Networth Doesn't Mean Much in DC it seems

[Anonymous]

OP you're fine. Just keep on doing what your doing. The happiest person in the room (any room) is the one with a couple of million socked away that no one knows about. I am sure you have lots of fellow millionaires nearby that don't flaunt it? Do you really want to live that lifestyle anyway? Our financial picture is similar, but we do intend to let loose a bit more when DH retires in 5-6 yrs. I don't work.

[Anonymous]

Anonymous wrote:DH and I are fiscally conservative and try to save as much as possible. We are 40 years old and work hard. Our HHI is about 300K and networth is about $2 million. Yet we don't live that lifestyle. It feels in DC it doesn't go far at all. We have a cleaning service that comes in once a month. We go out to eat at mom and pop restaurants (so nothing fancy). We drive and Corolla (3 years old) and Sienna (9 years old). I still worry a lot about funding kids 529s. We have 2 kids that will be heading to college in about 9 years and so far we have only been able to fund about $67k in total (for both kids). There is no way that we will be able to pay for the kids college fully. On paper we looks good.

Mutual Funds $207k
Retirement $710k
529 $67K
Cash $55k
Property $1million (net of loans)

So why do I feel like we have to think about every dollar that we spend all the time? Am I worrying for nothing? Should I worry more?

We have 3 properties (2 rentals and 1 main). The rental properties are paid off and our house has a 15 year mortgage. It should be paid off by the time the kids are in their second year of college. But I still don't feel that we are in a good enough position.

We do go a couple of vacations a year. Nothing fancy. Just rent a beach house or do a road trip.

I guess I am looking for advice and maybe someone can just tell me that I am worrying too much. Or else let me know if I am not saving enough.

We make half of you and have managed to save enough for our children's college. Plenty of great public schools in the area. Save for college instead.

[Anonymous]

Anonymous wrote:I have a question and I am NOT being snarky but I am ready with my body armor for all of the insults I am sure I am about to receive! Why does everyone feel they must pay for ALL of their childrens' college tuition? I certainly WISH my parents had been able to pay for mine and I am sure they wished they could have footed the bill for me too, but they could not. I went to a private, relatively expensive university, had some scholarships and a tiny bit of financial aid but the rest I paid for myself with hefty student loans (which I paid off by the time I was 26 and it was the happiest day of my life)! I also worked while in college and played sports, etc. and somehow managed to graduate at the top of my class (i.e. just pointing out that my grades did not suffer, I played Division 1 sports, had a job, and still paid for most of my tuition on my own).

It seems reading these threads of people being stressed about money that most SEEM to be stressed about college tuition. What is wrong with having the kids participate? Again, no snark, just a question.

Do you know what private schools run these days, all in? About 60k. So even if you pay for 3/4, that's still a lot left over for the child to take out in loans, which disadvantages them when they're just starting out in life. Also, 3/4 of ~240k is still a lot if money to save per child.

[Anonymous]

Anonymous wrote:DH and I are fiscally conservative and try to save as much as possible. We are 40 years old and work hard. Our HHI is about 300K and networth is about $2 million. Yet we don't live that lifestyle. It feels in DC it doesn't go far at all. We have a cleaning service that comes in once a month. We go out to eat at mom and pop restaurants (so nothing fancy). We drive and Corolla (3 years old) and Sienna (9 years old). I still worry a lot about funding kids 529s. We have 2 kids that will be heading to college in about 9 years and so far we have only been able to fund about $67k in total (for both kids). There is no way that we will be able to pay for the kids college fully. On paper we looks good.

Mutual Funds $207k
Retirement $710k
529 $67K
Cash $55k
Property $1million (net of loans)

So why do I feel like we have to think about every dollar that we spend all the time? Am I worrying for nothing? Should I worry more?

We have 3 properties (2 rentals and 1 main). The rental properties are paid off and our house has a 15 year mortgage. It should be paid off by the time the kids are in their second year of college. But I still don't feel that we are in a good enough position.

We do go a couple of vacations a year. Nothing fancy. Just rent a beach house or do a road trip.

I guess I am looking for advice and maybe someone can just tell me that I am worrying too much. Or else let me know if I am not saving enough.

You seem to have a lot of your money tied up in real estate. Seems like you are saving enough for retirement, but maybe not for college - is that $200k in mutual funds earmarked for retirement? If it's not in a restricted account, and you aren't counting on it for retirement, why not leverage that to help pay for college? Can you cash flow college once the mortgage is paid off? If not, then maybe refinance to a 30 year, keep paying the higher payment though until you need the extra cash flow for college. Or a HELOC, as a pp suggested. Can you sell the rental properties closer to college and use the profit for tuition payments? My kids are younger than yours (the oldest just entered K last year), and we have almost as much as you do saved in the 529s. So I think yes, you should be a bit concerned about how you are going to be paying for college, BUT, with your assets, you have options to make it work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Something is not adding up here. You make 300k, have a net worth of over 2 m, and yet still worry about taking a nice vacation or putting money aside for kids' college? What *do* you spend money on?

