Real Estate in Dallas

People say real estate is a goof investment over the long haul. I’m not so convinced as a millennial who could  possibly move in a few years. The Dallas housing market is also on fire. Some homes are selling within 48 hours. This wasn’t the case when my ex-partner and I bought our first home in 2012. Everyone’s gone mad since.

Some of the fees I don’t have to worry about as a non-home owner:

  • Maintenance – Roof, hot water heater, foundation, hail damage, floods, plumbing, HVAC
  • Housing Association / Transfer Fees
  • Property Taxes
  • Mortgage Interest
  • Alarm / Security
  • High utility bills – more square footage means higher bills to heat / cool
  • Closing Fees
  • Appraisal

It just seems to me that in many instances, the overhead doesn’t guarantee you will end up ahead. I also have friends who were caught in the housing bubble and had to do short sales.

The main appeal to me with home ownership is saying I own a piece of land / property, having my own garage and know that over the long term my money is building equity and not making someone else wealthy.

On the other hand… The homes I would consider are close to 200k. With a 20% down payment that would be $40k of up front costs. I can see the value if you have a family. For a single guy with my income it doesn’t make sense. So I’ll keep renting unless all of a sudden it becomes a buyer’s market again. The main appeal to me is a garage but that’s just because I’m a geek and like to fiddle with things in a garage lol.

Maybe I will buy someday. Just after 3-4 years after I’ve put enough aside. My rent is $800/mo now. If I save that for 4 years that’s enough for a down payment on a home. Even on a home that needs work I still think the overhead would be more than rent.

Rhetorically, there is a certain level of pride that comes along with saying “I am a home owner”, but also a high amount of stress. Everyone in my family who has bought one complains about the high taxes in New York, difficulty in finding tenants should you choose to rent and even then the troubles with evictions. Then the county comes up with more and more fees / surcharges that just makes you feel like a slave instead of a financially prosperous individual.

Here’s an interesting article from 2014 :

10 Things Millennials Won’t Spend Money On

Thoughts?

Props to Chasing Simple Dreams / A Rant About People and Being Enough

I don’t usually do this, but….I’d like to send a shout out to Terri at Chasing Simple Dreams. Of all the people who have commented on my blog, she’s been one of my biggest supporters at 29 comments! The first one was back in December of 2013! Terri if you’re reading this, thank you so much!!!! It means a lot to me that a stranger would continue to leave words of support for all this time.


The second part of this post is about friendships. I’m 32 now and have gone through a couple phases of my life where I felt alone. Why? Here’s a list:

  • Religion – See that mostly here in Texas, a lot of people network through church. Mention that I used to be a Jehovah’s Witness and the conversation and don’t go to church at all usually ends pretty quickly.
  • Sexual Orientation – Called the f word by some jerk in high school close to 5 years before I came out to anyone. Even then there are straight couples who probably see me as a sinner. Or family members that would stop talking to me if they knew I was gay.
  • Ethnicity – Not black or white enough, the two main groups of people in the school I went to. This extends to society in general.
  • Socioeconomic class – Disabled father and mother who worked a difficult job without a fancy title or pay
  • Car I drive – You drive a slow FWD car? What the heck man?? Sidenote – I bought the new car for me, not to impress others.
  • Conversationally – Being shy or not feeling like I have anything to discuss
  • College – Dude, what college did you go to? One you’ve never heard of. Did you play sports? Nope. What fraternity were you in? None, I went to a commuter school.
  • Drinking – As I get older I realize my tolerance for alcohol is on the low-ish side. I get a buzz after 1 drink and drunk on the 2nd one. Frozen margaritas are a bit offender..
  • Sports – See the college / professional league game last night? Nope I don’t follow sports. Ohh well that sucks.
  • Hobbies – What do you like to do for fun man? Listen to Personal Finance podcasts, read car forums and workout. Ohhh that’s lame.
  • Family – Seeing guys profiles on dating apps where they mention their friends and family are their life. Also a shit ton of instagram pictures with them looking super photogenic and on fancy trips every week practically. My family is 1500 miles away and I can go 5 days without socializing with a single human being.

