Month 24 Update – $32,140.58

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So here we are…April 5, 2014. Listening to some Fantasia and Aretha Franklin tunes on my Audio-Technica headphones while bf watches Scrubs and our siamese cat sits curled up a foot away completely unphased by both the noise of my typing and the television. I feel beat down by an irregular sleeping schedule, where I passed out around 10:30PM and woke up at 4:45AM. I was going to go the ambitious route and go to the gym / catch up on some reading. Instead I wormed around in bed for an hour before falling asleep again. Then I see the sun rise, check my phone and it’s 7:22. Oh crap, I’m late for work. So I go through the usual shower / iron routine, telling my bf to walk the dog and delaying breakfast until I get to the work cafeteria.

I hit an important milestone, on Month 24 of making straight payments to Sallie Mae. This shit is neither fun nor easy. I certainly see how some people can go for ten years of payments and still not have their loans paid off. Life can certainly get in the way of your plans to become debt-free. I have had some increased anxiety as of late with them. Going to Florida next month for a wedding. Bf reimbursed me most of the none I put down for that trip. $600 and change with airfare / hotel factored in. Then today he’s like you should really go visit your parents. Sure that would be nice but with what money, I have about $350 to my name right now. I currently have I hold myself to higher standards that I can get this paid off as quickly as possible while still enjoying life. Debt to me is slavery. I can’t turn back the hands of time but I can focus on my abilities in the pleasant to create a better life.

Another friend bought us tickets to the NCAA Championship games in Dallas next week. I don’t know any of the teams really, but it should be exciting. Never went to a basketball game before. Don’t lecture me, just because I lived an hour from Madison  Square Garden doesn’t mean I went. Same with the Statue of Liberty… or the World Trade Center back in the day.

I was thinking today maybe sell the car and drive around in an absolute piece of crap car until I am debt-free. Of course maintenance is an issue there and I’d always wondered how many years I could get out of a perfectly reliably running car of which I have full knowledge of all its maintenance records and overall treatment. Then I think about the $3k I put in the audio system that would not be appreciated by a 2nd owner or by the dealer / used car sales guy making me an offer. Last but not least I thought about how people get royally screwed over when trading in a car. Do I really want to put myself through all that again for a shiny piece of equipment that gets me from point A to point B. Even if it’s a hybrid or an electric car that will cut my fuel costs by half or a 3/4. I don’t want to be on the treadmill forever. I want to lose the weight and keep it off. My freedom, my sanity is worth more than material objects.

Also listened through the whole Millionaire Next Door Audiobook and stared going through Secrets of A Millionaire Mind. My goal is to shift my mindset to thinking more in terms of opportunities that exist instead of limiting thoughts in my head to generate wealth. Over the the years I’ve encountered systems of get rich schemes that sound good on the surface but upon closer inspection have either large inconsistencies or have so many negative things written about them why would I want to go down that path. MLM comes to mind, if people are going to buy something from me I want to believe 100% in the product / service and it must genuinely fill some kind of need or want in their lives.

I don’t think I’m a greedy person. I just know where I have fallen short in the past and want to see more of a payoff for my hard work and efforts.  Right now that hasn’t happened yet and it can be frustrating. I see myself farther along than I currently am. I feel beat down, tore down but I can and will get back up and do some amazing things with my life. A positive net worth would be a good first step. Last but not least along with getting more omega-3s, I find keeping a busy schedule is a sure-fire way not to get depressed. Simply put, ain’t nobody got time fo’ dat.

Was about to hit post, then I looked at Haha Money’s How Rich Are You article. Plugged my number in to a calculator and combined we are in the richest 0.4% of the world’s population and our income is 42 times that of the average person. For just me it’s in the richest 6.1% of the world’s population and income more than 14x the typical person. Kinda boggles the mind how I could be richer than so many people in the world yet feel so financially broke.

