Goodbye FIRE, I'm headed to the poorhouse

[Nords]

Wow, I'm surprised this wasn't on Nords' list:
When you move, places like Lowes and Home Depot want to know. They'll offer you coupons (usually 10% off). We *always* find a use for them.

Darn, I never knew that-- from now on we're "moving" every month!

Not everyone needs to own every tool, especially occasional use tools. They are expensive and hard to store. If you get along well, everyone buys things to fill in and then you borrow each others.

Hey hey hey, it's sentiments like this that keep American consumers from realizing their true indebtedness potential!

[rant]
Whipping out my Tim-The-Tool-Man-Taylor hat and speaking as a guy (in every pejorative sense of the term) with an eructational "Arrrgh-ooh?!?", I'm gonna go out on a limb and guess that the call sign "Sandy" is being used here in a female gender sense. Because otherwise this sentiment would never have been expressed in the men's locker room!

Would you let a girlfriend borrow your [insert sensitive personalized female-oriented equipment name here]?!? So why in the world would anyone expect guys to loan each other their tools?

If civilization collapsed that happened then no one would ever have an excuse a reason to buy the latest battery-powered laser-sighted carborundum-tipped variable-speed demagnetized LCD-lit Bluetooth auto-flossing chuckless hammer drill... or any other vital guy toys survival equipment...
[/rant]

Not that there's anything wrong with that.

 

[Rich_by_the_Bay]

[Insert]Tim the Toolman grunt[/insert]

I own a table saw, two routers and their assorted bits and jigs, a circular saw, a sabre saw, a palm sander, one corded and one uncorded drill, a rotary tool, a miter saw, a biscuit cutter, a powered hand planer, and a compressor with finish nailer...

Oh, yeah? Well, my drill bit is bigger than yours. Whaddya think of them there lugnuts. Huh?

 

[Peaceful_Warrior]

Concerning the fixed mortgage: The vast majority of my friends work in finance, investment banking, portfolio management etc. They make most of their money in the form of bonuses and they tend to be very analytical. Therefor they also choose the shorter term ARMs to manage cash flow and invest the difference in assets with a higher expected return. My dream is to have a paid off house even if my portfolio is smaller than theirs. To me its an emotional thing.

It's good that you recognize the emotional vs. financial aspects of the decision. All too often, people tend to lean far too much towards one side or the other.

As for the investment vs. mortgage situation, after doing some math I've realized that if I purchase a new place sometime in the next 6 months or so, then I can take the equity out of my current place and invest it and then purchase the new place with zero down.

In about 10-15 years, the invested assets would be able to pay the mortage on their own (although I would instead just let the assets grow and continue to pay the mortgage out of earned income).

 

[savedapile]

Just because you have a thirty year mortgage does not mean you need to take thirty years to pay it off. Up front, even a small extra monthly amount can shave years off a mortgage. Of course, you are wise to keep the payment small as being house poor is no fun.

For decorating ideas I got books out of the library and looked at rooms in the style we were decorating. We love that craftsman look, Frank Lloyd Wright and Stickley style and all so got books from that style. I made curtains and we painted the walls to resemble that simple style and gradually replaced our hand me down furniture.

 

[teejayevans]

Have you considered an Internet phone such as Vonage? For around $17 per month you get 500 mins of free long distance and you can keep your old phone number when you move. The service does require a high speed Internet connection.

I've used Vonage as my only phone service for around 3 years now and I'm very happy with it. I went from paying $75-80 per month down to $17.

One caveat is that out of 6 people I've recommended it to, 2 have cancelled the service and said it was lousy. Four think it's the greatest thing in the world. Not sure what the drivers are, but people's experiences vary widely. Also, I think there's a general consensus that the customer service isn't very good (in 3 years I've never had to use it personally).

One feature with Vonage that's really cool is that they provide voicemail for free and it can automatically send an email with the voice messages as an attachment.

For safety consider a regular line for emergencies, or buy a battery backup unit for your cable modem and phone adapter (~$50). We had a direct hit lightning strike that killed the power and started a small fire, yet my wife was still able to make the 911 call using vonage on our battery backed up system. Fire dept. arrived in 5 minutes and put out the fire with minimal damage.

Jim

Why not just stick with the cell phone you probably already have, I haven't had
a land-line in years
Tom

 

[saluki9]

Why not just stick with the cell phone you probably already have, I haven't had
a land-line in years
Tom

1. My cell phone is a company phone

2. DSL = $17/mo Cable = $55+/mo

3. Alarm system

4. Our town and the surrounding area doesn't allow cell towers because they are an "eyesore" so cell service isn't very good.

 

[madeit!]

