Today's Focus

Current Goal: Eliminate Mortgage on Rental Property

January 1, 2019: $59,592
September 13, 2019: $56,210

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Friday, September 13

Meet my NEXT Financial Goal

The plan to overhaul and streamline my finances is well underway.  Now that my student loans have been paid I will focus on paying the mortgage on my rental property.  Only one of the rental properties has a mortgage, and the interest rate is 5.125%. 

$103,000 in 2009?  Sold!


Deal of the Decade

Be fearful when others are greedy and greedy when others are fearful.  Warren Buffett







This is an exciting rental property for me for several reasons, and it is a reminder about how important it is to have some dry powder tucked away to take advantage of a deal.

  1. It was 2009.  The real estate market was in crisis.  D.R. Horton decided to stop development in this neighborhood due to slow sales.  The surrounding area was growing pretty fast, the fundamentals were good, but the builder wanted out.  This house was among the last spec homes built in the neighborhood, and contracts had fallen through with three previous buyers because financing was so hard to obtain during the housing crisis.  The price for this house was cut drastically.  Basically a fire sale.  I was able to buy it and add some nice interior upgrades for $103,000.  This is a 3 bedroom, 2 bath house.  To put it into perspective, I bought this exact model in a different neighborhood with fewer upgrades a year earlier for $28,000 more.
  2. Now that the market has recovered, so has the area.  Another builder stepped in to buy the empty lots and is completing the build-out of the neighborhood.  A fancy grocery store and shopping center opened less than a mile away.  An apartment complex at the entrance to the neighborhood was recently purchased, and upgrades by the new owner have allowed for 20% higher rents at that complex.  Within a couple miles, dozens of retail stores and restaurants have opened.
  3. After I bought the house I listed it for rent with a management company.  I immediately received an offer from a tenant but the tenant asked for a discount on the rent.  I figured I would make up the amount I was discounting by getting a tenant in the house right away, so I pulled the trigger.  Ten years later, the same tenant still lives in the house.
I am giddy every time I think about this - I've never had a tenant stick around for 10+ years.  I've steadily increased the rent, and while I still charge less than what I could get, there's huge value in keeping the same tenant (no turn costs, no vacancy costs, just a reliable rent check that is deposited into my account on time every single month).  The current rent is twice what my mortgage costs, so I'm comfortable with what I'm getting.

Time to Nix That Mortgage

With an interest rate of 5.125%, paying off the mortgage on this house is my next goal.  Today, I made a $2,000 extra payment.  I really like the feeling I get by reducing debt.  But more importantly, based on the current state of the real estate and stock markets, I sincerely feel this is the best use of my funds.  Real estate is expensive once again, and when there is a deal it is quickly bid up by professional investors with greater resources than me.  And the stock market is also pricey, especially considering we are due for a recession.  In addition to using cash flow to pay off this mortgage I am considering using some of the cash in my brokerage account.  

Paying off this mortgage offers a guaranteed 5% annual return.  That's a solid accomplishment.  Nothing to brag about, but certainly better under current market conditions.

Wednesday, September 4

My Frugal Miser - August Expenses: $17,229


August continued the trend of gluttonous spending.  Fortunately most of the spending was for our businesses, specifically the Airbnb.  I signed a contract for new siding and impact windows.  I made the first payment in August, with more to come once installation begins in October.  There were also some expenses related to my meeting job.  We signed up for a meeting in Nashville in September and I booked the hotel and flights last month.

Then there's our personal expenses.  First, the good:  I sold the two Madonna tickets for a solid profit.  I used a small part of the profit to buy two replacement tickets for one of her Miami concerts.  I also paid off my student loans completely, a $3,790 expense.  The Sonata has over 195,000 miles now.  Last month I bought two new tires and had a minor repair done.  It's almost time to start looking at replacing the car.  The not so good include our spending on food.  We took two short vacations and ate out a lot.  There's really no excuse for how much I spend on food.  We just need to be more frugal.  In Personal Care, I bought a TENS device that is supposed to help with pain.  I've been having a lot of foot pain and since we are doing several meetings in the coming weeks I want to try everything I can to alleviate it.

August Business Spending:  $13,800
August Personal Spending:  $3,429

August Expenses:  $17,229

$658 Auto (service, gas, insurance, AAA, etc.)
$0 Bank Fees
$347 Clothing/ Personal Care
($4,520) Fun (vacations movies, gambling, alcohol, concert tickets) income this month
$773 Food
$426 Health & Dental
$1,422 Household/Mortgage Payment/Home Repair
$0 Interest Expense
$3,790 Miscellaneous (Student loan overpayment)
$244 Taxes includes quarterly tax payments
$31 App Jobs Expenses (tolls, car washes, etc.)
$1,202 Unreimbursed Employee Expenses
$23 Reimbursed Employee Expenses income this month
$204 Utilities
$1,141  Rental Property Expenses
$11,404 AirBNB Expenses

Monday, September 2

My Frugal Miser - August Income: $8,723

There was a noticeable drop in my August income.  The biggest decline was in Airbnb bookings.  We had 11 vacant days last month.  I will have to more aggressively mark down rates if I want to keep the house occupied during slower times. 

I worked two meetings last month.  We took a couple of small trips during the month as Amazon was also slow.  See the trend?  August was slow!

August Income: $8,723

$60 Mystery Shopping
$1,367 Meeting Jobs
$108 Gig Apps (Rideshare, Scooter Charging, etc.)
$872 Amazon Deliveries
$4,040 Rental Income
$1,976 Airbnb Income
$66 Interest Income
$235 Other Sources

Investment Accounts Change in Value:  $8,437

August continued the trend of steady investment gains.  Even more impressive, much of my portfolio is in ultra-safe CDs.

Friday, August 23

Small Savings, Big Impact

Yesterday we wrapped up a two night, three day getaway to New Orleans.  I planned the trip around the Queen concert we attended Tuesday night.  Because of the irrational exuberance in Tampa, we were able to get better seats for significantly less cost in New Orleans.  Blame that on Ticketmaster's dynamic pricing algorithm.

