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#41 User is offline   intotheblackhole 

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Posted 19 September 2005 - 11:36 PM

DCS, on Sep 19 2005, 07:58 PM, said:

uphill, both ways... :lol:
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When I started 12 miles was a long ways. Now it's a piece of cake. Don't even notice the hills anymore... :thumbsup:
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#42 User is offline   intotheblackhole 

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Posted 19 September 2005 - 11:43 PM

madg, on Sep 19 2005, 06:53 PM, said:

(It's kinda late and I'm heading for bed... but believe it or not, I was just thinking about the New Orleans area as an opportunity.  Lenders and insurance companies will surely be taking possession of properties and will be looking to "turn them around"... likely selling at a discount to speculators... something like that?)
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NO is a high profile case. Where there is lots of loose money like there is going to be in NO there will be lots of dogs to catch the scraps before they hit the ground.

Look for individual distress like overdue on taxes, behind on payments, house is deteriorating and so on. Bank forclosures are nice but that is a cottage industry and is full of people who are good at doing that type of thing.

My wife just used word of mouth to get ours. She heard about both from friends and the local store.

This post has been edited by intotheblackhole: 19 September 2005 - 11:45 PM

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#43 User is offline   FerretFriend 

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Posted 20 September 2005 - 05:39 AM

intotheblackhole, on Sep 19 2005, 05:46 PM, said:

Excellent book. I have read it and model my life after it.

One thing I disagree on is the house issue. He says that a house is not an investment. I believe it is. You have to live somewhere and rent does not lead to owning. Plus with the tax breaks on property taxes and interest it makes it worthwhile.
I look at education as a good thing. Worth going into debt for if there is a reasonable possibility that the job will produce a good income.

And congratulations in graduation and the fact that you can see your need to get finances in order.

There's no humiliation in living within your means. This is the trap that Americans fall into and Wall Street loves to see. It is promoted by Madison Avenue. They design ads that make people want to buy and Wall Street reaps the profits.

I am on www.craigslist.org looking for used stuff to finish some remodeling on our vacation home. Almost all the stuff I get for my rentals is used and I can save about 70%. We just got a door from a liquidator that is all wood with a full length sealed double paned argon filled window. Got it for $50. I had to do some sanding to get out a few nicks but hey, it's a $300 door.
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ITBH, I thought I saw some hints of RDPD in your writing. :D Kiyosaki is a genius...not just because he was able to make his own money, but because he can stimulate the interest of other people in their own financial welfare. And now you've done both, too! Not an easy thing to do!

I agree with you to a certain point on the house. The problem today is that most people see their home as three bedroom, two bath ATM machines. I have read so many stories about people who are taking out their equity to pay for vacations, clothes shopping, cars, etc. - not for good reasons, like renovating to up the value of their investment. Bad move.

A home is also only an investment if it's not hideously overvalued. I am thinking of people here in MA who are buying modest two bedroom, 800-sq. foot houses in crappy neighborhoods on the side of interstate highways for half a million dollars. That is what makes a house a liability, rather than an investment.

As for college. Hmmmmm. I went to an outrageously expensive art school on the advice of several highly educated poor folks, who said "Just get the degree, and the money will follow". Bad decision anyway, but I made the best out of it by actually working in the field once I graduated.

After graduating five years ago, I am just now out of that hole. 50% of my twenties was spent not traveling, not buying assets, and not eating, for God's sake, to dig myself out of that hole. I stopped working in my chosen field after experiencing an industry-wide sea change that made it not very profitable anymore. If I were smart, I would have seen it coming. My $45,000 education is now just a hobby. :sick: Many of my friends who majored in "useful" fields in school are in worse shape than me.

My advice to young people who are about to enter college is not to go, unless you know EXACTLY what you want to do in life. Work for a few years, try on a few hats, and make a wise, informed, & mature decision. If you really want to go but have no idea what you want, live at home & go to a community college. That way, you get your education & waste less money if you decide basketweaving isn't really what you want to do in life. :D Think of how much the price of a college education would go down if fewer people were going just for the sake of going, and then going back again a few years later!

I am all over Craigslist too! My car, apartment furnishings, books, and much of my wardrobe comes from there! :D Thanks to CL, I have an apartment that looks like a Pottery Barn ad, for the price of one piece of Pottery Barn furniture. I spent about $600 on clothing last year (not by choice, but necessity), and still managed to dress in a way that inspired envy among my friends. I live in a city full of spoiled, rich college kids who donate their furniture & designer clothing to the Salvation Army after one season. Luckily, I'm their same size - their slothful spending is my savings!

