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:
$98,207
$85,483
$74,520.
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.
Showing posts with label Dirt. Show all posts
Showing posts with label Dirt. Show all posts
Tuesday, May 17, 2016
Tuesday, October 27, 2015
Updates on Debt
I've recently, as of today, updated our networth debt numbers. One of our goals for 2015 was to get our total debt load under $500,000 and I'm pleased to report that our debt is now at $489,000. Since, January 2007, our debt load has gone from $735,054 down to $489,000. That means, on average we have killed about $30,000 in debt per year since 2007.
On our primary home, purchased in 2004, we have paid off $105,546 in principal. Since we refinanced our mortgage a couple years ago to 2.75% our payments have accelerated. We also refinanced from a 25 year loan to a 15 year loan and cut off 7 years from our overall term. On our three investment property mortgages, as of next month, all three mortgages should be below $100,000.
As for our other debt, I've struggled with credit card debt, pay it down, run it up, pay it down, etc. I really need to kill it once and for all as its now been hanging around since the baby arrived. We also have a new debt that is not yet listed, 0% financing on floor tile that we bought for one of our investment properties. That debt is a couple of thousand dollars.
As for Mr. Sam's new truck, we continue to pay down his truck debt (we paid for his new truck half in cash and half in 0% financing) at $500 a month, so that debt will be gone in seven months. I really need to be saving for a nused car for me, as my car has been acting up. Recently it was out of commission for a few weeks with an electrical problem but the fix ended up only costing $250. There are several other more expensive things wrong with the car, but the dealer says none are pressing to fix as of now. The dealer gave me a print out of things to fix that would likely cost $4000 which is more than the car is worth. It was kinda funny as I had started to research my next car. Since Baby Sam arrived I, of course, want a family car. But, I'm better off trying to make my car last another year or so as I've only got $400 saved in my nused car fund.
On our primary home, purchased in 2004, we have paid off $105,546 in principal. Since we refinanced our mortgage a couple years ago to 2.75% our payments have accelerated. We also refinanced from a 25 year loan to a 15 year loan and cut off 7 years from our overall term. On our three investment property mortgages, as of next month, all three mortgages should be below $100,000.
As for our other debt, I've struggled with credit card debt, pay it down, run it up, pay it down, etc. I really need to kill it once and for all as its now been hanging around since the baby arrived. We also have a new debt that is not yet listed, 0% financing on floor tile that we bought for one of our investment properties. That debt is a couple of thousand dollars.
As for Mr. Sam's new truck, we continue to pay down his truck debt (we paid for his new truck half in cash and half in 0% financing) at $500 a month, so that debt will be gone in seven months. I really need to be saving for a nused car for me, as my car has been acting up. Recently it was out of commission for a few weeks with an electrical problem but the fix ended up only costing $250. There are several other more expensive things wrong with the car, but the dealer says none are pressing to fix as of now. The dealer gave me a print out of things to fix that would likely cost $4000 which is more than the car is worth. It was kinda funny as I had started to research my next car. Since Baby Sam arrived I, of course, want a family car. But, I'm better off trying to make my car last another year or so as I've only got $400 saved in my nused car fund.
Thursday, June 5, 2014
Aspirational Housing
Great article by author Michael Lewis of The Blind Side fame regarding the perils of expensive housing. Even a very rich man like Michael Lewis couldn't keep up with renting a landmark mansion in his home town. Mr. Lewis' fun essay also documents the hidden costs of utilities, maintenance and furnishings for a much larger house.
I'm in a phase right now where many of my friends are selling their first or second home and upgrading into McMansion world. It is somewhat surreal for my husband and I to visit our friends/peers who have moved from reasonable rancher to gated community McMansion. Some of them bought during Florida's real estate bubble deflation so they got good deals, but it is still a whole different world. One of my friends, who moved into McMansion world in the last couple of years mentioned that she felt like she had to buy (or lease) a new car to keep up with her new neighbors.
My friends' homes are beautiful and sometimes its hard not to think envious thoughts about those new chef kitchens and especially the walk in closets. But, I have no desire to take on that kind of debt. I did have a refreshing conversation with a college friend recently and she is just a couple of years away from paying off her home in full. Great motivation for me as not having a home mortgage is a goal that is always in the back of my mind.
I'm in a phase right now where many of my friends are selling their first or second home and upgrading into McMansion world. It is somewhat surreal for my husband and I to visit our friends/peers who have moved from reasonable rancher to gated community McMansion. Some of them bought during Florida's real estate bubble deflation so they got good deals, but it is still a whole different world. One of my friends, who moved into McMansion world in the last couple of years mentioned that she felt like she had to buy (or lease) a new car to keep up with her new neighbors.
