Tuesday, September 30, 2014

Building our House (part 1):

This building our house series of posts is going to be about what I underwent to obtain my first piece of property...and then what I had to accomplish to put my first house up.

No it isn't a tiny house.  Too bad because I really like the idea and the small amount of money required to build one.  My house is a modest 3 bed 2 bath ranch.  It has a full size basement (unfinished) and a 24x24 garage. 

When we moved in we did not even have a sidewalk!  Oh the humanity!  The horror.  I ended up building the sidewalk myself.

In fact I put a lot more work into the place then I originally thought and the place still cost us over 200k!!!  I am getting ahead of myself.  First we must go back to where we once were...


The Beginning: The land grab

Getting a piece of land shouldn't be that hard.  Especially when we had someone (grandpappy) who was generous enough to deed us the property.  Well it isn't that easy and this is partially why I am writing this.  To remind myself of how difficult the process was so I will NEVER EVER want to repeat it.  If this post also helps you build a house well then that is a plus as well.

First we had to get the land surveyed, staked, prepped for legal description.  That cost us a cool 1000 buckaroos.  I of course was novice and thought that somehow getting this property was going to be um how shall we say...free.  How wrong I was...

Next we had to record the plat, record some other land info, and get a quit claim deed.  Ok.  $169.50 later and we are ready to go.  This was actually a pretty good deal in my opinion as we had to have a lawyer draw all of this up for us and sometimes lawyers can get pricey. 

Next came one of the worst run arounds I have ever put myself through.  The dreaded local government and zoning!  I had to go through about a million steps before finally getting the lot approved for building which included
  • Finalizing plans with our builder (we changed at least 5 times and our builder was very understanding and patient with us).
  • Getting pre-approved for a loan (good thing my wife works at a financial institution).
  • Visiting the health department so I could pay them money to tell me it was ok to build
  • Having the soil tested to make sure it was ok and revisiting the health department to deliver the samples to them (Still ok to build!)
  • Making sure the taxes are current (So they made my grandpa drive down and pay in full before they split the plot)
  • Many other steps that I can't even remember at this point all designed to make sure you could only get one thing done at a time
  • Down payment to loaning institution $11k and some change Ouch!
After a week of driving around and dealing with some nice people who had to follow some stupid laws I finally ended up with the property in my name.  I can't remember exactly but I believe that filing my plot, fees, etc... ended up being an additional $1500-2000.

So after all of that and $2500-3000 dollars later I ended up with a gorgeous 2.1 acre lot.  This was a whole lot cheaper than if I had purchased the lot for fair market value.  Thanks papa!

 Electrical Service and the Foundation

Next up was getting the electrical service set up and good to go while the foundation was being put in.  We had two major problems at this stage. 

First major problem was that our foundation was being dug right after it had rained for almost a month straight.  The walls continually wanted to fall in so it took more rock then expected to make sure the walls held steady.  It also took more rock for the driveway because the ground kept swallowing it!  Rock ain't cheap.  Neither is the excavator or labor...so there went an extra $933 that was unforeseen.  We also ended up paying for some more copies of the blueprints at this stage ($100).

The next step didn't cost any extra money, but it did cost time.  The electrical company I was dealing with was not exactly friendly to put it mildly.  First I called the lady months in advance (like December before we built) and she said just to wait and call her back the month we were planning on building.  O.k.  Whatever.  So I call her up.  She is on vacation.  Nice!  Anyone else that can help, NOPE.  Double nice!  When she finally gets back it takes me a couple dozen tries to get a hold of her and then it takes a couple of weeks for them to come out and hook up temp service...great!  The only really fortunate part of the whole thing is that the builder only had to have his crew on generators for about a day because of how long the concrete took to cure and the foundation to be established.

The UNKNOWN

These expenses were all unknown to us and certainly a shockWe now had to either pay out of pocket for these expenses, or go under budget in other areas of our house.  This meant sacrificing certain items we may have wanted.  The other option was to get down and dirty and do more work than originally planned.

Total money out of Pocket so far: $15069.97 (obviously we knew about the down payment, but the extra 4-5k was shock to us).

