FIRE... by 2018

the fire is not dead

2007-03-17T01:52:00.000-04:00

Wow.. it's been a long long time. I was really busy towards the end of last summer, and then just got lazy. I hope I can pick up the slack and continue to post more regularly.

A lot has happened since I last posted. The sale of the apartment went pretty well. I had to lower my asking price to 219k but sold it pretty quickly. I got a promotion at work but still haven't received a raise yet. The bonus this year was pretty good at 25%, pushing my total comp to just over 100k. I made a decent amount of money in 2006 and I also spent a lot of money on a single item. An engagement ring! Yes. I got engaged to be married! It's quite scary. Also, my parents sold their house and they were quite generous with the proceeds. They gifted me $150k with the condition that the interest I earn on it be taxed to me but that they have access to whenever they need. I really don't mind, actually! I'm really quite lucky.

The fiance doesn't quite have the "entrepreneur" itch. However, she did enjoy seeing me buy apartments (at one point i was carrying 3 mortgages), fixing them, and selling them for profit. I found her an apartment over a year ago that she bought and will eventually become her first flip. She's in contract to sell her apt for a profit of about 100k in a little over a year's holding time. Pretty damn good.

The only thing that's still unprofitable for me is the STOCK MARKET! Long term, short term, value investing, dividend stocks, ETFs, Mutual Funds... i'm still in the red. It sucks. I hate it.

Our combined networth exceeded $1 million this year. Real estate had a lot to do with it. I'm determined to work with real estate to make more money but at the same time, I have to be cautious due to concerns over the health of this market. The best for me to do is be patient and wait for the right deal to come along and just keep looking for that opportunity.

$1 million may seem like a lot, but the last apartment I looked at was $795k for a 2 bed 2 bath at about 1000 sq ft in a nicer Brooklyn neighborhood. It is outrageously expensive to live in NYC. We'll continue to live below our means to horde as much as we can so we can retire much sooner than we hope to. For now, things are looking good. Let's hope it'll continue to be that way.

funny song - my cubicle

2006-08-04T17:03:00.000-04:00

This parody is so funny.. makes me want to go home and watch Office Space.

Been busy at work, which is somewhat unusual. Got invited to join a special program for exceptional employees, one where they hope to make us feel more comfortable in the work environment so we'll stay. Right. I think it's a joke and a waste of time.

The good news is a smaller unit in the same building of my rental property went into contract. Don't know how much it's in contract for, but the listing price was 229k. I'll be really happy with that figure. With that sale, I will probably break the half million mark this year.

Been studying for my GRE, focusing hard on my vocabulary. I wrote a little javascript page that picks a random word everytime it loads, like picking a card from a deck of flash cards. I use it on my Treo's web browser. Quite geeky, but so helpful.

my job - it sucks but not enough to leave, yet

2006-07-18T15:43:00.000-04:00

I complain about my job a whole lot. Don't worry, I'm working towards leaving, but not anytime soon. I just like to complain about it, cuz, well, I think it sucks. I'm in a role where there's no clear title for me. I have a hard time explaining to others what field I'm in and what I do exactly. I often feel I'm not technical enough at my job, and I don't understand or care too much about the business side either. It's a weird position. I did a breakdown of my job responsibilities and it shows that I do about 40% writing SQL or coding, 45% doing low-level tech stuff, and 15% crap. The 40% SQL/coding is the same stuff I've been doing for a long time, except for maybe a few tweaks here and there. So freshness doesn't exist.

To me, these tasks are pretty sh*tty. I hate this adhoc stuff. It really bores me. However, when I look at some pluses to my job, it really puts me on the fence. Right in the middle of the range of 1 to 10. The hours, benefits, pay, are all pretty good. Darn it, it's so difficult to choose when I'm not willing to sacrifice my short hours and the time off I get. I see people working their asses off and they complain about that too. I get advice to just stick it out and look at the bright side, but I also get advice to do something I enjoy. Well, what I really want is the cake and eat it too! If I have to choose, i'd choose to do something I enjoy doing rather than something that's boring but easy. At the same time, I am not the kind of person to just quit without finding a suitable alternative or enough money in the bank, which is also a reason why I'm selling the rental, so I have the cash if I decide to just quit. Anyway, I've scratched the whole MBA idea. It really isn't for me. However, I may pursue an MS degree and I'm deciding between Computer Science or Financial Engineering. FE sounds really interesting, but I don't know too much about it and I'm not confident I can get into a program (lack of self confidence from spending too much time in a low-tech low-finance position). I can only try. That's all I can say for now.

If I get into a program, I may want to stay at my job to finance the program, and I doubt it will affect my performance at school.. well, because my job is easy and I'd probably get away with leaving early and doing homework at work, as long as my current boss doesn't leave. Reasons like these make it hard for me to leave, but eventually I'd have to for a brighter future.

I am curious to see what others do at their jobs and a breakdown of their overall job satisfaction.

a good real estate broker she is not

2006-07-17T14:45:00.000-04:00

I've decided to list my empty rental apartment for sale instead of renting it out. Over the weekend, I met with a different broker than the one I normally work with to learn about her operation and to get her opinion on how much I should list it for. She impressed me with a long Powerpoint presentation, a better than average website, her tech-savviness and her overall salesmanship. She even brought with her a tablet PC with an air-card, which she said she had used to allow a buyer to sign a purchase agreement. Cool indeed. She was nice. If I were a buyer, I would trust her. She kept showing me her Powerpoint even though I was already quite impressed. Her best attribute, as she was really trying to sell to me, was that her success rate was 100%, and that her ratio of sale price to asking price is highest among the region. Wow. She really does seem to be a "good" broker, much better than the one I've worked with, who I am considering replaced.

I bought the apartment last year for $165k. I want to sell it for $200k at least. Did the market appreciate 20% over the year? Recent comps in the surrounding area seem to show that it has, (for smaller units at least). Now here's something interesting. In the past few weeks, a unit one flight up from me went on sale for $229k, but the apartment is 100 sq ft smaller than mine and has no other distinction in terms of finishes or condition. It is overpriced, and so far doesn't seem to have a lot of activity. This is huge for me. Knowing this, I can potentially list the apartment for $210k and it will seem like a great deal compared to the other unit. Selling an apartment is all about marketing, and you use any angle you can to get you an advantage. They have a whole lineup of shows on HGTV that teach you that. For me this time, it's about a mispriced unit in the same building, and how I price the unit based on this information is critical.

A "good" broker who prides herself on her high selling/asking ratio worries me a bit. It worries me because she may be too concerned about keeping her reputation. She'd most probably list the property way below market price just so she can get multiple full price offers or even offers above asking price. Then, she'll appear to be this awesome broker because she'd done a great job for the seller. I told her about my concerns, and pointed to her about a potential opportunity for me based on a mispricing of another unit. I wanted to see how she can work with me and be the good broker that I am desperately looking for. More importantly, I wanted to see how creative she can be in this situation.

She listened to me but went on with the presentation. It's been an hour and I needed her to get to the point. So I asked her what she think I should list it at based on her research and what I told her. Her answer was $185k, 6% commission to her and to sell it faster, I should offer another .5% to 1% to the buyer's agent. I was pissed that she had wasted so much of my time. At $185k, I would just walk away slightly better than break-even. Now why would I do that?! I told her that this would not work for me, and that perhaps she can come up with something more than her textbook "I think we had a 10% increase from last year and that's how I would price it." She couldn't think of anything new. I told her I would think about it, but seriously, I didn't have to think that hard.

After I left our meeting, I drove to meet with my less than perfect broker. I dropped off my keys with her and let her figure out how to price it competitively with the mispriced unit. She said she'll get back to me and I'm fine with that. Although she's sloppy, forgetful, and sometimes ditsy, she's always come up big for me in terms of getting the price that I want. I'm sure this time won't be different either. I guess more money in my pocket is worth putting up with her flaws.

Darn it. It would have been fun to sign documents on that tablet PC and have copies sent to my smartphone via a laptop aircard. Yes, it would have been geeky, but fun.

mansion impossible

2006-07-10T09:41:00.000-04:00

A great flash game.

Objective: To accumulate enough money to purchase a mansion by buying and selling properties.

citibank works for me

2006-07-07T11:45:00.000-04:00

Citibank has always been about convenience for me. With so many ATM locations in NYC and worldwide, I've never had to pay any fees to withdraw money. Just recently, Citi also teamed up with 7-Eleven to add another 5500 ATMs for its customers. It's a bit excessive, but I like the fact that there are more options for me. I also have a mortgage with Citi and qualify for a relationship where I get free certified checks, which normally costs $10. This service came in handy when I had to get multiple checks to bring to the closing table.

I'm quite satisfied with Citi on convenience alone, but more recently, I've even taken advantage of some of its high yielding products. I've signed up for the e-Savings account, which took less than a minute to set up since I was already a customer. The yield is highly competitive, paying 5% APY at the moment. I've also taken advantage of its 6 month CD product, which pays a yield of 5.5%. Finally, I've applied for the Citi Dividend Platinum Select Mastercard, which earns 5% cash back on purchases at supermarkets, drug stores, and gas stations, and 1% everywhere else.

I also prefer using its online banking over HSBC or Bank of America. The website is easy to use and not cluttered with "useless" information like BofA's. HSBC is far behind in terms of user experience.

In the future, I may even participate in its new MasterCard Paypass contactless payment system for NYC's subway system. Testing is already underway at some selected stations.

Yes, I'm a happy customer of Citibank. Convenience, great service, and great products offered are reasons I bank with them. I see no reason to switch to a different bank, unless someone can convince me otherwise.

picked up some UNIQLOthes on the cheap

2006-07-05T17:00:00.000-04:00

Over the last 2 weekends, I picked up some nice casual clothes from UNIQLO in Soho. UNIQLO, short for Unique Clothing, is Japan's most popular apparel retailer. Their quality and style is a lot like that of GAP or Banana Republic, but cheaper. Right now, they are having a grand opening sale, so a lot of things can be purchased for cheap.

I picked up a couple of polo t-shirts for $12.99 each. They are not only cheap but they are quick-drying, good for hot humid summer days here in NY. I also picked out 2 pairs of light summer pants for $14.50 a pair, 2 long-sleeve button-down for $12.99 each, and 2 pairs of jeans for $40.

I'm actually a horrible dresser, and when it comes to work clothes, I am even worse. In the summer time, i wear slacks and polo shirts EVERYDAY, and when the weather is cooler, I switch from polo shirts to solid dress-shirts. Only sometimes do I go stripes. =( There's really no one here to impress and if I need to go out after work, I'd go home first to change. But seriously, why would I want to spend $60 on an IZOD shirt just to wear it to work??? It's a good thing my gf loves me for my inner beauty.. *barf*

I guess being Unfashionable has helped me save more of my money. Anyway, go check out UNIQLO.

networth update and semi-annual progress

2006-07-05T11:50:00.000-04:00

Overall, June shows an increase in net worth of over $9,000, to $462,477, which could have been more if I hadn't spent like I did.

