Author Topic: Case Study - $800,000 in debt and where to start?  (Read 11748 times)

caracarn

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Re: Case Study - $800,000 in debt and where to start?
« Reply #100 on: September 13, 2017, 02:08:17 PM »
My household also needs 2 cars to ferry passengers to their well-paying jobs. This is a justifiable expense.

However, it sounds like to me that 99% of your Durango trips could also be accomplished by a Civic. It's a consumer trap to imagine the most extravagant personal transportation task (big family vacation) and then purchase a vehicle that will meet that need. The reality is that most vehicles carry one person around on their work commute.

You could always rent a Durango for a week every year for your family vacation.




I appreciate this real world example and perspective; it makes a lot of sense. 

Now...any strategies on how to convince my wife that her truck needs to go and she has to start driving the Buick?  LOL
The first question on this is is your spouse on board with your MMM epiphany?  If not you may want to check out the https://forum.mrmoneymustache.com/ask-a-mustachian/how-to-convert-your-so-to-mmm-in-50-awesome-steps/

If she is on board with making changes to gain your freedom over time, it should just involve walking her through the reality of what it can do for you.  Again, you're not recommending these changes on a whim.  You'll have math to back them up, but if she could care less about the math and wants the Durango because it fulfills some emotional need and she thinks your nuts for caring about how much you spend because as you said earlier, "it's not crazy since we gross more than $200K" then you need to start at the beginning.  Without that you'll just be in for a battle and may soon start posting questions about divorce.

Goldielocks

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Re: Case Study - $800,000 in debt and where to start?
« Reply #101 on: September 13, 2017, 04:10:06 PM »
Hmm.. how about say "We are in over $140k in debt that needs to be repaid in less than 7 years".
The Buick sound like it is a nice car, so it should not be too hard to talk about. 

Except, of course, if pretty much all the debt has been for things you have bought, alone, maybe like the start up business, and spending on your things, and she sees that only SHE appears to be giving something up (her nice new car).   So, I would mention how the plan is for you to buy a car that is under $4500, and any other concessions that you are making to fix the mess... and that you intend to not impact the new family home, etc.

Another alternative may be to sell the SFH,  it appears that it is the lowest profit margin by far, and could free up $40k.  Do this in conjunction with the Durango and you are all set.  Of course, you need to run the real estate business numbers first, there could be a lot more to the SFH that I don't know about.


thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #102 on: September 13, 2017, 04:18:22 PM »

Another alternative may be to sell the SFH,  it appears that it is the lowest profit margin by far, and could free up $40k.  Do this in conjunction with the Durango and you are all set.  Of course, you need to run the real estate business numbers first, there could be a lot more to the SFH that I don't know about.

Selling the SFH is already in progress (has been for awhile actually).  The guy currently renting it wants to buy it, but it needs some repairs.  I am essentially financing his renovations and increasing the sale price in kind (bringing it back up to FMV).  I should gross around $55k if things go right.  After repairs, taxes, etc I hope to net $30k, which I will immediately use to pay off the two personal loans.
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thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #103 on: September 14, 2017, 11:40:42 AM »
OK, so yeah, not in a great spot on either vehicle.  If I figured the numbers right you are at a $372.35 payment on the LaCrosse.  Also looking at your loan, you bought this thing used for $25K and financed it for 6 years?  Obviously 2 years into that loan I'm guessing you did not find a dealer sitting on an old 2010 in 2015 and buy it new then, but just checking.  I'm assuming you rolled the extended warranty into the financing, which is part of what inflated this sucker to the insane amount.  5 year old LaCrosse should have been under $15K, so not sure how you got squeezed for $25K.

It's actually worse than that sadly.  I traded in a leased car that I was over the mileage on 12 months early.  I rolled about $3500 of losses from that into the Lacrosse as well.  I really only paid like $16k for it 2 years ago, but add the $3,500 losses, $2,500 in extended warranty, and $3,000 in tax, and well there's your $25k loan.  It wasn't brand new, but did only have 23,000 miles when I bought it in 2015.
« Last Edit: September 14, 2017, 11:42:48 AM by thebudgetbloggo »
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former player

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Re: Case Study - $800,000 in debt and where to start?
« Reply #104 on: September 14, 2017, 12:42:15 PM »
Right.  So you bought the Buick two years ago for $16k (or $17k as per a previous post) plus $3k in transaction costs (tax).  It is now worth $12k, so it has cost you $2k or $2.5k a year in depreciation.  On top of that it has cost you $1.25k a year in additional insurance costs (which is what the warranty is).  The $3.5k loss on the previous car isn't really a loss on this car, you've just disguised the loss you made on the previous car 2 years ago and put off paying it by adding it to this loan.

So you are kidding yourself by thinking you will lose money by selling the car.  You have already lost (ie spent) the $13k, and are paying $372.35 a month so that you can continue to live in denial about having lost (ie spent) it.
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thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #105 on: September 14, 2017, 02:51:19 PM »
Right.  So you bought the Buick two years ago for $16k (or $17k as per a previous post) plus $3k in transaction costs (tax).  It is now worth $12k, so it has cost you $2k or $2.5k a year in depreciation.  On top of that it has cost you $1.25k a year in additional insurance costs (which is what the warranty is).  The $3.5k loss on the previous car isn't really a loss on this car, you've just disguised the loss you made on the previous car 2 years ago and put off paying it by adding it to this loan.

So you are kidding yourself by thinking you will lose money by selling the car.  You have already lost (ie spent) the $13k, and are paying $372.35 a month so that you can continue to live in denial about having lost (ie spent) it.

That's all true, and I appreciate your insight.  I'm concerned about the real and immediate $5-9k impact to our cash by selling it now...I would realize all those losses in one day, opposed to spreading them out over the next 48 months.  Not saying the current situation is ideal by any means, but yeah, I wanted to put off the losses at the time. 

We are going to look hard at this, but if we find that downsizing to one car just isn't feasible, using that cash does make an outright purchase of a lower cost car more difficult later. 

A lot of moving parts here between rental properties, cars, credit cards, and loans.  It will be hard to tackle all of this at once, so I'm trying to process things in a way that makes the most sense without getting overzealous. 

I'm already sitting here literally everyday reading this forum and racking my brain about the million different scenarios. 

I have a headache. 

Or maybe that's just the face punches. 

     
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former player

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Re: Case Study - $800,000 in debt and where to start?
« Reply #106 on: September 14, 2017, 04:07:43 PM »
Yes, you need to simplify everything.

First, finish paying off the credit cards. 