In the next post of this series I will lay out how my wife and I used all three strategies listed above to hit our goal and come in on budget somehow:/

Tuesday, September 23, 2014

Why I dislike pensions (but I'll take it if it's there)

Pensions.  What the heck is a pension?  A fixed amount, other than wages, paid at regular intervals to a person or to the person's surviving dependents in consideration of past services, age, merit, poverty, injury or loss sustained, etc.: or at least that is according to THIS website.  

Well hey that doesn't sound too bad does it.  I myself as a public school teacher have been part of a pension plan ever since I got my first job.  You may think I would be excited to be a part of this plan, but I am not.

In fact I am downright fearful.  First of all the state that I live in is known for corrupt government officials who have been part of various schemes that involve lining their pockets with a bunch of taxpayers money.  That money is probably also taken from the state teachers pension funds...so that blows.

Second, I don't have any control of how that money is invested or saved.  I would much rather have that money to invest, save, or spend at my leisure.  That means once my money exits my paycheck, not voluntarily btw, I lose all control of it.  That drives me nuts!!!

Some people may not be bothered by this.  Some people may tote the merits of a pension as guaranteed income for retirees.

The main problem with this is that you may be the last man holding the bag, aka the guy still living when the pension fund runs out of money.  Stacking Benjamins just did an excellent podcast on this and I highly recommend you listen to it.  (It is much better than this article:)

In fact, our pension system is flawed in the fact that if the money is not invested well as a whole or not enough people want to become and stay teachers then the fund runs out.  The only solution is to hire more teachers or make the new teachers work longer to collect later and less.  That is where we currently sit.

I (supposedly)  would have to work until 70ish under the new laws in my state to receive full benefits.  The state can kiss my hairy you know what if they think I'm working that long, but I am sure other teachers look at this and think that is the way it has to be.  Would you want a 70+ year old teaching that wanted to retire some 8+ years earlier.  I wouldn't!  They would be grouchy all the time and not really be an effective teacher.

So what is the solution?  Well I don't have a very popular solution but I think it would work.  GET RID OF THE PENSION!  That's right.  Just do away with it.  As an ex:  Anyone who has 10 years of service will still receive a pension, everyone else is on their own for savings.  Harsh.  Yes.  Absolute.  Yes.  Will it work?  Maybe.

Results are inconclusive.  People may or may not save more on their own for retirement.  Those who have retired or will who count on the pension may or may not make it, but they should be able to.  The point is that our current system is not working and we are heading for a giant fiery wreck at the end.  

The question I have for all of my fellow teacher's is that are you willing to risk it?  Are you willing to be dependent on something so far out of your control that you won't fight for getting that money back?  Are the perceived pros worth the impending cons?

How do you feel about pensions?  Yay or nay? 

Wednesday, September 10, 2014

Old School's (negative) NET WORTH!!! First Edition

O.k.  So this post is probably long overdue.  After all I do blog a lot on personal finance and I notice most other bloggers throwing their net worth out their so I probably should to.  I guess I just have been a little nervous to do so.  I mean after all, telling a bunch of people who you may or may not know isn't exactly normal in America.

Most people in America act like they have money and really don't.  I act like I don't have money and I really don't.  Then their are those who act like they don't have money and they really do.  I want to be the third option.

We all have to start somewhere so I guess I will just give you the lowdown on my net worth via Mint.  The only thing I don't really agree with on Mint is that the value of my cars is assessed.  I know I can change this setting but I really don't want to, and I don't factor in the value of my house either.  I figure the house is a liability really until I pay it down, because I can't cash it out...well I could but then I would be renting again and that is not my goal:)

According to Mint at this very moment my wife and I are worth....drum role...

-134,908.26

Well that sucks.  I suppose I can celebrate slightly in the fact that we started at -167,032.95.
We do not have any consumer debt, medical loans (yet), or car loans.  The only loan we currently have is our mortgage which sits at 163,507.90.  Our house is a modest 3 bed, 2 bath 1200sqft ranch (basement unfinished so far) on 2 gorgeous acres of woodland.  We built the house/had the house built in 2013 and have been living in it for almost a year.  I may write an extensive post later on building but for now I'll give you some more specifics on our current situation.

