Finance

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BMW Z3 Damage

This weekend my wife and I were involved in an accident on the highway.

Cruising along with the top down in my ego-tag at highway speed yesterday morning, the car in front of us kicked a large truck tire re-tread into the air which struck the hood of our car.

Evidently swerving at high speed doesn’t quite work like it does in the movies. We spun around a few times across three lanes and ended up facing the wrong direction and tangled up in the three steel cord style of guardrail.

The great news, at first, having gone from 70 mph to zero in the span of less than two seconds, was that we were both okay. Not a scratch between us.

I have to credit BMW — the outcome should have been worse. In fact, I’d bet if we’d been in one of our other vehicles, it would have been worse.

Who’d have thought a convertible would be safe?

After the fact, the news got even better.

As we stood on the side of the highway watching a wrecker tug our car down from the tangled mess of guardrails and torn up asphalt and onto a flatbed it hit me: the last remaining relic of my time as a frivolous spender was gone.

And you know what? That felt good.

Sure, I’d just trashed a $50k car, that at one time meant so much to me, and one that I’d worked so hard to pay for — but since I started to control my spending, I’d realized that it was quite possibly my biggest financial mistake.

Even seconds before that tire tread was thrown into the air, the car was no longer the status symbol I’d originally thought it was, but more a symbol of personal embarrassment — a blatant sign of my former financial irresponsibility. As a result, in recent years, it rarely left the garage.

All in all, a good day in my financial quest.

On a side note, I feel I should give kudos to Drew Loethscher, Victor the tow truck driver, and the rest of the folks at Tolland Citgo in Connecticut. They towed the car and were very welcoming considering the situation. Definitely not the stereotypical gas station/towing company experience.

And so far so good on the Allstate front. I filed a claim online yesterday and a friendly claims rep called yesterday afternoon; though she apparently didn’t read anything that I had originally submitted.

Somehow, I think I’ll be explaining the situation at least 10 more times to them — though the police report could answer and verify everything I’ve already told them.

Here’s to hoping that everything works out on that end I won’t be added to the already long list of very dissatisfied Allstate auto insurance customers.

Original Roof and Siding - Summer 2006As the weather has finally begun to turn warm, it’s now time to start planning for phase 2 of our home improvement. Fun, fun…

This past December, we re-roofed the house utilizing a $12k loan (with a crappy 15.5% rate) from Bank of America. Thankfully, that should be paid off entirely later this month.

This summer, we plan to have vinyl siding put on, a few new doors, a new basement hatchway door, and some of the porches should likely be rebuilt from scratch.

Financing the work, though, has always been a problem due to an insurance issue we have.

Due to things like Hurricane Katrina, insurance companies aren’t willing to accept as much (or any) risk these days. Long before the hurricane, our carrier, the horrible Allstate, abruptly cancelled our policy because our home was over 100 years old. Nothing quite like carrying a new mortgage and having your home owners coverage lapse less than 3 months in. Thanks Allstate. Really appreciate it.

Anyway, while searching frantically for coverage, it became very apparent that it was going to be difficult to insure an older home. Amica, while they wouldn’t cover the home, was the most straight forward and for that, I’d recommend them to anyone.

They flat out said, “We won’t issue a policy for a home that old.” I asked about how they can even operate in the Northeast US since most of the homes here were built well before 1950, many before 1850. The response was that many of their customers in New England had been grandfathered in, but as homes sell, or homeowners look to change carriers, they could run into problems.

Seems, I was ‘dropped’ into this problem by Allstate.

Allstate Insurance Sucks.

Have I mentioned I’m not a fan of Allstate yet?  Long story short — I eventually ended up on a very expensive State plan. The don’t cover much of anything and they require that an inspector come through my home every few months. Each year, when it comes time to pay the premium, they get threatening — insisting that “problems” be corrected or they’ll drop coverage. It’s an empty threat though — this is the bottom of the barrel. The funniest part is that they essentially ask you to tear down your home and build a new one — oh, and keep paying their premium (400% higher than a ‘real’ insurance company) after that and things will be fine. But, you’ll still need to take a day off from work every few months to let an inspector come in and tell you that your basement takes on a little water after a big rain. Sigh…So, after having this hanging over our shoulders for a few years now, we’ve made it a goal to get the hell out of this situation. My parents say I should just sell the home and buy one of those poorly constructed contemporaries from the 1980’s. No thanks. We’re gonna make this place ‘look’ new. Updates to date:

