http://www.msnbc.msn.com/id/38382773/ns/dateline_nbc-america_now

It’s definitely worth checking out.  I found myself feeling very lucky and a little bit guilty to have so much while others have so little.  It reinforces my decision to donate money monthly to the local food bank.

One of the houses that has been sitting vacant for nearly a year is back on the market for the third time since the bank took it back.  Here are a few tidbits about the house:

In June of 07 this house value was: $439K

First bank sales price: $340K

Second bank sales price: $299K

Third bank sales price: $275K

Today’s sales price: $265K

What is a bit shocking to me is that, while this house isn’t quite like mine and isn’t in quite as desirable of a location as mine (we live in a culdesac), it’s really not all that different.  We purchased our house 7.5 years ago for $280K.  After 7.5 years in our home, someone can drive up today and buy a house somewhat like ours for $15K cheaper than we did so long ago.  Ouch.

At this point, it doesn’t really matter all that much to us.  We aren’t planning on moving so it’s really like holding on to a stock that has fallen in value.  You only lose when you sell it.  Sure, there could be more downside risk, but I just don’t see how it can go too much lower.  The good news is that we haven’t used our house like an ATM machine so no matter what happens, we still have plenty of equity.

When I first started looking for a dryer, I spent about an hour looking around online.   I checked Home Depot, Lowes, Sears and all the usual suspects.  For a standard dryer the prices all seemed to be around $450 to $500.  Once I’d gotten my fill of online browsing, I decided to hop in the truck and head down to a couple of the stores, (including Costco) to see each of them in person.  As I stood in front of the first dryer I found myself thinking, “Geez, these things are expensive.”  Just as my mind finished that sentence, it occurred to me that I was putting a lot of thought and effort in to the purchase of a $450 dryer while nonchalantly throwing down $500 for a tiny metal and glass piece of electronics called the Ipad (a few months back).  I was feeling far more stress and indecision about a large appliance that I consider to be a “must have” in our home, and I hadn’t even paused for one second before spending all that money on a “luxury” item like the Ipad.

Realizing that the dryer was something that we absolutely needed and also realizing that I needed to keep things in perspective made it much easier to finally comes to terms with buying the dryer.  After that realization, the stress seemed to melt away but not nearly as much as it did once I realized I was going to solve the dryer problem with a $45 check to my neighbor instead of spending upwards of $1400 for a new washer and dryer.

Since then, I’ve found myself thinking about the comparison of the two items.  It bothers me that I’m so eager to throw down $500 for a frivolous item like an Ipad while I actually felt a bit of anxiety over what I should do about the dryer.  I suppose it all centers around the “want” vs “need” scenario, but my thought process really should be reversed.  I should readily buy what I consider a “necessity” and really spend the time anguishing over whether it’s a good decision to blow $500 on something that will be outdated and completely disposable long before a dryer.

I spent some time shopping around and my wife and I finally settled on new Maytag front loader machines.  It was killing me to buy both a new washer and dryer just because the dryer quit working but I guess I finally hit that frustration point where I just wanted the problem solved.  Total cost for my indifference: $1400.  They are due to be delivered on Friday.

Today I was talking to my neighbor across the street telling him that the dryer had died and that we’d bought new machines.  He said, “Oh, you should have told me sooner.  I’ve got a washer and dryer that are in great shape that I need to get rid of in the garage.”  At first I said, “Naaah.  We really don’t want to have mismatched units since you see them as you walk through the hallway downstairs and my wife wants the new ones.”  Yes, I know.  Pathetic.  Anyway, I decided to just take a peak at his units since we were standing right in front of his house.  They are an exact match to what we have.  Not close.  They are an exact match.  So, I bought the dryer for $50 and am heading down to cancel our order at Home Depot tonight.  At least I finally realized I was being a bonehead.

JD ultimately realized how fortunate he is in his CURRENT home and situation.  He references lifestyle inflation which is incredibly important to pay attention to.  It’s so easy to slowly increase your spending as your income levels go up.  It’s something I’ve battled for all of my adult working years and it’s why we’ve managed to keep our spending at 47% of our after tax, after investment income.

