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Made first Bid on a House

January 21st, 2011 at 01:59 pm

They didn't accept the bid, but it was a good learning process.

The asking price was $65,000. The place needed a new roof, a slight upgrade in the electric, and a lot of cosmetic work. However, the structure was solid, we liked where it was, and we liked the house.

We offered $46,000, which is probably what it's actually worth. I proceeded to panic for two days because things like that stress me out.

We're pre-approved up to $65,000 on a 15-year fixed with 20% down, which means we can get something up to $80k give or take. We could definitely borrow more, but I have an obsessive fear of debt.

They countered at $60,900, which I took to mean that they weren't going to play ball, so we're letting it sit.

Buying a house is a bizarre process.

Major Update

January 14th, 2011 at 12:11 am

I forgot all about this place until Saving Advice sent me a birthday greeting in my email! Nice marketing, guys! I seriously need to update everything here.

I have been very, very blessed since I made my last entry in here. Here's the scoop:

1. My wife and I have absolutely zero debt! Debt free!

2. We drive a paid-for 2006 Saturn Vue.

3. We have $18,250 in a savings account for a down payment on a house. We just looked at a really cute house that's selling for $65,000, which is around the price that we want.

4. We have $10,000 in an emergency fund in addition to our other savings.

5. My wife gets to be a stay-at-home dog mom.

6. We tithe 10% of our gross income to our church. I'm just telling you guys because you don't know who I am. Tithing has been so amazing. If you don't do it, I challenge you to do it for a year.

7. We're making plans for baby #1.

8. We are contributing about 12% of our gross income to retirement. One of our goals for 2011 is to raise that to 15%.

9. We do all of this on one teacher's salary.

10. God is good. Sometimes I get scared that things are too good to be true, but we just keep having faith and pushing through hard times as they come.

State Budget Cuts = My Job in Danger

January 10th, 2008 at 12:40 am

Well, Kentucky needs to balance its budget. That means education funding is about to be cut. Potential staff layoffs, hiring freezes, and other such wonderful things are on the horizon. Letters and memos have already been flooding through the state everywhere from community colleges, to state universities, to high schools: funding is being cut.

I pride myself on being an advocate of the free market. If a company can't compete, it shouldn't receive any help. The people who work in those careers should move on to more productive positions in the economy.

I may be faced with that now. The claim is art, business, home economics, and PE will be cut. Furthermore, I find it hard to believe that the 800+ students in my high school are going to receive English instruction unless there are the same number of English teachers as there are now. I guess I'm trying to say that I'm 70% sure that I'll have a teaching job this coming fall.

I don't like those odds one bit. Maybe I'm completely wrong. Maybe the last thing on anyone's mind is cutting English positions, but I'm the new guy. Other teachers there have houses and kids and tenure.

As I said before, I'm an advocate of the free market. I'll move on if I have to, but I'm not going to fib: it's going to hurt a bit.

This is why I save money. This is why I can't imagine living paycheck to paycheck. I currently have three month's living expenses saved up. With the three months of summer that I'll still have paychecks and insurance IF I don't have a job next year, that's at least six months of living expenses. I could feasibly have ten months in my emergency fund by the time next August rolls around.

It may seem like I'm blowing things out of proportion. I'm just saying that I see a storm coming, and I'm going to be caught right in the middle of it. I stand by my 70% chance of having the same teaching job next year. If I don't get rehired, I'll have plenty of money saved up. I'll easily find employment somewhere else.

Like I said, though, it's not going to be painless.

Wesabe

January 6th, 2008 at 09:01 pm

Does anyone here have experience with Wesabe?

Does Index Fund = Eggs in One Basket?

January 3rd, 2008 at 03:17 pm

As of now, my plan is to put 80% of my retirement in Vanguard's Total Stock Market Index Fund. That particular fund tracks every single American stock on the market. I plan to put the remaining 20% in Vanguard's Total International Stock Index Fund, which is a broad international fund spread among Europe, Asia, Africa, and some emerging markets.

This strategy comes straight from Suze Orman, and it makes a lot of sense to me. Suze makes the point that I can invest $300 per month for 15 years starting at age 25 and it will be worth more than a million dollars when I am 70. This assumes an average return of 8%, which is quite reasonable.

Now, I just finished Howard Dayton's _Your Money Map_. He has quite a different take on investing. I love Howard Dayton's advice, and I am following the Crown Money Map, which I would suggest everyone go check out at www.crownmoneymap.org

As I was saying, he has a different take on investing, or at least I think he does. It seems much more conservative. Basically, he advocates keeping 25% of your retirement in liquid or semi-liquid form by way of CDs, money market funds, etc. The remainder is put in index funds with more being put towards higher-risk investments as your money grows and eventually into a variety of different things such as real estate, etc. While this doesn't seem to offer the outstanding returns of Suze's approach, it does seem more diverse and safe.

Suze Orman's strategy is far simpler: just put it all in a broad index fund. I like the idea of just throwing $300 per month into an index fund for the next fifteen years and retiring a millionaire, but I don't know if that is putting all of my eggs in one basket.

You may be asking, "How is investing in a fund that tracks every stock on the market putting your eggs in one basket?". Well, that's what I am asking. Is investing in ONE fund, whether it tracks the whole market or not, not being diversified enough? In light of the mammoth financial problems the U.S. is facing now and will be facing in the future, is there any way to protect myself? Should I simply throw all of my money into the whole market and hope for the best?

P.S. Today was another snow day! Woo!