For me, it's an exciting game to find and exploit deals and cost savings.  The reason we are able to afford to splurge once in a while on things like concert tickets is because small savings have a big impact.  You've heard about the "latte factor."  Here's a real example of the latte factor in practice:

I booked our flight during a sale on Southwest Airlines, and I redeemed points, so our only out of pocket cost on the flight was the Terrorist Fee ($5 and change per ticket).  Because we visited during August, a typically slow time for New Orleans, hotels were less expensive.  I found a nice hotel in a great location for $83/night.  When rates are that low, it usually doesn't make sense to redeem points for a free room.  I prefer to save our points to use on more expensive hotels or during peak periods when they are worth more.

One trick that I always use for hotel and car reservations is to keep checking rates even after I make the reservation.  A couple weeks before our trip, hotel rates had dropped even more.  We switched to the Residence Inn New Orleans Downtown, for $67/night, saving $34 + tax.  Plus, the Residence Inn offered free breakfast and an evening reception, which we were not going to have at the other hotel.

Heading to the airport, there were a couple choices I made to save money.  Since this was a short trip, using Lyft wasn't practical.  There's a toll road (the Selmon Expressway) that the GPS suggested, but since it was 5:30 in the morning, there was no traffic.  I took Adamo Drive, which runs parallel to the Selmon.  The distance was comparable and it may have added 3 minutes to our travel time at that early hour.  Saved about $3 by not taking the toll road.  At the airport, we parked across the street at A-1 Express.  It's not the cheapest off-airport lot, but it's the best.  It's $4/day less than parking at the airport, plus I get 15% of what I spend there back as a AAA rebate to offset the cost of our AAA membership.  Total savings including the rebate:  $15.60.

I booked the earliest flight into New Orleans on a Tuesday, and the latest flight out on a Thursday.  Those tend to be the least expensive times to fly (Saturday is also cheap, but it didn't fit into our plans).  Because most people don't like to save money, we had to share our flight from Tampa to New Orleans with 52 other travelers, meaning the plane was less than 1/3 full.  This meant we didn't have to share our row with other travelers.  The way I see things, booking the early flight meant we had an extra day to play in New Orleans.

We arrived in New Orleans before 8 AM.  Now, only fools rent cars if they are staying in New Orleans.  Parking is difficult and expensive.  At our hotel, parking a car would cost $39/night.  Taking a Lyft to the hotel was $40.  But even that was stupid.  The better choice:  we bought a day pass for the local bus for $3 each ($34 saved).  It's important to note that there are two buses that will take you from the airport into the city.  Only one of those, the 202, accepts the day pass.  The E2 is operated by a different company, so our pass would not be eligible for that trip.  Still, either option was a fraction of the cost of rideshare or renting a car, and the additional time it took to get to our destination was negligible.

Because of my Marriott status, I'm often able to snag an early check-in as long as a room is available.  Since as I mentioned, this is the slow season, there were of course rooms available.  We were able to check into our room at 8 AM.  This absolutely changed the quality of our day.   We were traveling only with backpacks, but who wants to tote that on your back in the muggy heat all day?  One unexpected benefit:  the front desk agent who checked us in invited us to enjoy the complimentary breakfast.

The three days we spent in New Orleans were amazing.  The joy of saving money here and there made it even more fun.  During our trip, I was able to show our AAA card to save on admission to a plantation we visited.  I purchased a Lyft ride pass for $5 to get $5 off each trip, which we used a couple times when public transit wasn't practical.  I really wanted to bring home some pralines, so I lucked out when I found a deal on Groupon to buy a dozen for $15 (plus 9% cash back on Rakuten/Ebates).  When we looked in stores, pralines were $2-$3 each.  And we used our Sunken Gardens membership to get free admission to the Longue Vue House and Gardens.

Amplify this example into our daily life, and the cost savings are tremendous.  As I said, it's a game that I enjoy playing.  I'm sure for some people it might be stressful to think about saving a couple dollars here and there, but the opposite is true for me:  the regret when I don't save ruins the experience, so I have to seek out the best deal to feel good about my choices.

Tuesday, August 20

Making Money Selling Concert Tickets

I just made $2,200 profit selling two concert tickets.

A couple months ago I bid on the chance to purchase premium seats to see Madonna.  I bid in multiple cities - I knew there would be a lot of demand - and I won the chance to buy tickets for a show in Chicago.  These were primo seats - front row, center.  The package I bought included the seats as well as some additional bonuses like a pre-show party and photo on stage (sadly, no meet and greet).

As a kid, I was the biggest Madonna fan.  I've never seen her in concert, so I was willing to spend a lot for this special opportunity.  Alas, once I purchased the tickets, there was a little bit of buyer's remorse.  I started to think about what I could have done with the money.  For example, last week we went to see Live/Bush/Our Lady Peace and had fourth row seats that only cost $99 each.  I could see 16 concerts like that for what I paid for the Madonna tickets.  I could go on a really nice Mediterranean cruise and pay all my travel - flights, hotel and cruise - for what I paid for these tickets.

Happily, Ticketmaster has a Verified Resale program.  I discovered it a couple years ago when we had to sell our Bruno Mars tickets because of a work conflict.  I made a decent profit on my Bruno Mars tickets, and they weren't anywhere near the stage.  Not all artists or venues allow resale.  In fact, I don't know how to determine this before actually purchasing the tickets.  Fortunately, this concert allowed for it.  Since I still was okay with keeping the tickets if they didn't sell, I offered them at what I thought was a ridiculous figure: over $3,000 each.  A few weeks went by and nothing.  Then, I get an email last week telling me they sold.

Total profit:  $2,233.38

My jaw dropped.  So, I have learned a new way to make a little money on the side.  Since I can't identify before I buy the tickets whether they are allowed to be resold, I would only do this for an artist I would enjoy seeing anyway.  In this case, I'm going to see Madonna still, just not from the front row.  After she announced the initial dates, Madonna added a mini-residency in Miami, which wouldn't require air travel.  So technically, since I also canceled our flight to Chicago (so glad I booked on Southwest!), I did even better than the $2,200 profit.  Now, I can see her for free, using the profits I made selling the other seats.

One key to making the most profit is to buy the best possible seats.  People are obviously willing to pay to experience front row center.  Recently I was reading an article about this very idea:  I think it was Steve Wynn (yes, an older article) who discussed the idea that people will pay big bucks to feel like they are getting a one-of-a-kind experience.

