Hi! I am interested in advice on investing in mutual funds, index funds and real estate.
Our goal is to be FI/RE by 50. Our ages are 34 (me) and 33 (husband) right now.
Background Information (before raises in March)…
My husband and I will be 100% debt free as of November 30th. We will be saving our 6 month emergency fund – $15k by February 2018.
- We take home $100k after taxes
- We live on $27,564k a year (very low cost of living in Southwest Michigan)
- We tithe/give – $13.5k a year
Our company matches our 401k contributions at 5%. Starting January we will put in 5% because they match 100% on the first 3% of pay and 50% on the next 2% of pay plus give an automatic company contribution of 3% of our base pay before taxes to our 401(k) as well, so we get an 8% match each.
It can get complicated but what that works out to is:
- $375 from my paycheck as a contribution to 401k (5% contribution)
- From the company – a match of $225 (100% match on first 3% of pay) + $75 (50% match on next 2% of pay) + $225 (the automatic company contribution of 3% of my paycheck)
- Grand total each month to 401k from me and the company match: $900
- $177.5 from his paycheck as a contribution to 401k (5% contribution)
- From the company – a match of $106.5 (3% at 100% match) + $71 (2% at 50% match) + 106.5 (the automatic company contribution of 3% of his paycheck)
- Grand total each month to 401k from him and the company match: $461.50
We contribute $6,630/year and the company contributes $9,708 for a total of $16,338 to our 401(k)s.
We want to open up a 2 Roth IRAs next year and contribute the $11k.
That brings the annual investing total (us and our employer) to $27,338 before growth.
- what we live on: $27,564 (includes date night and personal spending money)
- what we give: $13,500
- what we will personally invest (not counting our match): $17,630
That brings our annual spending/investing/giving to: $58,694
We still have $41,306 to invest, take vacation, have fun.
By the way, my husband’s salary is likely to go up $10k next year with a promotion. In 2019 based on our career trajectories, once my husband completes his MBA his salary will increase another $50k and my salary will increase $30k as I’m likely to be promoted that year as well. So we’ll have more money coming in with the same expenses (our rent stays flat year over year). We’re not looking to purchase a house anytime soon.
We want to get into real estate. However, until we have enough money saved to purchase something cash we want our money to grow.
We went through Dave Ramsey’s FPU and will have completed Baby Steps 1-3 and be on Baby Steps 4 & 6 (I can’t have kids).
What are the best options when looking at investing money to grow for real estate purchases and what is a smart amount to set aside for vacations?
What is your advice for her?