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Archive for November, 2007

Pyramid Scheme Friends

November 29th, 2007 at 05:20 pm

Caution - Vent ahead ...

An acquaintance of DH's just called him for the 2nd time in about 6 years. The guy just started some natural supplement marketing program that sounds and awful lot like a pyramid scheme. Tried to sell DH on going to a marketing pitch ... er, I mean "free lunch." Last time the guy called DH was about 3 years ago, also when he had just gotten in to a similar scheme. [Wonder why he's not still doing that one? Hmmmm.....]

This guy didn't even know we weren't in Seattle anymore!

Blech --- Does it bother all of you as much as it bothers me that someone would call you up only when they are trying to sell you on something? Blech, blech, blech.

And doesn't this guy realize what a smart fellow my DH is? He would never get sucked in to such a scheme, so why waste his time calling?

Okay - I feel better now - Thanks for listening! Smile

I Did It!

November 28th, 2007 at 12:54 pm

I just sent off my resume with an on-line job application! Big deal, right?

Well ... In my "career life" I got one job right out of college that I kept for almost 17 years (survived 2 mergers and moved steadily up the ladder); did a couple temp jobs in-between that didn't have very strenuous hiring procedures; then I started my own business.

So, it has been ages and AGES since I sent out a serious resume. Mine was kind of dusty! Feels good to have it dusted off.

Hiring has sure changed quite a bit with the whole on-line application business. [When I got my first job out of college, our office did not even have a PC. We had a typewriter, a fax, and a teletype machine.]

The job I applied for is a temporary government position. I don't know if I'll be offered a job or if I'll even want it if I am offered it, but I thought I'd give it a shot!

I like that it is TEMPORARY. Since we haven't bought a house yet, I don't know what part of Austin we'll be settling in, so I haven't started looking for full-time, permanent work yet. And to tell you the truth I really enjoyed being self-employed, so I may decide to go that route again.

It feels good to have pushed myself to try something new.

Nice Splurge Yesterday

November 28th, 2007 at 05:44 am

We don't eat out very often, so it was a nice splurge for us yesterday when we had lunch at Costco after finishing our shopping there. DH had the hot dog & soda combo, and I had a slice of pizza. The total bill for the 2 of us, including tax, was $3.78. Not a bad price tag for a splurge!

House Hunting = Fun! (HA!)

November 27th, 2007 at 07:22 am

Awhile back I mentioned that I had found a foreclosure house that we would probably be able to get at a greatly discounted price, but that needed to have semi-serious some work done. This house is in a desirable, established neighborhood and has "good bones" but it has some issues that are probably due to the fact that the people were losing their home and just stopped keeping it up.

Took DH to see it ... He looked at it for about 2 minutes and said "NO WAY."

Okey-dokey ... At least now I know that he didn't really mean it when he said he was willing to buy a fixer if it was a great deal!!!

We've been doing TONS of looking together the past week, and I've concluded that, in spite of what he says, he will really only seriously consider a brand new or almost new house that is in great condition. Okay; that's easy; I just automatically rule out any houses over 3-4 years old.

But he has also been showing interest in houses that are significantly higher in price than what we had talked about originally. [Interestingly, my target price that a couple months ago was "way too high" according to DH is now too low according to the same guy! ]

He found one house in particular that he is quite smitten with. I had been in the neighborhood and liked it, and suggested that DH go take a look. There was one house in particular I mentioned he should look at. When DH was on his way home from visiting that neighborhood, he called me. I asked him what he thought of the house and he said ... "Let's talk about it when I get home." All I could think was "Oh-oh!!!" When he got home, he was all sweet, asking if he could pour me a glass of wine, etc. All I could think was "Oh crap! What is he cooking up in that brain of his?" Well, turns out he visited several houses in the neighborhood and fell hard for one that is significantly higher $$ than what we have been looking at.

He took me out to see it, and to tell you the truth, other than being larger than what we would ideally like, it is a perfect house.