Hookers and blow obviously.

Maybe DH is keeping a woman

[Anonymous]

OP, sorry you have received so many unhelpful comments. I am a financial planner so hopefully can give you some helpful advice.

I think what you are facing is that you have net worth but it is mostly tied up in "illiquid" assets - i.e. the properties and retirement. So from a cash flow basis, money may be tight despite your net worth.

I would try to run a financial projection and see if you are on track to meet your retirement needs. That should help you figure out if you are worrying too much or not enough.

[Anonymous]

Anonymous wrote:OP, sorry you have received so many unhelpful comments. I am a financial planner so hopefully can give you some helpful advice.

I think what you are facing is that you have net worth but it is mostly tied up in "illiquid" assets - i.e. the properties and retirement. So from a cash flow basis, money may be tight despite your net worth.

I would try to run a financial projection and see if you are on track to meet your retirement needs. That should help you figure out if you are worrying too much or not enough.

Op here. Thanks for the advice. How do I run a financial projection?

[Anonymous]

[quote=Anonymous]DH and I are fiscally conservative and try to save as much as possible. We are 40 years old and work hard. Our HHI is about 300K and networth is about $2 million. Yet we don't live that lifestyle. It feels in DC it doesn't go far at all. We have a cleaning service that comes in once a month. We go out to eat at mom and pop restaurants (so nothing fancy). We drive and Corolla (3 years old) and Sienna (9 years old). I still worry a lot about funding kids 529s. We have 2 kids that will be heading to college in about 9 years and so far we have only been able to fund about $67k in total (for both kids). There is no way that we will be able to pay for the kids college fully. On paper we looks good.

Mutual Funds $207k
Retirement $710k
529 $67K
Cash $55k
Property $1million (net of loans)

So why do I feel like we have to think about every dollar that we spend all the time? Am I worrying for nothing? Should I worry more?

We have 3 properties (2 rentals and 1 main). The rental properties are paid off and our house has a 15 year mortgage. It should be paid off by the time the kids are in their second year of college. But I still don't feel that we are in a good enough position.

We do go a couple of vacations a year. Nothing fancy. Just rent a beach house or do a road trip.

I guess I am looking for advice and maybe someone can just tell me that I am worrying too much. Or else let me know if I am not saving enough.

[/quote]

OP, The property line-item sticks out like a sore thumb. We need more $ breakdown on that: details of home values and mortgages, and cash-flow details on the rentals.

[Anonymous]

Anonymous wrote:

Anonymous wrote:DH and I are fiscally conservative and try to save as much as possible. We are 40 years old and work hard. Our HHI is about 300K and networth is about $2 million. Yet we don't live that lifestyle. It feels in DC it doesn't go far at all. We have a cleaning service that comes in once a month. We go out to eat at mom and pop restaurants (so nothing fancy). We drive and Corolla (3 years old) and Sienna (9 years old). I still worry a lot about funding kids 529s. We have 2 kids that will be heading to college in about 9 years and so far we have only been able to fund about $67k in total (for both kids). There is no way that we will be able to pay for the kids college fully. On paper we looks good.

Mutual Funds $207k
Retirement $710k
529 $67K
Cash $55k
Property $1million (net of loans)

So why do I feel like we have to think about every dollar that we spend all the time? Am I worrying for nothing? Should I worry more?

We have 3 properties (2 rentals and 1 main). The rental properties are paid off and our house has a 15 year mortgage. It should be paid off by the time the kids are in their second year of college. But I still don't feel that we are in a good enough position.

We do go a couple of vacations a year. Nothing fancy. Just rent a beach house or do a road trip.

I guess I am looking for advice and maybe someone can just tell me that I am worrying too much. Or else let me know if I am not saving enough.

You seem to have a lot of your money tied up in real estate. Seems like you are saving enough for retirement, but maybe not for college - is that $200k in mutual funds earmarked for retirement? If it's not in a restricted account, and you aren't counting on it for retirement, why not leverage that to help pay for college? Can you cash flow college once the mortgage is paid off? If not, then maybe refinance to a 30 year, keep paying the higher payment though until you need the extra cash flow for college. Or a HELOC, as a pp suggested. Can you sell the rental properties closer to college and use the profit for tuition payments? My kids are younger than yours (the oldest just entered K last year), and we have almost as much as you do saved in the 529s. So I think yes, you should be a bi concerned about how you are going to be paying for college, BUT, with your assets, you have options to make it work.

I agree, too much of your net worth is in real estate. Do a cash out refinance and put some of that money into 529s.

[Anonymous]

Or just sell one of the rental properties.