Things I’ve learned lately: MONEY

I’ve covered the basics and some of our story and psychology around money here before, so if you need a refresher take a minute to read this gigantic post from 2016.

Now, here’s my disclaimer. Please take this with a grain of salt. We started out very differently than so many of other business owners/professionals. Neither Aaron nor myself had any debt of any kind when we got engaged (We didn’t go to college, ergo no school loans). We bought our first house together before we were married …

Since 2016 we’ve sold those businesses Aaron owned, bought and sold a few homes, moved our primary residence, became landlords, and learned a lot along the way.

Let’s discuss:

A year ago we were still having the “Buy vs Rent” conversation with anyone who asked us what we thought. “Definitely buy a house, it’s the better investment,” we would offer. “Here’s how you invest in yourself to start flipping houses.” “The first one is always the most risky, because it’s moving forward with this big idea you have and seeing what happens next.”

Since then, I’ve found a few more voices in the personal finance realm that have made really good points and caused me to go: Huh. I no longer think rushing to buy a house is the better investment. I actually know this from our experience of renting for 2 years (2010-2012) and how freeing it was to have one line item dedicated to housing in our budget: RENT. That was it, pay it and be done. Live here but also live every where else you are because you’re not focused on fixing, building, changing or keeping a house up.

Money with Katie and Her First 100K are great follows on the ‘gram. I also love their podcasts, and Money with Katie’s website is a treasure trove of information for a geek like me.

We were big Dave Ramsey fans for a long time and he still has his place in personal finance. People who go through his courses know how well it works but there’s also so much shame in those conversations. I honestly didn’t know there were women who were talking about this. Investments and graphs, budgets and tax strategies. I found them this year and it’s been amazing to read, listen and watch how they talk about money.

Like, I don’t think credit cards are the devils semen just waiting to impregnate our life with bad decisions. We have, and use, credit cards. We pay them off entirely every month and if you aren’t up for that kind of responsibility, then yea, don’t have one. But there are so many upsides to them if you’re willing to keep track of your financial life.

Ok, now that we’ve got some of that out there … let’s dive in a little deeper. I’ll ramble about few areas of our personal finances; Owning Rentals, Future Goals and Strategies, my personal favorite – Currency, and I’ll wrap it up with my favorite Financial Tools.

Owning Rentals

We have 4 doors (3 properties, one is a duplex). We knew we wanted to own a few rental properties but didn’t know how to get started. It seemed like a lot of saving and waiting to be able to “get in” the rental market. You need a larger down payment for a mortgage on a rental property, the rates are higher, and there are hidden fees and taxes you have to pay right away. More inspections, complying with the City guidelines, Rental Certificates … etc. Not to mention when things go wrong, you get the call and you have to fix it or pay to have it fixed in a timely manner.

We started telling our neighbors that if they were interested in selling their homes, we’d love an opportunity to make the first offer. A couple of them reached out to us – multiple times we didn’t bite and they sold with a realtor or via an estate but we did end up buying the house next door to us, finally. This was our first rental. We used equity from our own home to get the house and fix it up: then we put a FOR RENT sign in the yard and the adventure began!

Renting out a home is a full time job and thankfully the first one was right next door so we could see everyone stopping by and looking in windows. It was easy to meet on a moments notice to show the home and we’ve been really happy with our renters (in all of our properties).

We broke the seal – the next deal didn’t seem as hard to understand. The mystery was gone and we had cash flow and an entire system set up for easy banking relationships and future borrowing opportunities.

Aaron really loves the rental business we have. He’s streamlined so much of the process (his sweet spot) and loves to share what we know and how we do things. We’ve toyed with the idea of making our process an easy to digest e-book and maybe we still will. I know he’d love to help other young investors get started.

We are always looking but with the housing market as hot as it is right now: we aren’t in a hurry to buy high. So we keep saving and waiting. Our goal is to have 10 properties. This is one arm of our future retirement planning.