Buying a big expensive "home" can be one ot the biggest obstacles to FIRE. Notice how the real estate industry has brainwashed us all into using the word "home" instead of "house". People are not just buying shelter anymore, they are told that they are buying a failsafe investment. They will not have to worry about saving for retirement since their "home" will appreciate at a double digit rate and they can just live in their "portfolio". Just like people have been brainwashed into thinking that they "need" a 3000, 4000 or even a 2000 sq. ft. house in a pretentious neighborhood. Not only are maintenance, utilities, taxes, home owners fees (someone has to pay for that impressive stone gate) etc going to be high, but there are a lot of hidden costs beyond that which have been discussed here. For instance, are you going to be happy with that five year old sensible Honda Civic in the driveway when the neighbors are driving (fill in the blank) ? Then you have to fill this big house with expensive stuff you do not really need! Furniture is a good example. The only commodity with a higher markup is cocain. Even cheap used furniture will last almost forever. No matter what kind you buy, you will only wind up giving or throwing it away someday anyway.
Over indulgence in houses, er I mean homes, rank near the top of FIRE killers, along with poor choice in spouses and automobile mania.

 

[saluki9]

Buying a big expensive "home" can be one ot the biggest obstacles to FIRE. Notice how the real estate industry has brainwashed us all into using the word "home" instead of "house". People are not just buying shelter anymore, they are told that they are buying a failsafe investment. They will not have to worry about saving for retirement since their "home" will appreciate at a double digit rate and they can just live in their "portfolio". Just like people have been brainwashed into thinking that they "need" a 3000, 4000 or even a 2000 sq. ft. house in a pretentious neighborhood. Not only are maintenance, utilities, taxes, home owners fees (someone has to pay for that impressive stone gate) etc going to be high, but there are a lot of hidden costs beyond that which have been discussed here. For instance, are you going to be happy with that five year old sensible Honda Civic in the driveway when the neighbors are driving (fill in the blank) ? Then you have to fill this big house with expensive stuff you do not really need! Furniture is a good example. The only commodity with a higher markup is cocain. Even cheap used furniture will last almost forever. No matter what kind you buy, you will only wind up giving or throwing it away someday anyway.
Over indulgence in houses, er I mean homes, rank near the top of FIRE killers, along with poor choice in spouses and automobile mania.

While I agree that too much home can be a FIRE killer I meant the title more as a joke. I only said it because the last couple years my wife and I were able to save around 40% of our gross income. The main reason we were able to do that is because we owned a small condo.

This house cost me slightly over $500K. In this area that is a very modest house and the only reason it's not 575 - $625K is that the house needs some work which I'm willing to do. Right across the street from my new home are several $1.5 - $2.M McMansions (4-5500 Sqw ft) but that doesn't bother me.

I do consider my home an investment, but not a financial one. It's an investment in my personal happiness so in that sense the Realtors are right. I suppose that for many people here a home isn't needed because they are always on the road, but not for me. I travel for work so I consider it a treat to stay home.

BTW: There will be a 6y/o Honda civic in the driveway. My wife loves the car so much she said she won't sell it until it falls apart. On top of that I have a critical (and chronic) case of automobile mania. (I guess I'm really screwed?)

 

[Nords]

I'm old fashioned and went for a 30year fixed at 5.875.

Hey, Saluki, Pentagon FCU just started advertising three-year CDs at 6.25%. Is your mortgage broker still offering that 5.875% loan?

BTW: There will be a 6y/o Honda civic in the driveway. My wife loves the car so much she said she won't sell it until it falls apart.

Only 2700 sq ft and a driveway beater? Your new neighbors are probably thinking "There goes the neighborhood"! They're going to ask you to keep that car in the garage where no one else has to gaze down upon it from their Escalades & Armadas... in fact they might not even be able to see it over their cell phones lattés hood ornaments...

 

[saluki9]

Hey, Saluki, Pentagon FCU just started advertising three-year CDs at 6.25%. Is your mortgage broker still offering that 5.875% loan?

Yeah, with no closing costs. Heck, go mortgage the neighbors house too! So much for efficient markets!

 

[uncledrz]

Saluki

Great advice above, Nords' list is exhaustive and complete, as are the others.

Having always been a homeowner myself, only advice is to do the repairs and maitenance that needs to be done before (if that's possible) it needs to be done, and remember that the lowest bid isn't always the best deal.

Enjoy your new home.

 

[madeit!]

Let me try this again...

While I agree that too much home can be a FIRE killer I meant the title more as a joke.

I think it is partially a joke - you probably are not headed for the poorhouse, but FIRE?...

I do consider my home an investment, but not a financial one. It's an investment in >my personal happiness so in that sense the Realtors ...yada yada...rationalize..rationalize...

As long as you keep investing in what you have been told equals personal happiness, you will have no worries, no worries about FIRE anyway. Good luck and keep on truckin', er I mean workin'!

 

[madeit!]

Sorry I messed up the quotes. Again, good luck.

 

[saluki9]

Let me try this again...


I think it is partially a joke - you probably are not headed for the poorhouse, but FIRE?...
As long as you keep investing in what you have been told equals personal happiness, you will have no worries, no worries about FIRE anyway. Good luck and keep on truckin', er I mean workin'!

wow, did somebody wake up on the wrong side of the bed today?

It's not what I've been told, it's what I know. To me FIRE doesn't mean getting out when I'm 35,40, or even 50, maybe 55 who knows? Right now I really like my work, someday I'd like to have the opportunity to do a lot of volunteering and work fewer paid hours.

FYI: Even with all my new home stuff I should be able to save 20-23% this year. If I manage to earn 2.75% (real) per year I should be able to "retire" by my early 50's