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Archive for August, 2007

Remembering Pets in Wills

August 31st, 2007 at 02:39 pm

Since Leona Helmsley's will and the fact that she left $12 million to her dog has been so much in the news lately, I thought this might be a good time to explain how we "little people" can make sure that our beloved four-legged children are taken care of long after we have departed this earth.

When my DH & I had our estate documents made, we did make a provision for our pets. We did not have a special document, we just had a paragraph inserted in the wills. Here is a direct quote from my will; I have left a few things blank for the sake of anonymity:

" ... I intend that the first xxx Dollars ($xxx) of ... my estate shall go to fund a trust for the benefit of any pets we own at the time of our deaths. My brother, xxx xxx, shall be the physical custodian and caretaker of our pets. He shall receive reimbursement for any funds actually spent for the care and welfare of said pets, and shall also receive compensation for his services, to be determined by the Trustee. My sister, xxx xxx, shall be the Trustee of this Trust, holding and managing the above sum for the benefit of our pets, as she sees fit, in her sole and absolute discretion. At such time as all of our pets are deceased, if any funds remain in this Trust, said funds shall be donated to a pet-related charity such as "xxx xxx" or "xxx xxx"in a proportion as the Trustee sees fit."

When I sent the Estate Documents and my "Letter of Instructions" to my Trustee sister, I included some comments and this is what I wrote to her about the Pet Trust:

"There is a large amount ($xxx) earmarked for a pet trust. You would probably want to set up a separate checking account for this, and have the trust file a tax return, so that you don't end up paying the taxes on the interest out of your pocket. Yes, we do realize that $xxx is a huge amount of money to leave to pet(s), and we definitely do NOT intend for our surviving pet(s) to live in the lap of luxury ... No Louis Vuitton dog collars, please!!! The reason this amount is so large is because:
- We want to leave ample money to cover our pets expenses
- We would never want any family members to have to pay for our pets expenses out of their own pockets
- We want xxx to be paid for the care he provides our pets
- We want to leave money to a pet-related charity, but only after all of the above-mentioned obligations have been fulfilled."

Compared to the amount that little Trouble Helmsley received, calling the amount we are leaving "large" is quite laughable. However, everything is relative, and compared to what our lawyer told us the average person leaves for their pets (a few hundred dollars) and as a percentage of our "estate" it is quite large.

Our pets are our responsibility, and when we bring them in to our family we are commiting to provide for them. That is why we felt it was important to make sure they would be taken care of (not pampered or spoiled, mind you, but have their basic needs met) for the rest of their lives.

Sold A Car

August 29th, 2007 at 03:07 pm

Forgot to mention that we sold one of our cars over the weekend. It all happened so fast that it still doesn't seem quite real. It was the Subaru Outback, the one we just bought in February at a terrific price, and the one for which we bought new tires and a new HD radio/CD player & speakers.

One of DH's friends wanted to buy a car for his son. The son wanted something with a decent audio system, and with enough space to hold equipment for his band. The parents wanted a reliable safe car that would never end up in a street race.

The dad knew the story of how we got the car and asked if we'd be willing to sell it. He said he'd reimburse us what we paid for the car, plus everything we had added to the car, including a major tuneup at 60K miles. The family came over to look at it and decided to buy it on the spot.

We decided to go ahead and sell it. It's a great deal for our friends who bought it. And it's a great deal for us too, because it means we won't have to drive it to Texas. Instead of DH & I driving separately, we'll all be able to go together in the truck, towing our Camry behind.

My last day of work is Monday, so we should be able to easily get by with one car. We're going to go as long as we can with just one car, at least until after I start working again. I think it would be great if we could try to get by with just one car period, but we'll see how that goes. Cars are such a money drain, not only with the purchase cost, upkeep, and gasoline, but also insurance & licensing.

Even tho' we spent "life energy" researching and buying the new tires & radio, and getting the Subaru serviced, what it boils down to is we got to use that car for a little over 6 months for just the cost of gasoline and insurance. Not too bad.

