Rumesh - SC Financial Group

A cash-out refinance did not make sense

Especially in their situation to add a mother in law unit to rent it out.

They are going from a really low mortgage rate to much higher one given the current rates…

Risks are:

- Higher interest rate
- Higher mortgage payment
- Higher cost for the remodel
- Negative cash flow early years
- Risk of time and occupancy

What else should they be thinking about?

Should you frontload your savings to your 401k?

I’d say it depends on the season of life you are in. If cash flow can be flexible and your financial commitments are low, then I would say yes, why not.

However, if goals and responsibilities have changed then I would enourage you to reconsider having a streamlined approach when it comes to your savings. This way, you can create consistency among all your goals through out the year…

Cash flow should be like water

Agile. versatile. essenstial.

Adapting savings according to life's seasons is crucial. I strongly advocate channeling cash flow towards varying goals, just like water adapting to different landscapes.

For instance, I work with a client aiming to buy a home within a year. Currently, he's allocating an extra $6,000 monthly to his retirement account and company stock purchase plan.

Considering his financial trajectory, we've decided to redirect this monthly surplus towards his down payment goal.

This strategic shift will yield him approximately $60,000 in cash, serving a specific purpose.