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  • #16
    FIREman -When at a cocktail party and people are talking about their vacation homes, fancy trips or cars.... bring up that savings rate! 😎 That is some serious wealth building there. Very few could touch that kind of discipline. saving while you are young is a huge ingredient for wealth. Keep doing that. You are the joneses to me in that regard. I can’t wait to see your net worth update in 5 years if you have that kind of discipline. (48/50 $6.5 NW no debt at all, no inheritance, started at zero 20 years ago, expensive kids, anticipated spouse retirement in 12 years, savings rate before taxes 22%).

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    • #17
      My physician friends who have expensive second beach homes and leased high end cars are all still working while I am comfortably retired. Food for thought.

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      • #18
        Originally posted by FIREman View Post
        I think you've all helped us avoid making a bad decision. We knew deep down it was probably not the best idea.
        Fullhouse11 - you're right this is us starting to feel the keeping up with the Joneses. We have decided to wait.

        It's exciting now that we are at the point where we are debt free (besides mortgage) and the money is starting to accumulate. Our savings rate in 2020 was 56% of net earnings. It's helpful to be reminded of the end goal in sight - financial independence. We've worked too hard over the last 8 years (Residency and post-residency) to not accumulate debt, paid off all student loans, paid off cars, and just keep shoveling into savings. Would be a shame to stunt our growth now by making an unnecessary luxury purchase.
        Smart move.

        High end rental property has so many things going against it - high mortgage, only few weeks of peak rental when you also want to use it, guests trashing it just because they paid 5K, you being long distance landlords, higher property taxes not being the primary home, and constant anxiety about money and upkeep and whether the renters can bail out in the last minute and so on.

        This pandemic has taught us that nothing is certain. A lock down or marked decline in rentals can cause havoc on your mortgage payments. I would rather spend 6-10K renting from AirBnB and VRBO and such, not only at the beach place but in other places too. Explore USA and the world when you are young and DINK.

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        • #19
          Originally posted by FIREman View Post
          Our savings rate in 2020 was 56% of net earnings.
          just because....what was your savings rate based on gross household income?

          Originally posted by FIREman View Post
          We have several friends who own property there as well, who have given us valuable insight into the rental market...which is reliably hot.
          why cant you rent their places for below market rate? what else are "friends" for?

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          • #20
            Originally posted by Fullhouse11 View Post
            FIREman -When at a cocktail party and people are talking about their vacation homes, fancy trips or cars.... bring up that savings rate! 😎 That is some serious wealth building there. Very few could touch that kind of discipline. saving while you are young is a huge ingredient for wealth. Keep doing that. You are the joneses to me in that regard. I can’t wait to see your net worth update in 5 years if you have that kind of discipline. (48/50 $6.5 NW no debt at all, no inheritance, started at zero 20 years ago, expensive kids, anticipated spouse retirement in 12 years, savings rate before taxes 22%).
            The reality is that you could actually say your savings rate was 100% and heads would nod and polite smiles. You are speaking a foreign language that does not translate.
            Now if you tell the dollar amount they will only think you are crass, uncouth, and a not so humble brag.Give up on the ego satisfaction with friends. One out of 100 and the spouse will be like "what?". Boring conversation for those that don't speak the language.

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            • #21
              Originally posted by Tim View Post

              The reality is that you could actually say your savings rate was 100% and heads would nod and polite smiles. You are speaking a foreign language that does not translate.
              Now if you tell the dollar amount they will only think you are crass, uncouth, and a not so humble brag.Give up on the ego satisfaction with friends. One out of 100 and the spouse will be like "what?". Boring conversation for those that don't speak the language.
              It wasn't literal instructions Tim. I should have said, "think about your savings rate and know that..."

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              • #22
                Peds 43% gross in 2020. 2020 was a "good" year for us, financially. I feel privileged saying that knowing that it was not a good year for so many. But, I see every day how hard my husband works and we remind ourselves that we've worked hard to get where we are at. Our total household income was ~$450k, though we anticipate it will be closer to $400k due to husband's side hustle being scaled down because of the pandemic.

                Fullhouse11 Thanks for sharing, that is inspiring! We also had to learn on our own, neither of us come from wealthy families. No inheritance, or help paying for college. In fact, my husband grew up homeless at times, and was the first in his family to graduate from college.