Future Goals and Strategies

One of them, as I just mentioned, is owning more rental properties. But I’ve recently gotten very interested in investing. Not in Day Trading – that’s not for me. I have nothing to offer on that subject, but in long term investments. Compound interest. I’m devouring everything I can read on investing. I’m a real good saver. It’s just my natural bend to save but I’ve traditionally kept a large cash balance and I’m slowly working my way towards investing more. Still saving, still accessible, but doing more for us in the meantime.

The evergreen advice always stands here: It almost doesn’t matter how much you have to start with, it matters more that you start early. Young. Definitely do the 401K match if it’s offered to you and then when you can … however much you can: add more.

The hardest part of future planning is that it always matters when you start. So start now. I love using Betterment for our investment accounts, it’s easy and I’m going to keep referencing Katie’s blog because the amount of information she has available is amazing.

A few words on this: I immediately feel shame when I say these things. It’s not lost on me that we are privileged, that a lot of the decisions we made have worked out for us. I’m not going to spend a lot of time here because I’ve covered this ad nauseam in other posts but I am getting to my next point which is more on the psychology of money and what we believe about it …

Currency

What do you think when I say Currency? Money? Cash? The green stuff, right? Sure, that’s obvious. But not everyone wants to be rich, some people just want to be free.

If what we do from here on out makes us rich, thats cool. But I already am and not in the way you want to subscribe to me. I’m more interested in the things in our life that make us a better community, a warmer home, a larger table, another opening for more of what I hold close.

As a very young girl I observed the adults around me act like Money, or Having Money, was the goal in life. It’s how they showed other adults what they felt was important. It’s how I was bargained with, for and ultimately discarded because my need for Money With Adults wasn’t following the right version of manipulation.

Not having money is a very tough place to live out of. There will never be enough when there never is. So money becomes this THING we just can’t quite reach for. I wish I knew the podcast I listened to that talked about the idea of finally having enough money to survive and what that did to their ability to be the boss of money, instead of money being the boss of them.

It’s a shift, for sure. And it’s powerful.

I have a few mantra’s I keep close: Let go, Let’s go! and I already have everything I need. There were a lot of years as young marrieds and being a young mom that money was the boss of me. The green stuff, and whether or not we had enough of it. We didn’t, most of the time. But I started paying attention to what I thought “having it” would fix. Would it cure my emptiness? Would it bring my loved ones back from the dead? Would it give me second chances? Would it buy me the life I really wanted? And what was so bad about the life I was currently in?

Money actually had nothing to do with any of that. So I started paying attention to what did. And this is where I’m going with Currency …

I learned that what mattered to me was not how many groceries I could afford to buy, but how many people I could fit at my table.

I learned that what mattered to me was not how clean my house was, but how it felt to sit on the floor with my kids while they learned to walk and hold them when they fell.

I learned that what mattered to me was not how finished my spaces were, but how alive I felt hosting friends and family inside any of the walls we had.

I learned that what mattered to me was not how current something was, but how at-home I could feel in the spaces I created.

Sometimes when we hear NO in our financial lives, we’re supposed to hear NOT YET. You eat an elephant one bite at a time. Looking at someone’s life on the outside who have been living, doing, etc for decades longer than you and comparing it to your current situation is real dumb. Your beginning isn’t supposed to look like someone’s middle or finish line. Adjust your focus and get clear on where you’re going, not where someone else is.

I’m now the boss of our money and my favorite currencies aren’t green at all. Unless it’s from my garden. My favorite currencies are love, patience, inclusion, food, hugs, warmth, walking in the woods, dancing and laughter! How I experience life, this one life I get, actually has nothing to do with money and everything to do with my attitude and gratitude.

But now that I know better, I can do better. And here’s how:

My Favorite Financial Tools

You Need a Budget (YNAB) … this is the budgeting app I use and have used for years now. Take advantage of their tools – I email them all the time, or do live chats within the app – and they are AMAZING at customer service and answering all of my questions. When our daughter got her first job, we bought a subscription for her also. Which we’ll cover until she’s on her own. Talk to your kids about money, show them your budget and what it costs to own things. Teach them how you keep it going. They’re not magically going to understand this because of algebra 1 in Mr. Tailbottoms 8th grade math class.