So I started crunching numbers. I guess I was hoping the numbers would say that the house wasn't remotely doable for us. Well, it's doable, and doable comfortably, according to the established rules of thumb. Motgage amount isn't a problem, since we'd be paying cash. House price would be no more than 2.5 times our average annual income (and probably more around 2.3 times, if we can get the price we think/hope we can). Property tax payments and upkeep are affordable. We'd still have plenty of cash reserves to keep DH's business running smoothly. We'd still have at least a year of expenses in our EF.

The sticking points for me are that the house would represent a larger percentage of our net worth than what I would like to see (I was shooting for no more than 25% but this house would be about 30% of NW), and we would lose the interest income on the money that would go in to the house. This last one's a biggie.

So, we are grappling with the question that everyone does (or certainly should) when they think about buying a house: What is most important for me when it comes to buying a house?

Since lists help me sort out my thoughts, I made a list of most important features of a purchased house. (If you can think of others, please let me know.):

- The price is cheap = Finances will be very comfortable

- The price can be had for significantly under market (it's a "good deal")

- The house has good investment potential

- The house is brand new or nearly new, in pristine condition

- The house is low-maintenance for an easy lifestlye (think condo as the easiest and go up from there)

- The house is small and/or energy-efficient = good for our planet

- The house is in a good location (safe, nice neighbors, easy to get to where you need to go)

- The house is the sort you would get a lot of pleasure living in = It's what "gorgeous" looks like to you

Both DH and I are struggling to figure out which qualities are must-haves for us. Of course, we'd love a house that is "all of the above" but we are realistic enough to know that at most we can hope to get half of those qualities.

DH reminded me that I am more practical-minded, and that he is more likely to use his 6th sense about these things (makes us a good team, I guess). Fact is, his 6th sense has resulted in some pretty good decisions for us so far. However, I know it would be foolish to make the biggest purchase of your life without really thinking it through first.

So ..... Am I being too cautious/conservative? ..... Is he developing "eyes bigger than his stomach?" ..... Will it take us another 2 years to buy a house? ..... Stay tuned.

Black Friday = Big Fakeout?

November 23rd, 2007 at 08:59 am

I've never once shopped on Black Friday --- Generally speaking, I'd rather have elective surgery than face the crowds! Smile

However, since moving to Austin, DH & I have been talking about getting a GPS to help us navigate the maze of roads here (it would be especially useful in our house-hunting efforts), so I contemplated putting on my shopping armour and fighting the hoardes if I could find a screaming deal.

I've been reading up and know what sorts of features are desirable, and got a general idea of prices. When yesterday's paper came I went through all the advertisements and looked at all GPS on sale. I looked at everything, including (but not limited to) the door busters.

Generally speaking, the sale prices were not any better than what I could find on-line or elsewhere. There was one door buster item that was $30 less than the next-cheapest price (and $30 is not an inconsiderable savings, so I would have been willing to muster my courage and venture out), but the model that was offered in that case wasn't very highly rated and seemed to be an out-dated and not very desirable model.

I started thinking that Black Friday is just a bunch of hype, and that people aren't really getting the deals they are lead (by the retailers and even the media) to believe they are.

End result = I'm still sitting here at home, blogging. My record of never once shopping on Black Friday stands.

P.S. - Maybe I'll find the sort of deal I'm looking for on Craigslist after the holidays, when someone is trying to unload an unwanted gift or has buyer's remorse??? If anyone wants to unload a good GPS at a fantastically discounted price, let me know!

Freedom From Want

November 21st, 2007 at 07:49 am

Most Americans are familiar with Norman Rockwell's beautiful picture, "Freedom From Want" showing a family sitting down to a bountiful turkey dinner. It was part of a series titled "The Four Freedoms": Freedom to Worship, Freedom from Fear, Freedom from Want and Freedom of Speech.

