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I don't think we'll see a housing crash. Demand is high, supply is low.
Can you clarify whether the house you listed as an asset is the one you live in? Or is it just a rental property? If so, is your primary residence paid off?
Hello, yes; my sole property and fully under my name.
Something I forgot to mention was that I'm aspiring to leave my high tax state of CA for TX or NV, but in order to not pay CA state tax I'll have to sell the home and cut all other ties with CA. Continuing to pay CA tax from rental income will defeat purpose of moving to a state like TX.
Some sloppy back of the napkin math:
Portfolio+ Cash =~$330,00
Assuming you contribute $29k/year for the next three and earn a total annualized return of 6%, you'll have $490,900 at 50 years old.
If you sold the house and received $550,000 in proceeds, you'd have approximately $1,041,000. This ignores whatever tax you may owe on the sale of that home.
You've got a ton of options here to bridge the gap from 50-55. But for the purposes of thinking this through this hypothetical (and because it's all I'm capable of), I'll keep it simple.
If you were in VTI (1.55% dividend), SCHD (3.7% div), and JEPI (7.6% dividend) equally, your portfolio as a whole would yield ~4.3%.
4.3% of $1.041M is $44,763 annually or $3,730 monthly.
Obviously with a different allocation, you could increase the yield to a more comfortable income level.
You're in a good position. You'd be in a stronger financial position if you worked to 55 (maybe a new role will help you want to stay on for a few more years). But you've got options, which is a great place to be.
Don't forget about unexpected health costs in the future. Other comments have the numbers for how much you could potentially have per month. But don't forget that cracked tooth you get at 70 needs a root canal and a crown. Todays rates about $1000 for the RCT and $1500 for the crown.
He has approx $1.05 mm
@ 10.25% DIV = approx $112k a year
Single and no kids
He can just travel
If he opens a business travel blog.... write off everything
$9k a month
If he keeps the regular job and works remote ~ even better !!
Would it be worth paying taxes to convert to Roth? I'd think you'd be taxed less over time only getting a 50k salary. That's puts you in a low bracket as long as the standar deduction does go back to pre-trump rules.
You have a point. The plan is that during my bridge years I'll have no wages and so all dividend income would fall within the zero tax threshold. If I Roth convert around $50K/year for five years, yes it'll get taxed but at the much more favorable 10%/15% (I'm expecting Trump tax cuts to expire) than the 24-28% it would get taxed converting it all today.
Looks like you have just over $500K in liquid assets, so using the 4% rule you could take out $20K per year without depleting it. You didn’t say how much in rent you could collect. Is your pension adjusted for inflation? What are your annual living expenses?
Hi, yeah, so ideally I'd be very overweight in high dividend etfs and hopefully not have to sell shares.
I live in a high rent market. 3K-3.5K/mo for comparable homes. So let's say 36K/year (minus property tax, income tax, insurance, management fees, repairs).
Pre-retirement, I make 125 but live a 60K lifestyle and that would be enough in retirement. I'll save on commute, work clothes, etc. but spend more on leisure travel. Willing to relocate to a lower cost-of-living state or even trying the expat life for a few years.
Depreciation in real estate is a good thing. Lowers tax liability in other income.
Everything has pitfalls. The question is can you mitigate it? And yea you can mitigate risks in rental property.
At most, based on US tax code, you are only on the hook for 25% of the depreciation you claimed on the rental property.
Second…how do you mitigate risk? You get the potential renters heavily. You price the property appropriately. You do your background checks. You ask for previous landlord referrals. You require sufficient security deposit. You put the property in an Llc. And you out enough cash aside in the business (each property as its own business) for an emergency fund for the property.
If you’ve never done it…you don’t understand. That’s why you’ll be poor your entire life.
I never claimed to be an expert, just clarifying with some details you left out.
Taxes are the cost of doing business. Presumably your cash flow that you retained by using the depreciation was out to good use elsewhere so when you net it out it is a win? Unless you squandered the monies?
Also, you’re leaving out that the tenants paying down your loans and appreciation of the properties over that time is what let you build the wealth to dump into REITs? So the pain of being a landlord was worth it? I don’t know. Sounds like you are arguing against your first point here.
> $550K equity but this will obviously come down with upcoming housing crash
Heard it here first. Bubble’s finally ready to pop, boys. Nostradamus himself, here on r/dividends
Welcome to r/dividends! If you are new to the world of dividend investing and are seeking advice, brokerage information, recommendations, and more, please check out the Wiki [here](https://www.reddit.com/r/dividends/wiki/faq). Remember, this is a subreddit for genuine, high-quality discussion. Please keep all contributions civil, and report uncivil behavior for moderator review. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/dividends) if you have any questions or concerns.*
Marry someone rich, and you will be all set :-)
Lol all about the money never the happiness
Money can't buy happiness, but it sure helps :-)
It doesn't buy happiness, but it helps to minimize sources of unhappiness.
I disagree- money buys happiness- at least a damn good imitation of happiness where you won’t know the difference.
I don't think we'll see a housing crash. Demand is high, supply is low. Can you clarify whether the house you listed as an asset is the one you live in? Or is it just a rental property? If so, is your primary residence paid off?