I just sold my car that I had been making payments on for the last three years. In my mind, there is absolutely no justification for making car payments...it is almost guaranteed that the car will be worth 1/8 what you've paid for it & will be a total sh!theap when all's done. Thus requiring another car loan. Rinse and repeat.

I sold my gas-guzzling SUV for what I owed on the loan, and bought an 11-year old Volvo sedan with <100,000 miles on it from my savings on car payments. My car insurance is cheaper, and I didn't cry like a baby when someone smashed a chair across the hood (someone was running through my neighborhood randomly swinging a chair at people's cars the other night...damned on-street parking!) The car is easily replaceable if something happens to it, unlike my heavily-financed Jeep. I'll drive that Volvo for the next five-seven years; when it finally craps out, I'll buy another used Volvo for cheap. (I'm hoping to be needing a station wagon by that point in time...hopefully I'll be married with at least one kid :D)

I live in a "cheap", but up & coming part of Boston most people never heard of five years ago. With the mortgage I got yesterday, I am going to make my landlord an offer he can't refuse...and I'll be paying less than I currently do in rent. I'm going to have about $40,000 left to my mortgage after purchasing my apartment; with that money, I'm going to get new windows, new cabinets, and some appliances...and will STILL be paying less than I do in rent, with an asset that has appreciated at least 20% in the time it takes to renovate. I'm pretty handy, and as such can do most of the work myself.

I know I could move to a cheaper part of the country and make out like a bandit on the money I'll be spending here in Boston. However, I am in the middle of working full time & going to nursing school (which I am financing with loans that will be forgiven upon getting my first job), and can't risk "changing horses" until after I finish my master's degree in a few years. Thus, I am stuck in Boston for the next few years. I figure it'll be better to own a condo in that time, build equity, & sell at a big profit when I decide to move rather than flush money down the toilet on rent in that time. I could buy a rental/investment property...but the fact is that right now, my time for dealing with that kind of thing is at a premium. Plus, I can't afford that kind of a note every month while I'm in school if I can't find a tenant. I'd love to have a rental property or ten, but really can't do it until school is over with. One thing at a time!

I'd love to hear more about buying your distressed properties, ITBH...what do you consider "distressed"? How do you find out about them? How do you protect yourself, legally speaking - have you incorporated? Do you buy foreclosed or HUD property? Tell us more! :protest:
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#44 User is offline   blanca696 

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Posted 20 September 2005 - 07:27 AM

I'd like to recommend Dave Ramsey. My husband and I started following him a few years ago and it has completely changed our financial lives even in the midst of starting a business. He has a radio show and a couple of books, "Financial Peace" and "The Total Money Makeover". I never realized being out of debt except for the house, which will be paid off in 5 years or less would be so freeing. Just my two cents.
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#45 User is offline   intotheblackhole 

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Posted 20 September 2005 - 10:22 AM

ferretfriend, on Sep 20 2005, 02:39 AM, said:

ITBH, I thought I saw some hints of RDPD in your writing.  :D  Kiyosaki is a genius...not just because he was able to make his own money, but because he can stimulate the interest of other people in their own financial welfare.  And now you've done both, too!  Not an easy thing to do!

I agree with you to a certain point on the house.  The problem today is that most people see their home as three bedroom, two bath ATM machines.  I have read so many stories about people who are taking out their equity to pay for vacations, clothes shopping, cars, etc. - not for good reasons, like renovating to up the value of their investment.  Bad move.

A home is also only an investment if it's not hideously overvalued.  I am thinking of people here in MA who are buying modest two bedroom, 800-sq. foot houses in crappy neighborhoods on the side of interstate highways for half a million dollars.  That is what makes a house a liability, rather than an investment.


Homes need to be within the limits of the people buying. I have several co-workers that have 2 kids and homes in the 3500 sq ft range. These things are so big and then there is no yard to play in. The payments are 1600/mo on a 30 year note. Then they wonder why they can't afford to go anywhere and do anything. Movies become a luxury and they have to work OT to pay for it.

My home is a modest 1000 sq ft. We bought it when prices were down and the people that owned wanted out real bad. The guy had just finished school and gotten a good job and was moving to a much larger home.

They had done some work on the home but it was a good thing that he didn't work as a carpenter as he would have starved to death. So the home needed to be redone. They had lots of people looking but no offers.

We made a low ball offer of 65,000 and he took it. I considered this distressed housing as the seller wanted out real bad.

We have done a lot of remodeling and it is worth 175,000 now. We put in 2 bedrooms in the basement, a full bathroom, new vinyl windows, and just vaulted the ceiling in one bedroom and in the process converted an empty attic into another bedroom.

It took years to get this done and we paid as we went. I bought all the tools which are a writeoff as we use them on the rentals (tax advantages on rentals are impressive).