My friends' homes are beautiful and sometimes its hard not to think envious thoughts about those new chef kitchens and especially the walk in closets. But, I have no desire to take on that kind of debt. I did have a refreshing conversation with a college friend recently and she is just a couple of years away from paying off her home in full. Great motivation for me as not having a home mortgage is a goal that is always in the back of my mind.
Monday, March 10, 2014
Royal Screw Up
So, I have a pretty good system set up for our personal finances. I have a system for paying bills and for our savings that works off of our spending plant. But, every once in a while things go surprisingly wrong.
At the end of last month, February, I was getting ready to do some work travel and I made the decision to pay our home mortgage March payment in February. What was I thinking, well it seemed like I had lots of cash laying around our joint checking account, I knew I was traveling and I figured let me just take care of that big bill now instead of later.
Big mistake! Several auto transfers and other obligations drafted after I made this payment and I, of course, came up short. And further, of course, I had to try and fix this mistake while traveling. Ugh, ugh, ugh.
Two weeks later, I am still undoing the damage that was incurred.
At the end of last month, February, I was getting ready to do some work travel and I made the decision to pay our home mortgage March payment in February. What was I thinking, well it seemed like I had lots of cash laying around our joint checking account, I knew I was traveling and I figured let me just take care of that big bill now instead of later.
Big mistake! Several auto transfers and other obligations drafted after I made this payment and I, of course, came up short. And further, of course, I had to try and fix this mistake while traveling. Ugh, ugh, ugh.
Two weeks later, I am still undoing the damage that was incurred.
Thursday, January 23, 2014
$300 Rule & $100 Rule
As I have previously posted, I have a long standing goal to have plantation shutters installed in two bedrooms in our home. But, since plantation shutters are very expensive I decided that I would update my plan and just get some new, nice shades for these two bedrooms.
I have done quite a bit of research, measured the windows, priced out my options and then I settled on a plan which will run about $800.
But, in our home there is another step I had to take and that was to discuss the project, the expense, the source of the funds (we have this money sitting in our house project account) with Mr. Sam. We have a rule that anything over $300 has to be discussed and agreed to between us. Most of the time we reach agreement pretty quickly, but not so this time around. I've talked to Mr. Sam about this project several times, gave him the pricing, told him about my research, but he thinks it is silly to spend this kind of money on custom shades. If we can't reach agreement then we don't go forward that is our rule. We imposed this rule back in 2007, because we were trying to throw every extra dollar at our debt. But, we have kept the rule because we believe that we should be in agreement that expenditures above $300 are necessary or a mutual want (vacation) or one of us convinces the other.
We did finally agree or he finally gave in, but we did reach agreement.
The other rule we have is the $100 rule. When we are spending more than a couple of hundred dollars we have to wait a day for each $100 of the purchase. So in this instance, if we are spending $800 on custom blinds we have to wait 8 days before we actually make the purchase. This waiting period prevents expensive impulse purchases.
I haven't yet ordered the blinds because of the waiting period rule, but will do so next week.
I have done quite a bit of research, measured the windows, priced out my options and then I settled on a plan which will run about $800.
But, in our home there is another step I had to take and that was to discuss the project, the expense, the source of the funds (we have this money sitting in our house project account) with Mr. Sam. We have a rule that anything over $300 has to be discussed and agreed to between us. Most of the time we reach agreement pretty quickly, but not so this time around. I've talked to Mr. Sam about this project several times, gave him the pricing, told him about my research, but he thinks it is silly to spend this kind of money on custom shades. If we can't reach agreement then we don't go forward that is our rule. We imposed this rule back in 2007, because we were trying to throw every extra dollar at our debt. But, we have kept the rule because we believe that we should be in agreement that expenditures above $300 are necessary or a mutual want (vacation) or one of us convinces the other.
We did finally agree or he finally gave in, but we did reach agreement.
The other rule we have is the $100 rule. When we are spending more than a couple of hundred dollars we have to wait a day for each $100 of the purchase. So in this instance, if we are spending $800 on custom blinds we have to wait 8 days before we actually make the purchase. This waiting period prevents expensive impulse purchases.
I haven't yet ordered the blinds because of the waiting period rule, but will do so next week.
Wednesday, January 8, 2014
2014 Additional Goals - Update
I posted earlier of my multi-year goal to update the widow treatments in our home and my plan for 2014 to make progress on this goal.