Wednesday, August 14

I Paid Off my Student Loans!

Quick update from the steamy swamps of Tampa Bay...

I've been working tirelessly this year to simplify my finances by eliminating accounts and paying off debt.  August marks a major milestone:  I have now paid off my student loan debt.

Getting rid of my student loans wasn't about saving on interest:  I consolidated at the perfect time and my interest rate was only 1.625%.  It was about eliminating a monthly debit from my checking account.  The psychological affect - one less bill every month, one less form to file on my taxes, one less account to track on my monthly spreadsheet - was more important than anything else.

So, with that, there's a new, more noble goal:  pay off the mortgage on my rental property.  I owe about $58,000 on it, and pay $449/month.  Getting this paid off will have a noticeable impact on my cash flow.

Monday, August 12

Cut, cut, cut...

If it doesn't "spark joy", why are you doing it?  Not to steal a phrase from Marie Kondo, but it's true.  We often spend money on things that don't make our lives better.  I've been questioning why I'm spending money on everything lately.  With that, it's cut, cut, cut.

  • After satisfying our 12 month agreement, I called to cancel our Busch Gardens passes.  We were paying $30/month for them, and in the last year we visited once for about two hours.  What a waste.
  • I've been thinking about canceling Netflix for a period of time.  More and more I notice that new movies aren't coming to Netflix.  My queue is loaded with content made by Netflix while noticeably void of movies that actually played in theaters.  Don't get me wrong - overall I love having Netflix.  But it seems like canceling for 90 days or so wouldn't hurt us at all.  We still have Sling and Amazon Prime.  Doing this would save around $50 with basically no consequences.  For now, I'm testing a downgrade.  I changed from the $12.99/mo HD plan for 4 devices to the $8.99/mo standard plan for one device at a time.  It's $4/month in savings... I want to see if we'll notice a difference in video quality.  Canceling altogether is still on the table.
  • I would love to find a way to reduce the cost of the big stuff, but how?  Auto insurance with GEICO - I've had auto insurance for more than 25 years, never filed a claim.  What am I getting for my $100/month besides piece of mind?  Same with health insurance.  I cut that cost down to $379/month this year, but that's still $379 more per month than I spend in actual costs.  I haven't filed a single claim with my insurer.
  • Same goes for the rental properties.  Do I really need termite protection?  What about property insurance - having never filed a claim, the premiums I have paid since becoming a landlord in 2006 could have nearly paid to replace one of my properties.
I'm taking a hard look at all recurring costs.  The immediate benefit, simplifying my finances, is all the motivation I need.  But knowing the money I earn isn't being wasted is just as important.

Thursday, August 8

My Frugal Miser - July Expenses: $9,390


July was an expensive month.  Fortunately my income exceeded my spending.  My Sonata has over 192,000 miles on it.  I don't have a car payment, but it does require some repairs every now and then.  Last month I replaced the serpentine belt and the rear suspension.  Spending on gas was also higher because I drove for Uber and Lyft some and did a lot of Amazon deliveries.

Spending on food and fun was higher last month.  We went to Costa Rica for a month, which accounts for a lot of it.  Last thing to mention:  $1,600 of my spending was directed as an overpayment of my student loans.  Not really an expense.  I'm getting really close to having those paid off.


July Business Spending:  $2,944
July Personal Spending:  $6,446

July Expenses:  $9,390

$1,150 Auto (service, gas, insurance, AAA, etc.)
$49 Bank Fees
$214 Clothing/ Personal Care
$570 Fun (vacations movies, gambling, alcohol, concert tickets) 
$470 Food
$530 Health & Dental
$1,482 Household/Mortgage Payment/Home Repair
$0 Interest Expense
$1,608 Miscellaneous (Student loan overpayment)
$117 Taxes includes quarterly tax payments
$25 App Jobs Expenses (tolls, car washes, etc.)
$58 Unreimbursed Employee Expenses
($476) Reimbursed Employee Expenses income this month
$256 Utilities
$1,445  Rental Property Expenses
$1,892 AirBNB Expenses

Tuesday, August 6

My Frugal Miser - July Income: $11,645

What a solid month! July will be the last "great" month of the year, unfortunately.  Airbnb bookings have slowed down significantly.  And while I have a few meetings booked, most of my work the rest of the year will have to come from making Amazon deliveries or driving rideshare.

July Income: $11,645

$30 Mystery Shopping
$2,556 Meeting Jobs
$162 Gig Apps (Rideshare, Scooter Charging, etc.)
$1,604 Amazon Deliveries
$4,040 Rental Income
$3,247 Airbnb Income
$66 Interest Income
-$60 Other Sources

Investment Accounts Change in Value:  $13,927

July was another great month for my stock investments.  Much of my portfolio is now in low-risk bonds and CDs, which should shelter me from the next correction.

Monday, July 8

Progress Towards Goals, Mid Year Update

I've always set goals - the accountability gives me focus.  Even when I don't achieve a goal, it's nice to have a written list of what I'd like to do. 

Here are my goals for 2019

  • Financial:  DEBT:  Pay off student loans.  Then begin paying off mortgage on rental property.
I'm well on my way to paying off my student loans.  This will likely be done before the end of summer.  
  • Personal Improvement:  Lose 20 pounds.
I've done okay so far this year.  I've lost close to 10 pounds.  We cut back on alcohol, which has made a big difference.  Probably cut about 90% of our alcohol consumption.  Now, I may have one beer or one glass of wine a couple times a week.  It's helped my waistline and my pocketbook.
  • Simplify:  Get rid of material things I don't use.  Eliminate unnecessary financial accounts.
I closed out my HSA, a savings account, and a credit card.  I'm actively drawing down my Prosper balance.  This week we loaded up a bunch of stuff to take to Goodwill.  It's been 11 months now since I've had a car payment.  Yes, the car is getting older (190,000 miles).  But whenever I get the urge to buy a new car, I remember how nice it is to not have a monthly payment.
  • Spending:  Spend less on food by eating out less often.
We are definitely eating out less, and of course when we do eat out, we normally don't buy alcohol anymore.


