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Utilities: $800 a month Frank Furbeck was taught at an early age that even if he didn’t have a lot of money, he should still set some aside for savings. He kept to that motto and is also teaching his sons Josh, 17, and Jake, 13, to follow the same direction. “[A man] told me that every time I get a raise I should put that money into my deferred compensation, and I will have something,” Furbeck said. “He was right.” Frank started working for the state of Illinois when he was 19. Now a systems analyst making $83,000 a year, he puts the maximum contribution of $15,500 a year into his deferred compensation, which has grown to about $227,000. Deferred compensation is like a 401(k), where an employee defers some portion of his income to a savings plan. It’s not matched by his employer, but the money is only federally taxed upon withdrawal. Frank’s fiancé, Trudi Morris, also a state employee, is an office coordinator in the payroll division for the Illinois Department of Human Services. Trudi had not started saving aggressively until she met Frank. She earns $36,000 a year and contributes almost half her pay to her deferred compensation by setting aside the maximum $15,500. She has saved up about $40,000. “We don’t live extravagantly or poorly,” Furbeck said. “I call it comfortable in my standards.” Frank and Trudi carry no credit card, auto or home debt. “I saw my mother struggle with credit cards, and I didn’t want to go that way,” Frank said. He owns all three of his cars and only pays property tax of about $100 per month for his home. Frank and Trudi have also saved $2,500 in a money market account bearing 3.9 percent interest. Frank also has $2,000 in a Roth IRA, $2,000 cash in a regular savings account and $2,000 in CDs. Trudi plans to set up a Roth IRA, but she hasn’t decided when. Frank set up 529 plans for both of his sons with about $6,000 each. But when Josh decided to enlist in the army, Frank transferred his full balance into Jake’s account, which now has $16,400. Frank started investing in a brokerage account for Josh with $1,500 in mutual funds. When Josh is employed, he will transfer the money to a Roth IRA. “It’s never too early to start saving for retirement,” Frank said. Although Frank stopped contributing to Jake’s 529 for now, he plans to fund 75 percent of his college education. Frank’s ex-wife sends a child-support check of $475 every month for both sons. Frank gives $200 to Josh and $50 to Jake. They both tithe 10 percent of their allowances, save half of what they have left and use the rest for whatever they want. As state employees, Frank and Trudi’s health and life insurance are covered by the state. For auto insurance, Frank pays $525 for liability every six months for Josh’s car and $300 for full coverage on the other two cars. Frank’s house, which he built himself, sits on 32 acres of land in rural Illinois. He spent about $50,000 on construction and another $4,500 on a small barn and fencing. The land and house currently have an estimated value of $250,000. Each month, Frank and Trudi spend around $800 on utilities, $350 a month on groceries and around $320 on gas. Frank tithes $400 a month to his church. As a hobby, Frank raises cattle and makes between $500 and $750 for each cow. He also saves on groceries since he butchers some of the meat for himself. His sons have their own cattle. Jake sold a cow and put the $850 he made into a brokerage account. With the extra cash they have in a month, Frank and Trudi like to go out to dinner at local restaurants. They use coupons and end up spending around $25 altogether. They also save on gas by carpooling to work everyday. As for wedding plans, Frank said, “We’ve both been married before, so the second time around is going to be us going away. No tuxes, no dresses, or any of that other stuff.” They plan to get married next year, but have not set a specific date yet. Frank plans to retire at 53 ½ after 35 years of state employment, which makes him eligible to receive a pension for 56 percent of his salary. He also has one year worth of sick time that he’s using toward retirement and hopes to reach millionaire status by the time he’s 60. Trudi plans to retire by the time she turns 58. “I live well below my means,” Frank said. “So when I leave state service, I will basically get a pay raise from what I’m used to bringing home.” Our expert’s takeFrank and Trudi are well on their way to millionaire status, according to Ric Martin, a Certified Financial Planner at Steinhaus Financial Group. Martin said that Frank can retire at age 53 ½ and Trudi can retire at 53. Both of them will have accumulated $1,910,378 of investment assets by Frank’s age goal of 60. According to Martin, Frank and Trudi could increase their standard of living to $53,250 per year in today’s dollars and still have enough money to last through age 95. Assuming a return rate of 8.5 percent, this would equate to $73,000, adjusted for inflation, at Frank’s age of 54 and Trudi’s age of 53, Martin said. Martin said Frank should boost his college savings for Jake to between $3,700 and $7,200 a year depending on what percentage his 529 is making and assuming the cost of college today (between $20,000 and $30,000). Frank can afford to contribute the maximum $5,000 into his Roth, Martin said. “His Roth should be invested into high growth and/or international investments based on Frank’s risk posture.” Martin also said Frank should add his CD to his money market account. Even though Frank and Trudi have done a good job saving for the long term, Martin said they should build an emergency account covering 6-12 months of expenses of $16,080 in readily available assets, based on their current standard of living. “They have almost no liquidity. Frank should get a line of credit against the house just for liquidity and emergency use,” he said. A bank will likely give them no more than 80 percent of the equity in their house or $200,000, according to Martin. Frank and Trudi also need to consider disability income needs, which at their age may be more important than life insurance, said Martin. “In the event that something happens to them, they would likely get 60 percent of their pay, which is then taxed,” he said. “Their after-tax cash flow may not be enough to sustain savings and the standard of living they are accustomed to now.” Frank should also review his life insurance because Martin thinks it may not be enough. He also recommends Frank’s deferred compensation should be a diversified portfolio of funds, iShares and some internationals sectors. Martin said Trudi should diversify her portfolio as well and include some international sectors. “A Roth is always advisable, but as you can see, they are already saving more than enough to exceed their retirement goals,” Martin said. Instead, they could put that money towards their liquid assets. Frank said he has a will and is setting up a trust, but Martin said he should consider getting a QTIP trust (Qualified terminable interest property trust), which allows assets to be transferred between spouses. It also keeps assets out of the estate of another person if the grantor dies first. “In the event of his fiancé passing thereafter, the estate does not pass exclusively to his fiancé’s family and not to the Frank’s two sons,” Martin said. - By Keisha Lamothe, CNNMoney.com staff writer Are you a millionaire in the making? Tell us why at millionaire@cnnmoney.com.Filed under 401(k), Blogroll, Uncategorized, ira, millionaires, personal finance, retirement, saving
Posted by tomznyc 10:51 am 149 Comments