A few things came to mind as I was reading the blog post.  First, along with a large house like that comes large expenses.  Even if I could afford to buy a “mansion on the hill”, I probably couldn’t afford even the most basic expenses.  Heating and cooling a place like that would cost many hundreds of dollars a month.  Taxes on a $2.3M house would be exorbitant.  Even paying to keep the landscaping looking decent would be a significant burden.  And the list goes on and on.  For all those extra expenses, would I find myself content?  It’s doubtful.  There is always more to covet.

Secondly, I’m not sure I’d enjoy isolating myself on to a gated estate.  I’m a social person and actually enjoy conversing with my neighbors.  In a house like the one JD highlights, I’d basically be walling off the rest of my neighbors and would probably, at best, just get a wave as I drove by the people near me.

The bottom line is that I’m pretty darned happy with where I’m at in life as well.  We have a nice, reasonable house to live in that has a new roof, new siding and should be ample to last us through raising our daughter.  There is plenty of room (2700 sq feet) and we have nice neighbors.  While we could upgrade to a nicer house in a nicer neighborhood, I don’t think the economic tradeoff would come close to being worth it and I know as soon as I got there, I’d find myself yearning for the bigger, nicer house down the street.  It’s really not about the houses at all, but rather, it’s about managing your expectations and being happy with what you have.

A few months ago my wife and I talked it over and decided that we’d try to avoid any major expenditures in 2010.  For the last couple years we’ve had to spend thousands and thousands of dollars on a new roof, construction at the lake, buying a new car for my wife, and the list goes on and on.  The last thing we really need to do is replace the windows in our house.  I’ve been contemplating doing that to take advantage of the 30% energy tax credit, but so far I’ve decided to forgo the tax credit and just build our savings account.  Had we not spent so much money on our house over the last couple years, I’d be much more inclined to take advantage of it.

So, for the rest of the summer we’ll be spending time at the local amusement/water park that my aunt bought us season tickets to, visiting our lake house that we built a couple years ago and just taking short day trips around the area.  Hopefully we’ll be able to enjoy ourselves thoroughly AND see our savings account increase.

Just in case it doesn’t come back to life fully, I’ve wiped it clean so I can feel good about selling it on Ebay.  It really is rather shocking that people are buying water damaged Iphones on Ebay for upwards of $200.  I’ve pretty much decided that I’m going to sell this no matter what and I managed to reserve a new one for next Thursday.  If this does come back to life completely, I’ll be honest about it getting exposed to water but I think the final auction price will be higher for a fully working phone.

Anyway, things aren’t quite as bad as they were.

A friend of mine happened to offer me his old 1st generation Iphone to get me by until the new Iphone comes out in a couple weeks.  When I tried to move my number to it I was informed that if I activated this phone, I’d lose all of my corporate discounts equating to about a $25 per month increase.  Yes, I’d have to pay an additional $25 per month to use a crusty old 1st generation Iphone.

I also discussed what my options are for getting a replacement phone.  I was told it would be $115 if I simply canceled my phone service with AT&T and walked away.  If I want to wait for two weeks with no phone, I can pay a $200 premium to buy another Iphone and keep my service with them.  That’s right, if I leave them and go to a new wireless company it costs me $115.  If I want to remain their customer, I have to pay a $200 premium (over the cost of the “new customer price”) to get another phone.  So, I have an $85 incentive to LEAVE AT&T.  That seems like a pretty stupid business rule when you consider the lengths they are going to, to try to attract new customers.  My understanding is that it’s actually relatively expensive for them to gain new subscribers.  You’d think that would keep them from having business rules that actually incentivize their customers to leave them in event of a disaster like a squeaky clean, freshly laundered Iphone.

At any rate, they should really consider using situations like this for anger management training.  I’m a pretty even tempered guy but I’m finding myself horribly frustrated with AT&T.

So, now I’m looking in to what it’s going to cost me to get a new phone.  If I was to buy a new Iphone without a contract, it would cost me $599.  That’s not going to happen.  I’ve only had this Iphone for a little over 10 months.  By my calculations, I think it’s going to cost me $125 penalty to get out of my current contract and upgrade to the new Iphone on June 24th.  I was thinking that I’d be stuck without a phone for the next couple weeks but a friend of mine has an old 1st generation Iphone that he’s going to loan me until I can get a new one.  It’s definitely an expensive mistake.