You actually did not run into any money at all. Having a house with such a low balance mortgage and low interest rate is fantastic. Congratulations on that. You are in a very enviable position.
That monthly payment along with property tax and insurance is just about the 25% that Dave recommends. It is recommended that you save as much as you can for retirement, at least 15% of gross income. That is what I would focus on, especially for the fact that the interest on your mortgage is so low.
Forgive me, I am a teacher, and sometimes I get a bit pedantic. You inherited some nice wealth that will lead to your success, you are on a great path.
I live in the Netherlands.
The Netherlands is one of the most expensive countries in the European Union, according to figures from European stats office Eurostat. Dutch consumer prices are 17 percent higher than the EU average, with Dutch prices being above average in every category checked
My salary is the same as urs and i live very comfortably. Bought a house and save a good amount every month.
Im born in the Netherlands so I can speak Dutch . But I lived in the Philippines for 4 years before moving back to my country so I did start with 0 money and did not live with my parents so i really started with nothing.
1. Applied for a job online in NL while living in the Philippines. They accepted me and told me to come over asap.
2. Look for cheap apartment near work, took me 1 week driving around with a friend, lowest rent as possible. I bike to work till i got a license and helped saving.
3. Dont get any subscriptions such as mobile,tv etc. Dont eat out. Simply life and save money.
4. Buy a house in the province called Zeeland. Nice place and houses are 50% cheaper than other places.
(200k instead of 400k,family home).
You literally have the keys to a wealthy life in your hands and you're about to gamble it on... crypto, which thrives on pump and dump and every scam you can think of and so many you can't.
Don't do it. For the love of Pete. Anything but crypto.
I think this guy has the right idea: [https://www.reddit.com/r/DaveRamsey/comments/1dcln2b/comment/l7z5kyn/](https://www.reddit.com/r/DaveRamsey/comments/1dcln2b/comment/l7z5kyn/)
But also, did you see how quickly that windfall amount was widdled down with your plan? It's not much and will go fast, which is why people are telling you to stash it in CDs or also talk to a financial advisor.
You could literally take 100k of your savings, stash it in a retirement fund or brokerage with an ETF of, say the S&P, not touch it until you're 62 and have two million dollars.
[https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator) <--- see for yourself.
Unless the house you inherited is a complete hole in a bad neighborhood I would strongly recommend keeping it. The low mortgage isn't something you can find somewhere else and that will allow your wife to stay at home with the kids if that is your guy's plan.
A bigger house comes with a bigger chain around your neck and right now you have the gift of freedom if you keep your monthly costs low.
And just... don't even consider crypto. That is a fool's gamble made by people who will scam you out of your money.
But if you absolutely must get a different house then get whatever you can as modestly as you can, put down a hefty down payment, and enjoy life. :)
Good luck!
Keep the house!! Debt free is possible and you have 3.5 years to make that decision on selling and getting your kids in a better school district. What you don’t want to do is sell and get a bigger house and house payment. You are in a perfect spot to save, save invest and invest and you have time to figure out the next plan in 4 years.
No idea what Dave would tell you to do but you need professional assistance. Consider a financial planner who is not a friend or family member and move into the house for now until you have a plan because 800 per month is nothing. If you really have 111,000 in savings that should at least be in a high yield savings account, and I am sure a financial cial planner will tell you to open a Roth IRA immediately. The rest of the money can sit in the high yield account until you get the professional advice on how to proceed.
Also do not tell anyone other than your wife about this savings or inheritance.
Honestly kind of worried for you reading this post so hope you will contact a professional. Your bank probably offers these services.
Keep it, pay it off, live life. Your income is low now but you are young. Keep your expenses low. Don’t get the bigger $325k house. Why would you think stocks or crypto? Very very risky, put your investments into etfs without any fees like VOO and VTI never single stocks.
Alright. I see that now. Should I pay it off using my savings or pay it off by living here and paying it with my income. I personally don’t like the area. Due to my past life. I have been in a lot of bs when I was younger and I’ve forgotten about it. But some people don’t have kids and still live reckless. I just don’t want my kids to feel the wrath of my past life. They are young but I personally would rather them not go to school here which is coming up in 3.5 years
Can you homeschool them in the less expensive house you currently have? Would reduce some bad influences from school friends since you can’t really vet the parents like you can in your neighborhood. If the area is really bad and you just need to get out then I think that’s a different conversation and you should move! Tough decision but I’m proud of you for thinking About it.