I finally heard back from my accountant about my '05 tax returns. I am due back approximately $13,000 between Federal and State. She deducted everything she could, including the use of the vehicle, tolls, gas, supplies, and other costs incurred while I worked on my properties. I felt it was legitimate since I really did buy the SUV to haul stuff to those apartments and I seldom use it for personal use. Aside from that, I had a whole year's interest to deduct on my primary residence, depreciation on rental properties, and passive losses.

My stock and retirement accounts suffered a harsh month. I did not collect rent for the month of June since I allowed the ex-tenants to use the security deposit for rent. Actually, I still owe them some money for the remainder of the deposit. The value of my SUV has dropped according to Kelly's Blue Book values. The reality is that it's probably worth less due to the high gas prices and the lack of demand for SUVs. June was also an irresponsible month since I spent freely during my vacation, ate at some fancy restaurants here in NY, and bought myself a new smart phone. It's all good.

A look back at my earliest posts, I started out the year at $394,359. Today, that number has increased to $462,477, an increase of $68,118, or 17.27%. I didn't do anything spectacular. The bulk of the increase was from bonus, the sale of a property I already had before I started this blog, and my upcoming tax refund. Seriously, I think the only things I did related to personal finance were that I increased my 401k contribution and I opened up online savings accounts at both HSBC and Citibank. I give myself a D for my PF efforts. Had I been more savvy on knowing where to park my money and be more diligent at saving, the net worth would sure be a lot higher.

Still, I feel proud that I've done well. Even though I did not save all that I could, at least I spent less than I made. With 6 months to go in 2006, I wonder if I can break the half-mil mark this year. I plan to sell my other rental and park the cash into online savings accounts now paying 5.05% at HSBC and 5% at Citibank. The interests earned can reduce my living expenses and without tenants to worry about, I can concentrate on getting a higher degree, perhaps getting a part-time MBA. Then, I can get a higher paying and hopefully more interesting job.

returned from the middle kingdom

2006-06-26T10:05:00.000-04:00

Hiya. I'm back from my very first visit to China. Thank you all for your comments on my last entry. China was a lot of fun, and even though I hit 7 cities, it was only a small fraction of things to see and learn in China. I am already thinking of another trip to discover the southern regions.

We started out in Beijing where it was obligatory that we checked out Tiananmen and also the Great Wall. Then, we flew to Urumqi (I have never heard of it nor knew it was a major city in China before this trip!!) where we began our Silk Road Tour which included the following cities: Urumqi, Kashgar, Turfan, Dunhuang, Lanzhou, and Xian. The Silk Road Tour was awesome and we saw many amazing things. We even visited local families and took pictures with them. In the very western part of China, where Kashgar is a major city, most people look middle eastern and spoke Uyghur, which is a Turkish based language. However, many of them also spoke Mandarin so that was kinda shocking. There are over 56 nationalities in China in which Han Chinese is the majority, sometimes referred to as "descendants of the Dragon", which is what I am. The Chinese currency note has the words "People's Bank of China" as well as the denomination in the Uyghur, Tibetan, Mongol and Zhuang languages on the back. All of this was so fascinating to me.

Overall, things were pretty cheap when converted back to USD. A Big Mac value meal was 15.50 rmb, which is less than $2. Local foods were even cheaper. A complete meal can be purchased for about $1. When buying touristy stuff, one must haggle! I hated the whole process but my friends enjoyed it so much. By the end of the trip, we were such experts that some of us were able to purchase things at 15-20% of asking price. Woah!

Of course, my sick real estate addiction made me ask all the tour guides how much an apartment costs in each of the cities we visited. In Kashgar, a 100 sq. meter apt (1076.39104 sq ft) costs roughly $15,000. In Lanzhou, the same apartment would cost about $30,000. That is the price for a 3 bed 2 bath apartment in a highrise building!!! Something similar would cost $1.25 million in Manhattan. I thought about FIRE and living in Lanzhou, but naah.. the air is too polluted. Speaking of pollution, Beijing was the worst! I got an upper respiratory infection and red eyes while the gf got a sinus infection. We had to be confined in the hotel 1 day because we were that sick! Uhm.. don't go to Beijing. That's my advice. And Beijing real estate was ridiculous. Some apartments were just as expensive as Manhattan condos, in USD!

I spent quite a bit of money on my trip but it was worth it. I am making it a goal to take at least 1 long trip a year. The only drawback on being on the other side of the world for a long time is the amount of time it takes to get readjusted. For the first few nights since I got back, I've gone to sleep around 8pm. Working got a lot tougher too. There was also the "Vacation Withdrawal Depression" I kept feeling, which made me an unpleasant person to be around.

Well.. good to be back. I'm all refreshed and ready to earn/save/invest so I can fund my early retirement and many trips along the way.

some thoughts before the big vaca

2006-05-31T11:45:00.000-04:00

Going on this year's big trip today. Won't be back for 2 and a half weeks. The trip is costly, but preparing for it isn't cheap either. I've spent over $400 bucks in the past week just getting the necessary items for the trip, including some recommended shots not covered by my health insurance. Heading to Beijing and other cities in China. I'm excited and nervous at the same time. It is my first time into China.

Some thoughts before I go:

1. Brooklyn real estate bubble? Yes, I agree that prices have come down a bit, but not drastically and sellers are not really having that hard a time selling. If it's in a good location and of good quality like this $499k 800 sq ft 1br 1.5ba I saw in April, it will not have problems selling. That apartment had 1 open house on a rainy day and is now in contract. Wow. I never even got a chance to view it.

2. I tried using Google Adsense Preview on the real estate website I built and saw too many "competing" brokers on the preview. There will be too many sites to block. So for now, that project is still on hold. Not sure if I'll ever capitalize on it.

3. Tenant confirmed ending the lease in June. I will try to rent it out again. If I can't get good tenants, I'll sell it and maybe move the gains to another property that's closer to where I live. To be honest, I'd rather sell than rent it out.

4. Still taking a beating on the stock market. Still clueless why a stock behaves the way it does. Purchased LQDT at $12.xx. It trades today at $19.xx, up over 50%. Why? I don't understand. What are people seeing that I am not??? Too bad the gain doesn't cover the losses on the ETFs I bought. Put a stop order GTC for $18 to cash in on the gain while I'm away.

5. Prosper.com - Did not look too much into it, but was wondering if someone can be both lender and borrower. With good credit, can this not be a money making idea?

That's it for now. Happy pf-blogging.

how i'd like to chop up this building

2006-05-26T11:45:00.000-04:00

I've only worked on fixing up and selling small condos. It's been fun and I would do it again if I find something good to work on. I think eventually, I'd want to work on bigger projects. A good next step to take would be to convert small buildings into condos, and I think this could be an interesting project to pursue.

First, check out this listing. It's a 4 story building with a full basement and a 5 car garage. Each floor is 20' x 40' but actual sq footage per floor would be around 700 to account for the hallway and staircase. Top floor would be larger since there won't be another flight of steps going up to the next floor. Asking price is $1,325,000. I've seen it listed for $1,250,000 not too long ago, so maybe the price was pushed up to let potential buyers negotiate down to the original asking price. Whatever.. let's suppose I purchase it for $1,250,000.

Here's how I'd want to chop it up.

1st floor would be a studio cut out to have the front of the building. It would be about 550 sq ft. The back of the building will have laundry and bike storage and an entrance to the outdoor space which I will built on top of the garage. The outdoor space will be a wooden deck and is used by all occupants of the building.
2nd and 3rd floors will be 1 bedroom apartments.
4th floor will be 2 small studios.
basement will have 5 storage rooms and a separate utilities room for the building mechanicals.

I'll spend about $30k per unit to put in new walls, floors, kitchen, and bathroom. $15k for the deck, $10k for the basement. Another $75k to turn the building pretty and structurally sound.

How I'd price the units:
2 top floor studios at $275k each
1 ground floor studio at $300k
2 1-bedrooms at $375k each
5 garages at $40k each
Total: $1,800,000

Cost of renovation: $250,000
Cost of building: $1,250,000

Profit before fees and other costs: $300,000

The hard part is to figure out how much all the other stuff costs!
Carrying cost, lawyer's fees, condo declaration fees, broker's fees if used, closing costs, architect plans, etc etc.

This project is way over my head right now, but hopefully, through education and experience, and perhaps finding the right people to work with, a project like this can be a reality one day.

it doesn't make sense to have a big family when you can't afford it

2006-05-23T13:50:00.000-04:00

First rule of personal finance: If you can't afford to buy something now, don't buy it now. Figure out how you can afford it, work on that goal, and when you're finally ready, buy it then. It's that simple. People get blinded by their wants and desires that they often overlook one fact. Just because you want something doesn't always mean you can have it.

When it comes to having a family, the same rule should apply. Can you afford to raise a family? If you can't, don't start one right away. Wait a bit. It's not just about love and sacrifices anymore, it's got to do with money. And raising a family requires lots of it.

When I read this story on USA Today, my first reaction was "Why would they have so many children if they cannot afford to?" Raising 6 children is not like owning 6 cars. When you're stretched to the limit, you can't just stop feeding/clothing/raising your children, whereas you can sell off your cars and be rid of your problems.

Amy and Kevin Smith are 35 year old parents with 6 children in a one income household in the San Francisco area. Kevin brings in $60,000 a year from his IT sys admin job, pays $1,380 a month for rent, $691 to repay debt, $90 for monthly cell phone bills and the remainder to food, utilities, and all other odds and ends. They have an emergency fund of $2500. Stretched too thin? I think so. They can pretty much forget about braces, new toys and clothes, music lessons, or even family vacations to a place other than grandma's house.

With 8 people in the house, they'd like a bigger place to live and to start saving for their kids' college funds. But how? A financial planner suggests the following: Opening an ING Direct account paying 4.15% interest for the $2,500 saved. (great advice, in 30 years, that will become $8,467) Save on their car insurance by raising their deductible. (Doesn't say how much they can save.) Open up a Roth IRA instead of contributing to 401k for easy access to contribution just in case. (If they had money to begin with...) 529 Plan (Again.. if they had money for this) Finally, Amy can pursue a side job making and selling handbags, in about 2 years when things supposedly would be easier as the youngest children begin school.

I think those are terrible advice. The Smiths will never get ahead and when the unexpected happens, I can see them getting deeper and deeper into debt. My advice? If Kevin really wants what's best for his kids, he should just work on his career. Get a higher paying job or a second job. A higher paying job will probably mean he'll have more responsibility and longer hours. Either way, he'll see less of his family. In this situation, it's not about making ends meet by buying used and pinching pennies. They really do need more money. $60k for a family of 8 living in an expensive area is just not enough. The family will survive, but will endure lots of hardships. Just a slight increase in gas prices can mean a difference of tens or hundreds of dollars a month, money that they don't have. What happens when Kevin loses his job? What will happen to the family, especially its emotional and psychological health?

