Personal Finance Goals - 2021

PUA_Rachacha

Woodpecker
Buy a real estate property - This is on my mind for longer period and I feel big unability to feel satisfied with myself, until I will do it. Nobody in my family ever owned anything and I want to be the one, who makes it, even though prices are ridiculous and it would put 30 years debt on me. I am 28 and I would like to do it before 30. Just to get a mortgage is something very difficult for young person, because you need to accumulate a lot of money to get it (I rely on crypto).

Build financial pillow - Having at least 3-4 salaries (~5k$) on my bank account to be prepared for enexpected costs (just this autumn I had experienced how important it is). Then focus on investments.

Figure out how to earn money on the side - This is something I am trying for a years and haven´t succeed yet, beside doing bouncer on the side. I was kinda lost and few weeks ago I have decided to go into programming. I am not an IT guy, but hopefully it will at least extend my view of possibilities.
What do you mean by RE property? A primary residence, or an investment property?

If you were or a family member was in the armed forces, USAA and Navy Federal Credit Union are offering 5% down, no PMI, at sub 3% rates. Amazing deal.

Otherwise, first-time homeowners can get an FHA loan, with 2.5% down, but PMI. Rate is going to be above 4.5%. My close friend did this, did a bunch of the work in his house by himself, then got it reappraised. Based on the sweat equity, he was able to get the loan-to-value below 80%, thereby releasing him from PMI. He and his wife eventually sold the house for a $200K profit in four years. They only put down $20K total at the beginning and replaced the windows, so their return was still astronomical. All of the sudden, they went from no nest egg to $200K. They moved down to Dallas and bought a house with very little debt with the sales proceeds. They are now moving on up.

I'm sure Ramsey talks about this, but for most people, owning a home is the most surefire way of increasing your wealth.

I purchased a condo when I was 34 and lived there until I was 39. Value went up $150K while I lived there, and the monthly P&I plus taxes/ins. was still less than a monthly rental payment. Now I have a renter in there paying all the bills, amortizing my mortgage, and I still net $1,500/mo. The condo has probably appreciated another $100K since I left b/c of the 'rona.

If you want ideas on side gigs, I would highly recommend reading the e-books and blog posts at Wall Street Playboys. They really spell it out what you need to do, and definitely don't sugarcoat it. I'm older so it was a little too late for me to take their advice, but you probably still have time. Their focus is starting an online business.

And it's an amazing feeling to be handed the keys to a house that you own. I'll never forget the night I walked into my condo after the closing and realized that this is mine, and I can do with it what I want. Go for it!
 

Dilated

Robin
Try to invest more than you net from your job over a full year. It’s tough...the key is to generate significant income from investments and keep expenses low.

Even if you fall short it can instill good fundamentals.
 

tomzestatlu

Kingfisher
What do you mean by RE property? A primary residence, or an investment property?

If you were or a family member was in the armed forces, USAA and Navy Federal Credit Union are offering 5% down, no PMI, at sub 3% rates. Amazing deal.

Otherwise, first-time homeowners can get an FHA loan, with 2.5% down, but PMI. Rate is going to be above 4.5%. My close friend did this, did a bunch of the work in his house by himself, then got it reappraised. Based on the sweat equity, he was able to get the loan-to-value below 80%, thereby releasing him from PMI. He and his wife eventually sold the house for a $200K profit in four years. They only put down $20K total at the beginning and replaced the windows, so their return was still astronomical. All of the sudden, they went from no nest egg to $200K. They moved down to Dallas and bought a house with very little debt with the sales proceeds. They are now moving on up.

I'm sure Ramsey talks about this, but for most people, owning a home is the most surefire way of increasing your wealth.

I purchased a condo when I was 34 and lived there until I was 39. Value went up $150K while I lived there, and the monthly P&I plus taxes/ins. was still less than a monthly rental payment. Now I have a renter in there paying all the bills, amortizing my mortgage, and I still net $1,500/mo. The condo has probably appreciated another $100K since I left b/c of the 'rona.

If you want ideas on side gigs, I would highly recommend reading the e-books and blog posts at Wall Street Playboys. They really spell it out what you need to do, and definitely don't sugarcoat it. I'm older so it was a little too late for me to take their advice, but you probably still have time. Their focus is starting an online business.