  • We replaced an ancient oil burning furnace (seriously, it was a modified coal furnace) with a new natural gas one.
  • We updated our electrical service from 60amp (with those weird little screw in fuses) to 200amp service with a modern breaker box. We also had an outdoor meter installed so we wouldn’t need to let the electric company in anymore to check our usage.
  • We had an obsolete chimney removed. It was in poor shape and it wasn’t venting anything, so it was a problem waiting to happen.
  • We had the roof replaced. The roof actually had it’s original cedar shingles under a couple layers of the typical ones you see these days — resulting in a rather lumpy appearance. We did a complete tear off and installed plywood before having it re-shingled.

Adding siding and doors to that list will make the exterior look new. The non-cosmetic parts of the interior (furnace and wiring) will be new, and thankfully the plumbing is just fine as-is. That, in theory, should put the insurance issue, which has been a thorn in our side the last four years, to rest.

Yes, financially it cost us a fortune to make these upgrades — especially when it wasn’t really on “our” schedule… And the return (the future savings on our homeowners insurance) isn’t all that great. But now, with them soon to be out of the way (and paid for in full), we should be on a great track for the next decade or so. I can’t think of another large scale improvement left to be made. Cosmetic interior renovations will seem inexpensive after this. I hope.

So, later this month we’ll have the various contractors come in for estimates. We already have two in mind — both have recently done work on similar homes in the neighborhood and they both look great. It will be interesting to see how different their quotes are.

We’ll keep you posted.

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fin_2007may1.gif

I think I’m going to start doing an update twice per month…

I spend so much time looking over and keeping track of my finances, it’s hard to wait an entire month for status reports — especially when I feel as though I’m “this” close to ridding myself of the debt nightmare I dug myself into.

Exciting in a nerdy sort of way.

Not a great finish for the month of April…

Negligible gains in our savings and our checking account took a monster hit — though much of that is answerable to the sizable decrease in the balance of our home improvement loan. In the end, a modest 2.36% gain.

In regards to the home improvement loan, from Bank of America, it was originally $12k at 15.5% (that was the best rate we could get on an unsecured loan — ridiculous) back in December of 2006, we’re on pace to be done with it later this month. Thank heavens.

For the next round of renovations this summer, we’re going to try the local credit union and probably charge a pretty fair chunk on plastic too if we need additional funding.

The credit card balance tipped to the wrong side for the first time in over a year during this period. I had an unexpected expense for a design project I’m working on — a project that unfortunately I’d already been paid for, so this cut heavily into the profit. Drat.

Hopefully, in the coming weeks, a few more April invoice payments will roll in allowing us to get back on a more aggressive track.

Seven more months to come up with another $33k to reach our goal for 2007.

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I was thinking that I should probably post my financial goal for 2007.  Sure, we’re well into the calendar year now, but it’s not to late to set a goal for the year.

It’s been a long journey since I decided I’d had enough of debt. Sometimes I wish I’d logged it all better so as to pick up more momentum just from looking at the results.  It’s all in there in my Microsoft Money file, and I can tell you, once you decide to change your ways, there really is a snowball effect.

To think, no long ago, I was shelling out over $400/month in finance charges to credit card companies. 

That’s over $10/day… for nothing!?  Nothing?!   Never again.

So, my goal for 2007 is to raise my net worth, not including the mortgage or house, to $100k.  It’s not a very ambitious goal, but we’ve got some expensive home improvement projects coming this summer and likely our first child on the horizon in 2008 as well.

fin_2007jan.gif
The digits for January 2007 are on the right. As of the numbers on April 15, I’m 31% of the way there having increased the net worth $15375.

By January 2008, I hope to have the credit cards hovering around the $300 level and ‘other’ loans (currently a home improvement loan at 15.5%?!  Ouch!) at $0. I’ll keep paying the auto loans regularly as the interest rate is so low (less than I’m currently making in an ING Direct account), there really isn’t any advantage in paying them early.  If all goes as planned, the additional home improvement will be paid out of pocket for the most part and contributions to savings and the 401k should increase as the debt disappears.