Well, I've done all my measuring for the bedroom windows, there are six, and I've priced out my options. I have selected a roman shade in a natural material (bamboo, grass, etc.) with a dual lift system. I have not figured out color yet, but I have ordered free swatches of the natural material so I can make an informed selection. A dual lift system means that the shade can be raised from bottom to top (traditional) or dropped from the top. This means that we can have the shades partially open from the top which will let light in but maintain privacy since we are in a dense area.
Well, I've done all my measuring for the bedroom windows, there are six, and I've priced out my options. I have selected a roman shade in a natural material (bamboo, grass, etc.) with a dual lift system. I have not figured out color yet, but I have ordered free swatches of the natural material so I can make an informed selection. A dual lift system means that the shade can be raised from bottom to top (traditional) or dropped from the top. This means that we can have the shades partially open from the top which will let light in but maintain privacy since we are in a dense area.
Saturday, January 4, 2014
2014 - Additional Goals
Previously I posted our 2014 savings goal numbers, I have a couple of other goals to list as well.
Back in March 2012 I posted about wanting to install plantation shutters in our front, first floor bedroom. Well, almost two years later, we've not made any progress on this goal, although we have accomplished other house projects.
So, for 2014 my goal is to replace the cheap plastic blinds (that have been up since we bought the house almost 10 years ago) in the front bedroom. You will note that I've not renewed the goal to have plantation shutters installed. While that is still a goal, I recognize that plantation shutters are both an expensive and time consuming project. I will, eventually, have plantation shutters installed, but for now my plan is to order blinds to replace the crappy plastic ones.
I've settled on a blind company. But, I have not decided on whether I'm going to order blinds or roman shades, much of that will depend on pricing. Many of our windows that need replacement window treatments are the same size, either as a single window, group of two or group of three. Off the top of my head, I have 6 bedroom windows, 2 study windows, 2 laundry windows). As a result, the blinds that I order now can, at some point, be moved from the front bedroom (after I get my shutters), to the back bedroom, to the study, etc. Said another way, even though I still plan to get shutters the blinds/shades that I plan to order now will not be wasted when I want to upgrade to shutters. Even at $100 a window (a high end budget), $400 in blinds will make me very happy (plus we've saved that money in our house account).
Also on the agenda this year is an office upgrade. We are going to do an Ikea cabinet and bookshelf built in hackplus new paint and our budget is $1000.
Finally, a debt goal. At present our debt load is @$538,000. I would like to get our debt below $500,000 in 2014. I have no idea if that is a reasonable goal or not. I've got to do some number crunching since we did not include any additional mortgage prepayment in our 2014 goals.
Back in March 2012 I posted about wanting to install plantation shutters in our front, first floor bedroom. Well, almost two years later, we've not made any progress on this goal, although we have accomplished other house projects.
So, for 2014 my goal is to replace the cheap plastic blinds (that have been up since we bought the house almost 10 years ago) in the front bedroom. You will note that I've not renewed the goal to have plantation shutters installed. While that is still a goal, I recognize that plantation shutters are both an expensive and time consuming project. I will, eventually, have plantation shutters installed, but for now my plan is to order blinds to replace the crappy plastic ones.
I've settled on a blind company. But, I have not decided on whether I'm going to order blinds or roman shades, much of that will depend on pricing. Many of our windows that need replacement window treatments are the same size, either as a single window, group of two or group of three. Off the top of my head, I have 6 bedroom windows, 2 study windows, 2 laundry windows). As a result, the blinds that I order now can, at some point, be moved from the front bedroom (after I get my shutters), to the back bedroom, to the study, etc. Said another way, even though I still plan to get shutters the blinds/shades that I plan to order now will not be wasted when I want to upgrade to shutters. Even at $100 a window (a high end budget), $400 in blinds will make me very happy (plus we've saved that money in our house account).
Also on the agenda this year is an office upgrade. We are going to do an Ikea cabinet and bookshelf built in hackplus new paint and our budget is $1000.
Finally, a debt goal. At present our debt load is @$538,000. I would like to get our debt below $500,000 in 2014. I have no idea if that is a reasonable goal or not. I've got to do some number crunching since we did not include any additional mortgage prepayment in our 2014 goals.
Monday, December 30, 2013
2014 Planning - Third Time is the Charm
So, for the third time we are going to plan/try to save $69,000, maybe 2014 will be the year we hit this number. Now that we have our 2014 total goal number, we have been working on planning.
Some goals are pretty easy to establish.
