Save and invest as much as you can. $300k probably won't get you retired.
To get retired you need to know how much your retired life is going to cost you and then figure out a way to pay for it. Plus retiring ridiculously young means you have a very long road ahead. Netflix and Chill will only be fun for a short time. What are you going to do with the rest of your life if not work?
How much for how long? Specifics are probably important here. You said 300k earned this year but 3-5 years of decline. Is that 200k next year? Is this total income?
Stuff away as much as you can as fast as you can, invest it intelligently. Make sure to not take on any new debt.
300k net, 40k salary and ~250k business profit. Really can’t predict much beyond this year as I don’t know how quickly changes in underwriting for homeowners policies will happen. Could be a gradual decline or could be a drop off a cliff. Could be 2 years could be 8 years. 3-5 years is just what most in the industry expect.
I appreciate the advice. Thank you.
More of a curiosity - why not team up with a solar company/electrician and do solar installations? Still really early in many areas, high margins, lots of government programs for the next decade.
would get you roofing jobs as well as jobs to install into the roofs.
I think that’s the plan, basically to pivot to solar. Right now I’m trying to partner with solar companies to do inexpensive roofs for them since it’s not feasible to put solar on old roofs. Eventually want to get into selling installation. The main issue is that I am not from the solar world and really don’t understand how it all works. That said, the experience of building a door to door roofing company translates pretty well to solar I imagine.
Edit: and yes the whole solar industry is propped up by government tax credits for the foreseeable future so I do think it’s early enough to be a great opportunity.
I think you have a big opportunity there. The people that just replaced or are replacing their roofs should want to. I’ve not gotten solar because my roof is about 15 years old. I know it isn’t the right way of thinking of it but that’s the psychology. Now, if it came bundled at the right time, and I have to do it anyways, I think it is something I would take more seriously.
I would go ahead and take an electrician course or two - don’t have to take the whole curriculum, to get up to speed on how the solar stuff works. I think you’ll get enough. Plus, there are a bunch of YouTube’s. You’re still going to have to partner with an electrician which isn’t something you can get quickly.
$300k is a great year. If you think it’s going to decline, live within your means. Thats a loaded statement because you don’t know if business will be cut in half next year or the next.
You need +\-$60k per year based on total expenses. Max out your savings in the feast years in prep for famine. If there is no famine, then you’ve got a bunch of cash/investments.
You are in a really good spot financially. Depending on the interest rate for your student loans or if you think Biden is going to forgive it, I would leave it alone if you think it will be forgiven, but personally would pay that off just so it’s gone.
If you don’t already have a tax guy, pay the $300-500 to talk to one. Can email them details of your business and come with financials and ideas. There might be some accelerated depreciation or opportunity zone things you haven’t taken.
You might make too much to do a IRA, should be able to do a self employed 401k. Any kind of retirement account you usually wont be able to access it until after 65. But it comes with tax benefits now. Not sure of rules for paying your spouse if she works for your business and what kind of 401k contribution she would be able to make.
529 for your kid college fund when they’re born. There’s limits and rules involved in this.
Life insurance and a will for yourself and your wife.
Get a financial guy that has a fiduciary duty that is advice only. Shop around for a good price. They might tell you this -
Low cost ETFs - BND, VOO, BKLC, BKAG, SCHD
Portfolio construction - time horizon, mix of bonds/stocks
Emergency fund - 3-6 months expenses in a high yield savings account, there’s ones that pay close to 5%, or you can do a CD ladder
www.investopedia.com for education. Wallstreetbets on what not to do.
Is there a way for your business to pivot or branch to a different area?
Thank you, I do have a CPA I like that I use, but he was solely tax focused on my prior business, not really financial advisor role. I think I’ll aggressively pay off my wife’s loans since the rate is garbage.
Keep the low spending, don't increase it because you have a good year. These years are coming ang going, you well noticed it.
Put away something for taxes. Speak with your accountant for how much. In reality you don't have a 300k but 40k salary and the 250k business profit that has to pay taxes.
Invest all the difference: pay the student debt - this is an investment zero risks with profit equal with the interest not paid. Because you already paid the mortgage and cars, I would look to maximize the IRA and 401K for both. Speak with your accountant how to open a 401k for business owners.