And it's an amazing feeling to be handed the keys to a house that you own. I'll never forget the night I walked into my condo after the closing and realized that this is mine, and I can do with it what I want. Go for it!
Residence for myself. Investment property could be nice, but it was worth it 10 years ago. Now the market is so drained, prices are so high and law terms are so strict, that it´s impossible to invest in real estate, until you have hundreds of thousands $ on your bank account.
Hopefully prices will stop rising by now, but anyway I don´t see it going down in any future, because demand is still too high. From this point of view, the sooner I buy something, the better for me, even though prices are ridiculous.
Actually I am in military, but I don´t live in USA, so there are no financial advantages for me. I am aiming at units, where I can earn good money and actually pay off potential mortgage in few years by doing combat deployments.

Side gigs are a little bit challenging for me, because by law, I can´t do any side bussines, because of my job. Anyway I am still looking for ideas and ways how to earn some extra money.
 

mvp

Pigeon
Good afternoon gentlemen,

2020 was a curse in many regards but also a blessing.

Positives:
Work from home is now here to stay at the company I currently work for. This means decreased expenses (transport cost a month has gone from $40 to $10, Lunches from $150 to $30, Leisure spending $200 to $50). I have an extra 2 hours a day due to not having to commute or wake up earlier to make breakfast etc.
Savings in turn have shot up to around $750 per month
Investments have doubled from only $250 to $500 per month spread amonst S&P500 Index Funds, Real Estate and Crypto.

Negatives:
Whilst it is nice to have the extra leisure money I really would prefer to be spending this on socialising and activities which we cannot currently do.
Poor year for travel only managed to go away to 3 countries when I had a goal of 8 for 2020
Work is now extremely mundane due to those personal interactions with colleagues being replaced by messaging apps.

Net Worth in December 2020 - $100,000 mostly in cash and investments

2021 Goals
Net Worth $200,000 December 2021
Live in Mexico and Brazil (can do this now due to shift to remote work)
Start paying the mortgage down asap whilst maintaining 15% minimum of income going to investments
I am debt free (apart from the mortgage) and will keep it that way

How to achieve this:
Change jobs (have various job offers on the table which pay significanlty more than my current work by around 40% higher if I jump ship)
Ensure my job is remote only, with no possibility of having to head back to the office once the crisis is over
Keep my lifestyle at the same level it currently is even with the new salary
Resist the temptation to buy a car - really do not need it and it is a money pit but man I really want an Audi A5 (if you see me post that I bought this car you have my permission to slap me).
Invest more into Crypto whilst keeping my portfolio balanced
Start an online coaching business (have been looking at this for a while now and want to actually make it happen in 2021)
 

cosine

Sparrow
Resist the temptation to buy a car - really do not need it and it is a money pit but man I really want an Audi A5
Also:
Savings in turn have shot up to around $750 per month
Investments have doubled from only $250 to $500 per month
I've wanted an S4 since I was 15, I get it.

You don't have the money to buy a new car. Unless you want to work until you're 75.

If your job change and/or your coaching business take off, AND you invest it wisely, then down the road you might be able afford one.
 

PUA_Rachacha

Woodpecker
Good afternoon gentlemen,

2020 was a curse in many regards but also a blessing.

Positives:
Work from home is now here to stay at the company I currently work for. This means decreased expenses (transport cost a month has gone from $40 to $10, Lunches from $150 to $30, Leisure spending $200 to $50). I have an extra 2 hours a day due to not having to commute or wake up earlier to make breakfast etc.
Savings in turn have shot up to around $750 per month
Investments have doubled from only $250 to $500 per month spread amonst S&P500 Index Funds, Real Estate and Crypto.

Negatives:
Whilst it is nice to have the extra leisure money I really would prefer to be spending this on socialising and activities which we cannot currently do.
Poor year for travel only managed to go away to 3 countries when I had a goal of 8 for 2020
Work is now extremely mundane due to those personal interactions with colleagues being replaced by messaging apps.

Net Worth in December 2020 - $100,000 mostly in cash and investments

2021 Goals
Net Worth $200,000 December 2021
Live in Mexico and Brazil (can do this now due to shift to remote work)
Start paying the mortgage down asap whilst maintaining 15% minimum of income going to investments
I am debt free (apart from the mortgage) and will keep it that way

How to achieve this:
Change jobs (have various job offers on the table which pay significanlty more than my current work by around 40% higher if I jump ship)
Ensure my job is remote only, with no possibility of having to head back to the office once the crisis is over
Keep my lifestyle at the same level it currently is even with the new salary
Resist the temptation to buy a car - really do not need it and it is a money pit but man I really want an Audi A5 (if you see me post that I bought this car you have my permission to slap me).
Invest more into Crypto whilst keeping my portfolio balanced
Start an online coaching business (have been looking at this for a while now and want to actually make it happen in 2021)
Buy a used A5. They're not too hard to maintain. I've got a BMW and have done most of the maintenance using Youtube and FCPEuro.