If anyone is reading this in their 20s, I have one bit of advice. Well two really. Start planning early and don’t let the time pass you by. I’m not old, but the years have taken a toll on me. Losing my dad and grandmother so young, watching them struggle with health issues for years, a decade of being unable to get traction professionally, racking up student loan debt. The most recent one was a former friend going clinically crazy last month & being checked into a mental health institution for self-destructive behaviors. He is out, but after some of the threats and obsessive behavior I no longer choose to associate with him.

So What About Retirement?

During my mid-20s I opened up both a stock trading account & a retirement account. I made a couple of big investing mistakes.

  • Not doing dollar cost averaging. It’s very difficult to time the market, even people who do it for a living get it wrong. The ones who do it right have their profits eaten up by capital gains taxes. If I continued to invest during the downturn of the 2008 era, all my portfolio losses would have turned into gains. I also would have a nice sized retirement account at this point relative to my age. $5,000 x 6 years = $30,000. Taking the calculation from The Millionaire Next Door into account age 30 x $30k / 10 = $90k is how much I should have in retirement at my current age.

  • Self-reliance. Letting the naivety of my 20s cloud my judgement in business. Thinking things would automatically fix themselves if I waited it out long enough. People make promises all the time and don’t keep it. Just because your boss is an incredible business person who has made a success in his career doesn’t mean he will make any efforts to keep you around in his business, or try to develop you into the kind of employee he / she wants to keep around. Work as a team but at the same time looking out for one’s own self-interests is key.

  • Eggs in one basket. I got burned way too many times not thinking about the level of risk associated with my investments. Put a few Gs in a penny stock, lost over 50% of it. Kept sending more and more money into it, basically throwing good money after bad.

Today my 401k is valued at $2300. Even though my student loans are a top priority, I also realize the time value of money and the importance of contributing in my 401k up until the match. So not including the match assuming an 8% average rate of return for my current balance up until retirement age (let’s just say 65).

That $2300 will be worth $34,006.29. This doesn’t include taxes on the yields, but still…not chump change.

One of the cars I’ve been eyeing as a replacement for my current vehicle is a new 2013 Infiniti G37 . 328 hp, RWD, VQ37 engine, 7 speed automatic transmission with paddle shifters. 0-60 in about 5.4 seconds. If I were to buy a new one for $30k, using the above calculations with a lump sum investment I’d be missing out on $444,000 of retirement income. How does that shiny new car sound now?

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Not saying I won’t ever buy the car, but being smarter about how much I pay for depreciating assets is very important if I want to be a PAW (Prodigious Accumulator of Wealth). :)

Lastly I wanted to reflect on how far I’ve come. It’s easy to say I’m not aggressive about paying my student loan debt quickly enough. Truth of the matter is in the 2 years since starting this blog over $3500 of what I paid has gone toward interest (@4.25%). So take the original balance of 45159.35 and subtract the Month 23 update amount of  33,018.91. Leaves you with $12141 plus 3500 so $15,641. That amount is more than half what I earned in 2010 and more than *all* my earnings in 2011. In 2010 it was because the job I got paid slightly more than what an intern might receive. In 2011 being unemployed and unable to collect unemployment contributed heavily to that…

So all things considered I think I’m doing well. If I keep making smart decisions I’ll have more money than my friends who currently earn more but spend less responsibly. Last but not least I started taking some fish oil in heavier dosages (4-6 capsules at 1000mg each). It’s really helped improve my mood. I was getting to the point of being cranky and lacking energy hardcore until I started getting more omega-3s in my diet. One could even call it mild depression. All the things I wanted to do because they make me feel better like the gym I couldn’t do. Almost like hitting a wall that you can’t climb or move around…I feel almost like a different person now. Like my drive is back and my outlook is more positive. Hope things stay this way. :)

Month 23 Update – $33,018.91

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Month 23 Update: i currently owe $33,018.91 on my student loans as of March 4, 2014. Image

Our washing machine needed to be serviced. I looked around on Yelp for the best company in the area. Basically I wanted the job done, didn’t want to wait the entire day for a service technician and obviously didn’t want to get price-gouged. I asked in advance, the owner said the repair typically runs $150. The actual cost was $99 as only labor was involved. If I let the machine go longer making noises I could’ve destroyed the entire thing.

