Net Worth Week 64 – She’s Here Edition!

Gentle Readers,
My room is not yet perfectly organized. (Hint, it never will be.) But I have reduced the amount of stuff through donations, give-aways, and trash where appropriate.  I got it done just in time for my girlfriend to arrive.
My niece is also visiting, but some tomfoolery has prevented me from seeing her until her last day here.
It is still unclear how long my job will last. We had 2.5 days of sitting waiting for work before we were put back on tasks that don’t need to be done. My resume is as current as possible.
It has been an expensive few weeks. This has corresponded with OT being curtailed due to weekend server upgrades. I thought I’d be done with my credit cards before the end of June. I was mistaken.
Thankfully, one of the expenses is for my tutor who I will be starting with very soon. July is going to be an intensely focused month on skill-building. Hopefully, when August roles around, I will find a job in that skill. There was a posting for a similar gig this week, but it is bad form to leave a gig early and I’m not quite prepared.
 It’s time to head out the door for breakfast. I hope y’all have wonderful Fourth of July Weekends!

This week’s net worth numbers

6/23/2017 6/30/2017
 Joy 1107 1107
 Travel 1  1
 Down Payment 19 19
 Retirement 21 21
 Health 45 45
 Moving 285 285
 EF 11 11
Business 1004 1004
Life 1116  1439
 IRA  13106  13134
 Brokerage 709  704
 Rewards Card 2 -2291 -2902
 CC (largest) 0  0
 CC (longest) 0  0
 Rewards Card (98) CR  0
SL 1 -105011 -105090
 SL 2 -46266 -46306
 Earnest -4455 -4465
 Net Worth -140500 -140992
 Percentage Change .19% -.35%

Do you have plans for Independence Day?

Fannie Mae Easing DTI Standards Impacts Your Ability To Get a Mortgage

Gentle Readers,
Remember when I learned that FHA guidance would make it much harder for me to get a mortgage any time soon? Things are changing, potentially.
Fannie Mae is changing their debt-to-income (DTI) formula. This will allow some folks to qualify for a mortgage who could not under the old standards.  The old DTI maximum was 45%, but at the end of July, it will be 50%.

What is the DTI Formula?

The DTI is simple to calculate. All of your debts go on the left of the colon and your income goes on the right. Then divide your debt by your income and multiple by 100.  That is your DTI percentage.
  • If I make $4000 a month, and have debt obligations of $2000, I have a DTI of 50% and am just barely eligible.  2000:4000  (2000/4000)100=50%
  • If I make $4000 a month, and have debt obligations of $1800, I have a DTI of 45% and am eligible.  (1800/4000)100=45%
This applicable DTI seems to be for Fannie Mae mortgages and not Freddie Mac or Federal Housing Administration mortgages. Their standards may or may not change to fall in line.

What does this DTI standard mean for me?

I’m not sure that this is a good move. The more debt you have relative to your income, the harder it is to pay for everything you need. This is true even without emergencies cropping up. Perhaps if the rent in your market is outrageous in comparison to your potential mortgage + insurance + maintenance, then this could be a boon for you.

 

This change still seems risky. Everything in the US market seems frothy right now. Real estate and other investment prices do not seem to correspond to the underlying asset values in a lot of markets. It does not seem like now should be the time for loosening our standards. Just because you can receive a mortgage, that does not mean it is financially responsible.

 

The next thing I need to research on my quest to own a condo is the Fannie Mae Homepath program.

 

What do you think of the new DTI requirement? Good for the market or for individuals? 

Planning For a Graduate’s Future – Redux

Gentle Readers,

It is graduation season again, and another family member is finishing high school. This time the plan is to stay in the family home until college starts. I like to not play favorites with siblings, so I am getting her almost the exact same set of books that I got him last year. One small deviation to account for the differences in their characters.

I decided to stick with the perennial favorite, “The Millionaire Next Door.” She plans on a high-paying career, but I think the stealth wealth envisioned here could help her stay on course no matter what happens.

Her personality is very different from her brother and I think she’ll be best served by the framework in “The Money Book for the Young, Fabulous & Broke.” That will be on top of her present-stack.

