Personal Finance Blog by Money Ning

Right Time to Buy a House?

MoneyNing — Tue, 13 May 2008 15:30:12 +0000

(Photo from Shea Homes)

In a surprising move, my boss made a offer on a single family home in Aliso Viejo, CA today. In fact, he is interested in two homes in the same “new development tracts” and he told the sales lady that he is willing to buy any of the two depending on the deal that he gets.

The offers my boss put in the houses listed at $1.6 million and $1.2 million were $1.35 million and $1 million respectively. He went in with his bank statements and told the sales lady that he can pay cash, and that he is ready and able to purchase by this month. The sales lady told him that she needs approval from management but my boss is quite confident that he will get the deal because those houses are already built and the builder is just sitting on them and losing money everyday that it sits unsold.

As I discussed numerous times before, I believe the housing market will be in a correction for at least another 6-12 months. I will eventually get a house, but I do not believe it is the right time yet. I feel that I will be able to get a better deal in 2009, which is why I haven’t pulled the trigger. In fact, we haven’t even looked at houses for a few months now.

However, after speaking to my boss and knowing what he’s done, it really puts doubts of my thesis. If the houses he put his offer in were listed at $1.8 million a year ago and he ends up getting it at $1 million, it is already a 44% decline from peak which is something I’d be happy with.

I know I shouldn’t see my house as an investment but it is going to be my single biggest purchase by far. I’m not trying to time the absolute bottom of the market but I’d hate to see myself paying for possibly $100,000 more than I need to pay as it will take me years to make up the difference.

What do you think? Fire away at the comments section, I really appreciate it.

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Motivation Monday - Start Exercising

MoneyNing — Mon, 12 May 2008 15:30:25 +0000

For the past few years, I started slowly but consistently gaining weight. It’s gotten to a point that I don’t feel as energetic as usual and that I’m always tired. So, the natural solution was to start exercising. 4 weeks ago, I started running at least 3 times a week for 30 minutes in each session. At first, it was very hard and I felt almost exhausted afterwards. I felt so tired I wasn’t able to sleep because my muscles were aching so much. Luckily, it got much better after a few sessions as I started to feel more comfortable with the length of the sessions and my sleeping problem went away.

Fast forward to today, I can already see the results of my routine. I’m much more energetic and in general much happier. It’s strange because I actually feel more alert after I run even though I would expect to be tired afterwards. I’m also much more optimistic and confident in everything and that in itself has made me much more motivated.

This is obviously a very indirect way of motivating ourselves but I can tell you that it works! Actually, this works so well that I feel sad to not have done this much earlier!

If you were like me and feel unmotivated and a lack of energy everyday, then try to start exercising! It will be very painful at the beginning but I assure you that it will be much better in a few weeks!

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Personal Finance on an Apple Macbook Pro Sunday Roundup

MoneyNing — Sun, 11 May 2008 16:00:54 +0000

After contemplating my options of replacing my current Dell laptop’s dim LCD screen, I went to the Apple store and bought a Macbook Pro! Now that I’ve used it for a few days, I can see why everyone who switched to a Mac never looks back. The screen is simply amazing, so I’m sure that working on this laptop for long hours will help my eyes in the long run. Furthermore, as someone who used Windows for the past 15 years, I found daily operation with the Mac to be much easier. I’m sure this will help my productivity and help give me more time to write good personal finance articles!

This week as usual, there are tons of good articles around the blogsphere! Check these out!

My Two Dollars tells us what we should see coming, the economic stimulus checks will mean higher taxes for us in the future!
Paid Twice seems to have found a treasure from someone else’s junk! I always found that it is important to look at all ways to gather coupons!
Dividend Growth Investor noticed that some states might be more investor friendly so he did an analysis to see which states the dividend paying stocks he’s interested in are located.
No Debt Plan just alerted me that Skype is only charging $2.95 per month for unlimited calls within US and Canada! Wow! I’m definitely signing up!
Cash Money Life suggests that we should involve our family and friends for our wedding! I must say that this is a good idea for anything because not only does it save us money but also gives us a chance to spend some time together with family and friends!

Carnivals during the past week!

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Let’s Do a Progress Check on Our Savings Plan for the Year

MoneyNing — Fri, 09 May 2008 15:30:44 +0000

It is always a good idea to do a checkup on the progress we’ve made with our savings and measure that against the savings plan that we make during the beginning of the year. This way, it allows us to make necessary changes if we are falling behind schedule and make sure that we still give ourselves a chance to make up for lost ground. For those who are on track (or even ahead of schedule), doing this will make us happy but for others, it might be a true wake up call where we need to make drastic changes to our spending and saving habits.