First, tax advantaged retirement savings. I will max out my 401k savings, $17,500, in 2014. We both will max our our non-deductible IRAs for 2014, so that is $5,500 each or $11,000. We will save $17,500 for Mr. Sam in 2014, that money will be after tax until he is eligible for his 401k in September. Then we will max out what he can contribute from 9/1/2014 until 12/31/2014 which Mr. Sam thinks will be about $12,000. So, the monthly savings we do for Mr. Sam's 401k between 1/1/2014 and 9/1/2014 will be used to supplement income for the last quarter when he is putting the bulk of his paycheck into his 401k. Then, the amount that is left over will be put into our trading account. While Mr. Sam will not be able to save as much in 401k savings, we will make sure to save at least the same amount in our non-tax advantaged trading account.
(1) Max out 401ks (goal is $35,000)
(2) Max out IRAs (goal is $11,000)
As for our IRAs, we have already saved $1800 towards our 2014 goal.
Second, other savings goals. I probably will maintain the monthly savings already set up which means we would put another $10,000 into our emergency savings in 2014. I like having money go towards e/r savings. With our various real estate properties, a health emergency fund makes me happy. For similar reasons, I probably will keep the $200 a month that goes towards our house account. With an old house, there are always repairs or projects (last year I imagined plantation shutters, but that project got put off). This year, we are also likely looking at a roof repair or roof improvement on our carriage house. Accordingly, I am putting $5,000 into roof project savings. If the roof project costs less, then we will put that money towards mortgage principal prepayment.
(3) Emergency account (goal is $10,000)
(4) Roof fund (goal is $5,000)
(5) House fund (goal is $3,000)
Third, Mr. Sam is going to need a replacement vehicle within the next couple of years. So, the last goal for 2014 is car replacement fund (goal is $5,000)
(6) Car replacement fund (goal is $5,000).
How about you, what are your financial plans and goals for 2014?
Some goals are pretty easy to establish.
First, tax advantaged retirement savings. I will max out my 401k savings, $17,500, in 2014. We both will max our our non-deductible IRAs for 2014, so that is $5,500 each or $11,000. We will save $17,500 for Mr. Sam in 2014, that money will be after tax until he is eligible for his 401k in September. Then we will max out what he can contribute from 9/1/2014 until 12/31/2014 which Mr. Sam thinks will be about $12,000. So, the monthly savings we do for Mr. Sam's 401k between 1/1/2014 and 9/1/2014 will be used to supplement income for the last quarter when he is putting the bulk of his paycheck into his 401k. Then, the amount that is left over will be put into our trading account. While Mr. Sam will not be able to save as much in 401k savings, we will make sure to save at least the same amount in our non-tax advantaged trading account.
(1) Max out 401ks (goal is $35,000)
(2) Max out IRAs (goal is $11,000)
As for our IRAs, we have already saved $1800 towards our 2014 goal.
Second, other savings goals. I probably will maintain the monthly savings already set up which means we would put another $10,000 into our emergency savings in 2014. I like having money go towards e/r savings. With our various real estate properties, a health emergency fund makes me happy. For similar reasons, I probably will keep the $200 a month that goes towards our house account. With an old house, there are always repairs or projects (last year I imagined plantation shutters, but that project got put off). This year, we are also likely looking at a roof repair or roof improvement on our carriage house. Accordingly, I am putting $5,000 into roof project savings. If the roof project costs less, then we will put that money towards mortgage principal prepayment.
(3) Emergency account (goal is $10,000)
(4) Roof fund (goal is $5,000)
(5) House fund (goal is $3,000)
Third, Mr. Sam is going to need a replacement vehicle within the next couple of years. So, the last goal for 2014 is car replacement fund (goal is $5,000)
(6) Car replacement fund (goal is $5,000).
How about you, what are your financial plans and goals for 2014?
Thursday, November 21, 2013
I Love Numbers!
A couple weeks back I posted an update on our debt progress. From 11/2012 - 11/2013 we paid off almost $35,000 in debt. At this point in our lives, debt means mortgage debt either on our primary home or our three investment properties or our piece of land.
I didn't think much about that number, except I liked it because I like round numbers. But, going back through our networthiq.com numbers I realized that our debt progress in 2013 took an unusual jump (thankfully in the right direction).
11/2012 - 11/2013 - @$35,000
11/2011 - 11/2012 - @$22,000
11/2010 - 11/2011 - @$20,000
11/2009 - 11/2010 - @$19,500
11/2008 - 11/2009 - @$19,000
I'm sure you can see that from 2008-2012 there was a gradual and upward trend on the amount of debt we killed each year. And then, all of sudden, whammo, this year a thirteen thousand increase. Even putting aside the mortgage principal prepayment goal of $5,000 (which was also a goal last year and the year before), I am surprised by this dramatic forward progress. I'm going to have to further investigate the numbers, but I'm assuming this year's dramatic advance is as a result of our primary home refinance, which closed last quarter of 2012, in which we shortened our term and got a reduced rate of 2.75%.