My car is coming up for a service appointment. Spark plugs are rated for 100k miles but the car is also 6 years old. Car has 76k miles. I might be able to put this one off for another year. Still afraid of heaving the plugs seize up in the cylinder head.

Electric bill was $204, I am very eager for warmer weather. The cold makes me less active and has basically doubled our bill. It’s gonna be rough until my next paycheck. Keeping a $1000 emergency fund is harder than I thought. I hit it, then go back under it again.

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My credit card balance is only $100 right now, but have about $250 in pending charges and $907 in cash. Last week I ate out almost every day due to stress / convenience and a need to go out and be more social. Gained 7lbs in a month but this isn’t permanent. Cutting back on carbs /  wheat in my diet and preparing more meals will help. I can’t remember the last day I got a full 8 hrs of undivided sleep.  I need to remember what it means to have fun.

I’ll end this with something a little different… I find the busier I am, the less time I have to be depressed about anything.

Five Steps to Happiness

1 – Stay Off Social Media
2 – Don’t Talk Negatively about Other
3 – Give Gratitude
4 – Make Time For Yourself by Saying No
5 – Say Sorry

:) Get Debt-Free and Stay That Way!!

Teaching a Debt Perspective to 12-Year-Olds

Teaching a Debt Perspective to 12-Year-Olds.

This blog post by Joe Mhalic is brilliant. I posted it on my personal Facebook account last week. Whether you’re 12 or 72 the points he makes are valid ones.

I also watched a Tony Robbins session on Financial Freedom. A key point was spending less than you earn and having proper asset allocation. He used several millionaires as examples, people with all their money invested into one company. Their company went under and so did their entire life savings.

From Mr. Money Mustache – Why the Middle Class Keeps Giving Itself the Shaft. Simple & Brilliant. 

Check out those links I think you’ll find at least something of value if you have the time. :)

Month 22 Update – 33,817.42

Hey there, knock knock. It’s me, the 30 year old guy in Dallas paying off his debt.

Been a while since my last post and I wanted to bring you all up to speed on what I’ve been doing lately.

So I bought a brand spanking new 15” Retina MacBook Pro with Iris Pro graphics for $1929.06.

Laptop: $1891.49 (this is the lowest possible price I could find and no tax )

Overnight Shipping: 37.57

Grand Total: 1929.06

 

What is he insane? He owes $34,342 on his student loans?! Suze would deny you! Hypocrite.

So take the 1929.06

Subtract 810 for 13” MacBook Air (paid $1560 shipped June 2012), might’ve gotten more if apple didn’t cut prices $200

Subtract 40 for the Apple Wired Keyboard sold

Subtract 70.50 for the Apple TV I have listed (got this with my credit card rewards points)

Subtract $30.00 for the USB Foot Pedal I sold. Originally I was going to do speech dictation work, then I saw how much it paid. It goes back to valuing your time / effort. I’d rather learn something technical that could help me in my current career / provide backup it I were to lose my job tomorrow.

Leaves ~$1000 for a brand new laptop not including my shipping fees or the cut eBay gets. I also sold a PhotoReading speed reading course for $99. All of these items were literally collecting dust, even the newest of the bunch the AppleTV rarely got used with our PS3 / Chromecast I was given as a gift hooked  to the living room TV. Selling stuff on eBay that is worth money and I don’t use is a little bit of a high. My computer and phone are my two most used electronic devices. 

Why did I buy the 15” Mac Book Pro?

  • Retina display. It’s super crisp, 220 pixels per inch, capable of resolutions up to 2880 x 1800.
  • Bigger screen. I use a mechanical keyboard with my laptop to avoid wrist strain. This puts me an additional ft away from the screen. With the 13” it was a lot harder to read. I kind of went from one extreme to the other going from a 17” laptop to a 13 inch.
  • Faster – Dual core vs quad core.  The CPUs are more capable at multitasking and running CPU intensive programs in general. The graphics are over 2 to 300% faster than what I was accustomed to with my HD 4000 graphics card. I’m starting to play more games to pass my time and the performance boost really comes in handy.

