Discover what to do with a six-figure windfall towards early retirement, navigating 401k fees and investment options. Explore the challenges of funding IVF treatments while maintaining financial stability. Consider the transition from RV living to building an off-grid home and strategic financial planning for long-term goals.
Consider personal circumstances and goals when deciding between paying cash for a home or taking out a loan.
Thoroughly research raw land investments to understand potential risks and market conditions.
Small businesses should weigh the cost of offering benefits against the value of attracting and retaining talent.
Deep dives
Purchasing Raw Land and Building an Off-Grid Home
Alan and his partner are considering purchasing raw land and building an off-grid home as their home base. They have hands-on experience with building and are confident in this lifestyle choice. Alan's salary job brings in $180,000 a year, and they have a combined investment of $300,000, mostly in passive index funds. They have around $125,000 in cash positions and non-retirement accounts. Their goal is to spend around $300,000 in total, with Alan planning to use his cash position to fund as much as possible. They are considering leveraging money from the taxable brokerage account for the remaining expenses, but they are diverse and value the idea of mini retirements. They are unsure about the implications of leveraging the brokerage account and are seeking advice on what type of loans to look into if they choose to take one.
Understanding the Debate Between Paying Cash and Taking a Loan
The debate between paying cash for a large purchase, like a home, versus taking out a loan and investing the rest is often oversimplified. Context is crucial when making such a decision, considering factors like income security, job stability, risk in other investments, and financial obligations. For Alan and his partner, being diverse and valuing mini retirements may make owning their home free and clear a more viable and preferred option. Arbitrary arguments in favor of leveraging should not overshadow the broader picture of personal circumstances and goals.
Considering Raw Land as an Investment
Alan also asks about the potential of raw land as a conservative investment option. While raw land has the potential for appreciation, it comes with its own set of considerations and risks. The value of raw land can fluctuate depending on factors such as development potential, location, and market conditions. Investing in raw land requires careful research and analysis to assess its long-term potential and suitability for specific goals. It is essential to understand the local real estate market, regulations, and any associated costs before considering raw land as an investment.
The Impact of Fees for Small Businesses
Small businesses often face higher fees when offering employee benefits due to limited resources and smaller participant pools. While larger companies can negotiate better fees, small businesses have to bear the burden of higher fees, impacting the business owner and employees alike. Despite the challenges, offering benefits is still beneficial for small businesses, as it attracts and retains talent.
Considering Financing Options for IVF
A listener named Remy seeks advice on financing in vitro fertilization (IVF) without insurance coverage. They have $20,000 in savings and need an additional $10,000. The idea of cashing out an iBond before its maturity date is discouraged, as it would result in losing the accrued interest. Instead, they could explore tapping into their taxable brokerage account, considering the difference in returns between the iBond and the investments in the brokerage account.
#489: Cara made $100,000 in commissions this year, her biggest bonus ever. What should she do with the money if she wants to retire early?
An anonymous caller is upset that the 401k plan he sold his boss on is charging him an Assets Under Management (AUM) fee. Should he keep the 401k at all?
Remy and her husband need to come up with $30,000 for IVF treatments. How do they build their family without breaking the family finances in the process?
Another anonymous caller and his partner have lived in an RV for years. They’re ready to settle. Should they sell most of his investments to purchase raw land and build an off-grid home?
Former financial planner Joe Saul-Sehy and I tackle these four questions in today’s episode.
Enjoy!
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