Started a Roth IRA, Now I Have to Put Off That Maserati...Again

"Wobbles the Mind" (wobblesthemind) 01/23/2019 at 11:40 • Filed to: Updates

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From being the next handsome black man in an Old Spice commercial to buying Mrs. Buttersworth because it’s the sexiest syrup on the shelf, I’m a man that prefers an interesting opening paragraph over a relevant one. But outside of a love for rhetorical answers and quippy hyperbole, I also started a Roth IRA and am taking it to the max!

As the years curb stomp my undying but very much suffering youth, I’m becoming more enthusiastic towards finances and fearful of the future. Debt was my focus out of school but with that falling behind me, it’s about returns and availability going forward . I believe in enough really being enough and leaving a legacy, f inancial or Subaru.

I used the money I was saving in order to pay off the Jeep by April (I owe $15,500) instead to max out my Roth for the 2018 tax year ($5,500) and pay off my apartment lease ($9,350). I’m still working to increase my available monthly income by paying the full terms on lease, insurances , and so forth. The new plan is to pay the Jeep off in early December a nd then I can max out my Roth for 2019 before the tax year ends.

I mentioned recently that I went from a day-to-day, to week-to-week, to month-to-month, and now working up to a year-to-year financial lifestyle before the Darcy to my Elizabeth comes around and finds me tolerable. I also decided to wait until I’m married and spawning more O verlords. Since m y clown hasnt been in any cannons, I figure I will wait to see if this circus brings any attractions before I go owing six figures on a tent.

Still working on the Maserati! The only major hurtle left is that I need to pay it in full which means it probably won’t happen until late 2021. You dont need to understand, so don’t fret over it. I ’m just thankful that the reality of adulthood hasn’t crushed my childish dreams.

Nibby > Wobbles the Mind 01/23/2019 at 11:47

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are y’all hiring? need a designer

davesaddiction @ opposite-lock.com > Wobbles the Mind 01/23/2019 at 11:57

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From being the next handsome black man in an Old Spice commercial to buying Mrs. Buttersworth because it’s the sexiest syrup on the shelf, I’m a man that prefers an interesting opening paragraph over a relevant one.

I laughed.

You’re only as old as you act. 

MonkeePuzzle > Wobbles the Mind 01/23/2019 at 11:59

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E92M3 > Wobbles the Mind 01/23/2019 at 12:14

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Just curious if you plan to renew after your current lease is up?

Also why not put that money into a savings account, e arn 2+ % on it (better than nothing), and pay your rent ea ch month when it’s due. Don’t get me wrong as a landlord I would love it if my tenants paid me today for the months remaining in their lease, but I doubt they'd ever do that. I know I wouldn't. What if the landlord dies next week and the beneficiaries want to sell the place?

functionoverfashion > Wobbles the Mind 01/23/2019 at 12:39

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Good on the IRA. I am floored by how many people live by the payday, not just when starting out at some entry-level position, but through their professional lives. Sure, when I was 23 I spent every penny I made, mostly on food and Keystone Light.

How many people do you know who would be in serious financial trouble after missing two paychecks? It’s stunning.

I’m not saying this from some position of great privilege, either. My wife and I make decent money and live below our means , there’s not much more to it.

Turbineguy: Nom de Zoom > davesaddiction @ opposite-lock.com 01/23/2019 at 13:35

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You’re only as old as you act

Absolutely. But Mrs Turbineguy is less than amused when her 50 year old husband gets the twins going at the dinner table by doing armpit farts.

Women. They just don’t understand how funny farts are. Le sigh. 

davesaddiction @ opposite-lock.com > Turbineguy: Nom de Zoom 01/23/2019 at 13:38

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They really don’t.

And Mrs. addiction doesn’t like tickle fights ! [sigh...]

Turbineguy: Nom de Zoom > davesaddiction @ opposite-lock.com 01/23/2019 at 13:40

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Yeah, I don’t even dare go there. She will hurt me.

HFV has no HFV. But somehow has 2 motorcycles > Wobbles the Mind 01/23/2019 at 13:41

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I’m pretty sure the reason to start an IRA is so you can buy a Maserati, later. 

davesaddiction @ opposite-lock.com > Turbineguy: Nom de Zoom 01/23/2019 at 13:47

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Oh yeah, she threatens all kind of pain, but she’s really, really cute when she’s slightly pissed at me.

“Time Out” is our safe word for tickle fights (I’m absolutely relentless with the kids until they finally say it, often gasping for air), and she’ll often give me “the look” and say “TIME OUT, [mental swear word]” if I just come close to her. Ha!

InFierority Complex > Wobbles the Mind 01/23/2019 at 14:49

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What Maserati is on the short list when you pull the trigger?

Wobbles the Mind > InFierority Complex 01/23/2019 at 16:22

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GranTurismo Convertible! 