 | Add a comment to Barry Rizzo, Toms River: a QTIP trust works to ensure your assets are given to your intended beneficiaries. The scenario: He dies, his estate transfers to his wife. Maybe her beneficiaries are NOT his two sons, maybe she has remarried and the assets are retitled, etc. Without a QTIP trust, that money is now out of Franks family and Trudi has control. The QTIP trust will give the money to Trudi as long as she needs it, but once she passes away, it is distributed per instructions that Frank sets up when the QTIP is established. There are lots of ways to structure your estate to make sure that your money goes to the people you intend. Sadly, many people aren’t aware of these options, and end up losing more than just control - an improperly structured estate can cost a lot of money in taxes that could have been avoided! Talk to a financial planner or an estate attorney about making sure your estate is structured properly. Posted By Kate, Ithaca NY : March 6, 2008 11:58 am
His wife sends child support payments because he has custody of the kids OBVIOUSLY!!. Stop worrying about why she is sending payments. If it were the reverse NO ONE would have a problem. Obviously she makes more than he does. ALSO he gives an amount to the boys out of the child support. Something many parents who get it don’t ever let their children see it or even know about it. Frank and Trudi, GOOD LUCK and GOD BLESS!! Posted By Kanika, Greensboro, NC : March 5, 2008 7:22 pm
Actually, if he paid for both his sons tuition to attend a proper four year college, didn’t have an ex-wife pay him child suport and a current wife who give him half his income with very little incremental cost as she just moved into his first wives bed he would not be in such great shape. He is a great saver, but his ex and current wife are helping fund his early retirement along with the fact he is short changing his children’s education. He is lucky, but what is to learn his. We should divorce our wife, hit her up for child support and then find a second childless wife to move in with us so we can have half her income? Posted By JW, NY, NY : March 5, 2008 3:50 pm
Only thing I’m curious about is if he bought the 32 acres or inherited it. As for most of the comments, you all need to realize they live well below the kind of lifestyle most people in the city live on with the same kind of income so you can’t be so surprised how they’re doing so much better financially. They do a lot to cut corners and save themselves money (ie. butchering their own meat, carpooling, probably grow their own vegetables if they’re raising cattle, built the house with his own hands). Cost of living in their area may be quite a bit less than living in the Metro DC area as well which helps. They also don’t carry credit card or loan debt so they aren’t throwing away money to interest every month (something I’m sure a lot of people would be wise to do as well). Posted By Dave, Fairfax VA : January 11, 2008 10:28 am
To Andy in Houston and Jack in NJ, We are in our mid 40’s and live in the Mid South where the standard of living is considered low in the country. Both of us work but we have a very low-profile life style. Our 401K and mutual funds have reach $870K this year and our $320K home is paid for. We just don’t spend money we don’t have,let alone thinking about loan, HELOC and other “smart spending” stuff. In our opinion all buzz banking words (HELOC, 80/20, mortgage, loan, lease, etc.) were created to trick people to spend money they just don’t have. For example, pro-HELOC people think they are so smart because the bank want you to think so! I know friends who make much more but they spend even more so they still don’t save much. Back to your jealousy friends, your life is none of their business. In fact most of our savings were accumulated in the last 10 years. Before we were 35, I was spendig money I did not have using credit. We really worked hard to catch up. The secret is just save, save, save. Look around you, people are trapped in their “smart home loans.” Who is smart now? If you want financial success, quietly pursue that and be happy with what you have. Most people just want to be milliaires but they won’t put forth the efforts to get there. Posted By Tony L., Germantown, TN : December 10, 2007 3:52 pm
I don’t think there are as many people confused about the difference between the actual loan versus the line of credit, as there are people who are confused enough to think a HELOC is a logical emergency plan. If a member of a couple gets sick and incurs additional medical expenses, and perhaps cannot work, is it a better idea to take on additional debt than to simply have a more reasonable level of cash reserves? Interest rates on savings accounts are competitive today with CD’s, and how many people who insist that cash savings are a poor investment actually invest the money they don’t save elsewhere (Hummers and plasma TV’s don’t count as investments), and if they do, make a better interest rate than 5%? Dave from Torrance: one’s home is the collateral for a home equity loan (you don’t pay it back, they take the house); it IS a loan on the house… Posted By Dan, Washington, D.C. : December 1, 2007 5:09 pm
As a couple, Frank and Trudi are doing great. But the VAST bulk is in Frank’s name and earned before the yet-to-take-place marriage. The financial advisor did NOT give good advice to Trudi. Trudi, set up that Roth 401K tomorrow!! I sincerely hope that you have a long and happy marriage . But you are not married yet and you should also look with a clear eye at your financial situation separate from Frank. Great that you are contributing to the deferred compensation plan, but also contribute to a Roth IRA which is something that YOU own if you set it up and fund it before the marriage. Also, please talk about the land: is it in both names? Good financial planning involves thinking about the interests of Frank [including his goals for his children], the interests of Trudi, and their interests together as a couple. The financial analyst short-changed Trudi. Posted By mea, california : November 11, 2007 12:38 pm
It’s not an American story to be well invested for retirement and for the kids education. Most Americans live paycheck to paycheck. My husband, me, my daughter, her husband, their two children, my son and his daughter live on $385.00 a week. Our bills are paid, we have no debt and have nothing saved for our future or for emergencies. I am told we are better off than most too. The scary part is no health insurance or home owners insurance. We bump along as best we can nonetheless. Posted By Dee, Pe Ell, Washington : November 10, 2007 7:32 pm
I would like to know what store they by there food in to feed a family of four on $350 a month !!!!!! Posted By Bill largo fl. : November 10, 2007 5:42 pm
Interesting story. However, people who live in a larger town, i.e. Chicago, certainly have more expenses, taxes, etc then this family. Plug in a mortgage of $1000-1500/month, taxes $5000/yr or more and you can see that it would be much more difficult to reach that “million dollar” target. Posted By Mark, Chicago, IL : November 10, 2007 3:45 pm
2 million sounded like a lot 20 years ago and interest rates were 10-12% for savings. Today, it is middle class. Cars that were 7,000 are 50,000. Homes that were 25,000 are 400,000. Gas that was 40 cents is now headed to 6+ dollars. Water was free from the faucet, now it bought by the bottle for more than gas. If it continues at this rate, multiply everything for the 40 year old NOW by 10 and that will be the price when he is 60. But he will likely live to 80 or 90+ and you have to multiply that by 10 again. He better plan on working until 60 or 70, or dying young. Posted By Greg Clark Gainesville Georgia : November 10, 2007 11:42 am
