net worth – Page 4 – One Dollar Allowance

July Financial Update

July 11, 2024July 11, 2024mrsonedollarallowanceLeave a comment

RENTAL EXPENSES

We took a trip to Richmond, VA to work on rental properties. It was fairly last minute. I had a schedule of work at each house that I planned. However, I didn’t plan on the heat index being 113 and 112 for the two main days we were there. I was able to get everything on my list done except for staining the new deck at one of the houses. I didn’t want to risk it not applying or curing correctly because it was too hot and in direct sun. Plus, the tenant didn’t even clear it off so I could work on it.

I had multiple houses pay rent late this month. I was surprised. One let us know on the 5th that they had an emergency, so they wouldn’t be able to pay until the 17th. I had someone pay half their rent early in June, but then haven’t received an answer as to why the rest of her balance ($345) hasn’t been paid yet. Another tenant misunderstood her maternity leave pay, so she asked for more time to pay rent. She paid $800 on the 7th. I told her not to worry about it, and just pay when she can, without the late fee; she only has $150 remaining.

I’m currently working through two roof replacements. One of them will be covered by insurance, but then I’ll be paying to have vents added, the chimney torn off and capped, and the soffits repaired on top of what insurance can do. Then the other one we’re paying out of pocket for. It’s original to the house, which was built 24 years ago. There has been storm damage to it over the last year, and it’s just generally time to address the age even though it hasn’t caused any problems yet.

PERSONAL EXPENSES

Our medical insurance company had some glitches in their claim processing through the first half of the year. Now they’ve caught up, meaning I’m paying large sums of medical bills. Mr. ODA took on booking lodging for his guys trip later this month, which meant that the second half of AirBnB payments were applied to the credit card.

Mr. ODA increased each kid’s UTMA from $75 to $100 per month. That means we’re investing $3,300 each month into accounts, on top of maxing Mr. ODA’s TSP contributions and both of our Roth IRA contributions for the year.

Our contractor has ghosted us on our own deck build. We bought some new furniture for the main deck area. Once it’s not 100 degrees outside, we’ll work on doing the waterproofing of the deck ourselves so that we can start living on the patio under the deck and get that hot tub ordered this fall.

NET WORTH

I updated the valuation of the houses this month. I typically only do that 3 or 4 times per year. I try to account for the big increases we see at the beginning of the spring, and then adjust slightly around this time of year once the comparable houses have closed and sold. This update added $140k worth of equity into the equation. All of our liabilities decreased since last month, and all our assets increased since last month. That has equated to an increase of over $200k in our net worth.

Risk Taking

June 29, 2024mrsonedollarallowanceLeave a comment

We’ve hit some pretty big milestones financially. Mr. ODA casually mentioned a certain number by a certain age, but our goals were more associated with quitting our full time jobs. I quit my job in May 2019. We’re in a situation for a couple of years where we’ve been ready for Mr. ODA to quit, but we keep pushing the date back because his job isn’t preventing us from doing the things we want to do.

How did we get to the point where we replaced my income and I could quit working without scaling back anything financially? We took risks. Some of them were big ones. Some of them weren’t so big, but they felt big at the time. Most risks worked in our favor, but some did not.

RETIREMENT ACCOUNT LOAN

Mr. ODA and I both worked for the Federal government. Their version of a ‘401k’ is the Thrift Savings Plan (TSP). There were two loan options that were available: a primary residence loan or a general purpose loan. You then repay the loan back to your account with interest (the interest is paid into your account as well). When we took our loans, the rate was just over 2%. According to tsp.gov, the rate is currently 4.75%. There’s a fee of $50 to take a primary residence loan and a fee of $100 to take a general purpose loan.

While you’re missing out on the compound interest of your account when you take the loan, the ability to buy our own house, create that equity, and be at the beginning of our careers made the decision easy for us. We made extra payments during the repayment period, and we were able to adjust the regular payments up and down based on our financial needs each month. We have no regrets in our decision.

ADJUSTABLE RATE MORTGAGE

An adjustable rate mortgage (ARM) sounds scary. A variable rate. Most people are used to locking in a 30-year mortgage. I’d venture to say that most people also think they know what an ARM entails, so they don’t even consider it. We considered it. We looked into it in great detail. We couldn’t see why more people didn’t use it. We actually were very hesitant over this decision the first time because an ARM’s reputation is very negative. However, we took our time to lay out the numbers and see what would work best for us.

The first time we used an ARM, we knew we had no intention of being in the DC area for more than 5 years. By using an ARM, we saved thousands worth of interest in our mortgage payments over the three years we owned it.

There are several “fail safe” parameters in an ARM. For one, you do lock in a rate for some period of time. We considered 5 year, 7 year, and 15 year options. Then after that period of time, your rate can only adjust within the contractual terms. For example, we have one rate that can adjust 2% in either direction at the 5 year mark, and then 1% for each of the following 4 years after that, with a cap of paying a maximum interest rate of 7% (this is an old loan, clearly). The rate adjustments aren’t a given, and they’re adjusted based on the prime rate at that time, not based on the whim of the bank or the maximum it could increase.

We also ran the numbers based on the interest rates. An ARM’s incentive was that the interest rate is lower than the 30-year conventional loan rate. I don’t have the details since this post is more of an overview, but the ARM saved us money we paid towards interest. Interest is a higher percentage of those earlier payments in an amortization schedule. We either sold the house or paid the loan off early, so the ARM adjustment never came into play, and we saved all that interest cost.

BUSINESS/COMMERCIAL LOAN

A series of events had us asking a local credit union about loan options. They offered us a commercial loan. This one has a big catch though: there’s a balloon payment. Our loan is amortized over 30 years, which is how our payments are calculated. However, the balance of the loan is due at the 5 year mark. That balance is going to be about $175k. We have no plans to pay that off by that time (we aren’t even making extra payments towards it). We will refinance it. The pro here was that our interest rate for a loan closed on in 2022 was 3.625% (when mortgage rates were in the 5% range). Hopefully by 2027, interest rates are lower than they are today; this is a gamble at the moment.

PARTNER

There’s a cap in the “Fannie/Freddie” world of the number of mortgages a person can hold. That cap is 10. There was a point where we had completely leveraged ourselves and ran out of room. We had a Realtor friend interested in more rental properties, and he agreed to front our down payments, which we’d pay back with interest, and have a 50% share in the houses.

We signed an agreement with him that outlined our payments to him for the down payment he covered (which we paid off in about 3 months), and it established our 50% shares in the two houses purchased via this method. We purchased the houses in April 2018 and February 2019, and put them in a limited liability corporation (LLC). Each month, I collect rent from the houses and pay out our partner’s share. These houses don’t ask for much (one has been rented since before we owned the house and one has a tenant that has been there a few years), but if they need something, I handle coordinating the maintenance request. We should have set up a schedule where I’m paid for my time since Mr. ODA and our partner really don’t do anything for these houses, but luckily the requests are few and far between. We split all costs 50/50.

