Akratic, I'm in Chicago as well - if you're interested in sailing, let me know. My second job is working on sailboats, can bring you out on the water sometime this summer. Would enjoy meeting other people with similar outlook, though I'm less looking for ERE than FIRE. Plan to have a lot of travel and keep my place in Chicago as a home base, but ERE will be my baseline for FU money.
akratic's ERE journal
@Seabourne, YES! Yes to the sailing and yes to meeting like-minded people in Chicago. Email me at ere@akratic.com
@Kevin M, yeah, I have a similar dream actually, except it involves buying a hostel in a really cheap country and putting my friends up in it for free, but otherwise running the hostel for fun/profit.
Part of me also wants to try to buy like a big loft space in Chicago and configure it like a dorm: a shared kitchen, bathroom, and living room, plus like 8-10 100-200sq ft rooms. Wouldn't even need a whole building. It's still more money than I have to throw around right now though, although I'm pretty confident the rooms would rent out quickly.
@Kevin M, yeah, I have a similar dream actually, except it involves buying a hostel in a really cheap country and putting my friends up in it for free, but otherwise running the hostel for fun/profit.
Part of me also wants to try to buy like a big loft space in Chicago and configure it like a dorm: a shared kitchen, bathroom, and living room, plus like 8-10 100-200sq ft rooms. Wouldn't even need a whole building. It's still more money than I have to throw around right now though, although I'm pretty confident the rooms would rent out quickly.
Where I'm at as of 1 August 2010
- 7.1x projected yearly expenses in assets
- 14% + inflation ROI needed to retire
- 28% of my way to ERE
- 1.93 projected years to FI
Analysis:
I knew July was going to be a step in the wrong direction. In July I flew to San Francisco and then spent ten days road-tripping back from there to Chicago, stopping at a bunch of amazing places on the way. If not for all the expenses associated with that trip, I would have done really well this month. I'm still surprised the road-trip didn't end up costing more than it did.
I have been aggressively pursuing ERE for six months now. Here are my average expenses over the last six months:
Housing: $650
Travel: $242
Food: $220
Gifts: $72
Transit: $55
Everything Else: $254
Total: $1546
And here is my current asset allocation:
63% cash
33% stocks
04% bonds
I really need to get serious about investing my money instead of letting it just sit in cash. I'm definitely intrigued by the Permanent Portfolio, and I've been slowly slogging my way through this thread. One thing I came realize during reading that thread is my current cash-heavy asset allocation is actually akin to speculating that we are in deflation/devaluation market conditions. That's not what I intended though: I intended to remain on the sidelines until I knew more about investing and was comfortable making my own decisions.
The investment income you see on the graphs is just assuming a 4% return, not actual hard numbers.
- 7.1x projected yearly expenses in assets
- 14% + inflation ROI needed to retire
- 28% of my way to ERE
- 1.93 projected years to FI
Analysis:
I knew July was going to be a step in the wrong direction. In July I flew to San Francisco and then spent ten days road-tripping back from there to Chicago, stopping at a bunch of amazing places on the way. If not for all the expenses associated with that trip, I would have done really well this month. I'm still surprised the road-trip didn't end up costing more than it did.
I have been aggressively pursuing ERE for six months now. Here are my average expenses over the last six months:
Housing: $650
Travel: $242
Food: $220
Gifts: $72
Transit: $55
Everything Else: $254
Total: $1546
And here is my current asset allocation:
63% cash
33% stocks
04% bonds
I really need to get serious about investing my money instead of letting it just sit in cash. I'm definitely intrigued by the Permanent Portfolio, and I've been slowly slogging my way through this thread. One thing I came realize during reading that thread is my current cash-heavy asset allocation is actually akin to speculating that we are in deflation/devaluation market conditions. That's not what I intended though: I intended to remain on the sidelines until I knew more about investing and was comfortable making my own decisions.
The investment income you see on the graphs is just assuming a 4% return, not actual hard numbers.
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Robert Muir
- Posts: 280
- Joined: Thu Jul 22, 2010 10:15 pm
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George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
Robert Muir -
If you look at the money flows for ETFs, I think you'll see that 0% interest rates and fear of stocks have driven folks into bond funds. For instance, my favorite municipal bond fund is now trading at a 7% premium to its net asset value (current yield is 6.75%). Which means stocks are probably undervalued unless you truly believe they're in for another decline.
