It's been probably a little over a year now since I started "getting serious" about my finances. I'll spare you the details on why it took me so long to see the light, but I discovered WCI around 7-8 months ago. I am confident that I have moved in a very positive direction overall, but moving forward I wanted to get others input about how I'm doing and any changes I should make to my current plan. I guess this is kind of a mid-year tune up of sorts...it was sparked by WCI's recent article about being debt free.
Details:
35 y/o married, no kids.
Income: His: Approx 250k (can be more or less depending on extra shifts, bonuses, etc). I work primarily as a hospitalist, but also have a side gig doing suboxone treatment and cover at a pulmonary rehab program occasionally.
Hers: 56k
Airbnb rental: ~13k annually
Debt: Mortgage: 294k at 4% 30 year on a house probably worth between 500-600k
Loan from family for house renovations: 48k at 2.5% for 30 years
Student Loans: 102k at 2.6% fixed ($488/month)
Car Loan: 32k at 3.29%
Credit Cards (zero interest cards opened to pay off remaining high interest student loans and a down payment on the car): 41k at 0% for 18 months
Savings/Retirement Accounts: 220k This will be the first year we max out all tax advantaged accounts annually as well as contributing to a taxable account. This number includes a 10k emergency fund.
My concerns are related mostly to the debt. I have a total of just over 500k of debt right now. This is a lot obviously, but compared to where I was a year ago when I finally started paying off my student loans, it's actually better. Our home has also appreciated a lot in the last 4-5 years so our net worth is much higher than it used to be. I started with 250k of student loans, some with interest rates as high as 7.25%. I've gotten rid of everything except that last 102k at 2.6% and the balance on the zero interest credit cards. I kind of slipped backwards a little a few months ago when I decided to buy myself a new car and added a car loan to the mix. To be fair, it is an electric car and I am doing a lot more driving now then I used to due to a job change and I'll be getting a $7500 tax credit next year from it. It's saving me probably 2-3k a year on gas, so I don't feel too bad about it, but I still would rather not have a car loan.
My plan has been:
1. Focus on contributing as much as possible to my tax advantaged and taxable account now since I'm still relatively young and want to maximize time in the market.
2. Pay off car before the factory warranty is up (48 months).
3. Pay off credit cards before introductory period is up or transfer to another zero interest card at that time.
4. Make minimum payments on mortgage, family loan, and student loans given the low interest rates.
5. Downsize home in the next 1-3 years and move to my in-law's farm where we could build a much smaller house on free land and have a smaller mortgage (probably 100k less than we have now). We would pay off the family loan as soon as our current house sells of course.
Given that we're in one of the longest bull runs in history, I'm starting to question my plan. If the stock market were to drop significantly, I would want to be able to jump on the opportunity to buy lots of cheap stocks (like so many of you got to do in 2009 through now). More freedom from fewer fixed expenses would be nice in that kind of a market.
Should I stop contributing so much to the taxable account and instead focus on getting rid of the car loan asap (could probably get rid of it by the end of the year if I'm aggressive)? Should I try to pay off my student loans quicker? Or should I just stay the course and focus on accumulating stocks and not worry so much about the fact that stocks are rather expensive at the moment?
Just looking for general comments and criticism. We still have a lot of debt and that bothers me. I'd like to immediately get down to having nothing but the student loan and a smaller mortgage. That would feel comfortable to me. My next biggest concern is increasing the size of our retirement accounts. I feel that we're behind because the first 5 years I was in practice I wasn't contributing nearly enough to these accounts and we were spending too much. We're doing much better in that regard, however. If we stick to our budget we should be able to save 1/2 of our take home pay each year from this point forward. We are actively working on identifying ways to spend less by analyzing our purchases each month and looking at where the waste is.
Details:
35 y/o married, no kids.
Income: His: Approx 250k (can be more or less depending on extra shifts, bonuses, etc). I work primarily as a hospitalist, but also have a side gig doing suboxone treatment and cover at a pulmonary rehab program occasionally.
Hers: 56k
Airbnb rental: ~13k annually
Debt: Mortgage: 294k at 4% 30 year on a house probably worth between 500-600k
Loan from family for house renovations: 48k at 2.5% for 30 years
Student Loans: 102k at 2.6% fixed ($488/month)
Car Loan: 32k at 3.29%
Credit Cards (zero interest cards opened to pay off remaining high interest student loans and a down payment on the car): 41k at 0% for 18 months
Savings/Retirement Accounts: 220k This will be the first year we max out all tax advantaged accounts annually as well as contributing to a taxable account. This number includes a 10k emergency fund.
My concerns are related mostly to the debt. I have a total of just over 500k of debt right now. This is a lot obviously, but compared to where I was a year ago when I finally started paying off my student loans, it's actually better. Our home has also appreciated a lot in the last 4-5 years so our net worth is much higher than it used to be. I started with 250k of student loans, some with interest rates as high as 7.25%. I've gotten rid of everything except that last 102k at 2.6% and the balance on the zero interest credit cards. I kind of slipped backwards a little a few months ago when I decided to buy myself a new car and added a car loan to the mix. To be fair, it is an electric car and I am doing a lot more driving now then I used to due to a job change and I'll be getting a $7500 tax credit next year from it. It's saving me probably 2-3k a year on gas, so I don't feel too bad about it, but I still would rather not have a car loan.
My plan has been:
1. Focus on contributing as much as possible to my tax advantaged and taxable account now since I'm still relatively young and want to maximize time in the market.
2. Pay off car before the factory warranty is up (48 months).
3. Pay off credit cards before introductory period is up or transfer to another zero interest card at that time.
4. Make minimum payments on mortgage, family loan, and student loans given the low interest rates.
5. Downsize home in the next 1-3 years and move to my in-law's farm where we could build a much smaller house on free land and have a smaller mortgage (probably 100k less than we have now). We would pay off the family loan as soon as our current house sells of course.
Given that we're in one of the longest bull runs in history, I'm starting to question my plan. If the stock market were to drop significantly, I would want to be able to jump on the opportunity to buy lots of cheap stocks (like so many of you got to do in 2009 through now). More freedom from fewer fixed expenses would be nice in that kind of a market.
Should I stop contributing so much to the taxable account and instead focus on getting rid of the car loan asap (could probably get rid of it by the end of the year if I'm aggressive)? Should I try to pay off my student loans quicker? Or should I just stay the course and focus on accumulating stocks and not worry so much about the fact that stocks are rather expensive at the moment?
Just looking for general comments and criticism. We still have a lot of debt and that bothers me. I'd like to immediately get down to having nothing but the student loan and a smaller mortgage. That would feel comfortable to me. My next biggest concern is increasing the size of our retirement accounts. I feel that we're behind because the first 5 years I was in practice I wasn't contributing nearly enough to these accounts and we were spending too much. We're doing much better in that regard, however. If we stick to our budget we should be able to save 1/2 of our take home pay each year from this point forward. We are actively working on identifying ways to spend less by analyzing our purchases each month and looking at where the waste is.
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