I don’t think she would even read the one I was least sure of for her brother, so I did not buy her it. I don’t want to waste her bookshelf space. She plans on being pre-med. That shelf-space is precious.

She believes in deep thought, supposedly, and I got her the esoteric one, too, “Early Retirement Extreme.” I suspect she won’t touch this either.

The deviation for her was “Truth & Beauty: A Friendship.” I loved this biography and think that many women with deep but fraught friendships could benefit from seeing one displayed in all of its gory richness. Patchett is one of my favorite living authors and this was helpful and painful to read during a particular time in my life. I think this family member may understand my twenties better from reading this. Perhaps not. I hope that she navigates relationships in a far healthier way.

Unlike her brother, I think traditional education is the current best route for her. I think she will flourish in college in a way her brother never would. Maybe I’ll buy a textbook for her? Or leave that to her parents…

What do wish you had read at 18?

Net Worth Week 52 – Year One Done

Gentle Readers,
One year of tracking my net worth is officially complete!
I’ve learned a lot by focusing so intently and have had some improvements while also having some setbacks. Those setbacks would have been worse if I hadn’t been focusing so hard.
At this point last year, my business was not going as well and I was about to spend a lot of my personal money keeping it afloat. I was also in a lot of pain, but had not yet figured out how to navigate the health system to get the care I needed. My girlfriend lived in my town, but in a very high stress, high hour job. I had begun learning a new skill, but was still very much a novice.
This year, I’m in a slightly better financial situation. My business is doing better and I understand better how to make it work. My pain is diminished and I am physically stronger. My girlfriend lives over 1000 miles away, and this chapter in our relationship has already taught us a lot. My skill-building is reaching exponential-growth levels and it is encouraging. My heart is also in a much calmer position. I’ve become more centered in a few ways even as the world around me, and portions of my life, are more uncertain.
This week has had some financial setbacks. After a few days with the mattress my roommate “gifted” me, my body has concluded it needs to be replaced along with the frame that is not structurally sound. I’m not thrilled with this, but I think my body can hold off a while. I ordered the frame my brother recommended and will use that once it comes in. I was worried for 24 hours that I would have to replace my phone after it took a trip into water. Thankfully, it is back in working order for now and I can wait to replace it.
I still find this weekly exercise useful and think I’ll keep it up for the time-being. One more year ought to get me into a better place.

This week’s net worth numbers

4/15/2016 4/7/2017
 Joy 1097 1105
 Travel 322 1
 Down Payment 18 19
 Retirement 21 21
 Health 45 45
 Moving 31 285
 EF 9 11
Business 1 1002
Life 907  639
 IRA  7026  12736
 Brokerage 221  689
 Rewards Card 2 n/a -585
 CC (largest) 0  -3264
 CC (longest) 0  0
 Rewards Card -3000 -1331
SL 1 -101892 -104519
 SL 2 -45001 -46041
 Earnest -10036 -5274
 Net Worth -150230 -144460
 Percentage Change 3.84%

Have you grown this year?

Net Worth Week 39

12/23/16 12/30/16 1/6/17
Joy 1102 1102 1103
Travel 324 324 324
Down Payment 19 19 19
Retirement 21 21 21
Health 45 45 45
Moving 284 284 284
EF 309 309 310
Business 1 501 501
Bed 0.29 0.29 0.29
Life 1912 1889  1422
IRA 10718 10879  11055
Brokerage 661 658  669
CC (largest) -4256 -4251  -4210
CC (longest) 0 0 0
Rewards Card -1274 -1534  -1406
SL 1 -103565 -103680  -103795
SL 2 -45606 -45659  -45711
Earnest -6942 -6956  -6507
Net Worth -146246 -146o49  -145876
Percentage Change .16% .13% .12%

Have you ever fired a client over ethics?