I'm not understanding the move to Brazil but also paying down your mortgage. Do you have your own place, and if so, will you be renting it out while you're living abroad?
 

mvp

Pigeon
Buy a used A5. They're not too hard to maintain. I've got a BMW and have done most of the maintenance using Youtube and FCPEuro.

I'm not understanding the move to Brazil but also paying down your mortgage. Do you have your own place, and if so, will you be renting it out while you're living abroad?
I live in Santiago, Chile, have a two bedroom and rent the other room out, would rent my room out whilst away. Been learning Portuguese, so want to go to Brazil to make sure I can become fluent.

I know I could grab an A5 but being in a city with an excellent subway system it really is a luxury rather than a necessity especially now I am working remotely!
 

aynrus

Kingfisher
One of my personal finance goals for 2021 is to drastically reduce living expenses by leaving expensive and generally materialistic USA...
To make my life less materialistic and less dependent on money, including my future, and learn to live off even more minimal spending than I already do. Perhaps shoot for living off the land with spending hardly any money at all.
Get algo trading up and running and improve at day trading in general.

Interesting how someone above said that no one in their family owned anything and they feel like owning real estate is their goal.
In my family real estate was owned and expensive one too, including rentals....which made me strongly feel I don't want to ever be a landlord. Even buying and holding real estate had been a problem for me because I feel like it infringes on my nomadic nature, but want to change this and at least to be able to live in a residence I own. I think something snapped in my head really hard when I moved to the US very long time ago and I hope I can get back to being able to being non-nomadic when I move back into my native environment. High property taxes had been alien and non-comprehensible concept for me.
 
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Hypno

Crow
I have a financial goal to purchase a 1 ton pickup, a 16 foot dump trailer and a 10,000 pound mini excavator to start doing excavation work on the side. I don't know if I can call it a primary financial goal, since its likely not going to make a ton more money than I do currently as a consulting engineer. However, I hate working at a desk job, and I have been doing this since 2006, and I am ready for a change.

My plan is to work part time at my engineering job and begin to pick up excavation work on the side. I have an extremely flexible job that would allow me to take a week or two off of unpaid time as needed.

I have been doing some bush-hogging work on the side, and have been around machinery, tractors and equipment my whole life. I do all of my own mechanical work, so I think I can make this work.

I have a friend who lives a mile away that does a variety of excavation, trucking, firewood production etc. and I plan to join him on a part time basis with my own LLC. He and I trust each other, and he is excited for the possibility of having someone else to work with who is reliable.

I am currently just banking as much money as possible so I do not have to make payments on any equipment while I try the industry out. This way I won't feel stressed if I spent a couple years just doing a few jobs per year.

Budget for the truck: $15000 (truck will be a 99-2003 f350 7.3 diesel, good trucks I've had one before)
Budget for trailer: $9000
Budget for used excavator $25,000


I currently have $21,000 saved, am working on finishing up a diesel converted Toyota Tacoma that I will sell for $10,000 and I will also sell my classic audi for $5000. I have a few other tractor implements that I no longer use that I can sell for a total of $1500, and an old bulldozer that I can sell for $2500.

My plan is to sell the above mentioned equipment/vehicles through 2021, thus giving me total liquid assets of $40,000. I will start to purchase equipment this year, probably truck and trailer first, and then get serious about finding the excavator in 2022.

I have a 15 month old little girl and will likely have another. I am also living in my house that I started building in 2017, and am still working on this project, so that requires a lot of work and money as well. We shall see how all this goes.

That's an interesting plan, I salute you.

I would give you two things to consider. First, consider buying one piece of equipment rather than waiting until you have all three. Second, do some market research - find what folks with this equipment charge, and how soon you can get an appointment for them to do your work. Buy the piece of equipment that has the longest lead time, because that is where the shortage is in your market.
 

Hypno

Crow
It really varies by state, the last one I checked on was Wisconsin https://www.wra.org/Education/Careers/Broker/Wisconsin_Broker_License_Information/ to become a full broker you need to have one of the following:
  • be an associate for 2 years under a full broker and have enough 'points' which are various completed transactions. (8 residential sales for example)
  • have 20 hours of college education on real estate or real estate law
  • be an attorney (be an attorney seems to be the escape clause for just about any kind of state license)
In TN it is much different, I think you just need 120 hours of additional education and another exam.