Homes are like anything else in finances. They have to be looked at as an investment and treated as such. We looked at a house in a bad neighborhood that we considered buying. It was on a dirt road, had 3000 sq ft, was really a nice home. But it was way overbuilt for the neighborhood. Bad choice and they will not get their money out of it.

Our home is still modest and will sell for what it is worth as we ahve done the work ourselves, and it is not overbuilt for the area.

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As for college.  Hmmmmm.  I went to an outrageously expensive art school on the advice of several highly educated poor folks, who said "Just get the degree, and the money will follow".  Bad decision anyway, but I made the best out of it by actually working in the field once I graduated.

After graduating five years ago, I am just now out of that hole.  50% of my twenties was spent not traveling, not buying assets, and not eating, for God's sake, to dig myself out of that hole.  I stopped working in my chosen field after experiencing an industry-wide sea change that made it not very profitable anymore.  If I were smart, I would have seen it coming.  My $45,000 education is now just a hobby.  :sick:  Many of my friends who majored in "useful" fields in school are in worse shape than me. 


The skills in schooling must be widely marketable. I can't see art school as being a highly marketable skill.

But now going to nursing school is a very wise choice. RN's will be in big demand more than they already are.

I do a lot of cycling and rememeber a comment in Cycling magazine. What is the career path for a Ph D in Greek History? Bike Messenger.

We have several friends that are Therapists. They have MA's and Ph D's. That's 6 and 8 years of post primary education. They make about 40k per year. While they were going to school and speinding the 1,000 per month for it I was making 3,000 per month and saving 1,000 of that. By the time they got out of school I had saved over 60,000 and was debt free. They are still paying off the student loans and wonder how they will retire. We all started out at about 40 years of age.

I am now 56 and have 3 rentals, a vacation home (all paid for) a primary home worth 175k (owe about 80k on it) and over 600k in my 401k and my wife's 403b. I am debt free except for my home.

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I am all over Craigslist too!  My car, apartment furnishings, books, and much of my wardrobe comes from there!  :D  Thanks to CL, I have an apartment that looks like a Pottery Barn ad, for the price of one piece of Pottery Barn furniture.  I spent about $600 on clothing last year (not by choice, but necessity), and still managed to dress in a way that inspired envy among my friends.  I live in a city full of spoiled, rich college kids who donate their furniture & designer clothing to the Salvation Army after one season.  Luckily, I'm their same size - their slothful spending is my savings!

I love CL. Just got about 200 bricks for free. I will use that to redo the foundation on my garage that is rotting out. I also got 9 - 2 ft by 7 ft tempered glass panels for free that I intend to make a sun room on our vacation home.

One of my hobbies is computing. I have 5 computers in the house and they are all networked. One computer is my Home Automation computer that runs the house (lights, HVAC, security, and keeps track of my schedule and pages me for appointments).

None of these computers are new and I don't think I have over 500 invested in all of them combined. Got them all on CL.

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I just sold my car that I had been making payments on for the last three years.  In my mind, there is absolutely no justification for making car payments...it is almost guaranteed that the car will be worth 1/8 what you've paid for it & will be a total sh!theap when all's done.  Thus requiring another car loan.  Rinse and repeat. 

I sold my gas-guzzling SUV for what I owed on the loan, and bought an 11-year old Volvo sedan with <100,000 miles on it from my savings on car payments.  My car insurance is cheaper, and I didn't cry like a baby when someone smashed a chair across the hood (someone was running through my neighborhood randomly swinging a chair at people's cars the other night...damned on-street parking!)  The car is easily replaceable if something happens to it, unlike my heavily-financed Jeep.  I'll drive that Volvo for the next five-seven years; when it finally craps out, I'll buy another used Volvo for cheap.  (I'm hoping to be needing a station wagon by that point in time...hopefully I'll be married with at least one kid :D)


Cars are the biggest money hole there is. It is a temporary pleasure that will not last but yet it you are stuck with the payments for years. It is like a one night stand. It was a moment of pleasure but now you have to pay child support.

I have had one new car in my life. I got it in 1978 and soon after there was a period of hyper inflation and the value of the car increased to 6000 even when it was 3 years old. I paid 4500 for it new. This was a unique time when having things was of some benefit. Inflation was 25% and the prime rate was 18%.

Other than that all my cars have been well used. It is cheaper to pay 100 per month fixing them than the 400 per month buying them. At one time I had 3 cars. One for me, one for my wife and one as a spare. It was still cheaper than one new car.

Now I ride my bicycle. The cost of that is about 100 per YEAR. My "new" 1994 truck that I just bought for 5k just sits in the driveway.