Something I thought I should mention — I’m afraid some readers might look at these numbers and finance posts as “bragging”.  Far from it.  I know we’re doing alright, better than a lot of households across the fruited plain, but at the same time, I’m also aware of the fact that $1 million dollars is within grasp of nearly every resident in the country, regardless of income.  I’d bet everyone reading this has a neighbor that has over a million in the bank somewhere.  I’m not there yet, not even close, but I’ll get there, and logging it all down along the way will help keep me focused.  Then, maybe then, I’ll have a number worth bragging about.

Point being, these are not high numbers in the grand scheme of things, and I’m not looking to brag.  I’m looking to show how easy it is to accumulate wealth — if you’re willing to put in the effort.

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nyse.jpg
Headlines all over the place are touting yesterday’s surge that put the DJIA over 13,000. And then, just a few lines into the articles, every one of them taken from the AP wire, they drop the line, “But appearances can be deceiving, and there may be more reason to worry than rejoice about Wall Street’s latest accomplishment.”

I disagree. While it is odd that it’s taken less than 7 months to go from 12k to 13k (it took like 7 years to go from 11k to 12k), I don’t think it’s realistic to call this a repeat of the dot com era.

Last night, CNBC was essentially calling this bittersweet, dropping in references to the rising energy costs (I still think gas is very affordable), the slumping housing market (it’s not slumping, people are just overpricing their homes), and the sub-prime mortgage issues in the news lately. On those, hey, if you fell for a 5-1 ARM mortgage, it’s not like you didn’t see the day coming when the rate would go up. You gambled and you lost. I like to think the number of people out there with this problem are greatly exaggerated in the media.

I’m also not one to get excited because the Dow hit a nice round number. Honestly, 13k is no more exciting than 12.5k for me. I love how they drop stats like it was the “35th record close since the start of October.” Talk about meaningless filler!? Did you know I just reached a new record for breaths taken since birth? Yep, I just raised it again. One more. And again.

Don’t get me wrong, any day that has a 1% gain is huge — my net worth for next month, should the pattern hold steady, will show that. The number 13k, though, is meaningless. Love it — a meaningless headline.

My real point though is that this is *nothing* like the dot com era. I made a lot of money before it came tumbling down, but I lost my shirt on stocks like Pets.com (what was I thinking?). The past 6 months or so of gains haven’t come from the Amazons, Googles, or Yahoos. It’s been the staples, Boeing, Pepsi, Corning, etc… That’s a big difference. Those aren’t volatile stocks.

And this talk of the economy tanking just doesn’t hold any weight in my wallet. Things are cruising along just fine. And no, the price of gas hasn’t changed the way I live my life. Not one bit.

Neither has this latest milestone.

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April 2007 Financial Specs

Nearly three years into this, I’m starting to actually see the light at the end of the tunnel of debt I managed to find myself in. It’s funny, once you change your whole outlook on money and finances and the ball gets rolling — and you keep track of the progress — it starts to become, well, almost exciting and fun at the same time. Maybe it’s just me…

One million dollars is actually a very easy, not to mention realistic, amount to reach for nearly anyone. Income doesn’t really matter so much, and I’m aware that I won’t be able to retire early on it or anything, but for now, it’s a goal. A reachable goal. One I don’t think I’ll get bored with and abandon in a couple of years. When I hit it, I’ll raise the bar.

While I’m still tanking on the Assets side of things, over the past month I managed to put a pretty large ding in the debt I’ve been carrying. Being that this is the first mention of my finances, it’s basically been like this for the better part of three years — so when it’s coming down in $6k increments and there’s only around $21k total in non-Mortgage debt, well, it’s almost time to celebrate the first leg of the climb and prepare for the next climb to $1,000,000.

For explanation sake, since this is my first financial update, I don’t include the house as an Asset. Mostly because it’s too much of a pain to figure out what it’s actually worth on a month by month basis, and even if I were comparing it to local real estate sales, it’s really a hit or miss guesstimate. The actual mortgage, however, is something that’s easy to track, so I include it as a liability.

For the total Net Worth though, I omit the mortgage from the calculation, as technically the Asset of the house should theoretically cancel out the mortgage and then some. Make sense? I hope so.

Hopefully, a few more months from now I won’t be so cash poor.

Can You Dig It?

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