Kara earned $100,000 in commissions this year, her biggest bonus to date. If you want to retire early, what should you do with the money?
An anonymous caller is upset that the 401k plan he sold to his boss is charging him assets under management (AUM) fees. Should you keep a 401k in the first place?
Remy and her husband need to come up with $30,000 for IVF treatment. How do they start a family without breaking the bank?
Another anonymous caller and his partner have been living in an RV for years. They are ready to reconcile. Should they buy raw land and sell most of his investments to build off-grid housing?
Former financial planner Joe Saul Sahe and I tackle these four questions in today's episode.
enjoy!
PS Have a question? Leave it here.
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Kara asks (01:36 minutes)): How should I decide between allocating my bonus to investments or paying off my primary residence?
I'm 30 years old and my partner is 31. I don't know if I will have children in the future, but I would like to retire early between the ages of 50 and 60.
Our combined base salary is $160,000 and our rental property net salary is $30,000. In March, he expects to receive a $100,000 fee check and his net income after taxes should be $65,000.
You plan to spend $15,000 adding a patio and hot tub to your new home, but what should you do with the remaining $50,000?
Our annual expenses are $100,000. We have a three-month emergency fund for rentals and a separate six-month emergency fund.
Our total investments are $457,000: $29,000 in an HSA, $344,000 in a 401ks, $75,000 in a Roth IRA, and $9,000 in a brokerage account.
My husband and I contribute 4% to our 401k plan. His company offers him a 4% match and my company offers his 8% match.
We owe $486,000 on our home at 6.875 percent interest. Our total net worth is $826,000.
According to the amortization schedule, a payment of $30,000 would save $160,000 in interest, and a payment of $50,000 would save $239,000 in interest.
Should you invest that money, pay more towards the principal on the home, or a combination of the two? What should we think about this?
Anonymous Question (20:37 minutes)): My wife and I earn a total of $145,000 as small-scale organic farmers.
Two years ago, we asked our boss to start a free 401k service for employers called Save Day, and we've saved over $40,000 so far.
We were excited because we didn't have any tax-advantaged options other than a Traditional IRA. And I was under the impression that they only charge a percentage fee on donations.
However, this is an “annualized fee charged monthly to each employee's 401k account and is assessed based on the overall total assets held within the account.”
Save Day also recently announced that it would increase its fees to 90 basis points.
This is a lot like the 1% assets under management (AUM) schemes that we are all warned to stay away from.
How do I weigh whether to close my account and lose the tax benefit or keep the account and pay the fees?
We're leaning towards the latter, but this is a mental blow. Am I letting taxes wag their tails?
Remy asks (39:25 minutes)): My husband and I are trying to grow our family, and it looks like we'll probably need IVF.
Out-of-pocket costs are expected to be $30,000. He has $20,000 in cash, but he doesn't know where to get the extra $10,000.
We have $60,000 invested in a brokerage account and $10,000 in I bonds that we purchased when interest rates were high.
Should I withdraw money from my brokerage account or cash out my I-bond before its maturity date?
Anonymous 2 people ask a question (50:15 minutes)): My partner and I have been living on the road in an RV for the past few years.
Although we enjoy the lifestyle, we would like to establish a home base for part of the year. We plan to purchase raw land to build a small off-grid home, but are stuck financially.
Our goal requires two major purchases: raw land and building costs.
Since most of the work will be done in-house, a large portion of the construction budget will be spent on materials and equipment. The total goal is 3 million yen.
How can I finance this purchase?
I am 30 years old and have an annual income of 18 million yen. My partner is a college graduate and expects to make $60,000 a year after graduation. We have no debt.
I have $300,000 saved for retirement and contribute the maximum to these accounts each year.
I also have $125,000 in cash and other non-retirement accounts, not including my emergency fund. My partner has invested his $130,000 in a brokerage account.
I plan on using cash, but I'm worried about the money in my taxable brokerage account.
We really hate debt and like the idea of being able to take a mini-retirement from time to time. Debt seems to make it harder to achieve.
Our schedule is flexible so you don't have to buy raw land and develop it at the same time.
If I decide to use a tax brokered account, what implications should I be aware of? Conversely, if I want to obtain a loan, what kind of loan should I consider?
Finally, what do you think about raw land as a conservative investment option?
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