I am 39 my wife is 34. We have 4 kids. Recently our financial lives changed. We went from making around 60k/year to 145k. It’s truly a blessing. Here’s the thing. We made it through those lesser times with little to no debt. I owe 70k on my house that I bought for 90k 11 years ago in a cheap market. Our home is now worth around 270k. I took out a 50k HELOC last year for necessary renovations. I own both of our cars outright. Mine is older but in great shape. Her’s is newer and right at the end of its warranty the engine failed so it just got a brand new one installed. We never used credit cards. My wife has one with our names on it but we only used it to purchase flights and stuff like that and paid it off appropriately. We have no debt outside of the mortgage and HELOC. No student loans. I recently got a job that has a pension system but we have no retirement outside of that.
I know this isn’t the typical situation you run into here. I gave the number to GPT and it told me I have a DTI of 9%. How do I start investing? Should I do it on my own? Should I pay a financial advisor or investor? I never had money, so I never learned about money.
TYIA
Where do I go? Never had money before.
byu/j121551 inpersonalfinance
Posted by j121551
5 Comments
Congrats on your pay raise. You are very disciplined and have managed money well.
You don’t need a financial advisor yet. Stick to basics of saving and investing. Keep at least 6 months of living expenses in high yield savings acct. Contribute to 401k, if available, to get full employer match. Then max out Roth IRA. Then max out HSA, if available. You need HDHP to qualify. If you have $ left over contribute more to 401k.
Use Vanguard, Schwab or Fidelity, and choose low cost stock index funds for instant diversification. Stay the course no matter what market news you hear.
Start using your credit card daily. There is no reason to not use it. You have the money to pay it off after use so it will only help build credit. As a 25M who doesn’t make that well of a living but isn’t in debt, I use my CC for everything and it’s built me up to a 780+ score.
Investing is as simple as signing up for Fidelity for their money market account. HYSA that will automatically add interest to the account monthly.
Honestly, the fact that you got from 60k to 145k while keeping debt low and owning your cars outright already puts you in a really solid spot.
It’s also a good sign that your first instinct wasn’t to immediately finance a bunch of new stuff once the income changed.
You don’t need to become some investing expert overnight either. Just learning the basics of retirement accounts, building savings, and investing consistently over time already puts you ahead of where you think you are.
Low cost s&p index fund….oh, don’t let lifestyle creep get ya. If can continue to live on 60 or even 70k you’ll be set!
r/bogleheads for long term passive investing is a great Reddit thread for this.
I’m not sure what your retirement savings are looking like but if you haven’t started now is the time. Are you able to contribute to company 401ks? Do you have Roth IRAs?
You’ve managed your money extremely well so stick to how you’ve been doing it- depending on the interest rates on your mortgage and loan can address if those are worth tackling further