The beatles Case Study

[The beatles]

People dont always want to be thinking about their finances.

We're scared for you. You're dealing with some major debts here, and are majorly delinquent on them. You won't have the privilege to *not* think about your finances all the time if you lose your home. We just want to help you avoid that. I think Retired@63 is seeing you being fairly unconcerned about the property tax thing ("that's not how it works in my county"), and is worried about anything that will pull your attention away.

It's not to say you have to be staring at a spreadsheet every minute of every day. But fundamentally, you don't have an income problem, you have a spending problem, so it's easy as a 'spectator' to see you looking at side hustles and get worried.

He literally wants me to not write on a blog because its not about my finances.

Seriously?

That's ridiculous.

I'm well aware of the tax situation.

But I cant think about it every minute of every day.

I even tried calling today but theyre closed for MLK day.

[The beatles]

I don't think it's so bad to be working on a little side gig, if it relaxes you.  But I would agree with recent posters that selling off some troublesome possessions is the way to go. Get rid of the stressful rental and big car loan.  Simplify. They add nothing but worry to your life, let them go.

I wish I could make the rental go bye bye right now.

$35k to $40k in cash sounds sooooo good right now.

[Bracken_Joy]

People dont always want to be thinking about their finances.

We're scared for you. You're dealing with some major debts here, and are majorly delinquent on them. You won't have the privilege to *not* think about your finances all the time if you lose your home. We just want to help you avoid that. I think Retired@63 is seeing you being fairly unconcerned about the property tax thing ("that's not how it works in my county"), and is worried about anything that will pull your attention away.

It's not to say you have to be staring at a spreadsheet every minute of every day. But fundamentally, you don't have an income problem, you have a spending problem, so it's easy as a 'spectator' to see you looking at side hustles and get worried.

He literally wants me to not write on a blog because its not about my finances.

Seriously?

That's ridiculous.

I'm well aware of the tax situation.

But I cant think about it every minute of every day.

I even tried calling today but theyre closed for MLK day.

People here are going to push you, and push you hard. You are welcome to do with the advice as you please- clearly even other posters on here disagree with each other. I'm just explaining *why* people are pushing you so very much. But, as many people keep coming back to- it's down to you and your wife what you are going to do. You'll get many view points on here- there isn't any one perfect way to do this. Weigh the options, and if they don't work for you, then that's fine. =) The important thing is just to look at people's rationale and see if it rings true for you. Learning and exploring and all that jazz.

You *are* making progress, so the biggest thing is to keep rolling with that momentum. Good job on trying to make the call. And, as always, for coming back here to face punches and opinions galore.

(Also, as a more meta thank you: your case study here has resulted in SO many good resources and feed back all in one place. I think your honesty and vulnerability here has led to a really incredible central resource, that I think will be of value to many people. So that should be an extra bright spot in all this- in addition to improving your own financial situation, you have led to the creation of something that can help other people, too. Even people like me who have been around here for a while- I have pushed myself WAY harder this month on my groceries than ever before, and have made a price book finally. So seriously- thank you).

[ketchup]

Just caught up on this whale of a thread!

1. Beatles, good on you for reaching out for help, taking the face-punches, sticking with it, and taking action!  You can do this.

2. I definitely agree with the recent posts.  Figure out your property tax situation ASAP!  That has to be priority one.  You don't want that to blow up.  Your last post mentioned calling today but they were closed.  Definitely call them tomorrow and get the ball rolling.

3. IRS debt.  Sounds like you're on your way with that one.  After you get the property tax situation evaluated and have a plan to take care of that, tackle the IRS debt.

4. No more work lunches.  Way to go!

5. Grocery spending.  Sounds like you've made a real 180 there, keep that up!  It's a marathon, not a sprint.  And healthy food does more than help your wallet.

6. Replacement bedroom TV.  Good on you for cancelling that order.  Either look into fixing that TV in lieu of replacing it, or just get it out of there.  I don't think anyone should have a TV in their bedroom.  Your brain should associate that room with only two things, and one of them is sleep.  Both will improve when other activities (even "good" stuff like reading in bed!) cease to happen in the bedroom.  You certainly sound like you have a big enough house for that.

