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Changing Circumstances

When I started this blog in 2009, I was broke and in debt to my eyeballs. It began as a way to publicly hold myself accountable and vent my need to talk about my money problems.

Those needs are changing for me because my circumstances are changing.

When my mother-in-law died, she left us a big physical mess in her house, but the financial picture is coming out nicely. Even though the details and paperwork have been horribly scattered and difficult to piece together, the end result is significant.

I have 2 side businesses that are not generating enough money to quit my day job, but should be by this time next year.

Right now, I have just under $17,000 in credit card debt. By Monday, it will be $3500. By December, it will be gone.

We’ll be dropping $15-20,000 into modernizing the house we’ve inherited, but then we should be able to rent it out for a net profit of $800 per month.

We paid off the inherited car last night. We haven’t decided if we’ll keep it or sell it.

All told–by the end of the year–we’ll have no debt except our primary mortgage and the additional income stream of a rental property. By the end of next year, our mortgage may be gone.

That’s a significantly different place than the one I started in 3 years ago.

What’s it mean for Live Real, Now?

It’s hard to talk about paying off debt every day when you don’t have debt. I imagine I will post more about making money and increasing the top line rather than shrinking debt and reducing the bottom line.

What’s next? I’m not sure, but I do know that I won’t be going away. You’re stuck with me. What would you like to see?

Prepping for an Estate Sale

Finance

At the end of the month, we’re having a massive garage/estate sale. When my mother-in-law died, she left us a lot of stuff.

A lot.

Really, when I say “lot”, I mean it. When most people say they have a lot of stuff, they mean they’ve got a closet to clean out. That’s similar to looking at a “scale of the universe” app and comparing a grain of salt to the Oort cloud. We’ve donated several truckloads of blankets, jackets, and toiletries to a homeless shelter and more than 80 rubbermaid containers full of clothes to the Salvation Army. That’s on top of two dumpsters(big enough to park a truck in) full of garbage of things we didn’t think were worth salvaging. That has still left us with several rooms packed full of stuff.

When I say ” a lot”, I mean it in a visceral, oh-my-god-can-this-be-over-or-should-we-consider-arson kind of way.

Now, it’s time to get rid of the stuff that’s left.

The things that have sentimental value have already come home with us.

The things that look unique, rare, or collectible–like the 1970s Pepsi glasses–have been set aside for more research. They may end up in the sale, or on eBay, depending on what we find out.

From here, I think I can just follow my garage sale guide.

We’re going to run the sale on Friday, Saturday, and Monday of Labor Day weekend, to maximize traffic.

We’ll advertise in the paper and put up some signs. The house is on the busiest street nearby, so passing traffic should be high.

The nice thing about having an emptied house is that setup can be completely done ahead of time. We’re setting up tables and starting to price it all this weekend.

On the days of the sale, we’ll have at least 2 people working the entire time. One will be inside, while the other will be outside for the tools and furniture that are getting sold. Both will have money and be able to make change.

Outside, we’ll have the bigger pieces of furniture, tools, and some kid stuff to draw in passerby. Inside will be the appliances, jewelry, and the small and/or valuable items. We’ll only be setting up in the living room and dining room, with the back hallway and kitchen roped off, to control access and visibility.

We’ve got a bit of help available at different times over the weekend, so we should be able to handle the entire sale, including breaks, relatively smoothly.

Have you ever run an estate sale? Anything I’m missing?

Mortgage Race

Finance

I spent last week at the Financial Blogger Conference. Saturday night was the big debauch, a 90s themed hip-hop dance party.

Yeah.

Instead, Crystal, Suba, and I hosted a super-secret pizza party to let some of the less “dance party” inclined attendees discuss things like the sanitary concerns of group body shots, sex toys, and horror movies.

During the course of the party, Crystal and I decided to race to pay off our mortgages.

Her balance is just under $25,000.

My balance is $26,266.40.

We both technically have the cash to pay off the balances right now, but we are both dealing with secondary housing issues. She’s building a new one, and I’m updating an inherited house. Neither of us is willing to use our cash reserves to pay off the balance right this moment.

