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Post by sd51555 on Jan 26, 2017 22:57:56 GMT -6
I had a target month of February to pay off my new land purchase. That statement alone is somewhat misleading. I will no longer have any liens on my new property come next month if all goes down as planned. I've been working up the order of operations to marshal the capital to pay off my contract for deed. I had it all mapped out in my head and on paper, but when I actually got down to steps needed to make it happen, the complexity finally set in.
I still owe X amount on the property. This payoff plan is a combination of sources from IRAs, 401k loan, bullion sale, and stock sale. My biggest driver was that I didn't want to punch a big hole in any of my retirement savings by doing this, hence the hodge podge of sources.
Step 1: Sell enough stuff in traditional to free up cash to move to roth.
Step 2: Convert $ from traditional IRA to roth IRA to raise cash position in roth.
Step 3: Increase payroll withholding to cover tax on roth conversion.
Step 4: Sell a little bit more in Roth to free up the rest of cash coming out of roth (There's enough in contributions over 11 years that it's tax free)
Step 5: Sell off a portion of 401k assets to have cash ready 2/1 to do 12-month 401k loan.
Step 6: Turn off 401k contributions for rest of 2017 to offset loan payment.
Step 7: Liquidate entire bullion position and get put into checking account.
Step 8: Sell appreciated stock in taxable account (loss on bullion to offset gain on stock).
Step 9: Monitor all transactions for completion to keep $$ moving from sale to transfer to available funds.
Step 10: Use contract for deed payment savings to begin knocking out the life insurance loan used for the down payment.
My head hurts, but I'm pretty sure I've got all my bases covered so there are no negative tax or cash flow impacts and this will actually accelerate the equity re-build from the sources that this whole boondoggle was funded. When the dust clears, all I'll have left is basically the life insurance loans, but those don't have mandatory payments because I didn't completely drain them. I want to knock those down as quickly as possible though, because that's where the cash will come from to build in a few years.
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Post by Tooln on Jan 26, 2017 23:03:08 GMT -6
It's nice when a plan comes together, I hope it works for you.
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Post by Satchmo on Jan 26, 2017 23:22:54 GMT -6
I had a target month of February to pay off my new land purchase. That statement alone is somewhat misleading. I will no longer have any liens on my new property come next month if all goes down as planned. I've been working up the order of operations to marshal the capital to pay off my contract for deed. I had it all mapped out in my head and on paper, but when I actually got down to steps needed to make it happen, the complexity finally set in. I still owe X amount on the property. This payoff plan is a combination of sources from IRAs, 401k loan, bullion sale, and stock sale. My biggest driver was that I didn't want to punch a big hole in any of my retirement savings by doing this, hence the hodge podge of sources. Step 1: Sell enough stuff in traditional to free up cash to move to roth. Step 2: Convert $ from traditional IRA to roth IRA to raise cash position in roth. Step 3: Increase payroll withholding to cover tax on roth conversion. Step 4: Sell a little bit more in Roth to free up the rest of cash coming out of roth (There's enough in contributions over 11 years that it's tax free) Step 5: Sell off a portion of 401k assets to have cash ready 2/1 to do 12-month 401k loan. Step 6: Turn off 401k contributions for rest of 2017 to offset loan payment. Step 7: Liquidate entire bullion position and get put into checking account. Step 8: Sell appreciated stock in taxable account (loss on bullion to offset gain on stock). Step 9: Monitor all transactions for completion to keep $$ moving from sale to transfer to available funds. Step 10: Use contract for deed payment savings to begin knocking out the life insurance loan used for the down payment. My head hurts, but I'm pretty sure I've got all my bases covered so there are no negative tax or cash flow impacts and this will actually accelerate the equity re-build from the sources that this whole boondoggle was funded. When the dust clears, all I'll have left is basically the life insurance loans, but those don't have mandatory payments because I didn't completely drain them. I want to knock those down as quickly as possible though, because that's where the cash will come from to build in a few years. Whoa.......now my head hurts.  |
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Post by mnfish on Jan 26, 2017 23:23:48 GMT -6
NICE work!
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Post by MoBuckChaser on Jan 27, 2017 6:03:15 GMT -6
Why you in such a hurry to pay it off? Why all the financial wrangling?
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Post by sd51555 on Jan 27, 2017 7:47:35 GMT -6
non-investment debt makes me sick to my stomach. I would feel much better if it was owned free and clear. Also, I want to get to work doing some serious improvements, but I didn't want to pour all that effort into it without holding a clear title.
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Post by MoBuckChaser on Jan 27, 2017 7:51:18 GMT -6
Does the land make you any money?
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Post by sd51555 on Jan 27, 2017 7:54:05 GMT -6
Nope. I should back up a step. I'm one of those bank on yourself guys. I don't mind having debt if it's for buying something tangible. While not a money making investment, I do consider it an asset. So I don't mind paying interest on my life insurance because it's 4.2%, requires no payments, isn't attached to the property, or a credit reporting entity.
I'm not punching a major hole in my retirement by scraping together nipples and dimes to pay this off. Frankly, all I've done the past ten years is save and invest. I almost wonder if the UPS guy wasn't Dutch. My contract was at 5.2% and with an older couple. Very nice people, but I just don't feel easy mailing them a check each month and hoping they can run an amortization schedule. Paying this off gets rid of many of my issues and delivers piece of mind.
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Post by sd51555 on Jan 27, 2017 8:11:17 GMT -6
The bullion has been a terrible investment while I've been in it and I wanted to trade metal for dirt.
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Post by smsmith on Jan 27, 2017 8:14:10 GMT -6
Paying this off gets rid of many of my issues and delivers piece of mind. I get it. There is something about owning outright. I've been living debt free for a number of years now...I could never go back to making payments. |
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Post by wiscwhip on Jan 27, 2017 8:16:50 GMT -6
Nope. I should back up a step. I'm one of those bank on yourself guys. I don't mind having debt if it's for buying something tangible. While not a money making investment, I do consider it an asset. So I don't mind paying interest on my life insurance because it's 4.2%, requires no payments, isn't attached to the property, or a credit reporting entity. I'm not punching a major hole in my retirement by scraping together nipples and dimes to pay this off. Frankly, all I've done the past ten years is save and invest. I almost wonder if the UPS guy wasn't Dutch. My contract was at 5.2% and with an older couple. Very nice people, but I just don't feel easy mailing them a check each month and hoping they can run an amortization schedule. Paying this off gets rid of many of my issues and delivers piece of mind. Somehow I don't think scraping your nipples together is going to help pay off your land or improve your retirement income, but to each his own I guess?   |
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Post by MoBuckChaser on Jan 27, 2017 8:30:51 GMT -6
You have some of the lowest interest rates in history. I would not scrap my investments to get rid of this great opportunity. JMO!
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Post by westbranch on Jan 27, 2017 8:39:44 GMT -6
Wisc, I don't think that is an auto correct error, SD must be working nights at the local chip n dales in sioux falls.
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Post by wiscwhip on Jan 27, 2017 8:43:02 GMT -6
Wisc, I don't think that is an auto correct error, SD must be working nights at the local chip n dales in sioux falls. I was wondering if he had a "sugar momma" somewhere that was paying him on the down low..................  |
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Post by kl9 on Jan 27, 2017 8:44:33 GMT -6
Wisc, I don't think that is an auto correct error, SD must be working nights at the local chip n dales in sioux falls. Or it autocorrected it for him from nickels to nipples because he uses that word more regularly? Dirty dog  |
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