Raptors, today I have a guest post from Daydreamer. The two of us have been chatting by email, sharing inspiration and investing strategies. I asked him to write a short case study for the edification of the group. He welcomes comments on his position and approach to help refine his thinking. Thanks for helping raptors!
music selection: “Wildflowers” — Tom Petty
Hi, I’ve always been somewhat against the traditional way of living, as in theres got to be a better way to live my life. Not that I’m unhappy but if I could have more freedom and more independence from the norm it would be nice. This was only multiplied by the fact that both of my parents never got to enjoy their retirement. I’m 38 yrs old now and have had a few financial setbacks. Two separate times I had to cash out my IRA which yes its big no no but life happens. When I was younger I took most of the money that my parents had left me and paid off my house so that I only had a 25k mortgage. Looking back I should have invested that money as I had a pretty low interest rate. Fast forward 11 years I am happily married (both with blue collar jobs) and have three sons 15, 14, and a 4 yr old. We sold the house a year ago which freed up the equity I had in it, and moved to my wife’s home town and paid off our cc debt. My financial stance as of right now not including my wife’s IRA is as follows.
Inherited IRA. = $109,000
Lizard King’s comments: Priority number one is an emergency fund sufficient to cover six months of expenses. Never know when you or the SO could become unemployed. Second priority is to max out company tax advantaged accounts (the money isn’t stranded until retirement age. You can read up on how to withdraw substantial portions penalty free here.) I like that you are predetermining your asset allocation with respect to a healthy mix of fixed income. Markets are volatile and fixed income adds ballast that is very emotionally soothing during crashes. Don’t rush options trading. When you are ready, start with just one contract at a time. Learn what your personal emotional reaction is going to be to getting called and/or assigned. Adjust accordingly.
Hope the lizards playing the home game have a lot to offer you.
Devour your prey raptors!