Net Worth Week 36 – Blustery Edition

12/2/16 12/9/16 12/16/16
Joy 1102 1102 1102
Travel 324 324 324
Down Payment 19 19 19
Retirement 21 21 21
Health 45 45 45
Moving 284 284 284
EF 309 309 309
Business 1 1 1
Bed 0.29 0.29 0.29
Life 2617 445  636
IRA 10124 10988  10883
Brokerage 399 664  661
CC (largest) -4341 -4341  -4341
CC (longest) -98 0 0
Rewards Card -1683 -988  -510
SL 1 -103477 -103334  -103449
SL 2 -45566 -45501  -45553
Earnest -7364 -6915  -6927
Net Worth -147283 -146880  -146494
Percentage Change .29% .27% .26%

How are you staying warm if winter has come to your neck of the woods?

Yakezie Challenge Update – Under 200,000!

Gentle Readers,

I completed the Yakezie Challenge!!!

I listened to the free advice from Sam and have succeeded in exactly the way he promised. My original post was one day over six months ago.

A refresher on joining the Yakezie Challenge :

1) Install the Alexa toolbar if not already and comment what your current Alexa ranking is.

2) Write consistently 2-4 times a week on your own site and consider guest posting around the community including on Yakezie.com to raise your profile. (I was consistently twice a week at first, and lately I have done 1 post a week)

3) Install the Yakezie Challenger Badge.

4) Announce on your blog that you have joined the Yakezie Challenge.

5) Selflessly promote others and build relationships. (Still good for all of life)

6) Stay committed and consistent over the next 6 months!

7) Introduce yourself on the Yakezie Challengers Forum and get to know your fellow Challengers and Members. (I’m not clear if this is still being updated and never added myself.)

8) After you’ve completed the 6-month challenge, let everyone know how it worked for you. If you’ve done it as intended, you could be invited to become an official Yakezie member.

As of  June 6, 2016, my Alexa ranking was 14,000,562 internationally and 1,489,921 nationally.

As of December 7, my Alexa ranking was 684,605 internationally and remarkably 180,247 in the US.  ZJ Thorne is officially under 200,000 and I did not fully follow all of the steps in the end. Imagine where I would be had I been able to make the full commitment!

Have you listened to the blogging giants and seen success?

 

 

Net Worth Week 25 – Mentor Edition

9/16/16 9/23/16 9/23/16
Joy 1100 1100 1100
Travel 323 323 323
Down Payment 19 19 19
Retirement 21 21 21
Health 45 45 45
Moving 283 283 283
EF 1004 1004 1004
Business 1 1 1
Bed 0.29 0.29 0.29
Life 871 1732  1596
IRA 9854 10079  10033
Brokerage 395 402  400
CC (largest) -4699 -4693  -4660
CC (longest) 0 0 0
Rewards Card 0 0  -701
SL 1 -102726 -102858  -102957
SL 2 -45223 -45283  -45328
Earnest -8126 -8143  -8160
Net Worth -146867 -145967  -146981
Percentage Change -.22% .60%  -.69%

Any recommendations for paying your employment and quarterly taxes as an LLC?

The Downsides of Co-ops

Gentle Readers,

While I am nowhere near ready to begin my home-search in earnest, since my current net worth has been hovering around the -$146,500 mark for the summer, I did check out my first open-house this weekend. It’s a cooperative I’ve been watching on Zillow and I had the time for a small trek.

I walked the 20 minutes from my current home, which also gave me another look at the neighborhood I’m considering. Before I was in such pain, I used to be a marathon runner and would run through that neighborhood as part of my training. Walking a neighborhood is very different from running in a neighborhood. As a woman in a city, I expect street harassment in both scenarios, but it is different when you are in running clothes. During that time of day, the walk felt safe. Good perk to feel first hand.

The building was a little more run-down than the photos showed. That was not a surprise. It’s also a bit off the beaten path, which is why it is going for $135,000 for all of its 700 square feet. I live in a group house now and could not really visualize what 700 SF meant and this was a good learning opportunity. It’s a lot of space for one person, but not overwhelming. I am hoping to buy something around that size, because I want the opportunity to live with someone comfortably if that is a possibility in the future. I definitely don’t want a studio, because I want the ability to host people without us all looking at one another’s pajamas.