I'll admit I'm gonna miss that HD radio tho' ... sigh.

Yessss! I can see some tomatoes!

August 27th, 2007 at 10:21 pm

Today when I was watering my tomato plants I noticed these little green bumps ... Took a closer look, and yes indeed, they are itty bitty little tomatoes.

My husband has been asking me in a teasing way whether we were ever going to see any, so I called up to him and had him come outside to take a look.

Since I am growing only the little grape tomatoes this year (since they supposedly grow well in containers), they don't have to get very big before they start ripening. I think I am going to be able to harvest some tomatoes before my move after all!

Laundry Detergent

August 26th, 2007 at 07:44 pm

When doing laundry today I started thinking about how I have never in my entire life followed the detergent manufacturer's recommendations for how much to use. Depending on the condition of the load, I use between 1/2 and 2/3 of the recommended amount, and everything always comes out perfectly clean. The only time I use close the recommended amount is when I am washing my cleaning cloths, because they are so dirty. I think it was my grandmother who taught me this trick ... She was a child of the Great Depression and learned frugality out of necessity.

I wonder how much money I have saved over the years by adjusting the amount of detergent to what I think is necessary rather than what the company with the profit motive tells me to use?

I do the same thing with dog food. I've never given my dog the full recommended amount. Even tho he gets LOTS of exercise, if I gave him the full amount recommended on the back of the bag he'd be ... well, he'd be fat and the dog food company would be richer. I monitor his weight and adjust his food volume when necessary.

Come to think of it, tho' I very rarely take over the counter meds, when I do I will usually start with a half-dose and see if that works. That is probably more about not wanting to overmedicate than with wanting to save money and resources, but it's another example of where less can be just enough.

Ebay Promo for Sellers Aug 23 & 24

August 24th, 2007 at 10:19 am

Today & tomorrow (Aug. 23 & 24) Ebay is having a promotion where you can upgrade to a 10-day listing for free. Not quite as good as free listings or 10-cent listings, but I'll take it!

http://www2.ebay.com/aw/core/200708.shtml#2007-08-22170025

Lots of Miscellaneous Stuff (Long)

August 22nd, 2007 at 04:08 pm

Haven't done a real blog entry for awhile because so much has been going on ... I've been busy and unable to organize my thoughts well ... I decided to do just one big long entry that covers a whole lot of things ... Sorry.

1. Business Closing / Moving Countdown: One-and-a-half weeks to go until I shut down my business. I've been saying many good-byes. I am glad they are spread out and not all coming at once; it's easier to take emotionally, absorbing just one or two good-byes per day. Five-and-a-half weeks until we leave for Austin. Got a free map of the USA from AAA and plotted our route on it, then hung it on the wall above my desk. It's exciting to look at it, knowing the date our new adventure begins is getting closer and closer.

2. No, I really don't have 4 weeks to prep for the move: I'll be travelling out of town for one week (going to Austin to choose an apartment, attending my alma matter's Reunion weekend, and going to my Mom's to help out with some things). I'll also have wrap-up work on my business, and my DH needs some help with his business. Also, my family is coming up for our final weekend here which of course is wonderful but takes up time. So, I estimate that gives me 2 weeks (broken up a bit here and there) to prep for the move. Should be plenty of time as long as I draw up a good plan/calendar, stick to it, and get enough help from DH. [Thank goodness I have the book "29 Days to a Smooth Move" ... It is the best resource for moves!]

3. Farewell Party: Reservation has been made; Guest list is 28; Invitations get mailed on Monday; final budget is $500. A nice restaurant near us does a very nice and reasonably-priced buffet once a month, and I chose to do our party on that day. I will pre-order some decent but moderately-priced wines and have them out on the table. Of course, people will be free to order other drinks, but knowing the wonderful group we are inviting (not a wine snob or big spender in the bunch), they will be perfectly happy with my selections. My goal is to put on an event that is both a really enjoyable event for our beloved guests and a wonderful send off for DH and I, but that doesn't break the bank. Given the plans made so far, I think all criteria will be met.

