Sorta survey, sort of brainstorming / spitballing my financial future

[Revelate]

So I've come to the realization that kids probably aren't in the cards, so I don't need this money I've been saving up for a home in a good school district with a yard and the rest of the useful things when it comes to raising children.

My investments are still doing well in the market, but I'm reconsidering doing something different when I'm next employed: namely, getting out from under what debt I have rather than just continuing to shuffle free cash flow into the brokerage account.  

I owe around 212k on a mortgage, ~17k or so in revolving debt (financing some stupid stuff that I should've done years ago in terms of making my condo an actual place I want to live), and I'm going to be spending more than I really should for a Tesla M3 AWD and financing as much as they'll let me... just wanted something nice for me for once and I spend a lot of time in my car when employed.

So all that runs to around 300k in debt give or take once the car is in frame in a few months.

Paper is cheap: mortgage is at 3.25%, the revolving is getting shuffled onto my HELOC which is at 4.5% I think currently, and the Tesla will probably get financed around 3% I'm guessing... on the flipside my investments across all classes (home, stocks, bonds, the REIT I've put some money into, etc) are up something like 27% over the last year, which is absurd and won't last, but the average of 6% or whatever is more than the interest rate... so smart money is just make minimum payments and keep pushing the investments forward.

But.

I'm starting to really look at the math, and on this cheap (for Los Angeles) condo that I have, if just took my free cash flow for the next few years and really tried to make a dent in the 300k, I'd be trending towards the following expense profile:

~2500/month.  HOA, property tax, insurance, food, entertainment, etc... and I'd be living pretty well.  Wouldn't need a real job, or at least I could do something I found more rewarding, unemployed who cares, etc ad nasuem.  I'd basically get to my retirement expenditure level before I'm 48ish.

Realized now 7 months into this sitting around doing other stuff and not making money that I'm starting to get a little edgy and concerned at the balances, and it's time to go back to work... but I'm looking at it now and just wondering what if I got rid of that psychological issue basically forever, how would my life change?  

So this being a social forum, I just wanted to hear some thoughts: how has getting completely out of debt (besides silly FICO reindeer games with a shared secured loan) impacted your life?  Or even working on paying off all the debt for that matter as solid concrete goals (saving money for "retirement" is pretty nebulous I think personally) are good too.

Thanks!

[Appleman]

This is very deep for the myFICO board, but I will reply the best I can.

Sounds like a thoughtful mid-life crisis. Realizing that some opportuities are behind us while others still remain. 

Financially it makes sense to get back into the work force with the lowest unemployment rate since the 1960s.

On the horizon, we may have a perfect storm coming our way financially. 

For me, I remain on the journey to pay off debt every day. Keeping a close eye on where I am and where I want to be keeps me in check most days. There are certainly days I see my debt as a prison but one of those nice white collar prisons. 

So, the goal of getting out of debt has helped focus my attention on things that are important or meaningful in my life. My spending use to be directly proportional to my available credit. 

[Revelate]

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@Appleman wrote:

This is very deep for the myFICO board, but I will reply the best I can.

Sounds like a thoughtful mid-life crisis. Realizing that some opportuities are behind us while others still remain. 

Financially it makes sense to get back into the work force with the lowest unemployment rate since the 1960s.

On the horizon, we may have a perfect storm coming our way financially. 

For me, I remain on the journey to pay off debt every day. Keeping a close eye on where I am and where I want to be keeps me in check most days. There are certainly days I see my debt as a prison but one of those nice white collar prisons. 

So, the goal of getting out of debt has helped focus my attention on things that are important or meaningful in my life. My spending use to be directly proportional to my available credit. 

---

Hah, yeah well, it's a community I'm a part of and has a wide variety of opinions so figured I'd toss it out there.  I do appreciate your perspective and thank you for posting it!