Wednesday, July 3

My Frugal Miser - June Expenses: $5,748


As I've eased into using spreadsheets instead of Quicken, I've been tweaking the reports I create to have a more meaningful look at my income and spending.  For June, I broke down my spending by personal expenses and business expenses.  The reason this is meaningful is because business expenses are taken on in order to generate income.  They aren't discretionary spending like on movies, vacations and eating out.  They are expenses for supplies for the Airbnb and the mortgage on my rental properties.

June Business Spending:  $1,965
June Personal Spending:  $3,783

I'm comfortable with June spending.  I was able to keep Food at $360 ($12/day) because some of my meals are provided to me when I work meeting jobs.  On the flip side, when they aren't provided I am often stuck paying for overpriced hotel or restaurant meals.  I mitigated this by bringing food with me, including protein shakes for breakfast and shelf-stable tuna and chicken for lunch.  The biggest personal expenses include the mortgage on our home and health insurance, neither of which can easily be reduced.

June Expenses:  $5,748

$253 Auto (service, gas, insurance, AAA, etc.)
$0 Bank Fees
$125 Clothing/ Personal Care
$396 Fun (vacations movies, gambling, alcohol, concert tickets) 
$360 Food
$506 Health & Dental
$1,243 Household/Mortgage Payment/Home Repair
$0 Interest Expense
$108 Miscellaneous (Student loan overpayment)
$544 Taxes includes quarterly tax payments
$0 App Jobs Expenses (tolls, car washes, etc.)
$116 Unreimbursed Employee Expenses
$1 Reimbursed Employee Expenses
$248 Utilities
$1,141  Rental Property Expenses
$709 AirBNB Expenses

Monday, July 1

My Frugal Miser - June Income: $8,548

June was a great month for work, but two meeting jobs will be paid in July, which means my income looks artificially low.  I worked meetings in Orlando, Chicago, Buford, GA and Las Vegas.  When I was home, I did Amazon deliveries.

Rental income, $3,370, was offset by one of my old management companies recapturing rent they should have forwarded to the new owner for a townhouse I sold earlier this year.  All my rental properties are occupied with rent current.  Airbnb bookings were solid, with only one vacant day and three days I intentionally blocked from reservations. 

July is going to be a decent month, but meeting season has virtually stopped for me.  Last July I worked more meeting jobs.  The Airbnb is mostly booked except the last week of July.  We will be on vacation for a week later in the month so Amazon income will take a hit.

June Income: $8,548

$0 Mystery Shopping
$1,160 Meeting Jobs
$230 Gig Apps (Rideshare, Scooter Charging, etc.)
$703 Amazon Deliveries
$3,370 Rental Income
$3,021 Airbnb Income
$63 Interest Income
$0 Other Sources

Investment Accounts Change in Value:  $16,526

June was an amazing month for my stock investments.  I've been moving cash from stocks to CD's though because I feel the market has gotten expensive.  

Friday, June 7

My Frugal Miser - May Expenses: $14,180


May was another expensive month. 

Many of the expenses are associated with income.  For example, I spent $1,893 on our Airbnb in May.  Half of that was for property insurance.  Most of the remaining amount was for utilities.  Airbnb guests aren't nearly as frugal when it comes to running the air conditioning and using water.  Rental expenses of $1,251 include the mortgage on one on the properties and management fees.

Another line item, miscellaneous, wasn't even an expense, but I'll include it to be consistent with how I run the report.  I decided to pay off one of my two student loans last month. 

I'm happy with how much I spent on everything else except for the Fun category.  I spent nearly $6,000 prepaying for flights, hotels, and concert tickets for some of the travel we plan to do later this year.  We kick off our "fun" with a week in Costa Rica in July, followed by a quick trip in August to New Orleans for a concert and to Chicago in October for another concert.  Then there's China at the end of October.  Fortunately, the vast majority of the expenses for these trips has now been paid.



May Expenses:  $14,180

$325 Auto (service, gas, insurance, AAA, etc.)
$0 Bank Fees
$164 Clothing/ Personal Care
$5,762 Fun (vacations movies, gambling, alcohol, concert tickets) 
$474 Food
$506 Health & Dental
$1,377 Household/Mortgage Payment/Home Repair
$0 Interest Expense
$1,795 Miscellaneous (Student loan overpayment)
$400 Taxes includes quarterly tax payments
$0 App Jobs Expenses (tolls, car washes, etc.)
$29 Unreimbursed Employee Expenses
($34) Reimbursed Employee Expenses (income)
$238 Utilities
$1,251  Rental Property Expenses
$1,893 AirBNB Expenses


Wednesday, June 5

My Frugal Miser - May Income: $11,090


The month of May was pretty solid.  I wrapped up a meeting in Chattanooga, and had other small meeting jobs in Tampa, Clearwater and Orlando.  Since most of the meeting work was short and local, I was able to do a lot of delivery routes last month for Amazon.  I also tried a couple of new app gigs, Roadie and charging scooters.  Neither of those will contribute meaningfully to my income.

Rental income, at just over $4,000, was about the normal amount moving forward now that the townhouses aren't included.  I do have one rental property held in an IRA account that I don't include in this income.  Right now, this line item is for four properties in the Birmingham, AL metro area.  Our rental in Tampa Bay is an Airbnb.  Airbnb income was strong, once again.  We brought in over $2,700 on that one property.  Ironically, that's nearly the amount three of my single family homes in Birmingham bring in... combined.

May Income: $11,090

$0 Mystery Shopping
$2,173 Meeting Jobs
$44 Gig Apps (Rideshare, Scooter Charging, etc.)
$1,986 Amazon Deliveries
$4,040 Rental Income
$2,782 Airbnb Income
$65 Interest Income
$0 Other Sources

Investment Accounts Change in Value:  ($5,179)


Thursday, May 30

More Simplifying...

This is really taking hold lately.  In the last couple of weeks I've done even more to simplify my life:

Finances

These days I'm focused on eliminating recurring transactions.  

