A Promotion
February 26th, 2012
Over the past couple years I have been working really hard towards a promotion at my day job. Working towards this has meant that I have had to almost effectively work two jobs and that has chewed up my time, my energy and over time beaten down my mental state. This past week I finally got the good news that it has happened.
On the good side is that all my effort has paid off and over the next few weeks I’ll be fully transitioning to the new position. My mental state has already started to improve and lets be honest the pay hike that came with it is definitely a good part of that. The other nice thing is that I won’t need to split my time between two fairly different roles.
Now that I’ve got this promotion I am going to have to do a few things and the first and foremost of these is to figure out how to adjust top my new pay. I’ve gotten raises and pay hikes in the past and its all too easy to start spending more.
What I want to with my new found money is to pay down my debt and to increase my savings. I have been putting about 5% of my income into savings, which while its not as high as it should be, I want to make sure that this percentage is maintained and actually increased.
The other thing that I will focus on is the debt that I’ve got and I am actually debating what to pay down first. I know that one of the best options is to pay down the highest interest rate consumer debit first then to snowball it onto other debts. I was also debating on accelerating the payments on out car to improve cash flow that much more. Right now I haven’t made a final decision but I am definitely going to do a full assessment and I’ll share my thoughts when this is done.
Either way I am ecstatic that I have persevered and that I have finally gotten this promotion!
Posted in Career, News/Misc | No Comments
Slowing Down
February 20th, 2012
The cruise control was set about 10km (about 6 miles/h) over the limit and I was being passed by people madly rushing too wherever they were going as if the world depended on it. You’d think they were all heart surgeons on their way to perform life saving surgery. But alas there isn’t that many surgeons in a rush where I live. So this just meant that there were simply a lot of people just rushing.
Today I conducted a bit of an experiment on the drive back from the cottage; that experiment was to slow down. I realized recently that I too had been rushing around like a mad man. Not only getting to where I was going but through life in general. So the experiment was to slow down, set the cruise control at a reasonable speed and just get to where I was going.
What was the result of this little experiment?
- I still got to where I was going, maybe a touch slower.
- I was able to pay more attention to the road and the surroundings.
- I witnessed a beautiful sunset.
- I saved a bunch of gas (my car has one of those fancy doo-dads that tells me its efficiency).
- I had time to think.
In my thinking and quiet time I realized that I had been like one of those people rushing places. I hadn’t taken the time to enjoy life and my 60 hour work week came back to me in a sudden rush. My life was passing me by and I was the one at the drivers seat pushing myself beyond the limit and for what? An existence where I was just getting by and time was passing me by.
A question came to mind and that was how was this rushing affecting the rest of my life? What about my finances? my health? most importantly my daughter and wife? I don’t know the answer to all of those questions just yet but I know that in many parts of my life I am and have been in a rut, my finances are under control but not in great shape and it feels like I have nothing but work and sleep in my life. It became clear that it was time to slow down and start taking stock of things before my health was impacted (or before it was impacted too much).
There was no reason to speed along the highway of life and be one of those maniacs in a minivan driving 40km (25 miles) over the limit where a more reasonable speed would have gotten me there just as easily. At end of the day I don’t want to miss my daughter growing up or loose my health for what? What is the worst that could happen if I slow down?
Posted in Commentary, Financial Situation, Productivity | No Comments
The Insidiousness of Getting By
February 18th, 2012
Recently I’ve been thinking a lot about my finances and this blog. I had always intened to use this as a sounding board and to track my progress but the thing is that part of my problem is the insiduousness of the fact that week in and week out we just make due, making slow progress if any. This unfortunately translates to a lack of effort in many ways.
When its not bad enough to make changes because all the obligations are met it becomes hard to make real progress forward. The stagnation that comes from just getting by is tough because at the end of the day there is no driving need to makel progress in a positive direction. For example last year I was able to for the first time save some money. I managed to get a whole months worth of bills saved up. This is mildly frightening because l turn 35 this year and have some debt but very little savings to show for it. Being able to make ends meet is great but if you find yourself in this situation while carrying debt you end up with the status quo and no push to fix any of the issues..
