2021 Goals Update

 2021 is flying by and it's important to check my progress towards fulfilling the year's goals.  Every year I set 3 or 4 goals, usually related to weight loss and managing my money.  This year is no different.  My goals for 2021:

$1,000/mo. to short-term savings and $400/mo to investments

What better way to reach a goal than to automate the steps?  I wanted to send $1,400/month to these two places.  Right now I am transferring $2,000/month but in a different order:  at the moment I'm sending $500 to a short-term savings account and $1,500 to an investment account.  Goal exceeded.

Weigh less than 180 pounds by 12/31/21

On October 7th, 2020 I was the heaviest ever:  239 pounds.  That's the day I started a keto diet.  I am on track, and right now I weigh 195 pounds.  I should be able to reach my goal by the end of the year.

Read more books

Can't win them all, can you?  I've put some effort into this, and technically I have read more books this year than last year.  But not as much as I'd like.  When we decided to move, I shifted focus to getting into the new house.  Now that we're here, there's quite a few projects going on to make it more comfortable.  Even so, I have managed to do some reading.  I've read a couple of books on the Kindle, as well as one I checked out of the library.  I'm keeping my Kindle charged and located in a convenient, visible place.  But there are still lots of physical books on my bookshelves that are doing little more than gathering dust.  I plan to change this.

How are you doing towards your own goals?

Anatomy of a Home Sale (or How I Got Free Housing for Over 2 Years)

I closed on the sale of my home on March 31st.  Through no skill, just a rising tide of increasing home values, I managed to live in a brand new house for 31 months with zero costs.

I sold my home to Zillow for $266,700.  I bought it for $214,990.  That's a $51,710 profit, or an average increase of $1,668 per month.  

The largest expense of homeownership was the interest I paid on the loan.  My mortgage was 4.75%.  I tried refinancing - twice - and both times our broken underwriting process decided I could not afford to save money on my monthly payments.  Frustrated, this became the impetus for selling.  I don't like being taken advantage of.  I paid a total of $19,990 in interest while I owned the home.

There were significant other expenses to owning this home.  I bought in a new development, and most neighborhoods these days have an HOA.  That only scratched the surface of the nuisance of owning in this neighborhood.  You see, I also paid CDD (Community Development District) fees.  This included interest on debt the developer took on to build the neighborhood, from laying fiber internet and street lights to a zero-entry pool and playground we never used.  Combined, HOA and CDD fees were about $400/month.

There was also homeowner's insurance.  This wasn't significant, a few hundred dollars per year.  New, concrete-block homes don't cost much to insure.

Last, there were some closing costs, both when I bought the house and when I sold it.  

Add everything up, and my profit from selling the house completely covered my carrying costs while living there.  

Our New Home Costs Less

We moved into one of my rental properties.  I bought it during the housing recession.  It was a foreclosure.  I could sell it today for 4x what I paid.  It's in a very convenient location, less than a mile from downtown  and the beach.  There's no HOA, no CDD.  I don't even pay for trash pickup since it is a service the city provides.  Since I bought the house with cash, there's no mortgage payment.

Did I Leave Money on the Table?

It isn't healthy for me to dwell on whether I got the very best price for selling my home.  I am happy with the price I sold for.  But one must assume Zillow knows their data. Ten days after selling, Zillow listed it for $290,900.  That represents a $24,200 premium over what they paid me.  They will have some transaction costs when selling the home, such as the commission they pay the buyer's agent.  It's been listed for just over a week now.  Traffic has been insane - almost 6,000 views and over 200 "saves" online.  As of now it is still an active listing.

My Frugal Miser - March 2021 Income

Even with substantial costs attributed to our move, my income easily exceeded expenses in March.  We completed our move back to Clearwater, so I didn't work nearly as much as usual.  We spent a lot of time cleaning up the house and with moving everything.