If you look at the money flows for ETFs, I think you'll see that 0% interest rates and fear of stocks have driven folks into bond funds. For instance, my favorite municipal bond fund is now trading at a 7% premium to its net asset value (current yield is 6.75%). Which means stocks are probably undervalued unless you truly believe they're in for another decline.
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George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
akratic -
That's a lot of cash to be sitting on. You could easily buy equal parts T and JNJ and PG and PEP and MCD to get a reasonable yield that's relatively low risk. I mention those 5 because they keep raising dividends faster than inflation and they're all producing historically high yields for the past two decades right now, which means their market prices are very favorable.
That's a lot of cash to be sitting on. You could easily buy equal parts T and JNJ and PG and PEP and MCD to get a reasonable yield that's relatively low risk. I mention those 5 because they keep raising dividends faster than inflation and they're all producing historically high yields for the past two decades right now, which means their market prices are very favorable.
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George the original one
- Posts: 5406
- Joined: Wed Jul 28, 2010 3:28 am
- Location: Wettest corner of Orygun
akratic,
This is nice. I always love to see favorites lists for inspirational books related to finance and lifestyle. As for learning about investing, I recommend "The four pillars of investing". It preaches low fee Vangaurd index funds, which are generally frowned upon on ERE posts, but I think it is good information if you would like to be well rounded in your knowledge of investment strategies and learn some basic information regarding stocks. Also, most 401k retirement plans don't allow for day trading or sell options, but they often offer low fee index funds. Maybe times are changing, but times are always changing, and the sky is always falling from one generation to the next.
It is kind of crazy how most of us have the same interests. I hope we get around to a sailing meet. I saw your post on the meet. You sound like your definitely going to be there. I will let you know if I revert back to saying I will show up. My brother lives near Chicago. Ideally, I would visit and bring him as he is the one who introduced me to Jacob's site.
This is nice. I always love to see favorites lists for inspirational books related to finance and lifestyle. As for learning about investing, I recommend "The four pillars of investing". It preaches low fee Vangaurd index funds, which are generally frowned upon on ERE posts, but I think it is good information if you would like to be well rounded in your knowledge of investment strategies and learn some basic information regarding stocks. Also, most 401k retirement plans don't allow for day trading or sell options, but they often offer low fee index funds. Maybe times are changing, but times are always changing, and the sky is always falling from one generation to the next.
It is kind of crazy how most of us have the same interests. I hope we get around to a sailing meet. I saw your post on the meet. You sound like your definitely going to be there. I will let you know if I revert back to saying I will show up. My brother lives near Chicago. Ideally, I would visit and bring him as he is the one who introduced me to Jacob's site.
@George: I'm starting to think June 2010 was a fluke in terms of low spending. We will see! Thanks for the dividend stock tips.
@Matthew/The Dude: The more of your posts I read on this forum, the more I wish you'd have made it to the Chicago coffee meetup!
Where I'm at as of 1 September 2010
- 8.0x projected yearly expenses in assets
- 12.5% + inflation ROI needed to retire right now
- 32% of my way to ERE
- 1.77 projected years to FI
Expenses:
I had some bad breaks this month, including losing my keys. This cost me:
- $95 for a locksmith to cut the ulock off my bike (locked up in the city of the center)
- $41 for a new ulock
- $25 to ride public transit for five days while dealing with everything
- $8 to make new copies of the five apartment keys
-> $169 in total
I could have spent less here (especially on the locksmith) except there were serious time constraints and stresses involved.
I also dropped $150 on a bike mechanics class at a local non-profit I want to support. It's a 24 hour class split across eight weeks, and I'm hoping to learn something useful and also potentially meet some people. So far, I think I will indeed come away with useful skills, but no new friends unfortunately.
Without that $319 ($169 + $150) I could have done well this month, but unfortunately that's not the way it works.
I also spent $200 on a round trip ticket to Maine this month, although I seem to take a trip every month, and I don't intend to stop after ERE either. This ERE thing would be easier if my girlfriend lived in the same city.