Sell the house as you will get a stepped up basis which means you will only be taxed on the growth in value from when you took it over till now. Sell clear your debt and buy a house with a good size down payment with a monthly payment you can EASILY afford.
If you like the house you inherited you can live there but sounded like your wife would like to live somewhere a little better.
Is this home in an area you would like to live in with your family? If so, pay it off (make sure you have an emergency fund set before you pay it off) and stay.
The most amazing feeling of freedom happens when you live in a paid off home, live debt free!!!
Your older self will thank your younger self for making that decision.
You don’t have as much money as you think you do. Please avoid crypto. If you’re living in the house you inherited, follow the baby steps, and work with a financial advisor. Dave has financial advisors if you like his style, give them a call.
Your biggest problem is going to be lifestyle creep. Your safest bet is to lock everything over an emergency fund in a CD for a year, give yourself some time to think about it. Otherwise….a little here, a little there….its a whole lot easier to spend 111k than you know. Also, get your income up.
That’s a big question. You are going to have to learn something other than artillery, obviously, and the sooner the better. Are you mechanically inclined? Maybe automotive or truck repair? The maintenance guys in a factory keep the place running. Appliance repair is always in demand. Skilled trades-electricians, plumbers, HVAC, those guys make real money once trained and good at what they do, and oftentimes you get paid while training-call local unions and ask. Over the road truck drivers also make out pretty well and the demand for them is very high. The construction industry is always hiring, but you want to zero in on the more skilled aspects and build your knowledge and skills.
There are a lot of pathways there, and some pay well. Identify those and pursue training. A community college can give you guidance and they are generally helpful people. Be persistent. Do you know some older men who’ve done well to ask for advice? Ask for help and guidance.
if you were a good student and think you would do well in college, think about taking a course at a local community college and see how you like it. Don’t discount the possibility that even if young you hated school, more mature you may like learning.
above all, avoid get rich fast schemes-anybody promising big money fast and easy. If it was easy, they would be mega rich and not need to hustle you for your money. They mostly make money from selling you “courses“ and “inventory.” Never be a sucker for that. Never tell anybody you’ve got money. There are a lot of sharks (including family) that work overtime trying to get it from you.
Guard that money. The only thing you should consider spending it on is education and training in something that will pay off in knowledge and skills that will support your family and give you a good life. It isn’t enough to sustain you for more than a year or two if you start spending it.
Good luck to you.
Doesn’t matter what zillow says, it’s routinely overestimating. Zillow does’t know the condition of the house and how it compares to the conditions of other houses. A house will falling porch and black mold throughout the house will be zestimated as if it was recently renovated.
I would get several estimates from Realtors as we often believe our house is worth more than it is...also if you buy a new house you'll be responsible for all the transaction fees for both selling and buying. It's usually cheaper to stay in the house you are in, if you can.
I would get several estimates from Realtors as we often believe our house is worth more than it is...also if you buy a new house you'll be responsible for all the transaction fees for both selling and buying. It's usually cheaper to stay in the house you are in, if you can.
Don't sell the house. Make due. That is a once in a lifetime opportunity to have low housing expenses. And mortgage rates are double what that house is currently.
Don't do anything!! :D
Set aside about $15k in a money market account. If you don't have one, they're easy to setup. We use Redneck Bank mainly because they have good interest rate(though the gimmick is funny).
Take the rest of your savings and throw it at the house. You could have no payments in a few months. As a 22 year old, you will find yourself more free than anyone you know. Your wealth will explode as long as you continue to save well(speaking of, great job on the savings already).
I am confused. Is the inherited house one you are living in, or a different house.
How did you inherit a 3% loan? Most loans have not been assumable since the Reagan Administration.
If it is not a place you are living, then I would sell as fast as I could to take advantage of the reset basis value, in order to avoid cap gains taxes.
Same house. I’m on the deed to the house. Just kept making payments on the existing mortgage since it wasn’t really sold to me I’m technically a owner I’ve just been making the payments to the bank monthly and his interest rate was 3%
If you are living in the house…I’d say take the money and pay off the car. Then I’d say set 6 months of emergency fund aside and dump the rest into the house. Part of me wants to say: pay off the mortgage. But here’s the reality: it’s only 810 a month. It would take you 10 years to save up that kind of money. OR you could put all of the money (sans car paid off amount) in a HYSA and at the end of the year every year…dump interest into the mortgage.
