Money Monday: Downsize

Dean and I had a party this past weekend to celebrate his birthday and me selling my home. We seriously haven’t connected with people since 2012 since the first few months of this year have been dedicated to the home sale, work, and other important matters. We haven’t had any fun and are in desperate need of a vacation!

In preparation for this party, I kept thinking we should rent a big spacious house with a huge backyard so we could entertain all our friends. I’m so glad we didn’t do that. Our 1-bedroom apartment accommodated 20+ guests just fine! Which brings me back to one of my new tenets in life which is DOWNSIZE YOUR SHIT.

Note to anyone who came to our party: if there’s anything that struck your fancy in our apartment, just let me know, it’s yours. We’ve got books, pillows, nightstands, side tables galore that we simply do not need. All this crap is driving me crazy. I only need the following material things in my life: Tempurpedic bed, a good reading lamp, books, clothes, shoes, and my MacBook air. That’s it. Everything else can go in the circular bin.

Here’s an opinion piece that really resonated with me. It should resonate with you too! Consider it mandatory reading, especially for those of you who live in these palatial homes filled with crap. The guy who wrote it was one of you.

Completely off-topic, Dean and I viewed this open house in Bernal Heights on Sunday. I really liked it, but agreed with Dean about the spiral staircase. We were going up and down the spiral staircase (the only way to get from the 1st to the 2nd floor) and he said, “This is a deal breaker.”

home1 home2 home3

Money Monday: Buy Less Shit

I’m on a spending diet and I encourage you to join me in this effort to buy less shit. After clearing out a condo filled with crap and trying to make the best use of our storage in a 1-bedroom apartment, I am convinced that Americans needlessly and wastefully buy a shitload of stuff that they don’t need. I mean, it’s embarrassing all the stuff I’d accumulated and never used. The irony is that I am super minimalist. I’ve become very zen about material things and realized I honestly want to take half the stuff I own and drop it off at the Salvation Army. It’s all crap.

We probably have the smallest kitchen known to mankind. We have the bare necessities: plates, cups, wine glasses, forks, knives, spoons. We don’t have a food processor or a blender or a cake display or a fondue set. We don’t pretend to be Martha Stewart nor should you! Get that crap out of your kitchen.

A quick glance at our transactions on Mint.com show the following:

Costco

SF Soup Company

Sprint

Kaiser

Safeway

Sallie Mae

Amazon (I bought vitamins)

Chevron

Haircut

Acupuncture

Osha Thai

Pluto’s (salad)

Kara’s Cupcakes (my sweet tooth)

It’s all food and basic necessities like cell phone, gas, and loan payments.

Here are some things I’ve implemented to assist me in my minimalist diet. I’ve removed all design and fashion blogs from my feed. All that shit just makes you want to buy more shit! Get rid of it. Aside from Vanity Fair (because it’s so gossipy good), I don’t subscribe to any other magazine. All those advertisements can set you down the $$$ consumer path. Out of sight, out of mind.

For us, it’s about eating good San Francisco food and saving for early retirement. I am on a mission to retire when I’m 50. Who’s with me?!

Money Monday: Real Estate Bubble

Hey people, if you haven’t noticed, we are experiencing a housing bubble: skyrocketing rents, zero inventory, and astronomical offers in terms of both volume and price. This is not the time to buy. Back away, people. Back away! I’m completely flabbergasted at how many people have decided that THIS is the time to buy. Very odd. Don’t get me wrong, I’m in the hunt myself, but I’m not paying up for a shack. I’d rather stick to our 1-bedroom, thank you very much. I have zero pressure to buy.

A coworker said that NOW is the time to buy into a new condo development because the price just keeps going up and up. And I’m like, dude, that is not sustainable. Use your brain! I asked him what the monthly HOAs are and he said $450. What a joke. Seriously, these people deserve to go into foreclosure for making such dumb mistakes.

Let’s do the math with an example.