The Airbnb was booked every day except one, plus I blocked two days on the calendar.  I had a tree service do a fair amount of work trimming trees, removing a dying citrus tree and grinding an old stump.  Stump grinders are super noisy so I made sure there wasn't a guest present.  I spent $790 on tree services and the yard looks so much nicer now.

I received rent for all three of the Birmingham rental properties.  I also received a distribution from Realty Mogul.

I am not including the gain from the sale of my primary residence in my income, but the proceeds are listed below.  I plan to write a separate post detailing the sale and how much I profited.

March Income: $12,219

$0 Mystery Shopping/ Merchandising
$0 Meeting Jobs
$5 Gig Apps (Rideshare, Food Deliveries, etc.)
$1,363 Amazon Deliveries
$3,446 Rental Income (Rental Expenses:  $420)
$3,978 Airbnb Income (Airbnb Expenses:  $1,863)
$26 Interest Income

$3,401 Other Sources

$86,939 Proceeds from Sale of Home

Investment Accounts Change in Value:  ($6,237)

My investment accounts were down.  A couple of AMC put options expired worthless and Vereit was down slightly.

My Frugal Miser - March 2021 Expenses

In March I kept expenses below income once again, but it wasn't a frugal month.  We spent a fair amount getting ready to move.  This included landscaping the new home (my partner's passion is gardening), moving costs, etc.

• The household expense includes $1,423 for the mortgage.  We moved at the end of the month to a house I already own outright, so this expense is going away.
• Spending on food was stubbornly high because of the expense of our low-carb diet.  We are still preparing nearly every meal at home, which saves on restaurant meals.
• I placed two new Healthy Wagers.  I have made a total of 5 bets that I can lose weight.  Two of those bets have ended and I won.  This helps motivate me to lose weight.

Fun

We love adventures.  Spending on experiences makes us better humans.  

• We visited Atlanta for 2 nights. 
• Jetstar canceled our August flight to Australia, and soon after Carnival canceled our cruise.  I opted to apply my cruise deposit towards a future cruise but took a refund for the flight from Honolulu to Sydney.   Conveniently, we salvaged our vacation plans:  last year I signed up for a timeshare offer through Hilton Grand Vacations that includes a 5 night stay in Hawaii.  I had already booked a flight from Tampa to San Jose, CA and from there to Honolulu for the Australia trip, so I simply switched the second flight to Kona for the same dates.  

March Expenses:  $6,251

$414 Auto (service, gas, insurance, AAA, etc.)

$595 Bank Fees (annual fee on Chase Hyatt card, trustee fee for Self-Directed IRA)
$0 Clothing/ Personal Care
$518 Fun (vacations, movies, gambling, alcohol, concert tickets)

$649 Food

$307 Health and Dental

$2,786 Household/Mortgage Payment/Home Repair

$139 Unreimbursed Job Expense

$0 Interest Expense

$0 Miscellaneous

$324 Taxes

$520 Utilities

Although the mortgage is going away, there are many projects we plan to take on at our new home.  This should increase the value of our home, but we are doing it to improve our quality of life.  We will be building a fence in April.  Soon I plan to have concrete poured for a patio area.  Eventually I am planning to remodel.

My Frugal Miser - February 2021 Income

February was a solid month, with income exceeding expenses by a healthy margin.

Amazon was good.  I've been paying for a service that automatically picks up routes for me.  I used to be able to get the same amount of work without having to pay for it, but the use of bots has made that impossible.

The Airbnb was booked every day and higher rates than last year.  March is already almost fully booked.

I received rent for two of the three Birmingham rental properties.  I also received quarterly income from some of my Realty Mogul investments.

February Income: $10,784

$60 Mystery Shopping/ Merchandising
$0 Meeting Jobs
$79 Gig Apps (Rideshare, Food Deliveries, etc.)
$2,913 Amazon Deliveries
$2,710 Rental Income (Rental Expenses:  $420)
$4,153 Airbnb Income (Airbnb Expenses:  $406)
$26 Interest Income

$843 Other Sources

Investment Accounts Change in Value:  $3,555

My investment accounts were mixed.  While Vereit was up 10%, my put options on AMC suffered more big losses.  I closed out my Carnival Cruise Lines position.