4. Ebay Sales: Still plodding along. Some things selling for more than expected, some for less, some not at all. Will be glad when it's done.

5. $20 Garden Challenge: Still enjoying plenty of fresh herbs and microgreens. It's been quite cool here, and I'm starting to wonder whether I'll actually see a tomato before the move! There have been lots of blossoms and some have dropped, but not one piece of fruit yet.

6. DC & NYC Trip: Booked my plane ticket and accomodations! I'll be travelling a total of 9 days ~ I'm so excited!!! I decided on a budget of $2,000. Yes, it's a lot of money, and yes, it will be worth every penny. I am renting a studio condo with a kitchen in downtown DC. I'll be flying from Austin to DC, and between DC and NYC I'll take the bus. [ThreeBeanSalad kindly suggested the Chinatown Bus, but I was able to find an even cheaper fare on Greyhound thanks to a fare sale, plus the scheduling with Greyhound is much better.] My younger sister & brother will be joining me in DC. They have both always wanted to go, and decided that since I was going already they may as well tag along. I'm super happy they will be coming. I'm not going to let them pitch in on the accomodations, but told them they could stay with me (my treat) in exchange for them feeding me one meal per day each. My sister will get groceries and cook dinner for me (say ... I'll have my own personal chef for a couple days ... outstanding!) and my brother will treat me to lunch while we are out sightseeing. My older sister is not going to join us because ...

7. Older Sister is Taking Baby Steps Towards Financial Security: Awhile back I wrote on the forums about how my sister's financial life was a wreck. She had to have her cat euthanized and did not have the money to pay for it. Frown
Well, since then she has made some progress but it has definitely been a "2 steps forward and 1 step back kind of thing." A big breakthrough was when she thought about joining us in DC but decided that she really should not because her priority is building up her EF. Oh yea! While it would have been great to have her with us, I really respect that she seems to be getting her priorities straight.

8. Caught Another Checkout Pricing Mistake: I know this entry so far has had a lot to do with big spending, but as I have said before I believe in focusing on the big AND small things. The other day at Office Depot when I was buying envelopes to mail the party invitations, the price rang up at $7.29 even tho' the posted price was $5.99. I had them cancel the sale and went over to customer service. They were very nice, walked over to the posted sign with me, admitted that the sign was wrong (apparently the price had increased but they hadn't changed the sign), and honored the posted sign. They also took the sign down and changed it, so I was the last person to get the envelopes at that price. [Yikes - I thought $5.99 for 50 envelopes was a huge amount of money. But I decided not to waste time & money driving to another store.] I couldn't begin to count how many times I have caught mistakes like that; I am always courteous, but never shy about letting the cashier know about the error, and I have never had a store fail to honor the posted price. Always check the prices!

9. "Subprime Mortgage Meltdown in the News": I agree with those who say, come on, what is the news?!? A few years ago when DH & I started reading about the types of mortgages people were taking out we couldn't get over how insane it was. That was years ago. Frankly, we were surprised it all didn't happen sooner; we were expecting it about a year earlier. I'm glad we sold our house when we did, and I know that this will not make me popular with people who are facing difficulties with their ARMs, but we may end up in a pretty good bargaining position when we buy our next house because we will be paying cash while other potential buyers will be facing the credit crunch. We'll either be able to get a deep discount from someone who needs to sell fast and has a shortage of potential buyers, or we may end up buying a foreclosure.
BTW, when we bought our last house we made sure that we could not only easily handle the mortgage payments, but that I could easily handle them on my own if (God forbid) something happened to my DH. My income is less than my husband's, and we thought it prudent to make sure the lesser income alone (mine) could easily support the house payments, so that I would never be in a position where I felt pressured to sell the house in a hurry. And we did refinance our mortgage once, but we refinanced for a LESSER amount and we went from a 30-yr fixed to a 15-yr fixed at a much lower rate. Never had a HELOC or a 2nd mortgage or a piggyback loan. Eventually, we paid off our mortgage early. Goodness, no one could imagine why we were being so conservative. They thought we were being downright silly. But I am here to tell you that you should never be afraid to go against the crowd, swim upstream, dance to a different drummer, etc, etc... Conventional wisdom isn't always so wise.