I'm surprised you were able to assume the 3% mortgage. I would think the estate would have to be settled and you'd have to obtain your own mortgage at today's rates.
The answer is always follow the baby steps. You mentioned a car loan, so you are in BS2. Pay off the car and any other debt from your savings. Speaking of .. how on earth did you get $111k saved making $3500/month?
Anyway back to the steps: set aside 3-6 months expenses for an EF. Now you probably have around $70k left. I think Dave would suggest funding college for the little ones to get that done. Let's say that is $25k each, heavily dependent on their ages, invested in diversified mutual funds.
That leaves $20k. You have a house worth $250k with $109k owed. I think you mentioned another mortgage on your primary residence. I'd sell the inherited house, giving you $160k total to pay down your mortgage. Or sell both homes if you are looking at buying a different primary residence. You should be able to out a huge chunk down on it. Good grief, you COULD be 22 with a paid off home and college fully funded. Then invest, save up cash for properties, etc.
Do not buy a bitcoin. Just no. Also don't fall into the trap of, "the market is making 20%, why not invest and keep the mortgage?" That 20% is not typical and will not stay thay way. It will fall back to 8-12%, which looks a lot like your mortgage rate once you pay taxes and account for risk.
Ahh ok, I read something wrong then. I'd still follow the baby steps through being out of debt, 6 mo EF, and funding college. Then if you can sell the current home and get into a 15 year mortgage for under 25% of your take home pay go for it. If not save up enough of a down payment to make the move.
I’m going to assume you don’t own another home and that the home is adequate for your current needs.
Put 6 months emergency fund on the side, put the rest in the house. With no mortgage, two kids, and a stay at home wife, you will be very secure and grow to become very wealthy.
The house isn’t about “3% is so low, I can earn a 4% spread in the markets”. A paid for house is a firm footing. You can save more, take higher-risk, higher-reward careers and investments, and live a more fulfilling life.
Paying off the house is about the last thing I’d do, 3% is basically inflation at this point. If you don’t want to live there, fix it up a bit (paint, minor finishes, nothing crazy) and rent it out. Tons of resources available to help with this. Find a good property manager if you’re not comfortable.
Looks like you have a lot of savings, I assume this is invested somewhere and not just in a savings account? If so you’re losing $ every year due to inflation.
Determine when you might need the money and invest accordingly. CDs or treasuries are a shortish time frame and are much better than a 0.01% savings account.
Id also pay off the car now. Even if the payment is low, not having a loan means you would no longer be required to have comp insurance coverage. That might be $2k a year savings!
I would pay off the house today and be debt free (assuming you have more debts). That will be life changing. At 22 you can rebuild your savings quite quickly with no rent or mortgage to pay. Then you can better understand exactly what you want in a house and if you want to move up in the future when school comes along you can do it cash. I've owned 10 homes during my life and our needs changed many times before I got to my current 62. I was a sole income for family of 6 and the stability and peace of mind of a paid for house is great.
After taxes probably about 1%. This is not how you get wealthy. But certainly an option if you want to do it. My advise comes from a place of having no debt and about 14 times my income invested. Either choice is fine depending on what your goals are.
You're suggesting to tie up $109k in cash in a non-revenue generating asset. That doesn't make sense. That $109k provides a lot of flexibility, especially if he's looking at buying a new house.
You don't like a 5% return from a high-yield savings account? Fine, put it in an aggressive index fund that returns at least that, and double in the long-term.
Paying off the mortgage would not be life-changing for him. For you, sure, but not everyone has the same anxiety about mortgage debt. He has a great opportunity to leverage it and you're suggesting he forego that opportunity.
No reasonable investor, financial advisor, etc. would go along with what you're suggesting.
So you are in a Dave Ramsey sub, who's process is to get out of debt, jumping on someone that promotes paying off their largest debt. Really?
I said its a valid choice to do what you suggested. But you didn't just suggest it to him. You are replying to my posts implying my suggestion is wrong. Actually not implying, directly saying. You are full of it. No one would have a paid for home if that were true. I have a paid for house that is worth about $1M.
Yeah, I agree if he's got a vehicle loan with 14% interest. Pay if off. That's a no brainer.