It's great to have a big and loving family, but love can't pay for that gallon of milk. I would think hard before starting a family, and even harder if I want a big family. I wish the Smiths the best of luck.

invest in a good laugh - scary movie 4

2006-05-19T11:41:00.000-04:00

I was reading today's AM New York free newspaper and came upon this chart. To my surprise, Scary Movie 4, of all movies, got positive reviews from critics from 6 different sources. Can it be true? Or was the person who put this chart together playing a joke on readers?? Anyway, I'm now very curious, and will probably spend my $6 dollars (Entertainment Book) to watch this. Just so you know, there's no plot in the movie but a bunch of gags and parodies and genuinely stupid humor. If you're not into this kind of stuff, bless you.

Wasting $6 and an hour and half of my life on this is much better than watching my stock portfolio lose value this week. Just a thought for the rest of you.

Have a good weekend.

property listings aggregate websites for nyc area

2006-05-18T13:45:00.000-04:00

My entry into the ETF market can't happen at a worse time. Right after I've gotten my checks from the sale of my investment property, I decided to buy a few ETFs to get started. I purchased over 14k among 5 different ETFs and have been watching them decrease in value ever since. It is a good thing that checks take some time to clear. Otherwise, I would be deeper in the red if I had actually put the proceeds from the sale into the stock market. I think I have pretty bad luck with the market. So for now.. the money will sit pretty in my Citibank e-Savings account and earn a respectable 4.75%. Until I know what to do with it, it'll probably stay there.

So out of habit, I started to look around for good deals on real estate again. Besides the usual Craigslist, NY Times, and Propertyshark sites, I've discovered a few aggregators that collect and display listings in the NYC area. This makes searching a lot easier, but it doesn't matter, there's nothing out there worth looking at.

Check 'em out:

happy about a new supermarket in town

2006-05-17T23:02:00.000-04:00

While New Yorkers across the East River enjoyed the grand openings of Trader Joe's and Whole Foods, Brooklynites waited patiently for our own specialty food stores to open. Today, a 52,000 sq ft Fairway opened for business in Red Hook, Brooklyn, making it convenient for many Brooklynites to shop for high quality foods at prices cheaper than at these Manhattan counterparts. At first, I was nonchalant about this grand opening, but after seeing photos from visitors to the supermarket on Curbed, I was convinced I needed to take a trip to see the excitement for myself. So after work, I picked up the gf and drove to the tip of Red Hook, and was shocked at the size of the supermarket. The freshness of the produce, the quality of the meats and fish, and the varieties of organic and other high quality products, all at very reasonable prices, amazed both of us as well. We purchased the "famous" Fairway baguett for 99 cents, got a quarter pound of prosciutto, some sheepsmilk cheese, olives, and even some Terra jalepeno sweet potato chips all for around $12 and made it our dinner for the night. The gf and I were very impressed by the supermarket.

It may seem strange to a lot of people, but having a quality supermarket really is a big deal in Brooklyn. There is really no comparable supermarket in terms of size, quality, price, and convenience (parking) anywhere in Brooklyn. The fact that I'm merely 5 minutes away kinda makes me wonder if closeness to the supermarket is a good selling point if I were to sell my condo one day. Anyway, that aside, I am just glad that life just got a little better.

mother's day special

2006-05-14T11:10:00.000-04:00

I really have to thank my mother for helping me get to where I am right now financially. If it wasn't for her, I don't think I'd have done as well as I have. Back in college, she realized that I had been using my credit card and paying the minimum payments on the balance. She explained to me how credit card companies charge really high interest and encouraged me not to carry a balance forward. She taught me not to spend money I did not have. I listened, so she paid off my balance (a few hundred dollars) and from that day forward, I'd always pay off my credit card bills on time. After college, I stayed in New York and shared an apartment with a friend in the city. The rent was not that much but our total living space was about 350 sq ft. My mom let me waste my money away for a year and encouraged me to live at home with her and dad free of charge until I've saved enough for a downpayment on my own apartment. She even padded my savings with $15,000 to help out with the purchase. That purchase helped me build about 250k in equity. Boy, am I glad I listened again. I guess she really knows what she's talking about. Not only did she encourage me to be a homeowner, but she also encouraged me to get involved with owning additional properties. I've never liked the landlord business but I did become interested in flipping properties. In the first few deals, she'd check them out with me and give me the reassurance once I've found a good deal. Thanks to her, I've gotten involved with 5 investment properties, and made quite a bit of money using very little capital that I had.

I'm very open about my finances with her and can tell her exactly how much I've made and how much I've saved. I don't feel that I have anything financial to hide from her. In fact, I feel as if this money belongs not just to me and if she ever needed money from me, she can just take as much as she wants to. So far, she had not asked for anything from me other than that I go home for dinner once in a while. She's a good mom.

my biggest payday to date - $56500

2006-05-11T16:04:00.000-04:00

Yes. I finally sold investment property #5, which from the beginning was meant to be a flipper (held for less than a year). Housing bubble talks and rising interest rates got me really really worried. I haven't mentioned too much about this deal in my previous posts other than the fact that it was in contract and that I had a horrible broker handling the deal for me. I didn't want to say too much, well, because my crazy mind thought that if I did, things would somehow go horribly wrong. Now that I've deposited the paycheck, I can reveal some more juicy info.

I came across this listing on the internet. The owner had left the country and wanted out of the property. She was a few months behind on her payments and she really wanted out. The agent who represented her was a friend and newbie agent, who priced the apartment way too low. Someone in the building had purchased a smaller unit for 25k more. I knew that it was a money maker. The apartment met all the conditions outlined here, so I believed that it was a good deal.

The decision to flip it was due to the cooling housing market and the fact that I already have an existing rental apartment. I also wanted to diversify and be more open to other types of investments. With closing costs and carrying costs, the apartment costs me roughly $160,000. I put in $40k of my own money, $10k borrowed from family (which I did not specify in my net worth update since I forgot!!! How horrible was that of me??), and the rest through HELOC and monthly payments. The sale price minus fees came out to $216.5k. The paycheck was $56,500 before taxes. Depositing the checks from closing into my bank gave me a sense of relief and satisfaction.

I still have to pay taxes on this sale. It would be considered ordinary income. To offset the hit, I have begun to maximize my 401k contribution and will probably contribute to the traditional IRA account. With the Traditional IRA, I can wait until April of next year. Speaking of taxes, I am now sane enough to chase down the tax preparer and demand an answer on my 2005 filing.

What I plan to do next.

Rental property - Tenant will stay til at least the end of June. I had thought about selling the property and looking for other investments, but I think I can do that with my gains without having to sell this rental. Besides, the cost is low enough and I'm breaking even right now with the potential of getting more rent with new tenants. A rental property would also make my overall portfolio a more balanced one. So I think I'll keep it.
I've opened up a Citibank e-Savings account and will deposit a chunk of the money (40k maybe??) into it. The process of creating that account was amazingly easy since I am already a customer. I was impressed.
The rest of the money I will put into my brokerage account. I started purchasing international ETFs and as my luck would have it, these new purchases have already dropped about 2%. I just don't have the kind of luck with the securities market as I do with real estate. However, I am determined to understand it and make investing in the securities market work for me.
I will also use some of the money to buy some IPOs in the secondary market. Burger King, Vonage, Mastercard? Yes, risky! I am willing to risk a little this year.
Focus more on my job. I plan to get some securities licences and make myself more marketable. I can then ask for a real raise or find another job that would pay more.

I am really happy today. I think this was a huge step to FIRE.

a failed attempt to make money off a website

2006-05-09T15:10:00.000-04:00

3 years ago, I had this idea to build real estate websites for small real estate companies throughout Brooklyn and charging them monthly hosting/maintenance fees. I developed a website and slapped on a pretty front end and approached a local realtor. In exchange for holding my real estate licence (I was toying with the idea of doing sales/rental listings part-time), I created the website for him for free. It also gave me a live site to show my potential clients of what I can provide them. However, right after the first site, my designer partner dropped out, I got caught up with buying/selling properties, and I learned that small real estate companies are too cheap to pay for a website. As a result, the business venture went into sleep mode.

Fast forward to now. The site is still up and running and has been bringing lots of business to the company. A new idea came to mind. What if I add some adsense links and text ads to the website? I spoke to the realtor and he was alright with the idea. So overnight, links appeared under the header bar and text ads appeared under the footer. Over the weekend, I generated about $6 in ad clicks before I got a call from the realtor to remove the ads. He wanted me to take them off because they were links to other realtors' websites, his competition. The ads were a bit inappropriate, but not entirely. There was no way the realtor can compete with these other well-established companies. But, whatever. I respected his feelings and took down the ads.

It was an interesting experiment because I already had the back-end built. I could offer free websites to any realtor if they allowed me to put ads in them. I just had to customize the style-sheet to fit the needs of each site. It was a win-win situation, I thought? Well, maybe not.

So now, I need to figure out how to benefit from this website I created for him. It's not generating any revenue for me, I've not asked the realtor to hold my licence anymore, and I don't forsee myself trying to go through with the original idea. How can I make money from this site??

Well.. I made $6, so it didn't fail completely.

better to be an independent consultant?

2006-05-05T10:58:00.000-04:00

I met up with an old boss for drinks after work yesterday and in one of our conversations, he mentioned that he had hired a consultant for his department for $100/hr. Quick math in the head tells me that it's roughly $200k a year. He offered me the position before, but I turned it down preferring to have a more steady work environment. (He did not tell me how much he was paying for the position.) This may sound like a lot but is it really worth it to pursue being an independent consultant? There are so many variables to think about.

For example:
- The $100/hr rate is what he pays the agency who subcontracted it to the "worker", so the worker only gets a cut of that money. Let's assume that he gets $60/hr, which reduces the annual salary to $117,600 based on 40 hour weeks for 49 weeks. (2 weeks vacation, 1 week for public holidays). At that rate, it doesn't seem worth it since it is not much more that what I make now. Furthermore, there are no benefits such as 401k + company match (but I suppose one can open up a SEP IRA), health insurance, sick days, or pension plan. Not only that, but the "worker" will be paid in form 1099 and will have to pay self-employment tax.

BUT. What if the middleman is taken out of the equation? 200k a year sounds pretty good for the same crappy work. What would be needed in addition to the typical employee benefits? Disability and liability insurance? What would that cost and how much will that cost affect the IC income?

A website I read suggests adjusting the gross pay by 35% to get a ballpark figure for a break-even point on salary alone, not considering taxes, deductions and employer group rates. For me, as an employee, the comparison number is $93k * 1.35, or $125,550 adjusted. As an IC, the number would be $200k / 1.35, or $148,148. That is $22,598 more.

Considering the lack of security as an IC and the extra work to manage expenses and the risk of not having work right after a contract expires, and other cons like feeling disconnected from the clients you work for, I am not sure if $100/hr is the right number. Plus, there won't be as much slack-off time as an IC, where you're typically put under a microscope.

