- Up at 5 two days in a row. Sleepy. #
- May your…year be filled w/ magic and dreams and good madness. I hope you…kiss someone who thinks you’re wonderful. @neilhimself #
- Woo! First all-cash grocery trip ever. Felt neat. #
- I accidentally took a 3 hour nap yesterday, so I had a hard time sleeping. 5am is difficult. #
- Wee! Got included in the Carnival of Personal Finance, again. http://su.pr/2AKnDB #
- Son’s wrestling season starts in two days. My next 3 months just got hectic. #
- RT @Moneymonk: A real emergency is something that threatens your survival, not just your desire to be comfortable -David Bach # [Read more…] about Twitter Weekly Updates for 2010-01-09
Refinancing Your Existing Loan to Purchase An Investment Property
Many people are looking at the housing market slump right now as an investment opportunity. Here are a few of the things that you need to know before getting a new home loan or refinancing your existing loan in order to make that happen.
Amount You Want to Borrow
A lot of borrowers go shopping for real estate and have exactly no idea how much money they can borrow. One of the first questions that you need to ask before going real estate hunting is how much can I borrow. You can ask a bank, lender, or financial institution to give you a ballpark figure of the amount of loan that you would qualify for. This will make it easier for you to narrow down exactly what type of property you can afford and what areas you can concentrate on.
Amount of Interest You Will Pay
Too many people are overly concerned with the purchase price of the home that they are buying. They fail to find out how much interest they will have to pay back to the bank in order to make their home ownership dreams come true. This is where a home loan calculator can be really useful. You can find out exactly how much interest you will repay over a 10, 20, or 30 year loan time period. You can also change the interest rate and down payment amount on those calculators to see if you can secure a lower monthly payment.
Credit Score Needed to Qualify
It doesn’t matter if you are buying a home for the first time or refinancing an existing loan. Your credit score matters. You need to start doing some research now if you want to secure a loan with a really low interest rate. This involves taking the time to see what credit scores traditional lenders are looking for and doing the work necessary to qualify for this loan. Your credit score will make a big difference in determining if an investment property purchase is a profitable endeavor or one that winds up costing you money. It will depend heavily on what kind of loan your credit score allowed you to negotiate.
Make the Choice
Once you know how much you will need and exactly how much you will be paying out over the life of another mortgage, you can decide whether you want to refinance your current home loan to get another one. Adding on another huge debt to an existing one is a big risk. Make sure to think it through fully before jumping in.
Make Extra Money: A Niche Site Walkthrough
Make Extra Money Part 1: Introduction
Right now, I have 7 sites promoting specific products, or “niche” sites. When those products are bought through my sites, I get a commission, ranging from 40-75%. Of those sites, 5 make money, 1 is newly finished, and 1 is not quite complete. I’m not going to pretend I’m making retirement-level money on these sites, but I am making enough money to make it worthwhile.
Make Extra Money Part 2: Niche Selection
These three topics have been making people rich since the invention of rich. Knowing that isn’t enough. If you want to make some money in the health niche, are you going to help people lose weight, add muscle, relieve stress, or reduce the symptoms of some unpleasant medical condition? Those are called “sub-niches”.
Making Extra Money Part 3: Product Selection
My niches site are all product-promotion sites. I pick a product–generally an e-book or video course–and set up a site dedicated to it. Naturally, picking a good product is an important part of the equation.
Make Extra Money Part 4: Keyword Research
If you aren’t targeting search terms that people use, you are wasting your time. If you are targeting terms that everybody else is targeting, it will take forever to get to the top of the search results. Spend the extra time now to do proper keyword research. It will save you a ton of time and hassle later. This is time well-spent.
Make Extra Money, Part 5: Domains and Hosting
In this installment, I show you how to pick a domain name and a website host.
Make Extra Money, Part 6: Setting Up a Site
A niche site doesn’t amount to much without, well, a site. In this installment, I show you how I configure a site, from start to finish.
Make Extra Money, Part 6.5: Why I Do It The Way I Do It
Several people have asked me to explain why I use the plugins and settings I use. This explains the “Why” behind Part 6.
More to come….