RENTERS WITH COMPENSATING FACTORS

I have several examples of entering into lease agreements with tenants that don’t have a perfect record. In these instances, we typically request some sort of compensating factor (e.g., a cosigner, an additional security deposit). We give everyone the chance to tell us about their financial and rental history before we run a background check on them (telling us doesn’t cost anything, but a background check does).

We had a prospective tenant not disclose a bankruptcy on her record. I could have immediately disqualified her and her husband, but I gave them a chance. They lived in that house for a year. They only moved because his job after grad school took them out of the area, but they set us up with a new tenant at their departure, and she stayed there for several years. Then they moved back to the area, and they requested a house of ours. We had one available, so we happily had them move into it. There’s one success story from giving someone a second chance.

I also have a couple that doesn’t have a happy ending. We had purchased a house without vetting the area. I had fully vetted a house two blocks away, but I learned my lesson that the crime of an area doesn’t need more than one block to change its ways. This house was in a bad area. The house itself was adorable. It attracted wonderful people to come see it, but they’d check the crime history of the area and decline applying (understandably). Someone came forward with a 448 credit score. That’s pretty bad. She wrote a really nice letter though. She disclosed everything up front and said she just wanted a roof over her and her son’s heads. I believed it. We then spent months and months struggling to get her to pay her rent, even offering her a payment plan several times and changing her lease structure to allow her to pay twice per month (hopefully eliminating the constant late fees she was accruing). We eventually gave her 30 days notice to vacate the premises due to lack of payment. She didn’t even make it a year. Instead of listing the property for rent, we ended up selling it. That was a whole other debacle where we entered into a contract to close by September of that year, but we didn’t close until the following January due to the lack of financial qualifications on the buyer’s end.

PAID OFF LOANS/MORTGAGES

This doesn’t appear to be a big risk. What could go wrong with paying off your mortgages? Well, if we didn’t have a cash reserve, and there was an emergency, then we paid off these loans with the cash on hand, leaving nothing to cover that emergency. However, those dooms-day concerns rarely come to life, and we had continued cash flow that replenished our accounts.

The positive here is that we freed up cash flow. Instead of having mortgage payments to make every month, we now have the cash to go into savings or towards any higher-than-expected bills. Besides the house we sold, we’ve also paid off 6 mortgages. That means that we’ve paid less interest to the banks, and that’s more money in our pockets.

We haven’t paid off any other loans because they’re all below 5% interest (they’re actually all below 4% except for 1 with our partner, and we would need his buy in the pay that off, which he hasn’t wanted to do). After payments to mortgages, our property manager, our partner, and utility payments, we have over $8,000 in cash flow per month. I will note that this doesn’t include things that I need to save up for each year to be able to afford (e.g., taxes and insurance), and it doesn’t include maintenance needs that crop up. Cash flow is important for us because if Mr. ODA quits his job, that’s less income to offset our regular personal expenses.

FINANCIAL AWARENESS

On any given day, we’re weighing several financial decisions fluidly. There are the givens that we have to pay the bills that are out there. I have to pay all the mortgages and utility bills. I weigh the best time of the month to pay each bill, which means that I may not pay them as soon as the statement arrives, but may wait until closer to the statement due date (but never carrying a balance unless it’s 0% interest). Then there are the options such as paying additional payments towards a credit card with a 0% interest rate, additional principal payments to a mortgage, or additional investment plans. We’re not looking to apply for any loans, so the $9k balance on a 0% interest credit card doesn’t have any attention of mine except the $500 I pay each month. I have it marked on my calendar when that 0% introductory rate expires, and I’ll have to pay the balance in full.

Our money is handled by a full, big picture, approach. Each day, there’s a chance that we come to a fork in the road and make a different decision because the variables changed slightly. We don’t put our money into “buckets” or “envelopes.” In my experience, people who handle their money like this end up overspending.

We hit our goal to replace my income well before our son was born, but then I kept working until he was 9 months old. While I was still working, we could have easily said, “we hit our goal, but since you’re still working, let’s put all that money into a slush fund of some kind.” When people see any “extra” money, they then look for their next splurge. They feel they deserve something for saving money instead of putting that extra money to work for you and your future.

There are those “autopilot” moments in our finances, but when it comes to making a big change, we put pen to paper and check the details. We aren’t going to take $100,000 out of our investment accounts to pay off a 2.5% mortgage. But one day, we will have to consider what to do with our loan that has a balloon payment, which shows it’s not a hard and fast rule that we won’t pay off anymore loans early (because if interest rates are still at 7.5% in 2027, it may not be worth refinancing that balance).

LIVE SMART WITH INFORMED DECISIONS

Take the time to make informed decisions and research the data for yourself. Run models with the projection of money to see for yourself if it works in your situation. Don’t spend your days listening to other people’s opinions on actions. If we had listened to opinions, we wouldn’t have taken a TSP loan or taken out ARMs.

We’re at over $4 million net worth, have a solid cash flow (which is important because if our net worth of $4 million was tied up in a retirement account, that wouldn’t give us the ability to live comfortably now), and have plenty of money going into accounts for the future (for both us and the kids). Our spending is managed regularly with an ingrained thought process. Take the small, first step for yourself without other people’s opinions weighing you down.

If you want to live differently from everyone else, you have to take action and think for yourself.

June Financial Update

June 15, 2024mrsonedollarallowanceLeave a comment

Welcome to summer, where we’re traveling and I’m not posting on time. This time it was because I had to figure out a few things with bills and health before I had the time to get to the update. I can schedule content in advance, but not this post where I need the most up to date numbers when talking about our net worth.

We’ve been busy with baseball and activities around the house, so our spending was lower than it had been. However, this time of year is typically where we see a lot of our rental property expenses come through. We purchased many houses around this time, which puts their insurance payments due now. Then the City of Richmond’s tax payments are due in June and December also. The City of Richmond doesn’t post our escrow payments timely, and it drives me crazy. Every 6 months, I get notification that I have unpaid taxes and it’s the due date. I have then go through every escrow and prove to myself that they were in fact paid out over 3 weeks ago, and then I have to go back and check that Richmond posts them eventually. I stopped sending checks into them for the accounts that aren’t escrowed because it took too long to monitor, so I pay the $0.95 fee to pay via their ACH option online.

Mr. ODA had been in a relationship with a financial advisor, which was $35 per month. Over the last 3 months, Mr. ODA has been working to become his ‘apprentice.’ He passed his Series 65 exam and will begin working on this guy’s team. Not that $35 is a huge amount, but that’s one less ‘subscription’ that we’re paying monthly.

Speaking of subscriptions, we did something that I’d venture to guess other people wouldn’t put the effort into. One of our credit cards (that we rarely use) had a promotion for a $15 statement credit if we had at least $100 worth of subscription and/or utility payments go through. Most of our utilities can’t be paid with a credit card without paying a fee. The fee for our internet service was low enough that we went ahead and switched that one over for one month. Then I went into our Y membership and switched the credit card on file for that payment. With a few button clicks in May and then later this month to switch everything back, we made $15. It doesn’t seem huge, but it’s the compound of that thought process and awareness that makes a difference in your finances.

