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Subject:  What to do AFTER the house? Date:  5/5/2005  9:44 PM
Author:  PaulEngr Number:  38232 of 46904

My wife and I are now "struggling" with what to do after paying off most of the major expenses.

We've got a substantial emergency fund. At this point, it's way more than 6 months of expenses. It's more like 6 month's salary (gross). It shouldn't be so high but simply put, we keep parking the money there and forgetting to sweep it out.

We've got the house. We've retired all the college loans. We paid off all the car loans a while ago. In fact other than a conventional mortgage, we have no debts. Our credit scores are so ridiculous that we get every conceivable credit card offer in the mail, multiple times a week. The existing credit card limits get bumped up almost quarterly and we almost can't conceive of ever actually limitting one out anymore. And we never maintain balances. I've had a card denied recently mostly because of "strange activity" issues. I paid for a few business expenses on a personal card because work won't get P-cards. So the credit card got frozen just because I bought several pallets of brick, some mechanical parts, a corporate training class, and mixed that in with the usual groceries and gasoline purchases. Like I explained to the CC company, "who in their right mind would be buying that stuff from those companies anyways if it was a stolen card?"

We have the retirement funding off to a huge start. It's growing so fast now that just the earnings on the retirement accounts are exceeding what I'm putting in each year. As it stands, the retirement accounts will grow to be substantially larger than our actual needs at retirement. So I've been cutting back the investments into them a little bit over time. I'm down from 10% to only 8% investment rate. I thought about cutting back more yet, but then what would I do with the extra money?

We started a Roth and just funded it to the limit because we intended on using it to help pay for college for our kids (exercising the option to withdraw principal first without touching the earnings). We debated for a while about how much to put in the Roth, but the annual contribution limit is so "small" that logic failed us on justifying smaller amounts. After looking at ESA's, 529's, and such, this is the best option for us. It gives us the insurance that it doesn't lock our kids into college-only as an option and produces good options even in the case of no higher education at all.

Our basic "problem" is that we started saving a lot when we were living on a $50K a year gross income and saving for a house and making vehicle payments. Basically, we were living then like we were only making $40K a year. It worked because we went from essentially living like we were poor to having a decent income. So we never really missed $10K a year.

We don't live on stir fries and other cooking techniques supplemented with lots of pasta and rice where we can stretch a pound of meat out to 3 days worth of meals and limit eating out to once a month. But at the same time, our income has grown substantially larger over the past several years. It's just that our lifestyle simply hasn't keep pace (fortuitous that it might be). I hesitate to say how much but let's just say I've had a couple promotions and my wife is now working more or less for sanity reasons in a good paying job (management level), even though she doesn't have to work at all at our current income levels (and never did before either).

My family is now at the point where we simply don't really have to worry about money anymore. We actually spend quite a bit less than we have coming in. We could be keeping up with the Jones's, but every time the Jones's visit us, they seem to be trying to keep up with us. My wife actually gets concerned about having "casual" friends over because the jealousy thing gets really annoying and strains relationships. We really can't hide some aspects of our life. The same people that get a jealousy streak simply don't understand that we worked hard to get where we are today. They don't realize that I once had a 500 sq. ft. studio apartment with NO WINDOWS on a basement floor simply because my idea of splurging at that time was to be able to have a place without room mates.

I guess my question for those who have "made it" financially in life is, then what? Once you are no longer struggling mostly towards reaching the 'essentials' in life, how do you decide what the heck to do with the money that you are still saving?

We of course keep socking the extra into various accounts. But we're getting to the point where we need to do something more. Essentially, the problem is that saving money with no purpose in mind is pointless. You keep getting into a "then what?" sort of question. As I see it, our options are:

1. Start paying down the mortgage. Great option but I'm a little concerned about this simply because it's sort of a one-way street. I mean, sure I could pay that 30 year mortgage off very quickly but I look at the money as "locked in" once it has been used for this purpose. On the other hand, it will "earn" 5%, gauranteed. Can't beat that with ING. But if we change our minds or "the big one" hits, it's really too late to turn it around even if we could take out second mortgages and such. In a lot of ways, this used to be a nice "quality of life" type issue...a must do when you can for peace of mind. But heck, I seem to be able to land good paying jobs in less than 2 months with my current skill set even in "roug