MikeWPhilly t1_j9yu684 wrote

Happy for you and paying off anything will obviously create more wealth. Nobody would ever say it’s bad. That said as an alternative story:

2016 - Built a new home for $440k. Getting married within 2 weeks of settlement so not fun timing but early new construction so good buy. I could have sold our $160k condo to avoid PMI (Only 10% down) and reduce payment stress but kept to rent. 2017 - new jobs household income up $40k. Early 2018 - paid off condo now our mortgage is as cheap on home as condo was thanks to rent cash flow. Late 2018 - Appraise home to remove PMI ($525k)

Now since then we could have paid off main home. Instead we bought several more traditional rentals (15 year mortgages) and one STR just last year. Net worth is up seven figures on properties alone and we bring in about $65k a year in cash flow. That cash flow is driving more investments.

Anyway both paths free up money/wealth. But investing tends to lead to compounding. And since my main mortgage is 3.25% never paying it off - I’ll let it run until all 30 years are done. Well we will probably only hit 25 years since I want to sell around 55 and build a custom 1st floor only home.


MikeWPhilly t1_j2esspv wrote

You have over 1 grand more a month in hand and your friend is contributing $450 less a month to her 401k. That’s essentially 40-45% more (401k is pre-tax) monthly than your friend and you make 32% more than her. Seems about right but it all comes down to deductions and details.


MikeWPhilly t1_iyfb5ob wrote

You can get a financial advisor but frankly unless it’s a networked connection for the amount of money it’s not worth it. You won’t be able to trust they are decent. If it were me you have two options:

  1. Buy an investment property. Could be lucrative cash flow for you and you won’t lose the down payment.
  2. invest in an index. Yes this year sucked, especially in S&P. but realistically if you put it in an index and come back in 15 years. you aren’t going to be unhappy with the returns. And considering your age still plenty of time to run it up.

I can’t picture for the life of me why you would pay off the debt. Especially since you aren’t struggling to pay the bills.


MikeWPhilly t1_iyf039i wrote

So I’m of the opinion that unless you go to school for engineering, specialties like healthcare, financial - college is quickly reaching the point of not worth the cost investment. I say that to say I get where you are coming from.

So if not doing a 529 you have a few options.

  1. Real Estate Investment which is passive income for you and them. The money/equity would appreciate and you’d be generating passive income that they could either take over and/or you could take out equity in 25 years or so.
  2. Stocks. I get not wanting to lose the money and you won’t really lose savings but cds at best “might” keep up with inflation. Historically if you stuck money in an index fund S&P as an example, you’d never lose money on any 20 year period. You’d typically would gain quite a bit. So you wouldn’t have ot baby sit it but just ike your 401k you’d have to realize you’d have some very good years (last 10 before 2022) and some not great years ike this year. But over the lifetime of it you’d appreciate quite a bit.

MikeWPhilly t1_iyez7e9 wrote

Timing is sort of bad all the way around. Used prices are in the process of dropping quickly, even new prices are adjusting down to MSRP and some discounts again.

So selling would be bad. As to low mileage, that will just help you in the long run and the car should last longer. While it’s not ideal it’s not exactly an end of world mistake assuming you aren’t having any problems paying for it?

but no selling it would make no sense. You’d have to probably wait about 3.5 years on the loan before it starts to make sense.


MikeWPhilly t1_iyeyt9m wrote

Extra payment aways have a big benefit. Take any 30 year mortgage calculator. If you add just 1 full payment a year (the full cost + escrow payment) you tend to end up with a mortgage that is about 8 years shorter. It’s not necessarily new. What is big though is the total interest financed over the life. Massive difference because of how high that has gotten.


MikeWPhilly t1_iyexvpk wrote

Depending on property value drive by valuation as per banks (just had one done for an investment property) is good for about 20-25% bandwidth. Or rather it becomes an option if you are putting that amount down and the house is still standing.

So suffice to say it could be a huge range. Frankly if you want to do it right but not cause issues you could offer to pay for a real appraisal (about $500) and then you’d have good numbers to work with.


MikeWPhilly t1_iyex5zy wrote

You definitely want a credit card overseas for emergencies and other use cases. Does it need to be with an airline? Nope. What is a good credit card depends on your spending habits and how much you spend. I prefer the platinum but it’s ease of use and I put a fortune through my cards for the points.

Nerdwallet and some of those sites can help point you towards some cards based off categories but everybody’s “best” card is going to vary due to spending habits, and volume of spend.


MikeWPhilly t1_iyeqsh2 wrote

It doesn’t really matter which one you do. I’d pay the car loan off first. Then put the full payment of that to the $6900. That will be paid off in no time. Then put both payments toward 6000. You should be able to pay for all 3 very quick then put all 3 payments to pay back your dad. Which would be essentially 2 years for him. About 2 years to pay off your 3 loans on your own unless you can pay extra over the the payments.