                Tim It is true that most around us have no clue how much planning and thinking and focus we place on financial planning & saving. A few times we've ventured into the conversation about retirement savings and the importance of 401k to our family and non-medical friends and their eyes glaze over Lol.

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                • #23
                  Originally posted by FIREman View Post
                  Peds 43% gross in 2020.
                  that is excellent.

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                  • #24
                    Originally posted by Fullhouse11 View Post

                    It wasn't literal instructions Tim. I should have said, "think about your savings rate and know that..."
                    Cute, "I am vacationing at my $20m pig farm in Iowa" is not impressive to most folks. Who wants a pig farm? Who wants $20m. Different languages.
                    Here is what impresses: The last sentence is the only words comprehended.

                    "The options were bought at a stake price of $500 and expiration of March 18, 2022. Pelosi paid between $500,000 and $1,000,000 for the options, according to the disclosure.
                    Pelosi also disclosed that she bought 20,000 shares of AllianceBernstein Holdings (NYSE: AB), 100 calls of Apple Inc (NASDAQ: AAPL) and 100 calls of Walt Disney Co (NYSE: DIS).

                    Tesla shares have risen from $640.34 at the time the calls were purchased to over $890 today. The call options were valued at $1.12 million as of Monday."

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                    • #25
                      I understand the appeal of a second, luxury home. It's enticing, but as some have mentioned, a bit keeping up with the Joneses. I commend you for admitting that, as keeping up with the Joneses comes in many forms. Lifestyle creep happens slowly and almost imperceptibly.
                      Mentioned before, but I agree with the following:
                      - The vacation home ties you to the home every summer. You'd almost feel guilty about not using it. If you do use it, you'll spend your time making repairs and maintenance. If you don't and there's no renter, you're spending twice: on your vacation and your luxury mortgage.
                      - these homes tend to have plenty of wear and tear
                      Your high savings rate is something to be emulated!

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                      • #26
                        Originally posted by Hatton View Post
                        You realize that your vacation travel will always be to this place. Are you sure you want to lock yourself into this at such a young age.
                        This + financial reasons are why my wife "convinced" me we could not buy a place at the beach. Just rent. You can rent for a long time at a lot of places and not hurt your finances.

                        A second home is a money pit. You are going to lose money. You will. It is a consumption item and it means you will need to work longer before you reach FI.

                        When thinking of buying all you can imagine are the good parts. Flooding, Hurricanes, Yucky renters, bad management companies, termites, or fire or just wear and tear.

                        Do you want to paint and do work fixing this place every free weekend? Do you want to pay someone else to do this?

                        You cannot afford it and become FI early........... sorry.

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                        • #27
                          Originally posted by Hatton View Post
                          My physician friends who have expensive second beach homes and leased high end cars are all still working while I am comfortably retired. Food for thought.
                          Stuff or Freedom? Which one? not both!

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                          • #28
                            I think a good ROT for second homes is you should be able to buy it with cash without blinking an eye. Whether you use cash or financing at that point is your decision, but you should at least be able to let go of all that cash at that point without affecting any of your other future plans. When you are at that point if you still want it go for it.

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                            • #29
                              Originally posted by Tim View Post

                              Cute, "I am vacationing at my $20m pig farm in Iowa" is not impressive to most folks. Who wants a pig farm? Who wants $20m. Different languages.
                              Here is what impresses: The last sentence is the only words comprehended.

                              "The options were bought at a stake price of $500 and expiration of March 18, 2022. Pelosi paid between $500,000 and $1,000,000 for the options, according to the disclosure.
                              Pelosi also disclosed that she bought 20,000 shares of AllianceBernstein Holdings (NYSE: AB), 100 calls of Apple Inc (NASDAQ: AAPL) and 100 calls of Walt Disney Co (NYSE: DIS).

                              Tesla shares have risen from $640.34 at the time the calls were purchased to over $890 today. The call options were valued at $1.12 million as of Monday."
                              Quit trolling me please.

                              Comment


                              • #30
                                Originally posted by Tangler View Post

                                Stuff or Freedom? Which one? not both!
                                Stuff and Freedom are the payoff if you execute your plan well and have a little luck. You can have everything you want, just not right now.

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