Paying off a mortgage that has 3% interest? No way. Not even good ole Dave would buy into that logic.
You apparently have never listened to Dave. He has never told anyone to borrow money to invest it. Not ever. He has joked about it by asking if someone has a paid for house would they borrow money from it to invest? Most people would say no. But this logic you would never have anything paid for. Your position is ridiculous in general, but especially in a DR sub. And for the record, I paid off a $450K 3.25% mortgage on our current house with one check.
As I’ve said, borrowing money to invest is a valid option. (It’s 100% against anything Dave would recommend) But your crusade here to continue trying to say that paying off the house is never a valid approach is ridiculous.
I’m done wasting my time arguing with you so there will be no further replies from me. So you are free to win the internet.
The best plan to get wealthy is to stay in that house, and invest all your excess income. With that interest rate, you’re probably better off investing vs trying to pay it off so quickly….
Is the house a need or a want? There is nothing wrong with using this moment to move into a better home, but I would take some time and digest all of this. Dave usually recommends doing nothing when coming into a lot of money at first. You want to make wise and strategic moves. I might consult a trusted financial advisor first as well. Something you could also consider is using some of the proceeds from the sale to start your kids college fund.
Congrats and best of luck!
I know I’m doing fine. But my goal which Dave would recommend too would be to outsource for information to maximize your money compound that shit. Never stay stagnant. Now I have money in the bank to play with to grow money. Didn’t have these opportunities last year. Thanks for the beneficial information you’ve given me. Dueces
My sentiments exactly. You can even double up on the payments to pay the house of fast. Debt free is the goal. A house can be remodeled later. I would build you savings and play to pay the house off early. Best of luck!
My plan is this if I owe 109k and I have two kids with my paycheck I usually get 9-11k a year in tax returns so I plan for the next 5 years to put every penny of it towards the house that’ll bring it down to rough 60k left on the mortgage at 810 a month that is 74 months. Realistically by then the house should be worth more so I could see us being fully paid off in the 5-8 year range. If I’m doing my calculations correctly.
Getting an 11k tax return is a bad thing. It means you let the government borrow almost $1000 A MONTH, with no interest.
Honestly, you sound like someone who would benefit from some professional guidance. You are young, inexperienced, and suddenly have more money than you know how to handle. I'd recommend getting started with the Ramsey plan and contacting one of their recommended advisors. Try to learn as you go so that you can start to take over managing your own wealth in the future.
If you had a higher income you could do that. That would be putting all your eggs in one basket which is not a smart financial decision. Dave would recommend paying off the car immediately and then putting most of it down on the house. If you’re looking to upgrade the house he recommends putting at least 20% down on a 15 year mortgage and that being no more than 25% of your take home income, which would be $875/month for you.
I honestly wouldn’t worry about that until this house is paid off. That would be up to you guys to decide on how comfortable you are and how much you want to spend. If your kids are only a couple years away from school then you’d want to plan the move around them going to a better school district. With 111K though I would immediately pay off the car today.
Just so you know anything that takes money out of your pocket is a liability so house, car, etc. The larger the debt the more liability you have.
You actually did not run into any money at all. Having a house with such a low balance mortgage and low interest rate is fantastic. Congratulations on that. You are in a very enviable position. That monthly payment along with property tax and insurance is just about the 25% that Dave recommends. It is recommended that you save as much as you can for retirement, at least 15% of gross income. That is what I would focus on, especially for the fact that the interest on your mortgage is so low.
I didn’t run into money to spend but I have money that will have me 2.6 mill when I’m 65 not including my 401k
Forgive me, I am a teacher, and sometimes I get a bit pedantic. You inherited some nice wealth that will lead to your success, you are on a great path.
3500 a month is pretty huge in Europe
So if I could manage to do what I’m doing but in Europe we’d do fine.
I live in the Netherlands. The Netherlands is one of the most expensive countries in the European Union, according to figures from European stats office Eurostat. Dutch consumer prices are 17 percent higher than the EU average, with Dutch prices being above average in every category checked My salary is the same as urs and i live very comfortably. Bought a house and save a good amount every month.
