[USER]

What can I do better/different or next? Here is my situation:
• Late 20s, unmarried, one young child, medium-COL area

• Gross monthly income: $20,172, Net monthly after taxes, deductions, etc.: $12,759

• Spend about $6K/month

• No consumer debt, $48K student loans (@ 5%) and $298K on 30-year-fixed mortgage at 2.25% (house value ~$500K)

• $0 credit card debt (~$200K available limits), $40K HELOC
with no balance ever

• $36K in emergency fund, $10K for a new vehicle, $2K for x-mas gifts, $500 “Do Good Fund”

• ~$175K in retirement

• ~$30K in private investment deals (real estate syndications and startups)

• Already maxed family HSA (I have a young child on my plan), 401K, and IRA for this year (and last year)

• Own 3 rental properties with roughly 50% equity
My vehicle is getting old – I’d like to save $20K total for a new vehicle for when mine dies.

I’d like to increase my emergency fund to 12 months and save for a wedding ring and wedding so I can cash flow those eventually (no debt).

I’d also like to save ~$150K for a down payment on a bigger/new house (this would also require me to increase my emergency fund).

Anything else I should be doing to improve my situation?

[Greg]

You are crushing it!
If you haven’t done an awesome vacation recently that’s what I’d do next.

After that, I’d knock out the student loan and build the emergency fund like you are planning on.

Personally I’d focus more on an after tax brokerage account than real estate for simplicity, but if you like RE then stick with it.

[Stef]

Do you have life insurance for the benefit of your child? Have you considered whether a 529 for your child would be advantageous to you?

[Tanh]

I have no advice on improving situation, I can provide words of wisdom that were given to me about car, ring, and wedding.

1) Used Toyota Camry will always be the fan favorite answer for cars

2) lab grown diamonds can be a wallet’s best friend if diamond is a must

3) it is okay to get married on paper first and then plan on a wedding later if you and spouse still want one afterwards

[Kaj]

I’d open a taxable brokerage account. At the moment I think you have other goals.

But it’s still a great milestone and a good place to dump surplus money monthly.

I’d put $1000 in it in VTI or equivalent.

Also, I hate to say it but you might want a pre-nup or at least a clear snapshot of your net worth before marriage.

Your life after should be shared, but you are bringing a lot in.

[Rick]

What retirement accounts do you have available and are you maxing those?

Is mega backdoor Roth available?

Outside of saving for next rental property, why not crush the student loan debt and get it to $0 asap?

Cash for house makes sense but outside of that, I think 12 months cash is a money loser given your total financial picture.

Rough math but you lose about your cash balance every decade compared to investing it.

So given your financial strength already, I wouldn’t expand that lost money any more than you feel you have to.

[Kevin]

Mega backdoor Roth, then if you have money to save after maxing that out, start saving in a brokerage account which could give you tax flexibility in retirement.

This is helpful especially if you will be on ACA insurance bc you retire before 65.

Also, just to clarify, mega backdoor Roth is not the same as backdoor Roth IRA, are you aware of the difference?

[Wendy]

You are rocking it! I’d put money into paying down that student loan, since that’s your real debt.

I can’t imagine being your age and having finances be so good.

Maybe start saving now for your kids college.

(I put money into a 529 when she was born and contributed all the way through and now we’re about to go to college and it’s going to be paid for so she won’t have debt. For me, that is ideal.)

[Fabio]

Just keep doing what you’re doing, as you obviously know what to do. You’ll be very, very wealthy in no time.

[Catie]

You are doing very well! Keep it up!
I see in other comments that you don’t plan on paying for college, but maybe the 529 offers a tax benefit in your state?

Some of the funds can then be rolled over into a Roth IRA for the beneficiary.

So instead of using it for college, they can use it to fund their Roth. Just a thought.

[Christopher]

I’ll second a taxable brokerage, and also the mega backdoor roth if available (that alone easily lopped off 2-3 years of working for me).

Maybe a 529 for yourself of the child, if it makes sense for your situation.

[Kim]

Why do you need a “ bigger /newer “ house? New vehicle? (stay where you are unless you’re specifically moving for a better school district.
Buy a used or less “ new” car.

College fund started yet for child? Fund your retirement more.

This would be my advice to myself at your age if I only knew better.

[Author]

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