For $150/hr.. that would be a different story.

test drive your dream job

2006-05-02T13:50:00.000-04:00

Ripped from a post in early-retirement.org

Tired of working on that TPS report all day long? Want to do something different but not sure if you'd like it? Then give Vocation Vacations a try. It's a service where you get paired up with a mentor and work one-on-one on that dream job of yours. If it's something you like, then pursue it. Otherwise, keep dreaming. At least you get to keep your job still.

Businessweek Article

thank you all for doing such a wonderful half assed job

2006-05-01T13:55:00.000-04:00

When I pay someone to do something for me, I expect them to do it well. Such is not the case lately. My 2005 tax filings, not done. The tax preparer told me to give her 2 weeks, so I give her two weeks. Will she call me tomorrow to let me know that it's all done? I highly doubt it. So why am I not chasing after her to get it done? Well, it's because I am dealing with other half assed "professionals" who are giving me even more headaches. The agent who's handling the sale of my "flipper" assured me we would close last week, on the word of the buyer having everything already in place. Of course, a week before the scheduled closing, I find out that the buyer has no commitment letter from the bank, the title search hasn't been ordered, the condo questionnaire hasn't been filled out... etc etc. Who's fault is it? I definitely blame it on the agent. Being a disclosed dual agent, she should be on top of this transaction. How dare she call me to ask me what's happening! "What's happening is that you're not doing your job! And I have to pay you for such lousy service!", I thought. These were not the "random things that came up last minute" but rather things that she should have followed up with. And when I asked her for the status, she shouldn't lie to me and tell me everything's cool, when she hasn't done the work that I'm paying her to do. Also, my lawyer should have at least contacted the buyer's attorney to see how everything was going. Not call on the week of, and then realize everything is not ready. Ugh!

I understand that these professionals have multiple clients to cater to and I am probably not one of their higher fee clients. It's just really aggravating to think that I am paying them thousands of dollars but can't expect a good enough level of service. It's like paying half a million for an apartment, and all you get is a 400 sq. ft studio on the 3rd floor with windows facing a brick wall. I just can't be happy with that, even if that is all I can afford.

The person at the damn IT department at work. Why does it take you 6 months to tell me that you've lost my request and I must submit it again? And why do I have to email you every few weeks to check on the status? Why do you ignore them? Can't you follow up with me just once?

The appliances store. Thanks for stopping by today with a dented refrigerator and no dishwasher. Although you specifically said you have it in stock. Thanks for not letting us know even after you were done with the delivery and realized something wasn't right. Thank you.

Thomasville furniture. Thank you for delivering a bed that has non-matching side rails (or whatever you called it). Thanks delivery guy, for running out of the apartment because you did not want to carry the thing back into your truck. Oh, thanks for the bad installation too. Customer service rep, thanks for telling us you can't do anything about the bed because that is how the manufacturer produces it.

Is this a NY thing or what? How do people deal with these annoyances without screaming and yelling and pulling their hair out?! Tell me!

Mr. Home Depot Cabinet Guy, you are the exception. You took your time, and gave us the best design possible within our budget. You were very professional. You even gave us a discount to beat Lowe's 15 minute pricing. You made us very happy. We thank you.

weekend, real estate, money update!

2006-04-25T01:26:00.000-04:00

Ah! What a wonderful long weekend. It started on Wednesday and ended on Sunday. Five days of rest and relaxation.. in uh, Brooklyn. Total disregard for Personal Finance. Sorry.. I screwed the budget thing a while ago. I will pick it up again, eventually, I swear! Anyway, I woke up late everyday and found things to do around the city. It was a taste of the FIRE life, and I absolutely loved it. I did some shopping, ran some errands and ate out several times. I even had Japanese food twice. For NYers, Sashimi Deluxe and Hamachi Kama at Tomoe Sushi is hard to beat. (Quality, quantity, and price!) Osaka in Cobble Hill had decent Sashimi as well. I wanted to go see the Bodies Exhibition at South Street Seaport, but at $24.50 a head, I just couldn't. Biking in Prospect Park wasn't a bad alternative. Overall, a fun weekend.

The Addiction that is Real Estate:

The deal on the flipper is about to go through. Addressed some items on the inspection list and hopefully everything will go smoothly. Won't say anymore right now.
The tenant on the other property says he may leave at the end of June instead of May. Whichever is fine I told him, as long as he gives me a month's notice. Not sure how I feel about it though. Since I still haven't decided on what to do with this property, I guess having another month to think about it isn't so bad. Found out that someone else in the building is selling a smaller unit (by 100 sq ft) that is in worse shape, for $199k. That's good news for me since that could mean a handsome gain for me too.
Wanted to check out an open house on a condo w/parking in a converted school house but decided against it due to the heavy rain on Sunday. $499k for a 800 sq ft 1br 1.5ba. Kinda pricey, but the parking is what's got my attention.
Speaking of parking, the apartment I visited about a month ago that has parking has been reduced to $315k. There was also a similar apartment without parking that was also asking $329k then is now reduced to $295k.
A buddy of mine mentioned to me about a possible FSBO on a 1Br w/ parking a few blocks away from me. I asked for the seller's contact info, but I haven't heard back. This would be the most ideal situation, but I think the seller might be too greedy and want something in the $400s.

Money:

I got a small raise. My base salary is now $80k. With the bonus that I received in February, my total cash compensation for 2006 will be slightly south of $93k. No complaints here. Boring job yes, good pay yes, wanting more for nothing, definitely. $80k is good, but $85k would be so much better.

i haven't done my taxes yet

2006-04-18T10:36:00.000-04:00

I switched to a new tax preparer this year b/c my previous one really sucked. She had missed a big deduction on a donation of a car that could have cost me $1,500 if I had not noticed it. This year's tax preparer isn't so good either. Swamped with other "more urgent" returns, she decided to put me off until she's done with her more important clients. She didn't exactly say that, but she certainly made it feel that way. Anywho, since I will be getting a refund, I can wait up to three years to file and claim the refund. I am not too happy with that, so hopefully she'll do a good job on this filing and help me get more money back on my previous years' returns as well. It's just so hard to find good help.

my job is the 7th best job in america. get out of here!

2006-04-13T00:30:00.000-04:00

Money Magazine and Salary.com researched a bunch of jobs and rated Computer/IT Analyst as the 7th best job in America. I laff! I laff!

I agree that the pay is decent, but look the grade given for the creativity aspect of the job. A "D"!!! Man, how true that is. My job functions are quite mundane and I am constantly bored. Problems arise and solutions are usually quick and simple. Boom Boom Bam. Go home.

The research also projects a 36% growth in the next 10-years, but the job type is at risk of outsourcing if you're not specialized. That kind of contradicts the "Ease of Entry" factor, doesn't it? In fact, I think it's hard to get a decent IT job nowadays, and because of outsourcing concerns, salaries have gone down due to too few jobs available and too many applicants.

Anyway, I think IT jobs suck, especially if you work for a big company. Everything is messed up and there's just too many hurdles to go through to get things done. You're always trying to solve problems but there are just too many to deal with. And when you finally fix something, it's already too late or the business needs have already changed.

Money Mag, you are wrong! Computer/IT Analyst should not be in the top 10.

great find from ikea this weekend

2006-04-10T18:24:00.000-04:00

I went to the Elizabeth NJ IKEA this weekend with the gf to get some cabinet door handles for her new kitchen and came upon a new product that will potentially save her thousands of $$. It's the new PLATTA decking squares. At $6.99 a piece with dimensions of 17.75" x 17.75", it comes out to about $3.19 a sq. ft. We've gotten an estimate for composite decking material at roughly $3,000 plus labor. With these IKEA decking squares and a couple of fences and other accessories from Lowes, we can do the project ourselves for under $1,000. Woo hoo!

analyzing a property i saw advertised on Real Estate Book

2006-04-07T15:40:00.000-04:00

As I was walking to the subway station on my way to work, I noticed that the new edition of The Real Estate Book has come out. I picked one up and looked through the listings on my subway ride. The only listing that stood out was a 3 family (triplex) brick house in Sunset Park brokered by ERA. Here's quick analysis of how I go about doing some background work on evaluating a property. The numbers used are rough estimates that help me get a quick calculation.

The property in question is here. $690,000 for 3 apartments: (2) 3 bedroom apartments, and (1) 2 bedroom apartment. Next, I went to Craigslist to get a rough idea of how much rents are in the area. 2 bedrooms are roughly $1400/mo and 3 bedrooms are roughly $1600/mo. The rentroll, therefore, is roughly $4600/mo. Because the address is available, I used PropertyShark to find out the taxes and other useful information. Taxes are $1600 a year. Then, I calculated the monthly cost of the place using a mortgage calculator. With a rough $400 for other cost (maintenance, insurance, utilities), the monthly cost is about $4000, with 20% downpayment and 6.5% interest. The profit is therefore $600/mo, or $7200 a year. The yield is about 5%.

Good deal? Not bad for a property in a bustling neighborhood in Brooklyn, NY and in today's crazy market. The numbers get better if you negotiate the price down. And if the numbers are right, you turn a profit. Is there something wrong with this? The description does say "Needs work" in the Real Estate Book, and "sold as is" on the website.

I looked at other listings by the broker and saw that he is also selling the property next door for $849,000. Could it have all the upgrades and are they worth $160,000 more? As a person who likes to invest in fixers, this may be a good opportunity. But, the capital required for this project would be huge, and I don't have that kind of money. I also found out through PropertyShark that the property was sold for $600k earlier this year. Maybe the person who bought it wants to get a quick profit and leave all the renovation work for someone else. Anyway, I am not interested in another project, but this place definitely is worth a look.

march 2006 net worth update

2006-04-05T17:30:00.000-04:00

My net worth increased a modest 0.3% (up $1,116) in March. Nothing too interesting. The biggest increase was in my 401k account, up 19.2% from February due to changing my contribution amount. I am putting in an extra $960 a month into my 401k and will target reaching the limit of $15k for 2006. The biggest expense I had in March was my 15,000 mile tune up for my Pathfinder, which was about $800. I charged the amount to a credit card and will pay it off sometime in April.

Assets:
Real Estate: $705,000.00 (unchanged)
Checking & Savings: $17,531
Brokerage: $ 32,000
401k: $7,570
Pension: $4,932
Restricted Stock: $12,159
Vested Stock: $1,243
Roth IRA: $3,798
Trad IRA: $2,392
Car: $18,865 (unchanged)
Total: $805,490

Liabilities:
Mortgage for Primary Residence: $146,911
Mortgage for Rental: $130,798
Line of Credit: $100,000
School Loans: $2,620
Personal Loan: $13,000
Credit Cards: $1,207
Total: $394,536

Net Worth: $410,954

February 2006 Net Worth

January 2006 Net Worth

7-eleven + citibank, how's that for convenience?

2006-04-04T16:55:00.000-04:00

Now you can use your Citibank ATM card at over 5500 7-Eleven locations. There's no charge to use the ATM if you're an existing Citibank customer. This isn't particularly great news for me since I hardly go to a 7-eleven, with the nearest being 3 miles away, but it's nice to know that the option is available to me.