Now that my credit card is paid off, I’ve moved that money to an extra interest-only payment on my mortgage, effectively doubling my mortgage payment, which puts my projected payoff date as about the end of next year. Crystal’s aiming for June, so I’ll have to hurry.

We do have tenants lined up for February, and all of the non-expense related rent will go to the mortgage.

I think I can win.

Update:

I forgot to mention the terms of the bet. The loser has to go visit the winner. When I win, Crystal’s going to fly to Minnesota to experience snow.

Car Dilemma

Finance

I’ve got most of my bills set up on auto-pilot, so I don’t have to worry about getting the payments in on time. It’s a huge time saver, but it occasionally comes with a downside.

A couple of weeks ago, I was reviewing our bills and saw this on our insurance statement:

2002 FORD	$51.07
2005 CHRYSLER	$47.40
1994 MERCURY	$1.64
2008 DODGE	$39.96
1986 HONDA — ANNUAL	$17.76

There are two problems with this.

1. We sold the 1994 Mercury a few months ago. Then, we forgot to tell the auto insurance company. We probably only wasted $6 on storage insurance, but it could have been worse.

2. We have 2 drivers in the house and 3 vehicles to drive, and the highest premium is on the vehicle getting driven the least.

We haven’t decided what we are going to do, yet.

Here are our needs:

We have 5 people in our family. My 13-year-old son is bordering on 6 feet tall and shows no sign of not growing.
Every weekend, we have at least 1 extra kid, sometimes 2.
We still have a giant(24 foot) boat that we won’t be selling until spring.
My wife wants to lease a couple of ponies next summer, which will mean a horse trailer to haul them in.

The Dodge is a Caliber, which is small. I don’t fit comfortably in the front seat for a long period of time, and I’ve got no idea how my son manages to fit in the backseat behind me, next to two car seats without complaining. It gets great gas mileage.

The Chrysler is a Pacifica, which fits out family perfectly, as long as there are no extras. It gets crowded with a dog and luggage for a trip, but it’s doable. We get gas mileage higher than the car is rated, but it doesn’t have a towing package. Even if it did, the car can’t handle a trailer full of horse.

The Ford is an F150 we bought new. It’s less roomy in the backseat than the Caliber, but better in the front seat and it can tow anything we need. Also the worst gas mileage of the lot.

The Honda is a motorcycle. I could haul both of the girls if I bungie-strap them to the backrest. Sucks in the winter.

Our choices seem to be:

A. Sell the Caliber. Drive the truck. Not perfect for hauling lots of kids, but it can work.

B. Sell the truck. Drive the Caliber. Screw the horses. (Not literally. Jeez, you have a dirty mind!) This still isn’t great for family outings, but works for a commuter.

C. Sell the truck. Sell the Caliber. Buy a mini-van. We’re looking at the GMC Acadia or the Chevy Traverse. Both are built on the same body, have third row seating that can fit an adult comfortably, and are rated high enough to tow a trailer full of horse. If we sold the car and the truck, and cash out an inherited IRA that has to be cashed out over the next few years anyway, we can come up with $22,000. That will buy a 1-year-old Traverse outright or get us within a few thousand of a similar Acadia.

I think C is the best long-term solution for our family. What do you think?

Giving It All Away

Business, Life

Monday, I start a new job, but I wasn’t actively looking for a new job.

In fact, over the last month, while I wasn’t actively looking for a new job, I’ve had 5 job offers. Solid job offers. Some of them came after I announced I was leaving.

How does that happen?

First, I’m good at what I do. At my last job, the company that developed the software system I managed would refer other customers to me if they wanted to do something the software wasn’t designed to do. I had a reputation for doing the impossible.

Second, I give it away. When somebody asks me for help, I do. When I can, I try to share as much of my knowledge as possible. I don’t hoard what I know, scared that somebody will steal it. That has led to a number of people who make it a habit to call me before pitching an idea or moving forward on a new strategy. “Jason, is this possible? What would it take?” If I can, I answer those questions, even if I’m not going to be doing the work.

Third, I’m not afraid of my limits. If I don’t know the answer, I say so. If I don’t know how to find the answer, I say that, too. Admitting you don’t know something automatically makes everything else you say sound more credible.