I do hundreds of peoples taxes and NOT ONE of them has the money I hear you state that they need to retired–including myself. Guess what we do retire and have more than enough money to do so comfortably!!!!!! Posted By Richard Tucson, AZ : November 10, 2007 11:20 am
Why such emphasis on retirement? Absolutely, savings is the best security for a comfortable future, but retirement for many people is the beginning of their demise. Working is such a blessing! Posted By Gina, PA : November 10, 2007 10:32 am
I guess I should move to and work for the state of Ill. They would not be able to do this in New Jersey. Posted By RR Fort Lee NJ : November 10, 2007 8:48 am
I think it’s wonderful what they are doing and have accomplished. Now if I could only get my 31 year old daughter to do that i could finally stop worrying about her. I have been harping on her to do this for years. She has NOT saved a dime. I’m afraid she will end up broke if she doesn’t start soon. She makes good money and she is always broke. I sent this article to her. I only hope she wakes up and soon. Posted By Barbara, Brighton, Mass : November 9, 2007 12:23 am
How do you only spend $350 a month on groceries and still eat healthy food? Posted By Kori , Colorado springs, CO : November 8, 2007 12:32 pm
“Frank’s ex-wife sends a child-support check of $475 every month for both sons. we all could be millionaires if we had an “ex wife” sending us checks every month and all our health insurance premiums were paid by taxpayers.Frank makes 83,000 and gets child support from ex wife???? What parallel universe is that? Posted By rick fiedler, new holland, pa : November 8, 2007 5:58 am
Saving is nice, but living is more important. Take time to take your boys on a vacation and build a memory. Life is short. Be careful you don’t worry about only money and forget how to live. Sometimes life has inexpected heartaches and you wish you had done more qualilty things as a family. Enjoy it now while you are young enough and healthy enough to live life. Posted By Deb, Colorado Springs, CO : November 8, 2007 5:30 am
Some and “Most” of your article refers to “ALOT” of your americans who were given a “FREE” education. Mostly MEN OR WOMEN who were born into money or country in the first place. Its easy to have kids and have EVERYTHING including your name put on AOL when you don’t start from nothing. How about do a story on people who start from bascially nothing with the help of basically YOURSELF! Posted By Bryan, Mooresville, NC : November 8, 2007 4:35 am
Great story…in a world that says just do it just buy it…they have done what is right …right down to the tithe….. Posted By Anonymous : November 8, 2007 2:47 am
GIVE ME A FREE 32 ACRE FARM, TWO JOBS AT $120, THOU A YEAR AND $270, THOU LATER ( A MASSIVE BUNDLE ANYWHERE) AND I BE A LOT MORE THAN A MILLIONAIRE IN THAT AMOUNT OF TIME. Posted By JAY, DEER PARK, WA : November 8, 2007 2:21 am
A line of credit is surficient for emergency,there’s no need to build a seperate emergency account covering 6-12 months of expenses.Instead, those funds can be invested more aggressively. Posted By Jack Lin,Claremont,CA : November 8, 2007 2:03 am
$800 a month on utilities? Sounds like they need to be a little more concerned with their carbon footprint to me! Posted By Tree Hugger, Anchorage, Alaska : November 8, 2007 1:50 am
If I made that kind of money it would be very very simple to Retire a millionair. Those kind of jobs are not available to 80 Percent of us slaves in the work place. Most jobs your lucky to make $20,000 a year. Posted By Mr. Hunter Westland MI : November 8, 2007 1:38 am
Excellent story and very worthwhile information. I will also print and share this story/information with my children. Thank you! Posted By Anonymous : November 8, 2007 1:32 am
how does a family of 4 eat healthy and do it on $350 a month? My family of 4 spends twice that!!! Posted By oceanside, california : November 8, 2007 1:30 am
Check on them after their kids are in college. They are “rich” by gov. standards and will get no assistance. Two college educations will eat away over $200,000. Posted By Dave, Houston, TX : November 8, 2007 12:44 am
While not yet in this same situation, I retired from public school music teaching after 26 year at age 52. My wife, a full-time pastor, was a stay-at-home mom; our daughter is married and living in California. For many years we had one car but saved in 403-B accounts. We live a comfortable life in a paid-off city row home. Posted By Cedric Elmer; Reading, PA : November 8, 2007 12:43 am
This is a good story! I am happy for them. But, it has not addressed the need for the early year child care expenses and the regular educational programs that kids are taking this days…That is what typical saving challeng that the middle-class families are facing!!! Do their sons use home computer, what are the educational goals that they are setting for the boys? Posted By M.T.Z. Pittburgh, PA : November 8, 2007 12:43 am
Their property tax is so so so low and Posted By Ruth Celentano Paramus, NJ : November 8, 2007 12:24 am
Good story - I wish them luck. Couple of items seemed out of kilter. Posted By John b, albuquerque, nm : November 8, 2007 12:16 am
Titheing on an $83,000 salary would be $692/month NOT $400. A tithe is 10% before taxes! Posted By Nancy Nolan Huhta Tampa, FL : November 7, 2007 11:49 pm
Its great if you pay $1200 in taxes, we pay $9000 oil is $1600 food is $450 Posted By helene orange ct. : November 7, 2007 11:39 pm
$350 a month on food, HA! HA! In new york state Westchester county for a family of four, two being growing teenagers, food per month runs about $500 to $550. That is just the beginning. This family is one in a millian, I wish my wife could save almost half her salary. We can barely take a vacation each year. More power to these millionaries. Posted By Steve Scuba, Mt Kisco, New York : November 7, 2007 11:38 pm
I think that it is sad that the ex-wife is sending Frank money for the 2 boys. Frank is making enough money himself why does he need the extra money? Obviously, the boys get to spend the money on whatever they want, so it is not going for their food or a roof over their head. Since Frank is saving so much money, I think that he needs to give his ex-wife the money back and let her start saving some! Posted By L. Canton, OH : November 7, 2007 11:21 pm
Very inspiring story. Wish I would have done the same years ago. Smart people, good work ethic, not greedy…guess its never too late to start saving. Posted By Gail, Davie, Florida : November 7, 2007 11:20 pm
The guy has no house payment. I domn’t know too many ppl in his position. Posted By Alex Westwood, MA : November 7, 2007 11:13 pm
Not sure why everyone is striving to be a “millionaire.” A million dollars for retirement is not much, especially given how young these people are & given low interest rates on savings & inflation, especially if someone lives in a big city. “mulit-millionaire” status would be a lot more interesting stories for most of us. Posted By Anonymous : November 7, 2007 10:53 pm
As much as we appreciate these kind of articles, most people do not have incomes of over 100K…how about do these kinds of stories on normal people who survive on under 30K??? that would probably help alot more people Thank you Posted By Alana, St Pauls NC : November 7, 2007 10:31 pm
I don’t see any long-term care insurance. I did not consider it and now my wife has AD and in good physical health. At the rate of long term care, $75,000 per year, my retirement will be gone in a hurry if and when I would have to have my wife put in a home. It gets harder everyday to care for her. Posted By Gene - Defiance, OH : November 7, 2007 10:27 pm