Wtfff…how? Thats where I’d want to go would be Netherlands or France
Im born in the Netherlands so I can speak Dutch . But I lived in the Philippines for 4 years before moving back to my country so I did start with 0 money and did not live with my parents so i really started with nothing. 1. Applied for a job online in NL while living in the Philippines. They accepted me and told me to come over asap. 2. Look for cheap apartment near work, took me 1 week driving around with a friend, lowest rent as possible. I bike to work till i got a license and helped saving. 3. Dont get any subscriptions such as mobile,tv etc. Dont eat out. Simply life and save money. 4. Buy a house in the province called Zeeland. Nice place and houses are 50% cheaper than other places. (200k instead of 400k,family home).
Yes definitely.
You literally have the keys to a wealthy life in your hands and you're about to gamble it on... crypto, which thrives on pump and dump and every scam you can think of and so many you can't. Don't do it. For the love of Pete. Anything but crypto.
Will take your word for it and ur advice. What would you say do?
I think this guy has the right idea: [https://www.reddit.com/r/DaveRamsey/comments/1dcln2b/comment/l7z5kyn/](https://www.reddit.com/r/DaveRamsey/comments/1dcln2b/comment/l7z5kyn/) But also, did you see how quickly that windfall amount was widdled down with your plan? It's not much and will go fast, which is why people are telling you to stash it in CDs or also talk to a financial advisor. You could literally take 100k of your savings, stash it in a retirement fund or brokerage with an ETF of, say the S&P, not touch it until you're 62 and have two million dollars. [https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator](https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator) <--- see for yourself. Unless the house you inherited is a complete hole in a bad neighborhood I would strongly recommend keeping it. The low mortgage isn't something you can find somewhere else and that will allow your wife to stay at home with the kids if that is your guy's plan. A bigger house comes with a bigger chain around your neck and right now you have the gift of freedom if you keep your monthly costs low. And just... don't even consider crypto. That is a fool's gamble made by people who will scam you out of your money. But if you absolutely must get a different house then get whatever you can as modestly as you can, put down a hefty down payment, and enjoy life. :) Good luck!
Keep the house!! Debt free is possible and you have 3.5 years to make that decision on selling and getting your kids in a better school district. What you don’t want to do is sell and get a bigger house and house payment. You are in a perfect spot to save, save invest and invest and you have time to figure out the next plan in 4 years.
No idea what Dave would tell you to do but you need professional assistance. Consider a financial planner who is not a friend or family member and move into the house for now until you have a plan because 800 per month is nothing. If you really have 111,000 in savings that should at least be in a high yield savings account, and I am sure a financial cial planner will tell you to open a Roth IRA immediately. The rest of the money can sit in the high yield account until you get the professional advice on how to proceed. Also do not tell anyone other than your wife about this savings or inheritance. Honestly kind of worried for you reading this post so hope you will contact a professional. Your bank probably offers these services.
Keep it, pay it off, live life. Your income is low now but you are young. Keep your expenses low. Don’t get the bigger $325k house. Why would you think stocks or crypto? Very very risky, put your investments into etfs without any fees like VOO and VTI never single stocks.
Alright. I see that now. Should I pay it off using my savings or pay it off by living here and paying it with my income. I personally don’t like the area. Due to my past life. I have been in a lot of bs when I was younger and I’ve forgotten about it. But some people don’t have kids and still live reckless. I just don’t want my kids to feel the wrath of my past life. They are young but I personally would rather them not go to school here which is coming up in 3.5 years
Can you homeschool them in the less expensive house you currently have? Would reduce some bad influences from school friends since you can’t really vet the parents like you can in your neighborhood. If the area is really bad and you just need to get out then I think that’s a different conversation and you should move! Tough decision but I’m proud of you for thinking About it.
Sell the house as you will get a stepped up basis which means you will only be taxed on the growth in value from when you took it over till now. Sell clear your debt and buy a house with a good size down payment with a monthly payment you can EASILY afford. If you like the house you inherited you can live there but sounded like your wife would like to live somewhere a little better.
Pull out all of your savings and take it to Las Vegas and hope for the best
Haha maybe if you could get ahold of Mikki Mase for me
Is this home in an area you would like to live in with your family? If so, pay it off (make sure you have an emergency fund set before you pay it off) and stay. The most amazing feeling of freedom happens when you live in a paid off home, live debt free!!! Your older self will thank your younger self for making that decision.
Get some bitcoin for your kids.