I didn't think much about that number, except I liked it because I like round numbers. But, going back through our networthiq.com numbers I realized that our debt progress in 2013 took an unusual jump (thankfully in the right direction).
11/2012 - 11/2013 - @$35,000
11/2011 - 11/2012 - @$22,000
11/2010 - 11/2011 - @$20,000
11/2009 - 11/2010 - @$19,500
11/2008 - 11/2009 - @$19,000
I'm sure you can see that from 2008-2012 there was a gradual and upward trend on the amount of debt we killed each year. And then, all of sudden, whammo, this year a thirteen thousand increase. Even putting aside the mortgage principal prepayment goal of $5,000 (which was also a goal last year and the year before), I am surprised by this dramatic forward progress. I'm going to have to further investigate the numbers, but I'm assuming this year's dramatic advance is as a result of our primary home refinance, which closed last quarter of 2012, in which we shortened our term and got a reduced rate of 2.75%.
Friday, November 15, 2013
The Upside of the Real Estate Crash
I was on Zillow today, poking around looking at a home that was recently listed a couple of blocks away.
Of course, I had to look up our home as well. As for the Zillow Zestimate, it has our home listed as worth $40,000 less than what we paid for it, almost 10 years ago now, which I would say is not too far off the mark.
More interesting to me, Zillow has property tax records listed going back to the year we bought the home. And while I knew hour taxes had gone way down, whoo-hoo I was surprised by the actual numbers. Our property taxes are down 54% from 2004. And, since Florida has both a homestead law and a law called Save our Homes, our property taxes on our primary dwelling (does not apply to our investment properties) can only increase at the rate of inflation or 3% which ever is less. As a result, it is going to take a very long time, assuming values continue to rise, to get back to that initial tax bill from 2004.
Of course, I had to look up our home as well. As for the Zillow Zestimate, it has our home listed as worth $40,000 less than what we paid for it, almost 10 years ago now, which I would say is not too far off the mark.
More interesting to me, Zillow has property tax records listed going back to the year we bought the home. And while I knew hour taxes had gone way down, whoo-hoo I was surprised by the actual numbers. Our property taxes are down 54% from 2004. And, since Florida has both a homestead law and a law called Save our Homes, our property taxes on our primary dwelling (does not apply to our investment properties) can only increase at the rate of inflation or 3% which ever is less. As a result, it is going to take a very long time, assuming values continue to rise, to get back to that initial tax bill from 2004.
Wednesday, November 13, 2013
Progress on Debt
Updating our networthiq.com numbers today and I was pleased to see we have less than $540,000 in debt (all real estate debt). We have paid off just under $35,000 in debt in the last twelve (12) months.
These types of round numbers make me happy. Now to get under $500,000 in debt.
These types of round numbers make me happy. Now to get under $500,000 in debt.
Monday, October 7, 2013
Investment Property Debt
Hit a milestone this month with our investment property debt, at present we owe less than $300,000 on our investment properties.
Feels good.
Thursday, August 15, 2013
Refinance of Rental # 3
Gosh, I am so glad we got refinanced our primary home last year (into a 15 year loan at 2.75% rate) before Mr. Sam was laid off from his job. Since we knew that the lay off was likely coming that was one of the reasons we pushed to get that REFI done, obviously better to have two stable salaries to show the bank.
Yesterday, I turned my attention to Rental #3 which is the only property/loan that we have not refinanced. And I did so because the mortgage company keeps sending my notices that this property qualifies for the HARP program or some other program and that they can do a cheap and quick REFI for us. While we need to refinance this property since this is our only non-conventional loan, its on an ARM that resets on an annual basis, it really has not made sense to do so because (1) the current rate is 3.125% and (2) I really don't think it qualifies for a REFI.
I had a lovely chat, seriously, with a mortgage broker at my current loan servicing company. She indicated that in fact the property is eligible regardless of the fact that it is not a primary dwelling. It is eligible because its backed by Fannie Mae, it originated prior to 6/1/09, no late payments in the last year (no late payments ever) and we haven't used the HARP program before on this loan.
But, the rates she could offer me for an investment property were in the 5% range. And, further we would likely be forced to refinance into another 30 year term, even though we would prefer a 15 year term, because under the HARP program the REFI cannot increase the mortgage payment by more than 20%. It makes no sense to me to impose a 20% limit on an investment property when we have several good years of rental income well above that level.
