Let's Talk Money

Lot's of good detailed stories here guys...

To anyone who may be reading this, if you're unhappy with where you are currently, take a look at some of the stories in this thread so far, and analyze what you're doing versus the habits some of these successful folks have.
1. Intentionality
2. Very limited debt use
3. Automate saving/investing
4. Looking long term vs this weekend

These are the difference makers. Use this content as encouragement to make the necessary changes in your own life.
Anyone can do this stuff... and please don't hesitate to reach out to me via PM if you'd like some personalized help with your own journey.

 

So did you create this thread to solicit clients? Are you a FA?

 

You should not call people bad names,

I have a horrible history with money. It is not as bad as some. Not living on the streets bad. But looking for change to buy food and living with a friends crack addicted brother in a bad area working a minimum wage part time bad story.

I am not one for details. I will say I struggled, did what I had to do. I got a lucky break in life when a kind person helped me pay for college and I got job as a restaurant manager afterwards . Even after landing a job I was always in debt and paycheck to paycheck. After marriage it was no better. Incomes went up, so did spending. We always had nice stuff but no money.

So, not being one for details I am fast forwarding to today. It is 35 years later. I just quit my job I hated after 15 years. I have a nice house, wife, and daughter, and massive debt. My new 2021 Tacoma and new 2021 ES 350 F Sport. If I was to pay off cards, house, cars, everything, maybe 500k. My wife works and bank account is low.

BUT, I am not worried. My job was going to kill me. I have several stress and hereditary related conditions now that I need to take care of the rest of my life. I am no good dead. I have huge equity in the house I can tap into. I have a 401k from my job I can cash out. And I am trading OTC:bb pennies which is doing great. Right now I have one that may clear all my debt for good within 2 weeks.

so my financial plan, be lucky in the OTC, and buy more Tacoma’s.

 

I created this to give people a place to hear from others and get encouragement to be better. If someone reaches out and wants personal help so be it.
I am not a financial advisor in the sense of selling investments. I am a financial coach, meaning I help people re-think their money situation and get into a better position so that they can then work with an investment pro if they want to invest.
Many people are held back by their own limiting beliefs and habits. I help people overcome that.

 

I can't wait. Wife is nervous as hell. I'm just super pumped, I'm 37 and we've been putting this off for years for "the right time." There is no "right time" but I've landed a job/career that I love, pays well enough that I can dump 10% into my 401k without noticing the loss, they contribute another 5% to it, and they also provide a fully company-funded cash balance pension plan. We will be set for retirement. Unfortunately, I may need to pull a small loan (less than $10k) to get her into a new or newer car. But it'll be paid off within a year, then all that money will go on top of the mortgage since it's already budgeted out.

I've considered refinancing to a 15yr, but currently our taxes are not in escrow. Every place that we looked at to refi wants our taxes in escrow which would bump our monthly payment higher than I'm comfortable with.

The very short version is: God forbid I lose my job, I can hustle and pay the monthly bills with no problems doing side work. I did it before, I can easily do it again. I have many skills, just not many "on paper." Having the taxes out of escrow means I only have to think about them twice a year, once for school, once for property. It's easier to save for a single large payment than pay more each month. I will keep it this way. So the 15yr mortgage is out of the question unless I can find a company that doesn't require taxes in escrow.

Back to just hammering it with extra principal. Maybe I'll start throwing my yearly bonus and pay increase on it too. We'll see...

 

I just turned 36 a couple days after Levi was born, we have been married ten years before we decided to take the plunge so we are a little older first time parents as well.


The only real advantage of the 15 year is the lower interest rate. If your current rate is not bad, and you have the discipline, just pay your 30 year like a 15 and you can finish in the same time. There are calculators online that you can crunch to find out what you need the added principal to be each month.

 

Man, I got stressed out just reading this. You don't sound like you are looking for advice but I'll give you some anyway. Consider selling BOTH those vehicles and downgrading, like today. You're in a very dangerous position. And cashing out 401k comes with huge penalties, that's not free money sitting there. That should be a last ditch option, like kid needs life-saving surgery and this is the only way type situation.

 

Right on, I'll be 38 in January, my wife is about 2.5yrs younger than me. We've been together for 16 years, married for almost 6.

Current interest rate is 4.125% on a mortgage taken out in 2015. That was the lowest rate I could find at the time for a construction loan. (house is a modular, 4 box colonial) Went from a construction loan to a conventional after we got our C/O).

I'm set to get a good bump in pay this coming January, so I'm about to kick it up a lot once that comes to fruition.

 

With that rate, you should prob refi, even if you do another 30YR.

Today's refi rates (WellsFargo):

 

Yeah, I guess I need to keep looking into it...

 

One thing worth mentioning is life insurance and a trust. When the kids were young we bought life insurance policies for my wife and I in case the worst happened. If something happened to one of us, the house could be paid off and the kids could remain in private school and go to college. If both of us died, there would be enough to carry the kids to adulthood and to pay for school. The trust ensures the proceeds from your estate go where you wish, provides for guardianship of minor children, sets up an executorship, and medical advance directives. It's money well spent.

Lots of people seem to think this or that will happen when someone dies or that it's enough to just let the relatives know what you want done. It is not. Without a trust, your property goes into probate where the court system takes control of the assets and decides how to disperse them. They also take a cut. If you own real property, and/or have assets, it's important to have a trust. A good attorney will guide you through he decision making. This is not an area to cut corners, and you do have to update it periodically.

So, here's the rub.
Choosing executors can be tricky and most attorneys will tell you not to have a coexecutor. I would say never, choose an executor or coexecutor who has little of their own or can't stand on their own feet.