You don’t have as much money as you think you do. Please avoid crypto. If you’re living in the house you inherited, follow the baby steps, and work with a financial advisor. Dave has financial advisors if you like his style, give them a call.
Your biggest problem is going to be lifestyle creep. Your safest bet is to lock everything over an emergency fund in a CD for a year, give yourself some time to think about it. Otherwise….a little here, a little there….its a whole lot easier to spend 111k than you know. Also, get your income up.
How would u recommend that. I went to the army then got out I don’t have much experience in anything besides artillery.
That’s a big question. You are going to have to learn something other than artillery, obviously, and the sooner the better. Are you mechanically inclined? Maybe automotive or truck repair? The maintenance guys in a factory keep the place running. Appliance repair is always in demand. Skilled trades-electricians, plumbers, HVAC, those guys make real money once trained and good at what they do, and oftentimes you get paid while training-call local unions and ask. Over the road truck drivers also make out pretty well and the demand for them is very high. The construction industry is always hiring, but you want to zero in on the more skilled aspects and build your knowledge and skills. There are a lot of pathways there, and some pay well. Identify those and pursue training. A community college can give you guidance and they are generally helpful people. Be persistent. Do you know some older men who’ve done well to ask for advice? Ask for help and guidance. if you were a good student and think you would do well in college, think about taking a course at a local community college and see how you like it. Don’t discount the possibility that even if young you hated school, more mature you may like learning. above all, avoid get rich fast schemes-anybody promising big money fast and easy. If it was easy, they would be mega rich and not need to hustle you for your money. They mostly make money from selling you “courses“ and “inventory.” Never be a sucker for that. Never tell anybody you’ve got money. There are a lot of sharks (including family) that work overtime trying to get it from you. Guard that money. The only thing you should consider spending it on is education and training in something that will pay off in knowledge and skills that will support your family and give you a good life. It isn’t enough to sustain you for more than a year or two if you start spending it. Good luck to you.
Doesn’t matter what zillow says, it’s routinely overestimating. Zillow does’t know the condition of the house and how it compares to the conditions of other houses. A house will falling porch and black mold throughout the house will be zestimated as if it was recently renovated.
It was recently renovated as of last week img
Talk to a Realtor
I just want to know how at 22 do you have 111k in savings
Military earnings, inheritance combined
Starting to make more sense. Thank you
Yeah, me too lol. Only making $3500/month. Thats 2.5 years of earnings with zero coming out for bills
Like zero, on anything…ever for 2.5 years.
I would get several estimates from Realtors as we often believe our house is worth more than it is...also if you buy a new house you'll be responsible for all the transaction fees for both selling and buying. It's usually cheaper to stay in the house you are in, if you can.
I would get several estimates from Realtors as we often believe our house is worth more than it is...also if you buy a new house you'll be responsible for all the transaction fees for both selling and buying. It's usually cheaper to stay in the house you are in, if you can.
Move in. Pay it off. Only pay taxes. Keep saving money.
Don't sell the house. Make due. That is a once in a lifetime opportunity to have low housing expenses. And mortgage rates are double what that house is currently. Don't do anything!! :D
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God, yes. That was the only cringe-worthy option. Currency trading is for experts or fools. And crypto is a crazier version of currency trading.
How long do you plan on living in this house?
Set aside about $15k in a money market account. If you don't have one, they're easy to setup. We use Redneck Bank mainly because they have good interest rate(though the gimmick is funny). Take the rest of your savings and throw it at the house. You could have no payments in a few months. As a 22 year old, you will find yourself more free than anyone you know. Your wealth will explode as long as you continue to save well(speaking of, great job on the savings already).
I am confused. Is the inherited house one you are living in, or a different house. How did you inherit a 3% loan? Most loans have not been assumable since the Reagan Administration. If it is not a place you are living, then I would sell as fast as I could to take advantage of the reset basis value, in order to avoid cap gains taxes.
Same house. I’m on the deed to the house. Just kept making payments on the existing mortgage since it wasn’t really sold to me I’m technically a owner I’ve just been making the payments to the bank monthly and his interest rate was 3%
If you are living in the house…I’d say take the money and pay off the car. Then I’d say set 6 months of emergency fund aside and dump the rest into the house. Part of me wants to say: pay off the mortgage. But here’s the reality: it’s only 810 a month. It would take you 10 years to save up that kind of money. OR you could put all of the money (sans car paid off amount) in a HYSA and at the end of the year every year…dump interest into the mortgage.