I hadn't considered it as a mid-life crisis before now, but I suppose it does sort of meet the definition of it and some of my behaviors in the past month or so do suggest such.  I suppose there are worse things than figuring out your life and taking it in a somewhat different direction as far as said mid-life criseses go, though arguably buying a car which adjusted for inflation is something like 33% more than I've ever spent previously is a little awkward, and now my looking at the Performance white interior... well, I think that would be textbook definition of mid-life crisis but I'm tempted to just own that label and go assuming this new gig comes through which I really expect it will.

Then again if it does I may have to go back to wearing suits (bank...), and this time would just go with two bespoke ones so that's another ~5k gone and meh, maybe I'll come to my senses before then as I will redo my budget for certain before going down this or any other financial route... may be a mid-life crisis but not necessary to be completely foolish.

[Anonymous]

Short and sweet! Live for the day within reasonable limits but also plan for the unpredictable future. There are no guarantees about what lies ahead.

[pizza1]

@Revelate...LOL..I see you're deep in thought again, and the kid idea has once again escaped you. I would agree with you on that part, as we've talked about that before. Move on...

My thoughts would be for you to sell your condo, and move to KC or SL, and then you wouldnt have to re-think things so much or as often CA is a beautiful place to live, but dang I couldnt even afford their gas! LOL..Time for a totally new change is my advice/thoughts 

[Revelate]

Laugh Pizza!

I am actually starting to do the job tourism thing now: looks like first stop San Francisco! KC is definitely on the list as a potential place to take a contract in though.

As for the condo, this is going up for at least the next decade at this point and selling would be premature .

Actually even with my 15 year mortgage I would now break even with mortgage + HOA + insurance + property tax when it comes to rent which seems insane to me but this market is seriously good lately for current owners.

[iced]

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@Revelate wrote:

So I've come to the realization that kids probably aren't in the cards, so I don't need this money I've been saving up for a home in a good school district with a yard and the rest of the useful things when it comes to raising children.

My investments are still doing well in the market, but I'm reconsidering doing something different when I'm next employed: namely, getting out from under what debt I have rather than just continuing to shuffle free cash flow into the brokerage account.  

I owe around 212k on a mortgage, ~17k or so in revolving debt (financing some stupid stuff that I should've done years ago in terms of making my condo an actual place I want to live), and I'm going to be spending more than I really should for a Tesla M3 AWD and financing as much as they'll let me... just wanted something nice for me for once and I spend a lot of time in my car when employed.

So all that runs to around 300k in debt give or take once the car is in frame in a few months.

Paper is cheap: mortgage is at 3.25%, the revolving is getting shuffled onto my HELOC which is at 4.5% I think currently, and the Tesla will probably get financed around 3% I'm guessing... on the flipside my investments across all classes (home, stocks, bonds, the REIT I've put some money into, etc) are up something like 27% over the last year, which is absurd and won't last, but the average of 6% or whatever is more than the interest rate... so smart money is just make minimum payments and keep pushing the investments forward.

But.

I'm starting to really look at the math, and on this cheap (for Los Angeles) condo that I have, if just took my free cash flow for the next few years and really tried to make a dent in the 300k, I'd be trending towards the following expense profile:

~2500/month.  HOA, property tax, insurance, food, entertainment, etc... and I'd be living pretty well.  Wouldn't need a real job, or at least I could do something I found more rewarding, unemployed who cares, etc ad nasuem.  I'd basically get to my retirement expenditure level before I'm 48ish.

Realized now 7 months into this sitting around doing other stuff and not making money that I'm starting to get a little edgy and concerned at the balances, and it's time to go back to work... but I'm looking at it now and just wondering what if I got rid of that psychological issue basically forever, how would my life change?  

So this being a social forum, I just wanted to hear some thoughts: how has getting completely out of debt (besides silly FICO reindeer games with a shared secured loan) impacted your life?  Or even working on paying off all the debt for that matter as solid concrete goals (saving money for "retirement" is pretty nebulous I think personally) are good too.

Thanks!

---

First, we need more conversations like this around here. This is the kind of stuff I think of with personal finance as a topic.

Backstory: In my 20s and 30s, debt surrounded me. It was largely my fault, being that I married someone who would always err on the side of material things today rather than security in the future. It led to arguments, stress, and me wondering how I could make 6 figures a year and still have nothing left at the end of the month. Then I realized I could save a lot of money by paying her alimony instead.