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I live in a "cheap", but up & coming part of Boston most people never heard of five years ago.  With the mortgage I got yesterday, I am going to make my landlord an offer he can't refuse...and I'll be paying less than I currently do in rent.  I'm going to have about $40,000 left to my mortgage after purchasing my apartment; with that money, I'm going to get new windows, new cabinets, and some appliances...and will STILL be paying less than I do in rent, with an asset that has appreciated at least 20% in the time it takes to renovate.  I'm pretty handy, and as such can do most of the work myself.


This is the part of ownership that is beneficial and where I take exception to Rich Dad, Poor Dad. Homes are good IF they are treated as any other investment.

To many times emotions play into buying a home. The home is sooooo pretty or it has a nice backyard, the layout is wonderful and so on. There should be one criteria for the home other than the obvious things like a roof, plumbing, electrical and so on. The one criteria should be, is it a good deal. Is the value equal to or LOWER than similar homes in the area?

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I know I could move to a cheaper part of the country and make out like a bandit on the money I'll be spending here in Boston.  However, I am in the middle of working full time & going to nursing school (which I am financing with loans that will be forgiven upon getting my first job), and can't risk "changing horses" until after I finish my master's degree in a few years.  Thus, I am stuck in Boston for the next few years.  I figure it'll be better to own a condo in that time, build equity, & sell at a big profit when I decide to move rather than flush money down the toilet on rent in that time.  I could buy a rental/investment property...but the fact is that right now, my time for dealing with that kind of thing is at a premium.  Plus, I can't afford that kind of a note every month while I'm in school if I can't find a tenant.  I'd love to have a rental property or ten, but really can't do it until school is over with.  One thing at a time!


Boston is expensive. I have a friend who just moved his business to Kansas and is saving 700k per year in building costs. In this international market with the web he can be jsut about anywhere. Most of his employees made the trip and they get paid the same. In the small town they are in they are considered rich and paid cash for their homes.

If most of them are smart they will keep expenses low and use this opportunity to use as a springboard to future financial security.

As and added bonus they now live in a RED state.

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I'd love to hear more about buying your distressed properties, ITBH...what do you consider "distressed"?  How do you find out about them?  How do you protect yourself, legally speaking - have you incorporated?  Do you buy foreclosed or HUD property?  Tell us more! :protest:
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Distressed property is any property that has a motivated seller. A simple definition.

A motivated seller can be en elderly person that just wants out of a home due to the constant maintenance. Or a distant relative of a deceased person who just wants to sell the home quickly and lives to far away to come and take care of it.

Divorce is another good one. They are onvolved in all this emotional stuff and just want out so they can move on with their lives.

Behind on taxes. This takes reasearch and many places it is on line. It is public information.

Foreclosures. Banks hate to own homes. I have a friend who is a part tiem realator and he gets these cheap. The bank wants out and will take enough to cover the loan and expenses (within reason of course. They have some responsibility to the seller to get a reasonable price for the home)

Most of all keep your eyes and ears open. Look for deals each and every day. Many times I find a deal (on a computer or something else) when you least expect it.

Someone who has lost their job and new is getting behind on payments. While this sounds cruel and predatory it is business. While I try to keep the human aspect and be compassionate in my business dealings I have to keep in mind that it is still business.

The one rental we got for about 60% of the asking price was an elderly alcoholic lady who just wanted out of her home as it was too much upkeep. She was drunk when we made the offer, was drunk when she accepted the offer, was drunk when signed the papers and drunk when she moved out.

The family was not happy and felt we took advantage of her. She has the 3 day right if recission allowed by law and we would have let ehr back out of the deal up to the 30 day closing period. She even realized what she had done and then insisted on cash which we complied with (bank check).

But if we hadn't done this someone else would have. I have to keep in mind that good deals are everywhere and they are deals for various reasons.

Some points to remember.

Don't get over extended. A house of cards is stressful and if it falls you start from ground zero. Build a good base and work from there. For rentals if you can't afford to make the payment if it isn't rented then it is not time to own it.

This is the classic tortise and hare story. Slow and steady wins the race.

This is why we decided that we would pay cash for our rentals. it is very safe and we cna easily make the tax and insuranced payments.

Above all if you are a landlord keep the compassion and humanity in all your dealings.

I don't know if you read my other post on this but we had one renter who's daughter was charged with manslaughter in Colorado after flipping a van and killing 4 firefighters that were inside. It was big front page national news. Anyhow he got behind on rent during that time for 4 months. We didn't threaten him with eviction and didn't ven worry about the money. We told him to forget about it and get a good lawyer for his daughter. He paid us anyhow even after we forgave the debt.

He was an excellent renter and we like to think we are excellent landlords.