I wanted to buy myself something nice. I won’t be getting rid of my car for a while, my wardrobe is decent, I’m making more and more meals at home. Since I use the computer so frequently I could justify this at least in my own mind. 

 

I’ve been somewhat on a roll with regard to my overall cash flow. Just completed my taxes and I’m getting over $1600 back between my two jobs and student loan interest deduction. That will be at approximately the same time as my next paycheck and I spent almost nothing eating out this week. I’m starting get more acclimated to bringing lunch with me to work. Maybe not every day but four out of five isn’t bad. Making meals for dinner is sometimes more of a challenge but I work through it. 

I had a couple of exchanges back and forth with Sallie Mae, basically my account says it’s prepaid until July 2014 however I’ve been making payments towards the principle not future payments. Long story short when I make an additional payment that exceeds my monthly minimum payment it advances their payment to counter by one even though the additional money still is applied toward principal… Then there was a separate issue of my student loan interest calculation not matching my estimations, Apparently there was over $800 in capitalized interest paid by me on account of my loans being in deferment previously. Although it helps with my tax refund I’m still mildly annoyed about how it was applied. 

This month February I’m going back to my $1000 per month strategy since I’m well caught up versus wherever was at the beginning of January. After the money I’ve been waiting on from my old employer comes in I will use that money an emergency fund and apply an additional $500-1000 per month of each paycheck toward making principal payments. Time to get gazelle-like intensity as Ramsey puts it.

As of this writing, I have $155 in my wallet, 2435 balance on my credit cards and $1750 in my bank account. I scheduled payments totaling $1350 for tomorrow and the rest will come right out of my tax refund money. 

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Having some bathroom faucet hot water issues. Hopefully I can fix it on my own and not have to rely on a plumber. Stay tuned…

Year In Review – 2013 / Month 21 Update – $34,370

A little late on this update, but I wanted to report on my progress so far.

I started this is in April 2012, at the time it was less than 2 months after I started a new job. Also on the heels of being screwed by a company I only worked at for a mere 6 weeks, bounced my paycheck and filed for bankruptcy. Those days are fortunately far behind me. Some highlights for the year..

 

  • went on 2 trips for the year, New York for a wedding, Las Vegas with friends to just have fun
  • quit a job that was paying an okay wage for another in the same industry making over 50% more
  • paid over $7500 on the balance of my student loan, roughly 1800 in additional interest
  • I pulled the money from my Roth IRA and will not be contributing to it again for the foreseeable future. Was doing $20/wk, but the past month I honestly couldn’t afford it. Paid off all my credit cards this past week and was left with less than $50 to live on and 10 days till the next paycheck. I also did a dumb thing and invested it all in one stock. I don’t think I will ever be doing that again for the rest of my life. Already gotten burned twice.

I put together a new spreadsheet on my budget. Came to the conclusion of two things.

  1. I cannot afford to continue paying $1000/mo on my student loan with all my other financial obligations. Every month since starting this something has come up where I needed to use my credit cards and then did las minute scrambling to get it paid off. Instead I will go to a modest $700/mo. This will stress me out much less, allow me to build up some type of emergency fund and I can pay more as I see fit. 
  2. My bf and I agreed that we eat out too freaking much. Gay men tend to have fancy / specific tastes in food and beverages, which means we spend a lot more money than the average person on dining out. Including the $40/wk I spend on eating at my employer’s cafeteria for December I spent $450 on food, not including any grocery shopping. That’s way, way more than I ever imagined myself paying. Before you ask, we stayed in for New Years and I didn’t buy anything. Our mutual goal is to eat-in 4 days a week and for me to start taking food in with me to work.
  3. Speaking of bf, been thinking about when to take things to the next level. I recently saw a movie called Bridegroom. Short version, two gay men from small towns move to California, meet each other through friends, fall madly in love. One’s family is open and accepting, the other is very anti-gay and has threatened his bf. They then get married, one is taking pictures on a roof, loses his footing and falls to his demise. Marriage wasn’t recognized in their state, the family of the deceased deny the partner the ability to attend the service /  funeral, basically leaving no closure and illustrating the larger issue of why gay marriage should be allowed / recognized at the state level. That and explaining some of the challenges people face growing up gay, some of the most resistance coming from one’s own family. There were a lot of things I could relate to, the fear of retaliation in public bit in particular. Alas it got me thinking again when would be the right time to ask the question. I think of Oprah and Steadman as being happy together without getting married, then there are gay couples that are married, but not exclusive… All things not really the subject of my blog here.