In other news, I need to do better with eating. My eating out (burritos, sandwiches, etc.), is slowly ramping up again. Two months ago I was cooking almost 100% of my meals, and I need to get back to doing that.
Investing:
My asset allocation remains the same as it was last month: extremely cash heavy. Yes, I'm paralyzed. No, it's not the market so much as my indecision.
I'm starting to investigate more and more seriously:
- 1) buying and living on a boat in downtown Chicago, for which I am thankful for tips from forum member Seabourne over drinks. (This is an investment in the sense that if it's done right, it could cheaply knock out my biggest expense: rent. And even contribute to lowering my social spending.)
- 2) buying a multi-family apartment building, living in it, fixing it up, and renting it out. I am inspired here by landedgentry on the forum, an excellent guest post on the ERE blog some months ago, and some friends and acquaintances who have done very well in real estate.
I've started looking through heaps of listings to identify the right place. I think I want something with 3-6 bedrooms in an area I want to live in, and I care primarily about the immediate cash flow.
I wish I had a mentor or advisor for this decision. Because I don't, I'm falling back on my old tricks: optimization, programming, and zoning out for hours on the computer. In other words, I'm building a data-mining program to suck in all the listing information, merge it with rental data, and spit out properties in rough order of projected cash flow. Maybe this will help me make an intelligent purchase?
Other Thoughts:
I'm going to consciously increase my rent consumption. In an effort to drive down the projection numbers four months ago, I moved from a nice neighborhood to a sketchy one, and I regret that decision. I am farther away from the social center of this city, and that's not worth saving a few hundred dollars a month. In other words, I've done the calculation jacob describes where you multiply by 25 and consider whether the expense is worth it ($300 extra in rent/month * 12 months * 25 => $90,000). And yes, I would pay $90,000 to live in a better neighborhood, and I'm going to. I'm going to look for a new apartment this month and move Oct 1. This was a good experiment though, so no regrets.
@Matthew/The Dude: The more of your posts I read on this forum, the more I wish you'd have made it to the Chicago coffee meetup!
Where I'm at as of 1 September 2010
- 8.0x projected yearly expenses in assets
- 12.5% + inflation ROI needed to retire right now
- 32% of my way to ERE
- 1.77 projected years to FI
Expenses:
I had some bad breaks this month, including losing my keys. This cost me:
- $95 for a locksmith to cut the ulock off my bike (locked up in the city of the center)
- $41 for a new ulock
- $25 to ride public transit for five days while dealing with everything
- $8 to make new copies of the five apartment keys
-> $169 in total
I could have spent less here (especially on the locksmith) except there were serious time constraints and stresses involved.
I also dropped $150 on a bike mechanics class at a local non-profit I want to support. It's a 24 hour class split across eight weeks, and I'm hoping to learn something useful and also potentially meet some people. So far, I think I will indeed come away with useful skills, but no new friends unfortunately.
Without that $319 ($169 + $150) I could have done well this month, but unfortunately that's not the way it works.
I also spent $200 on a round trip ticket to Maine this month, although I seem to take a trip every month, and I don't intend to stop after ERE either. This ERE thing would be easier if my girlfriend lived in the same city.
In other news, I need to do better with eating. My eating out (burritos, sandwiches, etc.), is slowly ramping up again. Two months ago I was cooking almost 100% of my meals, and I need to get back to doing that.
Investing:
My asset allocation remains the same as it was last month: extremely cash heavy. Yes, I'm paralyzed. No, it's not the market so much as my indecision.
I'm starting to investigate more and more seriously:
- 1) buying and living on a boat in downtown Chicago, for which I am thankful for tips from forum member Seabourne over drinks. (This is an investment in the sense that if it's done right, it could cheaply knock out my biggest expense: rent. And even contribute to lowering my social spending.)
- 2) buying a multi-family apartment building, living in it, fixing it up, and renting it out. I am inspired here by landedgentry on the forum, an excellent guest post on the ERE blog some months ago, and some friends and acquaintances who have done very well in real estate.
I've started looking through heaps of listings to identify the right place. I think I want something with 3-6 bedrooms in an area I want to live in, and I care primarily about the immediate cash flow.