Mortgage:     $163,507.90
Savings:        $4,679.63
Vehicle #1:   $9,222.00
Vehicle#2:    $2,500.00
Wifes 401k:  $11,661.19
Roth IRA:     $488.58
403b:            $ Unsure

I will not factor in checking and a few other saving accounts that we have because that money is already spoken for in the form of everyday bills, insurance, and annual expenses.

What I take away from this is that we are light on cash, but I am figuring that is due to paying medical bills out the wazoo.  That happens when a member of your family has a chronic illness.  There is nothing to be done and just a way of life so you just have to suck it up, make the best of it, and move on.

I am also getting my butt handed to me by my wife in the 401k department.  I know that I have some money in a 403b I set up when I first got hired, but I am not actively managing it currently and need to be better about that.  My wife also started before me in her career but she is still whipping my butt, something that will change this following year;)

GOALS:

1. I think that we should aspire to save $5000 in savings.  It is only $320.37 away so I know that we can do it.  Ultimately I'd feel pretty comfortable with 10-15k in the bank, but for now 5k seems do-able.

2.  I need to find out how much money is sitting around in my 403b and start to do a better job of managing that.  Right now I'm pretty sure the money is invested in a really crappy annuity, but that is my fault for just putting the thing on stupid auto pilot.  So my goal is to make a meeting with a rep and get it straitened out.

3.  Reduce spending, and increase earning.  The first part I can do.  I just need to not spend money on foolish things...which may be hard because I have a bachelor party coming up and I know I'm going to spend some dough on that.

Increasing my earning is where it gets difficult for me.  Two jobs is out of the question currently unless I were able to snag a paper route.  I have toyed around with other ways to make money.  I always read J.Moneys side hustle series and tried to get the old synapses firing in my brain.  I have a few ideas but I'm not going to share them until I start making some money...hopefully they pan out instead of falling flat on their face like many of my schemes do!

Well until next time keep on rolling that proverbial boulder up the hill and one day we will meet together at the top and laugh as we push it down the other side.

Tuesday, September 2, 2014

It ain't all Candyshops and Lollipops

What, you may gasp as you read the title.  I mean I know life is hard for me (the reader), but I just figured all you financial blogging guys and gals had it all figured out.  You may have been misled into thinking we are some sort of superhuman specimen's who never experience pain, heartache, or trial.  Maybe you think that we don't struggle like you every single day.

Nay.  I say nay to this nonsense.  I in fact have been misled into this thought process a time or two.  It isn't real popular to blog about repeated failure or trial but I assure you all bloggers struggle the same as you and I.

Here are some reason's that we as readers may believe that life is all peachy keen everyday for pf bloggers...

1. Highlighting the Highlights:  
I think it goes without saying that most people only write about the highlights or successes.  It in fact is actually a cultural phenomenon, I mean just take a look at facebook, twitter, etc...  No one wants to share a bad picture or tweet "Just ate breakfast."  Everyday life is boring, so the mundane must be transformed to "Just ate a sweet strip of Canadian bacon and washed it down with a nice swig of african chi." #Awesome!

O.k.  So maybe that was a little overboard and I'm not saying it is bad to write or read flowery language, but the problem that we/I have is getting caught up in thinking that is what everyday life is supposed to look like.  Instead of enjoying the really great experiences we have, we must tweet the fleeting moments and then make them the sole focus of our lives.

So read the highlights, but also know that to get to that highlight the writer probably had to struggle quite a bit to get to the top of the mountain.  It's OK to struggle.

2. Reading the Goals and not the missed shots
This point follows along the same line of thinking as not getting to read about the mundane details of life, those details that we live with everyday.

Often times pf bloggers will write about goals and net worth and achievements like they shot 95 or 100%.  They may mention one or two slip ups but for the most part it is all smooth sailing right?

WRONG!   Once again I think it is safe to say that to start and continue a PF blog to successful levels you must be willing to make mistakes.  The Great One aka Wayne Gretzky, said that he would miss 100% of the shots he did not take.  YOU WILL TOO.  You must make mistakes in order to hone your craft.  You have to screw up and mess up or you aren't trying hard enough.

It takes perseverance, and tenacity every single day to reach a long term goal.  Some days are not going to be as good as others.  Sometimes you will have setbacks or complete meltdowns within your plan.  Everyone does, even if you don't get to read about it, so keep pushing forward.