Then go down to one bank account and one (shared with your wife) credit card that you pay off in full each month for personal stuff and one bank account and credit card that you pay off in full each month for the rentals: if the other credit cards aren't costing you anything in yearly fees, keep them on ice as an emergency backup.  That will mean that you no longer need to spend time adding up accounts and juggling money between them, but will have each situation immediately obvious.  (It may not seem like much, especially if you are now settled into Mint or YNAB, but trust me: you have been overcomplicating your financial life for years and will be surprised how much easier it can be than you have made it.)

Thirdly, finish the renovations on the rental house you are selling and sell it: putting that $40k you will get towards paying off more debt is the biggest bang for your buck currently in your armory.  Make it an aim to get this done and dusted before Christmas.

With a bit of effort, you could even be down to no debt except mortgages and cars by Christmas.  That's worth going for.

Be frugal and industrious, and you will be free (Ben Franklin)

Goldielocks

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Re: Case Study - $800,000 in debt and where to start?
« Reply #107 on: September 14, 2017, 05:11:18 PM »
Yes -- tb -- you are completely on the down-hill side of this debt mountain, now that you are dealing with it, especially while you have assets and income.
Just one step at a time, and over the next few months it will be easier and easier.

K-ice

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Re: Case Study - $800,000 in debt and where to start?
« Reply #108 on: September 14, 2017, 05:44:06 PM »
I just checked my spread sheet.

Our worst debt ever was $723K so quite close to you. I haven't read all of your details yet... posting to follow.

This debt involved 3 properties.

I am still kind of shocked we would/could borrow that much.

Part of that was inflated as we borrowed from a HELOC and quickly used it to pay off part of a mortgage so the real debt mountain was "only" $670K in December 2009.

But some crazy collection of banks let us borrow over $700K at one time.

Today we are around the $112K mark on only 1 property. I am so looking forward to getting below $100K.

I am still not totally sure how we did it, but the priority was to pay off our home and then focus on the two rentals.   

My partner put nothing is "savings" over that time. I have put very little ~$25K.  Every time we amassed a stash we would make a lump sum payment. It was kind of a game. Once my partner saved $10K I had to put in my share.  I am actually behind by $10K at the moment in our "game" but I will catch up in the next month or so.



lhamo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #109 on: September 14, 2017, 06:37:30 PM »
Right.  So you bought the Buick two years ago for $16k (or $17k as per a previous post) plus $3k in transaction costs (tax).  It is now worth $12k, so it has cost you $2k or $2.5k a year in depreciation.  On top of that it has cost you $1.25k a year in additional insurance costs (which is what the warranty is).  The $3.5k loss on the previous car isn't really a loss on this car, you've just disguised the loss you made on the previous car 2 years ago and put off paying it by adding it to this loan.

So you are kidding yourself by thinking you will lose money by selling the car.  You have already lost (ie spent) the $13k, and are paying $372.35 a month so that you can continue to live in denial about having lost (ie spent) it.

That's all true, and I appreciate your insight.  I'm concerned about the real and immediate $5-9k impact to our cash by selling it now...I would realize all those losses in one day, opposed to spreading them out over the next 48 months.  Not saying the current situation is ideal by any means, but yeah, I wanted to put off the losses at the time. 

LISTEN TO YOURSELF -- ARE YOU INSANE OR JUST UNBELIEVABLY STUPID?!?!?!??!

Can you not see that when you rolled that money you owed on the lease into the new loan on a USED car, which you then increased the loan for to buy A RIDICULOUSLY high-priced warranty, this was not a way to "put off the losses."   YOU COMPOUNDED YOUR LOSS BY ADDING MORE MONEY OWED ON TOP OF THE ORIGINAL LEASE PENALTY PLUS THE INTEREST RATE FOR THE LOAN!!!!!  All on a rapidly deteriorating asset! 

Borrowing money is not a smart way to "put off losses" as long as there is an interest rate attached.  Ok, maybe if you can get an interest rate lower than inflation AND you have excess income to invest for better returns.  But that was not your situation, given how far you already were in the hole.

I guess it was good that you bought a used car -- so the first buyer already took the biggest depreciation hit when they drove it off the lot. 

Bite the bullet, dude.  You need to get out of these cars and the debt that comes with them.
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thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #110 on: September 14, 2017, 06:55:30 PM »

LISTEN TO YOURSELF -- ARE YOU INSANE OR JUST UNBELIEVABLY STUPID?!?!?!??!

Can you not see that when you rolled that money you owed on the lease into the new loan on a USED car, which you then increased the loan for to buy A RIDICULOUSLY high-priced warranty, this was not a way to "put off the losses."   YOU COMPOUNDED YOUR LOSS BY ADDING MORE MONEY OWED ON TOP OF THE ORIGINAL LEASE PENALTY PLUS THE INTEREST RATE FOR THE LOAN!!!!!  All on a rapidly deteriorating asset! 


Whoa.  Chill pill. 

"Current me" never said it was smart, a good idea, or fiscally responsible.  I'm just telling you "past me" figured that as opposed to paying $6,000 out of pocket, he could pay nothing and screw over "future me" for 6 years instead.

Clearly, if "past me" understood finance that well "current me" wouldn't be here trying to salvage what's left for "future me".

Lesson learned.  Won't be the last one.

« Last Edit: September 15, 2017, 07:39:15 AM by thebudgetbloggo »
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Basenji

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Re: Case Study - $800,000 in debt and where to start?
« Reply #111 on: September 15, 2017, 05:27:49 AM »
tbb, it will be better than salvaged, you'll make decisions in the future that will make your life better than you thought possible. One step at a time. Tough love here, but worth it.

lhamo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #112 on: September 15, 2017, 02:39:43 PM »
Whoa.  Chill pill. 

"Current me" never said it was smart, a good idea, or fiscally responsible.  I'm just telling you "past me" figured that as opposed to paying $6,000 out of pocket, he could pay nothing and screw over "future me" for 6 years instead.

Clearly, if "past me" understood finance that well "current me" wouldn't be here trying to salvage what's left for "future me".

Lesson learned.  Won't be the last one.

Sorry, I shouldn't have gone off like that on you.  It was rude and unhelpful and I apologize.

What sent me over the top was that it sounded to me like you were saying "Yeah, it was not smart of me to roll all those extra expenses into the loan but at the time I felt like couldn't take the immediate hit.  So I added interest on top of the bad decision.  And now I still can't stomach the immediate hit, so I'm just going to keep paying the interest for another four years."  Sunk cost fallacy, my friend. The money you spent on the cars is GONE.   It isn't coming back.   And you are continuing to pay interest on those sunk costs, which is not helping.  The question is, how quickly can you get yourself out of this hole?