As for the LTV ratio they keep citing in the advertisements, she indicated that is simply based on the original loan amount and the amount we currently owe. She further agreed that the LTV ration quoted in the documents likely has nothing to do with appraisal value (I seriously doubt this home would appraise for what we currently owe). But, even if we are underwater we can still REFI.
Right now it really doesn't make sense to refinance this property, but I'm going to start watching rates again. I'd like to lock in a rate under 5% with a decent term before the ARM adjusts above that level.
Yesterday, I turned my attention to Rental #3 which is the only property/loan that we have not refinanced. And I did so because the mortgage company keeps sending my notices that this property qualifies for the HARP program or some other program and that they can do a cheap and quick REFI for us. While we need to refinance this property since this is our only non-conventional loan, its on an ARM that resets on an annual basis, it really has not made sense to do so because (1) the current rate is 3.125% and (2) I really don't think it qualifies for a REFI.
I had a lovely chat, seriously, with a mortgage broker at my current loan servicing company. She indicated that in fact the property is eligible regardless of the fact that it is not a primary dwelling. It is eligible because its backed by Fannie Mae, it originated prior to 6/1/09, no late payments in the last year (no late payments ever) and we haven't used the HARP program before on this loan.
But, the rates she could offer me for an investment property were in the 5% range. And, further we would likely be forced to refinance into another 30 year term, even though we would prefer a 15 year term, because under the HARP program the REFI cannot increase the mortgage payment by more than 20%. It makes no sense to me to impose a 20% limit on an investment property when we have several good years of rental income well above that level.
As for the LTV ratio they keep citing in the advertisements, she indicated that is simply based on the original loan amount and the amount we currently owe. She further agreed that the LTV ration quoted in the documents likely has nothing to do with appraisal value (I seriously doubt this home would appraise for what we currently owe). But, even if we are underwater we can still REFI.
Right now it really doesn't make sense to refinance this property, but I'm going to start watching rates again. I'd like to lock in a rate under 5% with a decent term before the ARM adjusts above that level.
Wednesday, August 14, 2013
How Low Can You Limbo
In addition to our primary home mortgage, we have three other mortgages on our investment properties. In working on updating our net worth numbers today I realized that one of our investment property mortgages is now under $100,000 (specifically $97,061). Something about getting that loan number under $100,000 makes me very happy!!
We are also just a month away from getting our investment mortgage totals under $300,000. Which I will similarly celebrate next month. Gotta look for those silver linings.
We are also just a month away from getting our investment mortgage totals under $300,000. Which I will similarly celebrate next month. Gotta look for those silver linings.
Tuesday, June 11, 2013
Quick Debt Update
I don't post much about our debt, because there isn't much to say these days.
We don't use credit cards in our day to day life. But, we do, for our rental properties, occasionally run up the Home Depot credit card, we obtain 0% deals, and then pay it off over time with rental income. I am happy to report that the $2500, 0% interest, credit card debt incurred in November 2012 has been paid off with proceeds from rent.
Additionally, I was pleased to note that the mortgage balance, for our primary home, is now below $250,000. The outstanding balance is $248,962. In two (2) years we have knocked off $25,000 from our principal. And since our refinance back in September 2012 our progress has accelerated in that so much of what we pay each month goes to principal rather than interest. The original loan balance was $315,000 and we took the loan out in July 2004. We refinanced twice, reducing both the term of the loan and the interest rate each time.
Thursday, April 11, 2013
Remote Check Deposit - Follow Up
Earlier, I posted about Wells Fargo's new remote deposit feature which allows you to take a photo of your check and deposit it remotely.
Since its a new month, I used the remote deposit feature of our first two rental checks received in April. I found the feature easy to use and saved me the 10 minutes of running to the bank to deposit the check at the ATM (times two, saved me 20 minutes).
My only complaint is that I'm limited to $1000.00 remote deposit per day. However, I'm not clear if that limitation is per account (we have different accounts set up for our rental properties). So, for the first two rental checks, just under $1000.00 each, I received the checks on separate days and was able to remotely deposit both. But, the third rental checks is $1500.00 and it was rejected when I tried to deposit it using the remote deposit feature. I'm going to call Wells Fargo and see if I can get my daily balance bumped up to $1500.00 per day.
Since its a new month, I used the remote deposit feature of our first two rental checks received in April. I found the feature easy to use and saved me the 10 minutes of running to the bank to deposit the check at the ATM (times two, saved me 20 minutes).