I wish I had a mentor or advisor for this decision. Because I don't, I'm falling back on my old tricks: optimization, programming, and zoning out for hours on the computer. In other words, I'm building a data-mining program to suck in all the listing information, merge it with rental data, and spit out properties in rough order of projected cash flow. Maybe this will help me make an intelligent purchase?
Other Thoughts:
I'm going to consciously increase my rent consumption. In an effort to drive down the projection numbers four months ago, I moved from a nice neighborhood to a sketchy one, and I regret that decision. I am farther away from the social center of this city, and that's not worth saving a few hundred dollars a month. In other words, I've done the calculation jacob describes where you multiply by 25 and consider whether the expense is worth it ($300 extra in rent/month * 12 months * 25 => $90,000). And yes, I would pay $90,000 to live in a better neighborhood, and I'm going to. I'm going to look for a new apartment this month and move Oct 1. This was a good experiment though, so no regrets.
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jacob
- Site Admin
- Posts: 15976
- Joined: Fri Jun 28, 2013 8:38 pm
- Location: USA, Zone 5b, Koppen Dfa, Elev. 620ft, Walkscore 77
- Contact:
I think real estate mentors would be in quite high demand. I'd like to learn too.
Maybe I underestimate the demand for bicycle mechanics lessons. I think I could demonstrate everything taught at such a bicycle course/class; maybe an idea for a meetup? Or maybe it's something I should also look into more seriously for the local adult ed. system. I enjoy teaching [people who want to learn(*)], so I'd do it for free---making a buck would make it all the sweeter.
(*) I used to think college was an ideal place for that with all the minds eager to learn. Silly me ;-P
PS: A sawzall defeats a cable bicycle lock in a manner of seconds, but I suppose that wasn't an option downtown.
Maybe I underestimate the demand for bicycle mechanics lessons. I think I could demonstrate everything taught at such a bicycle course/class; maybe an idea for a meetup? Or maybe it's something I should also look into more seriously for the local adult ed. system. I enjoy teaching [people who want to learn(*)], so I'd do it for free---making a buck would make it all the sweeter.
(*) I used to think college was an ideal place for that with all the minds eager to learn. Silly me ;-P
PS: A sawzall defeats a cable bicycle lock in a manner of seconds, but I suppose that wasn't an option downtown.
@jacob, only three people in Chicago were willing to pay for the bike mechanics class (including me), and this is a highly visible organization. Also, I probably would not have paid this amount if I did not partially want to give money to these people anyway (they fix bikes and ship thousands of them around the world, great cause). It couldn't hurt to try though! I think you could definitely find interested students if you taught for free or cheap.
Also, something I forgot to put in my monthly update:
Another thing I started this month is going through jacob's book list.
I had already read: 1984, The Fountainhead, Meditations, Siddhartha, The warrior diet, Walden, and Your Money or Your Life
This month, from the book list, I read:
Cashflow Quadrant: I admit I'm a bit of a sucker for Kiyosaki. Guilty pleasure? What can I say, I like diagrams a lot, and big picture ideas too. One thing I found really insightful in this book is the difference between S (self-employed) and B (business owner). When I flirted with entrepreneurship, it was as an S, not a B. Oops.
Disciplined Minds: This book had a really interesting perspective on academia and the role of the typical professional employee. I found it really changing the way I looked at and explained some frequent situations. In other words, I *loved* this book. So you can imagine my disappointment when, after brilliantly building his case throughout the first nine chapters of the book, the author spent the last two chapters on some tangential political rant. Still highly recommended.
Another thing I started this month is going through jacob's book list.
I had already read: 1984, The Fountainhead, Meditations, Siddhartha, The warrior diet, Walden, and Your Money or Your Life
This month, from the book list, I read:
Cashflow Quadrant: I admit I'm a bit of a sucker for Kiyosaki. Guilty pleasure? What can I say, I like diagrams a lot, and big picture ideas too. One thing I found really insightful in this book is the difference between S (self-employed) and B (business owner). When I flirted with entrepreneurship, it was as an S, not a B. Oops.
Disciplined Minds: This book had a really interesting perspective on academia and the role of the typical professional employee. I found it really changing the way I looked at and explained some frequent situations. In other words, I *loved* this book. So you can imagine my disappointment when, after brilliantly building his case throughout the first nine chapters of the book, the author spent the last two chapters on some tangential political rant. Still highly recommended.