Does your wife realize how much debt you are in? If I were her I would be totally freaking out, not worrying about keeping my truck. 
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Another Reader

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Re: Case Study - $800,000 in debt and where to start?
« Reply #113 on: September 15, 2017, 02:52:02 PM »
Next time you need a car and are thinking about visiting a dealership, send one of the shrewd negotiators on this forum instead.  Car salesmen probably see you coming and rub their hands together with glee.  Payday has arrived!

thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #114 on: September 15, 2017, 08:52:27 PM »

Sorry, I shouldn't have gone off like that on you.  It was rude and unhelpful and I apologize.

What sent me over the top was that it sounded to me like you were saying "Yeah, it was not smart of me to roll all those extra expenses into the loan but at the time I felt like couldn't take the immediate hit.  So I added interest on top of the bad decision.  And now I still can't stomach the immediate hit, so I'm just going to keep paying the interest for another four years."  Sunk cost fallacy, my friend. The money you spent on the cars is GONE.   It isn't coming back.   And you are continuing to pay interest on those sunk costs, which is not helping.  The question is, how quickly can you get yourself out of this hole?

Does your wife realize how much debt you are in? If I were her I would be totally freaking out, not worrying about keeping my truck.

No sweat, I'm used to it already.  I'm not trying to justify or argue for keeping the cars.  It's clear that wouldn't be the best option.  What I am trying to do is climb a mountain one step at a time, without falling off.  All of this is going to take some time, and some mental re-programming.  I appreciate everyone's insight, it's truly been life changing already.
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OkieM

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Re: Case Study - $800,000 in debt and where to start?
« Reply #115 on: September 16, 2017, 04:48:43 PM »
Next time you need a car and are thinking about visiting a dealership, send one of the shrewd negotiators on this forum instead.  Car salesmen probably see you coming and rub their hands together with glee.  Payday has arrived!

If you are paying cash and you are buying a standard model (that you clearly specify everything) it works great to bid it out at 5-10 dealers without ever stepping foot at a dealership. They are especially no nonsense if you say you are buying it for a business. You can get the full discount with no haggling at all. They will always throw in delivering the car as well. They are so good at their job it's best to take all emotion out of it. Source: Did this 10+ times at a company I used to work for.

thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #116 on: September 18, 2017, 02:42:26 PM »
tbb, it will be better than salvaged, you'll make decisions in the future that will make your life better than you thought possible. One step at a time. Tough love here, but worth it.

Indeed, thank you for the encouragement!
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RetiredAt63

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Re: Case Study - $800,000 in debt and where to start?
« Reply #117 on: September 18, 2017, 03:58:39 PM »
I just read this whole thread.  Whew!

TBB, are you in love with being a landlord?  Do you have time for it all?  Because if not, I am going to be radical here and say sell them all.  If you want to have real estate investments, buy shares in a REIT.  So much simpler, and they know what they are doing. 

People have looked at various aspects of your situation, so I am going to go general.

We have no idea of what your life is like.  You work, plus you mentioned a side business (or at least an investment in a side business), your wife works, kids are ? age? how many after-school activities?  I am wondering how much time is available to you (which is why I am thinking REITs are the way to go for you) and how much energy you have left after work.

One of the guiding principles here on the forums is that money does not buy happiness.  A well-thought out life does bring happiness.  I am seeing a life that is basically in chaos, decisions made as the need arises, no long-term thinking about goals.  You need to sit down with your wife (and kids if old enough to have sensible input) and figure out what your life is like now and what you as a family would like it to be. Given all the mental energy you seem to be spending on jobs and rentals and who knows what, how much of your energy is going to your family?
 
And really, looking at the juggler juggling knives and flaming torches story so far, you need to simplify.  You will continue to spend money eating out if you can't sort out a home life that involves eating at home and a sensible grocery shopping plan.  Involving the kids in home maintenance activities (cooking, dishes, laundry, yard maintenance, minor home repairs) will prepare them better for adulthood.  Having the family plan what is important and what can be dropped will help the kids learn how to set their own priorities.

There is masses of information on the forums - the DIY threads (https://forum.mrmoneymustache.com/do-it-yourself-forum!/), the challenges(https://forum.mrmoneymustache.com/throw-down-the-gauntlet/) the winning stories (https://forum.mrmoneymustache.com/share-your-badassity/).  You can learn a lot reading through them.  Drop the TV time and read them instead.

Some info from your wife would help too, how does she see all this?  Does she even have a clear picture of all this?

Good luck.
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Heroes821

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Re: Case Study - $800,000 in debt and where to start?
« Reply #118 on: September 19, 2017, 06:22:35 AM »
Posting to follow,

I always enjoy a good casestudy where the OP keeps sticking to it and replying.

thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #119 on: September 19, 2017, 08:17:50 AM »
I just read this whole thread.  Whew!

TBB, are you in love with being a landlord?  Do you have time for it all?  Because if not, I am going to be radical here and say sell them all.  If you want to have real estate investments, buy shares in a REIT.  So much simpler, and they know what they are doing. 

People have looked at various aspects of your situation, so I am going to go general.

We have no idea of what your life is like.  You work, plus you mentioned a side business (or at least an investment in a side business), your wife works, kids are ? age? how many after-school activities?  I am wondering how much time is available to you (which is why I am thinking REITs are the way to go for you) and how much energy you have left after work.

One of the guiding principles here on the forums is that money does not buy happiness.  A well-thought out life does bring happiness.  I am seeing a life that is basically in chaos, decisions made as the need arises, no long-term thinking about goals.  You need to sit down with your wife (and kids if old enough to have sensible input) and figure out what your life is like now and what you as a family would like it to be. Given all the mental energy you seem to be spending on jobs and rentals and who knows what, how much of your energy is going to your family?
 
And really, looking at the juggler juggling knives and flaming torches story so far, you need to simplify.  You will continue to spend money eating out if you can't sort out a home life that involves eating at home and a sensible grocery shopping plan.  Involving the kids in home maintenance activities (cooking, dishes, laundry, yard maintenance, minor home repairs) will prepare them better for adulthood.  Having the family plan what is important and what can be dropped will help the kids learn how to set their own priorities.


Some info from your wife would help too, how does she see all this?  Does she even have a clear picture of all this?

Good luck.

I'm not married to being a landlord - I just kinda fell into it, since like someone else mentioned, the banks seemed to have no problem issuing me over $700,000 in mortgages.  I was never really compelled to sell since they've remained rented.  It's clear that they are probably not the most fiscally sound investment choice.  I'm in the process of preparing the SFH for sale, and need to split the mortgage to sell the Duplex, if I want to get maximum return on that sale.  I am considering keeping the condo if any of them, since I think it may be in the best shape from an ROI standpoint, but the jury is still out on that.

