Interest Based Income - part three

 Part one was about some basic math for interest based income. 

 Part two was about some personal math.

 So the numbers I showed you from part two for what I would need if I was to rent out my house.

Single family rent per month =$1,400

Single family rent per year = $16,800

Two family rent per month = $2,800

Two family rent per year = $33,600

Again, this is the magical $30,000 a year just without starting with a million dollars first.

What people don't talk about is that until that money is in your hands, it is not and will not ever be a guarantee. 

There are many landlords who talk about that money as if it was a guarantee and it is a very dangerous mindset to be in. This is how debit and foreclosures happen.

During the plague there were a whole bunch of landlords that not only thought this but demanded this while also telling the renters that they were going to be evicted. Thanks to that type of landlord there is a great deal of justified broken trust.

At an old job one of my coworkers was also a landlord. He would not send that current years rent until the following year. He treated it as interest from an investment. He also still have a full time job. Why? to cover his existing mortgages. His house was paid off. He had at least one other property paid off. He did not consider the next months rent as already in his pocket because he was fully aware that life could happen at the worst times.

I would have loved to have heard him making fun of all the terrible landlords that were crying about their renters leaving them because they jacked up the rent too high & were verbally abusive so now they couldn't afford their own mortgage OR the mortgages of their rental properties. 

Are there terrible tenants? I have known a few but they were always justifying their actions because the landlords were being horrid to them. If they hadn't had that opening they could have been shamed into caring. Mostly they just didn't pay the last month and used the security deposit as their last months rent. Not the best but there are details and horrid landlords.

Also, landlords are not ever able to go into tenants mail because that is 100% mail fraud and USPS will go after them.

This is to say that having a rental is not for the feint of heart or the cruel of mind. IF you are still thinking about it then a property management company is what you want to have. A lot of people don't realize just how much renters think you can control the companies. But you do want to listen to them because they will have the most contact. You don't want a company that drives away your renters.

 Think of the rental properties that you see for sale on sites like zillow. They are mostly listed by people that don't want to be landlords anymore. One would hope it's for good reasons but most are probably landlords that are just burned out and can't be bothered. 

It could be a grandparent that just is too old or they passed away and it is easier to sell then fight with family on who gets it.

It could be a a married couple and one of them landed a job that needs them to move and being an out of state landlord is not something they want to deal with.

It could be that a new landlord has 'graduated' from a smaller property to wanting to focus on larger ones. Which are easier for them to get cheaper loans for.

A divorce of family feud can also cause problems.

 Many seem to be stupid landlords that think their tenants money is theirs and as such planned out non-refundable trips and done other things to spend the money that they think is theirs. This is a very fast track to bankruptcy. Many of them are the type to try and evict people during a plague. They think only of their own benefit and fail to see how no one has to put up with that.

Please don't be like that group.

 

 

 

 

 

 

Interest Based Income - part two

Part one was about some basic math for interest based income.

Now the fun part, how would you could even start getting $100,000 let alone $500,000 saved up?

Yeah, this is the horrible part because most things these days are not designed to make it easy to save money. I have never rented so I can't guess on that type of budget. I do own a house though and that does open a door for me to get started saving. If I chose to sell my house I could in theory make $100,000 after everything is said and done.

I have not put a lot of money into my house but with just the base improvements I could see getting $100,000 from it if/when I sell. 

Could I do more improvements to my house? Of course. I would love to replace all the windows and the siding. But I will never see that money returned to me. It could cost $25,000 for all the windows and $20,000 to do the siding. Then another $10,000 for the driveway. I would just never see that $55,000 investment ever again. Not to mention I do not have the money to even consider doing them.

I will probably look into adding a pull down stairs for attic space. That is closer to the $1,000 range. The potential attic space wouldn't be to much but it would be worth it. Especially considering the only other access it a tiny little square. I still can't figure out how my house inspector got through it because I was cramped when I went through it.