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Steve Austin
- Posts: 177
- Joined: Thu Jul 22, 2010 12:17 am
Haha, my girlfriend is in Brazil right now, which makes her very cheap! (except for when I go visit her in October...) But yeah, her being in Brazil is also driving up the social life spending.
I think you're right that I should consolidate some of the categories though. The girlfriend-as-a-separate-line-item was conceived two girlfriends ago when I was dating someone very expensive and presumptuous, but it makes less sense now.
Maybe my expense categories should be:
Housing,
Food,
Travel,
Gifts,
Transit,
Health,
Other
Housing, Travel, and Food have to stay because they dominate my spending.
I find Gifts such an interesting category to track because it represents far more of my expenses than I ever expected (I'm not even particularly generous, it's just that my peers and friends spend so much more than I do and it's hard to keep up in social obligation situations).
Transit and Health are low costs for me right now, but they're big costs for most people, and will probably go up for me in the future.
I think you're right that I should consolidate some of the categories though. The girlfriend-as-a-separate-line-item was conceived two girlfriends ago when I was dating someone very expensive and presumptuous, but it makes less sense now.
Maybe my expense categories should be:
Housing,
Food,
Travel,
Gifts,
Transit,
Health,
Other
Housing, Travel, and Food have to stay because they dominate my spending.
I find Gifts such an interesting category to track because it represents far more of my expenses than I ever expected (I'm not even particularly generous, it's just that my peers and friends spend so much more than I do and it's hard to keep up in social obligation situations).
Transit and Health are low costs for me right now, but they're big costs for most people, and will probably go up for me in the future.
@Akratic @Jacob
I had mentioned "How to retire early and live well with less than a million dollars" for the section on real estate. The author comes off a little yuppie as he inherited but he had good insight from dealing with real estate as part of his portfolio.
He doesn't touch on this, but I think "slum lord" might be the way to go. Often the government writes the checks directly to the rental property for the people who receive this government help (so you still get paid even if the tenant normally wouldn't do so). The downside is I think the maintenance would be horrible for this crowd once a person moves out. Upside, lower amount needed for investment.
I had mentioned "How to retire early and live well with less than a million dollars" for the section on real estate. The author comes off a little yuppie as he inherited but he had good insight from dealing with real estate as part of his portfolio.
He doesn't touch on this, but I think "slum lord" might be the way to go. Often the government writes the checks directly to the rental property for the people who receive this government help (so you still get paid even if the tenant normally wouldn't do so). The downside is I think the maintenance would be horrible for this crowd once a person moves out. Upside, lower amount needed for investment.
@Debbie: yeah, I like the housing coop idea, but not the fact that they're all far from the center of the city, and they're normally vegan/crunchy.
@The Dude: added your books to the list. The real estate one higher on the list.
Where I'm at as of 1 October 2010
- 8.27x projected yearly expenses in assets
- 12.1% + inflation ROI needed to retire right now
- 33% of my way to ERE
- 1.75 projected years to FI
== EXPENSES ==
big expenses in September included:
- $266 for a round trip ticket to a wedding
- $75 for a new pair of shoes that should last me the next few years
- $120 for gym membership for the next year
- $240/mo on food (compared to a low of $100/mo in May) as a result of eating out far more often than I have in previous months
- $50 fee for a credit check on an apartment I wanted to move into (when the landlord saw my credit score and verified income, I wonder what he thought about me wanting to live in such a cheap apartment...)
I seem to have about $400/mo of unexpected expenses each month. One of these months I'm going to spend less than $1,000 total, and it's going to do wonders for the FI projections. Who knows when though.
My fixed expenses will be going up in the winter, as I will need to purchase an $85/mo public transit pass after biking becomes unpleasant. I will also need to buy a winter coat ($200+) and gloves. I also need to purchase a $100 wedding gift in October.
I moved apartments this month, locking in a new place at $366/mo + utilities with what appear to be really awesome roommates in a great location. I think the housing thing is finally solved, unless I can do better as a landlord. I had to meet twelve sets of roommates before finding this place, and I don't think there was a better place for me to rent on all of craigslist.