10. "The Jonses" Foreclosure House: I sent an Email to the bank that now owns the foreclosed house in our neighborhood letting them know we might be interested in buying it, but a real estate agent friend told me not to expect to be able to get a great deal on it, so I'm not holding my breath.

11. Feels Like Fall: I've covered a lot of ground in this post, some of it a bit heavy and/or preachy. I'll end on something light. It's been cool here, really starting to feel like fall. I have been thinking about changing my blog's color scheme to more fallish (instead of springish) colors ... But that may have to wait a bit, as I have bigger projects to tackle ...

If you actually read all of this long and rambling post, bless you!

MOMA

August 19th, 2007 at 10:25 am

Open your mind and eyes to the many opportunities to create a rich & rewarding, full & fun life that are free (or very inexpensive).

These will be different for everyone. For me, they include walking or playing with the dog, hanging out with my husband, volunteering in my community, talking with friends & family, playing games, and checking out books & DVDs from the library.

Saved $1,200! Thank you Penske!

August 14th, 2007 at 09:51 am

This morning I revisited the Penske truck rental site, because DH and I were discussing whether we could downgrade our reservation to a smaller truck (because we have been successful in selling off or getting rid of so much stuff). I ran a "test reservation" and found out the rates are down A WHOLE LOT from what they were when I reserved our truck. [I booked with Penske because their rates were much less than the other truck rental companies, especially considering I got a 22% combined discount for booking on-line and being a AAA member.] I called Penske to see if I could cancel our reservation and re-book, and they said that they could adjust to the new rate for us, and still apply the Web discount and the AAA discount. On top of that, even tho' the rate for a car carrier had increased I could stay locked in at the old (lower) rate. So, in about 30 minutes time this morning, I saved $1,200! Wow - Thank you Penske!

Of course I was excited, and I also loved how my DH got excited when I told him! [In our marriage, we both play offense and defense, but he's definitely the 'head of the offensive team' while I'm definitely 'defensive coordinator.' It's really motivating for me when he appreciates my efforts to save money every chance I get.]

In other relocation news:
- The charitable donation guys did a swing through our neighborhood yesterday & I put out one more big box of stuff for them to pick up.
- We freecycled away some big heavy storage units that were in our garage... No way did we want to move those! So glad that we won't have to deal with them, and that someone else can put them to good use.
- When getting the donation box put together, I found a few more items to list on Ebay. I really need to keep chomping away at that elephant...
- The half.com sales continue to trickle in. And I've decided that once the final Ebay sale is shipped off, the half.com sales will stop too. Any books that are left will get boxed up and taken to HalfPrice Books. As long as I'm going to the Post Office to ship Ebay stuff, I might as well keep selling on Half.com. But once the Ebay sales are finished, no more runs to the Post Office.
- We're continuing to let things run down and run out. I'll admit that I'll be glad when we get to Austin and I can just go to Costco and buy one great big container of laundry detergent instead of standing in Fred Meyer trying to estimate how many more loads of wash I'll be doing before our move!

Don't Let Anyone Else Tell You How To Invest (or, Dear Vanguard, I Love You!)

August 12th, 2007 at 09:37 am

About a year ago, my DH and I decided to take a "big picture" look at our investments, and as part of that process we consulted with both Vanguard & another company that I will refer to as "TRP" Smile hehe

We explained our situation and why our risk tolerance is lower than what the "Average Joe's" might be, and what our target asset allocation is.

