tag:blogger.com,1999:blog-2980246226076317453.post1106737635968589321..comments2024-03-27T09:17:51.095-07:00Comments on Done by Forty: Should I Stay or Should I Go?Done By Fortyhttp://www.blogger.com/profile/06246597867355460723noreply@blogger.comBlogger47125tag:blogger.com,1999:blog-2980246226076317453.post-67127964356628583562019-01-21T14:17:41.253-07:002019-01-21T14:17:41.253-07:00This comment has been removed by a blog administrator.John Penrosehttps://www.blogger.com/profile/03493655788439279441noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-27895562209025029172017-03-06T11:47:56.439-07:002017-03-06T11:47:56.439-07:00Bit late to the party here, but it sounds like the...Bit late to the party here, but it sounds like the decision to "go" is the right one! Happiness > money! Just make sure you don't slip back on that hedonic treadmill and want to move on up, move on out again in another 5 years time ;)theFIREstarter.co.ukhttps://www.blogger.com/profile/11161550795321520113noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-68592844869387530062017-02-22T18:30:15.003-07:002017-02-22T18:30:15.003-07:00I just got it right from Flickr Creative Commons. ...I just got it right from Flickr Creative Commons. I think it might be Danish?Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-31506074910961182542017-02-17T15:03:45.230-07:002017-02-17T15:03:45.230-07:00Id say sell.
Also where is the picture from that y...Id say sell.<br />Also where is the picture from that you've used? It looks very English, or perhaps Scottish.supermoneywoman.comhttp://supermoneywoman.comnoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-77144162849305246192017-02-09T13:39:39.338-07:002017-02-09T13:39:39.338-07:00Well, it depends on the comparison between the two...Well, it depends on the comparison between the two elementary schools, especially if you're trying to buy and hold. If they're both decent I wouldn't stress over it. You'll appreciate what we're looking at as a comparison here: PPS vs NA. Worth the difference in price by any metric. Sounds like your spread isn't that dramatic and probably doesn't matter as much.Femme Frugalityhttps://www.blogger.com/profile/07258982361804942329noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-38356014858623739012017-02-06T11:16:32.440-07:002017-02-06T11:16:32.440-07:00I actually knew that the business expenses & k...I actually knew that the business expenses & kids wouldn't apply to the standard deduction but I typed it anyway, just because I couldn't think of things that would apply other than mortgage interest & taxes. Maybe medical expenses? I don't know because I've never even gotten close.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-30146880671602197472017-02-05T13:53:13.271-07:002017-02-05T13:53:13.271-07:00I think a lot of people are not fully on top of th...I think a lot of people are not fully on top of their taxes... They know it's deductible so they assume that they qualify for the deduction and are taking it. For instance, having additional children wouldn't affect this deduction nor would having a business. At least not directly. Remember, I do design part time, but I do accounting for the rest of my pay. :D<br /><br />The people I speak with make a whole variety of assumptions (that this is in addition to a standard deduction, that it's a credit rather than an income reduction, etc) that aren't easily shaken. Realistically, very few people in the median income range exceed the standard deduction for very long. <br /><br />Actually, that's one of the reasons I completely support removing the mortgage interest deduction. It generally only is a factor for people with substantial mortgages (high income earners) or high property taxes (high income earners) or substantial state taxes (high income earners) while confusing the issue for those on the lower end of the spectrum.Morgannoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-85498075325313922362017-02-04T11:36:33.092-07:002017-02-04T11:36:33.092-07:00It's certainly thrown around a lot with my fam...It's certainly thrown around a lot with my family and friends. I wonder if they're all actually taking the deduction, and we're the weird ones.<br /><br />I'd have to buy a lot bigger of a house, I think. Or maybe have kids or a business.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-88424903061505452472017-02-03T19:07:26.071-07:002017-02-03T19:07:26.071-07:00Even if you do hit the 12,600 and can itemize, you...Even if you do hit the 12,600 and can itemize, you need to get far enough above that to care, know what I mean? At 15,000 you can itemize... which is an extra 2,400 dollar deduction. At 30%, which is high for most retires, that's a 740 tax reduction that you paid for with 15,000 dollars in deductions. Ugh. <br /><br />I hate the tax deduction.Morgannoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-80490752091702087182017-02-03T13:48:39.061-07:002017-02-03T13:48:39.061-07:00I hear you, Joe. We're definitely going to get...I hear you, Joe. We're definitely going to get a new house now. We just have to find it. :)<br /><br />I am sure we could rent it as is, but at a lower rent. And the opportunity costs alone of leaving the equity in the house are enough to make the numbers go sideways (not to mention we'd have 4 mortgages, which is too many for us).Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-70329109110880922162017-02-03T13:47:08.283-07:002017-02-03T13:47:08.283-07:00Good point about the deductions but we've neve...Good point about the deductions but we've never gotten close to the standard deduction for married couples. Even with the taxes + interest, I'm not sure we'll hit the $12,600 and be able to itemize. But hey, who knows.<br /><br />I know the market seems high right now but we're proponents of sticking to your asset allocation no matter what, so that money will go right into our "Simpleton's Portfolio"...but we'll likely DCA some of it. Maybe half.<br /><br />https://ed-chang.com/review/Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-6288094668090544262017-02-03T11:11:09.454-07:002017-02-03T11:11:09.454-07:00Scenario #2 - Sell, Buy, Move
I'm surprised n...Scenario #2 - Sell, Buy, Move<br /><br />I'm surprised nobody has pointed out the dynamics of the tax implications. Here goes:<br />1) The $130,000 mortgage interest will cost $5362 per year<br />2) The mortgage interest deduction will save you $1340 per year assuming 25% tax bracket<br />3) The investment of $130,000 @ 7% would earn %9,100 per year ($6,825 after taxes)<br />4) The $2,000 in property taxes is also tax deductible ($500 annual savings)<br /><br />So in scenario 2, you save time on renovations, and increase your annual income, after taxes, by about $2,400 ($200 a month), and get the house you really want.<br /><br />Another issue, though. Stocks are historically expensive with P/E ratios for the S&P 500 at 17.5 compared to historical averages closer to 15. So it's not a good time to buy high-returning equities that would return 7%.<br /><br />Consider a tax-free municipal bond fund, returning around 4.0% (5.3% tax equivalent yield). This should provide around $5,200 in tax-free dividends, paid out monthly like clockwork. Conveniently this is about equal to the cost of your mortgage interest, at a much lower risk.<br /><br />Finally, this avoids the risk of renovations going wrong, over budget, or not providing ROI when you finally sell. Wembley Fragglehttps://www.blogger.com/profile/10896553906573480217noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-41401704717847854682017-02-03T10:41:48.348-07:002017-02-03T10:41:48.348-07:00I'd say sell it. It will be a huge headache if...I'd say sell it. It will be a huge headache if you rent it out since there are a lot of renovations to do. Unless the tenants don't mind living in the house as is, I'd go ahead and sell it. Old houses are a lot of work... Retire by 40http://retireby40.orgnoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-14042124387651105672017-02-03T09:06:58.976-07:002017-02-03T09:06:58.976-07:00I think that's probably a good middle ground: ...I think that's probably a good middle ground: if we really wanted to pay off the mortgage, we're better off investing first then paying it off in one fell swoop. For now, we think we'll keep it around as long as possible (30 years) and just keep ourselves invested because, well, we should come out ahead like that over 30 years. I want to say the total returns of the market over the last 130+ years are north of 9% when you include dividends, but I'm just going from memory.<br /><br />Good suggestion. I'm sure once we pull the trigger on early retirement, we'll consider being totally debt free again. There's an allure.<br />Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-71618534109363290562017-02-03T09:04:59.881-07:002017-02-03T09:04:59.881-07:00There's a lot of good advice there.
Luckily, ...There's a lot of good advice there.<br /><br />Luckily, neither of us have commutes, so that's a good thing. <br /><br />We've spent a lot of time in the area hanging there with our friends, but that's always good advice: go at different times of day.<br /><br />We don't have alleys now (very old part of Scottsdale) and would in the next area. I don't know how much that matters, but I suppose it's a plus to have more space.<br /><br />Will have to confirm their long term plans but yeah, I think they're staying.<br /><br />There is a golf course in the neighborhood but, sadly, I don't play. It's an exercise in patience for me.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-30883800299837424882017-02-03T09:02:52.179-07:002017-02-03T09:02:52.179-07:00Yeah, the schools are a mix: the middle and high s...Yeah, the schools are a mix: the middle and high school are better than the elementary school. And the latter should be the focus first, I suppose.<br /><br />More to think about, for sure.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-56224518208765050092017-02-03T09:02:02.576-07:002017-02-03T09:02:02.576-07:00That would be funny!
