Monday, May 30, 2016

Amazon Mom Update

Almost a year ago, I signed up for Amazon Mom/Prime program.

What I have learned, and it is also what I expected, is that having Amazon Prime makes it super easy to buy stuff from Amazon.  "Free" two day delivery on lots of items means that I often go to Amazon for my buying needs.  Does that mean I'm spending more in general?  Hard to know.  I could be making the same purchases, but simply making them at Amazon instead of other retailers.  Or I could be making more purchases since Amazon makes it so easy.  I suspect it is both.

Today, I was working on my Amazon Prime subscription box.  The subscription service allows one to sign up for purchases that are regularly occurring.   For us, that includes diapers, wipes, diaper genie liners, baby sunscreen, baby snacks, etc.  If you sign up for five items a month that ups your savings to 15% off on everything and 20% off on diapers.

So each month, we get diapers and wipes.  Normally we get some puff snacks for Baby Sam.  That normally leaves two items left.  We have storage space, so I'm genarlly looking for something we go through a lot of and is a dry good or cleaning supply.

As working parents, coffee is a big thing for us, so today  I decided to look at coffee options.  On Amazon, even narrowing by Prime, that brings up thousands of choices.  Select ground and hazelnut and I'm down to hundreds.   Sort by price and I come up with some brands that Mr. Sam buys regularly.  Ok, price per bag, price per ounce.  No idea if this is a good price.  Am I falling into the trap of buying something to get a discount that isn't a good deal?   Cross check to the Wal-mart site and yes this is a good price.

Do the same thing for Mr. Clean Magic Eraser and I'm good to go for check out.

So bottom line, discounts can work but you have to be careful about making a poor buying choice for purposes of getting a discount.

Also, being able to get items I need delivered makes my life so much easier.  Between, work, baby, family life, maintaining sanity is important.

Thursday, May 26, 2016

Keeping Up With the Joneses - Part III

Earlier I posted about some of my friends and former co-workers that have been engaging in expensive housing purchases.  See the posts here and here.

Today, I'm discussing Leslie and John.

Leslie and I used to work together, so we are in the same industry.  John works in the arts business.  I really have no idea what kind of income John pulls down, but back when Leslie and I worked together she earned considerably more than he did.  I don't know if that is true today, but assume it is. Leslie and John have one child.

Last year they bought a $1 million dollar foreclosure home.  Yes, a foreclosure at $1 million.  Back during the housing bubble, the house had actually sold for $1.7 million so you could argue they got a great deal.  I would expect the house to appreciate quickly and, in fact, the property appraiser has it assessed at $1.6 million.  As a result, annual taxes on the home are $35,000 ($2900 a month).

The house is 4 bedrooms and has 4700 square foot of living space.  It also has a pool.  The neighborhood they moved to has an excellent elementary school, but after that it gets mixed for middle and high school.

They have a mortgage in the amount of $750,000.  And, they also took out a home equity line of credit in the amount of $100,000.  So total debt is $850,000.  With a 30 year mortgage their monthly payment is $3800, add in taxes monthly carrying costs are $6700.  This does not include insurance, which is expensive in Florida.

Leslie and John previously lived in very nice historic home in a community with a good elementary school.  They actually sold that nice home for a decent profit -  $172,000.  There old home was also 4 bedrooms and had a pool.  I'd argue their old home was in a better location because the street their new home is on is very busy.

Mr. Sam's Truck

Happy to report that Mr. Sam's 2013 truck is now paid off.

Tuesday, May 17, 2016

Keeping Up with the Joneses - Part II

Earlier, I wrote about some of my friends and co-workers whose house purchases have caused me to suffer house envy.

Next on the list, Jessica and Tony.  Jessica and I used to work together and she and I are in the same industry.  Tony works in the engineering field.  They do not have any children together, Tony has children from his prior marriage and just recently concluded his support obligatins.  They live in the same county we live in.

Last year, they built a home that cost more than a million dollars.  The home is more than 5000 square feet and has four bedrooms along with a pool.  Taxes on the home are $20,000 a year.  They have a $1.1 million dollar mortgage mortgage.  Carrying costs, assuming 30 year mortgage and not including insurance costs (which in Florida are expensive), are $7000 a month.

As a comparison, taxes on our home are approximately $3500 a year.

Also, when Jessica and Tony sold their prior home they lost $125,000 on the sale.  They had bought pre-recession and the value of their prior home had not yet fully recovered.

What do you think about this type of real estate purchase?  On the one hand, Jessica and Tony have a gorgeous home in a great location.  On the other hand they have a $1.1 million dollar mortgage and that type of debt would keep me up at night.

Real Estate Update

Just did an update on our networth numbers.  Our three investment property mortgages are each, now, under $100,000 in debt.

The current mortgage balance numbers are as follows:

We also are about to get under $200,000 on our primary home mortgage, right now the balance is $201,583.  Next month's mortgage payment should get the balance below $200,000.  This makes me happy especially in light of my recent house envy.

I seem to respond more positively to reducing our debt than I do to increasing our savings.