Current Events > so in order to retire properly, i need to save up 750,000 dollars in... 10 years

(+) Yeah! (+)

my math is itll take me 3 years to recover from my bankruptcy to get a mortgage, and then 15-20 years of paying off a mortgage (if i do it aggressively). by that time ill be in my mid 50s, leaving 10ish years to save up 750,000 dollars if i retire at 65.

ok so yeah easy.

uh..

is bitcoin still gonna be a thing?

---

You should be saving while paying off your mortgage.

---

Squall28 posted...

You should be saving while paying off your mortgage.

but then how will i pay off my mortgage

---

You definitely don't want to aggressively pay off your mortgage, you will get a better return in the stock market.

---

_BlueMonk posted...

but then how will i pay off my mortgage

By buying a house within your means. Your balance every month should be a net positive. If you can't do that, then don't buy a house.

---

Squall28 posted...

By buying a house within your means. Your balance every month should be a net positive. If you can't do that, then don't buy a house.

what would be in my means?

fyi im in california. a one story 3 bedroom house at about 1500 sqft goes for about 450,000

---

Squall28 posted...

You should be saving while paying off your mortgage.

Yeah first step is eliminating unnecessary expenditures.

Also if you have any investments financial planners have specific things they use and different points in your life to minimize risk. Might be worth a call.

---

divot1338 posted...

Yeah first step is eliminating unnecessary expenditures.

my budget for aggressively paying back a mortgage leaves about 500 dollars extra every month. if i just pay the minimum, its about 1500-2000 a month.

but then i pay twice as long and nearly double over the cost the of loan

---

Why are your expenses so high?

Move somewhere cheaper, pay $600/mo in mortgage, cook all your own food, you'll only spend $10-15k a year

---

Coloradough posted...

Why are your expenses so high?

Move somewhere cheaper, pay $600/mo in mortgage, cook all your own food, you'll only spend $10-15k a year

all our family is here and family means everything to us. plus i dont think we could make as much if we moved elsewere so we'd probably be in the same pickle.

and i do pinch pennies. i cook all my food, etc.

i do want to get a cheaper phone plan but

---

Conflict posted...

Wild idea

Maybe don't think so far into the future that you'll give yourself an anxiety attack

Wait how old are you, tc?

---

Dont aggressively pay off your mortgage. Take advantage of the low interest rate and invest the difference.

---

lol I'll never be able to retire. Maybe if I lived in a closet and bummed utilities and food off other people

---

EndOfDiscOne posted...

Dont aggressively pay off your mortgage. Take advantage of the low interest rate and invest the difference.

wait what? why wouldn't i want aggressively pay off my mortgage? all the math shows ill end up paying tons more over the lifetime of the loan

unless investing a couple thousand a month can make up the difference? can it?

---

I would not worry too much about paying off the mortgage, that money would be way better off going into a 401k and Roth IRA, especially with interest rates so low right now.

---

interesting! i didn't know people wouldn't suggest paying a mortgage off quickly.

i have to do more calculations...

---

ok! so during the time im paying off my mortgage, ill save up about 550000 dollars

how does investment work. will i be able to turn that 500k into at least 750k as it builds?

---

Get a cheaper house

---

you think you'll be able to live indefinitely on $750,000 principle? that seems a bit low. 3% withdraw / year comes out to $22.5k which is low. i'm not comfortable retiring until i have at least 1.5MM, maybe even 2MM and im in a relatively decent CoL area (central Ohio)

---

A mortgage is a loan for the long haul. There's no point to paying it off because you're never going to get a real, tangible return on that money unless you ever decide to actually sell the property. And even then property values might go up and they might go down or they might stay the same. Just easier to budget for the monthly payments.

Although I do personally put a few hundred extra down towards the principle just to minimize my interest at the end of the loan -_-

---

_BlueMonk posted...

all our family is here and family means everything to us. plus i dont think we could make as much if we moved elsewere so we'd probably be in the same pickle.

and i do pinch pennies. i cook all my food, etc.

i do want to get a cheaper phone plan but

It feels like theres fewer and fewer adults nowadays willing to move away from family. And its sad.

If you dont want to move, lower your standards in any way or give up anything you enjoy now to save money then focus on increasing your income instead through a side hustle or something.


---

_BlueMonk posted...

ok! so during the time im paying off my mortgage, ill save up about 550000 dollars

how does investment work. will i be able to turn that 500k into at least 750k as it builds?

Think of it this way:
- you effectively make a guaranteed return on mortgage payments equal to the interest rate of your mortgage (so probably like 3%)
- you make a risky return of like 7-10% on an equity heavy investment

Over a 30 year time horizon, you can and should take on some risk in pursuit of higher returns. Like you noted, retirement is expensive and you cant afford not to.

(That said i am paying off my mortgage asap and not really following my own advice)
---

Prismsblade posted...

It feels like theres fewer and fewer adults nowadays willing to move away from family. And its sad.

If you dont want to move, lower your standards in any way or give up anything you enjoy now to save money then focus on increasing your income instead through a side hustle or something.

Some people value being around family. It isn't an issue of being dependent on them. Both my parents moved away from their home. The end result is I never saw my extended family make than a few times a year and I'm not overly close to any of them. I don't think I have even come close to crying at a single one of my grandparent's funerals. Blue Monk has a kid on the way, I can understand wanting your parents to be around for that.

---

_BlueMonk posted...

ok! so during the time im paying off my mortgage, ill save up about 550000 dollars

how does investment work. will i be able to turn that 500k into at least 750k as it builds?

Yes. Speak to an investment professional, but generally if you know nothing, invest in mutual funds or ETF's and let the professionals do it for you. A safe one will give you an average annual return of like 6%.

Look up compound interest. Assuming this is over 30 years and you're saving $1,500 per month (or $18,000/year), at the end of 30 years you will have $1.5 Million.

http://www.moneychimp.com/calculator/compound_interest_calculator.htm




---

Better start watching extreme cheapskates on TLC and taking notes

yeah i was an only child. my mom is an immigrant and all her family is in the philippines. i never see them. my dads family all hate him cuz of issues over inheritance (is brothers all died, so when his parents died, and he got everything, their kids , my cousins, who wanted some got pissed.)

i grew up alone. it sucks. my wife has a huge extended family. her parents are down the block. her aunties and uncles are all here too. tons of cousins and family. i love it and so does she. i want my children to be surrounded by family.

her sister and her *ahem* non-person-of-color boyfriend are the ones who want to move away to virginia or vegas or whatever town. they keep saying its cheaper. great, but we want family.

---

3PiesAndAFork posted...

Yes. Speak to an investment professional, but generally if you know nothing, invest in mutual funds or ETF's and let the professionals do it for you. A safe one will give you an average annual return of like 6%.

Look up compound interest. Assuming this is over 30 years and you're saving $1,500 per month (or $18,000/year), at the end of 30 years you will have $1.5 Million.

http://www.moneychimp.com/calculator/compound_interest_calculator.htm

WHOA

---

Compsognathus posted...

Some people value being around family. It isn't an issue of being dependent on them. Both my parents moved away from their home. The end result is I never saw my extended family make than a few times a year and I'm not overly close to any of them. I don't think I have even come close to crying at a single one of my grandparent's funerals. Blue Monk has a kid on the way, I can understand wanting your parents to be around for that.

That's okay but when said family is always just a cheap plane ticket away wherever you're at in the US it's just being overdramatic at times.

And can be a huge detriment if said family or friends is somewhere with a bad economy or is just a terrible place in general. Which I dont think is a issue for TC likely but the same cant be said for many others.


---