7. Advertising.  You mentioned that you heard a radio ad for a remote starter, which is what opened that can of worms.  If you hadn't heard the ad, would you have been thinking about a remote starter that day?  Probably not.  In addition to solving any perceived use of a remote starter as others have said (by clearing all the extra shit out of your garage so you can park there), you should address the root: advertising. 

Don't listen to the radio in the car.  Listen to CDs.  Listen to music off your phone.  Listen to audiobooks.  Listen to podcasts. 

Same for TV.  Cut the cable, cut the commercials.  Watch what you want to watch if you really want to watch it, but watch it without ads on Netflix, Hulu, Amazon, DVDs from the library, etc.  Hell, download them off bittorrent; you're in serious debt.  Steer away from TV shows that have "upper-middle-class" (really upper-class) people featured in a way that normalizes luxury.  Watch things removed from consumerism.  Mad Men, Game of Thrones, Mythbusters, whatever. 

Throw away junk mail as soon as you get it.  You don't need anything in there.

8. Cars.  You haven't been too specific about your vehicles.  You said you have a large SUV.  Does your wife also have a large SUV?  You keep saying you don't want to go down to one car, but what about downsizing one of them?  That would still free up some cash.  Small car + big car is a good combination for someone in your situation.  That way you keep the utility of the big car for hauling kids around or whatever, but you can use a smaller one for all the solo driving you do (20 miles one way to work).

[former player]

I don't think it's so bad to be working on a little side gig, if it relaxes you.  But I would agree with recent posters that selling off some troublesome possessions is the way to go. Get rid of the stressful rental and big car loan.  Simplify. They add nothing but worry to your life, let them go.

I wish I could make the rental go bye bye right now.

$35k to $40k in cash sounds sooooo good right now.

Isn't it on the market yet?  If not, why not?

You can make the rental go bye bye and get the $35k to $40k in cash.  You start with one simple step: calling a real estate agent and asking them to put a (real and electronic) "for sale" sign up.  Easy.

[Poundwise]

If Redfin is in your area, why not give them a shot for selling your rental? I highly recommend them... saved $7K as a buyer.
You can get started tonight, don't have to wait for the morning.

https://www.redfin.com/

[The beatles]

If Redfin is in your area, why not give them a shot for selling your rental? I highly recommend them... saved $7K as a buyer.
You can get started tonight, don't have to wait for the morning.

https://www.redfin.com/

What should I say

[former player]

If Redfin is in your area, why not give them a shot for selling your rental? I highly recommend them... saved $7K as a buyer.
You can get started tonight, don't have to wait for the morning.

https://www.redfin.com/

What should I say

Tell them the property is on the market at a realistic price, that the whole amount owed will be paid from the sale proceeds and in the meantime you wish to set up a payment plan (first payment that day) until the sale is finalised.

[The beatles]

If Redfin is in your area, why not give them a shot for selling your rental? I highly recommend them... saved $7K as a buyer.
You can get started tonight, don't have to wait for the morning.

https://www.redfin.com/

What should I say

Tell them the property is on the market at a realistic price, that the whole amount owed will be paid from the sale proceeds and in the meantime you wish to set up a payment plan (first payment that day) until the sale is finalised.

I feel pretty bad for the renters too.

[GetSmart]

Have you asked the renters if they'd be interested in buying it yet ?

And if it's an outside buyer - perhaps they would allow the tenants to stay on.

Don't let these excuses hold you up.

[Poundwise]

Sorry, I don't have experience selling a rental; maybe post in the real estate forum?

Some places to start:
https://www.trulia.com/blog/how-to-sell-a-tenant-occupied-property/
https://www.landlordology.com/tenants-rights-selling-a-rental-property/
http://www.zillow.com/blog/sell-a-house-with-tenants-145436/

[Unique User]

For the rental - I own two and if I was going to buy another, I would buy one that needed work.  Additionally, as much as DH and I say we want to buy a house that is move in ready - we never do it, we always gravitate toward the house that needs work so we can put in sweat equity.   I would find another realtor, ask around or just email a bunch to find one that specializes in investment property. 

