Where to invest next?

[corn18]

Just to get back on track, for the OP, if you are comfortable with your current rental and want to be financially independent at 40, I would listen to TH and 97guns and move forward with expanding your RE investments. I would not do it at the expense of your 401k, but in addition to. Take your non 401k investments and get another rental property. That is not without risk, but you might not make it to financial independence by 40 with just the traditional route of saving.

Are you married? If so, maybe your spouse can run the rental side while you continue to rake in $200k / year at your job.

Have you considered starting your own business?

ANd for TH/97guns, notice I used financial independence vs. retired. Two very different concepts.

Tom

[AJ444]

You are in a position to max your 401k/HSA and have a lot left over to either invest in more rentals or more mutual funds in a taxable account. It really comes down to your preference. Once you don't max a retirement vehicle for a given year you lose that space forever.

We have been maxing 401k/HSA for years and are now millionaires at 36 via investing in Total Market Index funds alone. We also currently rent, as others have said there is more than one road to Dublin.

[corn18]

You are in a position to max your 401k/HSA and have a lot left over to either invest in more rentals or more mutual funds in a taxable account. It really comes down to your preference. Once you don't max a retirement vehicle for a given year you lose that space forever.

We have been maxing 401k/HSA for years and are now millionaires at 36 via investing in Total Market Index funds alone. We also currently rent, as others have said there is more than one road to Dublin.

Shhhhh... according to TH, this is not possible.

[TexasHusker]

Shhhhh... according to TH, this is not possible.

Never said it wasn't possible. You would have a lot more cred around here if you stopped with the distorting and misquoting.

But my best guess is you won't take my unsolicited advice, so continue as you were.

[corn18]

Never said it wasn't possible. You would have a lot more cred around here if you stopped with the distorting and misquoting.

But my best guess is you won't take my unsolicited advice, so continue as you were.

Did I misunderstand your statement?

"To semi-retire by 40 is certainly achievable, but you will need to forget about traditional retirement vehicles and step into the world of risk and some speculation."

[97guns]

We have been maxing 401k/HSA for years and are now millionaires at 36 via investing in Total Market Index funds alone. We also currently rent, as others have said there is more than one road to Dublin.

Tying into this quote

Did I misunderstand your statement?

"To semi-retire by 40 is certainly achievable, but you will need to forget about traditional retirement vehicles and step into the world of risk and some speculation."

Congrats on the millionaire status, just 23 more years before you can start drawing on it tax free

As much as I love and praise RE investing I will never insist that it's the only way, I have done well with stocks and taken advantage of 401k's to get to where I'm at

[TexasHusker]

Did I misunderstand your statement?

"To semi-retire by 40 is certainly achievable, but you will need to forget about traditional retirement vehicles and step into the world of risk and some speculation."

Beats me, but you certainly mischaracterized it.

Anything is possible. I'm giving my opinion based on my own results. Your results may vary.

[rennigade]

We have been maxing 401k/HSA for years and are now millionaires at 36 via investing in Total Market Index funds alone. We also currently rent, as others have said there is more than one road to Dublin.

We'll be hitting a million at around 36ish...maybe 37. I dont own any rentals either so basically we're miracles. Heck if I count the house we bought I may actually be at a million net worth...and im only 34! Of course I dont count real estate in my portfolio but more power to those who do...if it makes you feel good go for it. Its cool to say you're a millionaire then when you check your bank statement you have $300 to your name. The latte factor baby!

Op...whatever you do...do not invest in the vanguard 3 fund portfolio. What they say over at bogleheads doesnt work! There is no way to make money with the 3 fund portfolio. If you want to get rich and never have to punch a clock again do not invest in this!

[corn18]

I will say that if I knew then what I know now, I would have invested in real estate when I was in the military. We moved around a lot and the houses we bought would have made great rentals. I am an advocate. Just not a zealot.

And none of that would have mattered because the fundamental reason I am not FI now is that I lived well above my means until 2013. I would have done that whether I had RE or 401k investments. Can't outsave a lavish lifestyle. If I had lived below my means for all those years, my .1% salary would be a lot more fun right now.

That being said, the data show I will be FI in 2 years. Then I can evaluate whether I want to retire, partially retire or continue working.

[LivingAlmostLarge]

we did the 401k/ira and saving in taxable accounts and are over 7 figures. We did not do rentals and are solely investors. I guess we're FIRE doesn't feel like it. And we're 37 and 39 and we hit it a few years ago. We also drew down $90k about a year ago to live without a paycheck. Didn't go bare bones either (I have cleaners). Same $60k lifestyle as now but tuition and moving expenses killed the rest.

Anyway I think rentals make being FI much easier. They generate a lot of income. I think however starting out they can be risky. TH is older and had a big base income and savings before getting into rentals and franchise. 97guns did it while single and is just married. So he hasn't exactly been paying for labor/delivery and kids. TH has but was mostly corporate health insurance.

So notice it's different for everyone. We're a single income 2 kid household. Boring, conventional. Being FI honestly just made my DH more bold. He basically tells his work to go FU anytime he feels because he knows we're okay. So he loves his job.

Being FI doesn't = ER. It just might mean being able to say FU at anytime.

[AJ444]

Tying into this quote







Congrats on the millionaire status, just 23 more years before you can start drawing on it tax free

As much as I love and praise RE investing I will never insist that it's the only way, I have done well with stocks and taken advantage of 401k's to get to where I'm at

I think you mean penalty free instead of tax free?

Also I didn't say it was all in retirement accounts, we actually save far more in taxable accounts.

And, you can use a 72T distribution to access penalty free early withdrawals from retirement accounts, your 23 year statement is incorrect.

[AJ444]

we did the 401k/ira and saving in taxable accounts and are over 7 figures. We did not do rentals and are solely investors. I guess we're FIRE doesn't feel like it. And we're 37 and 39 and we hit it a few years ago. We also drew down $90k about a year ago to live without a paycheck. Didn't go bare bones either (I have cleaners). Same $60k lifestyle as now but tuition and moving expenses killed the rest.

Anyway I think rentals make being FI much easier. They generate a lot of income. I think however starting out they can be risky. TH is older and had a big base income and savings before getting into rentals and franchise. 97guns did it while single and is just married. So he hasn't exactly been paying for labor/delivery and kids. TH has but was mostly corporate health insurance.

So notice it's different for everyone. We're a single income 2 kid household. Boring, conventional. Being FI honestly just made my DH more bold. He basically tells his work to go FU anytime he feels because he knows we're okay. So he loves his job.

Being FI doesn't = ER. It just might mean being able to say FU at anytime.

So much truth to this, I am able to take strategic risks saying and doing things I never would have dreamed of in my 20's, and it has paid off

I have no fear of job loss because it means a long vacation.

[corn18]

Congrats on the millionaire status, just 23 more years before you can start drawing on it tax free

snip

You assume they have all that money in 401k/IRA accounts.

I have 58% of my retirement savings in accounts I can access right now. That will more than cover my needs until I reach 59.5

[element926]

Well...this topic has strayed a bit

Anyway, the key takeaways are as follows

- Continue to max 401k
- Decrease investments outside of the 401k and redirect to RE (high risk, high reward)
- Continue to invest in other outside investments, but my mindset must change if I really want to "retire" at 40.

[Goldy]

How about a backdoor Roth? There are some other p2p avenues but since you are already making good money with your rental I would be tempted to get another one of those.