A horrible calculation, that I just did and potential decisions

[Big_Hitter]

I Houston, we have Beaumont clay and digging is easy. What's not easy is keeping the pool from floating up out of the clay.

we got lucky - ours was put in around 1975 and may have moved a half inch - of course we lived in an area that had lots of pine trees so the soil is sandier than say, bellaire or alief

coworker put in a pool about 20 years ago in bellaire - i went swimming there shortly after they put it in - it had already moved 3 inches

 

[Andre1969]

No.7 is an $85K pool in Maryland.

https://www.inyopools.com/Blog/how-much-does-a-pool-cost-90-real-world-examples/

Thanks for posting that link. Honestly, I gotta say, for $85K I'm not that impressed...but Glenelg, MD is one of those areas that's a bit too blue for my blood, so I'm sure that factors into the cost. Anyway, here's the stats...


Price: $85,000 (including concrete decking and landscaping)
Pool Type: Inground
Pool Surface: Vinyl Liner (concrete bottom and steel sides)
Year Built: 2014
Location: Glenelg, MD
Build Time: 6 Months (over the winter, November – April)
Pool Size: 18′ x 36′ (30,000 Gallons)


That price makes me really glad I went ahead and bought a house already with a pool...because I don't think I'd make the investment, to have one added! Plus, when I was looking at houses, I started noticing that the houses with swimming pools weren't much more than the ones without, all other things being roughly comparable. I didn't specifically set out looking for a home with a pool, but decided that, if I liked everything else about the house, I wouldn't necessarily turn it down for having a pool.


Anyway, for comparison, mine is 23x51 feet, but it's a rectangle...no curved edges, corners, or organic shapes. It's about 10 feet at the deepest, with a diving board at the deep end, and a slide in the middle. Concrete extends maybe 10 feet around it on all sides, and has a 4-foot chain link fence around it. Landscaping is fairly minimal...just white gravel at the base of the fence, with a bunch of hostas planted here and there. So, mine is bigger than that Maryland pool, but not as fancy. And, it's a bit old...built in 1978.


The previous owner put around $30,000 into it between 2016 and 2018, converting it to salt water, putting in new skimmers, new tile, the coping or whatever they call the border concrete, and other repairs/upgrades. So, I'm sure there's the potential for some kind of major repair bill down the road. But, on days like this when temps are pushing 100 degrees, it's worth it!

 

[kgtest]

Greetings all.
This week I decided to do my DTI (debt to Income) calculation, which is 16%, then I did my back end calculation, which includes all expenses, minus entertainment comes to 21%. Both of these made me very happy, as it shows we are doing well (which we are now, after some setbacks).

However, I then decided to see how much interest I was paying versus my 16% of fixed bills. Our only debt is a house payment and pool payment. Needless to say, of that $, 40% is Interest.

To put it into context:
Income 15400 after taxes (this is the number I used)
Debt: House (3.5%) and Pool (5.25%): This includes all escrow: $2561
Bills: minus food, gas, entertainment: $3300

Interest is $1300 ish of the $2561. The truth of borrowing to buy a house!

So we are putting $5K per month towards the Pool payment and will pay it off over the next 12 - 18 months.

Things we are tempted to do: We owe $72500 ish on the Pool, and I’m tempted to take out enough 0% credit cards and put it on it. I think this would save us some money!

Has anyone done anything like that?

I work as hard as I can to pay as little tax...AND INTEREST as I have to. Theoretically I should be done paying interest when my 15 year refi closes out.

It's sad to look at how much the home ACTUALLY cost after adding in the purchase price and all the interest paid over the loan. Cash is KING!

 

[jmp470]

Let’s see if this works. It’s my test

 

[jmp470]

The Solar and pool ran about $120K. The Solar was $44K, I got a $4k instant rebate, and I was able to reduce my tax bill by $12K the year I put it in. Which was a great thing. I’m down to $72.5K left for the bill. Again, we are knocking it down by about $4900 per month. So, it will be done soon.

I have about $40K (rough guess) worth of things I want to do to my yard over the coming years.

1) A fence
2) A well
3) Landscape

My goal is to have the grass look like a golf course, which its looking good, not great.