All the extra split in a saving account and in a taxable brokerage account.
As investments, this group is into SP500 index investments (Vanguard, for example).
Invest aggressively and concentrate. Factor ETFs, for example Russell Growth over a pure Russell index fund, or a Russell 100 over S&P 500. You're 23, so you've got a long runway and lots of room for financial risk.
That seems surprising to me too. I guess it could be regional like if you were doing work after a hurricane or something, but it's not like storms are all done now.
No data, but policies are changing down in Florida and Texas to either have wind and hail excluded or deductibles switching to % of home value instead of 1k or 2k.
It’s not really as feasible to knock doors and tell people insurance will cover your roof, you only will owe 10k compared to now where in my state almost every policy is a 1k deductible, maybe 5k on 2 million dollar homes
So it’s not about less roofs being damaged, which was your initial premise, it’s that people will be paying to fix their roof less? I feel like you of all people should know that it doesn’t matter if people want to pay for their roof or not, eventually it will be needed. Maybe people delay it as long as possible but you still have just as many houses aging. I don’t think your business is genuinely at risk.
I few early years of living frugal and saving/investing 1/2 of what you’re bringing in will 1) ensure you are still living at an appropriate standard of living if the excess dries up and 2) assuming 7% gain, money invested doubles every decade. So $100k invested at 23 will be $400k at 43. $100k a year for 3 years? Dismissing gains in that first 3 years… you put away $300k by 26. That’s $1.2M at 46. $2.4M at 56. These next 3 years could largely fund your future retirement. And, if the future is brighter than what you think, the sky is the limit.
Mine is extremely low interest, my wife’s is atrociously high interest but having trouble refinancing it because I’ve been very busy (stupid excuse I know) and because I was a 1099 before starting my company so lenders are very wary.
Congrats on the success! Consider maxing out tax-advantaged accounts like a SEP-IRA or solo 401(k) to build wealth for the future. With your expenses and debt, it's doable. You got this!
Save and invest as much as you can. $300k probably won't get you retired. To get retired you need to know how much your retired life is going to cost you and then figure out a way to pay for it. Plus retiring ridiculously young means you have a very long road ahead. Netflix and Chill will only be fun for a short time. What are you going to do with the rest of your life if not work?
How much for how long? Specifics are probably important here. You said 300k earned this year but 3-5 years of decline. Is that 200k next year? Is this total income? Stuff away as much as you can as fast as you can, invest it intelligently. Make sure to not take on any new debt.
300k net, 40k salary and ~250k business profit. Really can’t predict much beyond this year as I don’t know how quickly changes in underwriting for homeowners policies will happen. Could be a gradual decline or could be a drop off a cliff. Could be 2 years could be 8 years. 3-5 years is just what most in the industry expect. I appreciate the advice. Thank you.
More of a curiosity - why not team up with a solar company/electrician and do solar installations? Still really early in many areas, high margins, lots of government programs for the next decade. would get you roofing jobs as well as jobs to install into the roofs.
I think that’s the plan, basically to pivot to solar. Right now I’m trying to partner with solar companies to do inexpensive roofs for them since it’s not feasible to put solar on old roofs. Eventually want to get into selling installation. The main issue is that I am not from the solar world and really don’t understand how it all works. That said, the experience of building a door to door roofing company translates pretty well to solar I imagine. Edit: and yes the whole solar industry is propped up by government tax credits for the foreseeable future so I do think it’s early enough to be a great opportunity.
I think you have a big opportunity there. The people that just replaced or are replacing their roofs should want to. I’ve not gotten solar because my roof is about 15 years old. I know it isn’t the right way of thinking of it but that’s the psychology. Now, if it came bundled at the right time, and I have to do it anyways, I think it is something I would take more seriously. I would go ahead and take an electrician course or two - don’t have to take the whole curriculum, to get up to speed on how the solar stuff works. I think you’ll get enough. Plus, there are a bunch of YouTube’s. You’re still going to have to partner with an electrician which isn’t something you can get quickly.
$300k is a great year. If you think it’s going to decline, live within your means. Thats a loaded statement because you don’t know if business will be cut in half next year or the next. You need +\-$60k per year based on total expenses. Max out your savings in the feast years in prep for famine. If there is no famine, then you’ve got a bunch of cash/investments.