    Long story short, I have commitment issues I’m still working through along with the childhood baggage associated with divorce… Gay marriage is not recognized in the state of Texas and I have no idea if it ever will be based on the conservative nature of the state. I also want to do this one time and one time only. As much as I have these issues, I’ve never met anyone like him, who has opened his heart to me and tries so hard to make me happy even when I am the most cranky person you can imagine.

I started reading a book called Debt-Free Forever: Take Control of Your Money and You Life by Gail Vaz-Oxlade (famous for the  Til Debt Due Us Part show on CNBC). Lots of good stuff inside. I’m only 7% done so don’t ask me too much about that. :P I still listen to Dave Ramsey’s podcast, but his whole evangelical Christian slant to things / discremenatory wording for FPU leaders on what constitutes marriage does rub me the wrong way. I was close to buying a ticket for his event in Dallas this spring but have since changed my mind. We also don’t plan on having / adopting children, so that part wouldn’t apply anyway.

Started doing scratchoffs again. Not an investment strategy, but a reminder life isn’t always about money and to have fun. First time around I spent $20 and got $40 back, 2nd time $10 and got $20 back.  $20 is the max I will spend an that’s typically 1-2 times a month. When I win I cash out the card and stop playing.

I wish you all the best in 2014 and keep up the work of paying off debts and breaking free from the shackles. 

Unexpected Expenses

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As much as I want to pay off Sallie Mae it’s time to beef up my emergency fund. For the month of January I’ll pay paying just the minimum $452 for the month. Between bills from the holidays and my pending medical bills it’s spreading me thin.

Today I was wheezing heavily and coughing at work. This has never happened to me before and lasted for a full 45 minutes. Luckily my job has a clinic on-site. I went down there and both people who worked there and those waiting felt really bad for me. So I was seen a full hour before my appointment. Chest x-ray ruled out pneumonia, tested negative for flu and negative for strep. Got a nebulizer treatment for a half hour, blood work drawn and two injections in my backside. I immediately started to feel better. My prescriptions were only $12. Went home and did 0 work afterward.

My current health plan has a $4000 deductible. That is going to $2000 in about two weeks. Still not enough to make a big difference in what I will end up owing. I hope most of the stuff at the clinic is covered by my co-pay but I cannot say so for sure. The x-rays will be a couple hundred dollars I figure.

Currently I have $197 in my bank account so an emergency fund is non-existant. I need to pull back at least for a month to do some damage control. Credit card balance is just under $700, close to $900 after pending transactions hit. That will be paid off in full after my next paycheck. I put the ATT ($87), Verizon ($150) and electricity bill (not yet added but $212) on it.

It’s a wakeup call that health is important and having insurance matters. Coming out of the holidays without super much massive damage (though I spent more than I wanted to) and that makes me happy. That’s all for now.

 

Update: Maybe the X-Rays aren’t as much as I thought. I see an estimated cost online of $32 for the center I went to.

Month 20 – $35,224 & The Holidays

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I’ve been on a bit of a spending spree lately, but I can justify most of it on items I really needed.

