New here - Lookingfor advice |
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Rage_Phish
Member
Cash: $ 3.50
Posts: 17
Joined: 20 Aug 2013
Location: Electric Avenue |
New here - Lookingfor advice |
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Hi All,
I have spent the day reading old posts on here and it seems like a great place to get good info.
I was hoping to get a bit of a grade on my own persoanl situation, saving practices, and future.
Im 30 years old
Own a condo with my brother (he doesnt live there) and split the mortgage with my GF 50/50 ($955 a piece). I am underwater and cant rent it for enough to cover the mortgage, so there really is not much i can do about this. I realize too much of my income goes to this.
That is my only debt
monthly income - 2,542
401k contribution - balance of $5,847) adding $348 a month by taking advantage of company match
Old 401k rolled over at a balance of $4,500
Roth Ira - $100 a month - just started this only has $100 in it so far
long term savings (i never touch this) - $6,500 (adding 200-300 a month to build emergency funds)
Short term savings (used for trips, big purchases) - $500, i try to keep this at $500 just incase somethign comes up i can use this cash for it.
Anyways, thanks in advnace for any advice or insight and just let me know if there is anything else you need.
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Tue Aug 20, 2013 7:31 pm |
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Rage_Phish
Member
Cash: $ 3.50
Posts: 17
Joined: 20 Aug 2013
Location: Electric Avenue |
honestly, i turn 30 next montha and dont feel i am anywhere close to where i should be as a 30 year old college grad.
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Tue Aug 20, 2013 7:33 pm |
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blixet
Preferred Member
Cash: $ 32.55
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Joined: 28 Apr 2013
Location: Southern California |
I'm going to guess at a "B" grade. Seems like you are doing OK overall.
What are your prospects for growing your income over, say, the next 5 yrs or so?
Information is more valuable sold than used – Fischer Black
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Tue Aug 20, 2013 7:53 pm |
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Rage_Phish
Member
Cash: $ 3.50
Posts: 17
Joined: 20 Aug 2013
Location: Electric Avenue |
Thanks for the reply.
I work in workers comp insurance on the underwriting side. My VP recently asked if I wanted to apply for an underwriting position, so i think my income level will be rising in the next 5 years. Although I'm not totally sold on this industry or this company. After becoming an underwriter there isnt that much room for growth after that, except to become an UW manager.
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Tue Aug 20, 2013 8:01 pm |
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oldguy
Senior Member
Cash: $ 751.85
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Joined: 21 May 2006
Location: arizona |
The condo must be about $250,000? And you earn $30,000? So - are you in a LOCL area or a HCOL area?
How does the bro tie in (financially) - is he your landlord? And how does he get compensated for his investment?
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Tue Aug 20, 2013 8:30 pm |
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Rage_Phish
Member
Cash: $ 3.50
Posts: 17
Joined: 20 Aug 2013
Location: Electric Avenue |
quote: Originally posted by oldguy The condo must be about $250,000? And you earn $30,000? So - are you in a LOCL area or a HCOL area?
How does the bro tie in (financially) - is he your landlord? And how does he get compensated for his investment?
Yes your figures are just about correct.
I live in the rahter HCOL area (San Francisco Bay Area)
My brother and i bought the condo together (50/50)
He moved out when my girlfriend moved in nad she now pays his portion of the mortgage. He is not my landlord by any means, he really doesnt ahve much tie to the house now that he has moved out.
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Tue Aug 20, 2013 8:36 pm |
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littleroc02us
Moderator
Cash: $ 384.35
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Joined: 09 Feb 2009
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Except that his name is on the note and he has money at stake, plus a credit score at stake should payments cease. If I were him I'd want off the note asap.
Risk comes from not knowing what you're doing. (Warren Buffet)
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Tue Aug 20, 2013 8:47 pm |
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Rage_Phish
Member
Cash: $ 3.50
Posts: 17
Joined: 20 Aug 2013
Location: Electric Avenue |
quote:
yes, this is true. but also is not a forseable problem.
How does one get off the note? Do you mean buy him out?
You'd have to refinance the property in your name only and pay him back whatever amount he invested plus interest. Not sure exactly what the rate would be.
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Tue Aug 20, 2013 8:50 pm |
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Rage_Phish
Member
Cash: $ 3.50
Posts: 17
Joined: 20 Aug 2013
Location: Electric Avenue |
hmm not sure what happened there, it look slike i quoted myself?
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Tue Aug 20, 2013 8:58 pm |
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oldguy
Senior Member
Cash: $ 751.85
Posts: 3656
Joined: 21 May 2006
Location: arizona |
quote: yes, this is true. but also is not a forseable problem.
Huh?? He has $125,000 locked into a condo that you & gf are utilizing - and he gets nothing? LOL - what's your definition of 'forseable'? Wouldn't he like to invest his $125,000 into the market and earn about 11%/yr - that would double it in 6.5 years.