  • Paying off Student Loans.  Even though it isn't the smartest money move (I only pay 1.625% interest), I've decided to pay off my student loans.  In May I paid off the smaller of the two loans.
  • After paying my student loans, I will start paying down the mortgage I have on one of my rental properties. 
  • I canceled my $9 Fare Club membership with Spirit Airlines.  It was due for renewal and I realized I had never benefited from it.  Easy decision to make.
  • I'm taking a hard look at all the recurring expenses.  Up on the chopping block are our Busch Gardens annual passes.  It gets harder after that:  nearly all the remaining expenses are mandatory ones like utility bills.

Investing in Recurring Income

While tackling recurring expenses, I want to grow recurring income.
  • Investing in our Airbnb.  It's still earning us significantly more rental income than a traditional rental.  With the dog days of summer upon us, I expect to have some unfilled days.  This will be the perfect time to do some work on the house.  Since the house was built in the 50's there are plenty of things that need to be done, from managing the overgrown back yard and dilapidated fence to replacing the ancient windows.
  • Shifting to more passive recurring income.  While the Airbnb certainly isn't a passive investment, I definitely want to put income generation on auto-pilot.  As an example, when I sold the townhouses, I used some of the funds to invest in Realty Mogul.  I'm a part-owner of an apartment complex in Raleigh, NC now, but I have zero responsibilities as far as maintaining the property or handling tenants.  Removing myself from day to day management frees me up to focus on other things.

Eliminating (More) Things

Next on my list is the garage.  Now that we sold 5 townhouses, I'm considering getting rid of some of my tools.  We also have two mopeds that we never use.  The list goes on.

Tuesday, May 14

How I've Been Simplifying My Life

Getting rid of material things, unnecessary tasks, and unused financial accounts is important to me.  Living simply allows me to focus.  Recently, two of my bank accounts were compromised.  Both were at the same bank, with one being my primary checking account.  I have no inkling as to how someone obtained both account numbers and routing numbers, and what's even more troubling was the method used to withdraw funds from the accounts.  Without knowing how to prevent this from happening again, the only thing I can think of to do is to simplify my finances so that I can be laser-focused on each of my accounts.

Bank Account Closures

Closed a Savings Account

I never used the savings account and only kept the minimum balance I thought I needed to get free checking at my bank.  Once I realized I qualified for free checking based on having direct deposits, it was no longer necessary to keep the savings account.  Since this was one of the compromised accounts, it made sense just to close it out. 

Closed My HSA

I drew down the balance in my Health Savings Account.  I no longer qualify to make deposits into the account, which made it an easy decision to get rid of it. 

Canceled a Credit Card

Finally, I canceled a credit card I had with Bank of America.  Since I had no other relationship with that bank and the card had an annual fee, it was a no-brainer to get rid of it.  I have other credit cards with annual fees, and will consider closing them when the benefits don't justify the fee.  I have two cards, for example, that award a free night each year at the branded hotel chain.  Since the annual fee is less than the cost of that free night, there's no reason to cancel the account.

Resolved Nagging Issues

When I purchased our phones last year, I took advantage of a Google Fi promotion for buy one phone, get one free.  For some odd reason, Google never credited my account for the promotion.  I had to contact the company more than a dozen times, but eventually they properly credited my account.  I'm still waiting on the apology for all my time that was wasted!

Lastly, when I sold the townhouses in March, there was a lien on one of them from a mortgage I paid off 10 years ago.  Chase forgot to release the lien when I paid off the mortgage.  Getting this resolved took several hours of my time, but I finally received the necessary paperwork, and the closing attorney released the funds I was due.  This was a huge relief!

Eliminating Things

The battle against "stuff" rages on.  What is helping right now is an idea I have to house hack our next home purchase.  Right now it's just an idea, but if we go through with it, I want our next home to be one that we can Airbnb during high demand times or when we are out of town.  In order to do that, we need to minimize our personal belongings, which will need to be stowed away before guests arrive.  

I've been actively dejunking.  Right now we have almost a carload of stuff that needs to be taken to Goodwill.  This is just a drop in the bucket, though.  My focus is on excessive clothing at the moment.  It's hard to get rid of clothes that "almost fit" or those that are barely worn but just aren't my style, even though it should be easy to toss these things.

How are you simplifying your life?

Monday, May 6

My Frugal Miser - April Expenses: $11,129


Overall April had a lot of expenses.  I replaced the HVAC system at the Airbnb.  It froze up for the second time, and with summer around the corner, I wanted to be proactive.  The old system was 20 years old so it was time. 

I also paid 6 months of auto insurance ($533), made a quarterly tax payment, and paid for our Chinese visas and gratuities for the China trip we are taking later this year.



April Expenses:  $11,129

$1,067 Auto (service, gas, insurance, AAA, etc.)
$0 Bank Fees
$10 Clothing/ Personal Care
$564 Fun (vacations movies, gambling, alcohol, concert tickets) 
$527 Food
$506 Health & Dental
$1,519 Household/Mortgage Payment/Home Repair
$34 Interest Expense*
$168 Miscellaneous
$690 Taxes includes quarterly tax payments
$0 App Jobs Expenses (tolls, car washes, etc.)
$131 Unreimbursed Employee Expenses
$57 Reimbursed Employee Expenses
$312 Utilities
$725  Rental Property Expenses
$4,889 AirBNB Expenses

*Interest expense includes student loans.  As the rate is below 2%, I am completely comfortable paying the interest each month and investing the money that I would otherwise use to pay off this loan.  

Friday, May 3

My Frugal Miser - April Income: $12,597


I had a decent month in April, and I worked a lot.  We went to Nashville for a meeting, where we made $1,400 before taxes.  I worked another small meeting in Orlando after that and ended the month with a meeting in Chattanooga (earnings from that one will be paid in May).  I also did a lot of Amazon routes, and drove for Uber and Lyft for a few hours one morning when I couldn't sleep. 

Rental income includes the security deposits I was refunded on the townhouses I sold at the end of March, so it was higher than normal.  The Airbnb was booked almost the entire month, though I did block a few days when we were out of town.

I put some of the proceeds from the townhouses in short term savings.  I earned a $200 bonus from Discover Bank.  Interest income will be higher until I find a better investment for that cash.

