$10k liquid + $15k in withheld taxes the government owes me.
At least 5-8x that in an HSA, 401k, SEP, IRAs, Roth IRAs and tax-advantaged government bonds paying 7.5% that I bought a few months after I cashed out of the Janus fund in Dec 1999. (My broker fired me for that)
I'm going to hold on to those bonds as long as I can, and I'd much rather borrow against the equity of the "home" I own at a lower rate. (I bought the home in cash, so this is my "first" mortgage -- I opened the account when I wanted some capital to take a chance at buying an adjoining property at a tax auction.)
One of the first things I did when I quit was write a check from the heloc to the HSA so I wouldn't have to think about making contributions for it.
It's a little more complex than that because I have two houses on one large lot and my wife's riding academy and the rental income creates a financial situation that's so sweet it's almost a scam. I think last year I got $16k of rent, experienced a positive cashflow of around $14k from it, but the IRS says we made $4.5k of income because of depreciation on our property.
(I have no idea why anybody buys a single family house; as much as muggles make a big deal of the mortgage interest deduction, owning a duplex means you can write off half the principal plus you get a cash flow to help w/ the mortgage and property taxes. Maybe you even get a cool neighbor.)
One key to making this work is that I can get a high deductible health insurance plan through COBRA for $500 a month and that will tide me through until Obamacare comes unless the Republicans defund it. That's important because there really isn't any such thing as individual health insurance in NY. (I'd better write that letter to my Republican congressman before I forget.)
Anyhow, it isn't all roses. I pay $4k a year in taxes for a "persistently dangerous" school that my son goes to where probably 1/2 of the parents w/ college educations don't send their kids to because they homeschool. They haven't had a principal last more than two years so long as I know.
The internet sucks out here too. Github works OK, but it took 30 seconds to create a trouble ticket with the off-brand project management software at my last job, which was one of the reasons I quit. Netflix and Amazon instant video work, but I can't really watch Youtube. I used to use Flickr a lot, but with the latest update it is so slow I can't even use my own photographs when I make a presentation because it takes 1 minute+ to load.
"I have no idea why anybody buys a single family house;"
I can give you a few personal reasons which hopefully resonates with a few others. I prefer having a "detached" home. I dont want the hassle of sharing anything with anyone. That does not mean I dont want neighbors. But I am not interested in hearing when my neighbor flushes their toilet. I like having a backyard with some vegetation. I like having a driveway that I don't have the share (lot of new townhomes do that) etc etc.
Biggest reason: Kids. Yes you can live with them in condos/townhomes etc. but the autonomy/freedom of a single family home cannot be undermined.
It is not always about money and ROI. Life is a lot more than that and this coming from someone who values money a lot.
I grew up in Manchester NH where housing prices are high in the suburbs where I grew up (that's how I traded a 1200 sq ft house for a 75 acre farm with two houses and a barn the size of an aircraft hangar.)
In a really nice neighborhood in downtown (w/ good access to the freeway as well as a local grocery store 2 blocks away, as well as a dunkin donuts and a great ice cream stand not to mention a municipal pool and a beautiful park with a big pond and hiking trails) my uncle bought a huge 3 story house that was "luxury housing" in 1910, lived on the first floor, put up his mother and sister on the second floor, rented out the third floor to one family since at least 1976, finished 1/3 of the basement and built an addition on the first floor, raised 2 kids.
His property values are "depressed" compared to an array of 2 story colonials that were built in 1998 next to the intersection of Rt 93 and 101 (we measured 80 db noise levels outside.) These houses are made of chipboard (we hit "peak wood" 15 years ago and nobody noticed) and they suffered 90% mortality for the yews planted on the foundations because the idiot contractors didn't know that you're supposed to take the burlap bag off yew plants when you plant them.