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Tue Aug 20, 2013 9:12 pm |
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Rage_Phish
Member
Cash: $ 3.50
Posts: 17
Joined: 20 Aug 2013
Location: Electric Avenue |
THis is the situation we have. I gave him many options (i move out and he gets a roomate, he lives with myself and GF, etc).
He chose to move back in with my parents due to his social anxiety/ lack of friends/ potential roomates and to save money.
I did not force him to do anything, i litteraly let him do whatever he wanted. This is the situation he came too.
And correct me if im wrong (which i probably am), but if he got off the note he would not have 125,000 to invest as most of that would go to paying back to loan, and he would only get back what he had actually paid into the loan while living there?
Thanks
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Tue Aug 20, 2013 9:17 pm |
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clydewolf
Senior Member
Cash: $ 50.25
Posts: 248
Joined: 27 May 2012
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quote: Originally posted by Rage_Phish TAnd correct me if im wrong (which i probably am), but if he got off the note he would not have 125,000 to invest as most of that would go to paying back to loan, and he would only get back what he had actually paid into the loan while living there?
You and your GF are making the mortgage payments now, so half of that is his payment, and half is your payment.
Both you and your brother are fortunate to have your GF making half of the mortgage payment.
What happens when GF decides she has had enough and moves out?
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Wed Aug 21, 2013 12:38 am |
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Rage_Phish
Member
Cash: $ 3.50
Posts: 17
Joined: 20 Aug 2013
Location: Electric Avenue |
I dont foresee her moving out. Sure these things happen, but right now here is no reason to think this will happen.
And in the event that it does my brother could simply move out of my parents place and into the condo. Or I could just get a roommate
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Wed Aug 21, 2013 6:18 am |
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MrNewEngland
Full Member
Cash: $ 20.85
Posts: 98
Joined: 04 Nov 2009
Location: The QC |
Re: New here - Lookingfor advice |
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quote: Originally posted by Rage_Phish Hi All,
I have spent the day reading old posts on here and it seems like a great place to get good info.
I was hoping to get a bit of a grade on my own persoanl situation, saving practices, and future.
Im 30 years old
Own a condo with my brother (he doesnt live there) and split the mortgage with my GF 50/50 ($955 a piece). I am underwater and cant rent it for enough to cover the mortgage, so there really is not much i can do about this. I realize too much of my income goes to this.
That is my only debt
monthly income - 2,542
401k contribution - balance of $5,847) adding $348 a month by taking advantage of company match
Old 401k rolled over at a balance of $4,500
Roth Ira - $100 a month - just started this only has $100 in it so far
long term savings (i never touch this) - $6,500 (adding 200-300 a month to build emergency funds)
Short term savings (used for trips, big purchases) - $500, i try to keep this at $500 just incase somethign comes up i can use this cash for it.
Anyways, thanks in advnace for any advice or insight and just let me know if there is anything else you need.
I don't think you're doing that poorly. The fact that the mortgage is your only debt is a very good thing. I am a few years older than you (I'm 35) and I just paid off my car and student loans and it feels great. People with huge amounts of high interest debt are under huge pressure - it has to be just crippling.
With that said it does suck that you're underwater on the condo... but the market will (and is) bounce back. Yes the mortgage to income ratio is pretty high... but it is what it is.
It's good that you've started investing. You can't save $200 until you save $100. And you're still young enough that compound interest is your friend. Eventually the interest will be more important than your contributions.
5 years ago I was in a pretty similar situation and that's when I got pretty serious about building my net worth. It's happening pretty quickly.
Best of luck to you!
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Wed Aug 21, 2013 1:26 pm |
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MrNewEngland
Full Member
Cash: $ 20.85
Posts: 98
Joined: 04 Nov 2009
Location: The QC |
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quote: Originally posted by oldguy
quote: yes, this is true. but also is not a forseable problem.
Huh?? He has $125,000 locked into a condo that you & gf are utilizing - and he gets nothing? LOL - what's your definition of 'forseable'? Wouldn't he like to invest his $125,000 into the market and earn about 11%/yr - that would double it in 6.5 years.
First off oldguy I respect you and have learned a lot on this board from your posts. I like the way you think about money and developing net worth. I've learned a lot about not worrying about debts with low interest rates if you can earn more elsewhere.
With that said I think your post (quoted above) is getting too hung up on crunching numbers and not looking at the real world situation. Sometimes in life sh!t happens.
Yes his brother has $125K tied up in the condo. But there's not a lot they could do with it (they can't sell it or rent it). It sounds like OP and his gf are paying all the mortgage so now the brother is free to put his mortgage payment money elsewhere. He's getting the mortgage paid down (slightly) for free while the condo (hopefully) appreciates.
Honestly... I don't see anything unfair about this situation. They're stuck in a bad situation (like many others since the real estate crash) and it sounds like they're making the best of it.
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Wed Aug 21, 2013 1:33 pm |
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