37 years old – because that’s how old I am

$700,000 purchase price for a nice 2-bedroom condo in San Francisco

25% down – because these days that’s how much you have to put down to compete

30 year loan at a 3.5% interest rate – which is generous for rates right now

Mortgage + 1.14% property taxes + $450 HOAs = $3,425 housing expense per month – that doesn’t even include electricity, water, garbage, cable

Imagine still paying $3,425 at 65 years old? Because I’d still have another 2 more years to go. I don’t want to be coughing up that much money in my twilight years. I want to be on the beach in Central America drinking raw coconut water and eating shrimp.

I have this ongoing debate with my mom because she is a firm believer in owning a home. She’s one of those old school types. I questioned why should we be shackled to such a high mortgage 30 years from now when we can easily rent a 2-bedroom in a podunk suburb for peanuts. She countered that once your home’s paid off, the only expenses left are utilities and property taxes (which I should add are insane if you live in San Francisco). I don’t know. I’m still not sold on this home ownership dream. But since my parents are, it’s good to know we can always move in with mom and dad!

Money Monday: Advertising

carlabanMy site is now setup to take sponsors. It’s super easy. Just click on the Advertising page above and there will be links to the pricing and setup. All my metrics are up-to-date too.

My first sponsor is Carlaban which is a newly-launched blog advertising directory. I’m really pleased that the owner contacted me; it’s quite the collaborative relationship. If you have a blog, you should go to the site and enter in your details. I just listed my blog in the directory as well! Great networking all around.

 

 

Leaving an Inheritance is a Bad Decision

I recently read an article titled Lost Inheritance by Missy Sullivan. I couldn’t find it online so I guess it can only be found in the print edition of the Schwab Investor magazine. You can get the gist of the article through these select quotes:

“Studies show Americans blow through family fortunes at a remarkable rate.”

“…inheritors, especially those who are new to the family-windfall phenomenon, face an unpleasant reality: They’re likely to blow it. Although it’s not widely discussed, financial advisers say that new riches prove particularly hard to hold onto–and even harder to patiently nurture and grow. Indeed research shows that family money rarely survives the transfer for long, with 70 percent evaporated by the end of the second generation. By the end of the third? Ninety percent.”

I am very strongly against the idea of leaving descendants money. As this article and studies prove, inheritance does more harm than good, acting as a crutch for recipients to meander through life with a lack of ambition, without the feeling of, “Shit I need to find a job because I need to eat.” I think it’s extremely detrimental just as I think it’s harmful to give in to any of your grown children’s financial needs. If my kid needs to move back home post-college, he better make those rent checks out to Mom and Dad because I ain’t running a shelter. If you’ve got 2 arms and 2 feet, you can find a job. Enough said.

I’ve heard examples of parents paying their grown children’s cell phone bills. Are you kidding me? These parents are enablers and deserve to be taken advantage of. So ridiculous!

Clearly, I’m a big proponent of the Giving Pledge. It’s a promise by billionaires, including Warren Buffett, Bill and Melinda Gates, and Mark Zuckerberg, to donate the majority of their wealth to philanthropy. Now that’s a gift that keeps on giving.

What are your thoughts?

Money Monday: Finding a Business Partner

Let’s make a deal! Anyone interested in becoming my business partner?

The more we rent places out and experience first-hand how owners bring in a a steady high rental income, the more I’m convinced that this is the path to early retirement. We are currently renting a super cute flat in Potrero Hill with an adorable sunny garden that makes me sing. The owners live above the flat and I’m pretty sure that this rental more than covers their mortgage.

I am now dead-set on finding the ultimate property with an in-law or separate unit to cash in on the rental income. There are always multi-unit properties available for sale. Here’s my question. How do you find investors who are interested in collaborating with you?

Please comment below for all to see.

Money Monday: Retirement Property for the Price of a Car

Did anyone see this article today in the NYTimes about retirement condos in Florida? The woman featured in the article recently purchased her 2-bedroom condo for $26,900. Are you kidding me?