My only complaint is that I'm limited to $1000.00 remote deposit per day. However, I'm not clear if that limitation is per account (we have different accounts set up for our rental properties). So, for the first two rental checks, just under $1000.00 each, I received the checks on separate days and was able to remotely deposit both. But, the third rental checks is $1500.00 and it was rejected when I tried to deposit it using the remote deposit feature. I'm going to call Wells Fargo and see if I can get my daily balance bumped up to $1500.00 per day.
Wednesday, April 10, 2013
You know its spring in Florida when . . .
You know its spring in Florida when you are at the Super Wal-Mart at 6:00 a.m. buying rat traps.
Now I'm not in charge of rat wrangling, rather Mr. Sam is takes care of this landlording task (thank goodness). So, he was at Super Wal-Mart early this morning buying traps.
Here in Florida we have problems with roof rats due in large part to our climate and the abundance of fruit trees. And, at one of our rental properties, we have a beautiful, big mango tree that produces tons of fruit. This tree produces so much fruit that its more than our tenants or ourselves could ever eat.
I've heard about some food pantries that run back yard fruit drives so I'm looking for an agency that is local to us where we can donate these mangos. In the meant time Mr. Sam is over at the property setting up traps.
Now I'm not in charge of rat wrangling, rather Mr. Sam is takes care of this landlording task (thank goodness). So, he was at Super Wal-Mart early this morning buying traps.
Here in Florida we have problems with roof rats due in large part to our climate and the abundance of fruit trees. And, at one of our rental properties, we have a beautiful, big mango tree that produces tons of fruit. This tree produces so much fruit that its more than our tenants or ourselves could ever eat.
I've heard about some food pantries that run back yard fruit drives so I'm looking for an agency that is local to us where we can donate these mangos. In the meant time Mr. Sam is over at the property setting up traps.
Wednesday, January 23, 2013
Insurance Homework - Follow Up
Six months or so ago I posted about how we were in the process of obtaining life insurance. And in September, I posted information about an umbrella insurance policy we were investigating.
I pleased to report we can cross these tasks off our "to do" list.
Regarding life insurance, we each obtained $500,000, 20 year term life insurance policy through the private market. I have a $500,000 life insurance policy through work which is very reasonably priced. When open enrollment comes around in December 2013 I understand that I can obtain a similar policy on Mr. Sam at similar discounted rates. So as of now, I have $1 million in life insurance and Mr. Sam has $500,000 in life insurance but we will increase that to $1 million early next year.
As for the umbrella policy, as I previously posted, this process was complicated by the fact that three of our properties are insured through the Florida state insurer of last resort, Citizens. Citizens insurance policies only provide $100,000 in liability coverage so we had to first obtain a "wrap" policy to increase our liability coverage from $100,000 to $300,000 for these three properties and then we had to obtain the umbrella policy.
We also ended up not including our property up north in our umbrella policy because it was going to cost us a almost $1000 to obtain a regular insurance policy before we obtained the umbrella policy. Since our property up north has no structure on it, we believe the risk of someone injuring themselves on our property is very low. Since there is no structure on the property anyone on the property is not an invitee and is trespassing, which while that doesn't mean there is no liability risk, the risk is pretty low.
So overall our insurance costs are going up, but we ended up saving about $1000 per year when we combined our car insurance policies and moved to a new company (we also increased our coverage) last year. As such, the money saved in our car insurance category is going to cover our umbrella and wrap policies.
I pleased to report we can cross these tasks off our "to do" list.
Regarding life insurance, we each obtained $500,000, 20 year term life insurance policy through the private market. I have a $500,000 life insurance policy through work which is very reasonably priced. When open enrollment comes around in December 2013 I understand that I can obtain a similar policy on Mr. Sam at similar discounted rates. So as of now, I have $1 million in life insurance and Mr. Sam has $500,000 in life insurance but we will increase that to $1 million early next year.
As for the umbrella policy, as I previously posted, this process was complicated by the fact that three of our properties are insured through the Florida state insurer of last resort, Citizens. Citizens insurance policies only provide $100,000 in liability coverage so we had to first obtain a "wrap" policy to increase our liability coverage from $100,000 to $300,000 for these three properties and then we had to obtain the umbrella policy.
We also ended up not including our property up north in our umbrella policy because it was going to cost us a almost $1000 to obtain a regular insurance policy before we obtained the umbrella policy. Since our property up north has no structure on it, we believe the risk of someone injuring themselves on our property is very low. Since there is no structure on the property anyone on the property is not an invitee and is trespassing, which while that doesn't mean there is no liability risk, the risk is pretty low.
