FIRE... by 2018

the fire is not dead

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

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

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

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

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

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

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

funny song - my cubicle

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

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

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

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

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

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

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

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

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

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

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

a good real estate broker she is not

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

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

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

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

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

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

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

mansion impossible

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

A great flash game.

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

citibank works for me

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

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

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

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

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

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

picked up some UNIQLOthes on the cheap

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

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

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

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

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

networth update and semi-annual progress

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

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

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

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

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

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

returned from the middle kingdom

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

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

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

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

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

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

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

some thoughts before the big vaca

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

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

Some thoughts before I go:

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

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

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

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

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

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

how i'd like to chop up this building

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

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

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

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

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

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

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

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

Profit before fees and other costs: $300,000

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

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

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

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

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

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

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

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

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

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

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

invest in a good laugh - scary movie 4

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

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

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

Have a good weekend.

property listings aggregate websites for nyc area

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

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

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

Check 'em out:

happy about a new supermarket in town

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

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

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

mother's day special

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

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

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

my biggest payday to date - $56500

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

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

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

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

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

What I plan to do next.

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

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

a failed attempt to make money off a website

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

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

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

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

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

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

better to be an independent consultant?

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

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

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

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

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

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

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

test drive your dream job

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

Ripped from a post in early-retirement.org

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

Businessweek Article

thank you all for doing such a wonderful half assed job

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

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

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

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

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

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

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

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

weekend, real estate, money update!

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

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

The Addiction that is Real Estate:

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

Money:

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

i haven't done my taxes yet

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

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

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

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

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

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

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

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

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

great find from ikea this weekend

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

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