The ‘bigger’ expenses of the month were one kid’s school registration fee ($175), purchased baseball tickets (the Oriole’s don’t charge for 2 kids per paying adult!), got an oil change ($65 ugh), paid two homeowners insurance policies that aren’t escrowed ($1,371), paid for pet sitting for a coming trip ($155), paid car insurances ($567), and built a few steps in a new walkway ($275). Our deck isn’t complete because the waterproofing isn’t waterproofed. We haven’t paid out the last $3,500 on that, but we also haven’t heard from our contractor in several weeks.

We initiated a homeowners insurance claim for one of our properties. The tenant wasn’t complaining about the house/roof, but we knew the roof and soffit were in rough shape. I was hesitant to contact a roofer because I wanted the job done right. I expected the house is really old, and there would be decking problems to fix. I dragged my feet on finding someone, but I did click with someone finally. He went out and actually suggested we go for a claim to cover the replacement. We’re in the process of that now. An adjuster has been out to see the damage, and now we wait for the estimate. In the meantime, another property had water spots on the ceiling show up. I had the roofer go out there to check it out, but he didn’t see anything glaring. That roof also needs replaced, but I’m going to get at least one more quote on that job since it’s not through insurance.

All the good things (assets) went up and all the bad things (liabilities) went down! Our net worth increased by $60k over the last month.

May Financial Update

May 9, 2024June 3, 2024mrsonedollarallowanceLeave a comment

I don’t even know where to begin. Mr. ODA and I are looking at our accounts wondering where it all went wrong. Only, it didn’t really go “wrong,” and we have plenty of money, we just don’t want to move anymore money. For not really doing any frivolous spending, we spent a lot. The rental houses needed a lot of money, which equated to high credit card balances and extra payments towards that.

We had been sitting with insurance money in our savings account or our Treasury account. That insurance money was paid out to us last summer, and we’ve been saving it until the deck was rebuilt. The deck is nearly complete, with a balance of only $3,500. So that’s $41,500 that’s left our cash accounts in the last month or so.

We have our typical monthly expenses – preschool tuition, YMCA registration. Then add in buying a few summer clothes staples for the kids (honestly, I’ve literally made it this for without having to buy them clothes because of hand-me-downs and gifts received, so this is a huge blessing and win). Although, I will note that these purchases totaled under $100. We had a pickleball tournament, kids bowl free subscription, a dance recital to purchase tickets for, an eye exam, contacts ordering, swim lessons, etc. All of these add up quick. Not to mention the gigantic purchases that were on the credit card of new flooring in a rental, new patio furniture to replace the set that a tree fell on last July, and season passes to the ski resort for next year (although that cost less than last year’s passes). We booked concert and baseball tickets for a trip this summer, bought flights to NY for a wedding, booked an AirBnB and rental car for a trip, paid for a week of summer camp for two of the kids, paid $800+ for taxes (that this jurisdiction allows me to pay with a credit card!), and then just the regular day to day spending.

It’s been an exhausting few weeks while we manage rental turnover, arguing with our deck contractor to do the job right (waterproofing is either 0% or 100%… there’s no “good enough”), managing a nasty tenant, reading two books that have a deadline of next Wednesday, an allergic reaction by one kid to amoxicillin, and keeping 3 kids alive and to all activities while finishing out the school year. All that to say, I plan to dig in much deeper into first-third-of-the-year spending here soon.

Our cash and investment accounts are down almost $37k from last month. Our credit cards are actually lower than last month, but the balances are still higher than I like to see. But everything else went in the right direction, with our net worth even increasing by over $25k. Hopefully we’ll hit a spending lull over the next month now and get back into a groove of ‘normal’ again.

Hitting our Goals

May 2, 2024May 2, 2024mrsonedollarallowanceLeave a comment

I mentioned at the beginning of the year that our general financial goal is $4 million net worth. I acknowledge that this is not a specific goal that most people can relate to. But I also pointed out that we weren’t always sitting with nearly that amount in our accounts, and that made me start thinking about where we were. This is long, but I didn’t think it worth splitting into multiple posts. I’ve gone into the topic in general, but this is our actual story and the steps we experienced.

This is just meant to show you that you can grow each year and slowly chip away at a goal. Everyone makes fun of the “don’t buy Starbucks everyday” philosophy. It’s not that saving that $7 per day is literally going to make you a millionaire in itself. It’s saying that if you’re willing to spend that $7 daily, that’s likely indicative of other spending in your day, and you should be more deliberate with your spending. I saw a meme on Instagram that said something similar about buying decor for your home, and if you’re willing to spend “just $25 on this lamp,” those little expenses add up over the year. I’m a broken record in saying make every purchase a deliberate, thought-out action; I went into how much effort (and years) I put in to purchasing a $4 tape dispenser on this post.

The background here is to first show you how I had no money, but I’ve been diligent on my spending and working towards goals. Mr. ODA was more of a saver and more prepared for the big life expenses in your early 20s. The part where we work towards buying a house is where we really buckled up and made life decisions that kept us on that track. Our money philosophies have gotten us to where we are today – every dollar has a purpose.

MY FINANCIAL HISTORY: COLLEGE, WHERE I STARTED MY INDEPENDENCE

I never liked relying on other people, so I was interested in making my own way as fast possible. My parents gave me an ultimatum during my sophomore year of college – either become a resident assistant for free room and board, or take out loans to help pay for it in the next two years. I didn’t want to take out loans, so I started looking for off campus housing. I didn’t mind living on campus. I have no idea why I was so dead-set against taking out loans and how that would have been ingrained in me at that time. But living off campus would allow me to pay month to month, instead of living on campus where I’d have to pay each semester’s housing costs up front.

On top of that, my dad offered me to buy out his car. He had let me drive the car to college that year, but around Christmas time, it started acting funny. It turned out that second gear in the transmission needed to be replaced. He said I could pay for the fix, and then it could be my car. I didn’t like the idea of being 3.5 hours away from my family and having a car that appeared unreliable. So I went car shopping, and I leased a Honda Civic. My car payment was about $300/month. I leased it instead of buying it because I didn’t need to put any money down.

I worked three jobs that summer after my sophomore year of college. It was so hard. I was working 40 hour weekends, and then I’d put hours in during the week. I remember getting burnt out and being overwhelmed because I had to miss my sister’s graduation party. I was working at a catering hall, which meant late hours on Friday and Saturday, and early hours on Sunday. I was also working at a bagel shop (big on Long Island), which was a 5:45 am call time, but at least I’d be done by 10 am. Then I was working as a cashier at K-Mart, which was Monday through Thursday in the afternoon or evening, and sometimes on Friday.

Even though I was working all those jobs, I still struggled with paying my bills once I got to college for my junior year. I paid too much for rent because I wanted to live on my own. None of my friends were interested in living off campus, and I was too afraid to live with someone I didn’t know. My parents ended up giving me $100/month for 6 months so I could pay to run my heat. I remember it being October, and I told my mom that I hadn’t turned my heat on yet. So she sent me the money each month to cover the heating bill instead of trying to live in layers and blankets because I didn’t want to pay for it.