Another renter was a single mother who was struggling to make ends meet. I bought her 4 cords of firewood for the winter without her knowing becasue it was the right thing to do.

One renter had a 9 year old boy and a 13 year old girl in a 2 bedroom house. the kids shared a room since there was no other option. This was not right in my mind and I built another bedroom and didn't raise the rest on her. It was a win win for us. We did the right thing but we also increased the value of the rental and now get another $50 a month for it (after she moved out).

Plus I got to have fun building it and justified a few new tools that I get to write off. :D

This post has been edited by intotheblackhole: 20 September 2005 - 10:29 AM

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#46 User is offline   intotheblackhole 

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Posted 20 September 2005 - 10:27 AM

blanca696, on Sep 20 2005, 04:27 AM, said:

I'd like to recommend Dave Ramsey.  My husband and I started following him a few years ago and it has completely changed our financial lives even in the midst of starting a business.  He has a radio show and a couple of books, "Financial Peace" and "The Total Money Makeover".  I never realized being out of debt except for the house, which will be paid off in 5 years or less would be so freeing.  Just my two cents.
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Dave Ramsey is excellent. I have been on his show as an examble of how to do it right. We had a great chat.
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#47 User is offline   intotheblackhole 

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Posted 20 September 2005 - 11:20 AM

Defender, on Sep 20 2005, 07:46 AM, said:

One thing I've experienced as a tenant for several years is that the best tenants are the ones who treat your property as their own home.  The last house we rented was far cheaper than most comparable apartments in the area because the landlord wanted a family who would treat it as a home.  In two years, he only had to come out to the house two times -- once to fix the plumbing in the crawl space and once to trim the trees.  It was worth it to him to give us the house at probably 70% of what he could have gotten as long as he didn't have to spend much time worrying about it.  He had two or three families who wanted to rent the house because he could afford to rent it below market price.  And from those families, he could pick which ones he felt would best care for his property.  It worked out well for both of us.


This is a good stratagdy for renting. There are laws that have to be looked into and make sure that they are followed. I have had to research them to keep me from getting sued.

We do word of mouth on our renters. People are not bound by law to tell you what they think of other people. It's rather easy to tell bias and fact in most situations.

We had one lady that wanted to rent from us and said she had poor credit when we said we would do a credit check. That is not all that important to us and she was telling us upfront she had poor credit. A plus for her. She also said she had 2 kids. Not a problem.

We asked around and were told she had 5 kids and they were terrors and didn't bath all that often. Needless to say we rented to someone else.


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An aside: What you have done is almost exactly what I've been looking to do.  We bought our first house last year.  It's a little run down and needs some TLC, but considering how much the area around us is expanding, we couldn't pass up the opportunity even if we are swallowing a little water by doing so.  But being in our late 20s, I think the risk is worth it because we have plenty of time before retirement to get back on our feet should something fall through.


For sure there is some risk to getting started and that is acceptable. And you are correct in that you can handle a setback. Your choice in the first house is perfect. Take pictures of it and you can smile when you are retiring on 10k per month and remember your first house and how small and needy it was.

Treading water is not all that bad. Equity without sweat is not appreciated (that is a rather profound statement if you think about it. I can't believe I said it).

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We're planning to refinance soon and get rid of our high interest credit card debt by rolling it into the mortgage.  We've definitely learned our lesson and have not run up any new debt (other than the mortgage) in the past few years, so I'm not concerned about racking up any new debt after the refi.  I just want a little breathing room so we can start saving.
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You want to know the really cool part? You are in your 20's and you get it.

I was in my early 40's before I got it.

You are way ahead of the curve and should feel good about that.

This post has been edited by intotheblackhole: 20 September 2005 - 11:23 AM

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#48 User is offline   Bill Lies 

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Posted 20 September 2005 - 02:19 PM

intotheblackhole, on Sep 19 2005, 02:35 PM, said:

I have several funds that are open to me in my 401k. My main choices are the following:

http://finance.yahoo...SSGPX&quicken=2
http://finance.yahoo...RSPFX&quicken=2
http://finance.yahoo...EUROX&quicken=2
http://finance.yahoo...NBGEX&quicken=2

I am divided among them pretty evenly.

My wife is in FSELX and FLPSX. I took her out of FSELX in late 1999 and put all hers in governemnt bonds. I knew the end of the dot bomb was in sight. I put her back into FSELX in late 2001 which has been a good move.

For a guy who is nearing retirement I am still playing risky. I watch the market and will move to bond funds if needed. I figure I can live off SS and the rental money just fine so I am comfortable with this level of risk.

