[Creative‏]

After hearing all this middle class trap I realized I’m actually Fi. I’ve got a net worth of about 2 million. I do have limitations of most of my net worth is tied up in real estate which isn’t cash flowing and my businessess.

What’s the solution? I’m selling
My house. Hoping to net about 800k when the dust settles.

The middle class trap is not a trap. It’s a great gift.

[Cierra]

Just listened to the middle class trap episode! So you ‘were’ in the MCT but now you’re going to be out of it.

Re-assessing is the whole point of this conversation so I think Scott has left his mark on you!

Congrats on being in a good position

[Charles]

Congrats on rebalancing your asset allocations. Adjust when an asset class grows, overweight in your overall portfolio.

WTG in realizing this and the fortitude to act.

[David]

Nice on the house. I have yet to live somewhere where I own a house that goes up that much in value.

Last property had about a 33% increase over the decade I owned it, but with all the work we had to put into the property, we broke even.

[Michelle]

Yes, it is a gift and those of us that grew up in extreme poverty understand this deeply.

We FIRE’d early with a similar NW, a bit more in RE assets.
As for selling the house… we “could” do this, too, as our area appreciated like crazy post-pandemic.

However- the cost of building & buying ALSO increased exponentially. So, the cost of replacement- building or buying- is not in our favor if we sell.

We have a great property in an excellent location, but it’s not ideal for aging in place & a bit high maintenance.

I would LOVE to sell and build again, but I just can’t stomach the thought of building a $1M house that used to be worth $600k.

[Scott]

Looks to me like you realized you were in the trap, and made moves to get out of it.

Congrats! Big moves, usually involving things like the redeploying the equity in the house and 401(k), are typically required to escape.

I hope more people escape the trap, while denying its existence, by making moves like this!

[Mark]

Networth of $2m and almost a $1mil house. That is definitely not middle class

[Sunny]

Get rid of stuff that’s not cash flowing. Buy more solid ETF investments that pay dividends.

[Jule]

Where will you live? Are you factoring this other new living expense?

[Adam]

Nothing you wrote indicates middle class. Maybe you aren’t liquid. But still not middle class.

[Sean]

Consider selling all of the rental real estate that’s not cash flowing and either buy better rental properties or invest the money in the stock market.

Having a 2 million dollar networth doesn’t necessarily make you fi, and selling your primary residence isn’t necessarily a good idea.

[Erin]

There was a guy who had a blog and even wrote a book a few years ago called “Radical Immediate Retirement”.

He basically advocated this approach.

Sell all you illiquid assets that don’t cash flow or have poor cash flow and retire on that pile of cash.

[Lauren]

If you’re building another house… aren’t you using money to build that?

[Dawn]

So, our plan (9-12 years in the making, depending on the market, job growth, etc) is to sell our primary home, build a 5 year cd ladder & then invest the rest in VTI.

We want to slow travel for 5 years or more…at the end of the 5 years, barring a bear market, we’ll have enough growth to buy a condo, or do a new ladder.

All of this without touching our retirement funds, so that when we settle down back in Florida we’ll be able to live whatever life we want.

[Scott]

Non producing assets like leveraged real estate are for wealth building, when working and cash flow isn’t needed, or wanted (taxes.)

must figure out how to transition to income generating/liquid assets as retirement nears.

[Jeremy]

Very impressive! Living through your 20s and 30s at/below the poverty level and being able to build up a very solid net worth is really fantastic!

You took a risk on a property investment that has appreciated very well and now you’re taking action to capture some of those gains and reset for the next level. NICELY DONE!

I’m assuming you’ll sell your primary residence, utilize at least some of the equity for the home you are building, and invest the rest into your portfolio?

Just my personal curiosity, are you going to get another mortgage for this new place or just pay for it in cash?

You mentioned you are FI now, are you going to actually retire or keep working?

[Author]

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