== INVESTING ==
I spent a lot of time in September pursuing a multi-unit real estate investment. I found a property that would have monthly costs of about: $1,000 for the mortgage and $900 for property taxes, maintenance, and other expenses (as best and conservatively as I can estimate them). However, it would have $2,400/mo of rental income, in addition to providing a free place for me to sleep. In other words, purchasing this property would have brought me very close to FI, as free rent plus $500/mo of investment income would almost do it.
Four offers were placed on the property, and my offer won! The seller accepted my offer, and then sprung the fact on me that this is a short sale, that he is being foreclosed on, and that the bank holding his mortgage will need to approve the transaction.
The bank declined. They did not counter, they did not give a price they were looking for, they just flat out refused.
This whole process caused lots of stress (and excitement) and is largely responsible for spending so much on food in September. It's not completely over yet, but it seems I will not be getting this property, and I will need to look for another.
I will continue to accumulate most of my money in cash, because one way or another, I expect to buy something in the next six months, and I want to make sure I can put at least 20% down. If the rental income more than covers the mortgage and other costs, I will not be afraid of the commitment, although I won't enjoy being somewhat locked into this city.
== ERE EDUCATION ==
I read surviving without a salary this month and enjoyed it. It gives a pretty all encompassing answer, like I expect jacob's book will do. In contrast, the author has kids, and rather than dropping out after reaching FI, they dropped out when they could make do with odd jobs, which I could pretty much do now if I really wanted to. They had the same extreme frugality mindset.
Funny quote from the book:
Question: What do you do for a living?
Answer: I'm independently poor.
I learned a *lot* this month about real estate investing through friends and my extended family. I was pleasantly surprised to find out how much they knew about this topic.
I'm excited to read jacob's book once I can get my hands on it, although this will be difficult without a mailing address.
== NEXT STEPS ==
I have decided to sell my side business because I would like to free up time to put even more effort into my day job, and I would also like to spend more time learning about investing. The real hourly wage of this side business is pathetic, and I'm sick of dealing with it. Multiple income streams are well and good, but this business has become more of a liability than an asset, and there's no simple path to turning that around that I can see. So much for muses and easy automation.
I have been enjoying my day job more and more these days, but I would still like the freedom to walk away from it in the future.
I will be spending four days in Boston and ten days in Brazil in October. The Boston trip is coming out of my normal $250/mo travel allowance, but the Brazil trip I'm budgeting as a one-time thing and paying for with side income from a weekend contract programming gig. This is how things will work in ERE, so I don't think it's cheating.
I will continue to aggressively pursue a real estate investment. It seems there are deals to be had right now.
@The Dude: added your books to the list. The real estate one higher on the list.
Where I'm at as of 1 October 2010
- 8.27x projected yearly expenses in assets
- 12.1% + inflation ROI needed to retire right now
- 33% of my way to ERE
- 1.75 projected years to FI
== EXPENSES ==
big expenses in September included:
- $266 for a round trip ticket to a wedding
- $75 for a new pair of shoes that should last me the next few years
- $120 for gym membership for the next year
- $240/mo on food (compared to a low of $100/mo in May) as a result of eating out far more often than I have in previous months
- $50 fee for a credit check on an apartment I wanted to move into (when the landlord saw my credit score and verified income, I wonder what he thought about me wanting to live in such a cheap apartment...)
I seem to have about $400/mo of unexpected expenses each month. One of these months I'm going to spend less than $1,000 total, and it's going to do wonders for the FI projections. Who knows when though.
My fixed expenses will be going up in the winter, as I will need to purchase an $85/mo public transit pass after biking becomes unpleasant. I will also need to buy a winter coat ($200+) and gloves. I also need to purchase a $100 wedding gift in October.
I moved apartments this month, locking in a new place at $366/mo + utilities with what appear to be really awesome roommates in a great location. I think the housing thing is finally solved, unless I can do better as a landlord. I had to meet twelve sets of roommates before finding this place, and I don't think there was a better place for me to rent on all of craigslist.