This story was rather interesting… but also UNREALISTIC… why? Well, to be frank with you I don’t know of anybody who is Frank’s age who does not make a mortgage payment on a house (I tip my hat to him for being able to do this) and who does not have car payments. Let’s keep it real please! Posted By Andy A., Columbia, MD : November 7, 2007 10:21 pm
WHO are we kidding here? I’ve been teaching in a New England public school system for 7 years now, feeling rather stuck because I’m 50 with advanced degrees that prohibit me from being hired due to “costs” - our new contract just “awarded” me $40,814 per year - HOW the heck am I supposed to put ANYTHING away, with three sons in college and high school on one income??????? How out of touch with the working public can we be? Posted By Annie, Chester NH : November 7, 2007 10:14 pm
This sounds great, but not very realistic. My wife and I have 2 kids, one in Middle school and one in High school. Both are in private schools which costs me approximatly $25,000 yearly. Then add on a Mortage, 3 car payements for 3 drivers and, not to mention $350 monthy for car insurance. We have a combined income of $100,000 and are living paycheck to payceck. We have minimized all expences and still can’t make ends meet. Seems like they are living beyond modest. Posted By Robert, Louisville KY. : November 7, 2007 10:10 pm
While a very nice story, you can’t retire on 2 million in any sort of comfort. That is stickly a middle of the middle class lifestyle. You can never save your way to prosperity. that is your Daddy’s life. Actully trying to be a real success and making more is the only way. Posted By Anonymous : November 7, 2007 10:08 pm
Ordinary people? All the ordinary people I know, have a mortgage and/or rent; own their own cars,too, because they are more than 10-year-old pieces of junk; pay out the nose for health insurance; and do not live extravagantly either becaue there is no money even for little things like going out to eat–all on about half of what he makes. How about stories about “real” ordinary people? Posted By Kris, Berthoud, CO : November 7, 2007 10:02 pm
I am happy as the next man for Frank and Trudi. But let’s point out the fact that they make $119,000 as a family. Anyone can save a nice chunk of change with that income. I will me amazed as HELL when you tell me how I can become a Millionaire off $45K a year. That will astonish me! Posted By J, Las Vegas, NV : November 7, 2007 9:59 pm
You don’t say where they live? I’m not diminishing what these people have save I think it’s awesome. However, with very low bills (1200 property tax!) and almost 120K in salary I think alot of people could invest that wisely Thank you for the article though Posted By Anonymous : November 7, 2007 9:50 pm
Not having a mortgage & ONLY paying 1200.00 a year in taxes is a HUGE advantage. I pay half of that in taxes a month! Posted By John-Cheshire,CT : November 7, 2007 9:39 pm
Yeah, what about health insurance? Duh Posted By Bec Ward, Seymour, IN : November 7, 2007 9:36 pm
Get real. Live in an urban setting and DON’T work for the government. You can’t save a penny making well over $250,000 a year. Posted By Bill Chappaqua, NY : November 7, 2007 9:35 pm
Okay..even with the cattle.. I am curious how this family of 4 can only eat 350 worth of groceries a month. They pack what for lunch? Do the kids eat the school lunch? Are they eating healthy? Posted By JTLowitz Tidewater, VA : November 7, 2007 9:27 pm
Please expand on the concept of a QTIP trust. If the estate doesn’t pass to the sons’,in the event of his and her death, who would it go to? Posted By Dr. Barry Rizzo, Toms River, NJ : November 7, 2007 9:24 pm
very impressive and I like the part where they say the sons tithe. Posted By Brenda F. LI, NY : November 7, 2007 9:24 pm
Leave them alone. They know what they are doing and don’t need to get into debt. Posted By Marge in St. Clair Shores, MI : November 7, 2007 9:22 pm
I admire Frank and Trudi; they are being very sensible, teaching the boys good values, and still enjoying life. One correction: Frank is making contributions to his church. He is not TITHING. Tithing means 10%, and $400 a month is not tithing, in his case. I’m not passing judgment on him, I’m just giving you a definition of the word “tithe.” Posted By Kay Yarnov, Vernon Hills IL : November 7, 2007 9:18 pm
That works in southern Illinois, but if you live in Northern Illinois you can’t find a home with $1200 taxes with a value of $250,000. State workers get paid the same in the north, but the cost of living is double that of the south. Not fair. Posted By Tom, Carol Stream, IL : November 7, 2007 9:17 pm
There is no way that I or anyone else who is feeding a family of 4 in the United States believes that you are only spending $350.PER MONTH! I would like to see your shoppng list AND the name of your Grocery store! Posted By Plain Jane Highland, NY : November 7, 2007 9:04 pm
Try living on Long Island, NY with Property taxes in excess of $8500 per year for an acre or less of land and Paying Health Insurance out of pocket at $9000 or better for a simple family plan . I can go on, but you get the point. This Family IS one in a Million! The rest of us are suffering in todays economy regardless of smart investments and proper planning. Posted By Dino …Long Island, NY : November 7, 2007 8:59 pm
I always open these stories to learn how I, too, can make ends meet and save for our future. However, I am always dismayed to find combined incomes of over $100,000. That’s easy! Please show us a “real” family. Posted By Tanya, Toledo, Ohio : November 7, 2007 8:59 pm
thanks for the details! Wow! have I got a lot of work to do! Posted By Suzanne, Garden Grove, CA : November 7, 2007 8:55 pm
As a certified nutritional health counselor, I can’t imagine this family is eating very healthy if their grocery bill is $350 per month! I think it would be a wise investment to spend a little more on what they are eating to keep them nice and healthy to enjoy the great nest egg they are creating! Cheap food causes diseases such as cancer, heart disease type 2 diabetes and many other ailments. Pay now instead of later and eat more fresh fruits and vegetables!! Posted By Diane from West Nyack New York : November 7, 2007 8:41 pm
Imagine having to pay only $1200 a YEAR in property tax! I pay more than that a month on my one bedroom apartment!! Posted By S.L. New York, NY : November 7, 2007 8:36 pm
I think it’s time for me to start putting money away for the future. I also want to retire at an early age, but I don’t have a clue on how to invest my money. This article has helped me in many ways, thanks. Posted By Raymond Flores, Odessa, Texas : November 7, 2007 8:27 pm
I’m happy for this family - but what about telling the “average” person how to save? Someone like me that makes 32k and is in their early 50’s? I live meekly and must put “extravagances” like food/gasoline on a c/c to survive. Please let us average folk know how to “get by”. Thank you. Posted By Leigh, Trenton NJ : November 7, 2007 8:14 pm
They have health and life insurance paid by the state. Most people don’t have that type of coverage and that’s what kills trying to save. I know. Posted By Greg, Erie, PA : November 7, 2007 8:06 pm
A line of credit “available for emergency” use. Notice the words available & emergency. Yes they are great savers but emergencies include extraordinary events. Unless you have a good fortune teller… That means they should have a line of credit available if ever needed. Posted By d : November 6, 2007 8:31 pm