After all I was 40 and had very little and made this change in 16 years which ain't all that bad.
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I wish I saw this post 2 years ago when these funds were open!
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#49 User is offline   intotheblackhole 

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Posted 20 September 2005 - 04:15 PM

Bill Lies, on Sep 20 2005, 11:19 AM, said:

I wish I saw this post 2 years ago when these funds were open!
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I knew that FLPSX was closed but didn't realize the others were.

Since I have them all I guess that they don't tell me these things.

There are other funds out there that meet or beat these if you do some research.
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#50 User is offline   Willie Tubbs 

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Posted 20 September 2005 - 05:06 PM

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My advice to young people who are about to enter college is not to go, unless you know EXACTLY what you want to do in life. Work for a few years, try on a few hats, and make a wise, informed, & mature decision.


However, stats show that those who don't go to college right after high school rarely ever go back and stats show college grads usually make considerably more money than non-college grads. There are of course always exceptions, but in general you are better off going right after high school.
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#51 User is offline   AnnieGotHerGun 

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Posted 21 September 2005 - 08:19 AM

intotheblack hole, do you Tithe?
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#52 User is offline   Luckey Haskins 

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Posted 21 September 2005 - 09:27 AM

Dublin5, on Sep 19 2005, 01:14 PM, said:

WOW!  Very cool!  Thanks!!!!  :popcorn:
All I have is a check book and cash.  No credit cards/ATM/check cards.  People look at me like I stepped off the Moon when I tell them I don't have credit cards.  And you're right.  It does reflect negatively on credit.  All I have is a home loan and a car loan.
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I know that look Dub! I don't even have a check book and the credit card companies send me dozens of mailings a month telling me how great their credit cards are. Right.

I've taken the same path as intotheblackhole except I don't own any rental properties. I'm far too lazy to expend that much effort. However, I do save a minimum of 15K a year and invest in 401K's or other investment vehicles. Never buy a brand new car and only pay cash for a good used one. Own my shack and the property it sits on. Only for the last 5 years have I wised up and followed a more responsible financial path.

I know what intotheblackhole means when you hate a job because you have to be there. I work when I feel like it and keep whatever hours I feel are nesc. to maintain my lifestyle. I tell people that I haven't really been employed for almost 7 years now and you should see the look on their faces!
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#53 User is offline   intotheblackhole 

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Posted 21 September 2005 - 09:42 AM

AnnieGotHerGun, on Sep 21 2005, 05:19 AM, said:

intotheblack hole, do you Tithe?
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I do. We also support my nephew who is and intern with Young Life and my neice who works on a reservation with Native American kids (she also works with Young Life).
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#54 User is offline   Iriemon 

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Posted 21 September 2005 - 01:21 PM

madg, on Sep 19 2005, 07:42 PM, said:

...
  • Accumulate wealth, not things.


  • Live beneath your means.

...
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From David Copperfield:

"My other piece of advice, Copperfield," said Mr. Micawber, "you know: Annual income twenty pounds, annual expenditures nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

Good advice then; good advice now, IMO.

This post has been edited by Iriemon: 21 September 2005 - 01:23 PM

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#55 User is offline   teufelhunden 

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Posted 21 September 2005 - 04:27 PM

All great advice and questions. Kyosaki was the first book my father-in-law suggested I read, and that started me down the road to changing my life financially. My wife and I are lucky enough to be able to start over in our 20's. Dave Ramsey's "Financial Peace University" is what we have been using to actually put into action our plan. First step was looking at our overall budget and figuring out what we didn't really need (ie cable/satellite, eating out all the time, etc), and agreeing not to buy on credit...no cash, no sale. We pay necessaties first (house, food, car, etc), and all unsecured debt with what we have left (and minimum payments on those). All extra money, in addition to what is allocated for savings, goes into an "emergency fund", until we have met our goal (we picked $1000) - that way if something does pop-up unexpected, we have the cash to pay for it, and don't have to use credit (since alot people intially get a card "for emergencies", but then they get trapped. Once we have our emergency fund done, we work on paying off our smallest debt first, by adding all our extra money and the savings allocation (since we have an emergency fund) to pay off that debt, while still making minimum payments on the rest. Once that debt is done, we take that debts payment, plus the extra money, plus the next smallest debt payment added to gether to knock that one out, and so on, until all debt but the house is paid for. At that point, we then take all extra money and fund a 3-6 month emergency fund, to cover all our expenses for that many months (say one of us gets sick, or laid off). Then, we focus on the house, and pay that off. At that point, we hit retirement savings/investments hard, and then as we have kids, work on their "college funds", if we choose to. We should have all our debt, except the house, paid off in about 2 years, and then the house maybe 5 years after that. I know some here have mentioned ruining or harming their credit, but who really cares, if your goal is to be debt free, and never in debt again (consumer)? If you need to buy a house, or a car, and you HAVE to finance, it's amazing what rates you can get with a large downpayment (which won't take long to save, if you have no other debt). Something that really opened my eyes was how much debt really costs you, and I don't mean in monthly payments and interest. I loked at a chart, and figured out, if I was taking my monthly debt payments, all the way back to when I got my first card/loan, and had invested them instead, I would have been a DECAMILLIONAIRE by 45!!! :popcorn: :blink: :cry: :bang: All I can say is, I am so glad that when we have kids, we can start them out right from the BEGINNING, and change my family's legacy for generations.
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#56 User is offline   Susancnw 

