screwing up the next 5 years allocations very much appreciated đź‘Ť
        How were you "wrong" to pay off debt? It would have been more better to invest in equities, but you weren't wrong.

        If I had an extra 15k/mo, I would put 75k into each kid's 529 in an age-based Vanguard fund, do 2020/2021 bdRoths for each parent, and put the rest into VTSAX in the brokerage. Depending on how you are feeling, I would do the same thing in 2022 vs skip the 529s. And in 2023, bdR and VTSAX. And in 2024, continue bdR and VTSAX and cut to part-time. And in 2028 when the 9 yo leaves the nest, probably just retire altogether.

        There is your one paragraph retirement plan.

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        • #5
          Welcome to the forum OP.

          You did nothing wrong in prioritizing payoff. You saved dollars and had a plan and executed it. No crystal ball on market predictions and home ownership in VHCOL is in itself a form of investment.

          So keep up that 15k into retirement and 529 for the kids. Make sure retirement options are fully maxd out. We were surprised on options initially not divulged by our HR.... Megabackdoor namely .

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          • #6
            You haven’t actually won the game yet. You are in a good position to do quite well, but you need to start investing more and getting comfortable with doing so.

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            • #7
              As G mentioned, you weren't wrong. You did what you were comfortable with and that's usually never wrong. With regards to retirement, you need to continue to do what you're comfortable with but if you're looking long term, the market is going to be the best answer. Don't forget that the markets spend a large amount of time near all time highs.

              Investing in Stocks At All-Time Highs (awealthofcommonsense.com)

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              • #8
                15K/mo for the past 10 years in VBINX .....

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                • #9
                  Won the game? Doesn’t look like you’ve started playing yet.

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                  • #10
                    You win the game when you have the ability to walk away tomorrow and still have the financial means to accomplish all your life goals.

                    You’re doing well but not there yet. You need to figure out what a financially independence or retirement number looks like and then see what sort of saving and investing returns would get you there in the time frame you have.

                    You don’t have a 529? You’re kids are both less than 10 years away from college. Sounds like you need to supercharge that going forward if you’re going to cover higher education.

                    You could remain conservative investors, but doing so may delay how long it takes you to reach retirement or financial independence, potentially by a lot.

                    Also, stop pretending to know what should or could happen to the market.

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                    • #11
                      Winning the game typically refers to achieving financial independence, so unless you plan to retire right now on your $260k, you haven't won.

                      Impressive job paying off the mortgages but you need to prioritize investing in a taxable account right now. I would personally put some in a 529 for each kid. How much? You'll get lots of different opinions on that.

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                      • #12
                        Originally posted by Anne View Post
                        You haven’t actually won the game yet. You are in a good position to do quite well, but you need to start investing more and getting comfortable with doing so.
                        Yeah. You just got past the first three innings. Starting pitcher still needs to go a few more for a quality start.

                        -Firm up the retirement goals and extrapolate the savings needed with your Asset Allocation determination (appears to be conservative).
                        -College funding plans -- separate from retirement goals -- plan goals and try to superfund 529s if able. -- but NOT at detriment of retirement goals --

                        As people pointed out - winning the game -- Financial Independence -- when you can walk away from it all.

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                        • #13
                          Just find an AA that you can be comfortable with. If it is less then 50% equity let is know so we can tell you to toughen up cupcake. But if you start putting money in the market know you will have won the game in a decade or so.

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                          • #14
                            Originally posted by Anne View Post
                            You haven’t actually won the game yet. You are in a good position to do quite well, but you need to start investing more and getting comfortable with doing so.
                            I agree. You have a 2 TD lead going into halftime. Lots of game yet to be played.

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                            • #15
                              It sounds like you are doing well. But, you may want to hire a fee for service financial planner. It seems you don't trust your gut.

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