In the case of the job I’ve accepted, I was available for my new supervisor for more than a year before he started with the company. I helped him plan the websites and social media strategies around his book. When he accepted his job, our next conversation progressed from “Let me ask you something” to “I’d like to hire you” over the course of a lunch because of the long foundation we had together. At every step of the interview process, I continued to share. As we discussed the website, the social media, the marketing plans, I gave my feedback as thoroughly as possible, before I had a job offer.

Giving away my knowledge and experience with no expectations has consistently helped me to improve myself and my situation. It helps that I enjoy being helpful. I kind of dig being treated like an expert, too.

How about you? Do you share selflessly, or do you keep what you know to yourself?

How to Build a Business on Cannibalism

Business

Last week, my wife posted on Facebook that she was frustrated with her job hunt.

HUFU: The healthy human flesh alternative.

An hour later, she got a call from someone she hadn’t talked to in 10 years. He wanted to talk about a great business opportunity. He wouldn’t say what it was, but wanted to bring a friend over to discuss it.

Fast forward to last night.

The night my wife agreed to meet with the old friend.

The meeting we forgot about.

So we invited our friend and his friends into the house. We sat down at the dining room table to hear the pitch. Our friend is just getting started so his “friend” delivered the pitch.

While I was waiting for him to explain the business, he was showing us pictures of he and his wife traveling around the country.

Instead of explaining the product, he asked about our most expensive dreams.

Instead of telling us how the marketing worked, he mentioned something about utilizing the internet–and i-Commerce–and talked about changing our buying habits.

Instead of showing us a product, he talked about driving volume and building a team.

There was nothing concrete, but a lot was said to ride on the dreams of people who are frustrated with their income or are living paycheck-to-paycheck.

More than an hour into the presentation, it was revealed that the “product” is a buying portal to allow people to buy Amway products from your personal Amway store.

Freaking Amway.

How do they find your personal Amway store, you ask? I don’t know, because you are supposed to be your own best customer. You make money by buying the products you use anyway, but buy them from Amway. For example, there’s the $10 toothbrush, the $16 baby wipes, or the $38 toilet paper.

For six frickin’ rolls.

Seriously, this stuff is meant to touch my butt once. I don’t need it made from pressed gold.

As for the visual…you’re welcome!

So I sell a kidney to buy enough toilet paper to keep my nether bits clean for a month and I get one point for every $3 I spend. I figure that’s about 50 points per month, given the foot traffic our bathrooms see.

If I hit 100(I think, he didn’t leave the paperwork) points, I get 6%(again, I wasn’t taking notes) back at the end of the next month. For the sake of the math, I’m going to double the number of butts in my house. 100 points means I need to spend $300. That’s 47 rolls of toilet paper. In exchange for this $300–and on top of gold-embroidered silk I now get to flush down the toilet–I’ll earn $18.

I know exactly how much toilet paper I buy right now. Amazon sends me a 48 roll package every other month for $31.42, shipped.

To simplify, Amway is offering me the ability to spend $300 to get $18 plus $31.42 worth of toilet paper. I’m supposed to end my financial worries by turning $300 into $50 every month.

Yay!

[Note to self: Demolish Amway’s business model by starting a company that will let people turn $200 into $50, without the nasty overhead of stocking overpriced crap. A 33% increase in efficiency will make me rich!]

But wait, say the imaginary Amway proponents that I hope aren’t frequenting my site, you’re forgetting the most important part!

Oh really?

There’s also a thing called a “segmented marketing team”. To the rest of the multi-level marketing world, this is known as your downline. If you can con your family and friends into turning their $300 into $50 every month, then help them con their family and friends into turning $300 into $50 every month, you’ll get rich! Amway has apparently figured out a way to share a small fraction of their 600% markup with their victims to make them feel like it’s a business opportunity instead of a robbery.

If I get 9 people in my “business team” and each of them build out their team, I get the coveted title of “Platinum Master” or whatever. All I have to do is sell the souls of 72 people and I can make a ton of money! If each member of my downline turns $300 into $50, Amway will get $18,000. In exchange for delivering those souls, the “average” Platinum Ninja makes about $4500 per month. That’s about $12,000–free and clear–for Amway.

When your business model consists entirely of your sales force doing all of the buying and consuming, it’s not a business model, it’s cannibalism.

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