When you just get by you might be able to pay everything which makes it seem like everything is good but it isnt. I like to use myself as an example becase i know mysef and my situation. So what does getting by mean to me? It means that even years after starting this blog and wanting to get out of debt I’m still there. We have done a lot and had we not purchased an extra property that we would be in much better financial shape from a debt perspective. We have been able to pay everything while still keeping outlifestyle at a certain level This meant that we didn’t have any incentive to do more, there was no pressure because we were getting by.
Getting by removes the need for action and without action forward progress will be slow at best.
I think a lot of people get stuck in this situation where you are simply making ends meet maybe setting aside a little but at the end of the day they don’t have any savings and the possibility of loosing a job becomes a scary proposition. Retirement comes looming before they know it and then they have to keep working.
The benefits of making due: you’re not falling further behind – most of the time.
My wife and I have been stuck in this unfortunate situation for too long – we keep doing the same things over and over because there is no pressure to do anything different. The only way out is action and breaking the bad habits of the status quo. Thankfully I have this blog as a gentle reminder to keep trying and as a driver towards action.
Action is the key.
Posted in Commentary, Debt, Financial Situation | 1 Comment
A quick update – Months of Silence
November 2nd, 2011
Every so often I take a look at this site because I feel a pang of guilt that I haven’t written on here in so long but life has been so busy lately that I just haven’t had much opportunity. The reality is that I let work take over too much of my life recently and between everything going on I just haven’t had much time for myself in general. Now I wanted to clear up something and that is I have not given up on this site, I refuse to let it quietly become one of the millions of dead blogs out there. If there comes a day that I want to stop writing on here I’ll just shut it down or pass it onto someone who is interested.
If I’m so busy then why am I all of a sudden writing? Well it all comes down to the being busy; things on the work front have been going great and I have been taking on a new role which has increased how much time I work. But after working too many 60 hour weeks and staying up late for the umpteenth time I was reading Leo Babauta’s site (ZenHabits) and I got jolted a little bit and it wasn’t a single post but a slow realization. The level of effort I was putting into everything left very little for me and my interests. Until this past week my xbox was not even plugged into the TV (I haven’t been an avid gamer for years but I still enjoy playing from time to time). The net result is that after reading though a whole boatload of material on Leo’s site I realized that I do need to get back to a few basics.
This writing (not just on this site) has always been one of those but also so has my interest in finances. Interests were aligning… there was possibility in the air! So I picked up a few books and just decided that I needed to get back to a few of my interests at least a little bit at a time.
So to the quick update – I’ve been working pretty intensely for the past year and a half and with a 3 year old in the house the work is endless, oh yeah we added the cottage this summer so we were up there a lot to get it ready for rental and just to use it.
The cottage did rent for the latter part of the summer and we managed to get some funds in for that. This year its all going to cover the amount of money we’ve invested in getting the cottage the way we like it (read: ready for renting). But the experience did teach us a few very valuable lessons: hiring out help does not have to be scary or challenging. Letting people into your property as a renter (even for a week) can produce some anxiety but it doesn’t have to.
From a financial point of view the cottage has altered out financial reality a bit but so far it hasn’t dramatically changed our lifestyle (other than we go up there). We are still managing to keep our finances in order though like way to many people we’re still carrying debt.
The idea of our personal finances hasn’t really left my mind, I keep tabs on my finances and investments and still read new books and blogs though not as many as I used to. Most recently I finished Ramit Sethi’s I will teach you to be Rich which I quite enjoyed and the timing was perfectly in line with my slow move to get back and writing.
In a nutshell that is a quick update – baring some drastic changes over the next few months hopefully I won’t remain as quiet as I have been. A life of all work and no play is pointless.
Posted in News/Misc | No Comments
Ready for Renting
August 7th, 2011
As many of you know my wife and I purchased a cottage at the beginning of the spring with the intent of both using it and renting it out. We spent a great deal of time and money and learned a great a lot about the process in general and I wanted to share that with everyone.