The people who are anti-HELOC I think are joking. It is a great tool and is not drawn upon unless an emergency occurs. Its not a loan against the house. Posted By Dave Torrance CA : November 6, 2007 5:30 pm
This is response to Bob’s comment on November 1rst. Although I do believe that a HELOC is a must have, I have to disagree with a few of his ideas. Most banks have a an annual fee on the HELOC, some have prepayment penalties and require you to keep them open for a few years. And the most important point is that the interests are not always tax deductible, always consult your accountant to find out if your financial situation would allow you to get a deduction. Posted By gmic, nyc,ny : November 6, 2007 10:15 am
Jeremy, you’re half right. 529’s held by parents for the benefit of their children are actually included in the FAFSA, although only 5.63% of total 529 assets are counted towards expected family contribution. Loophole: 529’s held by GRANDPARENTS are not counted in the FAFSA…at all. Just an FYI. Posted By Jordan, Baltimore, MD : November 6, 2007 9:31 am
Jack from NJ: My wife and I have similar financial status and age. 34 and 28 with combined $230K salary. We are definitely millionaires in the making. We have high income and live in a very “low cost of living” area which results in lots of disposable income. So, even though we try to keep our finances low key, friends and family notice often with envy. The main thing I have learned is that jealousy is a POWERFUL emotion. Sometimes even the most generous hearted people can’t resist the nasty impulse reactions caused by jealousy. Yes, their impulse reactions are usually offensive and hurtful. When my boss hired me 9 years ago, he warned me that my friends would change once my salary gained momentum. The old cliche should have been, “money changes the people around you when they don’t have it”. So, my advice is keep your financial successes to yourself as much as you can. My friends complain about money so much that I actually make up things like telling them that I have a loan on a car that payed cash for. If people are real nosy and ask how much I pay for something, I’ll tell them I got it used for half price. Once you trigger the jealousy emotion, you can’t apologize or take it back. The friends who can’t deal with their jealousy will simply fade away. Eventually you will magnetically find other financially successful friends. Posted By Andy Houston, TX : November 5, 2007 8:08 pm
I love the sarcastic remark (I hope sarcastic) by Johnson in NJ. He can’t imagine going into retirement with ONLY 1.9 million. HA. Doesn’t matter where you live in the USA or how far in the future we’re talking about. 1.9 million invested even in a LOW interest rate CD will get you over 100,000 per year. If a retired couple with no house payments and no kids to support, etc. can’t make it on 100,000 per year, then they are irresponsible and greedy and deserve no sympathy. Posted By Jason, Minneapolis, MN : November 5, 2007 4:20 pm
I would guess that this family would not tap a HELOC if they were faced with an emergency, so therefore I don’t see the need for them to waste their time and effort in setting one up. Most people think of an emergency as the loss of a job; they need some way to cover their huge expenses when the paycheck stops coming. With no debt and an low monthly expenses, the loss of a job is not an emergency for this family. They could get by on a smaller income if they had to. In my opinion, their biggest emergency would be if one of them became disabled and could no longer work. A HELOC would be of no value in this case. My suggestion is get an insurance policy which would cover STD, accidental death or LTD. Then if you want to spend the effort to open a HELOC, go for it. Posted By Matt, Kansas : November 5, 2007 3:59 pm
Money in 529 plans do not count against the FAFSA. Posted By Jeremy, Wake Forest, NC : November 5, 2007 10:54 am
A family financial profile that should be proud of, only slight vulnerbility is the liquid emergency saving. Having two incomes and the managed monthly expenses will allow you to mimimize that portion of the portfolio. There are better money market accounts to increase the interest, although the amount in savings would limit the drive to find and transfer to said account. Posted By Dan Noel, Hanover Pennsylvania : November 5, 2007 9:47 am
Where we live (coastal metro area), $800/month on utilities is normal if not below average, and $350/month on groceries is below average for a family of four. And boy are they lucky on property taxes; ours are about $16,000 on a four-bedroom home. Seriously. The cost of living here is just very high — I suppose it costs grocers more to get the food here, and so they charge us for that, and home prices are high near the city, so high assessments equal high property tax bills. I don’t know why the utilities bills are so steep; maybe someone else can explain that. It was SO much better when we lived in the Southwest — unbelievably cheaper. Posted By East Coast, City, State : November 4, 2007 11:39 pm
They are doing a great job with their finances by living below their means. However, they have totally neglected protection from the one certanty (just don’t know when it happens) - collapse of the US dollar. Why didn’t their financial adviser tell them about real money — silver and gold???? These people need to know their greatest risk! Posted By Dennis Johnson, Moorhead, MN : November 4, 2007 8:38 pm
I would invest in solar panels or wind energy to lower their utility bill. They would get a great tax credit on their income tax. Posted By Enrique,Tallahassee,Florida : November 3, 2007 7:06 pm
You two are doing a GREAT job.Not only with your finances.But more importantly with your childern.To lead by example with your childern is so unheard of this day and age.You dont need to live on top of the hill,in a million dollar home to enjoy life.You have showen us all that this true.Beening divorced for three years,The house on the hill has been my goal.but after crunching the numbers with my real estate agent,I would be working the rest off my life just to pay fot it.Just shows you how most of us think.So my plans have changed. Thanks to my real estate agent and stories like yours.Thank you for the reality check.Im now looking for a home that I can comfortably afford and still be able to save for retirment.And be able to go out on the town without putting the bill on a credit card.Thanks again Posted By Rene Cronkite,Diamond Bar,CA. : November 3, 2007 4:55 pm
I have to agree with the family from NY. If you live in the northeast 119k is almost poverty level! At just over 330k we do ok in this area but cannot imagine going into retirement with only 1.9 million saved. I suppose its just a matter of what you are comfortable with. Posted By Johnson, Rumson, NJ : November 3, 2007 3:26 pm
“Although Frank stopped contributing to Jake’s 529 for now, he plans to fund 75 percent of his college education” Frank, Don’t forget that Josh will be eligible for the GI Bill (currently worth over 40K) when he finishes his first year of his enlistment & pays just $1200 his first year (100 a month). Posted By James, OKC, OK : November 3, 2007 10:10 am
way to go!!!!thats my dream!your really a blessing Posted By emmanuel ogomegbunam ,verona,italy : November 3, 2007 3:30 am