My Frugal Miser - February 2021 Expenses

 

In February I kept expenses relatively low.  After we move they will drop even more.

• The household expense includes $1,423 for the mortgage.  We are moving at the end of March so this expense will be lower soon.
• Spending on food was reasonable considering the higher expense of our low-carb diet.  We are still preparing nearly every meal at home, which saves on restaurant meals.
• I bought a Groupon for front brake pads.  I paid $71 for the Groupon and received a $2.85 rebate from Rakuten.  My normal mechanic quoted $270 to replace the brakes.  
• Health and Dental will continue to be much lower than last year since I switched to an ACA plan.  In February I filled two prescriptions.  The balance is for the monthly insurance premium.

Fun

We love adventures, which makes it exciting to talk about the "fun" category.  

• I visited Las Vegas for three nights.  Travel is still really cheap.  My hotels were comped, I paid $42 for the flight, and food was inexpensive.  The only other expense was the car rental and gambling.  
• I want to highlight the $42 flight:  at the end of last year I completed a status match with Frontier.  Since I have a SWA Companion Pass, I qualified for the highest-level with Frontier, which lets you choose any seat on the plane and luggage is complimentary.  This allowed me to choose the first row with extra legroom.  I also had the pleasure of checking out the brand new American Express Centurion Lounge on my layover in Denver, compliments of my AMEX Platinum card.  
• I booked a May trip for Las Vegas.  Two roundtrip tickets were $159, but I had a $50 voucher which brought it down to $109.  I'm loving the Frontier status match since it means our upgraded seats and bags were included in that price.
• Other fun in February included tickets to a drive-in concert we attended.

February Expenses:  $3,786

$402 Auto (service, gas, insurance, AAA, etc.)

$150 Bank Fees (annual fee on CSR card)
$15 Clothing/ Personal Care
$643 Fun (vacations, movies, gambling, alcohol, concert tickets)

$532 Food

$187 Health and Dental

$1,449 Household/Mortgage Payment/Home Repair

$0 Interest Expense

$0 Miscellaneous

$78 Taxes

$256 Utilities

I have streamlined this post for 2021 by not reporting business spending in 2021 (Airbnb, rental property, unreimbursed job expenses, etc.)  This blog is about my personal journey towards financial independence, and I wanted to simplify things and focus on the expenses I should be able to reduce or eliminate.

Keto Diet: 120 Days

I started the keto diet on October 7, 2020.  

Weight on 10/07/20:  236.6

Weight on 01/07/21:  211.6

Weight on 2/9/21:  206.8

Total Weight Loss:  29.8 pounds

The weight loss has slowed, but I lost about 5 pounds in the last month.  We could cut more out of our diet, but I am scared that it would discourage me.  As long as I keep losing weight at a steady pace I am happy.  I attribute success to cutting a few basic items from my diet:  no bread, rice or noodles.  No added sugar.  Sure, there are other foods we shy away from, but this is the Cliff's Notes version of our diet.  

I updated my goals for 2021 to include weight loss.  By the end of this year I will weigh 180 pounds or less.

Selling My House to Zillow

 A few weeks ago we decided to move into one of my rental properties and sell our current home.  When I started researching how much my house was worth, I noticed on Zillow that they are purchasing homes in the Tampa Bay area.  

About a year ago I inquired with one of the companies that buys houses (maybe it was OfferPad, but I can't remember) and they offered $212,000 for our home.  I paid $215,000 for it in August, 2018 and, while the offer wasn't enough to convince me to move, it made me feel good that our home was sustaining its value.  I assumed that Zillow would lowball the offer like those "We Pay Cash for Houses" outfits.  This wasn't the case.