April Income: $12,597

$264 Mystery Shopping
$1,980 Meeting Jobs
$64 Gig Apps (Uber, Lyft, Postmates, Doordash)
$1,891 Amazon Deliveries
$5,941 Rental Income
$2,216 Airbnb Income
$35 Interest Income
$207 Other Sources

Investment Accounts Change in Value:  $2,516


Friday, April 5

My Frugal Miser - March Expenses: $3,589


March was a mixed bag.  Now that the month is over, a couple things surprised me.  The amount we spent on food was the biggest surprise.  There weren't any extravagant restaurant meals.  We bought a lot of groceries and had takeout several times.  The "Fun" category also surprised me, until I remembered we wrapped up a short vacation at the beginning of the month.  I also lost some money in Tunica after I sold the townhouses.  The transaction was a cause for celebration!

The Good

I received a substantial refund on my 2018 taxes.  This was mostly due to losses on rental properties.  I had major turn costs at the beginning of 2018.  Since I sold the 5 townhouses, rental expenses over time will be much lower.

The Not-So-Good

Bank fees were really high.  I opened a new credit card, the Marriott Bonvoy Brilliance card.  After meeting the spending requirement I will get 100,000 bonus Marriott points.  I also paid the annual fee for my self-directed IRA. 

I spent $2,017 on "fun".  This is a new category in 2019 that consolidates spending on vacations, entertainment, gambling, etc. 

I also had to have more dental work done last month.  Hopefully my teeth are good for the rest of the year!

March Expenses:  $3,589

$800 Auto (service, gas, insurance, AAA, etc.)
$948 Bank Fees
$30 Clothing/ Personal Care
$2,017 Fun (vacations movies, gambling, alcohol, concert tickets) 
$717 Food
$0 Gifts Given
$1,024 Health & Dental
$1,382 Household/Mortgage Payment/Home Repair
$40 Interest Expense*
$133 Miscellaneous
($5914) Taxes (Quarterly Tax Payment) tax refund for 2018 overpayment
$0 App Jobs Expenses (tolls, car washes, etc.)
$0 Unreimbursed Employee Expenses
$312 Utilities
$1,973  Rental Property Expenses
$1,053 AirBNB Expenses

*Interest expense includes student loans.  As the rate is below 2%, I am completely comfortable paying the interest each month and investing the money that I would otherwise use to pay off this loan.  

Wednesday, April 3

My Frugal Miser - March Income: $13,201


March was another solid month.
  • I worked one meeting, so more income came from Amazon deliveries last month.
  • I sold the townhouses on Friday, the 29th.  Rental income will be significantly lower moving forward.  I am looking for ways to replace that income using the proceeds from the sale.
  • The Airbnb had a record month.  I probably left money on the table and could have charged even more.
  • My investment accounts had a decent increase.  Also, I shifted my idle cash into some short term CDs to earn a little more interest until I find more attractive stock values.

March Income: $13,201

$244 Mystery Shopping
$784 Meeting Jobs
$0 Gig Apps (Uber, Lyft, Postmates, Doordash)
$1,846 Amazon Deliveries
$6,333 Rental Income
$3,810 AirBnB Income
$27 Interest Income
$156 Other Sources

Investment Accounts Change in Value (Excludes IRAs):  $6,067


Monday, April 1

March in the Rear-view...Sold 5 Properties!

March was a great month for many reasons.  It was less stressful because there aren't as many meetings to work during the month.  I did work one meeting early in the month for a long-time client.  It was super easy, but the pay was also on the lower-end.  I earned more delivering for Amazon because of this.  I like sleeping in my own bed every night.

It was also a great month because I accomplished several things.

Frugal Tip

Look for a discount!  Sometimes it pays to pick up the phone.

I'm guilty of relying on the web for just about everything.  In fact, I forget that I can do business over the phone still.  In February, there was an unexpected problem with my car that rendered it undriveable.  I was at the mechanic's shop, and I jumped online to rent a car.  There wasn't a single car available in Tampa Bay.  I mentioned this to my service advisor, and he picked up the phone to call Enterprise.  In under 60 seconds he had a car for me, at a really nice rate.  I had just checked online, and there was nothing.

A couple more examples.  My Internet bill at the AirBNB went up unexpectedly.  Most people would probably just pay the extra $10, assuming that prices naturally go up with inflation.  I looked online and couldn't find anything, so I called support.  All I had to do was agree to a 12 month contract, and I was able to keep the old rate.  I saved $120 and all it took was a 5 minute phone call.

One last example of looking for a discount.  My new health insurance doesn't include prescription drug coverage.  I had a sinus infection and went to Walgreens to fill a prescription for an antibiotic.  I was shocked at the price:  $72!  My friend was with me, and she asked if I had a Florida Discount Drug Card.  I had never heard of it, but getting one took 2 seconds and was free.  I literally just entered my name on a website and it generated an electronic card.  The pharmacist entered the card number, and the prescription price dropped by $39.

Taxes Are Done

I filed my taxes, which is always a big stress due to their complexity.  I received a substantial refund due to losses on my rental properties last year, and used the refund to finally catch up on all my credit card bills.  That's right - I'm back to a zero balance on everything.

No More Townhouses!

Second, I sold the townhouses.  I had been putting this off for years because it seemed easier to just hold onto them.  They were decent investments from a cash-flow perspective, but the area has gone way downhill.  A burglar was shot and killed in one of the neighbor's townhomes, random drive-by shootings had happened nearby, and drug activity was everywhere.  The last straw was when I went to Birmingham in January to work on a vacant townhouse.  Several of the other units were looking pretty shabby.  It was obvious that the owners (mostly landlords like me) weren't properly maintaining their properties.  Since I had not been able to raise rents for several years, while other costs were climbing, I thought it was time to look for a way out.  It also helps that the economy is firing on all cylinders, including real estate, so I feel like I got a fair price.  I sold all 5 townhouses to one investor in a package deal.  One and done.

Record AirBNB Income

March was an incredible month, as every single day was occupied at our AirBNB.  We grossed over $3,700 in March, a record.  What's even better, I could have made more.  Next year I know to charge more during the month of March.

Next Goals

My new normal is a month with about $3,500 less in rental income due to the sell of the 5 townhouses.  Much of that went towards property taxes, insurance and fire dues, as well as substantial turn costs whenever there was a vacancy.  Still, I would like to replace that income.  I'm leaning towards buying another AirBNB property, but prices are really high right now, so this may take time.  