Betterment … this is the investment platform I’m learning (and loving). In our financial past, we’ve had accountants and specialists take care of this side of our finances but as things get simpler for us and I learn more, I’m comfortable taking the reigns back and being educated on my choices is just as powerful as having them.

Mint … I use Mint to have an overall snapshot of our financial picture. I get an over-all look at our accounts, investments, assets and net worth. And you can use Mint as a budgeting tool if you’re just getting started (I used mint before I moved over to YNAB and never looked back).

Wealth planners and other educational tools: I’ve purchased a few different tutorials and materials from Money with Katie and am looking forward to more as I need them. We have quite a library of books on real estate and finances as well, but you can reach out if you want more information.

Now it’s Your Turn:

Have a good podcast, article, suggestion, tip, blog post, or?? … you get the idea. What are you learning lately about money, currency, financial goals, travel credit card hacking and whatever else you geek out about? I WANT TO KNOW.

I’m not asking anymore, I’m telling you – drop it in the comments for the rest of us who made it through all 2,200 words about money today. It’s our consolation prize.

You already have everything you need (for right now, for this moment, for the next half hour). Sometimes in order to see the long view, we have to focus on the next few steps in front of us. Don’t freak out, and keep going.

You’re doing amazing.

Renting

Dining room

I’ve been getting some emails about our journey to debt freedom and our living situation.

Timeline 2010-2011 housingClick on photo for larger view.

This timeline is the actual progression of things over the last 15 months (I say 15 months because the sale of our home was a few month progression to offer/agreement/closing).

Looking back would I do it all over again?

Yes

However I would do a few things differently. Perhaps instead of finding an interim apartment (originally for 4 months while the house we were building was completed) I’d find something I was comfortable being in long-term. If there’s one thing we’ve proven the past year it’s that Anything Can Happen.

I’d probably save myself a lot of heartache and just not try to buy another house, no matter how ON SALE it is, for a good year. Anything Can Happen, Yes – but we don’t always have to be rushing to the next hitching post.

We could have paid off our car instead of trying to buy the first house that didn’t work out. We stalled and waited and then tried to buy ANOTHER house.

We were knocking out our debt but we could have been here 4 months faster if we just stopped and followed through. Ever since we got married it feels like we’ve been on a fast track to better. Better what? I couldn’t even tell you. I had this image of what life was supposed to be like, unfortunately it mirrored the image of where my parents were at age 50 – successful in their careers, no mortgages or payments … who could easily go on vacation or spend thousands on a purchase with a check … because they worked hard, saved and built their financial security with diligence. Not frivolous risks.

We were poor when I was younger but I never knew it. We didn’t live poorly even though we couldn’t afford things. And really, I didn’t know any different.

I love getting emails from readers who say I’ve inspired them to work hard at their own debt-free plans or just to change one small thing about money in their lives. I love having these conversations: I love money. But not in an idyllic sort of way. I’m enamored with the math of it.

I’m a geek. And it’s just money, after all.

We’re still on a path to building a future and we’re doing well. I’ve had to confront my expectations on this issue so often. Life isn’t a rear view mirror.

We’ve come so far in such a short amount of time (read about it here) that I have this idea that we’ll get to the end EVEN FASTER!

When really – I don’t ever want to get to the end. How boring does that sound? I want to get to a place where I feel like there isn’t an end coming. You know? And that’s not financially. Just in general. I’d like to find a place to be present in my today and willing to cope with my tomorrows.

So! I’m a geeky numbers gal who loves a budget and a savings plan. Compounding interest is by far the most fun thing to play with. Ever.

Seriously – if all you do (and you’re close to 30, + or -) is set aside $200 a month in an account that on average (over a 10 year period) yields 12% (which is not astronomical or a myth) you’ll have over 7 million dollars by retirement age.

