Welcome to Money Talks! New approaches to money have exploded. Yet, money remains taboo. Less than half of you share personal finance information with your friends and family.
But that’s all changing. Now more and more of you are talking about money because it leads to better outcomes.
In an effort to provide personal finance insights through transparency (and have a bit of fun), I’ve created a series titled Money Talks that showcases how real people in Charlotte approach money.
It’s an anonymous way for you to share your money experiences and insights with our city. Answers are lightly edited for clarity and privacy (ex, exact age). Want to participate? Take the Money Talks survey.
Here’s a look at the personal finances of a married couple in their mid 40s.
Living situation:
My wife and I bought our house together in 2014, in the mid-$600s. It needed a lot of work. We’ve remodeled and upgraded parts over the last 10 years, but have paid cash for every job and have done as much of it as we can ourselves (think demo, paint, woodwork, replacing fixtures).
I don’t recall what the first mortgage rate was at the time (maybe around 3.7%), but we refinanced twice between 2019-2021. Current mortgage is at 2.69% on a 30 year fixed. Refinancing twice only made sense if we were disciplined to pay additional principal every month to save on interest and shorten the length of time to pay it off.
Family:
We’ve got 3 kids. They seem to get more expensive as they get older, between the things they need and/or want, sports, activities, summer camps, orthodontists, etc.
The unknown is how much college is going to cost when it’s time for them to go.
Jobs and salaries:
I work in real estate and my wife works for one of the banks.
Being in real estate, my income varies year to year, but I’d say between $300,000 – $500,000. I’m a 1099 independent contractor, but for tax purposes, I set up an LLC and pay myself a salary of $130,000 and take owner’s withdrawals when necessary.
My wife makes a salary of $200,000 with ±$125,000 bonus between cash and stock options.
In real estate, I never know how much money I’m going to make from one year to the next. We have an idea, but things can turn quickly. It can be stressful. Grateful to have a wife with a steady paycheck.
Salary journey:
Here’s what my first years in real estate looked like.
- Year 1: $0, I had a part-time job on nights and weekends to get by
- Year 2: $26,000
- Year 3: $96,000
- Year 4: $145,000
The recession in ’09-’10 wasn’t kind to real estate and COVID year(s) hurt as well.
My wife was making $70,000/year at a consulting firm when we first got married. She was hired away by a competitor which came with a pay increase. After a few years, a client hired her away, which came with another pay increase. She’s worked her way up into different positions, each time increasing her pay to where she is today.
My tip is to keep your head down, work hard and the money will follow.
Other income:
We have a property that I owned when we first got married. We were fortunate enough to be able to afford our current house and keep the original property as a rental.
Over time as our household income increased, we aggressively paid off that mortgage, so now we receive $2,000/month in free cash flow from the rental.
Debt:
Just the mortgage on our primary house. It’s a low interest rate of 2.69% and our payment is $2,000 (not including taxes), but we pay an extra $1,000/month towards principal. I’d love to pay it off in the next 7 years, but with such a low interest rate, it’s hard to justify that, rather than investing the money that earns higher returns in CDs, mutual funds, stocks, etc.
We hate debt and do not finance anything that is a depreciating asset. We pay cash for cars and anything else we need. Our cars are 8 and 10 years old.
Budgeting:
We do not budget, but are very cost-conscious. We wait for things to go on sale (and stock up when they do for non-perishables) and shop around for the best prices on a lot of things.
Splurge:
I will pay above market for experiences and good seats at events. Things I’ll remember for years.
Investment strategy:
I max out my SEP IRA every year (which is pre-tax and a tax deduction) of about $30K-$40K/year. My wife maxes out her Roth 401K which is after tax dollars, and has an employer match (which is more free money). We’ve got roughly $1.25M in retirement accounts.
From our rental property income, we put $300 per month into each child’s 529 college fund and put the rest into another investment account.
We’ve had a financial advisor for 15+ years to help me get comfortable with automatically depositing money into those accounts each month.
We both have term life insurance policies, but I also have a smaller whole life policy as another investment vehicle.
Net worth:
$5M. For most people, the more money they make, the more they spend. For us, the more money we made, the more we saved and invested.
If you want to grow your net worth, pay yourself first by saving and investing. Live below your means.
Retirement:
I’d like to semi-retire by the time I’m 60.
Best money decision:
I started to contribute to retirement accounts when I was just 26. I also have learned to fix things myself when I can by watching YouTube (but know your limits).
My worst money decision was buying a new car. First and last time I do that. It didn’t work out for our family situation. I sold it a year later which was $10,000 less than what we paid for it. Always buy used cars and reliable brands that hold their value better.
Overall, don’t try to keep up with the Joneses with material things, kids and pets will destroy anything nice and kids outgrow clothes and shoes every 6 months, so shop smart.
Money Talks is a weekly series showcasing how real people in Charlotte approach money. Participate.
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