In my late-20's or early-30's I finally figured out that the secret to achieving Freedom From Want is not in getting more stuff but in wanting less. I have my health, a wonderful husband, a precious dog, a loving family, a roof over my head, and plenty to eat. Everything else is just icing on the cake. I am blessed and very thankful.

Happy Thanksgiving Everyone!

P.S. - If you aren't familiar with it, here is a link to the picture:

http://www.normanrockwellvt.com/NewsletterIssues/FreedomfromWant.htm

DC & NYC Vacation: WOW!

November 19th, 2007 at 09:33 am

Last night I returned from a 9-day trip to Washington DC and NYC. It was a wonderful trip full of fantastic experiences. If they are able to, I highly recommend that every US citizen visit Washington DC once in their lifetime. I believed that before I went there (that is why I planned for a long time and set money aside for the trip), and now that I have actually been there I believe it even more strongly.

We visited the Memorials on The Mall (it was Veteran's Day Weekend, so there were many veterans there; as you can imagine that made it even more emotionally moving than it already is --- fortunately, we had packed our tissues). We toured the Capitol building and Botanic Gardens, the National Archives (where we saw the original Declaration of Independence, Constitution, and Bill of Rights), the National Portrait Gallery, Air & Space Museum, Museum of Natural History, Museum of African Art, and the Sculpture Garden. We saw the Zero Milestone, the Library of Congress, the Supreme Court, Lafayette Square, St. John's Church, Decatur House, and the White House from the front and back (yes - we stood there with the other tourists, gawking through the fence). We shared DC-themed ghost stories in the evenings after dinner (I read up on them before the trip). We ate pizza at Union Station. We sat on a bench on The Mall, eating Carousel Dogs, with views of the Washington Memorial in one direction, and the Capitol in the other. We even saw a drug bust going on next to the Potomac River! Smile We spent an absolutely delightful day at Mount Vernon.

In NYC, I wanted to just hang out with my family, and that is exactly what I did. In DC I played tourist, but in NYC it was all about loved ones. The only excursion we made was to a neighborhood park. Coloring pictures and playing games and musical instruments with my niece and nephew was much more rewarding than sightseeing or going shopping!

Of course, this trip cost money. I had set aside $2,000 for the trip, and then shortly before the trip I pencilled out a budget of $1,734. I actually spent $1,511 so far (I still have to get my pictures developed, but even after I have done that I'll be at least $200 under budget). Overall, I am pleased with my spendings. I did everything that I wanted to do to have a fantastic experience. I economized where I reasonably could (by walking and taking public transportation, and eating breakfast & dinner at our rental, for example), but also enjoyed some pleasant splurges that I would never do in my everyday life (such as buying a butterscotch sundae in the middle of the afternoon). Here are my numbers, budgeted and actual. There is only one item on this list that bothers me: I had purchased a bus ticket on-line at a great sale price, but I screwed up my reservation and I had to reissue it at full fare plus a $4 service charge. That was $38 spent completely needlessly, and since it was due to my own carelessness, it does bother me. But, looking at the big picture of my total expenditures, I think I did pretty well.

Mileage to & from the airport (DH drove me there & picked me up) = $48 Budgeted & Actual
Airfare = $311 Budgeted & Actual
Lodging = $840 Budgeted & Actual
Bus between DC & NYC = $35 Budgeted (Actual = $73 --- Ouch!!!)
Food & Beverages = $180 Budgeted (Actual = $101)
Local Transportation (Shuttle bus, Metro) = $70 Budgeted (Actual = $47)
Admissions = $25 Budgeted (Actual = $13)
Film & Photo Development = $30Budgeted (Actual = $5 + Photo Develeopment, not done yet)
Gifts = $100 Budgeted (Actual = $48)
Souveniers = $50 Budgeted (Actual = $25)
Misc = $45 Budgeted (Actual = $0)

THANKS AGAIN to all of the SA members who offered money-saving tips and advice on what to see!!! You all really helped in my trip prep!