== INVESTING ==
I spent a lot of time in September pursuing a multi-unit real estate investment. I found a property that would have monthly costs of about: $1,000 for the mortgage and $900 for property taxes, maintenance, and other expenses (as best and conservatively as I can estimate them). However, it would have $2,400/mo of rental income, in addition to providing a free place for me to sleep. In other words, purchasing this property would have brought me very close to FI, as free rent plus $500/mo of investment income would almost do it.
Four offers were placed on the property, and my offer won! The seller accepted my offer, and then sprung the fact on me that this is a short sale, that he is being foreclosed on, and that the bank holding his mortgage will need to approve the transaction.
The bank declined. They did not counter, they did not give a price they were looking for, they just flat out refused.
This whole process caused lots of stress (and excitement) and is largely responsible for spending so much on food in September. It's not completely over yet, but it seems I will not be getting this property, and I will need to look for another.
I will continue to accumulate most of my money in cash, because one way or another, I expect to buy something in the next six months, and I want to make sure I can put at least 20% down. If the rental income more than covers the mortgage and other costs, I will not be afraid of the commitment, although I won't enjoy being somewhat locked into this city.
== ERE EDUCATION ==
I read surviving without a salary this month and enjoyed it. It gives a pretty all encompassing answer, like I expect jacob's book will do. In contrast, the author has kids, and rather than dropping out after reaching FI, they dropped out when they could make do with odd jobs, which I could pretty much do now if I really wanted to. They had the same extreme frugality mindset.
Funny quote from the book:
Question: What do you do for a living?
Answer: I'm independently poor.
I learned a *lot* this month about real estate investing through friends and my extended family. I was pleasantly surprised to find out how much they knew about this topic.
I'm excited to read jacob's book once I can get my hands on it, although this will be difficult without a mailing address.
== NEXT STEPS ==
I have decided to sell my side business because I would like to free up time to put even more effort into my day job, and I would also like to spend more time learning about investing. The real hourly wage of this side business is pathetic, and I'm sick of dealing with it. Multiple income streams are well and good, but this business has become more of a liability than an asset, and there's no simple path to turning that around that I can see. So much for muses and easy automation.
I have been enjoying my day job more and more these days, but I would still like the freedom to walk away from it in the future.
I will be spending four days in Boston and ten days in Brazil in October. The Boston trip is coming out of my normal $250/mo travel allowance, but the Brazil trip I'm budgeting as a one-time thing and paying for with side income from a weekend contract programming gig. This is how things will work in ERE, so I don't think it's cheating.
I will continue to aggressively pursue a real estate investment. It seems there are deals to be had right now.
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borisborisboris
- Posts: 67
- Joined: Sun Aug 08, 2010 4:12 pm
Blogger I like who had a bad experience with buying a short sale:
http://timiacono.com/index.php/2010/09/ ... hort-sale/
You can click back through to his earlier posts about it. Seems like you're lucky the bank straight up declined, rather than kept you waiting a few months.
http://timiacono.com/index.php/2010/09/ ... hort-sale/
You can click back through to his earlier posts about it. Seems like you're lucky the bank straight up declined, rather than kept you waiting a few months.
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jeremymday
- Posts: 132
- Joined: Mon Oct 11, 2010 1:06 am
- Contact:
"By the way, I really like all the odd similarities in the ERE community: bicycles, sailboats, teaching, self-sufficiency, computers, learning, enjoying challenges, entrepreneurship, etc. For example, I think we'd get along if we were to meet in person. I think one of the things tying everyone here together is being very ambitious, but not about money or possessions -- ambitious about life."
I like how you put this and I agree totally. It's funny how I thought about boat living many years ago and how many people are interested in it.
I also like reading about your interest in real estate. If you wait it out Im sure you are probably still in the running to buy that house. (The bank cant hold it forever). BUT I would be sure you want to stay in that city for awhile. Or be ok with losing your 20% down payment. In either case, good luck, and keep the journal going!
I like how you put this and I agree totally. It's funny how I thought about boat living many years ago and how many people are interested in it.
I also like reading about your interest in real estate. If you wait it out Im sure you are probably still in the running to buy that house. (The bank cant hold it forever). BUT I would be sure you want to stay in that city for awhile. Or be ok with losing your 20% down payment. In either case, good luck, and keep the journal going!