We should start seeing positive cash flow again even without replacing the townhouses.  The next big cash outflow won't be until property taxes are due at the end of the year.  I just renewed the insurance policies, and don't expect any vacancies the rest of the year.  I will use the cash flow for a few things:  
  • I need to build up a cash reserve for turn costs and property tax bills.  $10,000 is probably what I need.
  • I want to invest more in our existing AirBNB.  Because it's an old house, there is a long list of repairs and improvements I would like to do.  Now that I know it's cash-generating potential, I want to spend a little money making it nicer and being proactive.  By proactive, I mean replacing the water heater and air conditioner sooner rather than later, before they break.
  • I'd like to spend some money in the backyard at our new house.  We only have a small concrete porch.  I'd like a sunroom, or at least a covered sitting area.  My partner wants a fence, which probably isn't a bad idea, either.
To sum things up, March was a wonderful month!  Life just became a little bit easier.  April will be a busy month, so bring it on!  We have a week-long meeting in Nashville followed by a meeting in Orlando.  The AirBNB is nearly sold-out for the month, so that too will keep us occupied.  In my spare time, Amazon.  I feel as if everything is firing on all cylinders.

Saturday, March 9

Catching Up and Getting Simple

Today is a beautiful day, and not just because it's sunny with a high in the low 80s here in Florida.  It's a beautiful day because I just wrapped up my federal tax return and business returns.  Even better, due to higher spending on the rental properties last year I will be getting a sizable refund this year.  Last year I had a big tax bill.

Filing taxes was easier this year.  Most of the meeting jobs I do have converted from 1099 to W-2, significantly cutting down on record keeping and forms to fill out.  My goal though is to keep simplifying my finances.  Here's what I'm working on in 2019:

Simplifying Finances, 2019...

  • A few years ago I opened a Health Savings Account.  Since I no longer have a high-deductible health plan, I can't add funds to the HSA.  I plan to withdraw the balance in this account this year as I have medical expenses.  Goal is to close it out by yearend.
  • I was one of the original adopters of Prosper, even attending Prosper Days back when it first started (the memories!).  The returns on this platform aren't meaningful enough to continue using it, so I've been withdrawing funds from it every time I had $100 available.  Some of the loans I made on Prosper mature at the end of 2022, so this is going to be a slow process.
  • I'm "shopping" the Birmingham townhomes to potential investors.  There's a good chance the sale won't go through, but I do have an interested buyer under contract.  These townhouses have been cash cows over the years, but the neighborhood has steadily declined and turnover costs are too high.  We've been thinking about adding another AirBNB property eventually, so if I do sell the townhouses, I'd potentially use the proceeds to fund another BNB here in Florida.

Having Fun, More Frugally...

We love to travel, but I don't like paying for it.  This year I'll spend every time finding ways to cut costs in the "fun" category, while not cutting back on fun.

  • Last month I opened a new credit card, the Marriott Bonvoy AMEX.  I did this for the bonus:  100,000 Marriott Rewards after spending $5,000 in three months.  This will get us several free nights in Marriott-branded properties.
  • We booked a trip to China through UTO Vacations.  It's 8 nights, and includes flights from New York, flights within China, hotels and tours.  It was only $299 per person, plus the cost of a Chinese Visa and gratuities.  Since it seemed too good to be true, I did a lot of research beforehand.  The "catch" to this incredible price is that our trip is subsidized by requiring us to visit specific stores in China on each tour.  Apparently the merchants pay a fee to the company to entice the tour to visit the store.  Overall it was a reasonable compromise, as each store visit only lasts an hour and there are only a handful of these along the way.  I liken it to doing a timeshare presentation:  the trip is substantially discounted as long as you listen to the sales pitch.

Last, but not least, is simplifying our "stuff".  This is an ongoing process that will never end.  I should probably wait until I've gathered some things to get rid of and then write another post on that.  Until then... have a great weekend!

Thursday, March 7

My Frugal Miser - February Expenses: $8,717


It's important to remind everybody that I am including business and personal expenses in these reports.  Business expenses are a necessary part of growing my income.  But there's a difference between buying sheets for my AirBnB and paying for a restaurant meal.  Nonetheless, it is all listed below.

I have switched from Quicken to a customized spreadsheet to manage my finances.  As part of that transition I have consolidated some categories.  I am also now reporting business expenses.  Previously I did not include rental property expenses. It's all designed to simplify managing my money.

The Good

Because the meeting jobs often provide us meals, our spending on food was really low:  $90.  I can't remember the last time it was so low.  Meeting work also meant less spending on gas for the car.  However, that was offset by a repair in February to fix an oil leak.

The Not-So-Good

I spent $1,500 on "fun".  This is a new category in 2019 that consolidates spending on vacations, entertainment, gambling, etc.  In February, I made a payment towards our next exotic vacation:  China.  We are going there in October.  We also took a trip to Vegas and Seattle at the end of the month, so some of the spending was on this trip.

I also had to have more minor dental work done last month.  Lastly, bank fees and interest.  I paid the annual fee on the Chase Sapphire Reserve card, which is $450.  I will get $300 in travel credits which will offset the cost of having this card.  I also paid some interest on two credit cards.  Rather than covering my balance with money from my investment accounts, I decided to keep an oustanding balance and just pay interest on it.  This isn't the cheapest way to do things, but I have my reasons.

February Expenses:  $8,717

$500 Auto (service, gas, insurance, AAA, etc.)
$460 Bank Fees
$96 Clothing/ Personal Care
$1,525 Fun (vacations movies, gambling, alcohol, concert tickets) 
$90 Food
$0 Gifts Given
$982 Health & Dental
$1,310 Household/Mortgage Payment/Home Repair
$0 Investment Expense
$105 Interest Expense*
$118 Miscellaneous
$0 Taxes (Quarterly Tax Payment)
$0 App Jobs Expenses (tolls, car washes, etc.)
$0 Unreimbursed Employee Expenses
$280 Utilities
$2,777  Rental Property Expenses
$474 AirBNB Expenses

*Interest expense includes student loans.  As the rate is below 2%, I am completely comfortable paying the interest each month and investing the money that I would otherwise use to pay off this loan.  