You are getting a lot of great advice (I've only read a bit), but agree completely on the property taxes and IRS, you really need to get those on payment plans.   

I really posted in order to offer advice to your wife.  When we realized we needed to turn things around, grocery bills and restaurants were one of the first things we cut.  For restaurants, it was really hard to cut them out altogether.  I started signing up for mystery shops which helped with our new zero budget.  The trick was to stay within the reimbursement so I didn't spend anything extra.  For groceries, we only bought what was on sale.  If chicken was on sale, we ate chicken, if pork was, we ate pork.  Same with vegetables, whatever was on sale, in season or on the markdown rack.  For convenience foods, I only bought the items that were super cheap after coupons, like 50 cents cheap, free was even better.  Most of it is crap yes, but because the amount I was willing to spend was so little, we ended up with very few convenience foods.  I also used coupons for shampoos, soaps, etc - our budget was almost non-existent for those items so I bought whatever brand was cheap/free after coupons.  Lastly, I had never had a veggie garden before, but I tried growing tomatoes one year because we loved tomatoes.  Total overload and by the time we moved four years later we had a 20X10 garden.  My daughter (1st grade to 5th grade those years) and her friends would go into the garden to snack on snow peas, blueberries and cherry tomatoes.  They all wanted to help weed as long as they could snack also.  Not sure if you have an area to garden, but even herbs are helpful.  I started treating it like a game and at the lowest, we were spending $275 a month on groceries.  I still do much of the same except garden, I don't think I could ever go back to my old habits. Good luck to you and your wife. 

[The beatles]

Doing the math on the rental.

$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200

I'm having a hard time thinking about giving away $223k for momentary gain.

We would be netting maybe $35k if we sold.

[MDM]

Doing the math on the rental.

$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200

I'm having a hard time thinking about giving away $223k for momentary gain.

We would be netting maybe $35k if we sold.

It would take "only" ~6.4%/yr to turn $35K into $223K in 30 years.

You would "earn" 25%/yr while you pay down those CC debts....

Yes, you could invest the $500 or $650 also, but....

[The beatles]

Doing the math on the rental.

$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200

I'm having a hard time thinking about giving away $223k for momentary gain.

We would be netting maybe $35k if we sold.

It would take "only" ~6.4%/yr to turn $35K into $223K in 30 years.

You would "earn" 25%/yr while you pay down those CC debts....

Yes, you could invest the $500 or $650 also, but....

Hmm.

Didn't think about it that way...

[researcher1]

Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.

People dont always want to be thinking about their finances. Blogging about my startup is a way to relax for a bit.

Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant.  This is from your blog...

"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1.  Finish the MVP (prototype). A couple of weeks of coding should do it.
2.  Conduct advanced testing and debugging of the software and system.
3.  Find people to use the website and give me feedback."

You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???

I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.

[TheStachery]

I'll say it again, your extra time is better spent delivering pizzas or driving for Uber.  You need more income in your spare time, even if it temporary.  While driving, listen to podcasts about getting out of debt.   When you're broke you need to get to work. 


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[Captain FIRE]

Holy shit, why are you not freaked out by the property tax and IRS issue?!?  You get this are serious problems, yes?  This is a BFD.  Are you trying to be zen-like on here about it, or are you ostriching, or do you genuinely not get why we think this is a huge problem? 

If I might lose my house to foreclosure, I'd be freaked out.  And you've got two kids!  As it is, I'm even freaked enough on your behalf to wander down the Alice in Wonderland rabbit hole and wonder if you maybe should accept your parent help to bail you out one last time on the IRS/taxes (except that I think that you need to learn to fix these financial issues on your own rather than always going to the Bank of Mom and Dad, and if you do this, you may never learn to be an adult and stand on your own two feet).

Can your wife put the kids in daycare and get a job? 

[The beatles]

Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.

People dont always want to be thinking about their finances. Blogging about my startup is a way to relax for a bit.

Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant.  This is from your blog...

