Pay off Taco early??????

The house is my goal but can't decide if we should stay in HI or not. You get a shack of a house w/ no land or a nice one bedroom condo for 500k. Thus the reason for exploring/vacation time.

 

We own our own home in Kahaluu and we are still trying to move to the mainland by the end of the year. That 10k in Hawaii is basically 7k cause how expensive everything here is. My vote would to take a little over a quarter of it get tickets to the mainland and explore for a new place to live. We make good money and it’s still hard to save here. Realistically 20% down payment on liveable home here is at minimum $150k plus. If you plan on staying I would invest it so you can make money off of the 10k.

 

I typed a once sentence joke. You had a temper tantrum and typed a novel. Who needs go go away?

 

And with the rising crime, rising taxes, crazy nanny state policies, and traffic Hawaii is only awesome when you go to the mainland and when people ask you where your from you can say Hawaii. Sure we have the beach but you gotta work so hard you don’t have time to enjoy it.

 

My advice is don't do anything with it at all. Ive always kept about 7-8k in saving just as a buffer in case shit happens.

If you're comfortable with your payment don't pay it down. If you're borrowing someone else money at a low interest rate, why would you.

CASH IS KING!!!

 

Yes sir. Ben Stein taught me keep about a years salary just in case. It really helped when wife and new born baby’s hospital bill was 26k and yes that was with insurance. Felt good paying that after it was all said in done. Besides my grandmother being a financial advisor and stock broker this book helped me with a lot of my money management.

 

Lol. Only 9% percent think you should take a vacation.

 

Lots to unpack here. You asked for an opinion, you may not agree and I’m down with that.

1) Retirement First: Debt is rarely good. For all but the unusually wealthy it is a necessary tool when used wisely. If you and your wife have found a LOCATION you would like to buy a home in, then that goal is in the bucket of “very important” financial goals as it is part of your retirement planning. If not the investment snowball is key. 10k compounded every 7 years double is a good thing.

2) College Saving: You mentioned kids, typically they come after retirement planning, but you must save at least $400 a month from when they are born (each) until they go to college to give them choices. Otherwise they have to check the “needs financial aid” box and that starts them out on the bottom of the list. Of course if you can’t afford that then they will need to figure out how to pay for their college.

3) Debt Reduction: Your imply you have $25,000 in loans on your truck. This is a strong indicator that you bought too much truck. You might want to consider selling it and driving shitboxes until you’re seven years into your home mortgage and begin to gain equity. Nice cars will come after the minivan.

4) Savings You need 6-9 months of cash on hand for the emergency fund. If your rent is 2k and car payments are 1k and food, insurance and other living expenses are 1k a month (example) then you need 25k in cash/short term assets minimum.

5) Quality of Life: All This is more important than vacations. Do some local day trips or off season weekends and make bank on the above. Eat at home, bring coffee in the morning etc.

6) Disposable income: You cannot put several grand into your Taco as a toy until the above is secure.

 

We own a condo in mililani. We've refinanced a couple times to get the mortgage low enough that the rent our tenants are paying make it within a couple hundred of breaking even. Nothing like having a $200 a month mortgage payment .

But the thing is we both have IRAs and emergency savings built up already so buying a house isn't putting all our eggs in one basket. Do NOT overbuy on the house. If you get the most expensive one you can afford, you'll be forever barely making the payments. That's the evil trap that leaves you with nothing left to enjoy life with. Buy small and just because you get a home loan, doesn't mean you have to spend all of it. Any amount of the loan you don't spend, is money you don't have to pay back later. I'm serious about that 20% though. They will charge you insurance on top of your mortgage until you've paid in 20% of the home's value. Another cost you'll have to factor in with the HOAs and prop taxes...most homes are far more expensive than people think because they only look at the mortgage and then realize there's a lot more they have to pay for...

I think at this point you pretty much have a general idea of what all our opinions are. I hope you put the knowledge to use and form your own plan with it. Feel free to PM me if you have any more specific questions.

 

Married with kids while renting in HI then adding a truck payment makes it tough.
Moving somewhere more reasonable would be a start, then buying a vehicle you could pay cash for.

 

Domestic outcry

 

Domesticated men are soft. Let them express.

 

With housing prices here the earlier you buy the better honestly.

 

Bottom line is the bottom line.
Do you owe more than you have or vice versa ? That's what matters.
Who gives a crap of what's paid off. Or your debt free. Remember the bottom line. Let your money work for you.
I keep hearing people say their house is paid off, but smart people have investments and let a 4% house loan loan go.
In other words, if you took say $40K and paid a Taco off 8 years ago when purchased, you would have saved a few thousand on a low interest loan.
If you had invested it in Spyders (S&P 500 index) you would have had a free Taco.
The key is INVEST, not pay off a low percentage loan.
However everyones time frame, needs, etc are different.

 

Keep an emergency fund of a couple months living expenses. The rest go towards paying down the Tacoma.

Your goal should be is to stay debt free as much as possible.

 

Or taken that $40k and invested in Bitcoin when it was nearly $20k and everyone said it could go to $100k. That $40k would be $8k now. IMO it is safer for most people to work on paying down debt, not playing the market.

 

Unless your interest rate is crazy, no reason to pay it down early.

Lots of people want a house. I had one, sold it a couple years ago and now just living cheap and using money saved for travel and experiences. Far more enjoyable than the house was. I got plenty of years left to get another one.

 

Bwahahahaha

 

Probably best to pay down the taco. I wouldn’t buy wheels/tires for a truck that you owe money on. If you and your wife need a vacation, then I highly recommend spending some of that on the experience. Those are worth every bit of the money you spend on them IMO - so long as it doesn’t derail your other financial plans.

$10k isn’t a lot, your best return is probably going to be paying down the taco and paying it off ASAP. Then start putting money into Roth’s and other investments. Compound interest and passive income are the way to future prosperity. Dividend paying stocks, real estate, and other assets that generate a return.

I wish I had started at your age. I am 34 and just finished the purchase of my first commercial property with a good tenant. I wish I had done it sooner. A house is fine, though we are considering selling ours.

You have time. Google the list of books most read by millionaires. Read those and make some good life choices. Do that for ten years and you can buy a dealership, not just the taco.

 

I had kids young (21) and sounds likelmaybe your in the same boat, I built my first house this year when I was 29. Don't sink 10k into a depreciating asset, that's bad business. You have to have a place to live and (theoretically) your home value will not shrink(long term not short, short term anything is possible). I vote vacation and house if u can swing it. Mortgage rates are still wicked low, for comparison, I built 277k house and needed 20k to pay down payment and closing cost, yes ipay pmi but it's like$100/month which isn't much. There are options it there now where u can avoid pmi if you can scrape together 10% which doesn't sound like much but when your paying $1400/mo in daycare for two kids it's hard to scrape together. Your area may be different cost wise so do what makes you happy!!