Tuesday, March 5

My Frugal Miser - February Income: $12,519


My income in February was good.
  • Meeting jobs took up the majority of my time.
  • One rental property is vacant; everything else is occupied with rent paid.  I m now including homes owned through my retirement accounts.
  • We had one 28 day rental at the AirBNB.  When I first went live with our rental, I had extremely low rates and a 20% off promotion.  This was the last vestige of that promotional activity.  I estimate our February income could have been $1,500 higher if I had been charging market rates in February.
  • My investment account barely changed.

February Income: $12,519

$336 Mystery Shopping
$3,239 Meeting Jobs
$0 Gig Apps (Uber, Lyft, Postmates, Doordash)
$646 Amazon Deliveries
$6,840 Rental Income
$1,431 AirBnB Income
$26 Interest Income
$0 Other Sources

Investment Accounts Change in Value (Excludes IRAs):  $423


Monday, February 11

My Frugal Miser - January Expenses: $12,996


January was another fairly expensive month.

I have switched from Quicken to a customized spreadsheet to manage my finances.  As part of that transition I have consolidated some categories.  I am also now reporting business expenses.  Previously I did not include rental property expenses. It's all designed to simplify managing my money.

  • We spent a week in Birmingham working on the empty townhouse.  I had to replace the cabinets and countertops, which was a $6,000 expense.
  • Food spending was high. We ate out every day while we were in Birmingham.  We eat restaurant food way too much.
  • I switched from an ACA health plan to one called Liberty Healthshare.  The monthly premiums are higher but overall it should lower my health expense.

January Expenses:  $12,996

$209 Auto (service, gas, insurance, AAA, etc.)
$0 Bank Fees
$47 Clothing/ Personal Care
$15 Fun (vacations movies, gambling, alcohol, concert tickets) 
$583 Food
$0 Gifts Given
$1,331 Household/Mortgage Payment/Home Repair
$0 Investment Expense
$77 Interest Expense*
$0 Miscellaneous
$0 Taxes (Quarterly Tax Payment)
$0 App Jobs Expenses (tolls, car washes, etc.)
$101 Unreimbursed Employee Expenses
$110 Utilities
$8,343 Rental Property Expenses

*Interest expense includes student loans.  As the rate is below 2%, I am completely comfortable paying the interest each month and investing the money that I would otherwise use to pay off this loan.  

Friday, February 8

My Frugal Miser - January Income: $14,389


My income in January was good.
  • Meeting season has begun.  More of my work was working meetings, but I still managed to deliver some for Amazon.  
  • One rental property is vacant; everything else is occupied with rent paid.  I m now including homes owned through my retirement accounts.
  • AirBnB was solid once again.
  • My investment account was way down.  My Sears put options lost a significant amount.  I had to close them out but still made a tiny profit.

January Income: $14,389

($21) Mystery Shopping
$1,425 Meeting Jobs
$27 Gig Apps (Uber, Lyft, Postmates, Doordash)
$868 Amazon Deliveries
$9,716 Rental Income
$2,150 AirBnB Income
$28 Interest Income
$197 Other Sources

Investment Accounts Change in Value (Excludes IRAs):  -$10,025



Sunday, January 13

AirBnB December Performance

AirBnB - December 2018


In our fourth month operating an AirBnB home we were cash-flow positive (that's two months in a row!)  Nightly rates are improving.  I was successful at filling a few vacant days by tinkering with rates.  Often if we are in-town and have a vacancy, I will lower rates as the vacant day approaches to try to get the house booked.  For example, I had a 3 day gap in mid-December.  Rates started at $79, which I gradually lowered until I picked up a booking at $49/night for two of those nights.  With the cleaning fee, that booking earned us $165 that we otherwise would have missed out on.

Financial Performance

Occupancy Rate:  90% (3 days unbooked)
Payments Received:  $2,886
Expenses:  $399

Net Income:  $2,487

Friday, January 11

My Frugal Miser - December Expenses: $7,294


December was another fairly expensive month.  Fortunately, I'm mostly finished furnishing our new house.  That was a major expense for 2018.
  • I had new brakes installed on my car; I also spent a lot on gas with all the Amazon deliveries I made.  Good thing gas prices are super low.
  • Food spending was high.  We had family visit for Christmas so this category includes spending for several additional people.
  • I had to replace a broken crown - over $800 after insurance.  Dental care can be expensive!

December Expenses:  $7,294

$434 Auto (service, gas, insurance, AAA, etc.)
$86 Bank Fees
$0 Charity
$0 Clothing
$0 Computer
$530 Entertainment (movies, gambling, alcohol, concert tickets) 
$769 Food
$319 Gifts Given
$1,843 Household/Mortgage Payment/Home Repair
$153 Health and Dental Insurance
$0 Investment Expense
$11 Interest Expense*
$808 Medical/Dental
$0 Miscellaneous
$9 Personal Care
$0 Subscriptions
$1,819 Taxes (Quarterly Tax Payment)
$31 App Jobs Expenses (tolls, car washes, etc.)
$0 Unreimbursed Employee Expenses
$390 Utilities
$94 Vacation

*Interest expense includes student loans.  As the rate is below 2%, I am completely comfortable paying the interest each month and investing the money that I would otherwise use to pay off this loan.  

Thursday, January 10

My Frugal Miser - December Income: $12,151


My income in December was strong.
  • Most of my work was delivering for Amazon.  Several days Amazon offered higher than normal rates because of higher volume.
  • One rental property is vacant; everything else is occupied with rent paid.
  • I had the best AirBnB month yet.  
  • My investment account was up.  

December Income: $12,151

($22) Mystery Shopping
$0 Meeting Jobs
$0 Reimbursed Job Expenses
$0 Gig Apps (Uber, Lyft, Postmates, Doordash)
$3,062 Amazon Deliveries
$6,205 Rental Income
$2,888 AirBnB Income
$18 Interest Income
$0 Other Sources

Investment Accounts Change in Value:  $3,356



Notes:  
  • I don't include transactions in my retirement accounts.  This includes rental income, dividends and capital gains and losses.