As we come to the end of the year 2023, man, has it been a year with many major life events. I got married to my lovely wife, we moved to the DMV area, my wife graduated, she also got her big girl job, and we got a puppy!!!
Entering the new year, there are new goals, investing goals!! The first goal is to set up a plan to pay off Christina’s student loans. Unfortunately, the Supreme Court decided it was good for the students to pay off their debt, jokes on them, many can’t, stupid arses. Rant aside, my wife and I have devised a plan using a student loan calculator and have evaluated that it will take 4 years to pay them off with minimum interest gained. Here is a link to the calculator!
Christina and I still plan to invest in our brokerage accounts (click the link to see our portfolios and others) with Public (check them out!). We will dollar cost average each week, but the amount will be less than usual… because we are saving and investing for a house!!
Using maths, we need to save at least $100,000 for a 20% down payment on a house in the DMV area. Using calculators that I’ve built (check out my Patreon page and sign up for access!), doing a 70/30 split between saving and investing, we imagine that if we invest for growth and save in a high-yield savings account, it should take us roughly 5 years. Yeah, that seems crazy, but remember renting isn’t a bad thing. When you rent, you don’t pay maintenance costs for when your washer and dryer break, your AC unit stops working, or your fridge dies. You don’t pay property tax, HOA fees (why the hell is this still a thing), or home insurance. By renting, you can collect all the cash that you would have to use for maintenance, taxes, and insurance and instead invest or save it.
The growth account, aka the Funds for Fun account, is the vehicle we will use to make a down payment on a house. We plan to put 12% of our monthly income here. The portfolio uses the core and satellite methodology. The core are two exchange-traded funds and the satellites are a collection of stocks with wide moats and stable cash inflows. We hope, praying to the mortgage gods above us, that this will be the principal vehicle to take us to Homeville.
Of course, my wife and I are not just investing in the stock market, but also putting money away in a high-yield savings account. Seriously, take advantage of a high-interest rate for your ordinary savings account. We plan to put 6% of our monthly income in this account. I would go for 100% investing, however, there are legit perks for putting the money in a savings account.
◦ Large cushy emergency fund
◦ We have a year’s worth of living costs just in case we both lose our job
◦ Emotional and psychological comfort
◦ Can use it to go on a vacation
◦ Etc
Using both vehicles we achieve several goals and prepare for the future. The question is, are you prepared?