Not sure how much debt you're talking about, but if you're able to replenish the funds really fast, why can't you just pay off the debt really fast instead? That way you wouldn't have to touch your 401K (horrible time to do that) OR take out a loan. I'm probably missing something though. Sorry about your divorce.
Between what I've seen here and the conversations I've had with a couple of different financial consultants, i"m going to leave the 401k alone for now. Pretty much universal agreement that this is the worst time to do it. While being out of debt sounds great, The hit I'd take plus missing out on the recovery isn't worth it. Thanks for all the advice.
It's weird telling people the old cliche of "it just happened..." but that's the truth. No one event caused it other than we just don't love each other like that any more. We went through mediation and I'm just waiting for my lawyer to turn that into a decree. As of now, though, the courts in Montgomery Cty aren't open so we're in a holding pattern no matter what. Problem with the house is that I won't be back in it until she gets a place of her own. That would require me paying her support before the decree is done. Not sure how I feel about that. I have a free place to stay right now that allows me time with my boys...so I'll just stick with the status quo for now. But I can't get it on the market until then.
I agree. We’re largely letting our investments ride. One thing to point out, though. If I were younger, I would be sorely tempted to buy one or two or even three houses or condos in areas of Austin that had been rapidly increasing in value due to location. Traffic has had a huge impact here on home values. People have been moving to Austin in droves from parts of the country with home prices that make Austin’s housing market look like the deal of the century. For various reasons, highway construction hasn’t kept up, and the traffic is far worse than it once was. So people will pay a premium to live “close in.” After all, downtown is considered to be where the action is. It isn’t all there, but it has that vibe. We’ve been here since the summer of 1980 and have seen this happen a couple of times before. Home prices crash due to “circumstances beyond our control,” not because of Austin, now internationally known as a cool place to live (not nearly as cool as it once was, but I wouldn’t live anywhere else in Texas). Some liquid people take advantage and in a few years, the market is not only back, it’s going great guns again. I know some of them. We are now in a period of economic uncertainty we haven’t seen in a very long time, if ever. There are those eager to get “out from under” and cash out, worried about job security. People that bought earlier In Austin’s real estate boom and were in it to ride home prices up, and boy, they had been going up here until the pandemic came out of nowhere. Some of those places have been remodeled, “modernized” on the inside. Some have been enlarged, as well. Some are for sell. We stayed out of the last opportunity to take advantage. It was a mistake. We’re retired now, our house is in an excellent area and is paid for, and we have a nice income. We could purchase a couple of places, take advantage of super low interest 15 year mortgages, pay them off early and make a killing. It would be for the kids more than for us, probably not the best reason to do it. We could sell one in a few years and add to our travel fund. We like to travel. I just don’t want the headache. My neighbor across the street has 3 rent houses himself in East Austin and thinks I should take some Advil, forget my age, and go for it. Get a company to take care of the properties. It’s tempting.
I have 1 rental and really want to add another right now. Are prices in Austin already dropping? I saw a good rental prospect property in Houston near River Oaks drop 20% this week. Austin didn't occur to me. Great market.
Listen to this podcast. Del talks about real estate on a weekly basis. https://lifestylesunlimited.com/category/radio_shows/ @Deckard Condos are the absolute worst real estate investment you can make. You're better off buying a used trailer.
I'm really not interested in them, but thanks for the advice. I mentioned condos because a huge number have been built in downtown Austin, and they usually sell out before the buildings are even completed. The vast majority of the high rises that have been added to downtown Austin the last five years are condo towers. There's usually retail on the ground floor, including a grocery, places to eat, and maybe office space on the first few floors of some of them, but they are overwhelmingly condos, with a couple of apartment towers in the mix. It's a trip how concentrated they are in Austin. A good friend of mine that had to move out of town due to his job about 3 years ago had a condo on West 5th. You could walk outside at night and find live music, numerous places to eat, a large number of bars. Clubs. Eye candy everywhere. He was considerably younger than me, in his late 50's, and while I enjoyed simply looking, he did more than look. More than once, I would give him a wave and head for my car and he would be heading for his condo with a girl 20 years younger than he was. ;-) There's a synergy happening there. The condos in their hundreds, bars, clubs, restaurants. It's nothing like Houston or Dallas, in my opinion. We'd never live in one, but an amazing number of people do, many who have moved here the last few years. That was really more to let people know there's a definite condo market. I've been considering houses. The impact on that scene of the Coronavirus? It must be devastating. Many businesses that were thriving won't survive this, which is depressing to think about.
Sorry to hear about this, the divorce and implications. When I got divorced, I was broke and in debt in the beginning, but it subsides and you adjust...I am assuming you both are keep your respective retirements, or else she'd get half...It is a tough call to pull out money to pay debt, plus keep in mind the penalty for early withdrawal and tax on said withdrawal. If you can take a 401K loan, do this...If this is not allowed, I would not take it out...If you look at your returns from your investments (mine was -25% ytd), it would be best to have more money in your account to have the chance to recover and have better returns...either way, good luck brother...
I decided to leave it be for now. I'll likely take out a loan for my 1/2. Leaving the money in there is the best approach, as I've learned. I'll definitely be broke for a bit while I try to sell the house that I'll be 100% responsible for. Once I get out from under that and into something more reasonable for 1 person (plus 2 kids for 1/2 the time), things will be a lot easier.