I must take issue with the recommendation to get a Home Equity Line of Credit. I agree with previous posters that say it is better than having a stash of cash in a mattress, or in a bank checking or savings account. However, while it does not tie up your money it does tie up your credit. Should these folks ever need to take out a home loan, say if they wanted to purchase a retirement home, their ability to repay may well be assessed by prospective lendors by taking the HELOC into account as outstanding debt (as it could be converted into a loan at any time). They might well do better to take out a very small (say $25K), short term HELOC if possible, to be replaced over the course of a couple of years by a ROTH IRA which provides for penalty-free withdrawals for most true emergency needs. That way neither their investable assets nor their available credit will be tied up. Posted By jp, richmond hill, ny : November 3, 2007 2:45 am
I’m not by any means claiming to be an expert but these people appear to be discipled enough to use our present interest rate environment to their advantage. I carry debt in the form of car loans (3.9%) and HELOC at Prime less 1% ( approx 4% effective) which I match with investment accounts that are clipping along in the high teens. This arbitrage works for me and allows for more cf into investment opportunities. When the economic conditions change, I’ll adjust accordingly. Debt can be a good thing if managed properly. The family appears to be highly disciplined and is a good candidate for implementing practices that allow them to safely take advantage of their ability to utilize OPM. Forging a relationship and track record with a solid investment bank may pay dividends in the future if times get tough. Intuitively, one would think that the bank would likely value the relationship and want to make sure that if/when good times reappear, they will have a client that is ideal from a risk assessment perspective, therefore keeping the family solvent. Posted By GB, Raleigh, NC : November 2, 2007 11:36 pm
These people should do both-set up an emergency fund and get a home equity line of credit. They may have an emergency before the fund is set-up and it may take time to do a HELOC. (Title searches need to be done and often some sort of appraisal.) Also, if for some reason they lose their jobs, they may not be able to get a HELOC because they are unemployed and no way to pay it back. With a HELOC, you get a checkbook and draw on it if needed. You are not being advance any moneys and have not created debt. Other than the yearly fee, I do not see any downside in having one for extreme emergencies. Frankly, I have had one for close to 15 years and have only used it probably three times max and paid it off in a few months. The advisor is giving them excellent advice. Posted By Jim, Chicago, IL : November 2, 2007 5:49 pm
Some of you need to really educate yourselves better before deciding if a recommendation is warranted or not. A HELOC is a wonderful tool JUST IN CASE OF EMERGENCY (i.e. losing a job, etc.) I am a FA and I was a personal banker for 8 years. One of you commented that you can get a loan anytime, why get one now? Well, because the times when you need a HELOC would be a time when the bank would not approve you for a loan–If you can’t show that you can pay back a loan or a line of credit, THE BANK WON’T GIVE YOU ONE. I don’t care if you’re worth 400K, if you have no job, you can’t get a big loan… The idea is to apply for a HELOC when you don’t need it, and then if an emergency ever were to occur, it would be there. EVERY PERSON who owns a home should have ACCESS to a HELOC. Solid advice. Posted By Michael, Davenport, IA : November 2, 2007 4:53 pm
Where does $250k a year go? For those who are interested: My wife and I are 35/36 with a 1 year old and will make $230,000 in base salary for 2007. Our monthly mortgage/property taxes/insurance are $4,000. We have an equity loan of $1,400/mo (2 more yrs.) and a down payment loan from our parents for $600/mo (2 more yrs). We max our 401k’s at $15,500/year each. Day care is $1,100/mo. One car is paid for, the other car is $600/mo (1 more yr). In addition to the 401k’s, we put away another $1,000/mo in an emergency fund. Our monthly food, gasoline, auto insurance, electric, gas, water, phone, 2 cell phones, cable/internet/alarm, parking, weekly cleaning lady, hair cuts, and dry cleaning run about $2,500/mo. Medical/dental/vision insurance runs about $500/mo. We have a balance on our credit card and pay about $1,000/mo on it. I estimate our 2007 fed tax bill will be about $40k. Our house is worth about $725k. Outstanding mortgage balance is $420k, HE-loan is 65k, downpayment loan is 30k, which means we have about $210k in equity. Retirement accounts (401ks, RO IRAs, Roth IRAs) are invested in broadly diversified mutual funds are valued at about $450k. That’s where $250k a year goes. Posted By Chad, Houston, TX : November 2, 2007 2:31 pm
I love that we have been getting on these people who are doing much better than most. Why do people have to nitpick whether he is paying a “FULL TITHE”. The definition of a thithe is paying 10% of one’s increase. Anciently it would have been 10% of the increase in one’s flocks or harvest. Today it is an increase in what one makes or receives. First of all it isn’t saying exactly what he paid or his philosphy on it. The real point of this article is what people have been taught al along. Save a portion of your money. SPend less than you make. Most of us CAN do those things. We choose not to do that because we are not willing to lower our standard of living now in order to have a more secure higher standard of living down the road. Posted By B Garvin Verrado AZ : November 2, 2007 12:57 pm
In responce to Jack who asks your lifestyle has changed since most of your co-workers, friends and relatives know how much you have? Do you hear bad comments/insult because of jealousy from other people? How do you handle it? No my life style has not changed at all, nor do I plan for it to. I am happy with the way I live, it will be nice to not have to worry about finances but will it change who I really am, I would say no. Posted By Frank Girard Il : November 2, 2007 12:48 pm
They should get the HELOC for the emergency fund and NOT put away savings for it. The big reason here is that any money in savings will have to be declared on their FAFSA (govt student aid declaration) form and will reduce their possibility of getting any student aid for the one son that wants to go to college. They also only have 16K in their 529. That will cover less than one year of college at most state schools without any aid. A HELOC will also help smooth out tuition bills, as one comment already pointed out. And the home equity loans are tax deductible, effectively lowering the interest rate. These folks are doing great, keep it up! Posted By Cliff Lo Verme, Merrimack, NH : November 2, 2007 9:06 am
Keep them debt free> No HELOC or any loans. They are doing great…Tithing is 10% of salary but you know they are at least giving something. I can’t believe the $800 per month on utilities…is that correct? I would place more money in their ROTH…its tax free. Posted By Kerby Ellis, Eads, Tn : November 2, 2007 8:10 am
Having a line of Credit is NOT the same as using a line of credit. I agree that they should have a line of credit available since they do not have enough in a savings account that they could go to if for instance they lost there jobs, had an untimely death or other emergency. Most banks will offer a line without closing costs and only charge you interest or fees if you use the line. Posted By Ed Miami, Fl. : November 2, 2007 7:28 am