I will say, the cost was totally worth it to me and my family! We love the pool and again, I swim laps almost daily. My kiddos do too.

 

[RunningBum]

We obviously knew the interest rate going into the
Project, but, I never did the calculations like I did above. It just shocked me, the 40% of my mandatory bills were interest.

OTOH, you can see how much money you can make on your investments, which are probably getting a better return if you can accept some risk.

 

[kgtest]

I have a buddy who just told me he spends over 10k a year just on fertilizer. Buuut, they wanted acreage. I would MUCH rather pay to heat a pool, then fertilize a lawn. Food tastes different in your mouth though and everyone's tastes are different.

 

[jmp470]

OTOH, you can see how much money you can make on your investments, which are probably getting a better return if you can accept some risk.

I own absolutely no 401K, No ROTH IRA, No mutual funds, etc...

I do own treasuries, which I rotate myself, and live off of.

I also trade stocks in the market, which can leave us with crazy income levels swings.

1 year, I’m buying new cars cash... the next year... we cannot spend anything extra.

We have grown use to either quarterly paychecks or even yearly paychecks.

However, that has changed with me taking a 18 - 24 month contract. I now get paid weekly, which is very different than before.

In the end, its all fun and makes life interesting!

 

[ExFlyBoy5]

At least show us a picture of what kind of pool 100 grand will get you these days.

Our neighbor is having one put in; at least $100K. They have been working on it since January and it's still not close to being done.

I'll post pics next year when they finish it. And yeah, the houses here are NOT $500K homes.

We have a pool and it's not very big...475 square feet total with deepest part at 5.5 feet. It cost about $60K when they (original owners) had it installed in 2006/2007. They are NOT cheap.

As to the OP, what is the interest rate on the pool? If it's really high then perhaps a HELOC (gasp!) *might* be a solution.

When I was a kid, we had a "pool man", and I was left with the impression that "pools suck". So to recap, all I did was watch the guy, and I was thinking "WTF"? Why bother?

That's the issue...they had a pool boy. Pool companies are huge scams. I maintain our pool which takes about 5-8 minutes daily to check chlorine and about 15 minutes a week doing the full test. We have a robot to clean, so no vacuuming for us.

Liability exposure also drives up your insurance.

I thought this too. However, before buying the house we got quotes with USAA and Amica and neither company had increased rates for the pool.

 

[jmp470]

Our neighbor is having one put in; at least $100K. They have been working on it since January and it's still not close to being done.

I'll post pics next year when they finish it. And yeah, the houses here are NOT $500K homes.

We have a pool and it's not very big...475 square feet total with deepest part at 5.5 feet. It cost about $60K when they (original owners) had it installed in 2006/2007. They are NOT cheap.

As to the OP, what is the interest rate on the pool? If it's really high then perhaps a HELOC (gasp!) *might* be a solution.



That's the issue...they had a pool boy. Pool companies are huge scams. I maintain our pool which takes about 5-8 minutes daily to check chlorine and about 15 minutes a week doing the full test. We have a robot to clean, so no vacuuming for us.

We area at 5.5%, in the grand scheme its not a lot. Neither is the house interest rate. However, when you start looking at it versus our very low running costs for the family, its high. That was my initial point in this post. But, I can always talk stocks or pools.

 

[ivinsfan]

I own absolutely no 401K, No ROTH IRA, No mutual funds, etc...

I do own treasuries, which I rotate myself, and live off of.

I also trade stocks in the market, which can leave us with crazy income levels swings.

1 year, I’m buying new cars cash... the next year... we cannot spend anything extra.

We have grown use to either quarterly paychecks or even yearly paychecks.

However, that has changed with me taking a 18 - 24 month contract. I now get paid weekly, which is very different than before.

In the end, its all fun and makes life interesting!

So you really don't mind paying interest since you are going to pay cash for multiple new cars, glad it's fun for you. How old are the cars getting replaced I'd drive 'em until they broke or I had most of that pool paid off.

 

[RunningBum]

I own absolutely no 401K, No ROTH IRA, No mutual funds, etc...

I do own treasuries, which I rotate myself, and live off of.