Vanguard took our information and gave us a very fine recommended portfolio based completely on what we told them.

TRP was a bit different. They asked us "Where do you think high-yield bonds fit in your investment strategy?" to which I repied "You mean junk bonds, right? They just aren't for us. We're not interested at all." They then proceeded to explain how their company's philosophy was that "high-yield" bonds had a place in every investor's portfolio, and then asked if they could go ahead and send us some information on them. I was starting to think "What part of 'no' don't you understand?" but just to keep the conversation moving along I told them fine, they could send the information. You can guess what I did with that info when it arrived --- straight to the recycling bin without a second glance!

After those conversations, DH & I decided that Vanguard is the company for us! It wasn't that TRP was overly pushy or sleazy, and I'm sure they do a bang-up job for lots of folks, but it was like they didn't really listen to what we had to say and tried to squeeze us in to a "one size fits all" plan. Vanguard on the other hand listened to us and believed us when we told them what we wanted!

This morning I was reading in the Business section of the paper about how investments in high-yield bonds are really taking a hit. I'm so glad we stayed true to ourselves and stuck with our conservative investments. In the end, we are the ones who have to live with the consequences. We've been sleeping just fine at night.

Don't ever let anyone else tell you how to invest! Listen to people's opinions and advice, certainly, but at the end of the day no one knows better than you what is right for you.

Chomping away at the Elephant

August 11th, 2007 at 04:29 pm

13 items listed on Ebay in the past 2 days --- I think that's about 1/3 of everything. I'd like to get everything else listed in the next 6 days, so that the auctions can end and we can get everything shipped off by the end of the month. Chomp ... chomp ... chomp ... burp.

The Fed pushed me off the Fence

August 10th, 2007 at 09:41 pm

I'd been sitting on the fence about whether to keep some cash in MMA's, move some to CD's, or wait to see if the yields on Treasuries went up. When the Fed decided to pump $38 billion in to the US economy today, I decided it was time to get off the fence. Expecting yields on Treasuries to be down immediately, and expecting yields on MMA's and CD's to go down very soon, I went ahead and got 2 six-month CD's (at 2 different banks) today. I would have gone for longer terms but my DH will need some of that cash in about 9 months for his business, and I'm also trying to keep things semi-liquid for when we buy a house (and who knows when that will be). Well, thank you, Fed, at least now the decision is made and I don't have to think about it anymore!

How do you eat an elephant?

August 10th, 2007 at 10:02 am

Q: How do you eat an elephant?
A: One bite at a time!

I have a small-size elephant I need to eat this month.

Two days ago I packed up 3 big boxes of things I wanted to get sold on Ebay prior to our move and hauled them off to a "Trading Post" that I found through Ebay. I thought this would be a way to get that project completed easily, even tho' it would mean paying a rather hefty commission. The trading post's info included a physical address and drop-off hours, with no mention of restrictions on items, in fact they said that they will sell anything. Turns out the address was just for a UPS store. I called the phone number for the company from the parking lot. They told me that they are a national company, and that the UPS store would ship the things to them, but that I had to open an account with them and each item had to be worth at least $30. Forget about that!

Chalk that up as another "live and learn" experience. So, I am going to list and sell those items myself, which is a rather big project to be tackling this close to the move.

The biggest hurdle I faced was getting packaging materials for everything. I know Ebay and the USPS have linked up to send free Priority Mail boxes to your house, but when I had checked several months ago it was for some huge number of boxes (like 50 for each size), and I had of course thought ahead and wondered what on earth I would do with all of the leftover boxes not to mention where would I keep them?

Well, the "where to keep them" part is easy now. I have already sold off so much through Craigslist and our garage sale in May that I have plenty of room.

And, I was most pleasantly surprised to find out that it is now possible to order the free boxes in multiples of 10. Yea! So, I ordered 10 of each size, and went ahead and listed a few things last night. I'll keep listing a few every day, as many as I can. Since DH's business has slowed down, he'll be the one making the post office runs when it is time to ship things.