To all featured millionaires in the making.. My wife and I are both 31 years old with a net worth of $325,000.($145,000 combined salary helps a lot)We started saving 6 years ago because of “millionaire in the making” site. Six years ago we dreamed that one day we’ll be on it.By the way, my question is… if your lifestyle has changed since most of your co-workers, friends and relatives know how much you have? Do you hear bad comments/insult because of jealousy from other people? How do you handle it? Posted By Jack JC, NJ : November 1, 2007 7:34 pm
Why all of the downplaying of this families excellent finances. It looks like they are doing better then most. Also, a tithe does not have to be 10% of your income either. A percentage of a tithe amount is a personal choice, very private, that need not be scrutinized by anyone. Posted By Eric, Denver CO. : November 1, 2007 7:32 pm
Very commendable, Frank. You’re walking the talk and it appears that your boys will be able to pass good lessons learned to their on families one day. Take the time to locate and purchase “The Richest Man in Babylon” for both of them just to reinforce the act of saving and the affects of compounding savings. You may retire as a millionaire but there’s no reason why your sons shouldn’t retire as multi-millionaires! Good going - very inspirational. Posted By DT, Blanco TX : November 1, 2007 7:00 pm
He is tithing 10% of his take-home pay. Give him a break and call it a tithe. More of us should follow his example!! Posted By constance, rochester NY : November 1, 2007 5:36 pm
Wow…these comments just go to show how little people know about certain financial things. It is recommended that they save up 6-12 months of emergency funds for expenses. Lets call this $20k-40k. So they can have this cash sitting in an interest bearing savings account at 1%, or they could invest this money at market rates and get 5-8 depending. When it is suggested to open a HELOC, that is nothing more than getting a check book to use if needed. There are no fees, and no harm if you don’t use it. You are not in debt if you don’t use it. Basically take the checkbook and stick it in the bank safety deposit book. If something came up and they needed a large sum of money quickly, a trip to the bank and 1 check would solve it. Then you pay basically prime rate on the loan, and the interest is tax deductible. And sense they are such avid savers it would not take them long to pay it off as there is no prepayment penalty. For those of you that do not realize this, please go see a financial adviser, or if yours doesn’t recommend this get a real one. Thanks! Posted By Bob, Here and there : November 1, 2007 3:29 pm
Nice story, but the average income isn’t $119,000 plus child support. These stories always seem to be about people who either have above average incomes or no kids or some advantage the average family doesn’t have. Let’s look at average income families. Posted By JohnO, Allen TX : November 1, 2007 3:02 pm
working in top MNC and single income I barely make 85K in New Jersey. If they have that high income plus child support (they should probably not sweat the kids mother anymore)… for they are well off. Posted By JK, Matwan, NJ : November 1, 2007 3:00 pm
Actually, $400 a month IS about 10% after taxes and deductions on the paycheck. Posted By VA : November 1, 2007 1:27 pm
As I understood it the reference of tithe was regarding the boys allowances. Anyway keep up the great work and being an example to rest of us credit reliant fools. Credit is the reason cost of living rises higher than incomes. We live above our means on credit so go figure that the price of goods and services increase also. Living like fake millionares, greedy for things we cannot afford. Current housing market is a prime example. Posted By M.K.B., San Antonio, Tx : November 1, 2007 1:01 pm
Commendable, definitely. But in all seriousness, $119K doesn’t go very far in the New York Metropolitan area. My husband and I earn a bit more than that yes, but we have two kids, a house worth about $750K with a $350K mortgage, pay $13K in annual property taxes, one car paid for, one we’re paying off, and we’ve NEVER had credit card debt. Contributions to 401K are tough, but through some good luck, we’ve got retirement funds through my husband’s previous employer. But we also manage to save a bunch of money monthly for emergencies. We don’t live nearly as extravagantly as some of our neighbors, but we definitely LIVE. You’d be hard pressed to find others in our immediate region living comfortably on that kind of income…particularly with real estate values and taxes in NJ. Posted By SS, Central NJ : November 1, 2007 12:48 pm
These are my favorite features that CNN Money does.it’s just money Posted By LA, Los Angeles, CA : November 1, 2007 12:21 pm
I think this family is doing a great job. They own a home, a car, and have no debt whatsoever. There isn’t many people that can say that, including millionairs. I congratulate them on their success and hope they continue the way that they are going. Posted By Dave, North Charleston, SC : November 1, 2007 11:59 am
Being in the Mortgage business, I would recommend that they do look into opening a line of credit now, and not wait until after an emergency has arisen. Two factors to consider in their case is. It is also a good idea to follow the old adage; In order to get a loan, first you must prove to the bank that you don’t need it. So get it now when you don’t need it, and it will be there if you do. Posted By Kevin Fairfax, VA : November 1, 2007 11:21 am
I wish every family was as responsible as these folks. They are in keeping with the old fable about the grasshopper and the ant. However, my fear is that one day our wonderful vote-buying congress will pass laws to bail out the grasshoppers at the expense of the ants. In the meantime, they are passing on a very strong message to their sons about how to live responsibly. The value of that is incalculable. Posted By Mike Boyer; Jacksonville, Florida : November 1, 2007 10:58 am
In my opinion it might be better for them to be maxing out a Traditional IRA rather than the ROTH. The current Tax advantages in my opinion far outway the future advantages of the ROTH. Posted By Brian, Cleveland OH : November 1, 2007 10:32 am
Just a few comments. Furbeck & Morris may be state employees, but that doesn’t mean they won’t have to worry about paying health insurance in retirement. I work in the public sector and they are slowly chipping away at this benefit for retirees. By the time I am eligible, the health insurance premiums will be much higher or non-existent at the rate they’re going. Also, I don’t see anything all that remarkable about maxing out deferred compensation plans at their income level. I am single, make 51K, live in a high cost area and will save 17-18K this year, 15.5K in the deferred comp plan, and the rest in my IRA. Posted By mysticaltyger San Jose, CA : November 1, 2007 10:32 am
Re the HELOC, If we are not in debt, how are financial planners/banks going to make any money off of us? They are in the business to do just that. Given this family’s financial situation and proven saving skills, I am not appalled they were given that advice, just disappointed. They seem smart enough to me though not to follow it. Posted By Sandy : November 1, 2007 10:31 am
I think they just need to establish an emergency saving account too but I think people are missing the point about the equity line. The tax advisor said to get one but there is a difference between having an equity line and actually having a balance against it. You can have an equity line available to you but not have a current balance. Because of not having much readily available cash, the equity line is a quick way of getting money but then they can pay it back again right away when they free up some of their money in other places. Posted By Jason, Charlotte NC : November 1, 2007 9:18 am