Maybe in my early retirement...That would be funny!<br /><br />Maybe in my early retirement, I'll have a desire to reno a house. But not right now. :)Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-24680637372850748322017-02-03T07:07:39.870-07:002017-02-03T07:07:39.870-07:00In this scenario there doesn't seem to be a cl...In this scenario there doesn't seem to be a clear winner from a financial perspective unless the markets go on a crazy bull market run for the next 30 years. Yeah it'll be higher but I doubt 10%+ annual returns. Even if the renovations were slightly better I'd still probably go with the newer house because there's a whole lot of positives to go with it. I don't know what y'all's utilities run each month but a newer house is likely going to be much more energy efficient and could possibly breakeven with the property tax increase.<br /><br />Any thoughts about just investing the $130k equity from the move and once it gets to enough to pay off the mortgage on the new house just sell the investments? Or wait until you get say $50k ahead or something so you still have some of the capital working for you? I've been leaning more towards wanting to get rid of our mortgage even though it's at a relatively low rate. Passive Income Pursuithttps://www.blogger.com/profile/13947101854482544346noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-28391100476037003102017-02-02T09:58:11.609-07:002017-02-02T09:58:11.609-07:00if you want to move, do the in depth research to c...if you want to move, do the in depth research to confirm it will be good long term...<br /><br />drive the new commute route(s).<br /><br />visit area at all times of day, not just evenings or weekends when visiting friends -- especially school start/stop time, if memory serves the neighborhood is near mcclintock high.<br /><br />immediate and near neighbors make a huge difference in day-to-day quality of life -- do you like/tolerate the current ones? will you go from alleyway separation to not having that extra space, or vice versa?<br /><br />look at crime stats; <br /><br />what banks/grocery/retail/ restaurants, etc will be nearby compared to current. <br /><br />are your friends staying long term in AZ too, in that neighborhood? would hate to move nearer and then have them move someplace else<br /><br />how stable is the management/finance of the golf course in the neighborhood, if that is important, or you find a house backing to it? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-76392397125848395802017-02-01T20:22:08.294-07:002017-02-01T20:22:08.294-07:00Ahh okay. If you're judging between two relati...Ahh okay. If you're judging between two relatively good schools I agree that the metrics are all NCLB-y. We're looking at a five and a ten as we face the next couple of years--with that big of a spread, I'll take the test scores as relative indicators. :)<br /><br />And that's it, I think. It's about spending on the things that matter to you, and it really sounds like where you raise your family is important to you guys. It is for most parents. Even if the friends ever move out, you'll still have the neighborhood. Femme Frugalityhttps://www.blogger.com/profile/07258982361804942329noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-53767830286464148832017-02-01T18:15:47.890-07:002017-02-01T18:15:47.890-07:00It would give you a whole new blog! 'Done by ...It would give you a whole new blog! 'Done by 2040'.Morgannoreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-11739619713210392622017-01-31T21:23:36.921-07:002017-01-31T21:23:36.921-07:00That's an excellent point, EcoCatLady. I know ...That's an excellent point, EcoCatLady. I know the math says invest it all at once. But we've never had the guts as a couple to go full bore. We end up having the same debate anytime we have a windfall: invest a big chunk up front, then dollar cost average the rest over a year or so. I'm sure we'll do the same this time.<br /><br />We could certainly take a smaller mortgage, but I think our hedge might be to just keep the cash on hand and invest slowly in case we do get that volatility. Heck, we're probably hoping for it if we have cash to invest.<br /><br />And I totally hear you on having a mortgage paid off. There's a big part of me (the "I used to be a huge Dave Ramsey Fan part") that would like to use that $130k just to keep the same sort of $100k mortgage we have now. I just don't think it's technically the best thing for us financially.Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-65660669290397711322017-01-31T21:19:48.507-07:002017-01-31T21:19:48.507-07:00I think you win the contest for most persuasive co...I think you win the contest for most persuasive comment on the blog today, Morgan. Nothing like someone speaking from experience to scare you straight.<br /><br />As you said, it has to be a labor of love. We're, I guess, kind of minimally handy. But the stuff our house needs is way beyond our current skills. It would take us a while to be even competent.<br /><br />But I have a lot of admiration for you guys doing the renovation and I'm sure it's going to be awesome when you're done. Best of luck, and thanks for sharing that perspective!Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-42380358132824795482017-01-31T21:17:10.929-07:002017-01-31T21:17:10.929-07:00That's really the kicker for us, Jason: we can...That's really the kicker for us, Jason: we can always take the invested funds and pay down the mortgage with it if we want. Having paid off our mortgage by paying extra every single month for 3+ years, I can confidently say it was not the most efficient way to do that. We should have invested the money and paid off the house in one fell swoop (*if that was our goal...and it really shouldn't have been our goal).<br /><br />Our monthly bills will certainly rise, but so will our invested capital. If it's not a total wash, I guess it's close enough. Thanks for your comment!Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.comtag:blogger.com,1999:blog-2980246226076317453.post-73656394842563549622017-01-31T21:14:42.275-07:002017-01-31T21:14:42.275-07:00Hey, Tin. There are definitely a lot of houses bei...Hey, Tin. There are definitely a lot of houses being redone in our neighborhood. Maybe that should have factored into the analysis?<br /><br />My thought has always been that, if you don't typically get $1 back out of $1 in renovations, you're probably better off buying an already remodeled home. (DIY changes that figure, I'm sure, but I just don't want to DIY).Done By Fortyhttps://www.blogger.com/profile/06246597867355460723noreply@blogger.com