The reason I could even hope to make $100,000 after selling is because I got a very affordable house when the interest was super low a few years ago. I got very luck and I know not everyone will want a cheap house in the middle of no ware.

I have also already updated the electric. That was a nightmare of tracking payments so I'm not full sure what the true total was but it was between $10,000 - $20,000 which was only because he was good friends with my realtor. The work took two years and was worth it.

Never buy a house from a church. Do not do it.

The bad part of that is that my tiny town hasn't seen an increase in prices. It is stuck in a price range and I would have to get very, very lucky to get more. It's just not an area that has houses that go more than $200,000 for my size of house.

On the flip side, if I wanted to rent out my house instead of selling? I could list it as is for renting as a single family house.

If I wanted to rent it as a two family, I would have to rip out two doors to make it a legal two family rental. Then I would have to figure out what to do about laundry for the second floor. So a two family is out.

However! While renting out my house would be ideal, it is only possible if I could find a management company in my area. I know they exist but I have yet to actually find one. My town is full of rentals and I can not for the life of me find any info online. I don't have any idea who in my town I could talk to about it because my town is a little bit weird about some things.

Which brings me back to square one of selling the house once I am ready as being the best option. Pending locating the cryptid management company in my area.

So, why go over all of this? Because it shows just how much a little thing can snowball and branch off into so, so many other things.

The numbers that you want to see (based on what I want to rent out for)

Single family rent per month =$1,400

Single family rent per year = $16,800

Two family rent per month = $2,800

Two family rent per year = $33,600

And that right there is the magical $30,000 a year just without starting with a million dollars first.

What people don't talk about is that until that money is in your hands, it is not and will not ever be a guarantee. 

Part three is going to be going over that very valuable point of view.

Interest Based Income - part one

 Interest Based Income

What I mean by this is earning enough money from your interest based savings account with a bank. I'm going to be tossing around a lot of numbers but the base interest I'll be using will be 3%. It's not the current interest rate but it's the one I'm going to use.

The thing I will not be getting into is going to be the taxes. If you earn $10 you will get a 1099-INT and you will just file that when doing your taxes. File your taxes. It will effect you yearly return. Thats all i have to say on taxes.

The basic amounts that I will be working with are going to be as follows:

$100

$1,000

$10,000

$100,000

$1,000,000

These are the big break points when talking about interest. When you have the small amounts it feels like it's not doing anything but that can carry over to the larger amounts also. The most common way people talk about earned interest is as yearly amounts.

Per Year

$100 = $3

$1,000 = $30

$10,000 = $300

$100,000 = $3,000

$1,000,000 = $30,000

Where I'm from, $30,000 is a full time minimum wage job. 

What you also want to focus on is the per month interest because this is what you will be able to budget with like an additional paycheck. This means that you will want a savings account that will pay you per month and when they pay you will be at the end of that month.

Per Month

$100 = $0.25

$1,000 = $2.50

$10,000 = $25.00

$100,000 = $250.00

$1,000,000 = $2,500.00

The monthly breakdown is how you can see when it makes a difference. $25 doesn't feel like it can do much but that $300 at the end of the year could be a nice cushion or treat.

But $250 a month? That's a bill. It could be an extra payment on a credit card. It could be a car payment. It could be a persons grocery bill. It is a small amount but it is a small amount that will make a difference. If you are able to save it then that extra $3,000 a year is definitely a good amount to have saved up for emergencies or fun.

Will it fix everything? No, but I have had a surprise car repair bill (thanks to chipmunks making a nest in my car and eating the wires) and it was just over $3,000 to fix. I would have been much better off it i had been able to just pay it off with cash instead of using a credit card. The interest I was paying on the credit card was insane.

This is what people mean by wanting their money to work for them.

This is why my ultimate personal goal is going to be to try and get $500,000 because that will be $15,000 per year or $1,250 per month. Which doesn't sound like a lot but it is. For me it would cover my mortgage and car payments. At my current spending it would very much fix everything for me.

