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When I have $13k laying around after 2 years and net of $200k I always put it into a ROTH and then liquidate it so that I can have a bunch of strangers to live with me to help cover my mortgage of said property...said no one ever...until now.
Last edited by Marka; 09-24-2014 at 01:08 AM..
Reason: removed orphaned quote
In all seriousness...the scenario you have laid out just doesn't make sense.
You say you have this huge income, but cashflow problems. You have a small 401k that you would like to liquidate to buy a small home. Most people that are pulling in $200k a year are not looking in the price range you are...so if it doesn't make sense then that leads to credibility issues of the poster.
I AM NOT making that money. She makes most of the money and spends it all. Yes, I should've been more disciplined for someone who's never owned a home (or lived in a house his entire life), it was a great feeling initially, BUT I didn't know that she would go on a spending spree and go nuts with it. Does my income help contribute her lifestyle? Absolutely! I had no clue what restoration hardware was til we got our place together. Did I want a 5 bedroom house in Pearland? Not really. I'm a simple guy! I've been living with IKEA furniture as long as I can remember. From someone who used to make $7/hr 4 years ago and today make over $60k/year, I consider it a huge accomplishment. My biggest mistake? I let a woman (who I trust) make my/our financial decisions for me. Yes I did **** up here! But you know what, I don't want to sit here and regret about it now, I want to make a change and start saving again and be financially free one day! Regardless of people criticizing me or talking nonsense, I will make sure I do things right. You know what? Cuz I've been doing it w/o anyone's help! I started this thread so simply I could get some guidance - a.) whether I should rent a piece of **** apartment so I can maximize my savings or b.) take a little risk and buy a small home and generate rental income while I'm working full-time and work weekends as a part-time realtor.
As far as cashing out your 401k, I say if given a choice between dieing and cashing out your 401k, choose dieing first!
You don't touch your 401k for any reason, ever..!
Now as for the rest of your plan, I got wealthy doing what you are suggesting. Bought my first home when I was 23 and single. Sold my car, took out several loans to get the down payment. Took in renters to pay the rent. It took massive sacrifice, eating P&J sandwiches three meals a day for a long time, hitchhiking to work, etc. You make far more than I did so you might not need to sacrifice quite as much.
I sold that house several years later for four times what I paid for it, bought another house with payments higher than my monthly income. Had to phoney up paperwork to get the loan. I was doing liar loans 30 years before the phrase became popular. Put in some more roommates, plus a second job, and payed the bills. Lots of risk, lots of reward. I lived right across the street from a university.
I kept doing that for many years until I finally got married at 40.
I never made more than mid management salary, but due to my renting rooms and fantastic California appreciation, I sold my last home for just under a mill when I retired, and paid cash for my retirement home in a gated community, plus own two rental home free and clear. Every thing because I took huge risks and sacrifice..
Not necessarily recommending it, just saying it can be done if you want it badly enough.
I'd be embarrassed to say we make almost 200k when it's my gf who makes 140k and pays for most of my stuff. If you have to use your retirement funds you are ready for the financial commitment for a house
I'm also 26 and have a similar 403b amount- but until a year ago, I was making barely over 35K in Boston and went through treatment for stage IV cancer on that income. So, I'm not someone trying to put "young ones" down when I say you are not in a position to own a home.
Get disciplined. Get Mint.com and track all of your expenditures. Cut back. Sell what you don't need. It sounds like your financial life is out of control. When you sell your current house, save whatever you get back (I hope you're not underwater) for a downpayment for a new house - but maybe rent for awhile.
I don't! Cuz my gf (who I live with) bought us expensive things...and I/we are paying that off. She's going to get her own place in Missouri City (most likely) and I am trying to find something closer to work/a university. I'm going to let her keep all the stuff when she moves in to the new place.
This looks like a red flag. People who have a taste for expensive things tend to have financial problems, and they drag the people close to them down the drain with them. There's also a higher chance of divorce, which is another wealth killer.
No one made wealth by being conservative. Don't forget the motto, "Higher the risk, higher the returns"
As Petunia said, "higher risk, higher potential returns". Big difference. And yes it IS possible to become wealthy by being somewhat conservative. Now, few people can become wealthy by putting all their money in CDs and savings accounts...that is true. But a lot of people do quite well taking a moderate amount of risk without going to extremes. Like I always say, moderately boring, balanced mutual funds that own a mix of stocks and bonds can do quite well over time without insane volatility.
I'm thinking of funds such as:
Vanguard Wellington
Oakmark Equity & Income
Mairs & Power Balanced
Dodge & Cox Balanced
These funds have all exceeded the returns of large company stocks over the last 20 years, with fewer ups and downs.
The people who do well with investing are CONSISTENT. To use a baseball analogy, they don't swing to hit home runs. They swing to hit singles and doubles, and may occasionally hit a home run, but usually that doesn't happen until after many years of hitting singles.
Are there exceptions like Donn? Yes. But also notice he didn't get married until 40 and it doesn't sound like he had a spendaholic girlfriend/wife either. He gave up a lot to hit those financial home runs. Are you ready to do the same?
Last edited by mysticaltyger; 09-22-2014 at 10:24 PM..
Sounds like you need a new girlfriend. If you think it's bad now, just wait until you're married.
This is what I'm thinking.
Quote:
Originally Posted by texsn95
PS: Quit saying "cuz" and you'll get more serious responses.
Also a good point.
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