"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1.  Finish the MVP (prototype). A couple of weeks of coding should do it.
2.  Conduct advanced testing and debugging of the software and system.
3.  Find people to use the website and give me feedback."

You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???

I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.

You act like paying off debt takes study time.

What would you like me to do with the 5 hours per week I spend on my side venture?

Call each credit card company and have a chat?

Call the town and re-verify that my payment plan is set up ever day?

Call the IRS and see if we're still on track every 3 days?

Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?

[The beatles]

I'll say it again, your extra time is better spent delivering pizzas or driving for Uber.  You need more income in your spare time, even if it temporary.  While driving, listen to podcasts about getting out of debt.   When you're broke you need to get to work. 


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I'd love to.

I wish Uber was in my area.

[The beatles]

Holy shit, why are you not freaked out by the property tax and IRS issue?!?  You get this are serious problems, yes?  This is a BFD.  Are you trying to be zen-like on here about it, or are you ostriching, or do you genuinely not get why we think this is a huge problem? 

If I might lose my house to foreclosure, I'd be freaked out.  And you've got two kids!  As it is, I'm even freaked enough on your behalf to wander down the Alice in Wonderland rabbit hole and wonder if you maybe should accept your parent help to bail you out one last time on the IRS/taxes (except that I think that you need to learn to fix these financial issues on your own rather than always going to the Bank of Mom and Dad, and if you do this, you may never learn to be an adult and stand on your own two feet).

Can your wife put the kids in daycare and get a job?

I am freaked out kinda. But what do you want me to do? Post in all caps?

[TheStachery]

I'll say it again, your extra time is better spent delivering pizzas or driving for Uber.  You need more income in your spare time, even if it temporary.  While driving, listen to podcasts about getting out of debt.   When you're broke you need to get to work. 


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I'd love to.

I wish Uber was in my area.

Deliver pizzas.  You can make $1000 month doing that.  What about Lyft.  I live in the middle of nowhere and we have Uber and lyft here. 


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[snacky]

Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.

People dont always want to be thinking about their finances. Blogging about my startup is a way to relax for a bit.

Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant.  This is from your blog...

"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1.  Finish the MVP (prototype). A couple of weeks of coding should do it.
2.  Conduct advanced testing and debugging of the software and system.
3.  Find people to use the website and give me feedback."

You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???

I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.

You act like paying off debt takes study time.

What would you like me to do with the 5 hours per week I spend on my side venture?

Call each credit card company and have a chat?

Call the town and re-verify that my payment plan is set up ever day?

Call the IRS and see if we're still on track every 3 days?

Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?

Delivering pizza. You might not have Uber but you have pizza places.
Listing the crap in your house for sale online. Every piece of sports equipment, every small appliance, anything that doesn't get daily or at least weekly use in your house you sell for whatever someone will pay for it.
Batch-cooking and freezing meals so the nights when you're out delivering pizza your wife doesn't have to do the evening chores without at least some help.
Setting your house up for an in-home daycare.

My god. Pull your socks up.

[researcher1]

Doing the math on the rental.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.

After reading all of your posts, it is very obvious that your head is in the clouds when it comes to dealing with this financial disaster.
It is clear you still don't get it, even after HUNDREDS of posts offering very good advice & education. 

Here are a few of the things that have transpired just in the past few days...
- Bought a TV
- Told us "we only use credit cards for toys right now."
- You are delinquent on your property taxes for the last three years.
- Explained your wife shops as a "coping mechanism" to "make her feel happy."
- Have an irrational attachment to this rental property and an unwillingness to put it on the market.
- Meanwhile, you're spending significant amounts of time on a "startup" dream that assists in buying "high end" products.

Dude, wake up!!!

I won't get into specifics, but you need to do the following immediately...
- Put the startup on the back burner
- Sell the rental ASAP
- Continue cutting spending
- Get marital counseling

[TheStachery]

Doing the math on the rental.

$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200

I'm having a hard time thinking about giving away $223k for momentary gain.

We would be netting maybe $35k if we sold.