Kids are 7 and 4, girls, and they have dance 4 nights a week.  Did I mention I'm also in the Air National Guard, so there goes at least one weekend a month.  I have zero energy all the time.  I started crossfit and haven't been back in a month because the time just isn't there.  But, I am still paying for it.  *sigh*

Family life is struggling, I will admit - I do appreciate that laying all this information out here has really helped put things in perspective for me.  It easy to just "keep on truckin" and accepting the status quo while your on the inside.  Reading through all of these perspectives has really shed a light on my situation and allowed me to see it from the outside, which is something I don't think I could have done alone.  It was easy to accept it because we were on cruise control...albeit on the wrong side of the road.

My wife has been on me about budgeting for a long time; and I've let her know that I'm getting all of this information together.  I don't think she has a very clear picture of it however, because she hasn't typically been involved in the day to day bill paying, etc.  It's not that I've made any effort to hide the situation, but I've never walked her through it all either.  This is something I need to fix for sure. 
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Bracken_Joy

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Re: Case Study - $800,000 in debt and where to start?
« Reply #120 on: September 19, 2017, 08:39:56 AM »
Wow. Your last post was really striking. Talk about a little bit of being a stranger in your own life. Do you ever wake up and wonder how you got there? It sounds, to me, unstable and overwhelming.

Feel free to disregard the following if it doesn't fit for you. But for me, what went hand in hand with finding my frugality were the concepts of minimalism and simple living. Some of my favorite blogs/posts about it:
http://www.frugalwoods.com/2014/06/26/hidden-perks-of-frugality/
http://www.frugalwoods.com/2014/06/11/frugality-is-not-mainstream/
http://www.becomingminimalist.com/un-busy/
http://www.becomingminimalist.com/the-10-most-important-things-to-simplify-in-your-life/
https://zenhabits.net/the-first-rule-of-simplifying-identify-the-essential-or-how-to-avoid-the-void/
https://nosidebar.com/design-a-simple-life/
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RetiredAt63

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Re: Case Study - $800,000 in debt and where to start?
« Reply #121 on: September 19, 2017, 09:19:04 AM »
Ok, good and bad.  As Bracken Joy said, you are a stranger in your own life.  Do you feel as if you are just sleep-walking through it?  Her reading suggestions are good.  And if you haven't read the Blog, start reading it, lots of important stuff in it.

Your wife is on the financial bandwagon, it sounds like she is willing to be an equal partner financially (some spouses, either gender, just are not).  Now that you have a better handle on the family finances, you can take some quiet time (when you are both rested) and go through everything with her.  It's a partnership, 2 brains are better than one, etc.  You both need to buy in to the changes that are coming.  And general info for guys, most wives would rather see more of their husband than more money coming in, our guys married us, not their jobs,and we married them, not their jobs.

DDs - my DD did dance as well, also soccer, karate, Scouting, but we were never out 4 nights a week in elementary school.  4 and 7 seems very young to be doing that much dance.  What is the rationale behind it?  Are they in the same class so both doing 4 nights?  Or different classes and 2 nights each, or 1 and 3?  Who takes them?  Can the parent taking them do errands while class is on, to free up family time for the weekend?  Or is class time the chance for the chauffeuring parent to have a bit of a rest?   So much to think about re arrangements here.  Not knocking this, car time with kids can be a great time to connect with them.  Long-term - what are the goals for dance?  Mine got into a very competitive dance world (my DD's area of dance does not really have a recreational component except at the adult level) and we ended up doing a lot of travel for competitions. I am not sure I would have started her if I had known this was the standard.  We did it frugally, it could have been much worse financially, but it did take a chunk of time and money. So if your daughters' dance is also competitive, the time to decide if you want to go down that rabbit hole is now, not when the teacher is talking about  a summer of competition.

Also re DD's and activities - traditionally girls did individual activities and boys did team activities - dance is an individual activity.  Are the girls getting lots of peer interaction? - you know, play time.  Or sports?  House leagues aren't usually too competitive, and competitive is stupid at their ages.  And other group activities - this can also include Scouting/Girl Guides/4H/other group things.  And they may be too young, but in this world I was always glad DD took karate, having a bit of self-defense skills is a good thing, and having a potential abusive boyfriend know the girl can wipe his clock is also a good thing. Oh, yes, I admit being a protective parent.

Re the real estate, if you had a passion for it I would say great, go for it, just do your financial calculations.  Since you just sort of ended up in it, I go by the comment to sell it all. Maybe aim to be totally out in 6 months?  Or a year?  But give yourself a deadline.   Just because the banks will lend to you is not a reason to take them up on it, the banks lent to all those people who have ended up under-water on their houses.  Banks are in business to make money, after all, and they are making some off of you right now.  And from you have posted, you don't have the time and energy to be a part-time landlord, save that time and energy for your family.

Re the Air National Guard, that means your wife is on her own with the girls one weekend a month.  Is she getting enough down time?  Are you being an active father?  Having a daughter myself meant I saw lots of her friends, and there were a lot of fathers who weren't all that involved because they didn't know how to interact with daughters.  Now that the daughters are all grown up the fathers are still not that involved in their daughters' lives, because they never were so there is no precedent.  Actually there were a lot of daughters who never saw that much of either parent because of their parents' jobs, and that was sad too.

And if is seems odd that I am looking at your life instead of your money, the two are inextricably entwined.  You can't change one without the other.
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caracarn

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Re: Case Study - $800,000 in debt and where to start?
« Reply #122 on: September 19, 2017, 10:10:14 AM »
I'm not married to being a landlord - I just kinda fell into it, since like someone else mentioned, the banks seemed to have no problem issuing me over $700,000 in mortgages.  I was never really compelled to sell since they've remained rented.  It's clear that they are probably not the most fiscally sound investment choice.  I'm in the process of preparing the SFH for sale, and need to split the mortgage to sell the Duplex, if I want to get maximum return on that sale.  I am considering keeping the condo if any of them, since I think it may be in the best shape from an ROI standpoint, but the jury is still out on that.

My wife has been on me about budgeting for a long time; and I've let her know that I'm getting all of this information together.  I don't think she has a very clear picture of it however, because she hasn't typically been involved in the day to day bill paying, etc.  It's not that I've made any effort to hide the situation, but I've never walked her through it all either.  This is something I need to fix for sure.
So I'm going to offer a bit of deeper thought on both of these.  Maybe totally off base, but wanted to mention so you can think about/investigate.