DEBT: Thinking beyond the slogans

November 8th, 2007 at 09:53 am

Warning ... This post may be viewed by some as a rant, but I don't mean it that way. It is meant to start a dialogue about thinking beyond the catchy slogans when it comes to discussions about debt.

There was a thread over on the forums recently where someone got on their high horse preaching about being debt-free.
It is easy to say "I want to be completely debt-free" but if you stop and really think about it deeply, you will realize how totally impractical that is.

Yes, it is 100% possible to pay as you go with cash for consumer purchases and avoid debt that way. Yes, it is definitely possible to save up and pay cash for major purchases such as appliances and cars. And I suppose that, yes, you could even save long and hard and pay cash for college and for your very first home (or just not buy a house and rent forever)...But really, how practical is that?

Like many of you, I prefer not to have personal debt. I am one of those who paid off my mortgage early. I don't carry a balance on my credit cards; I have no personal loans (no student loans, no car loans, nada). But I am not going to run around spewing the anti-debt slogans that I heard on some talk radio show, because I realize that debt has a place in our society, and sometimes it is very positive.

So, this is for those of you who want to preach about being anti-debt ... here is something to think about, if you are capable of opening your ears and mind wide enough: If you are really and truly going to promote a debt-free lifestyle, then shouldn't you be voting "NO" on every school, hospital, highway, and library bond that appears on your voter's ballot? Don't you realize that when you vote to approve a bond for public works, you are voting FOR DEBT?!? Shouldn't you be going to school board meeting and insisting that the children in your district attend school in run-down and outdated buildings until the district has enough cash saved up to pay for a new one? Shouldn't you be advocating that residents be allowed to die instead of upgrading hospitals with DEBT?

Sure, it would be fantastic if our local governments had enough reserves to pay cash for everything, but that is a pie-in-the-sky dream. Are you willing to make children, the ill, and yourself suffer until that fantasy day comes?

A Very Lucky Day

November 6th, 2007 at 06:36 pm

Lady Luck smiled on me 3 times today. The lucky events, in order of increasing importance:

1. I found organic frozen Earth's Best waffles on clearance at Target for $1 a box, and they even have a cute picture of Cookie Monster on the carton! Smile

2. DH returned from an overseas business trip, bearing gifts from family and associates as he always does. I know this will sound ungrateful, but often the gifts are something I neither want nor need and I have to find a way to get rid of them (donate, pass on to someone else, or sell), but this time they were absolutely perfect: A bit of cash (from his mom ... I wish she wouldn't but I can't find a gracious way to tell her not to), some chocolates (yee-haw!), and 6 pairs of socks! I am so low on socks and now I don't have to buy them --- They were exactly what I needed!

3. Now for the real doozy: As soon as we got back from the airport (after picking DH up) he wanted to check the oil in the car and told me to go on inside since it was cold. 2-1/2 hours later I went outside to find he had left the car doors wide open with his briefcase sitting on the back seat!!!!! Yes - there was cash in the briefcase, and yes, it was still there. Oh my goodness, that was a close call. I have no idea how many people drove by who could have just grabbed that briefcase and ran, but none of them did, and I am so grateful. Note to self: Do not leave DH alone with valuables when he is jet-lagged!

They say bad news comes in 3's. Maybe good luck does too.

New Health Insurance Policy

November 2nd, 2007 at 06:03 pm

Yea - The certificate of coverage and paperwork for our new health insurance policy arrived in the mail today! Having it in my hands is reassuring!

DH is self-employed so we have to purchase our own health insurance. The company we were insured with in Washington does not offer coverage in Texas, so we had to find a new company.

As a non-native English speaker, issues like choosing health insurance are things DH is more than happy to leave to me. (Heck, "Insurancese" is hard enough to figure out for those of us who speak English as a first language, right?)