Instead of doing this analysis in set intervals, I like to do it spontaneously. The general consensus is that not having a set schedule is not good because we would forget to do this but I care so much about my savings that I will never forget to do a checkup. So, I do what works best for me.

At the beginning of the year, I’ve made a goal of saving $30,000 in 2008. Upon looking at my records, I’ve transferred $18,500 into my brokerage already this year so I’m well ahead of schedule since this doesn’t even count my 401k and Roth IRA contributions! I’m very happy about my progress and results like these make me want to keep doing these types of analysis! So now that I know I will handily beat the original goal, I plan to increase my savings plan to $40,000 this year. I believe that it is going to be tough since my earnings for the rest of the year will be weaker than the first 4 months but it is going to be doable. In a few months, I will do another analysis and figure out my progress.

So, do you ever check your progress against your goals this year? If you don’t, I suggest you start today!

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Debt Consolidation - Do You Need Help?

MoneyNing — Thu, 08 May 2008 15:30:50 +0000

This is a guest post from Debt Lead, who has a debt consolidation website by Kimberly Credit Counseling.

Are you one of those people that are in way too deep when it comes to debt but just don’t know it yet? Are you one of those people that don’t have enough money to pay the bills without juggling things around? Are you one of those people that can’t buy groceries? Are you one of those people that say they will start saving for retirement tomorrow, not realizing that tomorrows add up to too late?

There are plenty of people out there that have a mortgage and an auto loan and are managing their debt wisely. They have no credit cards and in return, they have less stress when it comes to finances. Some people are even strong enough to have a credit card and pay it off in full each month.

However, most people out there are not that strong!

How do you know if your debt is out of control? Below may be some signs that you are having financial problems:

You only make the minimum payments on your credit cards.
You let bills slide for a few days or even a week.
You don’t have any savings or emergency funds available. You may take out loans to make ends meet.
You buy everyday items and pay bills with your credit cards and hardly use cash.
You have more than two credit cards with very high balances.
You have no money at the end of the month after your bills are paid.
You have maxed out your credit card(s).
You don’t even know how much you owe on your credit cards.
You are charging more than you are paying each month.
You have been declined for credit.
You bounce checks often.
Your creditors call you looking for payment.
You hide your spending and the credit card statements from your spouse.

If any of the above are true about your finances, you need to realize that you are in debt trouble. Right now, you are in over your head.

You need to re-think your finances and change your financial ways as soon as you can. It isn’t worth the stress having that financial burden, and you should start taking steps to paying off your debt and take control of your situation. Money shouldn’t control you, you should control money.

Start with listing all of your debts. Be honest and list everything so include interest rates, monthly payments and balance due. This will let you see exactly where you stand financially.

Next you should create a budget. This may take a month or two to get budget worked out. Look at it closely to find ways you can trim your spending and pay down your debt. You may find that you have to sell something or get a second job to get started but that’s okay.

One more thing you should do is get rid of those cards right now. Also set a few financial goals and try and reach them. You will never want to charge again when you see what it is really costing you. Take action against your debt situation now.

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From a Yield of -99.79% to +9.99% This Year So Far

MoneyNing — Wed, 07 May 2008 15:30:24 +0000

I’m happy to report that my current annualized yield on my investments is +9.99% when the Dow hasn’t even gone back to the break even point this year. It wasn’t long ago (January 16th, 2008 to be exact) when my annualized yield on my investment was -99.79%!

I know it sounds like my whole investment was pretty much gone, but the reality of why it was almost at -100% was that I was down about 5% since January 1st and it was extrapolated for the whole year. Had the performance of my investment portfolio stayed that bad all through the year, I would’ve wiped out all my savings!

However, this didn’t happen and I truly believed that it wouldn’t despite the fact that news of a possible recession, the housing crisis, and high gas prices were all over the place. I wasn’t scared and certainly never sold all my stock holdings to hide in saving accounts. I believe because the long term trend of the stock market is always up. I was also confident that the companies of the stocks I picked were good companies that had real earnings power and can weather any short to mid term economic storm.

As a result, I kept investing and bought more stocks when everyone else was madly trying to get out of the equity market. I made a few mistakes like selling a few stocks when it was at its lowest for the year, but the fact that I kept investing has helped me achieve the market beating returns this year so far.

I’m no expert in investing, but I know that if I keep trusting my research and has a discipline approach that takes the emotions out of the equation, I will come out ahead in the long run.

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Mortgage Loan Calculator

MoneyNing — Tue, 06 May 2008 15:30:23 +0000

Being a numbers guy, I was always calculating how much I needed to pay monthly once I bought my dream house. I remember a year ago when my wife and I almost bought a house, I was using my pen and paper to write down all the necessary expenses like property taxes, home owners insurance. As a result, I gave my readers an option to calculate all this in an electronic form up at the top of the page.