First, your statement of why you have rentals since "the banks seemed to have no problem issuing me over $700,000 in mortgages" aligns exactly with why you have two cars with poor loans on them as well.  Asides from being a ton of work that you have no time for, you are paying on these "investments" and not getting great ROI.  If you had indicated a passion for real estate, loving the DIY aspect of fixing your tenants issues, or something that drove fulfillment versus "they gave me a loan, so why not?"  then I'd suggest keeping some.   In this case I lean very heavily in get rid of them and maybe not even worry about a REIT.  Keep. It. Simple.  Many do very well with a handful of index funds or less.

Second, "my wife has been on me about budgeting for a long time" raises a questions especially given the other points of input.  She's not involved in the day to day bill paying and she herself has no idea about the finances.  Having been married to a woman who maxed out our credit cards every chance she got, I'd say you need to find out WHY your wife is on you about budgeting, because, sorry, but the answer may be because she wants to spend more and does not understand why she can't so she wants you to figure it out for her.  If she was interested from a frugality standpoint, she'd already know the answers at least way more so than you indicate.  She would not be passive.  This just smack to me of someone trying to find a license to spend and you giving her a "budget" of what she can go blow it on.  I'm taking into account your other comments such as about thinking it will be hard to convince your wife to drop her car and other things that align much more with someone who is addicted to spending than saving.

Laura33

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Re: Case Study - $800,000 in debt and where to start?
« Reply #123 on: September 19, 2017, 10:20:30 AM »
Kids are 7 and 4, girls, and they have dance 4 nights a week.  Did I mention I'm also in the Air National Guard, so there goes at least one weekend a month.  I have zero energy all the time.  I started crossfit and haven't been back in a month because the time just isn't there.  But, I am still paying for it.  *sigh*

Family life is struggling, I will admit - I do appreciate that laying all this information out here has really helped put things in perspective for me.  It easy to just "keep on truckin" and accepting the status quo while your on the inside.

Wow.  You have a lot going on.  I'm going to echo what I and others have said:  simplify this all.  Ditch the properties, put the money in VTSAX.  Stop the running around; tell yourself that for any new activity in your life, you need to drop something else.  Do the kids really need to go 4x/week?  If they do -- or if this is a battle you're not willing to fight right now -- then just make a habit of a calm family meal and puzzles and games or whatever on at least one other night; give your wife at least one night off; and take some time just for yourself the other night.  You're putting yourself through all of this for the good of your family -- but if your family life is struggling, then it's not worth it.  Time to re-think the way you want your life to be, and then just start living it.

FYI, I am very impressed by your progress so far and glad that you feel like you are moving in a better direction.  The key now is don't let the perfect be the enemy of the good -- don't get so caught up in finances and frugality that you let that effort keep dragging yourself away from your family life!  Bring your wife into this; she is a grown human, and so she gets equal say in the decisions that you are making now, and she also bears equal responsibility for figuring out how to fix things.  For this to take long-term, you both need to agree on a plan, and you both need to execute it consistently.
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thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #124 on: September 19, 2017, 10:57:32 AM »

DDs - my DD did dance as well, also soccer, karate, Scouting, but we were never out 4 nights a week in elementary school.  4 and 7 seems very young to be doing that much dance.  What is the rationale behind it?  Are they in the same class so both doing 4 nights?  Or different classes and 2 nights each, or 1 and 3?  Who takes them?  Can the parent taking them do errands while class is on, to free up family time for the weekend?  Or is class time the chance for the chauffeuring parent to have a bit of a rest?   So much to think about re arrangements here.  Not knocking this, car time with kids can be a great time to connect with them.  Long-term - what are the goals for dance?  Mine got into a very competitive dance world (my DD's area of dance does not really have a recreational component except at the adult level) and we ended up doing a lot of travel for competitions. I am not sure I would have started her if I had known this was the standard.  We did it frugally, it could have been much worse financially, but it did take a chunk of time and money. So if your daughters' dance is also competitive, the time to decide if you want to go down that rabbit hole is now, not when the teacher is talking about  a summer of competition.

Also re DD's and activities - traditionally girls did individual activities and boys did team activities - dance is an individual activity.  Are the girls getting lots of peer interaction? - you know, play time.  Or sports?  House leagues aren't usually too competitive, and competitive is stupid at their ages.  And other group activities - this can also include Scouting/Girl Guides/4H/other group things.  And they may be too young, but in this world I was always glad DD took karate, having a bit of self-defense skills is a good thing, and having a potential abusive boyfriend know the girl can wipe his clock is also a good thing. Oh, yes, I admit being a protective parent.

Re the real estate, if you had a passion for it I would say great, go for it, just do your financial calculations.  Since you just sort of ended up in it, I go by the comment to sell it all. Maybe aim to be totally out in 6 months?  Or a year?  But give yourself a deadline.   Just because the banks will lend to you is not a reason to take them up on it, the banks lent to all those people who have ended up under-water on their houses.  Banks are in business to make money, after all, and they are making some off of you right now.  And from you have posted, you don't have the time and energy to be a part-time landlord, save that time and energy for your family.

Re the Air National Guard, that means your wife is on her own with the girls one weekend a month.  Is she getting enough down time?  Are you being an active father?  Having a daughter myself meant I saw lots of her friends, and there were a lot of fathers who weren't all that involved because they didn't know how to interact with daughters.  Now that the daughters are all grown up the fathers are still not that involved in their daughters' lives, because they never were so there is no precedent.  Actually there were a lot of daughters who never saw that much of either parent because of their parents' jobs, and that was sad too.

And if is seems odd that I am looking at your life instead of your money, the two are inextricably entwined.  You can't change one without the other.

Should have been more specific.  They have 4 dance classes between the two of them, 3 nights a week.  One is in a ballet/tap combo class and tumbling, and the other is in tap and hip hop.  We do a pretty god job of splitting up the chauffeuring duties between my wife and I, but it is a lot to keep up with.  It's something my wife is pretty passionate about them doing, and they do seem to genuinely enjoy it.  It runs us about $270/mo plus costumes and time, icyww.

Neither of them are in sports atm, though softball is something we've considered.  We do have a quite a few friends/couples with kids their age, so they do interact with peers often.  I'm not sure what's normal there so it's hard to say if its really "enough".  Karate is a great idea.  ;oP

I do enjoy the "fixing it up" aspect of being a landlord, since I'm pretty handy, but I'm not very involved in the properties at this point - surprise.  I have management companies for the Duplex and Condo, and the SFH should be on the chopping block in the next 2-3 months.  Perhaps flipping houses would be a better fit for me (*face punch* AFTER simplifying some things).

