11-02-2021, 01:31 PM
(11-01-2021, 06:48 PM)ken-do-nim Wrote: When it comes to finding funds to invest, let me ask you some questions:
1) Can you live more simply? Smaller home, cheaper car, day trips instead of overnights? I've read stories about people who purposefully lived well below their means for 2-3 years in order to kickstart a portfolio.
2) Do you have valuables you can sell?
3) Can you find a higher paying job?
4) Can you / do you want to, lower your retirement savings in order to have money to invest in a taxable account now?
5) Are you saving for your children's college? Can they take out loans instead / pay their own way?
6) Can you do a cash-out refinance on your home?
7) Can you rent out a room in your home?
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My answers to #1-#7 are:
1) Thanks to Covid, a whole bunch of camp & vacation money all went to the brokerage account last year. (I still managed to get out to the Grand Canyon this year)
2) I sold about $1500 worth on eBay last year that all went into the brokerage account.
3) No.
4) I lowered my 401k funding percentage from 12% to 6%.
5) I think I have enough saved for my daughter's college
6) In March I did a cash-out refinance and put $100k into my brokerage account.
7) No, but when the kids no longer need the house, I'll move out and rent it. I expect to make at least $1k in profit each month.
My timeline is 11 years to at least $3 million, hopefully more. Not accounting for taxes on pre-tax accounts, all sources combined I'm a little over half way.
Ken, I would advise you not to do #7. Turning a primary residence into a rental is a mistake. You are giving up to $250k ($500k) tax free profit from the sale of your primary residence. If you turn it into a rental, you have a lower depreciable base and you just gave up a huge tax free gain. If you really want a rental, sell the house and then turn around a buy a rental for what you just sold your primary residence for.