So far this has been a very easy process:

1. On January 23rd, I answered some basic questions about the home on the Zillow website.  Things like square feet, number of bedrooms, and whether any updates had been made to the house.
2. On January 26th, I received an email titled, "We've Calculated a Market Value for Your Home."  When I clicked through the email, I discovered my house, according to Zillow, was now worth $266,700.  This was justified by a list of other houses that had recently sold in my neighborhood, so it was easy for me to see that my offer was within the range of what houses are selling for.
3. The next step was setting up an appointment for an inspector to evaluate the home.  I had the option to be present, but I chose to sign a waiver allowing the inspector to come while we weren't home.  
4. In addition to the market value, Zillow provided a couple of line items detailing what they would deduct to come up with a net price.  This included 4.9% in Transaction Costs (comparable to the 5% commission I would have in a normal transaction), 0.1% Selling Costs (described as the fee to let me select a closing date in the future), and Prep and Repair Costs of $2,490.  There was a breakdown of the repair costs, which included replacing carpet and touching up paint, along with a couple of other minor repairs.  I think the repair costs were reasonable.

I have signed the contract and responded to the standard information requests, nothing out of the ordinary.  Since one advantage of selling to Zillow is being able to set your closing date, I decided on March 31st.  Our tenant is due to move out at the end of February, giving us a month to get the rental property cleaned up and to move.

My personal opinion is that pretty much all asset prices are irrationally exuberant right now.  Stocks are in a bubble, and real estate is pricey, though not as crazy as stocks.  I can't time the market, but I was already looking at moving, and now seems like a great time to sell a home.

My Frugal Miser - January 2021 Income

 January was another solid month. 

Amazon was decent, but it seems to be getting harder to get routes.  Too many drivers.

The Airbnb was booked 29 days and rates are solid.  February is almost full and, because the Super Bowl is coming to town, rates are the highest they have ever been.  Converting this property to an Airbnb was the best financial decision I have made in years.

There were a couple of one-off sources of income.  In addition to the stimulus check everyone received, I received a large payment from the ARCP Securities Litigation Settlement.  

I received rent for all rental properties.

January Income: $12,278

($60) Mystery Shopping/ Merchandising spent money, no income
$0 Meeting Jobs
$77 Gig Apps (Rideshare, Food Deliveries, etc.)
$2,611 Amazon Deliveries
$3,050 Rental Income (Rental Expenses:  $1,259)
$2,668 Airbnb Income (Airbnb Expenses:  $830)
$27 Interest Income

$3,905 Other Sources

Investment Accounts Change in Value:  ($34,967)

My investment accounts were all down.  I'm not worried about Vereit, my biggest position, as it fluctuates and I have no plans to sell.  My put options on AMC suffered big losses.  The Reddit forum WallStreetBets has targeted several failing companies, including AMC.  It is market manipulation plain and simple.  Fortunately I have time before the options expire and it is possible their value will return before then.

My Frugal Miser: January 2021 Expenses

In January I finally managed to reduce our spending on food.  I also started a new ACA health insurance plan that reduced my premium by more than $400.  A few other highlights...

• The household expense includes $1,601 for the mortgage.  The mortgage company did an escrow analysis and this will drop almost $200 in February.  After we move - hopefully in March - this expense will decline even more.
• Spending on food dropped significantly.  We are still on the keto diet, but other than one restaurant meal we ate entirely at home.  
• I bought a set of 4 tires for the Elantra.  A nice surprise is that tires are less expensive than the Sonata because they are slightly smaller.  I paid $42.88/tire from Walmart, plus $12/each for mounting which includes lifetime tire rotations.  I also changed the oil.  The rest of the spending is for fuel.
• Health and Dental were helped in a couple ways and hurt in one.  I won a Healthy Wage 90 day challenge.  I bet $60 that I could lose 6% of my body weight and received $86 from the prize pool.  I also switched to an ACA plan that is a fraction of what I was paying last year.  However, I needed a minor periodontal procedure and my portion of the cost was $176.