I want more time, no question.  More time for the things that matter...kids, wife, vacation, just relaxing.  I have 3 more years in the Air Guard before I can retire, so that will no doubt help.  On top of the one weekend a month, I'm also gone for two weeks each year on training, so that's even harder.

No sweat, you are perfectly in line...no one has been wrong in their assessment of our situation yet, and its all good.

Please don't mistake my ignorance for arrogance -thebloggo

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thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #125 on: September 19, 2017, 02:48:28 PM »
Going to start a rolling post of progress here just to keep track.

Complete:

1. Credit cards have been paid off, resulting in freed up cash $300/mo
2. Winding down the Lending Club account has started, should add income of about $450/mo
3. Stopped contributing to emergency fund and misc saving accounts, resulting in freed up cash: $650

In doing these three things I now have about $1400/mo to throw on top of something.

I'm thinking this $1,400 goes on top of the $17,000 personal loan (PL1) with interest rate of 10.75%, which would pay that off in 11 months. 

Next would be the $14,000 personal loan (PL2) with an interest rate of 7.5%.  Combining the $1,400 with the $450 freed up by paying off PL1 would pay that off 7 months after PL1 is paid off, or 18 months from now.  I'm assuming the balance on PL2 is around $2300 lower 11 months from now.

I'm also making repairs to sell the SFH, so proceeds from that sale could change everything above depending on how much i net there.

This is pretty aggressive (for me) but should be doable considering we were living without this money one way or the other anyhow.

Thoughts?
Please don't mistake my ignorance for arrogance -thebloggo

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tyort1

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Re: Case Study - $800,000 in debt and where to start?
« Reply #126 on: September 19, 2017, 02:50:50 PM »
I'm actually impressed that you are willing to sell things and cut ties with your past financial mistakes.  Many people simply cannot do this and will hold onto bad debt till the bitter end.  Sell, simplify and focus on new, better habits.  You've already taken some of the hardest steps. 

One thing that helped me in the beginning was to think of it like a game.  "What recurring expense can I cut or eliminate THIS month?" 

Part of why people spend $$ on things like eating out is because of convenience, because they are stretched too thin and are exhausted.  As you make better financial decisions and learn to simplify your life, you get back TIME.  Time to spend with your family.  Time to engage in a hobby you love.  Time to just veg out and relax.  Trust me, even though the initial changes are hard, it's soooo worth it.
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Peony

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Re: Case Study - $800,000 in debt and where to start?
« Reply #127 on: September 19, 2017, 03:06:41 PM »
Posting to follow. And sending encouragement. I appreciate your openness to constructive criticism and look forward to watching your progress.

Another Reader

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Re: Case Study - $800,000 in debt and where to start?
« Reply #128 on: September 19, 2017, 03:25:20 PM »
"This is pretty aggressive (for me) but should be doable considering we were living without this money one way or the other anyhow."

Bingo!

Check2400

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Re: Case Study - $800,000 in debt and where to start?
« Reply #129 on: September 19, 2017, 04:16:21 PM »
Going to start a rolling post of progress here just to keep track.

Complete:

1. Credit cards have been paid off, resulting in freed up cash $300/mo
2. Winding down the Lending Club account has started, should add income of about $450/mo
3. Stopped contributing to emergency fund and misc saving accounts, resulting in freed up cash: $650

In doing these three things I now have about $1400/mo to throw on top of something.

I'm thinking this $1,400 goes on top of the $17,000 personal loan (PL1) with interest rate of 10.75%, which would pay that off in 11 months. 

Next would be the $14,000 personal loan (PL2) with an interest rate of 7.5%.  Combining the $1,400 with the $450 freed up by paying off PL1 would pay that off 7 months after PL1 is paid off, or 18 months from now.  I'm assuming the balance on PL2 is around $2300 lower 11 months from now.

I'm also making repairs to sell the SFH, so proceeds from that sale could change everything above depending on how much i net there.

This is pretty aggressive (for me) but should be doable considering we were living without this money one way or the other anyhow.

Thoughts?

My thoughts are simple:

GOOD JOB!

Keep it up and way to go.  Stop and smell the roses on this, and enjoy your major accomplishments.  You can act on advice on the other steps soon enough, but for now, GOOD JOB. 

I look forward to being jealous of you reaching FIRE before me :)

Laura33

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Re: Case Study - $800,000 in debt and where to start?
« Reply #130 on: September 19, 2017, 04:41:10 PM »
Awesome, awesome, awesome - great plan!
Laugh while you can, monkey-boy

Raenia

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Re: Case Study - $800,000 in debt and where to start?
« Reply #131 on: September 19, 2017, 05:39:38 PM »
Good job, you're doing very well at taking comments and moving in the right direction.  You've got a good plan here, now the trick is to stick to it.  We'll be here cheering you on!  Keep us updated, and good luck selling the SFH!

Dicey

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Re: Case Study - $800,000 in debt and where to start?
« Reply #132 on: September 19, 2017, 06:27:10 PM »
Love the direction of this thread. The story, the great advice, your responsiveness - all in all, a very exciting and compelling tale.

There will always be houses to flip. I strongly encourage you to simplify that part of your life as much as possible. Your DIY skills won't disappear, but your daughter's childhoods will. Houses can wait. I'd lean towards selling, but wisely, to limit the tax bite as much as possible. Conversely, it might be okay to just let them bubble on the back of the stove until you retire from the AG. Frankly, I have never fully understood why you lump mortgage debt into the "bad" category. IMO, your other debt is a hair-on-fire emergency, the mortgage debt, not so much.

A cautionary tale: a neighbor of ours caught the mustachian fire and approached his wife with all the things she needed to do to get on board. She resented his failure to see and appreciate the ways that she truly had been mustachian all along. Perhaps this was the last straw, because they are divorced now. She's in the home with their four kids. She converted the upstairs master into a separate (lovely) rental unit in our super-hot market. We think she's sleeping in the living room. (Sound familiar?) She has a great job and commutes in a nice looking, but rather old Camry she bought around the time of the divorce. We recently noticed an Odyssey that looks like it has some serious time on the meter. Turns out her kids are in a magnet school and they carpool. The Camry wasn't big enough, so she bought the Odyssey for carpooling duty. Spent $500. Only uses it on the days she has to haul six or more kids. Badass indeed.

Moral of the story: use caution as you introduce your wife to Mustachianism. You might be surprised, in a good way, at what she already does. Or not, but either way, approach her respectfully.
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Goldielocks

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Re: Case Study - $800,000 in debt and where to start?
« Reply #133 on: September 19, 2017, 08:12:46 PM »
tbb,  great plan.

