Interesting READ: 7 Ways to Prepare for Retirement in Your 20s

[villansfinest]

If your employer offers a Roth 401K, try utilizing that instead of the 401K. If not, no big deal. Once your Roth IRA is maxed out, move to the traditional IRA and start contributing to that.

Yo, CRC! i had dreams of doing that too, but i eventually found out this:

"Yes. An individual may make IRA contributions to both a Roth and a Traditional IRA, providing the combined contribution total does not exceed the contribution limit for the year.

Read more: http://www.investopedia.com/ask/answers/03/081503.asp#ixzz2DU9tTumY"

So although you can contribute to both vehicles during the same year, if you max your contribution to one, you can't contribute anything to the other. I'm starting to look in to low fee brokerage accounts to generate additional returns.

 

[wr]

best investment is real estate. Not flipping or renting houses exclusively, but raw land as well.

but it's not a passive form of investing like 401k, roth ira etc. You have to be involved and make decisions or higher the right people to act in capacity as agent for you.

 

[ricky409]

best investment is real estate. Not flipping or renting houses exclusively, but raw land as well.
but it's not a passive form of investing like 401k, roth ira etc. You have to be involved and make decisions or higher the right people to act in capacity as agent for you.

but i would figure that renting out the first two homes would prove profitable, wouldnt it?

 

[dominikin]

posting for later

 

[wr]

but i would figure that renting out the first two homes would prove profitable, wouldnt it?

Could you be more specific about renting out the two homes? You mean renting before you buy your own property for yourself?

renting is more or less profitable based on your equity, rental price, ownership rights etc. i would also consider if your plan is for short term cashflow or to create longterm leveraged positive cashflow which would allow you to build up a portfolio and get into more investing.

i was speaking from a longterm standpoint since this is about saving for retirement and people investing in their retirement can wait 20 + years for a payout. But sitting on land can yield great payouts as well without all the funky time restrictions on traditional retirement funds.

Plus in some cases when you invest in your retirement fund that may be what your money is doing anyway by way of REITs etc.

 

[atlien seeko]

Slowlane.

Tell me how I can retire IN my 20's and I'll be all ears...

 

[DeadsetAce]

No debt FTW!

 

[ricky409]

Could you be more specific about renting out the two homes? You mean renting before you buy your own property for yourself?
renting is more or less profitable based on your equity, rental price, ownership rights etc. i would also consider if your plan is for short term cashflow or to create longterm leveraged positive cashflow which would allow you to build up a portfolio and get into more investing.
i was speaking from a longterm standpoint since this is about saving for retirement and people investing in their retirement can wait 20 + years for a payout. But sitting on land can yield great payouts as well without all the funky time restrictions on traditional retirement funds.
Plus in some cases when you invest in your retirement fund that may be what your money is doing anyway by way of REITs etc.

i guess i was being kinda vague... i'll try to make it more clear... lemme know what you think...

start of 2013... no money...

2013 to Dec 31, 2013... saved up 10K, which is enough to put down on a $100k home...

Jan 1 2014 to Dec 31, 2015... lives in the home... saves up another 20K, , while still having OG $10K in the home

Jan 1 2015 to dec 31 2017... buys another home with newly saved $20k, while renting out the OG $10K home... (still growing the value of the of the home, even though he's not using his own money) also, in this time frame, he gets to save ANOTHER $20k...

so w/ that entire $50K... $10K is in one home... $20K is in another home... and $20k in savings across the span of five years...

the only difference is the first two homes have increased in value, partly b/c their homes and partly b/c the rent that people have paid him that went towards the mortgage...

you cash out on those two homes and instead of $50K in treasury bills that doesnt grow... you have roughly $70k... $20k less the moving expenses and broker fees...


OOOOORRRR... just move back into the OG home...

and have that B playa made w/ all kinda flatscreens for the yambs to look at whilel they bake bacon pancakes...

 

[wr]

Sounds feasible. Just make sure you set up a company or a trust to purchase each of your homes to protect your other assets in case something happens and isolation of risk.

Just gotta make sure your property is in an area were appreciation is worthwhile to your plan. And how much of that 10K goes to paying down principle.

Having a playa spot plushed out and all is cool, but you could be a someone who owns multiple properties and has a nice bachelor pad.

I know an old dude who owns about 15 residential properties with considerable equity and rents an apartment for himself for flexibility. (granted he split up from his wife and probably is disenchanted with having a home for himself and his new lifestyle) But he tells me he wish he would have done this all along.

He says the money from one of his rentals takes care of all his monthly expenses.

thing is he's had some of these properties for close to 20 years tho.

way amortization works on most 30 yr mortgages, your interest and principal portions of the monthly payment wont even equal out til about year 15 unless you are making considerable principle only payments, or purchasing points off your mortgage.

 

[ricky409]

how much do you think the mortgage would be on a $100K home?

my bro just copped a home for $300k, and his mortgage is $1400...

so i'm sure a $100k home would be considerably less... but since they're renters, you can charge a little more that will go towards the price of the home a little quicker..

not 15 years down to two years... but still a difference none the less.

 

[bigboi415]

great advice

 

[wr]

how much do you think the mortgage would be on a $100K home?
my bro just copped a home for $300k, and his mortgage is $1400...
so i'm sure a $100k home would be considerably less... but since they're renters, you can charge a little more that will go towards the price of the home a little quicker..
not 15 years down to two years... but still a difference none the less.

yea ur bro got a good deal.


Most 100k homes i know have mortgages in the 800-1100 and rental rates around 1000-1200 rage depending on credit and other factors like location, tax district etc.. In some cases if you put around 20% or more down you can eliminate paying mortgage insurance which would lower your monthly payment as well, or send more of it to pay down principle.

So really it boils down to having more money to make more money. I would say have at least 30k to play with.

10k can easily fly away.

For your case having at least 30 k and steady income and good credit can go a long way. You could put 20k down, sit on 10k, having supplemental rental income, then maybe get that second one.

But there's no across the board way to do it because there are many variables at hand.

 

[killthehype]

Good tips.
Those are the two BIGGEST ones. If you can handle those, that's HUGE, everything else on the list will work their way in naturally.

Lifestyle inflation has to be the biggest one, my dad used to pay for the Texas Rangers, dude was making 100k a year from 1991-1993, lost it all because of this exact reason.

 

[stunnafasho03]

401k is great if ur employer matches up to the 1st 5%..free money over time