Wobbles the Mind > HFV has no HFV. But somehow has 2 motorcycles 01/23/2019 at 16:28

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O nce they hit the 10 year old mark they pretty much hold their resell value (which is usually around the same as a CPO Mustang). Ev en the new stuff is sold at a 20% discount.

Wobbles the Mind > E92M3 01/23/2019 at 16:41

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I do plan to continue leasing with my current apartment (I’ve been there 6 years).   As for saving the money, an extra $200 a year would be nice but Id never notice that type of financial increase over a year. However, ha ving an $800 net income increase a month is extremely noticeable. 

Chariotoflove > InFierority Complex 01/23/2019 at 16:41

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The correct one!

Chariotoflove > Wobbles the Mind 01/23/2019 at 16:42

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Dude, you’re killing me. I’m planning on swapping test drives with you when you get it. Guess I’ll have to wait a little longer now.

InFierority Complex > Wobbles the Mind 01/23/2019 at 17:00

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AH, I figured because of the photos but didn’t want to assume. :)

Wobbles the Mind > Chariotoflove 01/23/2019 at 17:09

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I know, every day is razor blades and lemon juice! I'll confess that even though I said late 2021, I know myself well enough to know that if the right spec appears within 500 miles of me then I'm going to move on it.

Chariotoflove > Wobbles the Mind 01/23/2019 at 17:18

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Well, it will be nice knowing you’ll have the money to make the move when the day comes.

Wobbles the Mind > InFierority Complex 01/23/2019 at 17:21

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Ha, no problem! My heart is set on the GranCabrio because I know I’ll be able to keep it even when I have kids.  R ear facing car seats and adults fit in the back, which is an incredible metric for a convertible.

Wobbles the Mind > Chariotoflove 01/23/2019 at 17:28

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Im just happy that a $150,000 Maserati in 2011 is $40,000 in 2019.

E92M3 > Wobbles the Mind 01/23/2019 at 19:52

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I’d just be afraid they’d think this guy is n’ t living paycheck to paycheck, let’s raise his rent 5% next year. What if they get sued by another tenant and have to sell the property to settle with them. Or what if they get busted by the IRS for fraud and they seize the property or something. I mean your lease would probably expire before they got thru the legal process, but there’s any number of things that could happen. It ’s costing you the same whether you pay it all today or each month. 

A financial advisor would of reco mmended putting the money towards the car (after maxing out your ROTH), unless you have a 0% APR loan.

EngiNiner > Wobbles the Mind 01/23/2019 at 20:58

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I too fell in love with the Roth in my mid twenties (while also paying down minor debt ), and favored it over pre- tax and taxable investment accounts when allocating each month. The upsides were obvious, tax free growth being the biggest. But the more I see my earning potential grow, and my thirst for a sub-59 y. o. retirement seems more doable than not, I had to rethink my strategy. The Roth, as you know, ties up your returns til 59.5 - which can be a big deal if you’re looking to retire early. I’m sure you’ve seen the FIRE community weigh in, and their take is a bit long-winded, so I’ll refrain from explaining. But overall, a taxable brokerage account gives you more flexibility for using your money when you need it. Cause after all, it’s YOUR money, and a penalty to Uncle Sam for early withdrawal is a hard pill to swallow for me, personally. Would love to hear your thoughts as well.

-Mike

Wobbles the Mind > EngiNiner 01/24/2019 at 00:40

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I havent read much into the financial independence and retire early movement, but the summary seemed to be more about surviving on your returns alone. I f your lifestyle only needed $13 ,000 a year because you dont have any car or house payments, then having $65 0,000 in a savings account yeilding a 2% a nnual return would be enough for you to establish FIRE (until your lifestyle changed) . Of course there are far better returns out there, especially with renting out, real estate, and personal businesses.

The reason I like the Roth is that it keeps my taxes simple, I don’t need to care about which tax bracket I’m in when I retire, and I have a 401k with plenty of contribution room and I can use that to drop down a tax bracket if that ever becomes truly advantageous over the years (maybe when I marry and file jointly) . If I needed more than a full 401k contribution in order to drop down a tax bracket (and it would need to be a tax bracket with a 6% or more tax reduction for me to work that hard ) then I would definitely see myself switc hing to a traditional IRA i n order to support that.

IRAs are   post-taxed income to begin with so the contributions can be taken out without penalty . The fees are on the interest accrued in order to prevent people from using IRAs as super- ultra high yeild savings accounts . W ith a Roth IRA you can with your contributions at any time without consequence (besides a severe drop in future earnings) but with a Trad IRA you have to note when you filed deductions on contributions because you’re de-taxing your post-taxed inco me, meaning you need to pay taxes again on what you contributed. 

Ive only been looking at this stuff for like 4-6 weeks now so I dont kn ow all the slick tricks and what not. These are some big subjects.