JP-RETIREMENT-2-popup

Angel Valentin for The New York Times

Can we all make a pact to buy one of these units so we can all live together and grow old gracefully? We can swim, play shuffleboard, and nap in the sunshine!

It’ll be like living in the dorms or 90210 or Melrose Place. How fun! Who’s in? Get out your checkbooks.

Money Monday: Are You Paid Enough?

It’s that time of the year when I receive my compensation plan and my bonus gets paid out. I’m happy to report that I’m pleased with the numbers. Not only do I enjoy what I do, but I feel I’m paid a fair wage.

Exactly one year ago, I was no where close to pleased. Frankly, I was pissed. After I received my comp plan, I returned to my cubicle and acted like I’d just been pink-slipped. I grabbed the calendar and threw it in the trash. I tore down personal pictures and put them in my purse. I emptied my filing cabinet and put the folders in the recycling bin. I left the office dejected, as if I truly had been laid off.

Because I’m an intense and productive hard-worker, I expect to be compensated for the effort I put in. I thrive on compliments, appreciation, and cold hard cash. After a sleepless night, I knew that tears would do me no good nor could I very well implode in a fit of anger. I had to get even. I had to prove not only to my employer, but to myself that I was worth more. I had to prove that my reaction of shock and utter disappointment was justified.

Enter Job Hunting Catherine-Style

Search jobs internally using key word ‘MBA.’

Search jobs externally (LinkedIn, Simply Hired) using key word ‘MBA.’

Search jobs in alumni databases filtering by role (strategy, product management, investor relations) and location.

Send brief emails (no more than a handful of sentences) describing qualifications and attach resume.

Do not send cover letters. That is a serious waste of time. If you are qualified, your resume will prove your qualifications, not what you write in a personalized cover letter.

Given that I only applied to jobs I was qualified for, I got a good response rate from hiring managers. Two weeks after I had started my job search, I secured my first offer and was on my way to getting a second. Along the way, several recruiters and hiring managers asked that I contact them if ever I found myself looking to make a switch in the future.

Keep in mind, I didn’t want to leave my job, I only felt I wasn’t paid fairly. Once I secured that first offer, I asked that my employer match it.

Success!

It’s around this same time that I hear complaints from people about work and pay. Believe me, I’ve been there. If you don’t feel you’re paid enough, then test your marketability by gathering offer letters, and come to some conclusions about whether or not you’re worth what you think you’re worth. It’s important to be realistic, but more importantly you have to be confident and have faith in yourself.

Money Monday: Converting Retirement Funds into a Roth

6869770873This is a question for my readers.

Now that there are no restrictions on converting a traditional IRA into a Roth, have you done so and what were the implications of the conversion?

I’d like to do this, but seems like such a major move and given everything that is happening in my life, I am reluctant to start hankering with my retirement money.

The conversion seems to make total sense since I assume we all expect to make more money and be in a higher tax bracket at 59.5 years. But wondering if anyone out there has gone through with it.

Here’s a retirement primer on LearnVest. I didn’t think it was all too informative, nor did I like the flow charts, but background nonetheless.

Money Monday: Home for Sale

I know it’s not Monday and I’ve been delayed on my posting, but here’s why. My 1 bedroom condo in Lower Pacific Heights is now up on MLS and available for purchase! Get out your check books, people. It’s listed at $499k.

Here’s the marketing description: Lovely condo in a 3 unit building featuring light-filled living room, dining area, updated kitchen, and gorgeous hardwood floors. Low HOA dues, large common family/rec room with access to a shared garden, convenient location (Walk Score 92), w/d and designated parking & storage makes this a perfect starter home or investment property. Near public transportation, great restaurants, Trader Joes, & walking distance to parks, Fillmore & Laurel Village shopping areas!

Check out Dean’s staging. Yeah, looks exactly like our Lower Nob Hill apartment, right? That’s because we transferred our furniture over. I want to move back in, looks so fantastic.

2420 Geary Blvd #1A // cross street is Baker

 

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