First off one of the key criteria for us when we were looking for a cottage was the potential for renting for part of the summer in order to help offset the cost of the mortgage. We picked a larger starter cottage on a small lake. There is a thriving market for cottage rentals in the area and our real estate agent was able to confirm that there would be a lot of interest for this cottage.
What we did!
Well needless to say this cottage was not rent-able on day one of our taking possession. While the cottage didn’t have anything actually wrong with it, it did require some TLC; OK a whole lot of TLC. We painted virtually the whole house inside with the exception of the main living room and the bathroom. Outside we needed to clean up and paint the two decks with some minor updates needing to be done to one of them to bring it up to code.
We also furnished the place; normally when you purchase a cottage a portion of the furnishings are included. In this case if we didn’t have it written down in the contract it was gone when we got there (including a few light fixtures). The place now looks very nice and we’re very proud and happy with it.
Getting Renters
When it came to getting renters we decided that it wasn’t worth it taking the risk this year and attempt to find renters on our own. We found a local agency that we took on to find us renters. They don’t charge any money up front they only take a percentage when they rent the cottage out. The percentage seems pretty high at 20% but well worth not having to deal with the hassles tied to finding and dealing with renters. This company also offers additional services such as cleaning and some maintenance but we were able to find some people on our own for this.
So far using the agency has been working well; we’re onto our second renters (so the august mortgage is covered!!) and they are working on finding us some long term renters for the winter which would be great. I’m happy with the setup even if they are getting a substantial percentage; I think its worth it.
What’s Next?
As i mentioned we are hoping to keep this cottage rented throughout the winter months which would really help with covering the mortgage the the whole year and ideally could mean we don’t pay for the mortgage. We are also looking into getting the bathroom renovated because quite frankly someone built it in the 60’s and it needs some attention and updating. But we’re only starting to investigate this as its an expense we’ll have to factor in.
We can afford this cottage without having the rental income but it becomes a true investment the moment that rental income starts flowing in. Having someone else pay for your mortgage means you can pay it off that much sooner (assuming you continue to contribute as well). I’m excited about this and really hope it continues to work out.
Posted in Investments, Real-Estate | 1 Comment
Properties are time sinks – An update.
July 12th, 2011
There are times in our lives when we are so busy that we just have to pick and choose the things that we can realistically do. We set our priorities with what is happening around us. For example when your wife is about to give birth to your first child you don’t go on a hunting trip last minute with your buddies. Most of the choices in our lives are fairly straightforward and we know which ones are important.
I am slowly coming out of one of these patches; the past few months have been down right crazy and mostly because of our cottage purchase. We’ve been back and forth to the cottage pretty much every week working on it and getting it all cleaned up and ready for use. While its been busy it has also been a lot of fun. I’ve enjoyed it but its time to start dusting off the other things that I used to do.
There is one nice thing about a short forced break: it makes you re-proritize and at the end some of the things that were a priority before really weren’t or aren’t that important. Others you find that you miss and want to get back to. I found that I missed writing so its time to come back to it. The best part is that in the process of getting our cottage ready for use and for renting there were a lot of lessons to be learned and a new way of looking at our finances to make everything work.
Hopefully in the process of going quiet for a few months I haven’t lost too many readers but now that the cleanup is mostly done I can put some time and effort back to writing and this site.
Another thing that I’ve managed to do is to start re-balancing my work life balance and that by itself has been a challenge but I am starting to see improvement. More to come on this in the next few weeks as well as our recent adventures.
Posted in News/Misc | 3 Comments
Emotional Attachment
April 25th, 2011
Today I read a post over at Zen Habits about Simplifying your Life with Balance and part of the post really resonated with me. In our lives we become emotionally attached to things regardless of what they are. I know that in the past I have kept little rocks from trips because of something that had happened as a reminder. But at the end of the day I still have the memory and now I’m just carting a rock around (they’ve been tossed out). Does that diminish the emotional value of the memento? No it doesn’t but having too many of these can become a very large rock collection.
