| Subdivided land ? what to do with profit |
|
|
|
|
|
kjt1112
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 05 Aug 2005
|
| Subdivided land ? what to do with profit |
 |
|
We just subdivided some land and expect to make about $160,000 after all is said and done. We currently have a mort., for $250,000, no credit card debt and one car pmt of $400. Our current home needs about $50,000 to get it to where we want it. We thought to take the rest & pay off our car and pay down mortgage. This would leave us with a mortgage of around $150,000 & we'd refinance to a 10-15 yr deal rather than a 30 yr which is what we have currently. We thought the $$ saved on our mortgage we could save & invest (also have 4yr old, and we haven't saved much for his college at this point). Any other ideas? Of course we'll seek the advise of a financial planner when the time comes but I thought I'd get the jump on it and see what your thoughts were.
|
Fri Aug 05, 2005 11:23 pm |
|
|
efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
|
See http://www.irs.gov/pub/irs-pdf/p970.pdf especially #7 on page 40 about setting up an ESA account for education. Contributions are not deductable, but gains are. But the contribution limits are $2000/yr, so it may take 2005 and 2006 contributions ($4000 total) between end of year and tax time to really get started on investments for college fund.
College seems to cost at least 10 times what it cost me 30 years ago. No telling what it will cost in 15 years (5 times more?).
|
|
Sat Aug 06, 2005 12:37 am |
|
|
TmDrak
Contributing Member
Cash: $ 0.95
Posts: 38
Joined: 06 Aug 2005
|
Yeah definately get a jump on the college fund, who knows how much the cost will rise. Also if you have a Publix near you..you can setup a college account there..it saves some money for doing nothing..
|
|
Sat Aug 06, 2005 1:50 am |
|
|
bong12187
Preferred Member
Cash: $ 24.50
Posts: 120
Joined: 31 Jul 2005
|
| Re: Subdivided land ? what to do with profit |
|
|
quote:
Originally posted by kjt1112
We just subdivided some land and expect to make about $160,000 after all is said and done. We currently have a mort., for $250,000, no credit card debt and one car pmt of $400. Our current home needs about $50,000 to get it to where we want it. We thought to take the rest & pay off our car and pay down mortgage. This would leave us with a mortgage of around $150,000 & we'd refinance to a 10-15 yr deal rather than a 30 yr which is what we have currently. We thought the $$ saved on our mortgage we could save & invest (also have 4yr old, and we haven't saved much for his college at this point). Any other ideas? Of course we'll seek the advise of a financial planner when the time comes but I thought I'd get the jump on it and see what your thoughts were.
Have you ever tried doing the number on saving your money for your kid's college fund? Did you know that if you start putting in 2K right now until he turns 18 and your fund earns 10% per year, that will only come out to about 63K? Do you think that this enough to send your kid to college? I'm sure that you know that answer to this is a resounding "NO." However, if you use your left over money to pay your car and puchase a rental house that will give you a $500 passive income (after everything is paid for) every month, you will end up with $78k (passive income) and $67k ($400 monthly car pmt saved by paying it all). Additionally, you will have a buildup equity in your rental house when he/she turns 18. You can either sell the property or remortgage to get additional funds to send your kid to school.
|
|
Sat Aug 06, 2005 9:15 am |
|
|
|