The math geek in me jumps around at that equation. COME ON! It’s stupid not to think like that. $200 a month? For most people that’s less than only one of their car payments. Not even a months worth of groceries. Day care? $200 a month isn’t hard to find when you look for it.

Ok, one more thing and then we can move on. And we are moving on!! I have stuff to show you!

I’m not a couponer and have a decent grocery budget – we eat out often, pay for a babysitter weekly (or more) and enjoy dating each other. Our entertainment budget is large. I have no qualms about it. But I make up for it in other areas:

Literally, I don’t shop. I do not go shopping. Groceries it is for me! The occasional pair of shoes for the kids or thrifting for a need (shorts, jeans) but for myself – for the house? I have patience. I don’t impulse buy, and I used to all the time.

I browse the aisle of the side of the road, behind industrial shipping agencies and yes, have dumpster dived behind popular retailers. Craigslist is my favorite “box store” because what can’t you get there?

When I do buy new I price shop first but don’t feel bad when I find out I haven’t gotten the best deal on the item. Gas costs money too. I DIY everything I can and I allow myself to make mistakes and try again. It’s still less costly than quickly filling a “need” which usually ends up to be a “want”.

Your turn:
If you were going to change one thing about your life – financial or not – what would it be?

Voice of Reason … or Treason?

I just put a bunch of stuff for sale and I have people asking me WHY we’re selling our stuff. Including Aaron, but he’s well aware, he’s just pointing out that I like to do this. I love to sell our stuff.

And maybe this comes at a good time because I know so many people are making lists, checking them twice and waking up at ungodly hours to risk being run over for a sale.

This doesn’t appeal to me, surprising huh?

I’ve made no secret about the fact that I love Dave Ramsey and we’re in the Financial Peace University course right now – but I’ve just met the first person who admits to not liking him. Actually, quite the opposite, and it threw me – I’m not going to lie. I didn’t understand why someone would feel such strong feelings AGAINST a guy who’s doing so much GOOD … but their opinion didn’t match up with mine.

It was a great conversation actually. I walked away looking to dig deeper into a few different things, which I did and after all of that – I still agree with Dave.

Call me crazy, it really doesn’t bother me. I’ll call myself crazy, weird, not normal … all those things and that’s fine. I can take it.

I think the problem for most people is they listen to TOO MANY voices. Your parents’, your friends’, the infomercial guy selling you quick cash. And you just have to pick one. Be committed to SOMETHING. If you’re the gal who sells Avon, then be the gal who sells Avon.

I think it’s important to research and do your homework, especially when it comes to your own money – but I have no problem whatsoever sticking on Dave’s team and batting an average score of freedom and wealth.

I mean, really?

So yes, we’re selling some crap. Possessions. They’re things. If we some day have more square footage, then of course we’ll purchase and re-amass items, I just don’t subscribe to the rule of thumb that says we should pay someone else to keep them for us (storage unit, which we have) when at the end of a year, maybe two, we’ll have paid enough OUT that we could have already replaced a few of the items. Not all of them. But still.

Green is so much prettier than red.

By all means though, this is something I LOVE to talk about – so stir the pot. I want to know your opinions. Why NOT listen to some of Dave’s teaching? Why NOT be debt free and pay cash for everything? Why NOT have my income work for me instead of working for my income?

Most of what we’re selling are items we planned to sell after moving into the new home any way – we were looking to update or change our style and were saving to do so. Now that we’re not moving we’d like to make this apartment a little more comfortable – less “stuff” sitting around because we have it and make the space really work for the way our family lives inside of it.

On the list?

Bunk beds for the kids – who share a room.
Smaller couch (only half our sectional fits in our space now) and better seating for our active family.
New bed for us (our mattress is due for an update).

In order to do that, selling the current items is imminent. We don’t have spare bedrooms (or even space in the storage unit) to save the leftovers. So, away they go.

Anyone in the market for a couch, crib, car, chairs or coffee tables???

I know of a great deal. 😉