This emotional attachment by itself is not a bad thing as long as there is balance (as the post says); the funny thing is when money comes into the picture that attachment becomes stronger. When you put your money behind something stupid you are more likely to stick with it no matter if it’s continuing to cost you money. Personally I’ve held onto things that i purchased long long after I stopped using them; mostly because I had paid a lot of money. I emotionally invested myself in that purchase and getting rid of it became hard for me (in my case it was an old laptop that i have since thrown out).
Why does money make the emotional attachment of our decisions so much harder to break?
Unfortunately I’m not a psychologist so I can’t fully answer this question but I can give some personal perspective. When we spend on on a purchase means we are trading our hard earned money and effort for that item. When we realize that the money has been spent in error or not been fully realized we carry a certain guilt with it especially if its a lot of money. We have trouble getting rid of something simply because of how much money we spent on it and personally I’ve seen the emotional attachment holding steady when logic has acknowledged the item was junk.
Since starting this blog a few years ago I have become much less materialistic in my ways (to the chagrin of my wife to can’t find me Christmas presents anymore). With that said I still feel the urge to spend on toys and gadgets that I won’t use. But what really helped me solidify the self control not to spend was experiencing this emotional attachment to that stupid laptop. I now understand that if I put money into something it is sunk money and it shouldn’t carry any additional weight. Does this mean it won’t ever happen again to me? No I might buy an iPad tomorrow and refuse to get rid of it for years even though I don’t use it. I am clearly aware that money I spend on something might mean my attachment to it is stronger so I try to really understand if the purchase is really an item I need.
Being emotionally attached to something in your life can make it incredibly hard to change; as long as you know where that attachment comes from it will make it easier for you to decide if you really want to keep that thing or activity in your life.
Posted in Commentary, Financial Situation | No Comments
Net Worth Assessment (February)
April 24th, 2011
Its now the middle of April and the grass is starting to show some signs of green and I am only now getting to posting my Net Worth Assessment from a couple months ago. No do not expect there to be any Enron like cover ups it was just a very busy period of time as my wife and I were looking for cottages and I am not playing a bit of catch up. I wanted to make sure these posts made it up and though they are late they are here.
The month of February was an interesting month because of the cottage hunting we ended up getting our house re-appraised. If you’ve ever done this and had the assessment go in your favor it has a huge impact to your bottom line. In other words if the house goes up in value you have more equity in the house. That is exactly what happened here. While the month over month differences were minimal the liabilities went down but which is good.
Here are the numbers:
| Jan 31 Balance | Feb 28 Balance | |
| Liabilities | ||
| Consumer Credit | $9,463.85 |
$10,692.64
|
| Lines of Credit | $30,086.17 |
$29,693.15
|
| Mortgage | $240,701.26 |
$240,022.21
|
| Car Loan | $20,484.30 |
$20,149.34
|
| Total Liabilities | $300,735.58 |
$300,556.94
|
| Assets | ||
| House | $360,000.00 | $375,000.00 |
| Investments | $40,790.25 |
$43,636.63
|
| Total Assets | $400,790.25 |
$418,636.63
|
| Net Worth | $100,054.67 |
$118,079.69
|
| Growth |
$18,025.02
|
|
| % Increase |
18.02%
|
So Most of the important categories went down with the exception of consumer credit – I used some of this to pay for hotel rooms while we were running around looking for the cottage as well as a few other expenses (we went away for a weekend to treat ourselves). Other than this one splurge category everything seems to be in order. Even without the increase in the value of our house the increase would have been good.
Up next – the March numbers: this is where things get a bit wacky with two properties.
Posted in Budgeting and Planning, Financial Situation, Monthly Planning | No Comments
We Bought a Cottage!