I also trade stocks in the market, which can leave us with crazy income levels swings.

1 year, I’m buying new cars cash... the next year... we cannot spend anything extra.

We have grown use to either quarterly paychecks or even yearly paychecks.

However, that has changed with me taking a 18 - 24 month contract. I now get paid weekly, which is very different than before.

In the end, its all fun and makes life interesting!

I don't know what to make of this. I guess I like my finances to be boring and get the job done for me.

 

[jmp470]

So you really don't mind paying interest since you are going to pay cash for multiple new cars, glad it's fun for you. How old are the cars getting replaced I'd drive 'em until they broke or I had most of that pool paid off.

I replace my cars around the 100K mileage mark. Both were replaced in 2017. This time around, I want100k out of the family minivans and 250k out of the Prius. I’m thinking 4 years on the minivan and On the Prius.
Ive never owned a car over the 100K mark, so it will be interesting with the Prius.

 

[jmp470]

I don't know what to make of this. I guess I like my finances to be boring and get the job done for me.

For the most part our finances are boring! We live Day to Day on a fixed income, which is the treasury money.

 

[ivinsfan]

I replace my cars around the 100K mileage mark. Both were replaced in 2017. This time around, I want100k out of the family minivans and 250k out of the Prius. I’m thinking 4 years on the minivan and On the Prius.
Ive never owned a car over the 100K mark, so it will be interesting with the Prius.

Never owned a car over a 100K? Try it you might like it when the result is being able to pay off the family swimming pool. But I guess you would rather mess around with zero interest credit cards. Here's a novel idea take the car money and put it towards the pool. When it's necessary to replace a car, get a loan at the dealers rate with will be lower then what you are paying on the pool.

You are the one that seems to be unhappy with the pile of interest you are paying monthly.

 

[WhenIsItTime]

Tough crowd. OP wasn’t complaining about financial hardship (paying $5k/month on $72 debt is only 15 months) just sharing reminder that loans are costly.

When we join this forum, do we have to give up discretionary spending regardless of income/assets?

 

[REWahoo]

When we join this forum, do we have to give up discretionary spending regardless of income/assets?

Yes, unless you volunteer to participate in the "Blow That Dough!" thread.

 

[levindb]

Just do the airthmetic

Years ago, when the transaction fees were also at 0%, we financed a kitchen remodel and new car with 0% credit cards. We then extended the payments by replacing one 0% credit card with a newer offer. Net, we ended up with a few years of 0% and that allowed our investments to grow during that same period.

The managing of payments can be risk free with online bill pay from your bank...just schedule the payments in advance, including the final payment. Make each of those payments a few days in advance of the due date. Aldo, be careful that the final payment may be due on a date that is different than your normal credit card monthly payment date...that can be a gotcha.

The key is to look at how much interest you will be paying and saving using the 0% credit card(s). That will determine whether you want to do all of this. If you could save 3% on a $70K loan, paying it off over 12 months, that would be about $1000.

 

[neihn]

Yes, unless you volunteer to participate in the "Blow That Dough!" thread.

+1

 

[ivinsfan]

Tough crowd. OP wasn’t complaining about financial hardship (paying $5k/month on $72 debt is only 15 months) just sharing reminder that loans are costly.

When we join this forum, do we have to give up discretionary spending regardless of income/assets?

We didn't use the word horrible the OP did..

 

[RobLJ]

Spent 25 of my main working years in Houston. After mowing the lawn in summer, I used to just walk off the sidewalk/pool deck and fall in the pool, which amused my sons greatly. That stopped after the oldest son got old enough to mow.

only if you can't pay cash and you are tired of sweating 24/7

 

[Gevans17]

My dad built our pool himself because he was a DIYer and he wanted to lose weight.
He dug it with a shovel. 18 x 30 by 8 feet deep. Formed it up and poured the concrete Took him 9 months and lost 20 lbs. When he was done he cleaned up the shovel and mounted it ?

 

[Old Microbiologist]

My main point is to retire you must have zero debt. That is our personal mantra. We went to zero debt about 5 years before retiring except for 2 houses we were renting out and the mortgages, taxes, and improvements were covered by the renters. Those were sold when we retired and left the US each yielding roughly 1/3 in value so we ended up with around $500k in cash. The rentals were owned for less than 5 years.

