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March 11, 2013

I Got 99 Problems But Being Rich Ain’t One

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McMegan, who is not a financial adviser but plays one on the internet, answers white people’s problems.

In brief, these are the afflicted ones, likely drawn from the WSJ poverty pool, whom she has selected to internet comfort (mainly by saying: Adopt me! lol!):

  • On a personal finance level – both me and my wife just past our 40th birthday. We own a house valued around $750K and only have about $150K left to pay off. We have been paying down the house about $50K per year so should be debt free in three more years. For the past two years we have also been putting $25K into a 529 for the kids. So at this point we have about $50K in a 529. Almost all our savings are in the house as we only have about $150K in other investments. When is the kids’ college fund topped up? Are we being foolish to save for the kids educations as opposed to our own retirement?
  • My fiance and I are roughly-30-year-old software developers. We’ve both had some success in our 20s, which combined with a reasonably modest lifestyle, has resulted in close to $1 million in savings, about 30% of which is in retirement accounts.So far so good. But about a year ago, we decided to leave our jobs and start a startup. We raised a little bit of money, so we can pay ourselves a little bit of salary (about enough to pay the rent and not much else), but most of our “compensation” is equity in a company that we’re optimistic about, but is still pretty far from profitability. How much should we be spending down our savings to supplement our income? 
  • I’m 40ish, married, with three young kids. I make a good living ($240k+), we have $300k in a mortgage, and no other debt except a small car loan at a really low rate (less than $10k, less than 1%.) I’m self-employed, I max out my 401k, and have a nice emergency fund. My wife was a public school teacher for ten years, but no longer works and is unlikely to go back. She has around $100k in the state pension system. My question is whether we should leave it there. I realize there are tax consequences along with a 10% penalty, but it seems to me that I’d rather have $70k to maybe pay down my mortgage than wait for some paltry pension payment when we’re in our 60′s, assuming it would even be there. On the other hand, it also seems to me that I might be nuts. Thoughts?

I’m sure that, had one of these emailers been someone who spoke of trying to get by with a couple of kids on $24k per year, the advice would have fallen somewhere in the netherworld between “making bad choices” and “are there no workhouses?”.

Moral hazard averted!

To be fair, McMegan was reduced to giving financial advice to the struggling arriviste class because Michael Wolff had already landed that sweet “securing the best table in New York restaurants” assignment.

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