When I moved back up to college, I was working at JCPenney while going to school. I did pretty well. My grades didn’t suffer, and I still felt like I had a life so I didn’t get burnt out with only work and school. I took on extra shifts and stopped going home for the smaller holidays (e.g., Thanksgiving) so that I could work.

MY FINANCIAL HISTORY: MY BIG GIRL JOB

My guidance counselor told me that financial firms would be expecting internships on my resume. This was 2007; financial firms were fat and happy, so they weren’t paying interns. I kept my eye on the job boards (which were literal bulletin boards) in the financial building. I found an internship with the Federal government that was paying $13/hour! I applied in August. I heard nothing for weeks, so I gave up hope. Suddenly, I received a call asking me to come in for an interview on Halloween! I had never interviewed before, so this was scary. Then the guy told me that they didn’t even know if they were going to hire a mid-career hire or go the internship route, and they had never had an intern before. That was the second time I gave up hope. A month later, I received the job offer, and I started working in December 2007.

From the start, I put money into the Thrift Savings Plan (TSP), which is the government’s 401k equivalent. My parents told me to take each raise I got and put it right into there also. If I was used to living on the lower amount, then keep the rest in savings. I followed that advice until I maxed out the contributions. I didn’t have trouble paying my bills, but I wasn’t saving as much as I should have for rainy days.

MY FINANCIAL HISTORY: MEETING MR. ODA

Mr. ODA showed up in my office in October 2009. Shortly after meeting him, we were hanging out, and next thing I knew, he was asking me my social security number. He was signing me up for a rewards credit card, since I had a credit card through my bank that was getting me no incentives. By the time I met him, I was living comfortably, but I wasn’t saving with a goal in mind. Whatever was left over became savings, and it didn’t matter to me what that number was. I was maxing out my TSP and paying my bills comfortably, and that seemed good enough for me.

OUR FINANCIAL HISTORY: IN A RELATIONSHIP

Mr. ODA came with a lot more money than that into the relationship. He had always been planning to save for two big purchases: an engagement ring and a house. To me, buying a house was somewhere down the road, but I didn’t have the confidence to move forward on that. I hope to instill that confidence in my children because that would have made a big difference.

Mr. ODA designed my engagement ring at a little mom and pop jewelry store in Harrisburg, PA (long story on where we’ve lived, for how long, and why). He proposed in November 2011. In December, I moved to DC, and Mr. ODA joined me shortly after. We lived in an apartment. We lived halfway between where he and I worked, but I admit we paid way more for rent than we prudently should have. Even though I grew up in the shadows of New York City, actually living in a big city was scary to me. We went on a house hunting trip, and I struggled with anything that didn’t look really nice/new. We were able to get a reduced rent rate, but at about $800 per month for each of us, it was significantly more than the $450 per month I was paying in Albany, NY.

The goal was to rent for a year while we scoped out the area to find a house to buy. We didn’t know anything about Northern Virginia, and we wanted to go to open houses to learn how far our money would go. Newsflash: not far.

OUR FINANCIAL HISTORY: A WEDDING

While we explored the area for a house, we were also planning a wedding. We paid for more than half of our wedding. My parents gave us a chunk of money towards it. If I had been married in Kentucky, it would have covered most of the wedding. However, I grew up on Long Island, and a wedding is a very different kind of event there. I probably wouldn’t have known any different had I not attended several weddings in South Carolina, where weddings were low key. After looking at venues in both Kentucky and New York, I ended up breaking down one day that I had always dreamed of a specific type of wedding, and Kentucky just wasn’t it.

I saved as much as I could in all the other areas since the venue was so expensive. The venue cost included all the catering, staff, and cake. I went cheap on invitations, my dress, favors. I just didn’t have the cash on hand to do a lot, and I wish I had done more. I also wish that I had been married on site at that venue instead of in my hometown church, but it is what it is. I also went cheaper on the photographer, and the day was terrible because of him. I recommend to everyone to get a good photographer and really check their portfolio (and if they do crazy things for photos, don’t trust that they’ll not do crazy things when you ask them not to).

We got married in August, after our November engagement. We had to lay out over $12k for that. The unexpected part of that was that we found a house to buy earlier that summer.

OUR FINANCIAL HISTORY: OUR FIRST HOUSE

Mr. ODA was a good saver. The problem was that he didn’t expect to pay for a wedding, and he didn’t expect to live in Northern Virginia. He was expecting to buy a house around $150k. We were struggling to find a house with walls and floors (literally) at $350k.

We lived a meager state for that year. Our goal was to spend less than $5 per day on food. That meant we weren’t spending money at restaurants. We were packing our lunches for work days. We were living off of macaroni and cheese. We weren’t taking trips. And yes, we were literally tracking our expenses on food each day.

THIS IS IMPORTANT: We were preapproved to buy a house up to $750,000. THAT IS STUPID. We didn’t want to pay PMI, so our purchasing power was based on our down payment being 20% (if you don’t come to the table for a conventional loan with 20% of the purchase price, the bank tacks on PMI). Between loans we could take from each TSP, cash on hand that we projected to have with our savings over the year, and possible liquidation of investments, we projected we could have about $70,000 on hand. That means we were shooting for $350,000 as the purchase price.

Our Realtor knew we were approved for double that, but we held our ground on our price range. We considered several properties. We put an offer in on a house at $380k. It was a bank owned foreclosure that they had flipped for resale. The flip was bare bones, but the house looked ok. We wouldn’t need to put immediate work into it. Our offer was declined. Then later that day, the bank called and asked if we still wanted it. We were instructed that the previous bidder attempted to counter the bank, and that’s why we were given the offer. We weren’t willing to lose it and accepted. We were under contract for a $380,000 house. That meant we needed at least $76,000 by closing.

Mr. ODA and I each took out TSP loans, we were gifted money from our parents, and we used our savings. Our final closing costs were just over $78k. We got our 20% down, so no PMI. We then spent the next 3-5 years paying ourselves back in our TSP. The loan payment amounts were adjustable, so we paid more when we could, but we had the flexibility to back off some of the payment totals if we needed to.

OUR FINANCIAL HISTORY: SELLING OUR FIRST HOUSE

We bought our first house in July 2012. We sold the house in September 2015. In that time, the house appreciated by $70k. On top of that, we had the 20% equity we had put down, and we had the equity for the principal payments we made over the previous 3 years. We were moving from the DC area down to the Richmond, VA area. We ended up purchasing a new construction home for about $360k. After putting 20% down on that purchase and paying off some debt (I had a car payment, and even though it was 0.9% interest, I wanted to manage less payments per month), we needed to decide on what to do with the rest of the money from the sale. Mr. ODA convinced my to put that towards rentals.

OUR FINANCIAL HISTORY: RENTAL PURCHASES

With that extra equity we had sitting in our account (which we had in an interest earning account), we purchased 3 rental properties (all with at least 20% down). The leap of faith we took into a landlord role, while figuring out things we didn’t know as we went is why we’re where we are now. We created a semi-passive income stream with these rental properties. Our savings continued to grow, which we used to purchase several more rental properties (again, with at least 20% down each time).