So overall our insurance costs are going up, but we ended up saving about $1000 per year when we combined our car insurance policies and moved to a new company (we also increased our coverage) last year. As such, the money saved in our car insurance category is going to cover our umbrella and wrap policies.
Thursday, December 6, 2012
Mortgage Musings
Now that we are a few months into our new loan term it is time for me to start dreaming about killing the mortgage again.
As a reminder, our new loan term is 15 years (or 180 months) and our new rate is 2.75% fixed. Post-refinance, our monthly mortgage payment actually went up, although our rate went way down, about a $100 because we shortened the loan term by 6 years. Our current monthly loan payment is more than 60% principal payment, so we are already making good progress at chipping away on our principal.
If we continue to pay an extra $415 a month towards principal, which is what we have been doing the last couple of years, we will shorten our loan period by 40 months or 3+ years. We actually don't save that much in interest by prepaying on our loan because our current interest rate is so low. If we keep to this prepayment schedule of an extra $415 a month, we will save $13,500 in interest.
If we increased our prepayment to $830 a month (doubling what we are prepaying now) we will shorten the loan period by 65 months or almost 5 and a half years. Meaning that we would have the mortgage on our primary home paid off in under 10 years. Doing so would mean saving $21,800 in interest.
Having our mortgage paid off in under10 years is very appealing, but we'll have to balance that against whether it makes mathematical sense to do so and the priority of other goals.
As a reminder, our new loan term is 15 years (or 180 months) and our new rate is 2.75% fixed. Post-refinance, our monthly mortgage payment actually went up, although our rate went way down, about a $100 because we shortened the loan term by 6 years. Our current monthly loan payment is more than 60% principal payment, so we are already making good progress at chipping away on our principal.
If we continue to pay an extra $415 a month towards principal, which is what we have been doing the last couple of years, we will shorten our loan period by 40 months or 3+ years. We actually don't save that much in interest by prepaying on our loan because our current interest rate is so low. If we keep to this prepayment schedule of an extra $415 a month, we will save $13,500 in interest.
If we increased our prepayment to $830 a month (doubling what we are prepaying now) we will shorten the loan period by 65 months or almost 5 and a half years. Meaning that we would have the mortgage on our primary home paid off in under 10 years. Doing so would mean saving $21,800 in interest.
Having our mortgage paid off in under10 years is very appealing, but we'll have to balance that against whether it makes mathematical sense to do so and the priority of other goals.
Tuesday, December 4, 2012
Goal Setting
As I start planning our 2013 savings goals and I reflect on our progress to date on our 2012 savings goals this NYT Bucks Post by Carl Richards really resonated with me.
When setting an important goal, he focuses on financial goals, how do you respond to the question "how badly do you want it?"
Mr. Richards notes that there are generally two kinds of answers to this questions:
When I set our 2007 debt killing goals, I had the mindset that I (we) would do anything to reach our goals. Frankly, Mr. Sam thought I was a bit loony and he wasn't on board until he saw the plan on paper. During 2007 there were a number of times that we got derailed and our plan seemed like it was destined for failure. What did we do, we doubled our resolve and get going. The result, we paid off $55,500+ in just over a year.
Thinking about our 2012 savings goals, I can honestly say that we did want to save $69,000 but we were unwilling to change our lifestyle to meet our goals. Yes there were lots of other important expenses, our refi expenses, Mr. Sam's certification classes, that derailed us. But, more importantly, we did not make the sacrifice necessary to meet our goals.
I'll be thinking about this article as we set our 2013 savings goals and its further applicable to some career goals and personal goals that I'm working on.
When setting an important goal, he focuses on financial goals, how do you respond to the question "how badly do you want it?"
Mr. Richards notes that there are generally two kinds of answers to this questions:
- I want it badly, and I’ll do whatever it takes to get there.
- I want it badly, but I don’t think it’s possible.
When I set our 2007 debt killing goals, I had the mindset that I (we) would do anything to reach our goals. Frankly, Mr. Sam thought I was a bit loony and he wasn't on board until he saw the plan on paper. During 2007 there were a number of times that we got derailed and our plan seemed like it was destined for failure. What did we do, we doubled our resolve and get going. The result, we paid off $55,500+ in just over a year.
Thinking about our 2012 savings goals, I can honestly say that we did want to save $69,000 but we were unwilling to change our lifestyle to meet our goals. Yes there were lots of other important expenses, our refi expenses, Mr. Sam's certification classes, that derailed us. But, more importantly, we did not make the sacrifice necessary to meet our goals.
I'll be thinking about this article as we set our 2013 savings goals and its further applicable to some career goals and personal goals that I'm working on.
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