Hello from San Francisco, CA

pmichelsen · #1 (**permalink**) 08-09-2010, 11:19 AM

In the process of getting out of some expensive hobbies to start concentrating on my future so I figured might as well join a forum that focuses on saving money instead of spending it for a change.

Background:

29 years old, not married (yet), renter, I have about $500 of debt left and I will be paid off, own my vehicle outright, only have a basic savings account that needs some building.

Goals:

5 year goal: house, first child and hopefully a good amount of savings for the future.

10 year: We have a good chunk of property up North that we would like to build a vacation home on, however want to purchase a home before we begin construction. We hope to have our cabin built within the next 10 years and would like to budget 50-60k tops for that.

DavidBibby · #2 (**permalink**) 08-09-2010, 11:58 AM

Hello and welcome to the forum!

Being debt free is certainly a great place to start. Looks like you will soon have that covered once the $500 card is paid off.

This is what I would do in your situation.. others might have different ideas so take what advice suits you best.

1) Save an Emergency Fund quickly. This is to protect you from job-loss. This should be in a liquid savings account and accessible within a day or two should you need it. Ideally it should have about 3-6 months worth of EXPENSES, not INCOME. (Maybe that's 10k.. maybe 20k) Whatever it is.. do it as fast as possible.

2) Get yourself a small house (3 bed, 2 bath) with a small mortgage (under 100k). Make it a 15 year mortgage. Work on paying this small house off as quickly as you can. (You can pay it off in less than 10 years by paying a little extra.. it IS DO-ABLE!). Then you live rent free and can save your income for your bigger project.

3) When you're ready to build on your property. SELL the house you own.. take the proceeds and your savings and build your dream home on your property with CASH.

4) At age 39.. you'll have a paid off Dream-house on your property. You can now invest your income for the next 20 years and amass over 2 million in investments and live off the interest for the rest of your life.

Will this be easy? not at all.. but it is achievable. There are many obstacles that can get in the way. Car breaks down.. need a new one.

Your best chance of succeeding with this plan is to NOT borrow money ever again, except for that small mortgage I mentioned. So the emergency fund is to PROTECT you from JOB LOSS.. and it ALSO protect you from having to BORROW money when you really need it.

Good luck, and welcome again!

SamuelClark · #3 (**permalink**) 08-22-2010, 09:50 PM

I must say you got one hell of an advice! Regarding the cabin- there are a lot of pre-constructed, low sustainability (very important in a house time and money wise) and energy saving houses on the market- one of these can make a big difference in your financial situation when the time comes.

Best of luck!
Samuel Clark

jasmines · #4 (**permalink**) 08-25-2010, 03:42 AM

thank you for that!

big hugs

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