OUR FINANCIAL HISTORY: MRS. ODA ‘RETIRED’

By 2017, we had several rental properties, had paid off all our debts (e.g., car, TSP loans, IVF cost), and the net from the rentals was enough to replace my six-figure income. At that time, we had no kids, so there was no ‘real’ reason for me to not be working. As I continued to work, we kept it in mind that we’d be losing my regular income in the near future. I kept working, drawing down my leave balances, until our son was 8 months old (May 2019). I’ve worked a few random jobs here and there since then, but that was for something to do and not because we needed money.

MAKING GOALS

Mr. ODA had a goal of $1 million by 30. He exceeded it. At no point did we say “reach $4 million by 40” or anything like that. However, we’ve regularly tracked our net worth and made smart moves with the money we have. We don’t keep money in a liquid state for long. We make sure our money is working for us as much as possible. We take calculated risks that allow for interest earnings.

We also keep our ears open for extra income opportunities. We’ve been secret shoppers before, and I’ve taken on different short term work roles. That extra income isn’t meant to be frivolously spent; it’s income that we still utilize to move our family’s goals forward. We don’t buy the latest gadgets, but it’s not like we don’t have nice things. We spend will intention within our means; we don’t take out personal loans (e.g., furniture loans, layaway loans).

A goal that keeps moving due to preference is that Mr. ODA will stop working a full time job as well. The lack of insurance options is keeping that from becoming a reality, but if we really wanted to push it, he could quit tomorrow because we’re in a good financial spot. Nearly a year ago, we set up a separate bank account to have his pay check go into. It’s nice to know that we can live without his income, all the while having that bank account as a safety net.

April Financial Update

April 13, 2024mrsonedollarallowanceLeave a comment

I had this post mostly written by Wednesday, but we traveled earlier this week, and I haven’t kept track of the day very well. This is the first I’ve been able to update our net worth and get this done. Ironic, considering how I started this post when I expected it to be on time. And now..

This past month has been exhausting on me. I knew March was going to be busy. We had a bunch of sports schedules to manage, lots of kids birthday parties, hosting my dad for a long weekend that coincided with 3 family birthdays and the first anniversary of my mom’s passing, an assortment of Easter activities, a trip, and random other events. On top of managing these day-to-day things for our family, our deck replacement started, and we had to work on a massive turnover of a rental property. I’m in a perpetual state of tired these last few weeks.

DECK REPLACEMENT

On July 2nd of last year, a storm blew threw that destroyed our neighborhood. Honestly, we’re surprised by how little actual structure damage there was for our neighborhood because it looked like a war zone with the amount of trees down. A couple of houses had a tree fall on their roof, but only cause minimal damage that resulted in shingle replacement. We appeared to bear the brunt of the worst, which was a tree falling on our deck, crushing our furniture, moving all the supports, and cracking the concrete blow it. Another tree missed falling on one of our cars by centimeters, but that limb ended up cracking our driveway apron. We struggled communicating the extent of the damage with our insurance company, and they eventually realized what was needed and paid out on it five months after the incident. Our construction started on March 18th.

It hasn’t been an easy process. It’s emotionally draining on me because there were communication issues with our contractor that he wasn’t taking responsibility for. Then there were minor issues, but issues nonetheless. For instance, they installed waterproofing so the patio would be a dry area, but they cut through one of the barriers. Instead of realizing that was going to be an issue and fixing it themselves, I had to point it out. Then we went out there while it was raining to check it, only to see that there are 3 spots where water is just pouring through the seams. That just takes a lot out of me to have that conversation. They cracked off the top of our sewer cleanout, which not only made a mess in the yard, also caused a backup into our basement tub and toilet once it was glued back on because of a pressurizing issue (we think).

Then there are those hidden things that take energy, such as managing how to move money out of savings (while not exceeding the maximum of six transfers) and keeping track of all the bills, while ensuring the checking account has the right amount of money to cover the bills paid.

RENTAL PROPERTIES

Everyone paid rent on time! I had two technically pay on the 6th, but I sat waiting to see if it showed up before reaching out that morning. One of our tenants bought a house and vacated as of March 31st. They actually had left the house a little early, which was really helpful to us because the house needed a lot of work. The house had been flipped before we bought it. We knew everything was going to eventually need attention, but we hung on as long as possible. The neighborhood is really nice, so it was time to bring the state of the house up to a better standard. It had been “good enough” all these years, but there were definitely some items that should be replaced. This ended up being a huge overhaul, costing us over $10k. I’ll go into all the details in a future post.

NET WORTH

We’ve made a few substantial payments on the deck. We had been investing the money from the insurance company, while we waited for them to finish their estimates and then while waiting for the contractor to begin. Our taxable investment accounts have decreased a bit from that, and they’ll continue to decrease as this project finishes up in the next 2-3 weeks. The market is lower than it was a month ago, but our house values are starting their upward Spring trend, offsetting some of that loss. Overall, our net worth increased over the last month, but only by about $4,500 instead of the drastic increases we had been seeing month-to-month.

2023 in Review: Rentals

March 28, 2024March 4, 2024mrsonedollarallowanceLeave a comment

After several years of very minimal time having to be put into rentals once they were rented, 2023 made up for it. We had a lot of damage to properties, a lot of tenant payment issues, and just a general “can we not talk about rentals for ONE week please” moments. But even with that frustration, this is still the best.

All of these stories were elaborated on in posts throughout the year. This is meant as a summary of all our activities. You can search for the stories through keywords on the website, or just email me, and I’ll elaborate.

PROPERTY MANAGEMENT

In January, I took over management of our Kentucky properties. When we moved here in 2020, it was easier to maintain status quo. In Virginia, we had established contacts in the trades we’d need, and we felt comfortable there. In Kentucky, since we hadn’t lived there, nor did we have direct management of the properties (plus, the property manager did a lot of work in house), we just left it alone and kept paying the management fees. We bought a 4th property in Kentucky in 2022, and I kept it under my management. Through that process, I grew more comfortable with the area and any trades people I would need. Then over the course of 2022, the property management issues finally were painful enough that we cut ties.

We had cut ties with our first management company who was doing zero of the work they were supposed to do. In the process, we learned a few ways we wanted to see a future management company operate. We negotiated some of the fees that this company had. I didn’t foresee how frustrating that would be. For instance, they’d charge us 10% of the contracted price when hiring a company if they couldn’t do something in house. I said, “that’s what management is, and what I’m paying you for monthly.” They agreed to not add 10% to contractor payments. But I never saw the invoices, even when I asked for them, so it was hard for me to know whether I was being charged by them correctly. It turns out, I was always charged that extra 10%, and I needed to request the refund, every single time.

Problems really got bad when a single employee claimed we didn’t pay something we had and immediately charged us for it (over $1,000). We had to get the owner of the company involved. It was a mess. I finally said that’s enough, and even though I had a one month old baby, I took over management. Luckily, we had a clause in our contract that allowed us to cancel the contract (by either party) with 30 days notice.

