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?

What’s a Basis Point and How Will It Impact My Mortgage?

Gentle Readers,

You’ll recall that I want to buy a small place of my own, but that I have a lot of learning to do in the meantime. I understand how mortgages work in general, but a term I didn’t fully understand is Basis Point.

Mortgages are simple.

They are loans that are supported by collateral, ie the building you live in. You don’t make the proper payments, and your home can be returned to the mortgage lender. Your right to “your” home is conditional while there is a mortgage outstanding. Not a good look for you since you would prefer to remain living in the home. The lender makes money off of the loan itself through origination fees and interest payments. The lower the mortgage rate, the lower the cost of the loan for you. There are other parts of the mortgage, ie taxes and insurance, but I’m not going to write about those today.

There are a range of available down payments that are based on percentages of the total house and land value. It used to be standard for a buyer to pay in cash 20% of the value of the home. That standard is less likely these days. Some down payments are 3.5% of the home’s value or lower. I hope to do a 10% down payment for a home that is less than $170,000. My down payment would be $17,000 plus or minus some fees and my mortgage would be for $153,000. When I look at Bankrate’s Mortgage Calculator for those terms with today’s interest rates (3.39%), I would expect to pay $677.68 monthly for 360 months. Roughly equivalent to my current rent, which is why it is the top end of what I’d like to pay. I would actually prefer to pay much less.

Most lenders and buyers will agree to a 15 or 30 year term. That means, if you pay the stated amount every month for 30 years, the mortgage and associated payments will be completely paid off. You’ll actually own the home and not have the risk of a foreclosure from the lender. You will have satisfied the condition of the loan.

The interest rate on your mortgage determines how much you will pay in the long run. A higher interest rate means that the cost of borrowing that money will be greater for you. People with less than stellar credit are penalized by these higher interest rates, because lenders consider them less likely to fulfill their payment obligations. This means you have some control over how much you pay for your house. If you increase your credit score, you will look like less of a risk to lenders.  The less-risky version of you will have a lower interest rate and pay less.

All of that makes sense to me.

Basis Points are strange to me.

I know they exist, but I don’t understand what they have to do with my life. When I googled Basis Point, I got the following result:

“In addition to the interest rate, the lender could also charge you points and additional loan costs. Each point is one percent of the financed amount and is financed along with the principal.”

And also this definition:

“A basis point is a unit of measure used in finance to describe the percentage change  in the value or rate of a financial instrument . One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form. In most cases, it refers to changes in interest rates and bond yields.”

Why are mortgages stated this way? Why have an interest rate of 3.375% plus the ability to buy basis points? Why not just state the entire interest rate in one blow? It seems unnecessarily complicated to me.

One example I found explains that a way average consumers encounter basis points is during the lock-in period for a mortgage with your loan officer. She guarantees a certain rate at closing, which will be sometime in the near future, but not today. You are charged 50 basis points to lock in the rate. That is you are charged one-half of 1 percent of your mortgage loan balance to guarantee the interest rate you agreed upon. To me, it looks like an interest rate of 3.50% with fifty basis points ends up being a interest rate of 4.0.%. Am I wrong?

It also looks like a basis point can be known as a discount point. A discount point is a way to pay for a lower interest rate. I don’t really understand how this is different from a higher down payment, even with the following explanation.

“Discount points are a form of prepaid interest by which you pay the bank an upfront fee in exchange for it lowering the rate. The amount you can cut your loan’s rate will vary depending on how many points you pay and on how your bank underwrites it, but assuming that paying one point, or 1 percent of the loan’s balance, will lower the rate by 25 basis points.”

What do you wish you understood about basis points before securing your first mortgage? Is my understanding, or lack of understanding, off?

 

Why I Started My Own Small Business

Gentle Readers,

There are many reasons I decided to start my own small business two years ago. These reasons are still compelling to me even though I have been working full-time on top of my business, and started the business in a niche I did not yet fully understand. I am a queer woman and the professional world wanted to wipe that off of me.

Like many young professional women, I don’t necessarily fit in many work settings. I have worked for small businesses, fast food, county government, local nonprofits, national nonprofits, retail, and a variety of temping opportunities, first as an admin and now as a professional. I fit in maybe one of those work environments, and that organization no longer exists.

A little over two years ago, the female editor in chief of the NY Times was fired for daring to ask why she was being paid less than the male editor who occupied the role before you. Fired for asking why.

Work environments were not designed with women in mind because sexism said they didn’t have to be.

Most women I know contort themselves to fit in to work environments. We ignore the subtle and not-so-subtle sexism. We ignore clients hitting on us when we are not free to leave their vicinity. We ignore that desks are built with the average-sized man in mind, and are not comfortable for our bodies. We beg to have office buildings not burn us in winter and freeze us in summer since we are more likely dressed for the actual weather and not insistent (conditioned into) on wearing a three-piece suit regardless of the appropriateness to the season.

We read the articles telling us that we are considered harsh if we act confidently. We read the articles that bemoan our poor negotiating skills right next to the articles that say we are not appropriately ladylike when we negotiate well.

We are chided for our very voices with new concepts like vocal fry and commanded to talk in masculine normative methods of expression. EVEN when it is proven that women’s general style is more collaborative and more effective.

We contort ourselves. Many of us have extra things to contort. Our colleagues ask about boyfriends we aren’t interested in having. Our preferred styles of dressing can be read as unprofessional on a body read as femme, but would be fine on a body read as masculine. Our bodies themselves are not read as belonging in public due to disability. Our relationship styles may not value marriage or monogamy the way the government and dominant culture would prefer.

We can contort all of these things and still not succeed. We can still be fired for daring to simply ask about our pay rate.

I opened my own small business to avoid these controls on my personality and dress-code.

Two years ago, I was fed up with my gig-centered work-life and my inability to get hired for a career-based job in my profession. I had applied for so many things. I had contorted. I was not getting what I wanted.

So I decided to create it.

I am creating a space that focuses on a niche in my profession and allows me to serve my community through it. I am creating a space where I own the keys to the door, and set the dress code. I am still a professional, but my fantastic dyke hair is fine with my supervisor as she is me. She still makes me wear the pearls when it is required, but she never tells me to grow my hair out. She never requires me to wear heals. She never tells me to dress like a lady. She knows that I am a human and that being a good human is the true goal.

I am creating a space where I do not have to say yes to potential clients that I find distasteful to work with. I can focus on serving the LGBT community. I can serve my community competently, because I know from personal experience some of what they are facing and I know where to research the specific problems that impact us.

I am creating an environment where I do not have to punch in. Eventually, I will not have to be there to “get my 40,” but rather must get the work done in a timely manner for my clients. I work better after 10 am, and can set most appointments after that. I adapt my work life to me. Should I decide to have a family in the future, I can schedule my life and career together far more easily. I am creating this because I am dissatisfied with the work environments available to me.

I don’t want to just show up. I want my work to reflect my values. I am creating that work.

What made you start your own business?