I’d definitely max out annual Roth IRA contributions by cutting back on the differed compensation contributions. The Roth investments are tax free in the future (a good thing for millionaires) and the contributions can be withdrawn tax free anytime for emergencies. Posted By Bill Savage, Tacoma WA : November 1, 2007 3:00 am
Sounds like you are doing a great job with saving AND raising your kids. I have three young sons, and hope that I can instill our saving habits in them like you have. I wish nothing but success to Josh in the military… America is lucky to have him. Posted By Elizabeth, Austin, TX : October 31, 2007 11:07 pm
I have to commend this family. If I may make a suggestion, instead of taking out an equity line of credit for emergency funds, why don’t they just get a life insurance. There are many products out there that not only protect their family should something happen to them, but also collects a substantial cash value that they can borrow against should they need it. Their financial foundation is good, but it can be better if they had protection! Posted By Brad, San Ramon CA : October 31, 2007 6:35 pm
Savings cannot be overemphasized and it comes through very clearly in the story. Posted By Don Theobald Joliet, IL : October 31, 2007 6:23 pm
I think that maybe we should be a little slower to judge someone else’s “tithing” as $400 may be closer to 10% of his pay than it may appear on first glance. Assuming that his gross salary is $83000 (before taxes), if you subtract off his $15500 deferred contribution (which he never actually sees in his account) and the taxes he owes on the remaining income, his annual takehome income is roughly $48-50k… or about $4000/month. So he really is paying 10% of his check in tithes. In my humble opinion, he really is trying to live by the spirit of tithing and is teaching his sons to do the same. That TRULY is commendable. Posted By Chris, Cleveland, OH : October 31, 2007 5:20 pm
To respond to the person who thinks that putting an equity line on their home is “putting it to risk”, I ask: have they ever missed a mortgage payment to this point? If the answer is no, which I am lead to believe it will be, why would you assume that they will begin missing payments on an equity line should they borrow from it, and then be putting their home at risk? I am in the minority in this instance because I believe and emergency equity line is a must. As the FA points out, there is very little liquid money available currently. Just because you take out a HELOC doesn’t mean that you have to borrow off of it. Keep it for what it is there for… emergencies. Posted By Andrew, Wyandotte, MI : October 31, 2007 5:06 pm
A line of credit being set up in advance allows someone to invest their moeny in places with a higher yeild that are not so liquid as a savings account. It’s like a free insurance policy in a way. Instead of putting together a some of money that will sit in a savngs account earining 1% (or less) for a rainy day fund, why not put that money to better use with the comfort of knowing that a line of credit is sitting there waiting if ever they needed some quick emergency cash. Disciplined people like the family here will not abuse their home equity line of credit. These people could probably obtain an unsecured credit line as an altenative for a decent amount from a bank or credit union as well. Posted By Jason, Seattle WA : October 31, 2007 5:02 pm
The fact that so few people seem to understand the difference between a line of credit and an outright loan is scary. As for the featured family, the important lesson is that they have lived “below” their means, the opposite of the prevailing trend in the US. While this is very commendable, clearly their situation is far from much of middle america. Living in an area with a very cheap cost of housing is a huge boost to being able to save money. Plus, as others have stated, the ability to rely on State pension/healthcare in addition to the ability to defer a full 15.5k (compared to private companies who often limit the % contribution people can make to a 401k) is a major advantage. Posted By Ethan, Evanston, Illinois : October 31, 2007 4:47 pm
I’ve seen several comments below objecting to a home equity line of credit (HELOC). This is different than a home equity loan where debt is actually acquired in exchange for cash paid. A HELOC is a “just in case” sort of deal. You set it up and then you MAY draw upon it if you need it. If you don’t use it, then you don’t have any debt or repayment issues. I think I have that right… Posted By Dale, Wichita Kansas : October 31, 2007 4:41 pm
I find the comments about not getting a HELOC quite amusing and don’t really understand why people think this is a bad idea. You can fund a HELOC through a bank for a fee of $0. If one draws on the line then you are charged interest on what you have drawn at a daily rate. So in case of an emergency this is a very smart way to fund at a very low cost. A financial planner knows this and that is why he recommended it. Way to go Frank and Trudi. It’s refreshing to see somebody who cares about there financial decisions and future. Posted By Jason, Valencia, CA : October 31, 2007 4:27 pm
I would reccomend that Martin invest in some rental property. Sine he built his own home he defiently has the skills to maintain property. He should be able to pay off quick with his spending habits and using a HEL will keep his rate lower. It wold be a great help to his taxes and allow him to pay his son’s for helping him maintain. I would suggest that he start an S Corp and hire his son’s to help and then he will have other tax shelters available to him. The rental property will use his money to make money instead of working to make money. I would reccomend that he read the book “Rich Dad Poor Dad”. Posted By Dean Hardinsburg, KY : October 31, 2007 3:35 pm
Hey J.B. from Marion IL, you might want to check the definition before spouting off: Tithe A tithe (from Old English teogoþa “tenth” Posted By Mike, Juneau AK : October 31, 2007 2:44 pm
Gonna have to agree with Amy who said they don’t need a line of credit against their house. I realize the advice was to open one, not necessarily use one, but Amy is right, they make enough to quickly get a big emergency fund. Why open one? If for some reaon the needed money NOW and hadn’t yet built up a big emergency fund, they could THEN get a line of credit if they really needed it. OR, they could for the short term stop contributing to their 401ks so much and use that money. To open one in advance is ridiculous. They’ve done well without using credit. The ONLY thing they really should do is cut back on the retirement saving for just a little bit to get that emergency fund up to 6 months. Then, full-throttle on the retirement accounts again. Open a line of credit? NO WAY! They’ve got the system down — don’t borrow money, and don’t plan to either. Posted By Willy Flag, Columbus, OH : October 31, 2007 2:37 pm
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Ages: Frank, 43, Trudi, 42
is a one-tenth part of something, paid as a (usually) voluntary contribution or as a tax or levy, usually to support a Jewish or Christian religious organization. Today, tithes (or tithing) are normally voluntary and paid in cash, cheques, or stocks, whereas historically tithes could be paid in kind, such as agricultural products. Several European countries operate a formal process linked to the tax system allowing some churches to assess tithes.
Taking out a line of credit against your home for emergencies OR liquidity is the STUPIDEST thing I’ve ever heard of. SAVE UP AN EMERGENCY FUND.