Fun

We love adventures, which makes it exciting to talk about the "fun" category.  

• I visited Tunica for two nights.  My birthday offers were attractive and included free play and food, along with a free hotel room.  Flights were cheap, so why not?
• I booked most of the air travel for our August trip to Australia.  I suspect airlines will raise fares once the pandemic eases up and wanted to lock in what looked to be decent fares.  We will fly to Honolulu on Southwest and then fly to Sydney on Jetstar, which is the "low-fare" side of Qantas Airlines.
• I paused one of our AMC A-List memberships and will pause the other in February.

January Expenses:  $5,605

$589 Auto (service, gas, insurance, AAA, etc.)

$149 Bank Fees (annual fee on Chase SWA card)
$13 Clothing/ Personal Care
$2,017 Fun (vacations, movies, gambling, alcohol, concert tickets)

$377 Food

$197 Health and Dental

$1,853 Household/Mortgage Payment/Home Repair

$0 Interest Expense

$0 Miscellaneous

$228 Taxes

$182 Utilities

I have streamlined this post for 2021 by not reporting business spending in 2021 (Airbnb, rental property, unreimbursed job expenses, etc.)  This blog is about my personal journey towards financial independence, and I wanted to simplify things and focus on the expenses I should be able to reduce or eliminate.

We're Moving!

Big changes are ahead.  We've made the decision to move in March into one of my rental properties.  There are a few reasons for doing this, but the top reason is because our current home has high monthly costs that are outside our control.  Specifically, we have both an HOA ($200 every quarter) and a CDD (over $300 per month).  Additionally, the interest rate is a ridiculous 4.75% and I was turned down for a refinancing.  I'm still not sure how I justified this since we knew about these costs before I bought this house.  I think the excitement about building a brand new home got the best of me.

Advantages of Moving

There are several positive benefits to this move:

• I paid cash for the rental property, so there won't be a mortgage.  
• We will be 15 minutes from the Airbnb.  Based on 2020 trips, this will free up 135 hours of drive time and about $200 worth of gas, plus it will reduce wear and tear on the car.
• We will be more physically active.  The rental is on a major bicycle trail that runs through the county and is an easy bike ride to the beach.  It's a more dense area which means we can run most of our errands without getting in the car. 
• Instead of paying a mortgage, I'll be spending money on improving the home.  The area around the house has improved since I bought it and I think I can add value by updating it.  More to come...
• Because it's a smaller house, the cost of utilities should go down.
• Last, and maybe best:  once our current home sells, I will be completely debt-free!!!

Unless the real estate market crashes, I expect to sell the home we live in for a modest profit.  If I'm lucky, the increase in value will cover all our carrying costs for the 2+ years we've lived in this home.  

This won't be our forever home.  It's more of a house hacking opportunity - live in it while we make improvements that will raise its value.  Our "forever home" may not even be in the United States.  I still have a lot of thinking to do about that.

Keto Diet: 90 Days In

 I started the keto diet on October 7, 2020.  Good news:  It works!  I realize now that the reason I was so overweight can be attributed to just a few bad food choices.  Getting rid of sugar and flour and replacing them with healthier alternatives is the biggest contributor to my weight loss.  I don't even crave sugar anymore.  We have found recipes that satisfy my "sweet tooth" including a keto cheesecake and keto chocolate cake with vanilla frosting, both homemade.

Weight on 10/07/20:  236.6

Weight on 01/07/21:  211.6

Total Weight Loss:  25 pounds

I love that I lost 25 pounds and do not feel deprived.  I'm never hungry or have unhealthy cravings - those went away.  But there is more that I can do and I will probably have to do to keep up the pace.  While we have cut down on alcohol (beer has been totally eliminated), I want to keep drinking less.  I also want to eat more vegetables.  We have already started eating more salads which was a delightful change to the diet.

My Frugal Miser - December Income: $10,222

December was an impressive month.  