Type in your zip to see if there are any 7-Eleven locations near you.
http://www.citi.com/locations/index_us.htm

Some FAQs:

Are there any fees for using the Citibank ATMs in 7-Eleven stores?
No - there are no fees for Citibank customers. You can get cash, check your balance, and transfer funds FREE of charge at the Citibank ATMs in over 5,500 7-Eleven stores. (If you're not a customer, there's a fee for each ATM transaction.)

Can I do everything at 7-Eleven stores that I can do at the Citibank ATMs in branches?
At the Citibank ATMs in 7-Eleven stores, you can:

Get cash
Make transfers between your linked Citibank checking and savings accounts
Get account details such as balance information.

At this point in time, however, you can't make deposits or transfer funds using Citibank Global Transfers. And you can view only the account activity for your checking, savings, and Checking Plus (variable rate) accounts. You can't view your brokerage account, or other accounts such as your home equity line or loan.

How can I find the nearest 7-Eleven store?
Just use the Citi ATM/Branch Locator, which provides you with the location, a map, directions and the hours of each 7-Eleven location.

i jinxed myself. tenant moving out. job gets harder

2006-03-31T12:36:00.000-05:00

I blogged about the different jobs I have yesterday, and that being a landlord so far has been pretty easy. Guess what? I got a call from the tenant last night requesting to break his lease 3 months early because he's not making money from his job. We talked for a while and I decided that he can move out by the end of May. Legally, he's liable for the remainder of the rent until the end of the lease, but I'm too nice of a guy to be a toughass landlord. I am just not landlord material. I told him to give me another call end of April to confirm that he'll be moving out. He was very gracious and said he's willing to help me show the place to propective new tenants.

Now, what should I do with the property? It's locked in at 5.375% for 30yrs. I've held it for close to 1 year. Here are my options:

Sell it and pocket the gains. No more landlord headaches. Look for other opportunities or park cash in online savings accounts.

Keep renting it. Good long term strategy, but hate dealing with tenants. Don't want to end up with bad tenants and more headaches.

Sell it and do a 1031 exchange. Buy a place closer to home for easier management.

I really hope the fixer sells without any problems. The inspection and appraisal are both scheduled for next week. June can be interesting if I end up with 2 empty apartments. I just changed my 401k contribution from 5% to 20%, lowering my take home pay and making financial matters that much more interesting!! Lots to think/worry about in the coming months.

hey mon, how many jobs you got, mon?

2006-03-30T13:47:00.000-05:00

"I got tree jobs, tree jobs, mon!"

"Tree jobs? You lazy, mon!"

Hahaha.. Does anyone else remember the "Hey Mon" family from In Living Color? It's a skit about a Jamaican family with each member of the family having a multitude of jobs. The father and mother thinks of the son as lazy because he only has "tree" jobs, or something like that. It's really funny.

Anyway, I'm always complaining that I don't have enough time to do the things I want to do. The truth is, I am busy not only for myself but for my family and even people I am not related to. Why? I have no idea. Maybe I have the responsibility gene in me that makes me want to help others. Whatever it is, the things I'm busy with have stopped me from going skiing, going on a weekend getaway, visiting friends out of state, and for a long time, even going to the gym. Excuses? I'd like to think not.

Here I am, thinking I can start a website so I can get a little income from ad revenue. Yeah right, only if I quit one or more of these jobs:

My 9ish to 5ish job that gives me a regular income.

Serving as general contractor/lacky boy for gf's apartment renovation. Unpaid, but the potential is enormous!

Serving as translator/errand boy/good son for my parents who've recently moved to a new place and need a lot of help getting settled in and are selling their old house. Working on a long list of things they need around the house. The latest small project was to put up a closet system in their walk-in closet. Unpaid of course.
Condo president. I signed up because no one else stepped up. Tasks include dealing with sponsor, managing agent, unit owners, etc etc. A lot of work, but no one notices the good work that you've done. Only what is still not done. Unpaid. I want to quit.

Landlord & real estate related. Luckily, my tenant hasn't bothered me in 4 months. This job is the easiest right now. Real estate related: fixing up fixer; talking to lawyer, broker, mortgager; scoping out new deals and going to open houses. It's a job! Pay varies.

I got five jobs, mon! How many jobs you got? I'll get a sixth job as a webmaster for my website. Don't call me lazy, mon!

how do you save money on things you buy?

2006-03-28T11:49:00.000-05:00

I try my best to buy things at a discount whenever possible, but I know there are many things that I buy regularly that I could be saving money on and not. For example, I never got into the whole credit card cash back program. I don't know why, but I'm happy with my credit card that I've had since college and I never bothered to upgrade it. Yes, I am afraid of change. I like the fact that I remember my CC # and I can just type in the #s when I do an online checkout without having to reach for my card. And I hate to say this, but I could be saving a lot more money if I hadn't been so stubborn on change.

Anyway, besides not having a cash back credit card, I am trying to figure out how else I can save on my purchases. Readers, if you're kind enough to comment with your list or a link, that would be so wonderful.

Here's my short list - for now.

Costco. Even though I pay $45 a year for membership, my contact lens solutions alone saves me more money than the membership cost. I buy the generic brand that costs approx. 1/6 the price per unit of the brand name from the pharmacy. I also buy the twin pack of Honey Bunches of Oats that's about 1/4 the price per unit. Roast Chickens last three meals and costs only $5. I don't buy things I don't need so I don't overspend at Costco.

Pretax commuter benefit. One monthly metrocard costs $76. I buy it through work using pretax dollars so the effective cost is about 1/3 less.

I use Entertainment Book. I wait till it's half price before I buy one. Then, I use the coupons inside whenever possible. Last week, I purchased 2 Big Macs and a coffee for $4.71. It was buy one large sandwich get one free. That was lunch for the gf and I. I also use Entertainment Book for discount coupons for movies. The coupon for United Artists theaters allows you to redeem it at the box office which is more convenient than mailing in coupons for discount tickets. For movies in their 3rd week of release, tickets are only $6. It's $7.50 for new movies.

I like to watch movies but hate paying full price. There are theaters around me that have discounts on Tuesdays and Thursdays. I go to those.

There's a supermarket that sells precooked foods at half price after 6:30pm. The food still look fresh, but I get them for half price. Two eel bento boxes for $5. That was dinner Sunday night.

I only buy things on sale at the supermarket. I like Boston Market frozen dinners and only buy them when they're half off.

I shop for produce in cheaper neighborhoods. Seriously, this place I go to calls itself "The Original Poor People's Friend" and they have really cheap fresh produce.

I know all that supermarket / theater stuff is local to my area, so it won't help a lot of people outside of my region. However, I think Entertain Book is a great deal, and that is something I can recommend. Sometimes, certain chains do say no to the coupons, but McDonald's have always said yes. There are also restaurants that participate where you get one free entree with purchase of another entree. It really is a great deal if you like to dine out once in a while. The book pays for itself after a few weeks

sad open house for sad looking apartment

2006-03-27T11:02:00.000-05:00

I checked out an open house on Saturday afternoon for a 1br condo with a parking space. The real reason for checking the apartment is really the parking space. I really want a place to park that doesn't cost me $250 a month, which is how much it costs to rent a space where I am. So, I thought that if I own the 1br w/parking, I can rent out the apartment and keep the parking for my own use.

I arrived at the condo midway into the open house. I rang the doorbell and the agent led me into the apartment. The hallway leading into the apartment had dirty carpeting and walls, and looked old and unkept. The apartment was in bad shape with a small living room, old kitchen, messed up floors, a triangular block protruding from the floor that looked like the roof of the staircase on the outside that goes down to the basement. The agent really tried to sell me on the new laminate floors done in the bedroom, which was below ground and about 120sq ft in size. It was also poorly installed.

The asking price? $329,000. Size was approximately 500 sq ft. I am not sure if people would flock to this apartment even during the crazy boom that peaked last summer. There is nothing in close proximity to the condo building, the apartment faces the concrete parking lot, it was just... crappy. I was the only person at that point who showed up for the open house, since the sign in sheet was blank when I signed it. I wished I had not signed in either. I really don't want the agent to bother me about this place.

Conclusion? I hated the place and can't even put a price on it. However, I think someone will be crazy enough to buy it. I wish the owners luck in selling this place and if the place sells, I will be sure to write up on it.

when is it worth it to have someone else do your laundry?

2006-03-27T09:58:00.000-05:00

I used to think that people who drop off their laundry at the laundromat are either lazy or don't like to save money. After last night, however, I may have to think again.

Because of chores we've had to do for the current renovation project, we have been putting off doing our laundry for over 2 weeks. We managed to collect 5 loads of dirty clothes that weighed about 40 lbs. Last night, after finishing dinner and despite being tired from a whole day of running around buying/picking up materials, we trekked over to the laundromat half a block away and made it just in time for the last wash, at 8:30 pm. We did a triple load for darks, one load for whites, and one load for towels/sheets. We went back and forth between the laundromat and my apartment, and we finally left the laundromat at 10 pm with about 95% of the clothes completely dried. We then spent another hour folding the clothes and hanging the ones that were not completely dried yet. In total, we spent 2 1/2 hours and $11.75 plus the cost of detergent.

Now, if we had dropped off the laundry, it would cost $7 for the first 8 lbs, and $.75 for each additional lb, or (40-8) * $.75 + $7 = $31. Would it have been worth it? Let's say it cost about $.75 for the detergent we used, then our total cost was $12.50. It would mean that if we paid the laundromat to do our laundry, we would be paying someone $18.50, or $7.40/hr to wash, dry, and fold the laundry, and we wouldn't have anything left over that's not completely dried. We did the calculations in our head, and being as tired as we were, we concluded that it would have been totally worth it.

Furthermore, I think there may be places not far away that would charge less for laundry service, which would make it even more enticing to switch from self service to full service laundry. So if the renovation chores keep us busy every weekend, we might just pay to get our laundry done.

42 miles of traffic free cycling for only $40!!

2006-03-24T14:10:00.000-05:00

Alright, I am not helping anyone save money or get better returns on his investments. Shame on me! But this event is truly worth the money. If you register early, by April 7th, you pay only $40 to join thousands of cyclist on May 7th to ride through the five boroughs of New York City. I did this tour last year for the first time and had an absolute blast. The best part was riding up to the peak of the gowanus expressway and stop to take in the views. It's a cool experience because you feel like you own the roads! Sucks for drivers on that day though. The most challenging part of the ride is going over the Verrazzano Bridge into Staten Island, and the most annoying part is waiting in line at the end of the tour to take the ferry back to Manhattan.

The tour is open to beginners and expert riders so anyone is welcome. From start to finish, the tour should take about 6 hours!!! But, 2 of those hours are for waiting in line to get back to Manhattan by ferry. Along the tour, there are 5 rest areas where you can replenish your energy with water, bananas, and oranges provided by the organizers.