I would add in looking for a different (cheaper) car than the newer SUV that you have..  especially if you can't get the SFH sold with good profit within the next 3-4 months.


caracarn

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Re: Case Study - $800,000 in debt and where to start?
« Reply #134 on: September 20, 2017, 06:25:18 AM »
tbb, great job on continuing to make progress.  All the same comments at others.  Actually making a choice and taking action is the hardest part, so you will be in good shape if you stick with it as you've jumped the highest hurdle; getting over your desire not to change.

thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #135 on: September 21, 2017, 08:12:55 AM »
Going to start a rolling post of progress here just to keep track.

Complete:

1. Credit cards have been paid off, resulting in freed up cash $300/mo
2. Winding down the Lending Club account has started, should add income of about $450/mo
3. Stopped contributing to emergency fund and misc saving accounts, resulting in freed up cash: $650

In doing these three things I now have about $1400/mo to throw on top of something.

I'm thinking this $1,400 goes on top of the $17,000 personal loan (PL1) with interest rate of 10.75%, which would pay that off in 11 months. 

Next would be the $14,000 personal loan (PL2) with an interest rate of 7.5%.  Combining the $1,400 with the $450 freed up by paying off PL1 would pay that off 7 months after PL1 is paid off, or 18 months from now.  I'm assuming the balance on PL2 is around $2300 lower 11 months from now.

I'm also making repairs to sell the SFH, so proceeds from that sale could change everything above depending on how much i net there.

This is pretty aggressive (for me) but should be doable considering we were living without this money one way or the other anyhow.

Thoughts?

Forgot to add; and I don't think I ever mentioned this before...let the face punches commence.  We owned a BlueGreen timeshare we never used that I just sold (read: gave away) two months ago.  Another "seems like a good idea" at the time thing, but that was 10 years ago.  It was costing us about $830/yr in maintenance and fees, so there's $70/mo back.

I also downgraded my AMEX Platinum Card to Green yesterday, lowering the annual fee from $450 to $95 - about $30/mo savings there. 

So combine those two for about $100/mo more back in the pocket!  Woo hoo!  Small steps, buy they are adding up.
Please don't mistake my ignorance for arrogance -thebloggo

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Bracken_Joy

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Re: Case Study - $800,000 in debt and where to start?
« Reply #136 on: September 21, 2017, 08:16:28 AM »
I'm not even going to facepunch you on those last ones. You fixed them already, so hopefully you are entering the next phase of MMM growth: face punching YOURSELF. So I'll let you do your own face punching on this one ;)

(What does a $450/yr CC fee even COVER???)
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thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #137 on: September 21, 2017, 08:30:56 AM »

(What does a $450/yr CC fee even COVER???)

Quite a bit actually.  If you travel as much as I used to for work it pays for itself.  I probably would have kept it if things didn't slow down for me.  The good thing is if I start traveling again, I can always swap back up.

It's a rewards card, and some of the benefits included:

$200 Airline fee credit
Yearly fee credit for Global Entry/TSA Pre-Check
Automatic Hilton Gold Status
Automatic Starwood Preferred Gold Status
$75/yr in hotel credits
Priority pass select
Avis Preferred/National Emerald Club status
Unlimited Airport Lounge Access (mostly Intl)
Unlimited Boingo/Gogo Hotspot access
5x Points on travel
No Foreign transaction fees
$35/yr in Uber credits
Roadside assistance (4x/yr)
Access to AMEX Open (for small businesses)

Probably sounds like a plug, but it's really not.  It's only worth it if you use it, which is why I downgraded.


« Last Edit: September 21, 2017, 08:32:49 AM by thebudgetbloggo »
Please don't mistake my ignorance for arrogance -thebloggo

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lhamo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #138 on: September 21, 2017, 10:55:17 AM »
Amex also has the Blue Cash option, which is fee free -- you could save another $95/year that way (more with the cash back).
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RetiredAt63

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Re: Case Study - $800,000 in debt and where to start?
« Reply #139 on: September 21, 2017, 11:43:29 AM »
If I traveled enough to need all those extras, I would want my company to be providing me with the card, or covering the fee.  Good for you for down-grading.
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thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #140 on: September 21, 2017, 12:19:11 PM »
Amex also has the Blue Cash option, which is fee free -- you could save another $95/year that way (more with the cash back).

Blue Cash is a Credit Card and not a Charge Card, so unfortunately you can't upgrade/downgrade between those.  To go that route I would need to close the Platinum card and apply for Blue Cash separately - resulting in a new card, a hard credit inquiry, and 12 years of lost credit history.  Going this way I was able to keep my card number, Membership Rewards points, and *some* of the same benefits without having to re-qualify.
« Last Edit: September 21, 2017, 12:22:58 PM by thebudgetbloggo »
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thebudgetbloggo

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Re: Case Study - $800,000 in debt and where to start?
« Reply #141 on: September 21, 2017, 12:22:10 PM »
If I traveled enough to need all those extras, I would want my company to be providing me with the card, or covering the fee.  Good for you for down-grading.

My company does reimburse travel expenses, but how they are covered is on the individual.  They'd probably tell me the same thing as lhamo - "go get a card with no annual fee"...
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RetiredAt63

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Re: Case Study - $800,000 in debt and where to start?
« Reply #142 on: September 21, 2017, 03:29:38 PM »
If I traveled enough to need all those extras, I would want my company to be providing me with the card, or covering the fee.  Good for you for down-grading.

My company does reimburse travel expenses, but how they are covered is on the individual.  They'd probably tell me the same thing as lhamo - "go get a card with no annual fee"...

If your company doesn't want to pay an annual fee to cover your card, why should you?  Although I can see lots of nice perks when I go back to your list, but nothing that a company would want to foot.  You don't need roadside assistance with a rental, which is what you would be driving for work travel.  Everything else is hedonic adaptation for you.  Expensive perks.  Again, good for you for ditching it.
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Goldielocks

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Re: Case Study - $800,000 in debt and where to start?
« Reply #143 on: September 21, 2017, 11:18:56 PM »
Those last two are terrific!

You remind me of the article "The Principle of Constant Optimization"...   keep on tweaking the small stuff, while focusing on the large things (SFH, etc), and you will race ahead quickly.   The $400 to $1000/yr stuff does add up quickly to your bottom line.

http://www.mrmoneymustache.com/2013/05/15/the-principle-of-constant-optimization/

Not the example of the spendy couple, per se, that's you in the rearview mirror... but you are showing the example of "Practice Constant Optimization in all areas of your life." which you are starting to do now.
« Last Edit: September 21, 2017, 11:22:28 PM by Goldielocks »

Meesh

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Re: Case Study - $800,000 in debt and where to start?
« Reply #144 on: September 22, 2017, 11:48:31 AM »
I just read this whole thread.  Whew!