Some slight exaggeration here, but you get the idea. At the root I never felt good enough for people to like me. My self-esteem was low, my POV was always me vs them.

How do I deal with it?

  • I’ve accepted the past is the past. My efforts are best spent on things I do have control over.
  • Having good people around. This has made my life more rich and fulfilling. I want to experience that more and grow in the process.
  • Bouncing back – Sometimes I have bad days, but I still put myself out there. If people don’t want to talk to me because of the color of my skin, where I’m from or any of the other ridiculous reasons they can come up with that’s on them, not on me.
  • Being assertive – Focusing on what I want in life and using my time and energy toward that.
  • Seeing my progress – Some people stay in the same town and never leave. Great if that’s how you roll but if you’re miserable like I was, that doesn’t really fly.
  • Modeling – YouTube videos on people who dealt with this are priceless. Helps to break the pattern pretty darn easily.
Last but not least….Get the *fuck* off social media unless you’re marketing something or that’s your career. Don’t let it run or ruin your life.  A good portion of the people on there are pretentious, narcissistic or funding their lifestyles on debt. The others work their asses off (a few of my friends work 60-80 hrs a week), sacrifice in other areas (say 6 roommates in a NYC apartment, or no car), or have help either from their spouse or parents. Focus on deep, meaningful relationships with a small number of people. I’m working on that number, but a total of 10 feels about right.

Great minds discuss ideas; average minds discuss events; small minds discuss people.

This is a famous quote by Eleanor Roosevelt I often thing about. In a few years many events that pop up in the current day won’t matter. I’m talking about things a celebrity said or did to drum up publicity. Aside from the mindless entertainment component, who really cares what happened on <insert reality show here>. I have a habit of writing these late at night so I apologize for any typos or ramblings. I like living the good life and aside from money and health, quality connections are critical. 🙂

April 2016 – My New Zero Based Budget

This is the budget I’ve put together. Not disclosing my income here, but I do have monthly HSA contributions, 6% of my gross going to my Roth 401k, plus a 3% match and a 2% employer retirement contribution. I like Zero based budgets because every dollar gets a name. At the same time they can be scary because there is no money left over.

A couple points:

  • Student loan is still being chipped away at. In January it was $12,845, now it’s $8,515. Tax return, half my bonus and extra money each month went toward it.
  • I don’t spend $300 a month on entertainment. When I go out with friends I can often get by spending $20. At most $40 in one sitting. There is a line between groceries and entertainment. $300 seemed like a number that would cover a more outgoing month.
  • This is a budget based on cashflow, not leveraging the usage of any high interest credit cards. Also avoiding the high interest rate minimum payment game.
  • Raises – Possibly getting one in the coming months.
  • Bonuses – This doesn’t factor them into account. The last one however was pretty substantial. I’m not banking on getting another one
  • I don’t own a home, I rent. My lease rate is effective until April 2017. I’m fine with not owning, though I may upgrade to a slightly fancier place next year.
  • Car Fuel – Variable – My car gets 22mpg city / 30hwy. So let’s assume an average of 24mpg. Premium fuel at Costco today was $2.09/gallon. At the normal gas stations it’s close to $2.40. I drive roughly 12000 mi per yr. 12000/24 = 500 gallons a year. 500*2.09=$1,045 1045/12 = $87. I fully expect fuel costs to rise so the $150 number sounds more like the old “normal”.
  • Car maintenance = not on here. I have oil changes and tire rotations for the next 3 years / 39k miles.
  • Clothing – not on here. I do buy new (inexpensive) clothes from time to time but that can also be part of the entertainment / grocery budget.
  • I’m still looking at ways to make an extra $100+ a week without going nuts. I e-mailed someone about helping to post Real Estate listings on Craigslist but didn’t get a reply. There are lots of other options, the more I think about it CL is probably one of the worst places to do this.
  • I have cut back buying lunch at work considerably. I estimate a $200/mo savings.
  • Not actually paying car payment yet. 2nd week of May, so banking the money in the meantime.
Monthly Budget