I have yet to register but I will most likely go again this year and hopefully will make a tradition out of it. I am thinking of buying a bike carrier for my SUV and park it overnight on the Staten Island side and then drive home after the tour instead of waiting around.

So instead of updating your monthly net worth on May 7th, you should take part in the 29th annual Five Boro Bike Tour. It's going to be a lot of fun!

http://www.bikenewyork.org/BNY-TOUR.htm

try Pediasure for free

2006-03-23T13:24:00.000-05:00

Through, 3/26/06, you can purchase a 6-pack of Pediasure and get your money back via mail-in rebate. Up to a $12.99 value. Rebate form must be received by 4/30/06.

Details here: http://www.trypediasurefree.com/

HSBC online savings account - two stories

2006-03-22T20:02:00.000-05:00

I signed up for the HSBC online savings account on 3/5/06 and within 3 days, the new account appeared on the Account Summary of my HSBC Internet Banking dashboard. And although the coupon code for the $25 bonus expired on 2/28/06, I still used it during the application process. Thinking that I wasn't going to receive the bonus, I was shocked to see that an additional $25 was added to my account on 3/20/06. The whole process was simple and the turnaround times were faster than expected. I am thoroughly pleased.

A close friend of mine however, fell victim to mail fraud. She thought she had specified no ATM cards were needed during the application process. Whether or not that is true is still unknown. Regardless, someone got a hold of her ATM card(s) and PIN and her account was cleared of funds within 3 days. She's currently trying to get her money back. It's been a few days and no word yet on the results.

After hearing her story, I am a bit concerned about how HSBC handles mailing out sensitive materials like statements and ATM cards. I remember receiving a new ATM card in the mail at my parents' house when I've already moved away and have been receiving bank statements at my new location. I didn't think much of it but now that my parents are selling their house, I will have to make sure they never send anymore ATM cards to that address again.

Now I am worried about putting more money into my HSBC online account.

not my rehab project - but still very involved

2006-03-21T15:43:00.000-05:00

I haven't been very good about reading my book on income investing lately because I've been very involved in my gf's first rehab project. Outside of work and helping my folks out with their stuff, I've been spending all my free time helping her out with her project.

It's her first project so she's a little nervous. The goal for this project is to live in it for at least one year after the improvements and sell it only if she can get a very good price for it. Otherwise, it'd be a rental or a second home for us.

When we first saw the property, we knew it was a good buy because it fit into the formula that I've been using the past few years. To my surprise, the appraised value of the property was $42,000 higher than the purchased price, even accounting for the fixes that needed to be done. She was pretty psyched about the property as she should be, cuz she found herself a gem. Well, I found it for her. **pat self**

The budget is $15,000 for a complete makeover of the kitchen and the bathroom using mid-end materials. For the kitchen, all the appliances will be stainless steel, semi-custom cabinets, granite floors and countertop, and recessed lighting. The bathroom will have marble floor and shower, new tub, toilet, vanity, light fixtures and other accessories. We won't be doing the installations ourselves, so the budget includes the cost of hiring a contractor.

To save costs and other design headaches, we've picked out everything ourselves. Recently, we purchased cabinets through Home Depot after getting them to beat Lowe's in design and price for the same brand and style. Haggling does work. This past weekend, we purchased granite and marble tiles and saved on delivery costs since I used my SUV to haul them back to the apartment. It was backbreaking work, but so far everything seems to be going right and within budget.

By looking at similar properties that have sold or are now on the market, my estimate is that once the apartment is fixed up, she can make at least 50k gross on the sale, if she plans on selling right away. The property has amenities that are considered a premium in NYC like in-unit washer/dryer and outdoor space. I'm confident that this investment will give her a nice ROI.

Anyway, I'm extremely happy for her and our future together. She's well on her way to becoming FIRE as well. We'll just need to do 10 of these deals combined and maintain a steady income from our jobs and we'll do just fine.

adsense where are you?

2006-03-21T10:10:00.000-05:00

I am really curious about Adsense so i added it to my blog. However, it's been about 2 weeks and still nothing?! How long does it take to get approved? Is this normal?

Anyway, this whole blogging for money concept seems really interesting. I read Curbed and Brownstoner on an almost daily basis and judging from the number of comments they get, theses sites must have a lot of traffic. I wonder how much they generate in ad revenue.

This guy, Darren Rowse, at Problogger.net makes a six figure income from blogging full time. His website has a lot of content, more than I care to read. But I guess to be a pro, I should spend some time going through the stuff.

I've also been checking out Mike's site Retire Young and Wealthy. He's building a portfolio of revenue generating websites using a lot of interesting techniques. Recently, he had an idea to build a website a week. Man, where do people get so much time to do so many things?! Aside from his websites, he's also building a real estate empire. Props to you, Mike.

I got a few ideas that I want to try out on a website. It's got to do with my favorite activity: Eating! Who knows, maybe I can earn a 5 or 6 figure income from it. I'll just keep dreaming.

I just want my first penny from adsense. Come on now.

more free stuff at work would make me happier

2006-03-17T17:30:00.000-05:00

It's not much, but I got free pizza at work today. I saved $5.25 that I would have had to spend on a turkey sandwich for lunch. The pizza was not for any special occassion. Mr. Manager1 thought it would be nice to treat everyone in the group to lunch once in a while. Bless you, Mr. manager1.

It would be very nice if lunch was provided everyday. It'd save me at least $100 every month. Not only that, I think I'd get to eat better or even healthier foods. I actually know people who work at places that give out a lot of free stuff. 2 of them get free breakfast, lunch, drinks, snacks, and even free dinner if they stay past 7. Every morning they get a breakfast spread, then they order lunch through a website that I can't remember the name of, and by lunch time, their food arrive. Their budget is around $13 I think, so the choices are plenty.

The gf gets free drinks and snacks like Vitamin Water, Snapple, all kinds of Soda, trail mix, candy bars, and even chips. Yeah, too much of that stuff is bad for you, but hey, the only reason why I don't drink a lot of Snapple or Vitamin Water is that they cost money.

For me, I only get water and coffee at work. But the coffee taste bad so I usually buy coffee. Sometimes, someone would buy candy and leave it out for everyone. It's not the same. I think an unlimited supply of free snacks and drinks would be a lot better. I don't know if providing all these perks would make me any more productive, but it'd definitely make me a lot happier.

For now, I'll settle for more pizza Fridays.

changing my mind about 401k

2006-03-16T10:08:00.000-05:00

I was a strong believer in not contributing to a 401k account. Typical of most 20 somethings, I did not want to put money aside where I won't have access to for a long time. Because I had switched jobs many times, I also did not want to have to deal with the hassles of transferring my accounts. Another reason was that I had wanted to save for a downpayment for my apartment, and therefore would rather have money easily accessible.

Now that I've bought my apartment and have been at the same company for more than 3 years, I don't have any more excuses. I've since changed my mind about 401k. Mid last year, I started contributing 5% to receive the maximum match and have watched my account grow to over $6k. It was easy, I didn't have to do anything other than select how to allocate my contribution. I began reading about how pretax money in my 401k can grow faster than post-tax dollars and spoke to a few people who explained to me the time value of these pretax dollars. It all leads down to this. I should max out my 401k! especially since I am going to see an increase in income this year due to selling one of my properties (short term gain). Deferring taxes on part of my income from work should help lower my tax bill for this year.

So, to catch up to the $15,000 limit for 2006, I've changed my contribution from 5% to 20% for the rest of the year. Even if the real estate deal falls through, I can still work on building my 401k account for the next 12 years. Assuming I put in exactly $15,000 each year and my company matches up to $5,000 for a total of $20,000 increase in the account, and assuming a rate of return of 5%, 12 years from now the account will grow to over $318,000. Then, suppose I won't be working anymore and stop contributing, I can let that money grow at 5% and turn it to over $804,000 by the time I'm 60 and can start withdrawing without penalty. Pretty sweet.

I just got to work on my allocations to make sure my account is in good standing. How does this look?

Stock Investments
COLUMBIA LGCAP VALUE 20% NVLUX
DODGE & COX STK FD 10% DODGX
FIDELITY DIVERS INTL 20% FDIVX
GROWTH FD OF AMERICA 10% RGAFX

Bond Investments
WESTERN ASSET COREBD 10% WATFX

Company Stock
XYZ COM STK FUND 30%

Am I too heavily invested in my company by allocating 30% to the company stock fund?

free coffee from Starbucks

2006-03-15T11:08:00.000-05:00

If you haven't done it yet, go get yourself a 12oz cup of coffee from Starbucks. They are hosting their first annual "Coffee Break" today from 10am to noon. Hurry, there's only 50 minutes left for your FREE coffee.

Ahh.. I just got mine. It tastes so much better today cuz it's FREE!!

other people's weddings are costing me a lot of money

2006-03-14T13:50:00.000-05:00

This year, the gf and I are invited to 9 weddings. 3 are out of town, 5 are in town, and 1 is TBD. Suppose we spend an average of $300 per wedding, that's $2700 if we attend all of them. And that's only the wedding gift I'm talking about. The out of town weddings are in Hawaii, Los Cabos, and Houston. $3000 should cover the travel & lodging expenses. Dry cleaning, shoe shines, gas for the car to drive to these banquet halls, new tie/shirt should add another $100 - $200 to the equation. Wedding showers, bachelor parties, other miscellaneous costs... Who knows how much?!

The costs so far add to about $6500, I think. No, I don't think we're going to spend that kind of money on other people's weddings!

We're probably opting out of all the out of town weddings, so we'll save about $3000. What is the proper etiquette of not going to a wedding that you're invited to? Do you still give a gift? If yes, should it be the same value as if you were to go to the wedding?

So yeah, weddings are expensive to those attending also, not just to the wedding parties. We're $3500 poorer this year because of other people getting married.

rich friends - what's your take?

2006-03-13T13:55:00.000-05:00

My gf and I certainly don't try to keep up with our rich friends, but we do complain to ourselves on those times where going out with them costs more than what we like to spend. We're no poor folk ourselves, but we do like to live below our means. When we do hang out with our rich friends, I know that they do try to keep it "real" for us, but sometimes they forget that we're not as rich as them. As in the example of our outing last Friday, the intention was not to go crazy, but while having a good time, we ordered too much to drink and the bill became a lot more than we expected. Normally, the gf and I wouldn't order more than one drink each. This time, rich guy wanted us to try a nice bottle of wine, and before we could say no, he already ordered.

Should we expect our rich friends to be considerate of our spending habits all the time? Is that an inconsideration on our part that we would want our friends to do this? Suppose you were the rich friend, how would you feel if your poorer friend always wanted to eat from Mcdonald's dollar menu? How do you make it so that money doesn't become an issue between good friends? We try to balance it out a bit so that if we do overspend once, we'll need to go on the cheap the next time. So far, hanging out with our rich friends haven't been so bad where we feel the need to cut back on the number of times we can see them.