Since this was my responsibility, and since I believe adequate insurance coverage is an essential part of our financial plan, it was a relief to open the envelope and find the certificate.

A newspaper article I clipped awhile back offered some very good advice on finding an individual policy. I ended up using www.ehealthinsurance.com to get quotes. I had wanted to go with Blue Cross / Blue Shield since they were rated A+ by AM Best, but they had some odd requirements that seemed to be saying "non-U.S. citizens need not apply," so I decided to go with United Healthcare which has an A rating. After some mind-numbing reading about coverage under different policies, I made my choice.

I decided to go with a high-deductible, HSA-eligible plan. [This is the first time we have had that type of plan.] Our premiums are a whopping $321 per month less that what they used to be. We will be funding our HSA up to the maximum amount allowed, so that is where the money we save on the premiums will be going.

Now I just need to choose where to set up our HSA (Health Savings Account). I am leaning towards HSA Bank because it's recommended by Kiplinger's. If anyone has had an HSA and can make recommendations, please chime in.

Anyway ... I know this is a very boring entry, but gosh, don't you all feel good when you get those really important financial tasks completed??? I sure do.

Quarterly Results, Journey to Balance Sheet Affluent

November 2nd, 2007 at 08:15 am

Here's a brief recap ... In "The Millionaire Mind" author Thomas Stanley outlines the following formula:

Age x .112 x Annual Realized Household Income = Expected Net Worth

Households with at least 2 times their Expected Net Worth are considered "Balance Sheet Affluent" (or BA).

My goal is for my household to be BA by the time my husband is 50. Then, I think I will feel confident giving DH the green light to go ahead and pursue his lifelong dream of trying out for the Champions (senior) golf tour.

And now for the results for the quarter ended 10/31/07: We are now 1.569 times expected net worth. My goal was 1.435, and I had allowed for our number to decrease this quarter, but it actually increased. Why the better-than expected results?

Expenses: Savings on expenses was the number one reason. Moving expenses were substantially lower than budgeted - This was due to a combination of planning and hard work plus a bit of luck. We did not have to pay rent in September because we had prepaid last month's rent at the start of our lease. Our rent here is Austin is less than half what our rent was in Seattle, not only because the area is less expensive but because we are living in very small temporary quarters to keep costs down. We are down to just one car, which saves on insurance and upkeep.

Income: We sold one of our cars. My little business made a fair amount more in it's final month than I had expected. DH's business is past it's peak period for the year but still he's doing pretty well.

It's nice to be ahead this early on. There is room to have some setbacks and still meet the goal. It's going to get tougher meeting the quarterly goals because passive income will be down due to lower interest rates. We've already scouted out the best rates available, and we can't control what the Fed does, so there's no point in dwelling on this. It can't be helped.

Focusing on what I can control, my goals for the coming months are: 1) to find a fantastic bargain on a house and 2) to line up some temporary work as soon as possible after I return from my trip to DC next month.

I toured a very interesting REO (foreclosed & now owned by the bank) home yesterday; it needs some serious work done to it, and it doesn't meet my "dream home" criteria, but I think it does meet my top 3 requirements (can be purchased well below market + a nice place to live + a good investment). I'm going to take DH through it to see what he thinks; if he is up to the challenge of buying a semi-fixer, then I think we'll go ahead and have an inspection done and get some ballpark numbers for repairs and renovations, then perhaps go ahead and make an offer.

I've also identified a position I'm going to apply for. It is a 3-1/2 month temporary position. Not only do I think it would be interesting work, I like the idea of a temp job because it will give me a chance to see how I feel about being an employee again (after being self-employed for 4 years) and I don't want to take anything permanent until I know exactly where we will be living (so that I can factor in commute time when deciding where I want to work).

What I know for sure is that having a specific "big picture" goal, specific intermittent (quarterly goals), and checking my net worth at the end of every month really helps keep me focused. So does this blog and all of the great tips I pick up from you all! Thanks!