3400

Percentage to Total Portion of Budget Remaining
Rent

800

23.5%

$2600.00

Car Payment

544

16.00%

$2056.00

Student Loan

453

13.32%

$1603.00

Groceries

392.92

11.56%

$1210.08

Entertainment

300

8.82%

$910.08

Emergency Fund Add

200

5.88%

$710.08

Car Fuel (estimate)

150

4.41%

$560.08

Car Insurance (estimate)

106

3.12%

$454.08

Roth IRA Contribution

100

2.94%

$354.08

Cell Phone

92.16

2.71%

$261.92

TV + Internet

90.32

2.66%

$171.60

Apt Electricity

80

2.35%

$91.60

Dog Grooming

35

1.03%

$56.60

Gym Membership

21.6

0.64%

$35.00

Renters Insurance

20

0.59%

$15.00

Haircut

15

0.44%

-$0.00

Month 48 – 4 Years Talking About Money

Holy mother trucker!!! It’s been 4 years. My original name for the blog : “ONE MAN’S MISSION TO GET RID OF 45159.35 OF DEBT“. Kind of tacky perhaps, but it gets the message across.

So the purpose of this blog was to focus on the original debt I had on April 2012, none of the subsequent debt. So I write this post with that focus.

So with that said, as was said on the Suze Orman Show. So Suzy how am I doing?!?!!

Credit Cards: ~$241 balance. I’m moving away from credit card usage for many of my day to day expenses. The interest rates are high and I usually spend more than I want to. My debit card is more convenient, keeps me more accountable and helps to ensure my monthly spending stays more in check.

Navient:
On 4/8/2012:
snapshot

Today 4/4/2016:
navientmonth48

So since I started $33,459.67 has gone toward principal. Or from the total balance to begin with…$38,254.66. That was more than my entire take-home pay up until I was 29. It’s been a rough journey. As I get closer to the finish line I have decided that debt freedom isn’t the goal. The goal is to live a rich life that I enjoy. Pinching pennies isn’t the only way to make financial progress. Earning more, learning new skills, making small tweaks over time. Those things add up.

Someone commented last month that most people don’t pay attention to what they spend money on. I agree with this statement wholeheartedly, because when you pay attention you decide what to prioritize in your life. Not your bills. You spend where you want and cut back on the rest.

$8,500. Not counting interest, paying my currently monthly minimum of $453 leaves about is about 19 months away. The reality though…. Even with my $544 car note I will still have some extra to set aside on my loan. If I get a raise in a few months that money will go toward the loan.

Every night I watch videos on Udemy on web development. This year I am learning how to perform in a series of areas. I’m looking to develop my side hustle game. $100/week would cover most of my car payments. $250/wk covers that and the student loan payment. A little extra money can go a long way.

Lastly but not least, my car payment isn’t due for another month. I’m building a buffer in the meantime. By the time it’s due I will have an extra month’s payment set aside. I like this trend and maybe I’ll increase it. The APR is 1.9% or ~$600/yr in interest so not too extreme. My student loan at the current balance is $362/yr using 4.25% interest.

Some people have big debts at 10-18% interest and payments out of whack proportional to their income. I am blessed to be where I am now, but say I did have an 18% interest rate. On the SL it’d be $1532 and $5,760 on the car loan. That would be a whopping $7292  a year vs my $962 or 758% more. I know some don’t believe in credit but if you’re gonna play the game with the bank make sure your number is high enough so you don’t get ripped off. And minimize credit card debt because it will take forever to get out from up under it.

And the other bits…
401k: $14,921
Roth IRA: $3,843
Total Retirement: $18,764