I'll just keep reminding myself, one bite at a time. Even if I just get one listing done, that's still something.

Half Price Bread Rack

August 9th, 2007 at 09:37 am

Yesterday when I went grocery shopping, bread was on my list.

I always stop off at the half-price (day old) bread rack first to see what they have. I try to eat healthy, so I only buy 100% whole grain bread with no corn syrup. If there is something on the half-price rack that meets my criteria I will buy it; if not, I move on to the "regularly-priced aisle" to see what might be on sale. I'd say 2/3 or more of the bread I buy is from the half-price rack.

Yesterday there was a 4-pack of bagels on the half-price rack that fit the bill, so I bought those. [Shared one with DH this morning and it was delicious. I left one on the counter for tomorrow and put the other 2 in the fridge so they'll keep until I eat them.]

I realized that I have never seen anyone else buying things off of the half-price bread rack, even tho' I see them cruising the bread section all the time. In fact, I've never even seen anyone stop to look at it. Obviously things on that rack sell or the store wouldn't have it, and I am grateful that it's not more popular because it means I'm more likely to find something for myself there, but I can't for the life of me figure out why so many people won't buy off of it.

Bread can keep for a long time if you put it in the refrigerator. It is true that it gets a bit dried out that way, but it's perfectly OK if you're not a bread snob. It's not at all a health hazard, and it tastes just fine!

Why don't folks buy it? Are they unwilling to compromise one day's worth of freshness to save some money? Are they embarassed to be seen buying day-old bread? Do they think that saving a buck here & there doesn't add up? So many of here on this site are living proof that it does!

Counting Down

August 7th, 2007 at 08:06 am

Yesterday was a milestone in my 2 major countdowns:
- Exactly 4 weeks until my final client visit (I'll still have some "wrap up" work to do after that, but won't be making any more money from my business)
- Exactly 8 weeks until we depart for Austin

Add to that a broken fridge/freezer, dealing with some tax stuff from DH's business, trying to plan a couple of trips, planning a good-bye party and final visit from Mom & brother, plus starting to get the "we want to get together with you before you leave" invites and I'll admit that I've begun to feel a bit overwhelmed. I made long lists of the things I need to do, and am working on a master calendar. Once everything is laid out in front of me I'll probably still feel a bit overwhelmed but much more able to cope.

I decided to do the following to help cope as well:
- I am no longer tracking the $$$ amount of my pre-relocation sell off. I already exceeded my goal of $3,000, the amounts I'm making now are relatively small (no more furniture), and the most important thing at this point is that I "just get 'er done" rather than tracking the results. I'll probably do a final rough estimate, but no longer feel the need to input everytime I sell a book through Half.com
- I am going to gather up the things I still want to list on Ebay and take them off to a Trading Post and let them sell everything for me. Yes, they'll take a big chunk as their commission, but once again at this stage in the game the main thing is to "get 'er done."
- DH is going to get hit with a great big "Honey Do" list when he returns from his business trip on Wednesday. On previous moves, pretty much all he has had to do was show up on moving day to load and drive the truck. Not this time! Smile

Behold the Power of the Blog!

August 5th, 2007 at 08:14 am

Isn't it amazing what you can do when you commit to doing it in writing on a public forum?

I have completed 6 days of my 9-day commitment to eat only foods that I have on hand in the fridge, freezer, and pantry. No trips to the grocery store, no takeout, no restaurants. And it looks like I will make it the full 9 days in spite of being thrown a curveball:

On day 3 the refrigerator & freezer went on the fritz and stopped cooling completely! The temp in the fridge went up and then held at 50F, and the temp in the freezer is holding at 20F.

I have been "triaging" the order I eat things, and since I do not want to take a chance on getting sick I did throw away quite a bit from the fridge: chicken sausage, eggs, Egg Beaters, milk, and mayo. I had really been counting on those things to give me protein during these 9 days! Oh, well. Life happens.

