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Monday, January 14

Another $56 Electric Bill

It seems our electric meter is stuck.  The last three months the bill has basically been the same.  One of my tenants had a $400 electric bill and wanted me to feel sorry for them and understand why the rent would be late.  I felt like telling them to stop being so wasteful.

So, how does one spend $56 per month for electricity in a house full of three adults?

  • Living in Florida helps, at least in the winter.  We haven't used the heat yet.  With daily highs in the low 80s last week I started to worry we were going to need the A/C.  
  • Speaking of A/C, we haven't used it since early October.  That's what ceiling fans are for.
  • Not having Internet at home means our laptops aren't draining.  They get charged at the library when we access the Internet there.
  • Not having cable TV means we don't use the one TV we have that often.  The TV is usually on for a couple hours at night, that's all.
  • I have a strict rule about the clothes dryer:  We only use it to dry socks and towels.  We wouldn't dry those except the high humidity in the South means they absolutely won't dry before they start stinking.  We use a drying rack I bought at IKEA to dry all our clothes.  As a side benefit, our clothes last forever because we aren't subjecting them to hellish temperatures all the time.
Of course, we still spend nearly $2 per day for electricity.  I would love to cut that in half, but it would be difficult to do.  We are cooking our meals at home more and more, so I would wager most of the electricity we use is for cooking and heating water.  I've considered getting a tankless water heater but haven't been able to justify the expense of switching yet.

Saturday, January 5

My Frugal Miser - December Expenses: $13,921

During December my total expenses are always higher than my income because that is the month I pay all my property taxes.  My expenses would have been even higher, but I paid a couple of my tax bills in November.  Once again I was mostly frugal with my personal expenses.  I did spend a lot on fuel for my car due to unexpected travel and the lack of petroleum mystery shops.

December Personal Expenses ($1,893)

$387 Auto (all but $4 for fuel)
$0 Bank Fees
$0 Clothing
$98 Entertainment (movies, gambling, alcohol)
$401 Food
$117 Gifts Given
$556 Household/Housing/Home Repair
$159 Health and Dental Insurance
$112 Medical/Dental
$0 Miscellaneous
$0 Personal Care
$0 Subscriptions
$0 Taxes
$163 Utilities
($99) Vacation (refunds)

December Business Expenses ($12,028)

$1082 Mortgage Interest (rental properties)
$661 Interest on Debt (not including Mortgage Interest)
$10,285 Rental Properties - Maintenance and Repairs (and this month, taxes)

Total December Expenses : $13,921

  • I don't include principal payments in my expenses, only the interest portion of my monthly mortgage bills.
  • I expect Auto Service to increase, but it hasn't yet.  The Corolla has over 160,000 miles on it.
  • While I had paid over $900 for our cruise, Carnival only refunded the taxes when I had to cancel it.
  • Over half of the $400 I spent on food was for gift cards.  I like buying them in December because there are usually special offers available.  This will offset some of my food spending in the next few months.  I spent $47 from one gift card to do a mystery shop, so that will be reimbursed to me as cash.

Friday, January 4

My Frugal Miser - December Income: $9,579

I finished the year with a strong December.  I not only evicted my deadbeat; I also found and placed a new tenant.  This new tenant is a truck driver and his rent is automatically deposited into my checking account by his employer.  He paid a deposit, one month of rent, and began making weekly rent payments a week before his lease started.  I am thrilled to have a tenant who might actually work out, as the townhouse he is renting has been nothing but trouble from a tenant perspective.  All three tenants prior to him have ended up moving out with outstanding rent.

My other income was minimal, which was not a surprise to me.  Most of the month was dreadfully slow and I had several days where I did no mystery shopping.  January will be a little better but not a lot:  I missed out on the posting of a couple projects and in this more competitive area where I live now, someone else picked up all the jobs I would be doing.