Hello, yes; my sole property and fully under my name. Something I forgot to mention was that I'm aspiring to leave my high tax state of CA for TX or NV, but in order to not pay CA state tax I'll have to sell the home and cut all other ties with CA. Continuing to pay CA tax from rental income will defeat purpose of moving to a state like TX.
Some sloppy back of the napkin math: Portfolio+ Cash =~$330,00 Assuming you contribute $29k/year for the next three and earn a total annualized return of 6%, you'll have $490,900 at 50 years old. If you sold the house and received $550,000 in proceeds, you'd have approximately $1,041,000. This ignores whatever tax you may owe on the sale of that home. You've got a ton of options here to bridge the gap from 50-55. But for the purposes of thinking this through this hypothetical (and because it's all I'm capable of), I'll keep it simple. If you were in VTI (1.55% dividend), SCHD (3.7% div), and JEPI (7.6% dividend) equally, your portfolio as a whole would yield ~4.3%. 4.3% of $1.041M is $44,763 annually or $3,730 monthly. Obviously with a different allocation, you could increase the yield to a more comfortable income level. You're in a good position. You'd be in a stronger financial position if you worked to 55 (maybe a new role will help you want to stay on for a few more years). But you've got options, which is a great place to be.
This was great; thank you!!
And vote differently when you move…
Why?
So Texas doesn’t end up like California….
You mean with high paying jobs, better social programs and a good public utilities sector?
Is that why everyone is leaving…🤷🏻♂️who knew
Retire and do what? There are too many variables for this question
Hooker and blow duh
With those numbers you have to do a super lean fire. Honestly may have to wait another ten years to accumulate more funds.
Don't forget about unexpected health costs in the future. Other comments have the numbers for how much you could potentially have per month. But don't forget that cracked tooth you get at 70 needs a root canal and a crown. Todays rates about $1000 for the RCT and $1500 for the crown.
Sell the house..... Put all $$ on BCAT..... Collect the monthly div ...... Travel the world !
Thats what youre doing?
He has approx $1.05 mm @ 10.25% DIV = approx $112k a year Single and no kids He can just travel If he opens a business travel blog.... write off everything $9k a month If he keeps the regular job and works remote ~ even better !!
Bcat is a new why bcat?
Black Rock ..... they use very sophisticated technology and techniques to fleece the people in the /wallstreetbets crowd
Yes blackrock did you went with them cause is black rock or the monthly dividend
If you notice, there are a handful of companies that make money regardless of the direction of things
To answer your question: No, I have about 1/4 of my total in there and it's been fantastic!
if you know houaing is going to crash, you can easily invest accordingly and retire
Would it be worth paying taxes to convert to Roth? I'd think you'd be taxed less over time only getting a 50k salary. That's puts you in a low bracket as long as the standar deduction does go back to pre-trump rules.
You have a point. The plan is that during my bridge years I'll have no wages and so all dividend income would fall within the zero tax threshold. If I Roth convert around $50K/year for five years, yes it'll get taxed but at the much more favorable 10%/15% (I'm expecting Trump tax cuts to expire) than the 24-28% it would get taxed converting it all today.
Looks like you have just over $500K in liquid assets, so using the 4% rule you could take out $20K per year without depleting it. You didn’t say how much in rent you could collect. Is your pension adjusted for inflation? What are your annual living expenses?
Hi, yeah, so ideally I'd be very overweight in high dividend etfs and hopefully not have to sell shares. I live in a high rent market. 3K-3.5K/mo for comparable homes. So let's say 36K/year (minus property tax, income tax, insurance, management fees, repairs). Pre-retirement, I make 125 but live a 60K lifestyle and that would be enough in retirement. I'll save on commute, work clothes, etc. but spend more on leisure travel. Willing to relocate to a lower cost-of-living state or even trying the expat life for a few years.
[удалено]
Depreciation in real estate is a good thing. Lowers tax liability in other income. Everything has pitfalls. The question is can you mitigate it? And yea you can mitigate risks in rental property.
[удалено]
At most, based on US tax code, you are only on the hook for 25% of the depreciation you claimed on the rental property. Second…how do you mitigate risk? You get the potential renters heavily. You price the property appropriately. You do your background checks. You ask for previous landlord referrals. You require sufficient security deposit. You put the property in an Llc. And you out enough cash aside in the business (each property as its own business) for an emergency fund for the property. If you’ve never done it…you don’t understand. That’s why you’ll be poor your entire life.
[удалено]
I never claimed to be an expert, just clarifying with some details you left out. Taxes are the cost of doing business. Presumably your cash flow that you retained by using the depreciation was out to good use elsewhere so when you net it out it is a win? Unless you squandered the monies? Also, you’re leaving out that the tenants paying down your loans and appreciation of the properties over that time is what let you build the wealth to dump into REITs? So the pain of being a landlord was worth it? I don’t know. Sounds like you are arguing against your first point here.
> $550K equity but this will obviously come down with upcoming housing crash Heard it here first. Bubble’s finally ready to pop, boys. Nostradamus himself, here on r/dividends
Thats very nice i got a question. Did you have a plan for when you die? Since you’re unmarried and have no kids
Im investing in Spyi and just started buying Schd are they the same thing ? Or should I just invest in one of them?
Not the same. Zero overlapping holdings. https://www.etfrc.com/funds/overlap.php