You basically need to be a broker under state licensing laws to earn a commission. (When you do a transaction with a realtor, they are really a subagent of a broker.) However, in many states, attorneys sued and got favorable precedent that they are entitled to a real estate commission, so that is why you see that exception.
 

Hypno

Crow
Residence for myself. Investment property could be nice, but it was worth it 10 years ago. Now the market is so drained, prices are so high and law terms are so strict, that it´s impossible to invest in real estate, until you have hundreds of thousands $ on your bank account.
Hopefully prices will stop rising by now, but anyway I don´t see it going down in any future, because demand is still too high. From this point of view, the sooner I buy something, the better for me, even though prices are ridiculous.
Actually I am in military, but I don´t live in USA, so there are no financial advantages for me. I am aiming at units, where I can earn good money and actually pay off potential mortgage in few years by doing combat deployments.

Side gigs are a little bit challenging for me, because by law, I can´t do any side bussines, because of my job. Anyway I am still looking for ideas and ways how to earn some extra money.

Buy a 2br house and get a roommate. charge them a market rent - you'll make a little money on this and you'll control a bigger asset which is a hedge against inflation.
 

tomzestatlu

Kingfisher
Interesting how someone above said that no one in their family owned anything and they feel like owning real estate is their goal.
In my family real estate was owned and expensive one too, including rentals....which made me strongly feel I don't want to ever be a landlord. Even buying and holding real estate had been a problem for me because I feel like it infringes on my nomadic nature, but want to change this and at least to be able to live in a residence I own. I think something snapped in my head really hard when I moved to the US very long time ago and I hope I can get back to being able to being non-nomadic when I move back into my native environment. High property taxes had been alien and non-comprehensible concept for me.
Maybe you don´t have such goal, because it´s already there in your family.
I live in Eastern Europe and situation with real estate is a little bit too specific here. It started with privatisation of government properties many years ago (we were communistic country until 1989), when very normal people could buy flats for prices being even as low as 5% of current prices. Over last decade, there was this real estate investing boom, when a lot of families secured their future and a lot of people became wealthy. On the other hand, it created big social gap between owners and non-owners, because prices steadilly rise by dozens of percents yearly.
This is small country and real estate in cities is extremely scarce investment. The new appartments are being sold out even before they start to build them (big percent of them is being sold to wealthy real estate investors). At the same time, less and less people can actually afford to buy something. I was born in second biggest city in this country and I can´t afford to buy anything else than small garsoniere here (while being in debt for another 30 years). My prediction is, that the entry bar for buying a property will be unreachable for anybody, who don´t already come from wealthy family.
Recently I read an article about this topic and it confirms what you say. Those, who actually have the opportunities don´t feel this situation. My friends, who got houses, flats or land from their parents don´t see this happening. But I feel this as my last chance to build somehow decent background for my future family. Otherwise I will be always a slave paying expensive rent, without actually being able to do some progress to actual freedom.
Those who already do have that background can screw up. I can´t.

Buy a 2br house and get a roommate. charge them a market rent - you'll make a little money on this and you'll control a bigger asset which is a hedge against inflation.
Last week I had closed a deal with real estate agency on buying pretty 2 bedroom flat in smaller city. I didn´t want to move to such place, but it has decent position for my workplace and other potential workplaces I can reach in my job. It´s 10 minutes drive to city, where I actually looked for a flat and 40 minutes to city, where I was born and live now. So I guess it´s good deal (considering that flat in my home-city would cost me more than twice more money). Also, untill I am not single anymore, I will probably rent one bedroom to one of my colleagues (that´s what you advice).
If everything goes well and I will really buy it, it will be quite big achievment. Other people in my age, who buy something are supported by their families (they give them money or they guarantee them with other properties, so they don´t need much money on their accounts) and often they do it in couples. I do it only on my own with no support, started with zero. And that´s extremely rare on current ridiculous real estate market.
 