I'll be going over my personal reasons in part two.

 I will close with saying that if I had $2,000,000 in the bank I could very easily live off of the estimated $5,000 a month interest. Even if I was paying for my own health insurance.

To be honest I would probably keep my day job just so I wouldn't have to deal with tracking down my own health insurance and then I could keep my 401k. But thats going to be a part three I think.

 Part two was about some personal math.

on the Volt car Warranty

 Long story short car financial managers are going to lie to you that the very very clearly specified warranty will not cover what it says it will. They will say it only covers the battery.

Like I said, they lie.

There is a 8 year / 100,000 mile warranty by Chevy/GM that covers all the electronics that make the car run in their Warranty Manuel that is listed on their site but that the dealership will try to charge you $4,000+ to fix. Specifically the BECM.

This only work if you are still in/under the 8 year / 100,000 mile warranty!!

 I didn't even know about this warranty let alone that I was still covered by it. Thankfully my friend did and was texting me info on it while we were talking about it before I authorized the work. 

No your tech guys will not check the warranty for you. Again you will need to specify VoltTech and the Warranty Manuel that is on GM's site.

There are a few small-ish things like the 12volt battery that can cost $200 & the $400 coolant flushing that they have to do 3 times & they are required to do (I am still arguing about this one but seems legit) and any  other thing that is not the main control box or specifies as being under the VoltTech warranty.

 

Also AAA got me a super Super awesome tow company that was able to give me a ride with them to the dealership near my parents that was almost 3 hours away from the gas station that my car wouldn't turn back on at. Super awesome guys.

Now if you just say that you found info on it on a website no one is going to take you seriously. That is why you have to specify VoltTech and the Warranty Manuel that is on GM's site.

 The site I found that told me about the VoltTech part was https://www.gm-volt.com/threads/2017-battery-energy-control-module-replacement-becm.328801/page-3

The problem I (and a ton of others) had was "shift to park" error.

There is a forced restart that I did by accident when my car wouldn't start the day before my trip. something like holding the power button on for 10-20 seconds and then leaving the door open for 60 seconds. I did this while freaking out in my driveway at home. This is a full shutdown of the car because the "shift to park" error doesn't let you shut your car off all the way.

So! fortunately because I freaked out the day before I was completely calm when I had the same problem at the gas station and I was totally not shocked when the earlier solution didn't work.

I do think my calm and relaxed attitude threw the tow guys for a loop. But they were super awesome.

Can you afford your job?

An odd title, but an important question that I never thought much about.

So way, way back in 2011 I wrote about debt & controlling mothers... By the end of that summer we got into another argument and this time she said "fine! then you can do it!". I haven't grabbed anything so fast in my life. ((Small recap, my mom wanted to be, and was in total control of my finances because blah blah blah and I was lazy & trying to do too much at once.))

After all was said and done I know have savings. Mostly because I finished paying off my card. I would have more if I have done my credit card balance transfer a hell of a lot sooner.

I transferred two credit card balances into one credit card bill. I had two bills that my mom had insisted on paying more then the min on. $275 each was what she had been doing before I got control of it. After? I'm paying $200 because that is the amount that works and is slightly over my minimum.

Unfortunately I chose to do a little math and looked into what was the minimum I would have to make per hour if I wanted to get a new job. I'm using really bad math but it makes for a nice cushion when planning.

Example:
$11 hr x 40 hr = $440 x 52 wk = $22,880 - 40% = $13,738

I played with my pay check and found that 40% was pretty close to representing taxes and health and 401k crap.  I should have just gone with 50% and made my life a tad easier.

My old job? didn't pay anywhere near that. In fact, my bills were $3,000 over what I was making. Not counting the trips my mom encouraged me to go on and starting a jewelry thing. All the while saying I could afford it.

I was very lucky that I am so boring or it could have been much, much worse.

