Ep. 109: Gordon has paid down a ton of debt and is ready to party (buy a bigger house)

M$D: 8/23/2028

Meet Gordon

Age: 37

Gordon’s main concerns, in his words:

Hi, Pete. I kid you not, it feels like I have listened to every one of your episodes since I discovered you on Stacking Benjamins a couple weeks ago. I think I may be turning ginger through my headphones. Anyway, my wife and I are 37, and we have a 2-year old. We gross about $12K per month ($7K for me, $5K for her). She’s a teacher, and I’m an auditor; both of us will receive pensions if we stay in our current jobs for a couple more decades, which should replace a decent chunk (but nowhere near all) of our income in retirement. After taxes, mortgage, and savings, our living expenses each month are about $4,500. Since Jan. ’15, we’ve paid off about $48K in debt (student loan, car loan, 0% store credit cards, and mortgage) and are on pace to have the remaining $55K we owe on our townhouse (somewhat of an albatross/money pit that was purchased at the height of the market in June ’06) paid off by Dec. ’17. The mortgage is our only current debt, and the townhouse is worth maybe $85K. We have $18K in emergency funds and an additional $21K in taxable investments. Additionally, we’ve saved about $10K in a 529 plan (currently contributing $300 per month) and another $2K in a custodial account. We’ve also got $262K split between my thrift plan, IRA’s, and Roth IRA’s, and our thrift contribution savings rate is 17% of my salary, including my employer match. We don’t currently use a financial advisor and generally invest in low-cost index funds for retirement. All things considered, I feel like we’re doing a pretty good job and are very blessed, but we also are looking to significantly upgrade out of our starter home in the next three years and have 8- and 10-year old vehicles. At the same time, I want to be mindful of lifestyle creep and make sure we’re still making sufficient progress toward our post-salary life. I’m comfortable with the risks investing comes with, but the media will make you crazy with their predictions about the future of everything from college and health care costs to longevity and long-term care. I’d love to hear your thoughts on our journey to a million (and hopefully beyond).

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