Middle-aged and a financial dud

[Anonymous]

I don't think it's as helpful to have the I told you so comments or I earn less and have over a million. I was a little shocked when I read the post too BC I am of a similar age.I don't disagree but I think OP already knows he screwed up big time. And just wants solutions.

This is what I would do. Agreed on Dave Ramsey financial peace university. Do online. Dave is for financial alcoholics so to speak.

Speaking of Dave do not follow his investment advice at all. Use him to get out of your debt hole but avoid his smart vestor pros etc.

When you are ready to invest invest only in index funds, BC they are low cost and diversified. E.g. s and p 500 index fund or total stock market fund. If you have an employer match take advantage to get the match, don't wait to get out of debt. But maybe do less until you get out of debt then you have to accumulate much quicker after you are in better shape.

Dave is very debt adverse and thinks cc are evil. I have a cc but pay it off monthly and never carry balance. If you are out of control with cc debt then you shouldn't use one at all. Look into snowball method. Line up debts and pay off smallest one, rolling the momentum to the next one. Dave explains the logic here quite well.

If you want to save money you can probably get everything you need from just watching his YouTube. But I do think if your situation is dire, fpu will be a worthwhile investment. Good luck. It's late but it's never too late.

[Anonymous]

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

Nobody is asking you to tell us your story

[Anonymous]

Anonymous wrote:

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

+1

DH and I have always made way less than you as well. But, we’ve had the financial discipline to always take the high road and live within our means. We’re in our mid-40s and have $1.6M saved in our 401k, $750K saved in 529 plans for our three kids, a taxable brokerage account with $600K, and an online savings account with 36 months ($150K) of net living expenses for emergencies.

Maybe it’s time to stop spending so much of your money on buying the latest car and cell phone model every two years – take the bus like we do. Lose the cleaning service. Stop eating out and actually cook your food. Stop taking vacations – save that for when you’re in retirement.

Nobody gives a shit sugar plum. Is this making the OP feel better

[Anonymous]

Ok- here is what to do.

1- at least get company match for 401K and w each raise increase until you max this out.

2-Pay off debt

3-start buying ibonds. Maybe $500 a month?

4-start brokerage account.

We can help you more if we know more about you. Age, debts, expenses, etc.

[Anonymous]

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

Thanks, Captain Obvious.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

Thanks, Captain Obvious.

I'm the poster you replied to. I apologize to OP for being harsh, but I think it might be beneficial in the long-run to know that others have managed to be very frugal yet content with their lives. If OP had had extenuating circumstances beyond the usual, they would have said so. So start today, OP. Better late than never.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

+1

DH and I have always made way less than you as well. But, we’ve had the financial discipline to always take the high road and live within our means. We’re in our mid-40s and have $1.6M saved in our 401k, $750K saved in 529 plans for our three kids, a taxable brokerage account with $600K, and an online savings account with 36 months ($150K) of net living expenses for emergencies.

Maybe it’s time to stop spending so much of your money on buying the latest car and cell phone model every two years – take the bus like we do. Lose the cleaning service. Stop eating out and actually cook your food. Stop taking vacations – save that for when you’re in retirement.

With respect, do you have student loans or medical bills?

[Anonymous]

Have the savings come directly from your paycheck so you don't even see it.

Make some goals - If you are 45, you still have 20 years of savings between now and 65. So say you want to have $1 million saved then - make a spreadsheet on how much to save between now and then. I think you can likely do it by maxing 401ks and IRAs, and upping those amounts when you reach 50 with the "catch-up" contributions.

Then you'll have to look at your spending to see where you can cut. Track your spending - there are some online tools like Mint that will do it for you, but you'll have to link your accounts.

And then you'll have to stick to your plan. Which will mean forgoing some of the things you've been spending on (restaurants, vacations, latest cell phones, etc.) Learn to love all of the free things available to see and do around here, and the thrift shops, etc.

You can do it! All is not lost!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Any debt?