Building 5 Bad Habits
Good habits are boring. I mean, yes, they will help you succeed and provide some security, but so what? Bad habits are fun. Except meth. Meth is a bad habit that is decidedly not fun. Don’t do meth. Seriously.
There are so many entertaining bad habits that I couldn’t possibly cover them all. I’m going to stick to the bad financial habits that will make your life more exciting.
- Break your budget. A budget constrains you, keeps you from buying the things you want and traveling to distant, exotic places when you know you can’t afford the trip. The best way to build this habit is to not only avoid tracking your expenses, but also avoid tracking what you actually spend. If you don’t know what you owe or what you’ve spent, the end of every month is an adventure!
- Impulse shopping. For the next week, I want you to go to your favorite store every day. Buy the first thing you see that makes you want to hum. Every day. Don’t worry about being able to afford it. That’s what credit is for, right? Bonus points for buying it on the “no interest for a year, then we screw you” plan. I’m sure you’ll be making more money by the time the bill is due. You could get lucky and have a rich relative die and leave you a fortune. That’s like winning the lottery twice, because you won’t have to buy him Christmas cards anymore.
- Meals on the go. Cooking is a drag. Besides, who wants to slap a slice of meat and cheese on a couple slices of bread, when you can get a drive-through case of the Aztec two-step for $5. Did you know that the big yellow ‘M’ stands for “Montezuma?” On your way to practice impulse shopping, pick up some lunch. For your money, you’ll get less convenience, more additives, and the opportunity to gamble on the lunch employees caring as much about cleanliness as you do. It’s a win for everyone!
- Ego shopping. Actual accomplishments and improvement are hard. It’s much better to wrap up your sense of self-worth in the smartest phone, the shiniest car, or the Gucciest purse. Allowing Mastercard to finance your self-esteem guarantees that your next smile is just a shopping trip away. Who needs the hassle of dealing with things that matter? After your impulse purchase, buy something fancy! Show your friends that you are not only a more discerning consumer, but also that you are better than they are. Watch them turn green with envy. When they shrug and tell your that their phone has the one feature they need–the ability to ring when called–know that it is envy speaking.
- Expensive Vacations. You need to relax. I know how hard it is lugging that iBlackPhoneP(a/o)doid in and out of the designer sportscar with all-leather cow interior and big, brown baby seal-eyes for headlights. It’s work. Back and forth buying crap you don’t need to fuel your ego, dodging vicious calls from creditors and having to Dine-N-Dash every time a friend invites you out for dinner makes a dude tired. Take a week in Europe to calm your thoughts. You deserve it, even if you don’t actually have the money for it. Isn’t Great-Uncle Horace sick?
What are your favorite bad habits?
Update: This post has been included in the Carnival of Personal Finance.
Apple Launches iPad Air in November
With a lighter and thinner chasis, the newly announced iPad Air has a more powerful processor with a great new design and performance features that’s sure to continue Apple’s trend setting reputation. Apple senior vice president Phil Schiller is calling it the biggest leap forward for a full-sized iPad. We expect people have already started packing overnight bags for their long wait on the sidewalks outside the stores.
Apple is promoting its newest innovation as having the power of lightness, hence the addition of the “Air” moniker. That’s because the iPad Air weighs a mere pound and even then doesn’t feel like it. It’s 7.5 millimeters thin and has a design that might remind you of the iPad mini. It’s been engineered with a smaller bezel that shrinks the tablet without losing any screen size. The new dimensions and weight actually makes it easier to hold the tablet in one hand.The device will certainly impress its fans with its incredible power. The new A7 chip has a 64 bit architecture, providing graphics and CPU processing that’s significantly faster than the previous version. Working alongside the A7, the M7 motion co-processor, according to Apple, provides a graphic performance that’s over 70 times faster than the processor in the original iPad model. In fact, in terms of graphics, the Retina Display is likely the most impressive aspect of the new iPad. Graphics promise to render at two times the speed of the last iPad. The pared down bezel makes the screen stand out prominently.The iPad Air is supposed to give a user the chance to do more in more places with an advanced wireless connection. It’s faster than ever in more locations than ever before. The iPad Air brings a WiFi performance twice the speed of the last iPad. It utilizes two antennas instead of one, and MIMO, the latest in communication and smart antenna technology. The WiFi and Cellular model will support more LTE brands, offering greater support and quicker connection anywhere in the world.