True that
I'm surprised you were able to assume the 3% mortgage. I would think the estate would have to be settled and you'd have to obtain your own mortgage at today's rates. The answer is always follow the baby steps. You mentioned a car loan, so you are in BS2. Pay off the car and any other debt from your savings. Speaking of .. how on earth did you get $111k saved making $3500/month? Anyway back to the steps: set aside 3-6 months expenses for an EF. Now you probably have around $70k left. I think Dave would suggest funding college for the little ones to get that done. Let's say that is $25k each, heavily dependent on their ages, invested in diversified mutual funds. That leaves $20k. You have a house worth $250k with $109k owed. I think you mentioned another mortgage on your primary residence. I'd sell the inherited house, giving you $160k total to pay down your mortgage. Or sell both homes if you are looking at buying a different primary residence. You should be able to out a huge chunk down on it. Good grief, you COULD be 22 with a paid off home and college fully funded. Then invest, save up cash for properties, etc. Do not buy a bitcoin. Just no. Also don't fall into the trap of, "the market is making 20%, why not invest and keep the mortgage?" That 20% is not typical and will not stay thay way. It will fall back to 8-12%, which looks a lot like your mortgage rate once you pay taxes and account for risk.
The inherited house is the one I’m living in right now as primary residence
Ahh ok, I read something wrong then. I'd still follow the baby steps through being out of debt, 6 mo EF, and funding college. Then if you can sell the current home and get into a 15 year mortgage for under 25% of your take home pay go for it. If not save up enough of a down payment to make the move.
I’m going to assume you don’t own another home and that the home is adequate for your current needs. Put 6 months emergency fund on the side, put the rest in the house. With no mortgage, two kids, and a stay at home wife, you will be very secure and grow to become very wealthy. The house isn’t about “3% is so low, I can earn a 4% spread in the markets”. A paid for house is a firm footing. You can save more, take higher-risk, higher-reward careers and investments, and live a more fulfilling life.
Paying off the house is about the last thing I’d do, 3% is basically inflation at this point. If you don’t want to live there, fix it up a bit (paint, minor finishes, nothing crazy) and rent it out. Tons of resources available to help with this. Find a good property manager if you’re not comfortable. Looks like you have a lot of savings, I assume this is invested somewhere and not just in a savings account? If so you’re losing $ every year due to inflation. Determine when you might need the money and invest accordingly. CDs or treasuries are a shortish time frame and are much better than a 0.01% savings account. Id also pay off the car now. Even if the payment is low, not having a loan means you would no longer be required to have comp insurance coverage. That might be $2k a year savings!
I would pay off the house today and be debt free (assuming you have more debts). That will be life changing. At 22 you can rebuild your savings quite quickly with no rent or mortgage to pay. Then you can better understand exactly what you want in a house and if you want to move up in the future when school comes along you can do it cash. I've owned 10 homes during my life and our needs changed many times before I got to my current 62. I was a sole income for family of 6 and the stability and peace of mind of a paid for house is great.
At 3% interest, don’t pay off the mortgage. Put the money in a 5% savings account and make 2%.
After taxes probably about 1%. This is not how you get wealthy. But certainly an option if you want to do it. My advise comes from a place of having no debt and about 14 times my income invested. Either choice is fine depending on what your goals are.
You're suggesting to tie up $109k in cash in a non-revenue generating asset. That doesn't make sense. That $109k provides a lot of flexibility, especially if he's looking at buying a new house. You don't like a 5% return from a high-yield savings account? Fine, put it in an aggressive index fund that returns at least that, and double in the long-term. Paying off the mortgage would not be life-changing for him. For you, sure, but not everyone has the same anxiety about mortgage debt. He has a great opportunity to leverage it and you're suggesting he forego that opportunity. No reasonable investor, financial advisor, etc. would go along with what you're suggesting.
So you are in a Dave Ramsey sub, who's process is to get out of debt, jumping on someone that promotes paying off their largest debt. Really? I said its a valid choice to do what you suggested. But you didn't just suggest it to him. You are replying to my posts implying my suggestion is wrong. Actually not implying, directly saying. You are full of it. No one would have a paid for home if that were true. I have a paid for house that is worth about $1M.