April 3rd, 2011
Over the years there have been a few goals that both my wife and I have wanted to accomplish and one of these was to own a cottage. We nearly accomplished this a few years back but the deal fell through and rather than finding a new deal we decided to get married instead. I think this was the better choice personally. But the idea of owning a cottage for our own never really left and we’ve been keeping an eye on the market to see if anything was out there.
In February I was looking around on MLS and discovered that there were in fact cottages that could potentially be in our price range. We have been trying to get our finances in order and as part of that we were very clear on what we could and what we could not afford. To see cottages within that range was exciting and we started doing more investigation.
Where we live cottages are often extremely expensive so to find affordable cottages meant that the housing market had gone soft (which it did in 2008/2009) and the prices would be rebounding. It also meant that the cottages we would be looking at were more than likely going to be out of the way pieces of crap. Out of all of the cottages that we looked few of them were uninhabitable in my opinion and at only a small handful were worth considering. We ended up finding one that was perfect for us and our little girl.
Why buy a cottage?
One of the first questions that came to mind when we saw cottages in our price range was why buy a cottage now? We would be making our financial situation that much tighter by doing this. The answer is pretty simple: rental income! Cottages seem to be pretty easy to rent and this rental income can easily cover the mortgage on the place. In our case we would be able to use the cottage most of the time and rent it out a couple weeks during the summer months to offset our costs.
If we were to rent this cottage out all summer we could have a year round property paid for by our renters. Our goal is not to do this but to supplement the cost of carrying the property with the rental income. We want to enjoy the place too.
How we did it
If you look back to my January financial statement post you’re probably wondering where we invented the money for this cottage as we did not have a massive down-payment just laying around to be used. We are fortunate enough to have purchased our house at a great price and the renovations we’ve completed over the past couple years have dramatically increased our property value. Very simply we had enough equity in our home to be able to pull money out as a down-payment without putting ourselves at risk from an equity in the house point of view.
The net result is that we now have two properties that we have more than 20% down on and mortgages that we will be able to handle without any difficulty. The best part is that one of these properties has the potential to become a self sustaining income property.
What we considered
A cottage is still a property so a lot of factors needed to be considered before the purchase. Here’s a list of things that we covered during our search:
- Physical property (a house inspection was completed as part of the sale)
- Insurance was factored in (including additional insurance for renting the property)
- Location (how much are we going to spend to get there regularly)
- Utility and Tax costs
- Resale value
- Potential Income
- Required renovations
- Expected Maintenance costs
The net result was that not only did the above criteria work with the property we got but we were sure that we wouldn’t be overextending ourselves when it came to actually carrying costs.
At the end of the day we’re both very excited and we can’t wait to start using it (we get the keys in a month)! Our financials will change as a result of this but I believe that this will be for only for the better.
Posted in Extra Income, Financial Situation, Real-Estate | 3 Comments
Update – Spring Silence
April 3rd, 2011
While this is not a very prolific blog like many of those out there; all too often it is because of everything else going on in my life and this latest round of silence was another one of these times. It was a combination of a few things that kept me away from the computer and from posting, while most of these are not exciting there are a few that were.
In this case I ended up absolutely bogged down with work to the point of working at home 3+ hours each night. Now some of this work does fall into the interesting and exciting camp but at the end of the day it is work. I am expecting things to lighten up starting in April and the goal will be to keep them this way. I don’t mind putting in a bit of extra time at work but working 11 hour days and weekends is a bit much and takes away from family.
The second and more exciting thing was that in February my wife and i started looking at cottages to buy. This was a very long process because by their nature cottages are not a 10 minute drive away. I will post about this in a separate entrybut the net result is that we were able to find a cottage and we take possession in May.
Finally, and most recently, I’ve been dealing with a few health issues – probably related to working myself too hard for the better part of the last year. I’m OK and the issues were minor but they did illustrate to me the fact that health has to come first which it hasn’t. Again I will post about this separately.
Overall its just been a very busy couple months and I’m looking forward to some down time which will start to happen with the cottage and some planning on the work front. Stay tuned – I’ve got lots of stuff to share now.
Posted in News/Misc | No Comments