I met with each of the 3 properties’ tenants they had under management, and I executed my own leases with them. First, their lease was a mess and disorganized (and had errors that were crossed out and initialed). Second, I like having my template in place so that I know what it says, and how it’s laid out. I recently learned that my VA property manager’s lease didn’t have some key information I would have preferred to see there, so I even started using my leases for the properties she manages.

INSURANCE CLAIMS

After having no insurance claims for all our homeownership years, we had three this year. One was on our personal house, and two were rental properties. I covered our own issues in a previous post; a wind storm caused a tree to fall on our deck, one (well, one and a half) on the fence, and a few limbs on the driveway.

We had a bad wind storm come through in March. The tree fell from the back of the property and hit the roof of a rental property. By some miracle, there was not a single puncture of a limb into the house. The roof sustained the fall and weight of the tree. We didn’t even need to fix the roof, just the fascia board and gutter. Insurance was super easy to work with. An adjuster came out, reviewed the damage, and issued a check.

We had another rental property with the water heater in the attic (instead of the crawl space or just anywhere better conditioned than the attic). A 2-week freeze came through in December 2022, and it froze the pipes. When it thawed, water just poured through the ceiling and into the house. There was 2 inches of water everywhere. The ceiling in the master bedroom, master bathroom, laundry room, and part of the kitchen caved in. The walls in the master bedroom and bathroom needed to be taken down to the studs and rebuilt. The bottom 2′ of all the walls in the house had to be torn out and put back together. All the flooring (that we had put in 5 months earlier) had to be replaced. And with all of that said, it actually wasn’t that bad of a process. Since insurance covered everything, it was just what it was. If I had to pay for each step, it would have been more painful (in time, contractor management, and cost). We were “out of commission” for about 3 months, but insurance even covered lost rent.

I sit here and type this while my back deck is still damaged. By the time we got through our claim with the insurance company, we were months out from the contractor getting to us. I’m hoping it’ll be replaced by May.

MAINTENANCE CALLS

I was surprised to realize that we only replaced two dishwashers and one refrigerator this year. Then I realized it’s probably because we’ve replaced almost all the other ones in the last few years – yikes.

We had a house cited by the City for unsightly conditions in the front yard. The tenant mowed and cleaned up some things right away, and we hired someone to come cut up a fallen tree limb that we didn’t know about.

We had another house cited by insurance for not having a handrail on the front stoop (even though we’ve owned this house for 6 years at that point, with the same insurance). We had our handyman install one for us. While he was there, he fixed the ceiling in a bedroom where there had been water damage.

We paid for a flat roof to be fixed, after several years of fighting it and it continuing to leak (it’s so hard to find a roofer to work on a flat roof). That was a debacle because he was delayed for weeks, didn’t communicate, and then took it upon himself to change the scope of work. I wasn’t happy with the new scope and forced him to uphold the contract and do it right.

One house was completely painted during the turnover. We also had the tile and cast iron tub in that house newly epoxied (and then learned that it didn’t even last a year and is flaking).

We also had a new one – wildlife traps. A tenant had a raccoon living in her attic. The management company “fixed” it, but didn’t actually. I hired a professional when I took over management. They didn’t catch anything over the course of a few days, so they were confident nothing was in the attic. They then repaired the hole.

And then the usual – several plumbing/HVAC issues that were resolved throughout the year. Those will always be there. We had a big one with a water main line leak due to trees infiltrating the pipes (and unfortunately, that wasn’t the first time we’ve done that type of work).

We spent $15k across the 13 properties (some had $0 spent) on maintenance calls.

INCREASE IN TAXES AND INSURANCE

In November, I had posted about how our taxes and insurance charges have increased over the previous year. Our escrow accounts increased by $312 in payments. Our taxes were over $3,400 more than the previous year’s payments, and our insurance policies increased by over $1,000. Both the tax assessments and the replacement value costs were increased by these entities to reflect the higher home prices over the last few years, and that caused a higher-than-expected increase in all these costs. Some tax jurisdictions took their time in catching up their assessments to the skyrocketing prices of 2020/2021, but some took advantage of it right away. We have two houses where the taxes over the last 4 years have hardly changed, but we have others where the costs increased significantly.

INCREASE IN RENTAL INCOME

Our total income in 2023 increased from 2022 by almost $12,000. Although, I’ll note that we had over $4,000 paid from a rent relief program in January 2023 that really counted some towards 2022 amounts owed.

Most of my rent increases went into effect in 2022, just based on how the years played out. I had two properties increase by $50/month each in May 2023.

When the tenant flooded the house, we were able to upgrade a few things in there. In that time, the market rent always increased. So we went from $1200/month to $1600/month in rent over that time. It ended up being a problem because the new tenant lost her job, but that becomes a problem in 2024, after we struggled with her paying rent from October 1 through February.

We also had tenant turnover in another property, where the rent went from $800/month to $925/month. The previous tenant had been there several years. We had decent numbers (e.g., covering of expenses) on the house, and she kept struggling to pay on time, so I didn’t have the heart to increase the rent on her. It was my way of giving her a break because she had done something really big/difficult in her life. When we put it on the market, it wasn’t an ideal time of year, so we went low at $925. This tenant asked to leave mid-lease. We ended up re-renting the house at $995.

We had another tenant buy a house and vacate their lease early, leaving us to re-rent it for January 1. We were able to get someone in by February. Luckily, their lease break fee for that time of year was a month’s worth of rent, so we technically weren’t out of any income for that month-long gap. We were able to re-rent the house at $1,650 (from 1,350); that’s not realized until 2024 income though. We also took a leap of faith on this new tenant, who didn’t completely meet our criteria, but she asked for a chance; hopefully when I’m making this post next year, I haven’t regretted the decision to rent to her.

SUMMARY

This year, we had one tenant egregiously not pay rent on time, another tenant continuously pay late by a few days (although for their track record, paying 33% of payments due late is actually low), and a few who needed a bit more time (and communicated in advance) so we didn’t charge them a late fee. We had two houses with insurance claims, two major expenses (main water line replacement and flat roof repairs), and about $9k worth of other maintenance expenses on the houses.

I took over management of 3 of the 4 properties in Kentucky that were under a property manager. We added a house to the Virginia property manager’s portfolio. We had to turn over two properties in the winter wasn’t ideal, but we made it work. Technically, it was 3 properties over the winter, but one gave notice in 2024. We increased the rent on two houses by $50/month each to cover large increases in taxes and insurance payments.

Overall, this was a time-consuming year. We spent more time managing these properties and dealing with issues than any previous year. I can’t say that there was a single month where we just collected rent without any calls or discussion with a property manager. Heck, I could handle the “is it ok if I pay rent on the 9th” type messages, but this year was more than that. Here’s to hoping that everything is moving smoothly in 2024.

March Financial Update

March 14, 2024mrsonedollarallowanceLeave a comment

We’re just going to cut to the chase – $4 million net worth! I mentioned that this was a goal for this year. Unlike other years worth of large jumps because of purchasing houses, this was less in our control (granted, our market allocation decisions are what’s driving it…. and by “our,” I absolutely mean only Mr. ODA’s because I don’t do anything in that realm).