I am assuming that things with plenty of sugar, salt, or vinegar are going to be okay. The things in the freezer are all safe, tho definitely have lost quality and general appeal because they are partially defrosted. [Last night I baked some sweet potato fries that turned out semi-mushy because they were only half-frozen when they went in the oven.]

The repair company is coming on Tuesday, so hopefully the fridge will be fully functional by the time DH returns home.

I will admit that if the fridge/freezer had completely stopped working and everything in it had to be dumped, I probably would have let myself go the store and restock.

I am going to have to deal with getting reimbursed for the repair from our friend/landlord who lives overseas. In the past we just deducted any house-related expenses (we had to get the garage door repaired twice, and we paid his property tax bills for him) from the following month's rent, but we had prepaid our final month's rent so we don't owe him any more money. We'll see how that goes ...

P.S. In the interest of "full disclosure," I did buy a glass of lemonade from the lemonade stand of one of my client's daughters, but I'm not counting that as a takeout purchase but rather "PR for the business." Smile

The Jonses Lost Their House Today

August 3rd, 2007 at 09:07 pm

Today at foreclosure auction my neighbors "The Jonses" (not their real names of course) lost their house.

I've been following what has been happening with this house for the past 6 months, and dug in to the records available on-line, because I am interested in buying it. [Even tho' DH and I are planning to relocate to Texas in 2 months, we have been keeping an eye on the local real estate market and are would gladly stay here if we found a screaming deal on a house.]

The real estate market in my area has definitely cooled off, but it is not the disaster that it is in some other parts of the country, so foreclosures in the neighborhood are not an everyday occurence.

If this were a case of "poor, naive borrowers ripped off by an unscrupulous mortgage company" I would not tell this story. But this is a clear example of people not just trying to keep up with the Jonses but trying to BE the Jonses, and it is my hope that by sharing it anyone who is living beyond their means or living paycheck to paycheck will stop and think about their lifestyle and the consequences.

There can be no doubt that Mr. Jones is an extremely intelligent, healthy, sane man. He would not be able to have the job he had if he were not. He also made a top-drawer salary. [No, I do not know exactly what his take-home pay was, but it is public knowledge what people in his profession make and his salary was top-tier.] Mrs. Jones is a lovely woman who is always impeccably coiffed and dressed fashionably but tastefully.

The Jonses drive late-model European luxury cars that are always spic and span.

Their home is their pride and joy, and they wanted nothing but the finest in upgrades. Even tho' the house was brand new and perfectly fine by most people's standards, when they bought it 3-1/2 years ago, they had many features (sinks, light fixtures, cabinets, flooring) ripped out and replaced with top-of-the-line items before they moved in. Their kitchen appliances are the type Martha Stewart might have in her home. They turned one bedroom in to a well-equipped home gym, and they have a TV that takes up an entire wall in one room.

Mr. Jonses' yard is the envy of his neighboors. He maintains it perfectly, thanks in part to his ~$3K mower that makes it look like a golf course. [Yes, at least one neighbor went out and bought the same machine, perhaps out of envy over his neighbor's grass? And yes, even I asked about it and went on-line to see how much it cost thinking my DH might like one ... And NO, after seeing the price, I most definitely did not buy one.]


The Jonses were the envy of the neighborhood, the ones some others tried to keep up with, and the subject of much admiring (and probably slightly jealous) talk.

But talk about a huge difference between appearances and reality! What I learned from digging in to publicly-available records is that the Jonses not only refinanced their home about 4 times over the course of 3 years, they currently have a whopping THREE Deeds of Trust on the house. There are not only the 1st and 2nd mortgages, it looks like maybe there was a piggyback loan to cover the original downpayment. And each time they refinanced they increased the principal balance. This means they used their home as the proverbial "piggy bank" which no doubt is how they paid for the luxury cars, appliances, tools, fixtures, and who knows what else.