Canon printer – Goes for $130, got it for 69.99. The printer I was using before an Epson Stylus CX 4200 works fine but it’s also from Bush W’s second term. Just about time for a replacement..
AppleTV – Got it for “free” as part of the rewards program on my credit card. I will use this, possibly subscribe to Hulu Plus, use the HBO Go account through my parents and our PS3 and get rid of two of the three boxes we have in the house once contract is up. For the most part, two TVs go unwatched. Speaking of, I just checked my FIOS bill and my 1 year HBO / Cinemax credit was about to run out. That would be an extra $25/mo for something I barely watch as it is (other than when True Blood is on).

Audio-Technica ATH-M50 Professional Studio Monitor Headphones – I listen to music often on my iPhone / MacBook Air. The Bose ones have always amazed me with the base and clarity with high notes. However not worth the $300 I would pay if I got them in the mall. The current pair of headphones I have are from 2009 and not particular comfortable on my ears for more than 15 minutes.

Universal Bathroom Fan Replacement Electric Motor Kit – Only like $15 and I used money my friend gave me on a Gift Card to buy this. Basically the fan in our bathroom sounded like it was ready to die and was embarrassing when friends would use it and heard this loud grinding noise.

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Infinity USB Digital Foot Control – Used one of these first when I was an Executive Assistant in a previous life. I plan to start doing some part-time work in the transcribing field. My goal is for an extra $100/month. That can cover gas, eating out and various other things. Transcribing is based on both speed and accuracy. It’s hard to do both clicking Play / Pause constantly. Haven’t had time to really think it through fully between picking a company and how much of my time per week I want to dedicate toward this. 5-8 hours is probably a good ballpark range.

On top of that I’ve been buying some gifts for my bf. I do these things out of both love and the understanding he is getting me something for Christmas too. Probably not spending over $250 and still have more shopping to do. Haven’t bought anything for my parents, we kind of have a mutual understanding that times are tough and I have most everything I truly need.

My credit card balance was 0 but is now up to $595.

Also a quick recap of Thanksgiving. I ate way more than I should of and felt extremely guilty about it. I’ll spare you the picture of my stomach sticking out like I’m pregnant. Also after a couple of days I was not really willing to eat unhealthy leftovers anymore. So a lot of food went in the garbage. That’s what happens when people cook for a small army and the number that shows up is markedly lower than planned. I’ve been to the gym a few times in the days since and think I’m on the right path.

The overeating really made me think about life in general. How people eat food to fill an emotional void. I’ve met three people who either had a gastric bypass or lap band surgery. In some cases some of their weight gain may have been preventable but for me, paying proper attention to health is my religion. Too many people in my life had to deal with the effects of bad health. I’m going to fight like hell not to be a statistic. My BMI is presently 32.5. Above 30 is obsess and 25-29.9 is overweight. Tom Venuto’s Book The Body Fat Solution has helped me understand more about why I’m getting fat. The social element was and continues to be the hardest part of all, eating out with friends. Having a taste for a particular item on the menu, drink or a dessert and underestimating or completely disregarding the number of calories it contains. Then repeating that same cycle day after day, week after week, month after month. I’m done, I’ve reached a Picard The Line Must Be Drawn Here moment.

Last but not least we’ve had some crazy ice storm here in Dallas. Plenty of accidents left and right, a friend had to get his car repaired for hail damage. I’ve seen ambulances zooming buy on multiple times a day. Be safe, Happy Holidays. Remember People First, Then Money, Then Things. Now you say safe.

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Saving 20% on My Cell Phone Bill and $5 on FIOS

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Looks like I’m now eligible for 20% off my AT&T wireless phone thanks to where I work. It’s $20/mo but my bill should be much closer to $80 instead of over $100 for unlimited data. Say $20/mo savings * 12 = $240/yr. I upgrade to a new phone every two years and it runs around $199. So basically 2 months free, a new phone every time I upgrade or 4-6 tanks of gas… and a whopping $5/mo on my FIOS bill. Still thinking about other ways to lower that one and what I’m willing to give up. Just sharing my gratitude.. :)

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