RENTALS

Well, we’ve had a quiet month. What’s going to be funny is, I’m going to list the things that we did. Quiet doesn’t mean silent or without effort, but we’ve had a rough go of it over the last year, so this was a welcomed break.

We had termites at a property. We pay $98 annually for their termite warranty program, since we found extensive termite damage and live termites when we bought the house. We’ve had to treat the house several times, so this $98 is a steal. However, I’m wondering why we keep needing to treat the house.

We paid $125 for a plumber to go out to a clogged sink. When we received the invoice, it was for 2 plumbers to go. Between the phone call that they were on their way and the tenant saying they were great, only 35 minutes had elapsed. The company charged us almost $300. Mr. ODA called to ask why they choose to send two plumbers to do a one-man job, while also charging us for it. The owner said it was for liability purposes, which Mr. ODA fought back on. They agreed to a reduced rate, but we were only charged $125, which was less than agreed upon.

We had our third tenant move in, after we unexpectedly had to turnover three houses in the middle of winter. We also were given notice by another tenant that she’s vacating by the end of March. We handled increases for two houses (one handled by a property manager to increase $50/month, and one handled by me to increase by $25/month).

We had one tenant pay on the morning of the 6th with no communication, so I did have our property manager let them know that’s not going to be ok. We also had a usual suspect pay late, with the late fee. However, their communication was frustrating. They said they’d pay on the 6th. At the end of the 6th, they said the money hadn’t cleared like they expected. No communication on the 7th. I asked for an updated on the morning of the 8th, and they said it would be that day. At 11 pm, I hadn’t received anything and reached out. I was then told that money was going into the ATM right then so that she could pay. Sometimes I wish I could do a deep dive into tenant finances so that I could help them out.

PERSONAL

Mr. ODA has a trip in July where a group of guys will hike in the Rockies. Our family is going out before that trip is scheduled to do our own exploring. We booked 4 round trip plane tickets, and Mr. ODA handled the lodging booking for the guys’ portion. That’s almost $3,000 worth of purchases, so our credit cards are higher than usual.

Speaking of the plane tickets. We purchased gift cards from Costco for Southwest. The gift cards are essentially $450 for $500 worth of purchasing power at Southwest. We bought two, therefore saving $100 on the tickets. For an extra few clicks on the computer, and the 15 minutes waiting time before the e-gift cards were delivered to my email, that’s $100 that can be used somewhere else.

We bought a new vanity for our bathroom. That was about $700 for the vanity, faucet, toilet flusher, and mirror. I sold the old vanity (in rough shape) for $30. And because I’m proud that I did most of it on my own, here’s a picture. I needed Mr. ODA’s help with the supply lines because I lost patience with how tightly they were screwed on and my lack of progress. I cut the baseboards down to size, except I somehow measured wrong on one quarter round cut (I was cutting while it was on the wall). Mr. ODA cut and installed the replacement piece for me.

We finished up the ski season. The kids did great. I was really proud of them for sticking with it. We used our season pass well (i.e., exceeding the cost had we bought individual tickets for each visit). I took two of the three kids to the aquarium, and we took the baby for a procedure at a local children’s hospital. We’ve started tee ball for our oldest. Our March is very full and busy, so we’re getting into the swing of things and keeping track of the schedule.

NET WORTH

Well, we far exceeded that $4 million goal. The market went up big, with our biggest changes being in our retirement account, IRAs, and cash. Our cash increase is offset by the lower amount in our Treasury account. Some of the short term bonds were transferred back into our savings account, and we’ve kept that money in savings since our deck replacement is slated to begin.

2023 in Review: Net Worth

March 7, 2024February 10, 2024mrsonedollarallowanceLeave a comment

A few years ago, I set out on this journey. I wanted to talk about money so that people would start talking about money. Talking about money is taboo. Someone will act funny talking about what they bought their house for, yet it’s public record that can be found in 2 seconds. People act like it’s “cool” to say they’re broke, as if it’s a badge of honor. I want people to talk about their spending and find ways to move forward so that money isn’t controlling their life.

In addition to that general goal, I’m also sharing lessons learned as we navigate owning rental properties. I hope that information helps both landlords (including potential ones) and tenants. I want tenants to understand the work that goes into owning the house and renting it to someone, and how the statement, “I can own a house for less than rent” doesn’t get you very far because you’re not the one maintaining the rental.

At the end of 2022, I was in the process of moving to a new home, renovating the new home, and was very pregnant with two toddlers nipping at my heels. My posts were just the monthly financial updates (and I didn’t even get to a December post because our baby was a sick little one). It was always in the back of my mind to make a post, but I didn’t have the bandwidth. It took until the last day of June for me to get my feet under me and start posting again. A few years ago, I tried to post twice per week. This year, my goal was once per week, with a schedule of Thursdays. I posted 31 times in 2023. I posted every week from June 30th until December 31st, except for Thanksgiving day.

MONEY

We used to make much bigger moves in our finances – buy a house, sell a house, pay off mortgages. This year, we did things differently. Mr. ODA discovered Treasury Direct. He invests in these short term savings bonds. They’re available from 4 weeks to 52 weeks, but we’ve only held them for 4 or 8 week periods. We had three different insurance claims over the last year or so, leaving high savings balances for a few months. Treasury Direct was a way to get our money to work for us, earning at a faster rate than a regular savings account.

Our net worth increased by almost $400k, which is impressive since there wasn’t a large swing with a new house purchase. In January, home values were still high. However, the higher interest rates over this year cooled the market some, leaving our values $64k lower than January.

The goal all along has been for both of us to quit working. I quit in 2019, but have been doing odd jobs here and there. Mr. ODA’s quit date continues to be pushed back for a variety of reasons, but it’s something we’ve been planning towards. One step towards that goal was that we opened a new checking account. Nearly all of his pay check goes into that account, and we don’t touch it. While I could manually track our money as if we don’t have his income, it was a big step to helping us visualize him not working and how our finances would play out. I’m happy to report that I haven’t felt the strain of not having his paycheck coming into the account.

We opened one new credit card this year. We open new credit cards when we have a large purchase coming up. It started with our IVF journey, and we’ve continued that concept. It’s a “free loan” for us. We could either pay the total sum immediately (typically over $10k) from savings, or we could get an interest free credit card, allow our money to earn interest in savings, and then pay the balance by the end of the interest-free introductory period. That’s the path we choose. We replaced the carpet in our new home – the living room and entire second floor except bathrooms – for over $10,000. That’s sitting on an interest-free credit card right now, and I make $500 payments each month, until I need to pay the full balance at the end of the introductory period.

INCOME

Since I quit working my full-time-Federal-career in 2019, I’ve done several odd jobs. I’ve wanted the small break from being in the house, the small opportunity to have conversations with other adults, and a small feeling of contributing to the household’s finances. 2023 was the first year that I didn’t contribute more significantly. I worked 1 day as a substitute teacher in a preschool; $47 was deposited into our checking account. Comical. Even though in the literal “job” sense, I didn’t contribute much, I did work.