3. PF Bloggers Attitudes..."They're GREATTTT!"
That's right.  Just like Tony the Tiger used to say, personal finance bloggers have great attitudes for the most part.  They know how to take a crappy situation that would frustrate most, and turn it into a positive one.  This is actually why I love reading most pf blogs, because of the splendid energy and attitude most have.

A perfect example is this article by MMM.  If you have not read it do so and be prepared for some SaWeetness.  I personally would have been in quite a funky mood if I had faced what MMM did, but his attitude is GREATTT!

It is awesome if you have this attitude and I encourage you to strive for it, but don't worry if doubt passes through your mind time and again.  These PF bloggers go through it too.  I go through it.  Just because writers may mask their struggles with positive attitudes does not mean they can not relate to you/I as a reader.  We can.

So pick up your boots, buckle your belt, and get ready to kick life so hard in the teeth everyday that you win.

Monday, September 1, 2014

30 Ways you Waste Money "mini" Article Review

So for those of you who don't know there is quite the plethora of information out there on personal finance.  I am always reading new articles trying to gain more information and hoping for a leg up on the game of life.

When I started this journey I read MSN money, Kiplingers, and Yahoo Finance.  These sites were easy to access and viewed by thousands of people.  I figured that these articles would surely have truthful information that would lead me to success.  Oh how wrong I was:)

I don't know how or why but one day I came across Mr. Money Mustache.   Man was I blown away!  Here was a guy who laughed in the face of mainstream financial advice.  Soon I discovered GRS, 20somethingfinance, and others.

These guys know there stuff and are not afraid to show their bottom line aka what they actually have in the bank.  I mean, wouldn't you rather take advice from someone who is willing to show their portfolio versus some random writer on MSN?  I know I would and I do!  I'm not trying to discourage you from reading from these other sites, but I would encourage you to read them with a more critical eye which is why I am reviewing a recently published article by Kiplingers.  Here is the LINK to the article if you would like to follow along as I poke a few quick holes in some of the advice given.  Remember that these "holes" are merely my opinion and that you should always use critical thought when reading my opinions. 

The first tip they give in the article focuses on consumption. 

BUYING AT THE WRONG TIME.  I would rather focus on reduction rather than consumption.  The premise of the tip is fine.  Don't buy an item at full retail and try and buy at the end of each season during mark downs, etc, however,  I prefer to just not buy.  Do I need new clothes every season?  NOPE.  I believe this tip misses the importance of highlighting the wrong time.  The wrong time in my opinion is when you don't actually need an item, you simply buy because of receiving a good deal.  It isn't really a good deal if you didn't need the item in the first place.

TOSSING FOOD BASED ON THE EXPIRATION DATE.  I know that not a lot of people are going to agree with me on this one, but I will not eat food past the expiration date.  Sorry but not sorry.  I don't want to get sick and deal with the medical bills or the sorrow of having my stomach pumped.  Instead I would say plan your meals and food consumption so you never have to worry about expiration dates.  If you check in the store before you buy then you can avoid a lot of this mess all together.  See an expiration date approaching...try and use up the item or make something with the item and freeze it for a later date.

OVERSPENDING ON GAS AND OIL.  This one is kind of obvious.  I like the tip about not spending for premium fuel or changing the oil every 3000 miles.  Most people already do this.  Also buying a slightly used fuel efficient car to replace a gas guzzling monster is a great idea too.  The advice does not mention a reduction in use.  Why wouldn't you ride your bike or walk instead of driving if you could?  How about a bus or other form of public transit?  If you must drive could you carpool or consolidate trips?  Think before you just go hop in your vehicle and drive two doors down to your friends just because it is a little "too hot or chilly" out!

These are just three of the pieces of advice in the article that I found to be troublesome.  I'm not saying the article didn't have good advice.  I just want you to think before you act on advice you read from a big supplier (like Kiplingers, yahoo, etc...).  In fact you should always think when processing information that is going to affect your financial life.  Does this apply to me?  Will this information be harmful or helpful to my situation?  Can I take this advice and improve upon it?

Remember that you want to improve your life and "get mo monies".  To do that you are going to have to use critical thought and not just follow the masses, even if that means ignoring some of the very advice on this blog:o

Garbage in, Garbage out.