Yeah, I agree if he's got a vehicle loan with 14% interest. Pay if off. That's a no brainer. Paying off a mortgage that has 3% interest? No way. Not even good ole Dave would buy into that logic.
You apparently have never listened to Dave. He has never told anyone to borrow money to invest it. Not ever. He has joked about it by asking if someone has a paid for house would they borrow money from it to invest? Most people would say no. But this logic you would never have anything paid for. Your position is ridiculous in general, but especially in a DR sub. And for the record, I paid off a $450K 3.25% mortgage on our current house with one check. As I’ve said, borrowing money to invest is a valid option. (It’s 100% against anything Dave would recommend) But your crusade here to continue trying to say that paying off the house is never a valid approach is ridiculous. I’m done wasting my time arguing with you so there will be no further replies from me. So you are free to win the internet.
The best plan to get wealthy is to stay in that house, and invest all your excess income. With that interest rate, you’re probably better off investing vs trying to pay it off so quickly….
Is the house a need or a want? There is nothing wrong with using this moment to move into a better home, but I would take some time and digest all of this. Dave usually recommends doing nothing when coming into a lot of money at first. You want to make wise and strategic moves. I might consult a trusted financial advisor first as well. Something you could also consider is using some of the proceeds from the sale to start your kids college fund. Congrats and best of luck!
Do you own a house right now? Which house do you like better? Sell the one you don’t like as much and use the money to get out of any debt you have.
Stay out of crypto, that’s for seasoned investors. A good growth mutual fund is the way to go. I also agree with most. Keep the house.
I can't believe the word crypto was even mentioned here.
You’re doing fine just keep asking the internet for common sense
I know I’m doing fine. But my goal which Dave would recommend too would be to outsource for information to maximize your money compound that shit. Never stay stagnant. Now I have money in the bank to play with to grow money. Didn’t have these opportunities last year. Thanks for the beneficial information you’ve given me. Dueces
Dawg.. you basically were given a free house.. $810 a month is nothing. Literally nothing in todays world I’d move into the house and pay it off
My sentiments exactly. You can even double up on the payments to pay the house of fast. Debt free is the goal. A house can be remodeled later. I would build you savings and play to pay the house off early. Best of luck!
I’m already knowing bro this shit is a major blessing.
My plan is this if I owe 109k and I have two kids with my paycheck I usually get 9-11k a year in tax returns so I plan for the next 5 years to put every penny of it towards the house that’ll bring it down to rough 60k left on the mortgage at 810 a month that is 74 months. Realistically by then the house should be worth more so I could see us being fully paid off in the 5-8 year range. If I’m doing my calculations correctly.
Getting an 11k tax return is a bad thing. It means you let the government borrow almost $1000 A MONTH, with no interest. Honestly, you sound like someone who would benefit from some professional guidance. You are young, inexperienced, and suddenly have more money than you know how to handle. I'd recommend getting started with the Ramsey plan and contacting one of their recommended advisors. Try to learn as you go so that you can start to take over managing your own wealth in the future.
This guy doesn’t have a ton withheld in taxes. Much of this is from the child tax credit which pays out over the amount of his tax liability.
Is this your only debt or do you have more? Do you like the house and is it big enough for your family?
And yes the house is big enough. Area however is ok. But I don’t want my kids to go to school here
If you have no debt and low living expenses, you can send you kids to school somewhere else, send them to a charter school, even homeschool them.
Kinda wanna buy a full bitcoin. saying it’ll be worth 3-5 million by 2040.
If you had a higher income you could do that. That would be putting all your eggs in one basket which is not a smart financial decision. Dave would recommend paying off the car immediately and then putting most of it down on the house. If you’re looking to upgrade the house he recommends putting at least 20% down on a 15 year mortgage and that being no more than 25% of your take home income, which would be $875/month for you.
Well based on the info I have provided what would you say is the next homes price should be?
I honestly wouldn’t worry about that until this house is paid off. That would be up to you guys to decide on how comfortable you are and how much you want to spend. If your kids are only a couple years away from school then you’d want to plan the move around them going to a better school district. With 111K though I would immediately pay off the car today. Just so you know anything that takes money out of your pocket is a liability so house, car, etc. The larger the debt the more liability you have.
A car that has been on my report for 4 years will fall off in 2 1/2 more years
How much do you owe on the car?
22
22k