Amazon was unsurprisingly busy as Christmas approached.  One of my friends introduced me to a "bot" service that automatically grabs Amazon routes based on the criteria I set.  This has made it a bit easier to get work although I do have to pay for the service.

The Airbnb continues to be a bright spot.  It was booked 27 days in December, and income exceeded $3,000 again.  January got off to a strong start with an 18 day booking starting on the 2nd.

I received rent for all rental properties.

December Income: $10,222

$0 Mystery Shopping/ Merchandising
$0 Meeting Jobs
$68 Gig Apps (Rideshare, Food Deliveries, etc.)
$2,546 Amazon Deliveries
$3,050 Rental Income
$3,353 Airbnb Income
$25 Interest Income

$1,180 Other Sources

Investment Accounts Change in Value:  $32,062

My investment accounts did extremely well.  Since Vereit is my biggest position, it doesn't take much to move the needle.  Last month Vereit shares were up.  My put options for AMC barely budged, although shares in the stock plummeted in December. I am optimistic I will profit overall.  Carnival Cruise Lines gained some, and I sold a portion of my shares in one account, before shares settled back down.

My Frugal Miser - December Expenses: $7,838

December wasn't too bad, and it's looking like January will be even better.  

• Airbnb expenses were quite low.  My goal here is to invest in the property during slow season (September-November), which is exactly what I did this year.  The only expenses in November were for normal things like utilities and supplies.  
• Rental expenses were also low.  Since I already paid property taxes, my only rental expenses in November were the management fees I pay for two properties I own in Alabama.
• The household expense includes $1,601 for the mortgage.  The only other expense was the quarterly HOA dues.
• Spending on food remains high.  We are still on the keto diet.  Protein tends to be more expensive, plus at the end of the month we visited a friend who has high-end tastes.

Fun

We love adventures, which makes it exciting to talk about the "fun" category.  

• We visited Asheville and Pigeon Forge (Dollywood).  When I was researching prices for Dollywood I discovered that buying one season pass ($150) would be a fantastic bargain because it includes a bring-a-friend ticket for this Christmas season as well as 3 tickets in 2021.  Instead of us both buying season passes, this option made more sense.  If we visit 4 times, our per visit cost is just $18.75/each.  I also splurged on an annual pass to the Biltmore Estate.  This is definitely not a frugal purchase, and I had a hard time justifying it:  even with $50 off, the annual passes were $200 each.  I used points for our hotels, so the total cost of the trip was $88 for both flights, the cost of passes to the attractions, a rental car, food and a couple of souvenirs.
• We spent a couple of nights in Miami visiting a friend.  It was a relatively inexpensive trip but we did spend a lot on food while there.
• I made another payment towards our China trip.
• I booked another cruise for later in the year.  The deals are too good to pass up.
• Last, we pay $48/month for AMC A-List membership.  I should probably cancel this until new movies return to the theater.

December is the last month I will be paying $479 for health insurance - I switched back to an ACA plan, which should save $400/mo.  Unfortunately I needed periodontal surgery in December which was the single largest expense for the month after the mortgage.  I also spent a fair amount on gifts (listed under the miscellaneous category) which won't be repeated in January.

December Business Spending:  $850
December Personal Spending:  $6,988

December Expenses:  $7,838

$364 Auto (service, gas, insurance, AAA, etc.)

$174 Bank Fees
$20 Clothing/ Personal Care
$1,454 Fun (vacations movies, gambling, alcohol, concert tickets)

$994 Food

$1,449 Health and Dental

$1,783 Household/Mortgage Payment/Home Repair

$0 Interest Expense

$370 Miscellaneous

$122 Taxes includes quarterly tax payments
$0 App Jobs Expenses (tolls, car washes, etc.)
$0 Unreimbursed Job Expenses
$0 Reimbursed Job Expenses

$259 Utilities
$420 Rental Property Expenses
$430 AirBNB Expenses