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Posted 22 September 2005 - 12:28 AM

>>One of out renters had a daughter driving the van in Colorado that flipped and 4 firefighters were killed. She was charged with manslaughter and our renter got behind in the rent. We told him to forget catching up and pay for a lawyer for his daughter. He paid is back anyhow even after we told him it was forgiven.>>

ITBH,

How did that come out? I live in CO and remember feeling so very sorry for her, she was so young when it happened, her supervisor should have known better (those big vans are tough to drive even with years of experience!) and my heart broke that she'd have to live with that for the rest of her life.

Back on topic--we are close to debt free, less than $500 in credit card debt, although we rent and plan to buy/build in about 3 years. Both vehicles are used and we do need both. Hubby has a cabinet business getting off the ground (still!), and we basically live on my salary. And since I am unemployed at the moment, we are living on unemployment. Hub has looked for work in his field, but money in this area of N CO really suck. He can make about $10/hr and usually less for 30 years of woodworking skills. Impressive portfolio. Things would be different if the shop he was working at had not closed. Owner was ill with sinus problems (years of woodworking dust) and decided that he had about "mined" the area out for business (he'd decided that he only wanted to work for Christians....two of whom sued him after he closed up shop. Both lost their cases. So much for working for "only Christians". our experience is that the worst hurt in our lives has come from "christians". But I stray off topic. I hope to be working again by the end of the month or Oct at the latest. Hub substitutes at our kids' school and is considering getting his license to teach there and build his business in the summer months. We can't afford to build the spray shed that he needs to be able to work year round, and other stuff needs to be done. Frankly, we need about $5k to get it ALL done.

We have pared our expenses to the bone and our only luxury is our satellite. No eating out, few movies rented or gone to (get them free from the library). Once we are back on our feet again, then what???
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#57 User is offline   intotheblackhole 

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Posted 22 September 2005 - 11:58 AM

susancnw, on Sep 21 2005, 09:28 PM, said:

>>One of out renters had a daughter driving the van in Colorado that flipped and 4 firefighters were killed. She was charged with manslaughter and our renter got behind in the rent. We told him to forget catching up and pay for a lawyer for his daughter. He paid is back anyhow even after we told him it was forgiven.>>

ITBH,

How did that come out?  I live in CO and remember feeling so very sorry for her, she was so young when it happened, her supervisor should have known better (those big vans are tough to drive even with years of experience!) and my heart broke that she'd have to live with that for the rest of her life.


I never did find out. He moved out before it was over. We kept in touch for a while but he is a busy guy and not into writing letters. He is not very computer literate.

The case should have been dropped or never been filed to begin with.

You are correct that those vans are not all that easy to drive. They are long, narrow and tall and that is a bad combination.

Quote

Back on topic--we are close to debt free, less than $500 in credit card debt, although we rent and  plan to buy/build in about 3 years.  Both vehicles are used and we do need both.  Hubby has a cabinet business getting off the ground (still!), and we basically live on my salary.  And since I am unemployed at the moment, we are living on unemployment. Hub has looked for work in his field, but money in this area of N CO really suck.  He can make about $10/hr and usually less for 30 years of woodworking skills.  Impressive portfolio.  Things would be different if the shop he was working at had not closed.  Owner was ill with sinus problems (years of woodworking dust) and decided that he had about "mined" the area out for business (he'd decided that he only wanted to work for Christians....two of whom sued him after he closed up shop.  Both lost their cases.  So much for working for "only Christians".  our experience is that the worst hurt in our lives has come from "christians".  But I stray off topic.  I hope to be working again by the end of the month or Oct at the latest.  Hub substitutes at our kids' school and is considering getting his license to teach there and build his business in the summer months.  We can't afford to build the spray shed that he needs to be able to work year round, and other stuff needs to be done. Frankly, we need about $5k to get it ALL done.

We have pared our expenses to the bone and our only luxury is our satellite.  No eating out, few movies rented or gone to (get them free from the library).  Once we are back on our feet again, then what???
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Set backs happen. I have been there and done that. I ended up raising my wife's 3 youngest sisters and brother for many years. I didn't get any money from the government or their mother and had to pay all of that myself. My wife didn't work and I was in the process of running my new business which was not on it's feet yet.