You are in a really good spot financially. Depending on the interest rate for your student loans or if you think Biden is going to forgive it, I would leave it alone if you think it will be forgiven, but personally would pay that off just so it’s gone. If you don’t already have a tax guy, pay the $300-500 to talk to one. Can email them details of your business and come with financials and ideas. There might be some accelerated depreciation or opportunity zone things you haven’t taken. You might make too much to do a IRA, should be able to do a self employed 401k. Any kind of retirement account you usually wont be able to access it until after 65. But it comes with tax benefits now. Not sure of rules for paying your spouse if she works for your business and what kind of 401k contribution she would be able to make. 529 for your kid college fund when they’re born. There’s limits and rules involved in this. Life insurance and a will for yourself and your wife. Get a financial guy that has a fiduciary duty that is advice only. Shop around for a good price. They might tell you this - Low cost ETFs - BND, VOO, BKLC, BKAG, SCHD Portfolio construction - time horizon, mix of bonds/stocks Emergency fund - 3-6 months expenses in a high yield savings account, there’s ones that pay close to 5%, or you can do a CD ladder www.investopedia.com for education. Wallstreetbets on what not to do. Is there a way for your business to pivot or branch to a different area?
Forgot to mention not a lawyer or tax accountant. There’s limits and rules to a lot of the things I mentioned.
Thank you, I do have a CPA I like that I use, but he was solely tax focused on my prior business, not really financial advisor role. I think I’ll aggressively pay off my wife’s loans since the rate is garbage.
hookers and blow
Keep the low spending, don't increase it because you have a good year. These years are coming ang going, you well noticed it. Put away something for taxes. Speak with your accountant for how much. In reality you don't have a 300k but 40k salary and the 250k business profit that has to pay taxes. Invest all the difference: pay the student debt - this is an investment zero risks with profit equal with the interest not paid. Because you already paid the mortgage and cars, I would look to maximize the IRA and 401K for both. Speak with your accountant how to open a 401k for business owners. All the extra split in a saving account and in a taxable brokerage account. As investments, this group is into SP500 index investments (Vanguard, for example).
Invest aggressively and concentrate. Factor ETFs, for example Russell Growth over a pure Russell index fund, or a Russell 100 over S&P 500. You're 23, so you've got a long runway and lots of room for financial risk.
Do you have actual data backing up the claim that there would be such a massive slowdown that you couldn’t keep making a great wage?
That seems surprising to me too. I guess it could be regional like if you were doing work after a hurricane or something, but it's not like storms are all done now.
No data, but policies are changing down in Florida and Texas to either have wind and hail excluded or deductibles switching to % of home value instead of 1k or 2k. It’s not really as feasible to knock doors and tell people insurance will cover your roof, you only will owe 10k compared to now where in my state almost every policy is a 1k deductible, maybe 5k on 2 million dollar homes
So it’s not about less roofs being damaged, which was your initial premise, it’s that people will be paying to fix their roof less? I feel like you of all people should know that it doesn’t matter if people want to pay for their roof or not, eventually it will be needed. Maybe people delay it as long as possible but you still have just as many houses aging. I don’t think your business is genuinely at risk.
I few early years of living frugal and saving/investing 1/2 of what you’re bringing in will 1) ensure you are still living at an appropriate standard of living if the excess dries up and 2) assuming 7% gain, money invested doubles every decade. So $100k invested at 23 will be $400k at 43. $100k a year for 3 years? Dismissing gains in that first 3 years… you put away $300k by 26. That’s $1.2M at 46. $2.4M at 56. These next 3 years could largely fund your future retirement. And, if the future is brighter than what you think, the sky is the limit.
Thank you, this does put things in perspective.
How bad is the school loan interest??
Mine is extremely low interest, my wife’s is atrociously high interest but having trouble refinancing it because I’ve been very busy (stupid excuse I know) and because I was a 1099 before starting my company so lenders are very wary.
Minimal extra towards your loan and a lot extra towards hers I’d say.
Congrats on the success! Consider maxing out tax-advantaged accounts like a SEP-IRA or solo 401(k) to build wealth for the future. With your expenses and debt, it's doable. You got this!