With almost a half million apps already available for the iPad, you have a great head start on things to do. Apps built into the iPad Air will include solutions for routine tasks, like web surfing and checking email. A number of previously apps that had to be purchased are now free, such as iMovie, Keynote, iPhoto, GarageBand and Pages. Popular apps for other Apple products, they have all been upgraded to work with iOS 7 and the iPad. Quickly put together an original song or detail a presentation anywhere. As a lot of apps are developed solely for Apple products, these can look stunning on their displays.
The iPad Air’s current launch date is November 1. It will come in black and gray or silver and white. It will start at $499 for a 16 gigabyte WiFi version. This is $100 more than previous generation launches, but supporters say the consumer is getting more screen real estate. The Cellular model will retail for $629. The iPad 2 will continue in the stores for $399.
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New Debt
For the first time in 2 years(almost to the day), I am acquiring new debt that I can’t afford to pay off immediately. On a credit card.
Last Thursday, my son entered vision therapy. He has what is commonly known as a “lazy eye”, but is more properly called a “wandering eye”. His eyes don’t always lock on to whatever he is looking at. Instead, one of his eyes will (occasionally, but not always) drift to the side and shut off. His brain doesn’t interpret the signals from that eye.
We had two sessions of tests to diagnose the specific problems: $350.
We will have 28 weekly sessions of therapy @ $140 per session: $3920
There is an equipment fee: $85
That’s a total of $4355 over the next 7 months.
Insurance covers some of it, but the therapist is out-of-network, so it’s “pay first, get reimbursed later from the insurance company”. If we pay up front, we get 1 session free, bringing the price to $4215, minus insurance.
I have a health savings account that I have been trying to max out to cover this, to make my payments all pre-tax. I haven’t been able to get enough in there, yet. In fact, since I don’t have my kids on my insurance, my maximum HSA contribution is $3050.
Since finding out that vision therapy was going to be necessary, I have managed to save $1000 in cash, and about $1500 in my HSA. That’s $2500 of a $4215 bill, leaving $1715 that I still need to be able to cover.
Here is my plan:
We’re charging the entire $4215 at 11.9% interest on a card with a 2% travel rewards program. This will give me $84.30 worth of travel rewards good for reimbursing any travel expenses.
I will immediately pay off $1000 from cash savings.
I will also immediately file for an insurance reimbursement, which will cover 80% – $500, or $2972 minus a bit. Our insurance got a waiver on the pseudo-wonderful healthcare fraud act on the grounds that the plan sucks so bad that it would cost too much to comply with the law. No joke. I’m expecting about a $2500 reimbursement, and I have no idea how long that takes.
In 6 weeks, when I have maxed out my HSA contributions for the year, I will file for an HSA reimbursement for about $2500, leaving about $500 to cover some medical costs for the rest of the year. Vision therapy doesn’t count against my deductible, since my kids are on my wife’s insurance plan.
Starting in June, my debt snowball will no longer be going to max out my HSA and will instead go straight to this card, to finish paying it off as quickly as possible. That’s $750 per month.
Any money from any side work will also go towards this bill, but I don’t budget for that, because it isn’t reliable money.
The projected results:
$3215 on the credit card for 6 weeks @ 11.9% = $50 in interest payments.
After the HSA reimbursement, there will be $715 left to pay, which will be paid off in June for another $10 in interest.
When we get the insurance reimbursement, we’ll replenish the medical bill account, to start getting ready for the kid’s braces next year. We’ll drop $1500 into that account and use the remaining $1000 as a debt snowball payment.
We’ll end up paying $60 in interest to save $140 in therapy costs, so it’s good math, but I hate the idea of racking up another credit card bill. I could drop the interest costs a bit by raiding my emergency fund, but that still wouldn’t cover it all, and it would leave me with very little left for an actual emergency. I could raid the emergency fund for half of its value($700), and reduce the initial interest paid to $25 and the total interest paid to about $40, then use the $1000 leftover from the insurance reimbursement to replace my emergency fund.