The problem is you're bad at math.  If you were any good at it you wouldn't be in this mess in the first place. 


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[researcher1]

Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant.  This is from your blog...
"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1.  Finish the MVP (prototype). A couple of weeks of coding should do it.
2.  Conduct advanced testing and debugging of the software and system.
3.  Find people to use the website and give me feedback."

You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???
I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.

You act like paying off debt takes study time.
What would you like me to do with the 5 hours per week I spend on my side venture?
Call each credit card company and have a chat?
Call the town and re-verify that my payment plan is set up ever day?
Call the IRS and see if we're still on track every 3 days?
Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?

For Christ's sake, do you really need this spelled out for you? 

Here are just a few examples of how you should be spending your spare time...
- Read as many books about debt/personal finance/budgeting you can get your hands on
- Create financial/budgeting spreadsheets/databases and analyze data
- Spend time reviewing & making actual changes to your budget
- Have conversations with your wife about the source of her unhappiness
- Spend time learning to cook and meal planning (to avoid eating out)

At the very least, you should use that 5 hours/week reading the stack of books you should have checked out from the library.

[The beatles]

I'll say it again, your extra time is better spent delivering pizzas or driving for Uber.  You need more income in your spare time, even if it temporary.  While driving, listen to podcasts about getting out of debt.   When you're broke you need to get to work. 


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I'd love to.

I wish Uber was in my area.

Deliver pizzas.  You can make $1000 month doing that.  What about Lyft.  I live in the middle of nowhere and we have Uber and lyft here. 


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We don't have Uber or Lyft.

I would love to have either. I think it would be fun.

Pizza's are not an option.

[The beatles]

Doing the math on the rental.
$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
TOTAL = $223,200
I'm having a hard time thinking about giving away $223k for momentary gain.
We would be netting maybe $35k if we sold.

After reading all of your posts, it is very obvious that your head is in the clouds when it comes to dealing with this financial disaster.
It is clear you still don't get it, even after HUNDREDS of posts offering very good advice & education. 

Here are a few of the things that have transpired just in the past few days...
- Bought a TV
- Told us "we only use credit cards for toys right now."
- You are delinquent on your property taxes for the last three years.
- Explained your wife shops as a "coping mechanism" to "make her feel happy."
- Have an irrational attachment to this rental property and an unwillingness to put it on the market.
- Meanwhile, you're spending significant amounts of time on a "startup" dream that assists in buying "high end" products.

Dude, wake up!!!

I won't get into specifics, but you need to do the following immediately...
- Put the startup on the back burner
- Sell the rental ASAP
- Continue cutting spending
- Get marital counseling

Half (or more) of this post is just wrong.

[The beatles]

Doing the math on the rental.

$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200

I'm having a hard time thinking about giving away $223k for momentary gain.

We would be netting maybe $35k if we sold.

The problem is you're bad at math.  If you were any good at it you wouldn't be in this mess in the first place. 


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Right, because math skills is why we spend too much, and there has never been a consumeristic mathematician.

[sonjak]

I get the impression from your posts that you are only "kinda freaked out" because the parents can always bail you out.  And besides, foreclosures and repossessions and getting kicked out on the street with your kids in their pajamas doesn't happen to (people like) you. 

(People like) you also don't have garage sales to sell expensive toys, buy secondhand, deliver pizzas or seriously budget. 

(People like) you get takeout and eat in nice restaurants.

(People like) you buy based on brand labels.

(People like) you have an online side business that you can brag about and cars that show just how successful you are. 

(People like) you have a rental because you "own real estate."

(People like) you are broke and won't face it.

[The beatles]

Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant.  This is from your blog...
"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1.  Finish the MVP (prototype). A couple of weeks of coding should do it.
2.  Conduct advanced testing and debugging of the software and system.
3.  Find people to use the website and give me feedback."

You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???
I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.

You act like paying off debt takes study time.
What would you like me to do with the 5 hours per week I spend on my side venture?
Call each credit card company and have a chat?
Call the town and re-verify that my payment plan is set up ever day?
Call the IRS and see if we're still on track every 3 days?
Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?