From a financial point, this was a very bad situation. Emotionally? Nah, I'm good. Yes we argue and such but it's a 'normal' thing. She has stopped asking if I want her help because I was mean and laughed evil.

Personaly I would be much better off if I could move out. But that is slowly in the works (p.s. the first time home buyers club is evil) but I don't know if I can scrounge up the closing costs. Closing costs are the devil.

Finished My Taxes and I Have Another Plan

I just finished my taxes and am very happy. I always make one urchase with my tax money to treat myself. I got a new camera one year and a laptop another. But when I do this I make sure I have most of my tax return left over and use that to pay bills.

This year I'm going to put the rest away in a savings account.

This is a bit of a change for me and I know I will be tempted to use it. But if I don't I will have a nice little nest egg for when I try and find a job in New York City. I can envision my readers going 'ah-ha!' as my insanity makes a little bit of sense. Please alow me to help it make more sense.

If I put this money aside I will have almost half of what I will need. That will shorten my wait time between finishing college and moving to NYC greatly. At the same time i will have finished paying for my car and will hopefully still have a grace period before I have to start paying my school loan back.

I do not know how having a student loan and financial assistance will effect my taxes. This is something I will have to wait until next year to find out. I have a few more things I need to do to see if I can transfer to a better college. If done soon enough I would start in May of this year. I need to check to see how that is going later this week.

Should you get a P.O. Box in another city for a New Job

During my search to try and find a new job in another city I thought about getting a P.O. Box.

The main reason I did Not get one was that seeing P.O. Box on your resume, to me, seems like a red flag. It makes it seem like you do not live in that city or that you move frequently. Or the company might not give it a second thought.

If you do get asked as to why you have a P.O. Box make sure you have an answer ready. If they ask you about the P.O. Box address they might ask where you are currently living. Do not make up an outrageous lie, they will be able to tell. If anything tell them that it is a temporary thing. They might not press beyond that but be prepared if they do.

Personally, if you are not living with in 2hrs of the city you are trying to get a job in or unless you were going to be living there in 1-2 months, I wouldn't bother. Most companies want to know what your plans are and when you will be in the city. They will not pay for your travel costs to interview with them and plane tickets add up fast. a P.O. Box would just be adding to the cost of your search

If you will be in your new city in 1-2 months put that on your cover letter. If you are planing to go there prior to look at apartments or houses add that you would be available on such and such days. It is much easier to re-schedule with your Realtor agent then a potential job.


Again, mention these  things in your cover letter. Have questions & answers ready for any and all phone interviews. It's the little things that can make your search just that much less stressful.

A Battle of Cover Letters

Which I will be sending out tonight. I should have sent some out last night but I didn't want to stay up late. I was also chased out of the kitchen by the latest Indiana Jones movie. And the last thing I want to do is try and drive to my current job in the snow on a small amount of sleep.

But this time there seem to be more openings nearer to me. Which is good because if I can get a closer job I will save on gas. Which will let me save up and pay other small bills.

I am probably jinxing myself now but I found the perfect job in New York City for myself. This is the one I should have applied to last night. I am not going to bed tonight until I do. It will require a completely different kind of cover letter then I am used to writing because I think I have figured out what I did wrong.

What I didn't put in my letter was why I was trying to move.

It seems like a small non-essential detail but it actually says quite a bit. It lets the company know that I do have an immediate place to stay and that there is a plan to get there. It also implies that this isn't a frivolous job search but a serious hunt. As well as availiblity to travle out there for interviews.

On the down side if not written right it will sound like I'm desperate and trying a sob story.

The second idea I had was to apply with a hiring agency that was in the city. The bad said is most of the jobs they can offer would be temp to hire. I'm more then terrified of that kind of position.

So tonight I wrack my brain and try not to worry too much that I sound stupid.

Continuing The Search

So, last week I had what I thought was a good interview.