We have a pool here in Europe (a relatively rare thing) and paid cash and did the contractor work ourselves including permits. It cost us around $20k for an in ground 5x10 meter vinyl liner pool and another $10k for a sliding dome cover made from polycarbonate. The pool is built using some kind of interlocking foam bricks with concrete and were not expensive. We rented a backhoe and dug the pool ourselves and used the dirt for landscaping small hills around the garden which were then planted with ornamental bushes and flowers. We hired all the guys separately to do the work including the concrete, the pumps, and the entire pool area which is bricks over concrete and also we put in a large gazebo and pergola which has a sink and refrigerator. While all that was being installed we also installed a lawn sprinkler system and ethernet cabling.

To get to zero debt before retiring we double paid (or more) all mortgages (it all goes to principle for the excess payment) and stopped carrying any other debt especially credit cards. We use them a lot and use a Chase card with 2% cash back and always pay it off each month. But, knowing we were retiring within 15 years we had a 15 year mortgage which we paid off in 5+ years. We stopped eating out entirely and went frugal as much as possible. I retire from my job at the earliest point possible and we had around $250k in cash by then. We travelled to Europe to shop for a place to live and purchased a house here in Hungary. The permission for a non-EU citizen plus visas took around 6 months. We put our house on the market and when it sold we shipped everything we could in a 40 foot container and shipped our car door-to door. That cost us around $40k. Between our cash and the money we got from the sale of the main house we paid cash for the house in Hungary and then spent an additional $100k in renovations. We did not contract than out ourselves and we basically paid $100k for $25K of work but being new and foreign we were unable to cope with trying to do that ourselves BUT we learned a lot which paid off later. We still use those same contractors from building the pool and renovating the second house which joins our property which we combined with a third empty plot which was on the other side (another $15k) making one large 3 lot place with 2 houses and a pool on it. We have a plumber, electrician, mason, tile, and painters for any work we need done. We have recently repainted and renovated bathrooms and we save a bundle doing it this way now as it is now 10 years since we did the original renovations. We help other expats (Brits as I think we are the only Americans in Hungary) with their work and several Hungarian and German friends to get their houses done as well for free.

I know I get flamed for my ideas about economics but it has worked for us. We are living our dream life here in Hungary with a nice cash reserve and $750k in equities. Our pensions cover all expenses and we spend roughly 50% of that so stopped being frugal although we still rarely eat out. We have only one car (bought with cash) which we don't drive much as I bicycle everywhere. I have a nice yacht on the lake in a fantastic marina and a beautiful house and garden. We travel 3 to 4 times a year and have a full time property manager and a part time house keeper. We pay well and tip well so we can count on the workers to show and do good work. They know a good thing as Hungarians are notorious for cheating workers. The second house is owned by my wife's sister and we split the costs on the third plot with the pool on it. They use this as a vacation house although they have 3 others as well, one in Cypress, one in Gelendzhik (Black Sea), and the last is an apartment in Murmansk. They come here 3-4 weeks every August as it is a fantastic vacation resort. We maintain their house throughout the year so it works out well for everyone.

 

[Retired Expat]

There is a reason they call pools, “a hole in the ground you throw money into”. I had one in CA for 10 years. Constant work to keep it looking good, chemicals and electricity for the pump. Tried both with or without a pool guy but with still had to clean it for the weekend or supplement chemicals between his visits. Hardly used it enough to even be close to considered worthwhile. Winter too old and in summer too warm to be refreshing.

Now belong to a gym with a large indoor pool and much happier. The only time a pool might make sense is if it is indoors, or you live somewhere like Miami AND HAVE KIDS.

 

[mvoo]

Seems crazy too me. Besides the amount you’ve put into a pool (wow), your income and expenses would allow you to pay that debt off in 8 or 9 months if you were truly worried about the debt. It doesn’t seem you are (just by the machinations you’re considering to save on interest). My suggestion therefore is take a look in the mirror and revisit your relationship with money - and pay off the debt, don’t recycle it. That is, if you’re really interested in retiring early.....