For Christ's sake, do you really need this spelled out for you? 

Here are just a few examples of how you should be spending your spare time...
- Read as many books about debt/personal finance/budgeting you can get your hands on
- Create financial/budgeting spreadsheets/databases and analyze data
- Spend time reviewing & making actual changes to your budget
- Have conversations with your wife about the source of her unhappiness
- Spend time learning to cook and meal planning (to avoid eating out)

At the very least, you should use that 5 hours/week reading the stack of books you should have checked out from the library.

Alright did all of that.

Next?

[researcher1]

You act like paying off debt takes study time.

I had to follow-up on this quote, as it proves my point that your head is in the clouds about the situation at hand.

Paying off debt is actually a very small part of the problem you are facing!  You have far greater issues that you should also be addressing, like learning how to set up & live on a budget and why your wife uses shopping as a coping mechanism.

I find it interesting that you mention this about Paul Graham in your blog...
"He is brilliant, brilliant. Transcending higher education status quo, brilliant. And because of this, or perhaps forced by this, I read his blog and study his advice as if they are the last written words of wisdom on earth."

So you are willing to study this guy's words for your side venture, BUT you don't think your financial situation requires study time???

[researcher1]

Half (or more) of this post is just wrong.

Why don't you go point by point and let us know what is wrong?  All of the points I made were pulled directly from your posts.

[Allie]

Doing the math on the rental.

$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200

I'm having a hard time thinking about giving away $223k for momentary gain.

We would be netting maybe $35k if we sold.

The problem is you're bad at math.  If you were any good at it you wouldn't be in this mess in the first place. 


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^for real.  You need to expand your knowledge of investments, opportunity costs, and such.  The above is such an over simplification of your rental situation.  Are you accounting for the new roof?  How about the 2 new water heaters, new furnaces, new paint, new carpet, new driveway, other new roof, tenant damage, vacancies, new bathrooms, new kitchen appliances.  All of these things have a usable life that will expire at least once in the next 30 years.  Did you look into the possible investments you could make with that money?  Even if you were to save up and put 20% down on a multi family property, you could come out way ahead depending on your market. 

If only someone had written a blog post about selling stuff you wouldn't buy right now...hmmm.

Oh, yeah. 

http://www.mrmoneymustache.com/2015/07/02/if-you-wouldnt-buy-it-you-should-probably-sell-it/

It's a good read, if someone hasn't linked it before. 

[horsepoor]

Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant.  This is from your blog...
"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1.  Finish the MVP (prototype). A couple of weeks of coding should do it.
2.  Conduct advanced testing and debugging of the software and system.
3.  Find people to use the website and give me feedback."

You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???
I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.

You act like paying off debt takes study time.
What would you like me to do with the 5 hours per week I spend on my side venture?
Call each credit card company and have a chat?
Call the town and re-verify that my payment plan is set up ever day?
Call the IRS and see if we're still on track every 3 days?
Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?

For Christ's sake, do you really need this spelled out for you? 

Here are just a few examples of how you should be spending your spare time...
- Read as many books about debt/personal finance/budgeting you can get your hands on
- Create financial/budgeting spreadsheets/databases and analyze data
- Spend time reviewing & making actual changes to your budget
- Have conversations with your wife about the source of her unhappiness
- Spend time learning to cook and meal planning (to avoid eating out)

At the very least, you should use that 5 hours/week reading the stack of books you should have checked out from the library.

Alright did all of that.

Next?

Go list all of that stuff cluttering your garage, 2 of your three couches, and your 90" tv on Craigslist.  Sell any small trinkets worth more than $5 on eBay.

Learn how to find and stack grocery coupons.

Figure out something other than Uber or pizza delivery to put cash in uour hands in the present tense.

Go read the What Small Thing Did You Do Today to Save Money?  Thread for literally thousands of ideas on trimming your expenses

[Zoot]

You act like paying off debt takes study time.

Actually, it does.  Look at the time the people on this thread have spent researching laws in your county, running numbers, noodling on plans.  If you add it up, it's likely hundreds of hours.