Recommend Dave Ramsey Financial Peace for the basics. You can do anything you put your mind to, OP!

+1

Start here, OP:
https://www.ramseysolutions.com/ramseyplus/financial-peace/class

OP Ramsey is a scam, look at the reviews. Do not pay this money save it instead.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

+1

DH and I have always made way less than you as well. But, we’ve had the financial discipline to always take the high road and live within our means. We’re in our mid-40s and have $1.6M saved in our 401k, $750K saved in 529 plans for our three kids, a taxable brokerage account with $600K, and an online savings account with 36 months ($150K) of net living expenses for emergencies.

Maybe it’s time to stop spending so much of your money on buying the latest car and cell phone model every two years – take the bus like we do. Lose the cleaning service. Stop eating out and actually cook your food. Stop taking vacations – save that for when you’re in retirement.

I don't believe this for a second. You're saying you make "way less" than OP's $160k--so maybe $120k? Even if you've been making this HHI for 20 years that's $2.4m in income. You're telling me on roughly $2.4k in income you saved $3.1m between all of the accounts you listed? All while...housing, feeding, and clothing yourselves and 3 kids? This just is not plausible even with the stock run up over the past 10 years. If this is true, you are an anomaly that either got lucky in the market or had other cash infusions, and not someone OP or anyone else should measure themselves against.

[Anonymous]

Mr. Money Mustache

Sell a car
Eat in, rice and beans
Thrift shop for clothing
Get a prepaid cell phone, ditch your cell phone plans
Read books from library, play board games
Vacation at a family member's house or camp
Take on some side work
Payoff debt
invest in stocks (index funds)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

+1

DH and I have always made way less than you as well. But, we’ve had the financial discipline to always take the high road and live within our means. We’re in our mid-40s and have $1.6M saved in our 401k, $750K saved in 529 plans for our three kids, a taxable brokerage account with $600K, and an online savings account with 36 months ($150K) of net living expenses for emergencies.

Maybe it’s time to stop spending so much of your money on buying the latest car and cell phone model every two years – take the bus like we do. Lose the cleaning service. Stop eating out and actually cook your food. Stop taking vacations – save that for when you’re in retirement.

I don't believe this for a second. You're saying you make "way less" than OP's $160k--so maybe $120k? Even if you've been making this HHI for 20 years that's $2.4m in income. You're telling me on roughly $2.4k in income you saved $3.1m between all of the accounts you listed? All while...housing, feeding, and clothing yourselves and 3 kids? This just is not plausible even with the stock run up over the past 10 years. If this is true, you are an anomaly that either got lucky in the market or had other cash infusions, and not someone OP or anyone else should measure themselves against.

I wondered about this too. And with 4000/month living expenses, must be a super low mortgage (i.e. bought a while ago) and no day care costs. We were only able to keep costs below that as renters in very old apartment buildings until we had kids.

[Anonymous]

OP, I'm 12:29 poster

Mr. Money Mustache would also tell you to relocate to
a lower cost of living area.

I'm not familiar with VA or DC but Maryland state income tax is high.

You would give yourself a big raise if you could relocate to a state with no income tax.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

Thanks, Captain Obvious.

I'm the poster you replied to. I apologize to OP for being harsh, but I think it might be beneficial in the long-run to know that others have managed to be very frugal yet content with their lives. If OP had had extenuating circumstances beyond the usual, they would have said so. So start today, OP. Better late than never.

NP. "Others" on this forum are all exceptions, including you. OP is the norm.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We've always made significantly less than you, OP, and yet own a home in a nice suburb of DC and have enough to pay for college and retirement. We lived extremely frugally when we were younger, however, and invested in stocks early on that have done well over the decades. You really must start reining in your spending and investing what you can, except that your time-frame will be much shorter.

Thanks, Captain Obvious.

Well apparently it wasn't so Obvious to the OP. Because I agree with their income, they should not be living paycheck to paycheck. It's a choice they've made to do so and are now seeing the consequences of those choices.
Live frugally and you can figure out how to save