My wife wanted to get a cup of coffee and I said we couldn't afford it. She went without for years as did I. For the first 10 years of our life we had nothing extra. Most of the stuff we had was cast offs from neighbors.

You have done the right thing in getting you expenses down to nothing. When the rebound happens you will recover quickly as you don't have a lot of stuff to catch up on when it comes to back bills and credit card debt.

Sometimes you have to cut your losses. I remember my brother in law that bought one of my very profitable business's. He started another division of the business and it was more of a pet project than a money maker. The other parts of the business that were proven profit makers started to slow down as he spent more time and energy on his new pet project. Soon he was in debt and unable to pay his bills. His market share of the profitable part was cut in half.

He asked me to come and help out. I offered to take a look and see what was happening. I soon figured out that he was loosing lot of money on his pet project.

As the saying goes, we loose money on every sale but make up for in in volume.

This was his mind set.

I shut down his pet project much to his dismay. Focused on the profitable part and got his creditors to back off. In about a year I had him back on track and gave the operations back to him.

He kept on with that business plan that I detailed in for the creditors for about 2 years. He slowly started up his pet project again and ended up in the same situation. I refused to come back and bail him out and he finally went bankrupt.

The point of this is that sometimes what a person whats to do will not make enough money to support a family. There needs to be a decision to move on to something else. It would be nice if we could all make money doing what we wanted to do but that is not what life is about.

These things can be hobbies and maybe after many years can develop into a business. But this is rare and few actually make a successful transition from hobby to business.

While I am not in the business to offer help in descisions and offer this kind of advice carefully and without financial liability, I have finally figured out that I needed to go where the money is. Once there is a foundation for income then I could branch out to other things.

I am not "thrilled" with my job but it is okay and I tolerate it. I have been burned out years ago and finally gotten over that. My profession has a very high burnout rate and few survive to retirement. I will be one of the first to retire on my local area of the company I work for. Most of the kids that start into this business are gone and I don't bother to remember their names anymore as they come an go so quickly.

But the job gives me the income I need and the ability to have lots of fun hobbies. I get 6 weeks of vacation a year, benefits, excellent retirement, and I can't complain about the pay.

So I guess the moral of the story is to get something that pays well even though it is not exactly a job that is high on the list of things that would have been picked for a career.

Sorry about your experience with Christians. Don't paint with a wide brush. There are some that will make the rest of us look bad. I am a cyclist and the same holds true to that. We are Americans and there are Americans that make the rest of look bad. This is true in every walk of life so please don't focus on the group. Focus on the person.
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#58 User is offline   Bill Lies 

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Posted 22 September 2005 - 12:19 PM

ITBH,

Hey I just wanted to let you know, that since reading your first post I've spent a lot of time thinking about the things you've said. I always have had the same attitude (save and get your money to work for you), but it was good to hear your story and it has encouraged and renewed my spirit.

Thank You!
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#59 User is offline   intotheblackhole 

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Posted 22 September 2005 - 01:58 PM

Bill Lies, on Sep 22 2005, 09:19 AM, said:

ITBH,

Hey I just wanted to let you know, that since reading your first post I've spent a lot of time thinking about the things you've said.  I always have had the same attitude (save and get your money to work for you), but it was good to hear your story and it has encouraged and renewed my spirit.

Thank You!
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As I said in the original posting I hope that my comments can help someone out.

Thank you for the thank you. It made me feel like my time putting it together was worthwhile.

Good luck in your financial future (and in every other area of your life).
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#60 User is offline   PunchingDelaney 

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Posted 04 February 2006 - 07:31 PM

Bill Lies, on Sep 19 2005, 01:32 PM, said:

Good stuff.  I will say that you can go overboard with this, but the principals here are rock solid.

ALWAYS spend less than you make!  That's my financial rule of life.  I only put 10% in my 401K, but save outside of retirement, so that I have money in case of emergency.  I know some people who put 15% in 401K, but have no other savings.  That to me doesn't make sense.

There are though, things that I do spend some money on.  Like vacations, to me the experiences on vacation add so greatly to the wealth of your life.
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I have both an IRA and a 401(k). I also recently opened up a home maintenance fund. Suze Orman recommends putting $75 a month into a home maintenance fund for repairs to your home.

I guess, technically, I need to open an emergency fund, too. You should save up to 3 mos living expenses.

The best advice I've ever heard for saving money is to "make it automatic". Set it up where the money comes out of yopur paycheck before you even get your paycheck. You won't miss it then.
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