Reply to What a self made multiple millionaire would do in your shoes to increase your net worth.

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[quote=Anonymous][quote=Anonymous]Another one who will bite:

Me: 33 yo, work FT make 140,000 - dream of self employment as I have no passion for my job, but no real ideas on the self employment front, so I stick with it
DH: 34 yo, work FT make 95,000, somewhat same mindset as me - we are both hard workers, but low innovators it seems :-)

1 rental property worth 350k, owe 316k. Make approx $300 /month in cash flow and have passive losses after depreciation right at 3k/year, so no forfeited passive losses.

Saving for college for one DS.

Most of our savings is tied up in 401ks (approx 300k) and about 75 - 100k in various stocks.

Our monthly debt (mortgage, student loans, car loan (I love long term low-interest debt)) can be serviced by the 95k salary alone.[/quote]

OP here.  What do you do?

The goal here is increasing your passive cashflow to $95K per year.  For you that would be rich, as you truly wouldn't have to work.  Let me see if I have some ideas.

Lets start with the rental real estate.  First, what is your cash on cash return (how much did you put down on the property inclusive of closing costs and repairs before it was rented?)  What is your current interest rate?  What type of property is it (bedrooms? bathrooms? condo? house?, etc)?  What type of mortgage do you currently have?  Where is the property located (if DC, be specific as I know it extremely well).

Your comment on passive loss worries me.  Unless you or your spouse are a real estate professional as defined by the IRS you cannot write passive losses, in excess of passive gain against ordinary income.

Moving past real estate.  Is your 401K a ROTH?  How many 401Ks to do you have?  Any IRAs?  Any with prior employers?  Please provide rough balances for each.  How much do you currently contribute annually? (for you and your spouse), what are your company matches?  do either of you get discounts in buying employer stock?  Based on your answers I will give you more comments.  This appears to be where you are weakest and can make the biggest moves.  Please describe your education savings plan (it is directly related to 401K contributions).

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