However he did all the talking. and I do mean all. I did learn everything about the job. but I wasn't able to sell myself. I managed to mention a few things and that I would love to be able to work there. It was the perfect setup for me. I would have thrived there.

He said he would be contacting 2-3 people this week and possibly doing a second interview. I thought that since he told me this that I was in the running. Apparently I'm not one of them. I wish he had not said that so I wouldn't keep hoping and waiting for a call back.

The included apartment would have been awesome.

Saving Money

Back to the saving money bit.

If, like me, you are looking into getting a job in another city/state you will need at least $10,000 - $15,000. Why? Because some leasing companies will not rent to you unless you have that much saved up. They want to make sure that should you loose your job that you will be able to pay them. It also shows that you can pay them.

Makes sense? I didn't think so.

To them you are an investment. If they have to evict you that will cost them a good deal of money and they do not like loosing money. (I heard locally there is about 3 months of non-payment prior to eviction.) So they want to make sure that they won't have to evict you. They will possibly also run a credit check and background check. So don't be surprise if they present you with these forms.

If in 6 years I end up getting a better job locally(fat chance but a possibility) I might use my saved money for a down payment on a house. The housing market here is not all that good right now. But in a few years? who knows. It's a possibility I have to keep in mind.

High Cost of Living

So, I mentioned my last post to my mom & aunt over the weekend and they thought that $2,000 was far too much for a studio. They then commandeered my laptop and proceeded to show me what they were talking about. There was in fact a studio apartment for $1,250. They also said I would need about $500 for food because they insist that I would be eating out a lot. I was about to tell them 'maybe after I found friends' when they said my cousins would probably kidnap me all the time.

But! I can't really trust their numbers because not only are they, my mom and aunt, not living in the city right now. But they also are basing spending money on my sis and cousin. both of which have very active social lives. It crazy just how many people my sister knows.

Regardless I still need to save up $10,000 - $15,000 before I can consider moving. :-(

Apartments in New York City

Every once in a while I will poke around to look at floor plans for New York City apartments. It's like an addiction. Fortunately it's an addiction I don't have to pay for yet.

Tribeca Green  My favorite so far.

The Brodskyorg Organization This one seems to have a lot to choose from.
The Avalon Communities Interesting floor plans.

Yeah, I dream big. And yes these are primarily managed apartments

What to do?

While looking at placement adds for New York City (the main city I would like to live in) it occored to me that I would have to pay rent while I'm out there. I thought 'ok, no big deal. How much could it be?' so I wasn't all that worried. I know people out there and they have said they would put me up for a month or so.

So I did a little math.

A studio, just you, in a decent area would run about $2000 a month.
Assume:
$200 for food
$300 utilities + cable + cell/blackberry
$350 current car payment
$350 parking garage
$100 car insurance
$100 fun money
$90 gas

That's $3,190 a Month or $38,280 a Year. So I would have to make at least $40k a year after taxes to survive and have something saved up incase of an emergancy. Even knowing my numbers are higher because I'm not sure what the utilities would be, this is still a good punch to the gut.

Rehashing the numbers I took out the parking ($34,080yr). Then the cars payments ($29,880yr). This is assuming that I can park on the street and don't have to get my car  Which gave me a much better number. Until I looked at the average pay for someone like me ($20,000 - $45,000yr).

As of right now I don't have very much saved up. I defiantly do not have enough to attempt to move to the city. Maybe if my family put me up for half a year I could make ends meet but do not want to do that to them. To successful I think I would need at least $10,000 - $15,000 in the bank. Unfortunatly right now there is no way I can save up that kind of money at my current job and with my car payments. My job is the harder part to fix, no one is hiring right now for my job position. My car payments will be done in three years, so that's right out.

Right now, assuming I stay at my current job, it will probably take 6 years to save up what I need. That is a long time and I will be 34 years old. This is not a happy thought. Perhaps if I skip out on family trips I could shave a year off that total... maybe if I got a second job I could save more faster. I'll have to look into it more.