Ask Rich

Rich Lacey Oct 2014 Heidelberg1

This is a brand new blog.  If you like it, please share it. It’ll encourage me to grow it faster!!

I’ve been serious about finances and real estate for a long time now.  Feel free to use the comments section on this page or send me an email directly about any finance, investing, or real estate situation you would like my advice on.  My goal is to read and answer all emails and comments.

Let me know what kind of posts you would like to see.


Typical disclaimer crap: The information on this blog is based on my personal opinion and experience, it should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial  and real estate professional. My thoughts and opinions may change as I learn and accumulate more knowledge.


6 thoughts on “Ask Rich”

  1. I enjoyed reading your story and how you have been successful with renting properties. I’m an Air Force Officer as well and have been in for 5 years. I have been reading a lot about being successful when it comes to rentals but I just can’t bring myself to taking out a huge mortgage. I’m about to move to DC and the houses there are so expensive. I keep debating on renting instead of purchasing and just putting my extra funds into a index fund. I’m trying to reach FI as quickly as possible. Any advice to someone new at all of this would be appreciated.

    • Andrew.

      My advice to someone new at this is check out my book review under “Cool Stuff” in the main menu. That’s the book you need to get off to a good start. If you don’t want to buy the book, read Jim Collins’s blog.

      You asked a great question, and I particularly understand this issue, having been in the exact same boat in 2003 when I moved to D.C. and had been in the Air Force for 3 years. I bought a house and that time, and eventually paid it off. The return on investment was way too low, even though I bought at a great time. It’s much worse now. You shouldn’t buy a house as a military member unless it’s going to make good money as a rental. The rent should be at least 1% of the purchase price to have the potential of being a good buy. Mine are all above 1.5%. So rent in D.C., don’t buy. There are lots of people in D.C. that bought and moved away, and now have to rent their house out at a loss. You can live in one of those, but don’t BE one of those. What you should focus on is:

      Get out of debt, including cars
      Emergency fund (a few months salary)
      Fully fund Roth IRAs and TSPs (in low fee S&P 500 index, vanguard even better)
      Start normal investment account, also low fee S&P 500 index, vanguard even better

      Once you’ve done all that, you should consider taking out a loan with at least 20% down (or paying cash if possible) for a rental property. But NOT in D.C. Too overpriced. I’ll talk much more about this in future posts.

      I’m happy to go over your situation in more detail if you’d like. Email me.


  2. I feel like we are so behind reading your blog! You guys have done very well.
    My husband is Air Force as well but he’s enlisted E5 9 years of service (about to put E6 on) and I haven’t worked since moving overseas 2 years ago and we have 2 young kiddos. We are pcsing to MacDill in August (yes, we know way far in advance not sure why). Tampa is where I’m from so I’m very comfortable with the area but holy moly have house prices risen since we left in 2011. We were wanting to purchase a house to live in and then rent out and hopefully move back to when my husband retires but after looking at the house prices in the area I think we may stick to renting. Really nervous to put our 100k cash down on a house and loose it all because of 2nd housing bubble :-/

    • You are still young and in a position to retire quite early if you do things right. You can learn from my mistakes and the mistakes of others who are blogging. In most situations I can imagine for military members, buying a house to live in is usually a mistake over renting instead. One of my large financial mistakes was buying the house in D.C.while we were stationed there, and then renting it out after we PCSed (moved away). I would have been far better off finding a location with higher ROI on rentals and buying there, and just renting in D.C.

      My wife and I lived frugally for most of our career. Until recently, travel was infrequent, and only when it was cheap. Don’t overdo it when you are still in the money accumulation stage. You want to increase your earnings and decrease your monthly expenses. Pay is low for enlisted. Your husband can consider OTS, side job, or getting out and finding a higher paying job. You should also consider side-hustle/part time job of some kind if staying at home with the kids is important to you. Not sure if you were asking for advice, but I gave it.

      My advice in a simple summary

      Read, or buy his book. This is the safest way to invest.

      Buy real estate mimicking what I’ve done. You are in a position to buy in cash. That’s awesome.


  3. HI Rich, I loved hearing your story on ChooseFI. I had a question regarding your house purchases done in your Roth. I have also looked into this and really like this strategy. My only concern is what to do with the cash while waiting to purchase a second home. If I buy one home, it will take quite awhile for it to generate enough cash to purchase a second. From what I can tell, I don’t have the option to put this money in an index fund or something until I’m ready to use it again for another house. What are your thoughts on this?

    • The house will be in a self directed ira, and that’s where rent will be going. You can do anything you want with that rent money inside your ira. It could be invested in stocks, gold, index funds, art, cattle, or cash. The issue with investing it instead of leaving it in cash is it could lose money as you try to save up for your second house, so that’s a call you have to make depending on what your strategy is. I’ve always left my money in cash so far, but hard to know if that’s right or wrong until the future comes!


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