TBB, are you in love with being a landlord?  Do you have time for it all?  Because if not, I am going to be radical here and say sell them all.  If you want to have real estate investments, buy shares in a REIT.  So much simpler, and they know what they are doing. 

People have looked at various aspects of your situation, so I am going to go general.

We have no idea of what your life is like.  You work, plus you mentioned a side business (or at least an investment in a side business), your wife works, kids are ? age? how many after-school activities?  I am wondering how much time is available to you (which is why I am thinking REITs are the way to go for you) and how much energy you have left after work.

One of the guiding principles here on the forums is that money does not buy happiness.  A well-thought out life does bring happiness.  I am seeing a life that is basically in chaos, decisions made as the need arises, no long-term thinking about goals.  You need to sit down with your wife (and kids if old enough to have sensible input) and figure out what your life is like now and what you as a family would like it to be. Given all the mental energy you seem to be spending on jobs and rentals and who knows what, how much of your energy is going to your family?
 
And really, looking at the juggler juggling knives and flaming torches story so far, you need to simplify.  You will continue to spend money eating out if you can't sort out a home life that involves eating at home and a sensible grocery shopping plan.  Involving the kids in home maintenance activities (cooking, dishes, laundry, yard maintenance, minor home repairs) will prepare them better for adulthood.  Having the family plan what is important and what can be dropped will help the kids learn how to set their own priorities.


Some info from your wife would help too, how does she see all this?  Does she even have a clear picture of all this?

Good luck.

I'm not married to being a landlord - I just kinda fell into it, since like someone else mentioned, the banks seemed to have no problem issuing me over $700,000 in mortgages.  I was never really compelled to sell since they've remained rented.  It's clear that they are probably not the most fiscally sound investment choice.  I'm in the process of preparing the SFH for sale, and need to split the mortgage to sell the Duplex, if I want to get maximum return on that sale.  I am considering keeping the condo if any of them, since I think it may be in the best shape from an ROI standpoint, but the jury is still out on that.

Kids are 7 and 4, girls, and they have dance 4 nights a week.  Did I mention I'm also in the Air National Guard, so there goes at least one weekend a month.  I have zero energy all the time.  I started crossfit and haven't been back in a month because the time just isn't there.  But, I am still paying for it.  *sigh*

Family life is struggling, I will admit - I do appreciate that laying all this information out here has really helped put things in perspective for me.  It easy to just "keep on truckin" and accepting the status quo while your on the inside.  Reading through all of these perspectives has really shed a light on my situation and allowed me to see it from the outside, which is something I don't think I could have done alone.  It was easy to accept it because we were on cruise control...albeit on the wrong side of the road.

My wife has been on me about budgeting for a long time; and I've let her know that I'm getting all of this information together.  I don't think she has a very clear picture of it however, because she hasn't typically been involved in the day to day bill paying, etc.  It's not that I've made any effort to hide the situation, but I've never walked her through it all either.  This is something I need to fix for sure.

Between 3 rentals, a side business, the national guard and a full time job with a long commute and travel, I'm not surprised your family life is a bit "struggling". You have essentially 4 jobs. It seems like you are or were a bit blowing in the wind with your direction in life. Can I ask how much time you spend with your family? Some ways you can add family time are simple and I'm guessing you started on this but here are some ideas:

Cooking. Learn to cook together. Look up things you love to eat when you go out and try to do it yourself. They will not be good initially but over time you'll perfect them and wonder why you used to go out to buy them because yours are better and cheaper anyway. Feel too exhausted to cook during the week? Batch cook over the weekend and freeze meals. Right now we have homemade frozen pizza, precooked frozen spaghetti sauce, and waffles in our freezer. Prep a weeks worth of salads, 2 or 3 different types and put them in containers in the fridge to grab. The kiddos get a kick out of helping too. Batch cooking works well because over the weekend you have more energy and can make it into a fun activity and during the week its way faster and cheaper to just nuke a pizza for 2 minutes then even grab fast food.

Cut your cable (even better ditch the TV altogether!). Spend that time every night having quality screen free time with your children. Play board games, have a dance party since they like dance, or make a puppet show idk. Try for at least an hr every night. Workout and involve the kids, getting them active too. TV not only is a time suck but it has opportunity costs. You can spend that time bettering your lives and creating memories with each other. After a while you'll wonder why what some fictional person will do next week was ever important to you. Have a show you love? See if you can get that one or two shows you can't live without on amazon prime for a fraction of the cost and making you less likely to just watch because its there and you're bored and tired.

Get rid of your side jobs. Keep only the ones that give you real joy working on them. I'm guessing you do most of these on the weekend. Take that time and try to make at least one weekend day family day. Go to the park, get a zoo or children's museum membership and go often.

*edited for typos
« Last Edit: September 22, 2017, 11:54:55 AM by Meesh »

oneday

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Re: Case Study - $800,000 in debt and where to start?
« Reply #145 on: Today at 04:46:08 PM »
Going to start a rolling post of progress here just to keep track.

Complete:

1. Credit cards have been paid off, resulting in freed up cash $300/mo
2. Winding down the Lending Club account has started, should add income of about $450/mo
3. Stopped contributing to emergency fund and misc saving accounts, resulting in freed up cash: $650

In doing these three things I now have about $1400/mo to throw on top of something.

I'm thinking this $1,400 goes on top of the $17,000 personal loan (PL1) with interest rate of 10.75%, which would pay that off in 11 months. 

Next would be the $14,000 personal loan (PL2) with an interest rate of 7.5%.  Combining the $1,400 with the $450 freed up by paying off PL1 would pay that off 7 months after PL1 is paid off, or 18 months from now.  I'm assuming the balance on PL2 is around $2300 lower 11 months from now.

I'm also making repairs to sell the SFH, so proceeds from that sale could change everything above depending on how much i net there.

This is pretty aggressive (for me) but should be doable considering we were living without this money one way or the other anyhow.

Thoughts?

Forgot to add; and I don't think I ever mentioned this before...let the face punches commence.  We owned a BlueGreen timeshare we never used that I just sold (read: gave away) two months ago.  Another "seems like a good idea" at the time thing, but that was 10 years ago.  It was costing us about $830/yr in maintenance and fees, so there's $70/mo back.

I also downgraded my AMEX Platinum Card to Green yesterday, lowering the annual fee from $450 to $95 - about $30/mo savings there. 

So combine those two for about $100/mo more back in the pocket!  Woo hoo!  Small steps, buy they are adding up.

I had a similar experience with getting rid of timeshare. From my perspective, you did well in getting rid of it & stopping the bleeding of maintenance fees.
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