How do people interact with their rich friends? Or do they just don't want to have rich friends because they feel it's a burden to their financial health?

hanging with our rich friends

2006-03-13T11:15:00.000-05:00

My gf and I hang out with our "rich" couple friends regulary. This past Friday, we went out with them to dinner at a seafood restaurant that we both like, but would only go once in a while for a celebration of some sort. Appertizers, entrees, desserts and drinks later, the bill came out to $135 per couple. Ouch. We don't have a budget for how much we'd want to spend on a night out, but $100 for an entire night for two was something that I would be more comfortable with. When we got hit with the bill, I was afraid that the night was going to end up to be an expensive one. The fun time we had at dinner didn't seem as fun anymore. Luckily, we decided to just hung out at their apartment afterwards and did not end up spending any more money that night.

Our rich friends live in a relatively expensive apartment. Their annual income exceed $1mm. To them, the meal we had was cheap. For us, we definitely "felt" it. We do try to be cautious when going out with them, but this time our caution slipped us. We don't blame them for our overspending, because it really wasn't their fault. It would be silly of us to stop being friends with them because they "make" us spend too much. We can only be careful.

It's funny, but I compare our rich friends to all the pf folks out there with pets. They are expensive to keep, but well worth the extra expense. They really are good friends.

flipping property in this market

2006-03-09T13:35:00.000-05:00

My realtor came back to me with two offers on the property that I have for sale. There are both at asking price, and both parties are putting down less than 10% as downpayment. I accepted the offer from the person with better credit. The realtor assures me that the place will appraise and that we'll close in less than 2 months. This is good news to me, but for some reason, I am just not as confident as I was a year ago when I sold another property for above what I originally wanted. I fear that the buyer would back out if within the next 2 months sellers begin to panic and start slashing their prices. Hopefully, the market would at least remain the same throughout spring, which traditionally have been when real estate activity begin to heat up again.

The sale of this property is important to me. Most obviously, I would make a good amount of money on the sale. Also important is that this would lessen my worry about tying up too much of my money in the "housing bubble". If the sale goes through, it would also give me more confidence in applying MY formula for successful real estate investing to other deals.

**My formula, which is very specific to my own situation, should not be taken as advice for anyone.

What has worked for me with so far, nothing fancy or tricky, just a lot of research:

Buy in an up-and-coming area based on facts, not just speculation. For example, if money is poured into an area by large corporations and/or the local government, and the locals favor this influx of money, then it's a buy. However, don't buy into the "future" value of the up-and-coming neighborhood. I've seen realtors inflate asking prices based on what will happen in the future.

Buy starter homes. In NYC, this could mean studios or one bedrooms. Singles or couples who are not ready to start a family but want to build equity and later trade up. The mindset for buyers is that they will not stay there for too long and therefore most are not as picky as families are. There are also a lot more potential buyers in this segment.

Buy fixers, but not total rehab. I don't have time to do a complete rehab. I also don't know enough to do a complete rehab. I don't want to navigate through the housing codes or get permits etc. Buy something that need comestic changes. New coat of paint, new fixtures, new appliances, etc.

Buy a place that you can see yourself living in. Can't sell it? You can live there yourself, or rent it out.

Buy a place that can be rented out for profit, or at least breakeven. Can't sell it? Hold it for long term appreciation. Make sure the rent would at least cover your mortgage/insurance/taxes/maintenance.

Buy a place with public or outdoor space. In NY especially, space is limited. If you find something with outdoor space or is near a park, you get a lot more potential buyers.

That's it. It's worked so far, and I hope it'll continue to work for me in the future.

my blog is one month old

2006-03-07T23:27:00.000-05:00

It's been one month since I began this blog. I haven't made as much progress as I had hoped but my first month blogging had been a positive experience. My achievements for the month are:

After I gathered all the information regarding my assets and liabilities, I had a clearer picture of my financial health. I learned that I was too concentrated in real estate and my cash was not earning enough interest.
I learned the hard way that it's not easy to make money in stocks.
I opened up an HSBC online savings account and linked it to my existing HSBC accounts.
I converted coins that were just lying around in my apartment into cash, that I will later deposit into my HSBC online savings account.
I started keeping track of my daily expenses to help me set up a budget.
I started reading Ben Stein's "Yes, You Can Be a Successful Income Investor! Reaching For Yield in Today's Market"

The list is not that long, but I feel like I've accomplished a lot. Compared to a month ago, I've definitely become a lot more aware of my money and how it is suppose to work for me.

feeling squeezed out of new york? reverse immigrate!

2006-03-06T23:40:00.000-05:00

For the past few years, my friend and her husband have been trying to find a decent home in a decent school district to raise their two daughters aged 9 and 4. By the time they were offered jobs in Singapore, they've narrowed their criteria to a single family home with 3 bd, 2 ba priced no more than $600,000. But even at $600,000, their choices were limited. Almost everything they've seen needed repairs or were not quite "right". The decision was not hard to make. In a month, they'll be leaving NYC and won't be back for a while.

It used to be that immigrants can come to this land of opportunity, work hard, and reap the benefits of their hard work in 10 to 20 years. That is the story of my parents, who brought their kids to this country roughly 20 years ago. Now, they sit on the 700k equity of their home, collect SS benefits, and never once think about returning to the place where they've once called home for over 40 years. Nowadays, immigrants face a different reality. The reality that hard work and extreme saving may not pay off and that maybe life back home was really not that bad afterall. Perhaps the land of opportunity has run out of opportunities and the possibilities of making it rich is no longer attainable.

It was extremely sad to learn that my friend and her family could not afford to live in the outer borough of Queens, in this "great" city called New York. At the same time, I feel incredibly lucky to have purchased a home back when it was still relatively affordable. However, I can't help to think about what happens when I want to start a family. Will I want to have a house with a yard and a driveway, enough room for as many kids my future wife and I want to have? Or will I try to squeeze them into my 800 sq ft condo? Do I trade up but still carry a 500k mortgage for 30 years? Will I face the same dilemma that my friend faced? Those are hard questions to answer even for someone with a decent amount of money. And when will I get a chance to relax and live comfortably with my future family?

One day, I think I might leave this country too. I'll leave behind all these worries and the stress that they bring. I'll have enough passive income from the money that I'll amass in the next 12 years. I'll live comfortably, and won't have to think about mortgages or commuting time or school districts. I'll keep the condo, just in case my future kids want to come back for a taste of the hard life.

change is good. $137.77 good.

2006-03-04T23:02:00.000-05:00

After sorting my coins into buckets of pennies, nickels, dimes, and quarters, I headed over to the nearest Commerce Bank branch. The process of turning the coins into cash is simple. Simply pour your coins into the "Penny Arcade," print out the receipt , and bring it over to the teller for cash. No fees will be taken out, and you do not have to be a customer of the bank to do this. While the process is easy, the machine I used was a bit inaccurate. To test out the machine, I poured in only pennies and nickels and printed out 1 receipt. On the receipt, there were 337 nickels, 1123 pennies, 5 dimes, and 1 half-dollar. Hmm.. maybe the person before me screwed up somehow and left me his/her dimes and half-dollar. Next, I poured in my quarters and dimes but the receipt showed that I also had 19 pennies. Strange.

I was a little dissappointed to see the discrepencies. But due to the convenience of the "Penny Arcade" and not having to pay a fee, I suppose I can overlook them.

I have to say, it felt really good to convert all those coins into cash. Now I have an additional $137.77 to ~~spend~~ save.

how much loose change do you have?

2006-03-04T12:30:00.000-05:00

One of my not so good habits when returning home is to empty out my pockets and dump all my change into the change bowl. Aside from using the quarters for laundry and having a few bucks in the car for parking meters, i really don't do much with them. So over a looong period of time, this is how much change I've collected in my apartment. I think it's well over $100 worth. That's a decent amount of interest I could have earned if the money was sitting at a bank account.

So, now that I've just opened up my HSBC Online Savings account, I'll fund it some more with these coins. But I'd have to exchange them for cash first. I'll head over to Commerce Bank as soon as I'm done sorting out the coins.

tycoon in the making 3/3/06 - cnnmoney

2006-03-03T14:06:00.000-05:00

It's been a while since i've read a good profile on "Tycoon in the Making" in the Real Estate section of CNNMoney.com. The latest profile is of a single mother in bubbly California. Since 2000, Mary bought 9 properties, sold 4 for $220,000 in profits, rents 4 out for positive cashflow, and lives in 1. The 5 properties that she has in her portfolio is worth about $1.8 mm and if she were to liquidate today, she'd gross about $1.1 mm. Quite impressive. Even if the bubble does pop, and prices drop 30% on average, she'll still be worth over $700k in real estate. So she's in good shape, and that's not counting her $70k+/yr job and her 401k, IRA, savings and other investments.

What I like most about Mary is that she recognized that some of her assets were non-performing and had sold them for profit. In one example, she realized that a 219k property could only bring in $1,100 a mo. Instead of holding on to that property with a negative cashflow in hopes of price appreciation, she traded it in for 2 cash flow properties. Her strategies were pretty straight forward. Buy and hold properties that make money, flip a few for quick gain, do a 1031 exchange to better performing assets. I am sure when her kids are grown up, she'll downgrade her house and pay less taxes using the 2 of 5 tax exclusion strategy.

I would have to say that she was really lucky in purchasing her home when she did. When interest rates dropped, it allowed her to refinance and tap into her home equity to fund other investments. However, having right timing is not enough. Knowing how to act on it is key. Instead of cashing out and buying fancy things, she made good use of the money and build a nice portfolio for her and family.

february 2006 net worth update

2006-03-02T13:22:00.000-05:00

My net worth increased 3.9% (up $15,478) in February due to my receiving the year end cash and stock bonus. In anticipation of the bonus, I gambled away some of it in some highly volatile stocks. Otherwise, my net worth would have been a little higher. The biggest expense I had in February was my insurance premium for my Pathfinder, which was $890 for six months through GEICO. Overall, the numbers for February are still pretty good, but definitely could have been better.

Assets:
Real Estate: $705,000.00 (unchanged from January)
Checking & Savings: $17,446
Brokerage: $ 32,000
401k: $6,352
Pension: $4,658
Restricted Stock: $12,175
Vested Stock: $1,238
Roth IRA: $3,798 (not really sure.. i am transferring it out and putting into my current broker)
Trad IRA: $2,384
Car: $18,865 (unchanged from January)
Total: $803,916

Liabilities:
Mortgage for Primary Residence: $147,327
Mortgage for Rental: $130,951
Line of Credit: $100,000
School Loans: $2,800
Personal Loan: $13,000
Total: $394,078

Net Worth: $409,838

ok.. blogger police.. bring me in

2006-03-01T12:13:00.000-05:00

Yikes.. i just realized that in my previous post about UARM that i've promised myself to not do anything silly. And then within a week, I did something even dumber! I guess i just couldn't help it. The thought of a quick gain was too tempting. I'm guilty.. take me away..

what happened was..