The layout was a little strange. The kitchen is a good size, but it is currently situated so that you cannot fully open the oven or fridge because they face one another. This seems to be an issue of old outlets, but the room to move the oven over is available. There’ll be a whole in the cabinetry, but you could work with it. Overall, the place was cute and had nice windows and a bathroom of one’s own plus some good closet space.

Not bad as an incentive to keep me working toward my home-buying goal.

What distinguishes a co-op different from a condo?

Co-ops are different from condominiums in very important ways. With a condo, you are buying the unit you live in. With a co-op, you are buying a share of the building’s corporation. This is a huge difference with enormous impacts on you for as long as you own. The corporation/board has a lot of power. You do not.

Co-ops almost always require higher down payments and have higher monthly fees. I cannot find a co-op in my city that requires less than a 10% down payment. FHA loans are a no-go here, which would make it hard on first-time home-buyers.  Co-op and condo buildings both prefer to have relatively high owner-occupancy, which prevents owners from renting their homes out easily or at all. Co-op boards have the power to block potential buyers, which means closing on a co-op is hard when you are buying in and when you are trying to sell. It’s a lot of hassle that could keep you paying on a space you do not want anymore.

Co-ops often have high association fees. Partially, this is because the co-op fee may cover an underlying mortgage on the building and property taxes on top of maintenance and utility costs. The share you live in may sell for lower than a similarly sized condo, but the co-op fee can more than offset that. In some buildings, the fees include all utilities up to wi-fi. It may be a wash. You must look at the bylaws closely.

You also have the problem of finding a real estate agent and mortgage broker who knows what co-ops mean for buyers. At the place I checked out near me on Saturday the agent could not answer any of my questions. She eventually told me that she does not normally do co-ops, and it showed.  A big problem in some cities is the dearth of banks that offer co-op mortgages. Shopping around rates will be hard.

There is one major perk for those of us who would like the safety of stealth-wealth. Co-ops offer privacy. You own a share in a corporation, which does not include a public record of ownership. You can hide your address to people not in the building. This is helpful for folks fleeing abuse or famous people who’d like to be left alone.

The more I learn about co-ops, the less I want them. They feel less free than I’d like in my major purchase, but I am intrigued by the privacy option.

Would you consider a co-op over a condo?

 

Net Worth Week 18 – IRA Milestone Edition

My IRA made it to the $10,000 mark for the first time this week! My net worth is slightly more negative than last week due to a plane ticket purchase, but important growth is happening. It definitely makes me feel good. I am supposed to be mentally preparing for a big correction, which I do think will happen, that will drastically change the current value of my portfolio. However, these little victories feel like a balm nevertheless. I’ll take them.

My business included two client meetings and word of a potential client on the horizon. I hope it comes to fruition soon. There are really big expenses due at the end of the month, and I don’t want to pay from my own emergency fund.

My pain is still present, but it is altered. Reflexology and massage are helping a lot. The former is doing the most for my bones, and is cheaper than the latter. I’m still trying to get to maintenance mode and out of What the Devil Is Wrong mode, but this is looking up.

I still love Earnest and credit them with my ability to conquer some of this debt.

Date 7/22/16 7/29/2016 8/5/2016 8/12/2016
Joy 1099 1099 1100  1100
Travel 323 323 323  323
Down Payment  19 19 19 19
retirement  21 21 21 21
health  45 45 45 45
Moving  31 31 31 31
EF  2002 2002 2003 2003
Business  1 1 1 1
Bed  .29 0.29 0.29 0.29
Life  897 1796 1444 769
IRA  9908 9920 9984  10087
Brokerage  337 407 409  410
CC (largest)  -4791 -4791 -4791  -4791
CC (longest)  -529 -1095 -273  -295
Rewards Card  0 0 0  -273
SL 1  -102489  -102604 -102713 -102489
SL 2  -45115  -45168 -45217 -45115
Earnest  -8915 -8934 -8486 -8504
-$147156 -$146927 -$146099 -$146657
  -.32% change .15% change .56% change -.38% change

How are your retirements doing?