<p>While both my kids are currently employed in their fields (economics and engineering), I do have concern that at some point one or the other of them will be unemployed for at least a while. It simply isn’t a “gold watch after 30 years at the same company” world anymore. But I figure it will be up to them (and their spouses) to deal with. My main priority is to be well enough set financially in retirement that they will never have to worry about helping me.</p>
<p>SOS, what calculator do you use to figure out monthly return from your 401k, and is it set to adjust up with inflation?</p>
<p>I’ve been going through several books on investing and retirement funding - Malaspina, Solin, Mauldin, Ayres, etc. and it’s interesting on how varied the opinions are. Has anyone analyzed Ian Ayres’ “lifecycle Investing technique” where he says the figures show a 200% in-stock portfolio for the 20-somethings has better risk/rewards than the traditional target date approach (110-age % in equity). Another interesting factor he talks about is to factor the current cash value of projected SS income in making the equity/bond ratio calculations. On the other side you have people like Mauldin who are talking about a long term (decades) stagnant or downward bear markets, spouting numbers to support their theories. </p>
<p>Would be nice to have calculators where we can actually plug in contribution amounts and see how theory A fares versus approach B.</p>
<p>I admire all of you who are able to deal with rentals, especially those who do it as a side job. I have a hard time keeping our house in fair shape, and can’t imagine having to deal with all the issues involving tenants. Good for you - the closest I ever want to get to this will be through REITs.</p>
<p>Renting condos are no big deal, Dad<em>of</em>3. Far easier than a house. I wouldn’t want to deal with houses. If there is a serious problem, usually the condo association has to take care of it. If you buy something in good shape and choose your tenants carefully, generally the problems are minor. If you’re kind of handy you can fix it, if not, just hiring a professional is easy. There are so many more important and costly things that have gone wrong with our home. So far the issues with condos have been small potatoes. Except the water leak that our insurance company dealt with. I can see doing this through retirement, unless it starts to become more work.</p>
<p>Rentals can be a pain sometimes, but if you are in it long term it can be very lucrative.</p>
<p>My accounting wasn’t very good when we started collecting rentals, so it is hard to say exactly how much we have invested out of pocket (for a number of our properties we used our heloc on our house for the down payment and closing costs, i.e., 100% financing) but it is much less than $200k. For that we will have have income stream that will net $100-125k per year after the mortgages are paid off in a few years. Plus all that equity that other people have paid for.</p>
<p>I have a lot of sweat equity because I’m pretty handy, which helps.</p>
<p>We’ve invested much more in our 401ks and IRAs, and it will probably provide 25% of what our real estate will get us.</p>
<p>Jeez, I thought we did well on our rentals, but our rental income is nothing like yours, notrichenough.</p>
<p>Notrichenough , I like that. 
i wish I had done that. </p>
<p>Busdriver11, it takes time. ;)</p>
<p>Dr. Google, not worried. But, mortgage paid off and money saved for future possible tuition grad school I think we are set. I figure we have 3 extra bedrooms and food should either D’s need to come here for a while. Interestingly that actually worked out just fine a few years ago when D1 with her now H came to stay with us for a few months while securing employment elsewhere.</p>
<p>Ridiculously low interest rates have helped a lot. Thank you Ben Bernanke.</p>
<p>I don’t know, dstark, it might take a long time for rents to go up to get notrichenoughs payoff. If our rentals are all full and nothing breaks, I think we might make 35-36K/yr. I can’t imagine it going up to notrichenoughs level, ever. And yes, low interest rates really help those of us who live on borrowed money.</p>
<p>Busdriver, we have several small multi-unit buildings that total 16 rental units. Current gross rent is about $14K/month, taxes+ insurance+ water is over $3K/month, and then there’s landscaping, snow plowing, repairs, commissions, etc that vary from year to year.</p>
<p>Sounds like you need to buy more units. :)</p>
<p>We can’t afford more units. We spent a little over 400K getting our four units, and that was a steal. I can’t believe you only spent less than 200K for 16 units, unless I misread that. What a deal.</p>
<p>Rich, you’ve done well.
I want kid #2 to have that starter job after college. I wonder if she needs our income to cosign for her first apartment. Kid #1 is ok so far. I did worry about her self-employment income.
Just general anxiety of not being able to help.</p>
<p>Busdriver, the purchase prices were much higher, however because we used our heloc for the down payment and initial repairs, we essentially had 100% financing for a bunch of them.</p>
<p>We were lucky that we bought our house at the bottom of the previous bust in the early 90s, and it’s value went up enough to give us substantial equity we could invest in other properties. And the crash in the late 00s did give us some screaming buying opportunities.</p>
<p>Notrichenough, you used to argue with me. You get it now. </p>
<p>I am glad you are appreciative.</p>
<p>I had conversations this week with 5 different people, 5 different people on the impact of low interest rates. If you are on the wrong end, it is very bad. </p>
<p>Busdriver11, it takes a very long time. Haven’t you ever taken a penny and doubled it for every day in the month? The dollar amount is very low for a long time and then it explodes upward. That is how real estate works on a slightly different scale . </p>
<p>As a trader, real estate has been too slow for me… But looking back over 20 years… I should have played. :)</p>
<p>I have a friend who is going to inherit millions because his parents and his wife’s parents invested in real estate. </p>
<p>My friend was complaining that when one parent dies, he is going to have to pay $2 million in estates taxes. You know that doesnt go over well with me. ;)</p>
<p>I said, “Are you kidding? Just your inheritance puts your wealth in the top 1 percent of the country.”</p>
<p>My friend felt a little better . ;)</p>
<p>Dstark, sometimes I just like to argue. ;)</p>
<p>Although I don’t remember ever arguing that low interest rates are universally good for everyone. Fortunately our parents are not dependent on interest income.</p>
<p>Mostly the low rates have allowed us to pay things off sooner, which will give us the flexibility to retire sooner if we want.</p>
<p>That’s a lot of estate taxes. He must be inheriting what, 9-10 million? Lucky guy. But why would he pay estate taxes when just one parent dies? Don’t they both have to be dead for him to inherit, or is it structured differently?</p>
<p>Well, I sure hope real estate explodes, but I fear it may have already done so, with nothing left but a slight creep upwards.</p>
<p>Notrichenough, you were arguing about people getting benefits and I said you were benefitting by the low interest rate policy and you said you weren’t. :)</p>
<p>Yours is the good story. There are dangerous stories out there. I see people grasping for yield by doing some risky stuff. Bugs me.</p>
<p>I would like to invest in a few apartment buildings. I will have partners. The first deal is 50/50 that it will happen. I hope to generate close to $36,000 a year on these. </p>
<p>In 35 years, maybe $100,000 a year will be generated. That will cover one of my kids. </p>
<p>Notrichenough, do you upgrade windows, kitchens, baths?</p>
<p>Busdriver11, one parent already died. This would be the second one. He inherired some stuff when the first parent died. He didn’t mention taxes on that death. The second death is where the two million dollar tax comes into play. </p>
<p>There are trusts, generation skipping trusts, assets switching hands before death at discounts, just lots of stuff flying around.</p>
<p>I dont know all the details and it is not my business. I just told him to enjoy his wealth. Sometimes a person needs a mental slap in the face. :)</p>
<p>Kind of weird to be complaining about all those inheritance taxes when a parent is still alive. Talk about counting other peoples money. How about you give him a real slap to the face?</p>