Take the time to write Craigslist posts and sell your stuff.  Take the time to work with a realtor.  Take the time to research quotes on replacing the roof on your rental if that's the path you're going to take.  The stuff about the side venture will just clutter up your head and distract you from your main focus, which is escaping the cheetah that is about to turn you and your family into gazelle burgers.

Call each credit card company and have a chat?

Yes, actually, you SHOULD do this.  Ask them to lower your interest rate, and see if they'll budge.  Sometimes they will.  Sometimes they may have offers.  Sometimes a card on which you have a little room may be able to accept a balance transfer from one with a higher interest rate.  Play the game--you need every win you can get, however small.

[Unique User]

I'll say it again, your extra time is better spent delivering pizzas or driving for Uber.  You need more income in your spare time, even if it temporary.  While driving, listen to podcasts about getting out of debt.   When you're broke you need to get to work. 


Sent from my iPhone using Tapatalk

I'd love to.

I wish Uber was in my area.

Deliver pizzas.  You can make $1000 month doing that.  What about Lyft.  I live in the middle of nowhere and we have Uber and lyft here. 


Sent from my iPhone using Tapatalk

We don't have Uber or Lyft.

I would love to have either. I think it would be fun.

Pizza's are not an option.

Then find another option.  When we were just starting to get out of our mess I worked ten hours a week retail at night or on weekends on top of working a regular job, it sucked and it wasn't a lot of money, but it helped.  There are a lot of side hustles, many of them not something to brag about.  I mystery shop, totally boring and housewifey.  But who cares, last year I made a decent amount of cash for small amount of time I put into it and thousands in reimbursements for things like restaurants, grocery stores, pizza deliveries and oil changes.  My search option is not working, but search side hustle threads for ideas. 

You and your wife also need to spend your time learning how to cook, meal plan and shop only what is on sale.  You are only 30, learning those skills will pay off FOR YEARS. 

[lemanfan]

You and your wife also need to spend your time learning how to cook, meal plan and shop only what is on sale.  You are only 30, learning those skills will pay off FOR YEARS DECADES.

And you set a good example for the kids.

[Laura33]

Because writing is my outlet.
Before the blog I would write and save it in word documents on my computer.
It takes 20 minutes.
I'm not sitting here spending hours of my time that I would otherwise be spending paying off debt.

People dont always want to be thinking about their finances. Blogging about my startup is a way to relax for a bit.

Writing the blog post might take 20 minutes, but the time/effort you are currently putting into this "startup" is significant.  This is from your blog...

"I plan to make leaps of progress in the next few weeks. I’ve outlined a few of the next steps and assigned generous timetables.
1.  Finish the MVP (prototype). A couple of weeks of coding should do it.
2.  Conduct advanced testing and debugging of the software and system.
3.  Find people to use the website and give me feedback."

You say you plan to "make leaps of progress in the next few weeks" on this side venture.
Instead, why don't you use this time to begin recovering from your financial train wreck???

I can't comprehend why you are prioritizing this side venture over dealing with your very dire financial situation.

You act like paying off debt takes study time.

What would you like me to do with the 5 hours per week I spend on my side venture?

Call each credit card company and have a chat?

Call the town and re-verify that my payment plan is set up ever day?

Call the IRS and see if we're still on track every 3 days?

Let's pretend I stop my side venture - What do you think I'm going to be doing in that time?

Unless you have accomplished each and every item on this list, every minute you have spent on anything other than bringing in more money NOW or reducing debt has been wasted.  Not to mention selling the rental - what contractors have you called about the rood?  What lenders have you called about financing the roof?  What other real estate agents have you met with to get a second opinion on the value/salability with and without the roof repair?  Have you written an ad yet for a FSBO website?

You are getting a strongly negative reaction here because you are giving people the impression that you are just looking for excuses NOT to make significant changes.  Personally, I think you should sell the new house (which you can't afford and which has basically zero equity), and move back into the rental, which you can actually afford.  But you sure can't afford two -- your failure to pay the taxes and maintain the rental demonstrates that.  Whatever the long-term value of that property may be, it is $0 when you lose it in a tax sale.