My kids are coexecutors because they have shown they are able to work together and each stands on their own two feet. when they were minors, my sister was the executor. My sister and I are the executors of our parent's estate. My parents have made it clear what they want done in their trust and we know where everything is, so I think it will all be fine. My parents were the executors of each of their parent's estates. Both had huge problems with siblings who had not a pot to piss in and were internet lawyers. Both parents also have siblings who would need care for the rest of their lives so a large part of those trusts provided for that care. Suffice to say, the slackers... it's always the slackers, created a lot of problems for each parent because they think everything should have went to them. It's a fairly common occurrence.

For my Mom, it ended when my uncle passed away about 10 years ago. There was a lot of money there. My grandparents (and great grandparents going back several generations) were ranchers who grew citrus in So Cal. My grandfather sold the ranch and the water rights he had to a canyon down here at the end of WWII. He invested the money and did well. My Mom made sure my disabled uncle was well cared for in a nice place close to her. The other one wanted to use the cheapest place possible. People can be vey petty when money is involved.

For my Dad, it continues as his brother is still alive. On my Dad's side there are a lot of siblings and I have a lot of cousins. My grandparents on this side also had a lot of money. Neither was educated beyond HS, but my grandmother was smart, and a wheeler-dealer with property. One mistake my grandmother made was giving a copy of the will to each person named in it. Honestly, I think it was a trigger for two of my cousins to never do anything with their lives. They thought they were going to be rich when grandma died. Others fought over "their fair share", a phrase that makes me want to punch someone. None could understand the division and dispersal can only be according to the directions in the trust. My grandma lived a long time, she died at 99, about 18 years ago. She was this tough, little Irish woman who we suspected God forgot to collect at some time. She was 5 foot nothing, about a buck-five, soaking wet, tough and stubborn. she may have stayed so long just to irritate some of the ones waiting for their share. I think my sister, one of my cousins, and myself are the only ones who have not spent that money. Pretty sure all of us turned it into more money.
The point is, these things can go south. In each of these cases, relatives got into the house and took items before they could be inventoried. Money tends to make people do things you wouldn't think they would otherwise do. Lots of people seem to have underlying ideas about what's fair, what should be, and what something is worth. It's not a time when there should be family discord, but there often is. I've heard similar stories from people I know or work with.

The take away. You need life insurance if you have dependents. you need a trust to protect your assets for those dependents. My personal opinion is to keep it simple, but talk to the executor and dependents about what you would like to happen. Yes, it's written down, but it's good to make sure all involved have a common understanding. You can leave a list of small items you would like to give to persons in the trust to simplify that part. Directions for services or pre paid services are a good idea. One thing I talked to my kids about was to not live their life from the perspective of Dad wouldn't like this, or that. They need to make their own decisions based up their values and judgement. I've seen a few people who paralyze themselves with trying to please someone who has passed. Use an attorney instead of a paralegal. The most important thing is to keep the family together. fighting about money is ridiculous. I wouldn't give out copies of a trust other than the advance directive. They can contact the lawyer when the time comes. As you get older, you may consider making the executor(s) a POA on your bank account as it gives them access to funds when they will need to carry out some tasks on your behalf. Update the trust to reflect changes in your property and accounts. The trust has to be notarized and filed with the county records clerk to reflect your real property is held by the trust.

Just one guy's 2 cents, your mileage may vary.

 

Only thing I would add is make sure it's TERM life insurance, don't buy whole life. If someone is selling whole like they either are a crook or they can't do math.

 

Great post. I'm not getting into it on the internet, but my father and aunt were both royally screwed by their sister when my grandfather passed away.

 

Trusts Vs Wills can be a tricky question depending on the situation and size of the estate... and you can have both. One quick note regarding guardianship of minors, this stipulation is part of a will, not a trust.

 

This would cause some issues I think. I'd want my kid to live with my brother, and he'd be all for it. My wife would probably want him to live with her sister where he has a cousin that's within 3mo of the same age.

My brother lives 10 minutes from me, same town, same school district. He'd get to enjoy the same friends, close to family (parents are 10 minutes away too). Her sister lives 15min in the opposite direction, other side of the river. Different school district, etc...

My wife hates these conversations. I believe they're necessary. I prefer to plan out the what-ifs in a logical manner, but only to the point to give direction should that what-if come to fruition.

 

Yea for sure. Conversations in this area can be very difficult for some people... have you had this conversation with your wife?
My wife and I have 2 young kids now and recently went through this process of choosing a guardian, it's a difficult thing to decide.
Another thing to keep in mind when considering this, is to include the person you're planning on granting custody to, in your case your bother or sister-in-law.
Once my wife and I were leaning one specific direction, we talked about it with the person we wanted the kids to go to, just to ensure they would be open to the idea and willing to take on that responsibility.

 

Ours is term. Never used it of course, but if it was needed...
I had cancer about 18 years ago and I was glad we had it if the worst were to happen. Fortunately, I got through it okay.
That also underscores the importance of health insurance. The treatment would have bankrupt us without it.

 

I hear ya man, I had cancer in 2013, I had just put my 20 year term in place in 2011 when we got married. Came out ok, but having that in place gave me a lot of peace that she would be taken care of if the worst were to have happened. Now that we have a little one, and we have probably have 10x the income of then, we need to up both of ours with new Terms.

 

I have, we didn't fully agree on anything yet. I'd want our kid to stay in the same school district with his friends. My brother would also take our dog if something happened to both of us which would be beneficial for our kid. He and I have already talked about it. He also is very well off from years of hard work. He never got to have kids for reasons I'm not putting on the internet.

And he's within 2yrs of me age wise, great with kids. I'm honestly not sure my inlaws could afford a second child.

 

true dat !!!

work hard???

pay UR self FIRST !!!