Financial Success? what event changed your financial future?

[sv2007]

Success is relative, especially in self -eval.

So, if you think you are successful, what was the start?
Kind of like a chain of events, what was the first event?

I used to stick with the typical investments: company 401k, IRAs, index funds. Due to a move, I used company stock options to buy a house instead of selling our old house, this got the ball rolling (the initial spark), basically, as wife puts it, the company gave us a house (totally paid for). But it gave us more than a house, it brought us into RE investment and we made most of our money from real estate.

[97guns]

me too, purchasing company stock got me going with my investing career, i was in the right place at the right time riding the Dot Com wave

[disneysteve]

I don't think there was a specific event or decision.

I think what has made me successful is being raised to be frugal and mind my money.

As for investing, certainly starting early with stocks and mutual funds has been the key to success. We opened our first mutual fund account in 1992 with $50/month. Today we have a $750,000 portfolio.

The other key was getting a good education that led to a well-paying career.

[feh]

Acquisition of a degree that has enabled me to work in IT for 30 years.

[DaveInPgh]

[disneysteve]

DaveinPgh, what does that picture mean? How was paying off your house the event that made you financially successful?

I know they say a picture is worth a thousand words, but on a discussion forum, words are rather important.

[DaveInPgh]

DaveinPgh, what does that picture mean? How was paying off your house the event that made you financially successful?

I know they say a picture is worth a thousand words, but on a discussion forum, words are rather important.

Paying off a home is a big milestone for many. Now that we are practically debt free, we have a significant amount of discretionary income.

Of course the ideal scenario is for us to direct that income to our retirement accounts so we can move toward our goal of early retirement. However, we are not obligated to use that money for a specific purpose every month.

Last month it helped fund a home improvement WANT.

[disneysteve]

Paying off a home is a big milestone for many. Now that we are practically debt free, we have a significant amount of discretionary income.

Of course the ideal scenario is for us to direct that income to our retirement accounts so we can move toward our goal of early retirement. However, we are not obligated to use that money for a specific purpose every month.

Last month it helped fund a home improvement WANT.

Congrats on paying off the house! How long did it take you?

My original hope was to pay it off by the time I was 50 but life got in the way. Although to be fair, we have more than enough in assets to pay it off at any time and have just chosen not to due to the low interest rate.

With the added income from my new job, I may start chipping away at the mortgage a little more but right now the main focus is still on paying for college for our daughter.

[DaveInPgh]

Congrats on paying off the house! How long did it take you?

My original hope was to pay it off by the time I was 50 but life got in the way. Although to be fair, we have more than enough in assets to pay it off at any time and have just chosen not to due to the low interest rate.

With the added income from my new job, I may start chipping away at the mortgage a little more but right now the main focus is still on paying for college for our daughter.

Thank you. Just over 10 1/2 years. We bought it with a 15 yr fixed rate mortgage and paid it off in 127 months instead of 180.

We originally had the same goal of age 50, but we later decided to make it a higher priority due to our employment situations. We both work for companies that have had a lot of lay offs annually for many years now. We also dislike our jobs, but our level of income and benefits are tough to give up.

[disneysteve]

Thank you. Just over 10 1/2 years. We bought it with a 15 yr fixed rate mortgage and paid it off in 127 months instead of 180.

We originally had the same goal of age 50, but we later decided to make it a higher priority due to our employment situations. We both work for companies that have had a lot of lay offs annually for many years now.

That's great - the mortgage, not the job situation.

I've been just the opposite. My job is very stable - I've been here over 16 years. It just hasn't made sense financially to attack a low interest mortgage when we could be investing instead. And now we have a Parent PLUS loan for our daughter at over 6% so our priority is getting rid of that as quickly as possible. Right now, I'm paying $1,000/month on that.

[97guns]

a 750k stock portfolio or a paid off 750k home is the same thing, doesnt matter where it is, its all net worth

[DaveInPgh]

That's great - the mortgage, not the job situation.

I've been just the opposite. My job is very stable - I've been here over 16 years. It just hasn't made sense financially to attack a low interest mortgage when we could be investing instead. And now we have a Parent PLUS loan for our daughter at over 6% so our priority is getting rid of that as quickly as possible. Right now, I'm paying $1,000/month on that.

Yeah, it can be a tough decision to direct extra money to a low interest mortgage when you are confident that your money is better off in investments. We of course had an emergency fund to see us through in the event of employment loss, but we decided we wanted the peace of mind. More so her than me regarding the peace of mind. I am more of a risk taker.

[disneysteve]

a 750k stock portfolio or a paid off 750k home is the same thing, doesnt matter where it is, its all net worth

That's true, but there can be a very big difference in getting to those two points. It was much quicker and easier to get to a 750K portfolio since the market returns are far greater than real estate returns.

Our house is worth maybe 230K. We paid 142K 22 years ago. So that's about a 2.5% growth rate. It would take a very long time to get to 750K at that rate.

Contrast that with our investments where we've gone from $0 to $750,000 in about the same time period (more like 24 years). A huge chunk of that $750,000 came from earnings, not contributions.

[GoodSteward]

a 750k stock portfolio or a paid off 750k home is the same thing, doesnt matter where it is, its all net worth

In number form sure, but not in real value. You can't take a few bricks to go buy a car you need. The only way to access that value is to give part of it to someone else.

[Jluke]

a 750k stock portfolio or a paid off 750k home is the same thing, doesnt matter where it is, its all net worth

sort of...

with the stock portfolio you're earning dividends, capital gains - exposed to market ups/downs of course. you can sell at any moment pretty easily. and still have a place to live.

with a home you're paying taxes, utilities, etc. you sell and you have to buy another place; which includes realtor fees, loan fees, etc. Now if you're renting the home, it's a different story - but again if you're renting a 750k home, you are probably rolling in the money anyways.

I'd rather have the stock portfolio.