2006-03-01T11:19:00.000-05:00

I keep saying what an idiot I am at stock investing. This will prove it! I'm fessing up to my ignorance and hopefully this will be the end of my stupid investing days.

What happened was...

BIDU. Baidu - A Chinese language internet search provider that went public in August of 2005. I've watched it soar to a high of 153 and slowly dropped to low 50's. And then positive earnings came out that topped Wall Street expectations. Price rose 10% in after hours trading. The next morning, hoping to cash in on the news, I bought a few hundred shares. But just as soon as my order got filled, the price started to drop. I ended up losing 10%. I won't disclose how much that is exactly, but it'll obviously be reflected on my Net Worth update.

I'm not too upset about it anymore. It was a bad mistake and I won't dwell on it. I've ordered 3 investment books from amazon which should be arriving today. Hopefully, I'll wise up a little from reading them. It would be good if I could slowly make up the loss by making some smarter investments in the future.

On a brighter note, my realtor has come back to me with some good news. She told me that there will be 2 offers coming in for my flipper. I won't be too happy just yet. Nothing is certain until we close. But at least it was nice to hear that there is progress.

Also, starting today, I will write down all my expenses. It looks like many pf bloggers have benefitted from doing this and following a budget. I'll get a clearer picture of what my budget should look like by the end of the month. Just thinking about some of my expenses, I already feel that I'm spending too much on coffee. What's worse is that the coffee really isn't that good. sigh.

fire away

2006-02-27T00:12:00.000-05:00

On friday, Empty Spaces, Inc. dropped by and left me a bunch of comments. Of course, I had to visit his blog to see who he was all about. This 31 yr old is truly something. He's done extremely well in real estate buying, selling, flipping, and cash-flowing and has ventured into partnerships to buy businesses and even looked into buying an oil field. His talents doesn't only lie in his investing acumen, but also in asset protection and tax savings strategies. On top of that, he also holds a full time job as a programmer and is married!! I can learn a lot from this guy.

He's on his way to FIRE at the ripe young age of 34, by 2009. I just want to wish him luck and hope to learn more about his adventures in his quest to FIRE.

buy high sell low

2006-02-23T11:11:00.000-05:00

Uggh!! I am such a dick. Again I tried to time the market and it backfired. I SHOULD really stop "betting" so stupidly. There's just no excuse. Must carve out some time to read those investment books.

stupid stupid stupid.

another reminder that nyc is really expensive

2006-02-21T17:13:00.000-05:00

My gf and i were invited to a couple friend's apartment over the weekend. They live in a 2 bed 2 bath apartment with washer/dryer in the apartment, floor to ceiling windows with good views, in a doorman-ed elevator building. There's a bar down the block and a 24 hour bodega around the corner. $4000/mo. NYC standard for near luxury.

How much would we have to make to live there?

Assuming that it also costs $4000/mo to own this place, you would need to earn at least $12000/mo using the 33% monthly housing expenses (debt) to income ratio typically used when qualifying for a mortgage. That comes out to $144,000 a year. But after income taxes and other expenses, there's hardly any money left for savings. For me personally, I would be comfortable if I could spend no more than 20% of my income on my housing expense. With that in mind, our salary would have to be $4000/.2 = $20,000/mo or $240,000 a year.

A quarter million dollars a year just to rent the place. In ten years, the rent becomes $5375 a month assuming a 3% increase each year. By then, we would have to make $322,500. Just to rent.

Let's just buy it then, and keep the monthly payment fixed. Good idea. Let's do the math. The apartment is 1050 sq ft. Assumptions: Average price per sq ft in manhattan is $1000, purchase price = $1,050,000. Condo fees and taxes about $1 a sq ft, or $1050 a month. 25% downpayment. 30 years fixed rate. 6.5% Jumbo loan.

Calculate. $6,028/mo. Again, using 20% Debt to Income ratio, we would have to make $361,680 a year. That's a lot of pressure for 2 people. And no, we cannot ever have more than 1 child.

bi-weekly mortgage payment. what a scam!

2006-02-17T00:02:00.000-05:00

I keep getting these offers in the mail to help me pay off my mortgage sooner by using a bi-weekly payment system. I already pre-pay an additional $200 to my principal each month so i was curious how i could further reduce my interest payments on my loan. So i decided to do a little research on this so called money-saving system.

My bank currently partners with a third party that charges a one time set up fee of $375 and a transaction cost of $.75 for each payment. Not bad, if it helps me save thousands right? Wrong. Not only will this method cost me more, but I can save more money without all the fuss.

How it works.
The way it works is that you pay half your monthly P&I every other week so that you end up paying 26 half payments, or 13 full payments toward your mortgage. Genius! Not really. What happens in the background is that the intermediary holds your bi-weekly payments in a trust account and pays your monthly mortgage payment from that account. Once the additional payments add up to one full payment (your 26th payment,) your P&I gets reduced by one extra monthly payment. For 11 months, your principal does not get reduced further than your regular amount!

What you can do instead
Prepay each month. It's that simple. Take one payment, divide by 12, and add that amount to your monthly payment. This way, your principal gets reduced even more every month therefore saving a bit more interest each month. Eventually, you'll even get to pay off your mortgage 2 months faster.

Yeah.. so no bi-weekly payment for me. In fact, my $200 prepayment a month is actually paying off the mortgage faster. For now, I am scheduled to pay off my mortgage by 2021. However, I'd really like to be done by 2018, so i would have to increase my monthly payment and prepay the loan down to follow a 15 year schedule. Details to come..

If I only had a crash course in stock investing

2006-02-14T11:17:00.000-05:00

First of all, I'll admit again that I am terrible at investing in stocks. I followed a list of IPOs and decided to go in on some of them. Chipotle was one of them. I got into the hype and got out of it and made some money. It is overvalued (so I'm told). However, I do think that this company has a lot of potential. Everytime I walk pass a Chipotle during lunch, there's a long line of people waiting to give them money. Personally, I am not a fan of Chipotle's food. But as long as others love it, I can see the company do well in the years to come. I'll keep my eye out for price to bottom out and pick up some. In the meantime, I should check out this book How to Make Money in Stocks as recommended by Money Turtle.

Anyway, another on the list was UARM. Although there was much hype and had positive earnings, the numbers just didn't jive with the value of the stock. As a result, the stock took a dive and lost over 20% of its value. I did lose some money in it but I'll take it as a lesson for being a stupid investor.

So I've learned my lesson. And before I do something foolish again, I'll just sit on the sideline and watch. However, if I had been more knowledgable, I could have seen a similar story with STP, another overvalued company. Short selling 200 shares yesterday would have been nice. It would have made me $1600 today.

This stuff is scary, but I'm hooked on it.

February is Bonus Month!!

2006-02-13T12:05:00.000-05:00

I got my numbers for my Year End Bonus and I am pretty happy with what I am getting. $13000 cash bonus plus about $7300 worth of stock grants. Not too shabby for a 9-5 type of work. At the next pay period, my 401k contribution will also be increased by $1300 (5% of $13000 + 5% company match) so my numbers for Feb are looking pretty good. Since my score was a "Exceed Expectation", I've decided to ask for a raise as well! Hopefully, the next adjustment won't be just another Cost of Living adjustment.

I always hated being a corporate drone but this job has been pretty good to me financially and it gives me a lot of free time outside of work, which I am using to take care of some family obligations and hopefully to one day start a side business. I remember reading about operating a side business in one of the blogs in the personal finance network. I guess I'll have to link to it next time I come across it again.

I've got so many ideas about being more aware for my finances.. I'm glad I've started my very own blog to write about them.

Getting Started

2006-02-10T16:57:00.000-05:00

Well, the first thing I did after my last post was to gather up all my accounts and add up all my assets and liabilities. Like I said before, the real estate portion is decent (for now), but the rest is just plain ugly. How is it ugly? Well, I started my traditional IRA about 6 years ago at $2,000. It is now worth $2376! Ugh. My Roth, double UGH! I contributed twice. Once for $2000 and another for $3,000. It's now worth $3,797 and costing me qtrly fees. Well, I did move the Traditional IRA into a 9 month CD at 4% recently, so that's not totally bad.

Here's the summary:

Assets:

Primary Residence: $ 388,000.00 (NYC estimated market value, used for 06/07 tax)
Rental Property: $ 165,000.00 (Price I paid for it in July 05. Not adjusted. Rented)
Flipper Property: $ 152,000.00 (Price I paid for it in Aug 05. Currently listed for sale)
Checking & Savings: $ 10,399.42 (With 3 different banks. Looking into HSBC online savings)
Brokerage: $ 34,170.00 (Crap. Tried to play some IPOs but got burned by UARM)
401k: $ 4,275.06 (Started not too long ago. Fully Vested. Company matches 5%)
Pension: $ 4,343.44 (Will vest in 2 more years)
Restricted Stock: $ 4,349.00
Vested Stock: $ 1,174.23
Roth IRA: $ 3,797.00 (in money market and losing money)
Trad IRA: $ 2,376.44 (9 month CD expires in July 06. 4% APY)
Car: $18,865 (2004 Nissan Pathfinder SE - KBB value in good condition)
Total: $788,749.59

Liabilities:
Mortgage for Primary Residence: $147,790 (30 yrs @ 5.75% w/ additional $200/mo prepayment)
Mortgage for Rental: $131,100 (30 yrs @ 5.375%)
Line of Credit: $100,000 (@ Prime - .25)
School Loans: $2,500 (very low rates)
Personal Loan: $13,000 (loan from parents, minimal interest as long as higher than the bank)
Total: $394,390

Net Worth: $394,359

I'm quite happy with this number actually. But I am sure I could have done better if I had known more about investing in the financial markets. An interesting observation is that I am almost exactly 50% leveraged. Is that the right term?? I am worth as much as I owe. Anyway, I wonder if it's better to be more leveraged at my age (28), maybe like a traditional mortgage at 80%, and try to built more wealth with the leverage. It would be interesting to look into the behavior of others to see how they handle "good" debt.

Introduction

2006-02-08T15:31:00.000-05:00

As I read posts from other bloggers about their personal finances, I realize that my own financial situation is a mess. Not only that, I've also come to the conclusion that my knowledge of investing is limited. As a result, I would like to use this blog as a tool to educate myself in the area of personal finance. Hopefully, bloggers who write about their personal finances can give me suggestions as I begin my quest to build my net worth (wisely), with the goal of becoming Financially Independent / Retired Early, by 2018, when I turn 41.

Although somewhat clueless about everything else, I have done well investing in Real Estate. If there was one thing I did right, it was buying a condo when I was 25. Having said that, I believe my current Net Worth is about 375k, with more than 300k in equity in 3 properties. As the Real Estate market flattens or fizzles, I think it would be wise for me to look at alternative investments, so that will be a high priority for now.

When would I know if I've arrived at FIRE? I don't know at this point. At the minimum, it would be a primary residence that's paid off, plus enough money to last till SS age.. well.. we'll see. I guess I'll learn more about how much I need (to live comfortably) as this quest progresses.