Choosing Less

I’ve recently struggled with choosing less.  I truly don’t want a smaller house, I don’t want a smaller car.

Post here what your recommendations are for dealing with this attitude.

I’m in a rut.

I know the right answers, but there’s just something pushing me to live like a queen 🙂

Chalking it up to moving stress right now.

Be a Motley Fool

This is why I love Motley Fool, a website with amazing information (also, like me, they obviously place a premium over information than looks ;)):

“Generally speaking you should attempt to pay off the debts with the highest interest rate first. Some people, such as Dave Ramsey suggest you pay the card with the smallest balance first, that’s fine, and can help you feel you’re getting rid of the debt quicker, but it’s not the most efficient way. This calculator allows you to enter up to 20 different debts with their associated APRs, and the total amount you want to spend per month servicing your debts, and it’ll work out the order in which you should pay them together with the monthly payments.”

And then – THEN! They have this awesome calculator for you to use. Rock on.

Here’s the link: http://www.whatsthecost.com/snowball.aspx

What’s Your Plan?

Saving for a Season hatched out of an idea that we save best when we have a purpose.
The following does not constitute financial advice. Always seek help from tax and real estate professionals prior to important real estate decisions.

Have you moved from your home and now must rent it out?
Are you regretting your decision not to sell?
I am here to tell you how in fact, it could be you chose the right path.

MAKE “ACCIDENTAL” TOTALLY ON PURPOSE
You thought you’d make some money selling your last home to put money toward your next home, but that didn’t happen. You’ve decided to rent it out so you’ve either hired a property management team or you’ve decided to manage it yourself. You have renters. You’re an “accidental” landlord.

Don’t ask, “How did I get into this position?” or, “How do I get out of this?” or even, “How annoying could the renters get?” I instead offer another angle for you to consider (though you should always analyze your individual situation carefully).
Ask these questions:
– How can I have someone else deposit $300-$500 in my account every month?
– How can I earn an hourly wage of $30-$50, while working out of my house or on the road?
– How can I do that while spending 10-15 hours a month on something for which I am the subject matter
expert?
– How can I do this while getting a guaranteed salary promotion?

FROM A NIGHTMARE TO A DREAM COME TRUE
The answers usually point to sales; however, in this case, the answer could be your home. You are the subject matter expert because you lived there. Someone else is paying most of your mortgage (if not all) while they rent out your home, depositing money for you.
That is income. While money in a home is not easily retrievable, it is accumulating for you at an almost gift of a rate. In a typical mortgage, the rate of accumulation increases as well: each year, the bank’s interest decreases, and your mortgage payment is made up of more principal. So in a typical mortgage’s first year, it may accumulate only $3000 in equity. The next year, it could be $4000*. Each year, equity accumulation increases!
Your property is basically promoting you every year.
So it’s true: you have a part-time job that some only dream about.

FIND A BUSINESS SUIT
Want to make it a career? Follow sites like this one, and research numbers. Use mortgage calculators and amortization tables to set up the case for why buying and holding a property could benefit you.
After crunching all these numbers, you may decide you want to make your part-time job a career. Consider each move a career builder, as you have another opportunity to purchase a home, also known as a future rental. Consider your business plan, and why you’re in the business. Consider the following each time you purchase another home:
– What home is adequate for me and a good fit for most others?
– In the future, how can this home provide living space for others not in a position to buy?
– How can I be the best business owner possible?

And, probably most importantly, consider what you’ve learned. Your first home may have made you an “accidental” landlord, but the next one doesn’t have to surprise you. Because of your lessons learned, you can now crunch numbers to come out on top. Ask these questions:

– How can I work this next mortgage to provide 10% profit on my investment?
Have I considered property taxes, repairs, insurance, HOA, and management fees?
Have I considered its rentability: school district, number of bedrooms and bath, and yard?
Have I researched the area’s rental market now, and considered its future?
– How much money do I put down to achieve this goal? Aim to make 8-10% on your initial investment. So,
if you put $10,000 down, you want to be able to make at least $100 over and above your monthly
costs.**

And yes, in case you were wondering, the answers to these questions might result in the purchase of a smaller home.

There is a great deal of pressure right now to be debt-free. I talk heavily about this in my upcoming book because I feel that perhaps, for some without consumer debt, paying down house debt may not be good stewardship. Good stewardship is responsibly using time and money to grow more. As I’ve pointed out, renting out a home – not paying it off – has the potential to grow far more than would burying your own money in something that may or may not sell.

You have a gift with your rental home. It enriches your life, and it has the potential to enrich the lives of many future tenants. Treat it well – and choose better next time.

*Check your amortization table for specifics
**Always check your appetite for risk and never over-leverage your income.

The Dream Beginning

If I could have started having property visions during college, this is what they would look like:
Purchase a home my freshman year.

—–Er – back up! I’m in college! How would I do that?!?! – – – –

Work every summer starting at age 10, with lawns. Continue with lawns, and its corresponding low overhead.

Snow shoveling in winter.

Babysitting during school year.

Throughout seasons, work several jobs to accumulate money for college, but also for savings. Aim for $15,000 in savings.

Obtain job in college town.

Land squarely at college with money in the bank, and a small 3 bedroom house off campus, the total taking no more than 10% of my income. Rent out rooms (with lease agreements!), starting freshman year.

Money from job goes towards college and savings.

Leave college with degree in hand, and a property manager with the home.

Purchase small, rentable home in town of new job, taking no more than 15% of income.

Repeat last step with each move.

Renters pay down mortgage – income savings go toward purchasing home.

Ideally, buy duplex after 2nd home. Live in one side.

And there you have it.

P.S. While this means buying a car used, and being an amazing steward of what you consume, it also means becoming the source of your own income perhaps by age 35. Have a great day.

Helping Military Save for a Season

I am so excited to announce that the lovely ladies at BuildaMenu.com have decided to offer a VERY special coupon to active duty military families!  In the midst of all the transformation with the military, this is GOOD NEWS.

BuildaMenu.com was set up to offer meal planning for busy families.  For only $8 a month, you make your meal and snack selections and receive a full menu and shopping list for the store of your choice.

I get to announce an exclusive offer, starting here, today!

If you are an active duty military family, you can enjoy this convenience for 1/2 off the monthly membership for 2 years.

That’s only $4/month for 24 months!

All you have to do is email them at active_military@buildamenu.com.

They’ll send you an email with the code to use on BuildaMenu.com and a reminder this is for active duty military.

And if you needed another reason to feel good, BuildaMenu.com will proudly contribute to the orphan care charity of your choice for the entire duration of your membership.

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So check them out today!  Save money in one of the three ways we do that here at SavingforaSeason.com.

Interested in how this amazing convenience will work for you?  Visit http://www.buildamenu.com/how-does-build-menu-work

It’s time for me to go build my menu for the week!  Have a great one!

Although I would never want to be in a place to compare fathers, this classic book does a great job of showing how we can learn from our examples:

Rich Dad Poor Dad

Ever heard of “the box”?  Read this, then tell me which part of the box you’re in, and which part of the box you want to be in.

Personally, I continue to learn – as the world changes – and of all things, that’s the best place to be: an observation post. How to be a good steward of your money in the 1920s may or may not be the way to make it grow in 2020.

Happy reading!