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529 versus Real Estate

June 16th, 2017 at 10:31 am

So we're doing our ESA at $2k/year for each kid. We have mentioned adding to that around $2k/year each kid into a 529.

Right now we are positioning ourselves to be financially independent soon enough not including college. DH will be 52 and I will be 50 when our youngest goes to college. I always had it as a goal that we would be Financially independent by 45 and I think it'll happen. But realistically I think we may have to wait until age 55 for DH to "retire" so that we could cash flow college.

But reading more about investing in real estate and I think in 2 years we could save enough to perhaps consider investing in it. I wonder if it would make sense to do a rental property for each child and use that instead of 529?

There are a lot of negatives including we're starting late, they won't be paid off and the cash flow might not work. Plus we'd need at least 2 homes for each child. But I wonder if this would make sense?

I can't do it for something that generates $100/month cash flow even with the depreciation tax break. I think that means we'll have to invest in something away and be an absentee landlord to make it happen.

Plus I need DH to get on board. I know he'll be anti-real estate. So anything I find has to make a lot of financial sense.

Any thoughts or experiences? Do you think this is a good idea? This is a long term play so I think with our financial situation we need at least 2 years of stability right now and planning. I need time to research to present my report to DH about where and how we will invest and who will manage the property for us. This is not something I feel we can jump into since we'll be needing to foot most of the cash down payment, emergency fund at first.

cash on hand

June 12th, 2017 at 09:26 am

So we bought our house. We still have about 1.5-2 years of living expenses in cash. But we are planning on doing some extensive remodeling of the basement. We also have to stash another $15k for 2017 Roth IRAs and college savings. I'm thinking also that we should start $2k for each DK into a 529. That would take our savings to $19k plus $18k into the 401k.

I find myself hesitating because I don't want to not enough cash on hand to do a remodel cash. But it's a strange feeling after sitting on so much cash to be down to a more reasonable number and still hesitating to invest it.

Plus I feel like we have a tentative spending budget but there are a lot of variables we can't account for yet. Maybe by the end of the year I'll feel comfortable enough to invest some of our cash.

What about everyone else? My goal is 6 months cash on hand and the rest is invested. We used to live like this but when we moved without income we bumped it up to as much as possible.