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aynrus

Kingfisher
Maybe you don´t have such goal, because it´s already there in your family.
I live in Eastern Europe and situation with real estate is a little bit too specific here. It started with privatisation of government properties many years ago (we were communistic country until 1989), when very normal people could buy flats for prices being even as low as 5% of current prices. Over last decade, there was this real estate investing boom, when a lot of families secured their future and a lot of people became wealthy. On the other hand, it created big social gap between owners and non-owners, because prices steadilly rise by dozens of percents yearly.
This is small country and real estate in cities is extremely scarce investment. The new appartments are being sold out even before they start to build them (big percent of them is being sold to wealthy real estate investors). At the same time, less and less people can actually afford to buy something. I was born in second biggest city in this country and I can´t afford to buy anything else than small garsoniere here (while being in debt for another 30 years). My prediction is, that the entry bar for buying a property will be unreachable for anybody, who don´t already come from wealthy family.
Recently I read an article about this topic and it confirms what you say. Those, who actually have the opportunities don´t feel this situation. My friends, who got houses, flats or land from their parents don´t see this happening. But I feel this as my last chance to build somehow decent background for my future family. Otherwise I will be always a slave paying expensive rent, without actually being able to do some progress to actual freedom.
Those who already do have that background can screw up. I can´t.

"In my family" doesn't mean I have or will ever have any of it....that's the way it is.
I'm very familiar with what you're talking about and feel that situation well, don't be mistaken...I've been through a lot with real estate, and been through some major housing trouble, which had been ongoing situation, to put it very mildly. I don't have a roof over my head through my family, zero, nada, none.
You misunderstood me. I meant that I'm not able to put roots in the US and can not keep a home here. (anyway, owning a home in high property tax country such as US means merely renting it from the government). Real estate prices are very high here right now, just too high and I don't see a point in spending these money, as I can't live here neither I'd want to keep RE investment overseas, once I leave US, since it'd be too hard to oversee and visit it. Plus some financial regulations are making it a problem.

I'm from Eastern Europe too, originally. Been through privatization, done that. Sad to hear about that situation with apartment scarcity and them being sold out so fast, now sure what country this is happening in. I'm originally from Russia and Belarus - the cold climate and Putin I think are keeping wealthy investors at bay, thanks God, for now, except in big cities where it's expensive. Once I move back, I definitely plan to own a simple rural house.

Housing should be a home, not an investment or speculative instrument and if the country is turning it into a speculative instrument, I don't want to live in such country and pack my bags. Housing booms are right there along with Great Reset stuff. Luckily I knew simpler life and won't accept anything less, don't care for popular/"hot" locations - if I have to live in less desirable location to avoid that whole expansive/boom environment and type of society that comes along, so be it.

But there's no "last chance". There'll be bust of real estate coming up. Every country and the world have real estate cycles, US one lasts around 18 years on average, for example, and right now it's coming up to the peak of the bull cycle.
 
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My financial goal is to stop the bleeding and finalize my divorce. Its been pending for 4.5 years due to my ex's bad faith, covid, and other factors.
I feel for you.

No man should have to endure such a painful thing. Always helps everyone else put their own problems in perspective too
 

aynrus

Kingfisher
I gave it more thought and I guess my true financial goal is to spend even less money than I already do paying into the System, meaning to minimize expenses to almost non-existent level (after inexpensive rural house is purchased) because every time spent just functions as support of rip-off total-control financial slavery System.... I grew up in a completely different world than what it's now in most Western countries, though, and the ideas of debt, mortgage, insurance, etc are not something I was able to come to terms with, these things always rang as markers of slavery to the cabal (and the overall system functionality was suspiciously similar to the idea of cabal, even though called a democracy). The System is fully, 100% run by big corporations that own everything, including most governments, at this point and living expenses are being artificially inflated, not to mention the manufactured pressure to always compete with the "Johnses" and waste life on chasing fake "success". I was able to generate high income in the past but found it was making me extremely unhappy and waiting for the day to quit forever and remove myself from society even. I could spend more money then, but I was only supporting the system by doing so and feeding the widespread greed more. I guess I want to decouple from money to the highest degree I could realistically achieve, after my relocation is complete, and invest more into survival and food producing skills so that if I have to live almost money-free one day, I should be able to. This would place many restrictions on me, and I should learn to welcome and not resent them.
 
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cosine

Sparrow
Even buying and holding real estate had been a problem for me because I feel like it infringes on my nomadic nature
If your properties have enough cash flow, you can outsource property management. Once that happens, I think it actually increases the ability to be nomadic, travel, etc.

I also find that if you have passive income from real estate, and you have some liquid investments too, you are more free to take risks and move around. If you have $1k-$2k/month coming in passively, then getting fired/laid off will still suck, but you will have some mechanism to stop the bleeding. You could quit your job and try to upskill yourself, or start a side business...etc.

I also find that having some large % of my net worth in a stable investment like cash-flowing real estate makes me feel much more free to purchase more volatile but rewarding investments like bitcoin.
 
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