About a year ago, Mr. Jones and his employer parted ways. Circumstances are unknown. According to Mr. Jones, it was his choice because he plans to start his own company. Whether this is true or not is not certain, but the new company is not yet launched so I have my doubts.

A few months after that, foreclosure proceedings were begun. The Jonses listed their house on the market and tried to sell it, but they did not have any luck. I know they had at least one offer. It was a lowball offer from my DH and I, that we made when we thought there was only 1 mortgage on the house. Now we know why they didn't even bother to counter. They weren't able to be very flexible in their pricing because they owe about 98% of their asking price on the 3 Deeds of Trust. That does not include the delinquent property taxes, nor what they would have to pay in sales taxes and real estate commissions. [Naturally, they went with a full-commission agent, even tho there are discount agents available in our area. Nothing but the best, right?]

The foreclosure auction was continued (postponed) once, but the 2nd scheduled auction date was today and the house was auctioned off. Of course, no one wanted to bid on a house with so much outstanding debt, so the house was "reverted to the beneficiary" which means that the bank now owns it.

The Jonses are really, really nice people. While I definitely hold them responsible for what has happened to them, I wish them well and hope they can pull themselves out of the quagmire they are in. I hope they will move out of their house and leave with dignity. It would be a real shame for the neighbors to see them being forced out by Sherriffs deputies.

There are SO MANY lessons to be learned from this story and I'm sure you can figure them out for yourselves ...

Journey to BalAff - 1st Quarter Results & 2nd Quarter Goals

August 2nd, 2007 at 09:47 am

Since I don't want to give Broken Arrow too much of a big head, I will try to remember to title my entries related to my "Journey to Balance Sheet Affluent" something other than "Journey to BA" Smile

Well, even tho' I revised my goal upwards by quite a bit, we still managed to exceed our 1st quarter goal quite handily. Our current estimated* Net Worth is 1.51 times our expected net worth according to the "Balance Sheet Affluent" formula [Age x .112 x Total Realized Annual Income].

*I say estimated because the current balance in DH's business account is just a rough estimate. Just before he left on a business trip, I asked him, "How much do you have in your business account, minus what you owe, plus what people owe you" and he gave me a very round figure as he did not have the time to calculate it precisely. After he gets back and gets all caught up, I will be able to get a precise number from him. Also, DH took all of our foreign currency with him on his trip, so I entered that amount as "zero" even tho' I expect he will bring some back with him.

These are the things that helped us on the positive side this quarter:
- DH's business has been excellent [His busiest season falls in this quarter, and it has been a very good year]
- My little business had been pretty good too
- We got the money from our garage sale in May, plus additional funds have come in steadily from Half.com
- I made $20 on Pinecone surveys ... Hey every little bit counts, right? Wink I am one who believes in focusing on the big AND small things when it comes to personal finance
- Interest earnings: I have gotten our bank accounts (MMAs and CDs) narrowed down to a few banks that have consistently offered the best rates over time. I may not be getting the very best available rate at any given moment, but I'm also not seeing my rates suddenly drop or having lag time waiting for funds to get transferred from one institution to another.
- Mutual Fund Investments: Our choices are quite conservative, and the results for the quarter were fine.

Necessary but unusual expenses this quarter (and there are always going to be some unusual expenses, so we have to anticipate them) were:
- Car repair
- New tires for car
- Teeth cleaning for dog
Unnecessary but very nice "want" purchases this quarter were:
- New radio & speakers for car
- New driver for DH (to replace his old one which had cracked)

My "Journey to BA" goals for this 2nd quarter are primarily related to our relocation:
- Finish pre-relocation sell off
- Keep relocation expenses as low as possible (the less stuff to move the better; keep costs while on the road down)
- When chosing a rental in the Austin area, choose a cheap one!!! [It is so tempting to go for something nicer, but I must remember that it is only temporary housing and it makes no sense at all to spend a lot of money on a rental.]