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I am 26, husband is 25 no kids yet. We are currently self employed rental property owners of 7 units so we have not been contributing to 401k or IRA at all. My husband maybe getting a job next week making 33k a year with benefits. Ok heres our financial look:
Monthy income $3600 (will go to $5500 after he starts working new job next week)
Monthly expenses $2850
IRA (was from job I worked for 2 years) $1800
Savings $31k
All of our rental property is paid for, our house is our only dept (67k left understandtgage) our cars paid off and no credit card dept.
My questions are, if we stay self employed should we contribute to IRA monthly and how much is normal? I want to also save money in our account up or would it be better to invest some money elsewhere? I am pretty clueless about stocks bonds ect.. so not sure where we should be going.. should we just save money in our account, invest it, put in IRA? Any advice for us at our age with what we have and what goals should be as we age? My dad is so concerned about us saving up lots of money for retirement. I just want to be on track for the future and feel we are behind.
we are hoping to move within 3 years out of state. We will save up, sell our home and pay cash for new one. we will use some of our savings for moving expenses, new furniture ect. but are budgeting for that later on.
we also do have a financial advisor who always wants to meet but I feel like im wasting his time since we rarely contribute to IRA and do not have much money to do anything with. I might get in touch with him though but not sure what we even want to do. I dont know, i just need some direction and insight from others. Any advice overall?
Self employed folks can open an SEP-IRA and contribute a much larger amount than would be allowed with a conventional Traditional or Roth IRA.
You need to diversify a bit. Why all real estate and no stocks or stock mutual funds? If I were you I'd be trying to at least put 10% of all gross income into stock mutual funds (first max out any tax-advantaged accounts, then extra can go into taxable).
Congrats on paying for the properties in full. A lot of naysayers will insist that it is "mathematically" a disadvantage. However they tend to forget that leverage can go both ways, magnifying the effects of both gains and losses.
Self employed folks can open an SEP-IRA and contribute a much larger amount than would be allowed with a conventional Traditional or Roth IRA.
You need to diversify a bit. Why all real estate and no stocks or stock mutual funds?
Real estate is something my husband and I had a passion for, something we more enjoyed which is why we got into it. I just really do not know much about stocks, mutual funds.. id be concerned i would pick the wrong things. Its something i need to read up on and learn about. Should i go through the financial advisor to pick stocks or is it something i need to do myself?
I will definitely look into the SEP-IRA you mentioned.
What is a reasonable amount that should be saved up for retirement by mid 30s?
Real estate is something my husband and I had a passion for, something we more enjoyed which is why we got into it. I just really do not know much about stocks, mutual funds.. id be concerned i would pick the wrong things. Its something i need to read up on and learn about. Should i go through the financial advisor to pick stocks or is it something i need to do myself?
These days there are plenty of references on getting started on retirement investments. You might try Investing for Dummies if you have no experience.
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Originally Posted by Icemodeled
I will definitely look into the SEP-IRA you mentioned.
What is a reasonable amount that should be saved up for retirement by mid 30s?
The usual guideline would be around 1X your annual gross income. I think if you have a large paid-off real estate empire it's OK to have somewhat less (e.g. 0.5X - 0.75X), but you still need the diversification.
And as I asked, should I just ask my financial advisor or learn on my own first?
Do you already have a financial advisor? If so, it can't hurt to ask - but be on the lookout for possible conflicts of interest, especially if the advisor is commission-based and is telling you to buy products that he'd get a cut from.
There are 1000s of websites and books where you can learn about investments and saving for retirement. Start learning then when you feel comfortable then start investing.
I like to listen to Warren Buffett and read his information.
Do you already have a financial advisor? If so, it can't hurt to ask - but be on the lookout for possible conflicts of interest, especially if the advisor is commission-based and is telling you to buy products that he'd get a cut from.
Yes I do, same guy my parents use. Yes that is what I am concerned of, I dont want someone who will get me to do something just because they want to make money. Not saying he would but you never know if thats their mindset.
So it sounds like its best to just learn myself first and understand it then maybe speak with him and see whats best. I have a lot of research to do.
Other then stocks and mutual funds, is there any advice or goals I should have? I plan on working to pay off mortgage quickly and should start contributing to IRA monthly.. maybe $500 a month. I think my husbands new job will come with 401k benefits also.
Thanks everyone for the comments so far & thanks jms for the sites, I will check those out!
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