But I guess they are expensive because of the liquidity premium that you can sell go get an equally bad house in Texas or Las Vegas or anywhere.
this is the only realistic post i saw on here. the people who say they saved 2k before starting their venture are probably 18-22 years old and crashing at their parents' pad.
if you're a grown up, i don't see anyway you can start a venture without a year of savings built up or some sort of income (investments, part-time work, etc). let's say you give your venture 6 months and you fail. you'll need a few months to get yourself a paying job again before you're evicted/foreclosed.
If you're in that situation (can crash at your parent's pad) you should take advantage of it.
Remember now it's not just about "not getting evicted", it is also useful to have working capital.
I have a project I'm working on that will probably cost $600-$800 of computation in a Hadoop cluster in Amzazon AWS assuming I don't screw it up and have to do it twice.
In my situation I can "just do it".
To make an analogy with Poker, you do not want to be short stacked.
I know many "entrepreneurs" have an idea which they could move forward with personal investments in the $50-$5000 range. Instead of making a cool demo or any kind of prototype, they go talking to angel investors and they wonder why they get nowhere.
Somehow though, they manage to find $150 to give to Time Warner and $150 to give to Verizon every month.
For a while, for instance, I was talking w/ people in NJ, CT (imagine a donut centered around NYC) about applications of text analysis in financial services. Lots of talking to investors, but no demo.
I spent about 40 hours and about $12 (domain name) on a demo over the course of six months, which failed. It's material for a blog post. I can say I didn't know anything at all about the problem when I started and now I know something.
Also you really gotta pay attention to taxes when you're self employed. I lost about a year because I owed the IRS and NY about $15k of estimated tax I didn't pay, so I took a job I shouldn't have taken. I can be philosophical about it because I met one of my competitors at a conference and he was bouncing off the walls because he'd spent a year fighting with the technology transfer (prevention) office at his uni.
18-23* :) Use what you have available to you. Took me 6 months and now I'm ready to go. It would have been a significantly harder position to be in otherwise. Before I am even leaving I'm saving up around 20-30k or ensuring a minimum of 4k coming in per month though. A stable income is definitely a must.
At least 5-8x that in an HSA, 401k, SEP, IRAs, Roth IRAs and tax-advantaged government bonds paying 7.5% that I bought a few months after I cashed out of the Janus fund in Dec 1999. (My broker fired me for that)
I'm going to hold on to those bonds as long as I can, and I'd much rather borrow against the equity of the "home" I own at a lower rate. (I bought the home in cash, so this is my "first" mortgage -- I opened the account when I wanted some capital to take a chance at buying an adjoining property at a tax auction.)
One of the first things I did when I quit was write a check from the heloc to the HSA so I wouldn't have to think about making contributions for it.
It's a little more complex than that because I have two houses on one large lot and my wife's riding academy and the rental income creates a financial situation that's so sweet it's almost a scam. I think last year I got $16k of rent, experienced a positive cashflow of around $14k from it, but the IRS says we made $4.5k of income because of depreciation on our property.
(I have no idea why anybody buys a single family house; as much as muggles make a big deal of the mortgage interest deduction, owning a duplex means you can write off half the principal plus you get a cash flow to help w/ the mortgage and property taxes. Maybe you even get a cool neighbor.)
One key to making this work is that I can get a high deductible health insurance plan through COBRA for $500 a month and that will tide me through until Obamacare comes unless the Republicans defund it. That's important because there really isn't any such thing as individual health insurance in NY. (I'd better write that letter to my Republican congressman before I forget.)
Anyhow, it isn't all roses. I pay $4k a year in taxes for a "persistently dangerous" school that my son goes to where probably 1/2 of the parents w/ college educations don't send their kids to because they homeschool. They haven't had a principal last more than two years so long as I know.
The internet sucks out here too. Github works OK, but it took 30 seconds to create a trouble ticket with the off-brand project management software at my last job, which was one of the reasons I quit. Netflix and Amazon instant video work, but I can't really watch Youtube. I used to use Flickr a lot, but with the latest update it is so slow I can't even use my own photographs when I make a presentation because it takes 1 minute+ to load.