Fast forward a year from now. I still haven’t bought my house, so the need for a mortgage calculator is still in tact but I found one that puts what I have in shame! Luckily, the website I came across has a free widget that I can embed into my site so I will be implementing that fairly soon on my website for all readers to enjoy.

The tool that I came across can be reached at mlcalc.com. Once you get to the main page, the page provides a clean and simple interface for two main calculators: Mortgage Calculator and Loan Calculator. The only difference between the calculators are that the mortgage calculator lets you put in variables like your down payment, property tax, property insurance and private mortgage insurance (PMI - the bank sometimes requires this if you put in a down payment of less than 20%) which you can see on the left.

Once you click calculate, the results are given in chart and table form so the exact monthly payment is shown like below. Note that I cut off the data after year 2019 to save space but the calculator gives out a full 30 years of data.

The pretty colors and easy to read layout are what originally attracted me to this calculator. However, now that I’ve played around with it, I believe I can easily use this with my internet enabled phone to negotiate with any lender right on the spot whether I’m buying a car or house! If you are always trying to come up with your own way to calculate your mortgage payment, why not give this a spin?

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Motivation Monday - Change the Environment

MoneyNing — Mon, 05 May 2008 15:30:56 +0000

We look for all kinds of ways to motivate ourselves, but sometimes all we really need is a little change of environment. An extra light here, books on the other side of our desks etc can do wonders to our energy level.

One of the things I did lately was change my laptop from a Dell to a MacBook. With the amount of time I spend online, my laptop was pretty much the main part of my work environment. By changing my laptop that looks and feels different, I literally changed everything about my work.

With this change, there is a new level of excitement from checking my emails to posting blog posts. I’m sure that this alone will increase my productivity tremendously as I will be more efficient and can be more creative with my articles.

If a laptop change is too big of a change, try the ones I mentioned above. Other ones include but not limited to:

Replace the chair that you sit on so many days of the week
Change the wallpaper/wall color (if you are working at home)
Buy a really nice and new pen to work with

I just literally came up with these three suggestions off the top of my head. Little changes are very easy to come up with and implement and I’m sure there are a ton more that we can think of. Some are obviously easy to do than others but the main point is to bring some freshness into our work environment. I bet that by doing so, we will be much more motivated!

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Links Sunday Apple Edition

MoneyNing — Sun, 04 May 2008 19:34:59 +0000

Between my blog and work, I’m logging a ton of hours on the computer. My eyes are starting to feel really tired these days and as I look into the possible reasons for this, I realized that my laptop’s screen is really dim. I compared my own laptop against my wife’s and the brightness difference was undeniable. I took this experiment one step further and went to the Apple store and saw all the nice and bright LCDs and laptop screens. One thing was apparent, I needed to change the screen I was looking at or else I will be sorry when I get old.

While I comptemplate a possible buying decision (if you have any suggestions, feel free to email or write a comment as I will really appreciate it), check out these articles from around the world!

Dividend Growth Investor shows us another way to take advantage of leverage. Be very careful in these types of investments because you are really increasing your risk for potential return.
With gas prices at record levels, Bloggin Ads writes an article about gas, cars and more. I especially like the last advice he gave us his readers to read about money saving ideas by reading MoneyNing!
Spartan Saving writes about what he thinks is the top ten ways to save money!
My Two Dollars shows us how to increase our home’s selling price!
Paid Twice tells us that he’s gotten his economic stimulus check. Have you?

Carnivals I’ve participated in:

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Frugal Honeymoon

MoneyNing — Fri, 02 May 2008 15:30:42 +0000

In about 2 weeks, I will be going on my honeymoon with my wife. We’ve decided to go to Japan, a place where I’ve always dreamed of visiting one day. Even though our itinerary is already set, many day to day activities are not finalized yet.

Should we try to be frugal in our honeymoon?

On one hand, I’m scared because we can easily spend much of our savings on only 10 days of our lives if we aren’t careful. Many of my family members suggested all these fancy restaurants in Japan that we have to go to because they are just so good. Add that onto all the admission fees, transportation and lodging costs can only mean a huge bill when we are all set and done.

On the other hand, our honeymoon is an “once in a lifetime” event and I want it to be memorable for my wife and I. I want us to be able to remember everything we’ve done and enjoyed during these 10 days and not just remember that we wanted to save money and always went for second best because of cost reasons.

We can comfortably afford this trip even if we slurge a bit, so I’m leaning towards letting go the frugal part of me for 2 week but maybe I will make a big mistake because I appreciate the future value of the money I might use today.

So, I’m in a crossroad and need your help. What do you think?

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