MikeWPhilly t1_iyepvom wrote

Start maxing out both of your 401k 100%. You still can catch up big time if you max out both. I make far more than my wife who makes $70k but we put something like 28% of her income into 401k so she hits the limit each year. That should be step 1. Step 2 is is moving at least 600k or so into some index funds or stocks to make money off it. You have far to much cash. You’ve actually in theory lost 50k alone due to inflation just this past year. Invest it somewhere whether real estate or stocks.

Step 3 should be figuring out a real budget, ideally where do you want to live, will you stay in the home, how much money etc..

Step 1 and 2 should be done asap though.


MikeWPhilly t1_iyeazt5 wrote

We are a a progressive tax system. It is always worth it to make more. People need to stop making this statement because it’s essentially an old wives tales. And it’s not so much about you but just I see this comment far to often.

As to the money yes ESPP programs are always free money and you should always max it out if you can afford no access to that income for the 6 month period. I just autosell it. Only time in your life besides, 401k match, that people will hand you free money.


MikeWPhilly t1_iydz34w wrote

$25k would be good if so. Just be ready for surprise expenses at the end. wife and I added a videographer that was expensive but now a days if you asked either one of us we could have skipped photos and just done that ( we watch it every year ).

Smart move on the car. The other benefit then is you should hve some down payment money from the wedding for car so it’s not a bad choice. Have you figured out how expensive the car is you want to buy? That’s the other big piece. Good news is market should be adjusted next year (used cars dropping big time right now).

And the house the comment was more about must have repairs immediately. I invest in real estate and been around it all my life. $250k I don’t doubt you can get 3-4 bedrooms my comment was more the fact that you are likely looking at 1950-1980’s time period for it being built (unless you are looking at town homes?) and so you might have some bigger repairs needed when buying like a roof, new hvac, etc… It’s just something to keep in mind you might have some larger bills on top of the closing costs when buying.


MikeWPhilly t1_iydyg8a wrote

Did he have a residence else where? From your posts on my other comments he did not. You also said he was in CA at his parents for over his month. He was living there and you are probably screwed because of that to be honest. Unless you can show he had a residence with mail else where?


MikeWPhilly t1_iydy0hz wrote

So I’ll say this. When I got married the fiancée and I combined income of $260k (approx she was doing OT at that time) bought a $448k home and kept my previous property for investment. We settled on that home the same way week we had to pay the wedding - so I’ll tell you first hand it will be stressful as hell. The only reason I did it is because the home purchase was an incredibly good deal and by time we settled it appraised $45k over what we paid. Given your home purchase is less I’d say it’s easily doable in theory BUT there are definitely some odds and ends to address.

  1. You haven’t mentioned how expensive your wedding is. weddings have huge ranges as expensive as $100k. Even with parents helping with some items we ended up paying $32.5k out of pocket. How much is the wedding going to cost you?
  2. The car purchase. If you aren’t buying the car until next year and paying to replace the engine. Why not buy the new car AFTER the home purchase & wedding? If you are fixing it I don’t get the rush and it will make a massive difference on the stress level.
  3. also even in the Midwest $250k won’t go far so just keep in mind you might need roof or hvac repair so ou could be out 30-40k.

Otherwise i see no issue with it. The big thing is you have to be super disciplined in saving up to it. I’d also really push the car off if you are fixing it 6 months more makes no difference.


MikeWPhilly t1_iydf2pp wrote

Yeah this is likely the issue. So the son had no other residence other than the home in CA at that point? If so he’s screwed. You basically had somebody who technically lived there (based off yoru comment he was staying I assume he had no apartment in the other state anymore) and you never updated the insurance for the household.


MikeWPhilly t1_iyda0qu wrote

Was going to write a post but Lucky has. It’s more that’ll likely the MIP. Which is probably $150 or so a month. So that’s likely the difference maker. Also lucky’ s point about not being able to remove the MIP is a key piece of info. $100k is really not much a house in most parts of the country (or even condo) without knowing what home price ranges Op is looking at it’s hard to make any recommendations but realistically OP might be better off with a traditional and 20% down. Hard ot know what starter homes go for with no info. Eldengames - what how price range are ou looking at?


MikeWPhilly t1_iyd72p2 wrote

So filling in the blanks is this essentially the car was in California where the son lived and the mother lives in a different state? or does the mother live in cali and it was parked in her driveway and he drove it then while there? The first option the insurance is probably saying it was the kids car, with him in cali where he is living and you weren’t properly insured.

The second option though doesn’t make sense and the insurance company would have to give a reason to deny the claim. My guess is it’s the first but the context still isn’t very clear.

Edit - read some of your other comments. The son was home for a month? Why was he home? Had he just left school and/or moved in temporarily? It sounds like they he was home for a very long period of time and the insurance company was trying to say he was a household member. A household member that you removed to lower costs. So this seems to be the rub but not enough detail on why he was home, how long etc..