Labor Day Matters

Gentle Readers,

Today is the Labor Day holiday in the United States. This is the first time since I finished graduate school that I have it as a paid holiday. I am a contingent worker and have very few actually enforceable labor rights even though I am a professional worker. The only reason I am being paid for this holiday now is because I am working on a project for the Federal Government. This gig is still contingent, and, when their systems are malfunctioning, I am denied the ability to work a full forty hours. I can and will be let go with an hour’s notice once the project ends. There will be no warning and no severance.

Labor Day was created at the end of the 19th Century as a “yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.” via Department of Labor.

The History of the US Labor Movement in Brief

The history of labor relations between the owners and the workers has been violent and contentious in the US. Many people were killed for demanding an 8 hour day, safe working conditions, the end of child-labor, Social Security, Medicare, and sufficient time off. The State very often sided with the owners of capital. Over the bodies of workers.

In 1911, we saw the deadliest industrial accident in US history at the Triangle Shirtwaist Factory. The death toll was so high because the doors had been blocked to prevent workers from taking unscheduled breaks. Labor leaders Francis Perkins saw some of the workers jump to their deaths from the high windows. It lived with her for the rest of her life. She began working even harder to improve factory conditions. Her labor work led her to meeting and impressing Governor Franklin D. Roosevelt.  He later appointed her as the very first Secretary of Labor. They worked together to create The New Deal. Perkins was pragmatic in all things and her story matters greatly to the history of our country. Leaders today would do well to learn about her style and ability to compromise.

Many of the advances in corporate bottom-lines are due to automation and more efficient workers, due in part to technological advances. The gains are not trickling-down to the laborers. The C-Suite has grown in size and earning capacity. When Reagan broke the unions in the 1980s, he made it possible for owners to succeed at the very expense of laborers. This is the fulcrum for the decline of the middle-class in many sections of our country. The good union jobs went away or the factory closed and the workers have not been able to adapt to the new labor market. Whole regions have experienced brain-drain as the young flee after college to find a sustainable employment environment.

Right now, there is a moment across the US for a $15 hour minimum-wage. Some companies (Walmart) and cities are making changes on their own to try and forego new regulations. In many cities, it is impossible for a person making minimum wage to afford even a 1 bedroom apartment while working full-time. It is unsustainable.

Direct actions and protests like the Occupy Wall Street, Fight for Fifteen, and anti-WTO groups will continue. Fights at the Supreme Court regarding the Family and Medical Leave Act and employer-based health coverage will continue.

As for me, I’m grateful for people who fought to allow women to work, who sought non-discrimination protections for LGBTQIA people, and who gave me a cause of action if my employer is risking my life. There’s still a ways to go, but thank you.

How are you spending your Labor Days?

 

Preparing to Buy a Place – 1 Year Out

Gentle Readers,

In April 2016  – I made the decision to get my financial house in order, because it is time for them to become my erstwhile roommates. This is the true reason I started this blog. I know that I work best under “pressure,” which is where putting my financial mess out in public comes in. This is a space for me to learn and grow.

I know a few things. I need great credit so that I can get a favorable rate on my mortgage and I need a down payment.

My Fico Score was 732 when I made this decision. This is essentially what it was before I opened my business two years ago.  It was great, but not excellent. By most reckonings, the bottom end of excellent is 750. I was close. That 18 point difference will make a difference on the APR I’m offered on my mortgage, and thus on the amount of interest I will pay over the life of my loan.

Once I made this decision I began making calculations.  How long to pay off my CC debt.  How long to save up a deposit. How to get my credit score up.

I’m on track to pay off my credit card debt by October or November, barring new expenses. I have an upcoming dentist visit and I think it will be time for adult braces due to some bad changes in my mouth. Expensive. I’ll see if they have a payment plan.

I’m glad to report that my credit score is now 787 as of May. HAPPY DANCE!

I did this by paying off two of my three credit cards. I took out a loan through earnest to do this.  I learned that the right type of credit (the earnest loan) looks more like a mini-mortgage and makes me look more responsible. I also kept the amount of credit utilized on the other card low because I learned that having less than 30% of your available credit utilized makes a difference in your credit score. This is why I did not close those cards, but continue to use them for tiny purchases each month. 

I did all this in April. More than 6 months before I would approach a lender to see what I could get pre-approved for.  It worked. All of this concentrated effort paid off. I’m firmly in the excellent credit category and can keep improving.

I also put more of my expenses on auto-debit so that I won’t accidentally miss them.

I learned that a mortgage should not be more than 2.5 times your annual salary. I had never heard this rule, but it makes sense to me. Helps me to plan. Thanks to Freedom is Groovy for linking here to Fritz Gilbert’s Retirement Manifesto, which is available here.

I do not consider the place I live to be an investment since I need to live somewhere. I do not want to tie up too much of my capital in my mortgage and other housing costs. That means I’m looking to pay little. I don’t want to live in a dump, but I don’t want something incredibly nice.

Things I need to learn:

  • What the heck is a basis point?
  • Will I even be able to get a mortgage without a cosigner since I have years of contingency work?
  • FHA loan rules.
  • HOA rules.
  • The differences between condos and coops.
  • If I want a coop, learn about the coop mortgage rules.
  • How much of an emergency fund will make me feel secure?

Things I need to do:

  • Pay off the rest of my credit card debt.
  • Get into no more credit card debt
  • Save a down payment.
  • Save enough money to actually move.
  • Prepare my financial documents so I’m ready to talk to a lender.
  • Find a realtor I respect
  • Decide what I want versus what I need in a home.
  • Monitor the local market.
  • Buy a home.
  • Take advantage of my access to a garage to paint and/or build the furniture I want for the new space.
  • Move.
  • Unpack.
  • Not share my shower with people I’m not in love with.

How did you prepare when you wanted to buy a home? Am I missing anything?

 

 

 

Checking in on a Delicious Venture – Perks of Being a Silent Partner

Gentle Readers,

I have one investment that I do not include in my list of assets or liabilities, because I don’t know precisely how to in a way that makes sense for me, yet.

I invested in a friend’s small business last summer. I am one of under 30 shareholders. I am a silent partner. This sounds terribly foreign to me, even a year later. In part, because I am an out of state investor. I invested on the strength of his paperwork and photos and his pitch.

My friend created a food business that I understand and believe he can succeed in. I finally got to check in on that business in person as part of my vacation trip today.

(when did this become my life? It sounds terribly mature)

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(checking out the kitchen and the sous vide)

It tastes incredible.  Seriously, my mouth is really glad I had to check out my investment. I now understand why all of his customers are spreading the word.

I do not know if my share will make a financial return. I believe it will, based on projections. He is attracting clients rapidly. I suspect that he’ll need to do another capital infusion in the next 12-18 months, unless there is a recession, because he will need to expand to keep up with the demand. It’s a good problem to have.

I also believe that investing in my friend gave him more than money. This business is great for him and for his relationship to his career. He was floundering after leaving his former profession, and came up with an incredible idea that he was capable of executing. He just needed capital. The change in him has been incredible to see.

Even if I end up writing off this investment, my money is worth what it can do to make the world better. One person at a time.

Have you invested as a silent partner?