Things turned around fairly quick at that point. I went from wondering where all my cash went to maxing out my 401k and putting extra principle toward both mortgage and student loans (they kept getting deferred to the point I owed almost twice what I borrowed, before interest). I was even able to squeeze extra into savings each month. The impact of being free of the control of debt has been major for me, particularly in two areas:

1. I cannot understate how life impacting not having to worry about having enough money for something is. Car needs repairs? No prob. Need to take a quick weekend vacation or emergency trip? Sure. Yearly insurance bill arrives? Handled. Even medical I can pay out of pocket and bank my HSA for later. I was living way beyond my means when I was younger. I was the typical lazy American with a TV in every bedroom and living room, more house than I needed, a lawn and two car garage, every channel known to man and multiple subcriptions to things I used once or twice a month. I've since come back to sensibility and I am now a 1 TV home (no HD or fancy channels), no yard or garage, and less than half the square footage I originally had. My family imagines how horrible it must be to live this way, but....I love it. I always have a positive balance in my accounts. If I want to go somewhere or do something, my first thoughts go to when and how i'll go about going to that place or doing that thing, not if I can afford it.

2. Being debt free means I can focus on saving rather than spending. I've found a new-found love for saving and the future. I'm in my early 40s now and that nebulous "retirement" goal isn't so nebulous anymore. When I had very little saved toward it and was younger, it was pretty nebulous because it seemed so far away. To a 30 year old, retiring at say 65 was something further away than my entire life up to that point, but in 10 years that's shifted to being almost two-thirds of the way there. Now it's a light at the end of the tunnel. What really drives it home for me is that freedom I have today described above; I don't want to lose that feeling. Even in retirement, I don't want to ever have to be in the situation where I can't go somewhere or do something because I can't afford it. I don't want to have to worry where the money for a bill comes from. My retirement target also includes an $80,000/year budget for travel. It's a big number I'm shooting for, but I'm pretty sure I'll make it. The bigger the numbers get in my savings (and compounding means they do start to grow faster and faster), the more secure I feel about it.

Like you, I have no children at present, but that's not off the table yet, so I still have to factor the possibility into my plans.

[iced]

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@Revelate wrote: 

I hadn't considered it as a mid-life crisis before now, but I suppose it does sort of meet the definition of it and some of my behaviors in the past month or so do suggest such.  I suppose there are worse things than figuring out your life and taking it in a somewhat different direction as far as said mid-life criseses go, though arguably buying a car which adjusted for inflation is something like 33% more than I've ever spent previously is a little awkward, and now my looking at the Performance white interior... well, I think that would be textbook definition of mid-life crisis but I'm tempted to just own that label and go assuming this new gig comes through which I really expect it will.

Then again if it does I may have to go back to wearing suits (bank...), and this time would just go with two bespoke ones so that's another ~5k gone and meh, maybe I'll come to my senses before then as I will redo my budget for certain before going down this or any other financial route... may be a mid-life crisis but not necessary to be completely foolish.

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Working has nothing to do with suits. Every man should have at least two nice suits (i.e., tailored and cut right, not off the rack at Macy's), one black and one in another dark color (I suggest blue). I work from home in gym clothes most days and still follow this rule. You never know when you'll have a wedding, funeral, party, or special occasion that calls for one.

[Thomas_Thumb]

Well I have a half dozen well tailored suits but, they don't seem to fit so well anymore. I wear a nice suit when the situation dictates but, I compromize on fit these days . 

[iced]

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@Thomas_Thumb wrote:

Well I have a half dozen well tailored suits but, they don't seem to fit so well anymore. I wear a nice suit when the situation dictates but, I compromize on fit these days . 

---

If it's a bit small, you can always fake it by not buttoning the jacket (if its the waist...well, maybe you can let it out a size).

It's the frumpy, two-sizes-too-large suits I see men wear that make me sad. Too large can be fixed with tailoring, so it looks like those gents are phoning it in when they do that.