Quote:
Originally Posted by zx10guy
My situation is I "own" my primary residence which I bought in 2001 as new construction and just before the big housing boom. I also "own" a vacation property I bought in 2012 in Delaware. The reason why I put own in quotes is I've always had this mental thing about do I truly own the home if I have a substantial mortgage on it?
Anyways, I subscribe to the other train of thought with real estate. I won't pay off the mortgages early. I'll take them out to term and in turn divert the money towards retirement and unqualified investments. One of the points in the video I posted above is that sinking money into real estate makes it harder to get that cash out when you need to sell it. Where as investments, you can just issue an order to sell and have your money within a few days. There is an argument that many people are not disciplined enough to move money they would other wise sink into real estate into investments. Well, it's the same argument about credit cards. These two things I know will grate at Dave Ramsey zealots. I've been able to be very disciplined with these two things over many years and have the balance sheets to show for it.
For my primary residence in the DC area, I've refi'd twice and am now at 3.75% fixed for 30 years. My vacation property was purchased at 3.25% fixed for 30 years. As a percentage of my monthly gross income, the primary home accounts for about 11% and my vacation property accounts for about 8%. So I'm certainly not living beyond my means. I've maxed out my 401k contributions and have been putting money away into an after tax investment account. Could I be doing better with my money? Sure.
Real estate in the DC area has been insane and even more so with Amazon moving in. While I hope for a correction, I wouldn't expect much of any crash with the Federal government and other economic factors bolstering the real estate market here.
I was on target to my retirement age goal of 55 (I'm currently 49 years old). Have been socking away money into a 529B since my daughter was born up to the max tax deduction for my state and have 5 figures already saved up. All cars and motorcycles paid off. So only mortgage debt.
Then 2 major life issues hit me. Major medical and divorce. So far the predominate responders I've seen on this thread are men. I understand how everyone would think things will always be great in your future planning. I thought so too. Married very late because I wanted to be sure I found the "one". Well that didn't pan out. I also didn't live a bad lifestyle. Have been physically active. Never smoked. Don't drink all that often. Yet, I got hit with cancer twice. The divorce is the situation that has set me back the most. The only fortunate thing for me was I filed some what early enough where I'm not on the hook for long term alimony. Nor do I have to split more of my savings to her. The fortunate thing that has saved me was both properties were purchased pre marital and a huge chunk of my retirement is also pre marital. Had all of that been marital property, I would have been devastated financially. This also leads into the whole messy topic of a prenup. There were reasons why I didn't get one drafted before marriage and I took a gamble. This is one of the decisions in my life that I regret the most. In some ways, I also regret marrying this woman but then I wouldn't have my precious daughter so I have to keep that part in perspective.
The latter part of my post is probably TMI for the topic. But I felt compelled to say it because I certainly didn't plan for any of it and here I am dealing with these never could happen situations (so I thought).
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Sorry to hear man. I hope your health is better and you get clear of all this.