Besides the fact that I had to care for a newborn baby and keep three kids and a dog alive for the whole year….. 😉

I manage our rental properties. This year required a lot of management. I’m managing the work that needs to be done at each property. I’m recording expenses per property. I’m tracking income each month to ensure that we’ve been paid rent from everyone (and one property made this a very frustratingly daunting task).

On top of that, I also have worked to declutter and organize our house. As our last baby grows, we don’t need all the baby accessories that take up space. By selling these, it’s providing the ability to buy things that the kids need now. I brought in nearly $1,000 through that process.

Mr. ODA signed up to be a secret shopper. He goes into restaurants, follows the instructions he’s given, and is essentially reimbursed for the meal. He “made” about $750 doing that. It’s important to note that we’re spending money to get that money though. If he spends $15 on a meal at an assigned restaurant, he may be getting only $15 back from the company. Sometimes they offer a premium if they can’t get people to select the “shop,” but it’s just a few dollars.

CREDIT CARD REWARDS & INTEREST EARNED

Every year I love to tout this category. This year, the interest earned section far outperformed any recent years. I typically make a post where I go into the details of how our credit cards are earned, so this is just an overview. For the sake of this conversation, this is based on rewards redeemed as cash. Citi makes it easy to see how much has been earned/redeemed, but Chase has a portal where things are different. Chase allows for your points to go further if you redeem through their travel portal. That makes it hard to manage “earned” versus “redeemed” for a total each year, because the amount earned is inevitably less than it’ll be redeemed for.

Between all our credit card redemptions for cash and interest earned on checking and savings account, we brought in $4,000.

GOALS

I want to track our expenses more often throughout the year. I want to be able to get a handle on trends we’re making with our expenses and whether there’s an opportunity to cut costs. When I do this review once per year, it’s not giving me a lot to work with.

Mr. ODA is discussing leaving his job this year. It’s something that’s been on the table for several years now, but there’s never been a real reason to leave his flexible job where he has a bunch of leave and benefits.

Mr. ODA is working towards a financial advisor certification though. It’s a big deal, and I’m excited about it. He loves to talk about money and help other people with their finances, so I’m hoping this is a springboard for him to doing more of what he enjoys.

I’d like to work more. The few temporary jobs I’ve had have been more time consuming over a short period of time, whereas this substitute teacher position right now is so sporadic that I’m only working 1 day per pay period. While I appreciate the availability I have, I’m looking for something with a little more consistency (granted, for the Fall semester, I would basically be available everyday of the week, so maybe that will help).

We’d like our deck and patio to be replaced, which will then lead to more home improvement expenses. We plan to build a privacy feature wall under the deck, so that we can add a hot tub on the patio. There’s also an old hookup for a tv, which means some sort of tv set up is planned for out there, which may be further expenses. We have two more bathrooms in this house that haven’t been touched yet, and I plan to do a few upgrades.

A lofty goal will be that we keep our tenants in place and don’t have any insurance claims this year. The last year has definitely been more taxing on us than previous years.

I think the big goal is that Mr. ODA wants to hit $4 million in net worth. Mr. ODA was 30 when we hit $1 million, 34 at $3 million, and hopefully 37 for $4 million (I don’t know when $2 million occurred because we weren’t updating regularly). Being that we’re at $3.98 million now, and that we grew by nearly $400k this year without any drastic moves (buying/selling a house), I think it can happen!

NET WORTH

This “net worth” graph isn’t the best since I didn’t update our net worth from February through June, but I kept those months in there so you can see the trajectory. I’m sad that life got in the way of my updating those data points. If I just post the first and last month, you can see there’s an increase. But that doesn’t show you that there are dips along the way, and everything is based on a single snapshot in time, even though balances are changing daily. I hope that I’m able to track each data point this year and in future years so I can see these trends.

February Financial Update

February 16, 2024mrsonedollarallowanceLeave a comment

RENTALS

The rentals were expensive this month with $4600 paid out. This doesn’t include work that’s currently under way, but not paid for yet.

I paid for a water heater replacement, which was $1,904. I had to pay insurance on a larger property ($793). I paid the balance of the window replacement at one property, which was $1,064. I also paid for a plumber to address a leaking toilet and a rotted faucet ($325). We had a new tenant move into a vacant property, so we had that cleaned before her arrival ($165).

I had to pay for a plumber’s service call ($95) for clogged drains, for them to refer me to a rooter company ($250). I emailed that tenant that preventive measures need to be taken because I’ve not had so many calls to one property. She assured me they have taken appropriate measures and it’s just old pipes. The only problem being that we have several other properties with old pipes that never call for clogs.

We’ve turned over two properties and are about to turnover another property in the dead of winter. It’s so frustrating to be in such a position. All of those stories will be elaborated on in future posts.
– On one property, we charged a lease break fee of one month’s rent to cover our losses (the fee was different based on the month in which they broke the lease). Luckily, that covered our entire month of January being vacant, but we found someone for 2/1.
– Another tenant asked to leave a property because he lost his job. That was handled a bit different because we didn’t know in advance that this tenant would want to leave mid-lease. We told them there’s a fee of $250 (which is what it costs us to pay the property manager to find a new tenant), and that they had to pay rent until we found a new tenant. We didn’t lose any rent on that property.
– Now, we have a newly vacant property because the tenant can no longer afford it. I’m not expecting to recover her unpaid rent at this point. We approved a tenant to start 2/28, leaving us with 27 days of lost rent. However, we sent a lease over for them to sign. They’re currently dragging their feet on signing because they want to pay with their tax return. I don’t love that idea. They’ve been easy to communicate with up until this point, just slow. I’m hoping this gamble works out.

PERSONAL FINANCES

I had to transfer money to Mr. ODA’s account to cover the purchase of our new back door and a new treadmill (although that was only $400). This is an interesting concept for us. Mr. ODA had an account before we met. His account was grandfathered in to new terms and conditions at this bank. He’s kept his checking account and credit card for the rewards (I have access to the account; my name just isn’t on it). Any online purchases go on that credit card. However, that account only receives $250 every other week from Mr. ODA’s pay check (occasionally it’ll receive rent via Zelle). So sometimes, we need to transfer money from our main checking account to cover that credit card payment. All our security deposit accounts are with that bank too. So I had to then transfer from a security deposit account into his checking account, and then have him send that money to our main account. It wasn’t our finest money management moment.

Not much else happened this past month. We’ve gone skiing with the kids some more, I went on a moms’ cruise (which was amazing), took a small trip to piggyback Mr. ODA’s work trip, and have done activities around town. We’re gearing up for a procedure at a local children’s hospital next week, which I’m expecting will wipe out our deductible. Luckily that’s only $3,000, but I’m sure we’ll hit it. We’ll actually be late hitting it this year; it’s usually done in January.

NET WORTH

One of this year’s goal is to hit $4 million net worth. I thought it was going to be a ways away, but the market has been up big recently. We’re only about $14k away from that goal now!