December Income
$1,070 Mystery Shopping
$8,501 Rental Income
$8 Other Sources
$9,579 Total Income for December

  • I don't include transactions in my retirement accounts.  This includes rental income, dividends and capital gains and losses.
  • I include merchandising and hospitality work in the mystery shopping category since the companies that I shop for provide this extra side work. 

Wednesday, January 2

My Frugal Miser - Looking Back at My 2012 Goals

2012 was one of the greatest years of my life, even though it ended with a very sad event when I lost my best friend in December.  Last year saw many major life events.  I moved from Birmingham, Alabama to Clearwater, Florida in the hope of starting fresh.  I accepted the fact that my grandfather's Alzheimer's means he no longer knows who I am.  And, I mourned the loss of my very best friend of 24 years.  Consequently, we canceled our 7 day cruise, so there were no major vacations last year (still, I had to pay for that cruise, so hardly any savings in that category).  Even though I am no longer "gainfully employed" in the traditional sense, I found earning opportunities through mystery shopping while juicing my rental income by keeping a lid on expenses.

I had 5 big goals for 2012:
  1. Lose at least 24 pounds.  For the first time in a long time, I did manage to lose weight over the year, but I failed to lose 24 pounds.  My weight went from 245 at the beginning of the year to 230 on 12/31.  I lost 15 pounds.
  2. Increase my net worth by $50,000.  That was easy:  my net worth increased by $74,020.  I shifted most of my retirement assets into a Self-Directed IRA which invests in real estate.  While my properties will be listed at the price I paid, the rent I receive (less any expenses related to those houses, of course) counts as an increase in my worth.  But once again, the biggest contributor to the increase was in reducing debt.  I reduced my overall debt by over $49,000 in 2012. 
  3. Reduce utilities expense by 10%.  In 2011 I spent $2,722 on electricity, natural gas, water/sewer, Internet and phone.  In 2012, I spent $2,760 on utilities, basically the same as last year.  But, almost $600 of that went to pay deposits on my new utilities.  Let's call this line neither success nor failure since technically I did reduce my utility usage by 10% but in cash outlay I did not.
  4. Reduce credit card/LOC debt by $36,000.  Not quite:  I reduced it by $32,354.  No excuses here.  I could have made a couple changes in December to achieve this goal, but decided to keep cash on hand rather than apply it to debt.
  5. Purchase 1 rental property.  Through my Self-Directed IRA I purchased two.  Success!
I am proud of the progress I made, but I know I can do better.

Tuesday, January 1

My Frugal Miser - 2013 Goals (and Beyond)

Happy New Year to All!

I am stomping on the gas for 2013.

In 2012 I made some major changes in my life.  These changes position me to achieve excellence moving forward.  With that, I want to focus on my 2013 goals but also sketch out some longer term planning.

My 2013 Goals
  1. Lose weight. At least 30 pounds.  I've never met this goal, but I finally lost a few pounds in 2012.  Now that I live in paradise, getting more exercise has never been easier.
  2. Increase my net worth by $75,000.
  3. Reduce utilities expense by 10%. In 2012 I spent $2,760 on electricity, natural gas, water/sewer, Internet and phone.  For 2013, I would like to reduce it to $2,484.
  4. Reduce debt to $350,000 if my tenants do not exercise their lease-purchase option; below $300,000 if the option is exercised.
  5. Purchase 1 piece of real estate. 
I've never posted goals that I hope to achieve in the longer term.  As I study investing more and more, I realize that looking out just one year at a time is short-sited.  I need to be focused on the BIG stuff - those things that are going to happen if I put my mind to it, but that I don't expect to happen in the next 365 days.

Goals After 2013
  1. I will reach a Net Worth of $1,000,000 by 12/31/2015.
  2. I will be completely debt free by 12/31/2014.
  3. I will weigh less than 165 pounds by 12/31/2014.
  4. I will have gross rental income (including from my self-directed IRA) of $20,000/month by 12/31/2017.