If you're going to focus on the future profit, you also have to look at the opportunity cost.  You have more wants/needs than you have dollars right now, which means that every dollar you spend on the property is another dollar you cannot send to your CC companies.   You are basically leveraging yourself by borrowing from your CCs to pay your property expenses.  So if you want to make this all about the math, compare your anticipated return over 30 years from that rental to the 30-year cost of borrowing your carrying costs (including the costs you are not paying now, like the taxes and maintenance) at 25%. 

[OurTown]

My God, this is interesting.  This should be a book, or maybe a mini-series.

[The beatles]

I get the impression from your posts that you are only "kinda freaked out" because the parents can always bail you out.  And besides, foreclosures and repossessions and getting kicked out on the street with your kids in their pajamas doesn't happen to (people like) you. 

(People like) you also don't have garage sales to sell expensive toys, buy secondhand, deliver pizzas or seriously budget. 

(People like) you get takeout and eat in nice restaurants.

(People like) you buy based on brand labels.

(People like) you have an online side business that you can brag about and cars that show just how successful you are. 

(People like) you have a rental because you "own real estate."

(People like) you are broke and won't face it.

Nearly this entire post ignores the fact that "people like us" have drastically changed and are no longer doing much of what you said.

[The beatles]

You act like paying off debt takes study time.

Actually, it does.  Look at the time the people on this thread have spent researching laws in your county, running numbers, noodling on plans.  If you add it up, it's likely hundreds of hours.

Take the time to write Craigslist posts and sell your stuff.  Take the time to work with a realtor.  Take the time to research quotes on replacing the roof on your rental if that's the path you're going to take.  The stuff about the side venture will just clutter up your head and distract you from your main focus, which is escaping the cheetah that is about to turn you and your family into gazelle burgers.

Call each credit card company and have a chat?

Yes, actually, you SHOULD do this.  Ask them to lower your interest rate, and see if they'll budge.  Sometimes they will.  Sometimes they may have offers.  Sometimes a card on which you have a little room may be able to accept a balance transfer from one with a higher interest rate.  Play the game--you need every win you can get, however small.

Everything you've mentioned, we've already done.

Would you like me to do it a 2nd and 3rd time for fun sake?

[ChipmunkSavings]

So you have asked each of your 7 credit card companies if they would agree to lower the fees? What did they say?

[Malum Prohibitum]

You act like paying off debt takes study time.

Actually, it does.  Look at the time the people on this thread have spent researching laws in your county, running numbers, noodling on plans.  If you add it up, it's likely hundreds of hours.

Take the time to write Craigslist posts and sell your stuff.  Take the time to work with a realtor.  Take the time to research quotes on replacing the roof on your rental if that's the path you're going to take.  The stuff about the side venture will just clutter up your head and distract you from your main focus, which is escaping the cheetah that is about to turn you and your family into gazelle burgers.

Call each credit card company and have a chat?

Yes, actually, you SHOULD do this.  Ask them to lower your interest rate, and see if they'll budge.  Sometimes they will.  Sometimes they may have offers.  Sometimes a card on which you have a little room may be able to accept a balance transfer from one with a higher interest rate.  Play the game--you need every win you can get, however small.

Everything you've mentioned, we've already done.

Would you like me to do it a 2nd and 3rd time for fun sake?

  Really?  How much did you net from selling stuff on Craigslist?  How much are the roofing bids?

Additional:

Have you put together a budget with your wife?  If so, then post it up.

Getting a spending plan is step one.  You have to know where the money is going.

Have you instituted tracking of your spending?  If so what are you doing to track it?  Is your wife tracking, too?

[Malum Prohibitum]

Malum Prohibitum - I think you are confusing the two houses.  The rental has no mortgage; therefore the taxes and insurance are the responsibility of the owner.  The house they are living in has a mortgage.

  If that were the case, then the solution is easy.  Sell the big house and live in the rental house.  Even with a 25k HELOC and 9k in taxes owed, that is still probably the best solution.

[The beatles]

Doing the math on the rental.

$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200

I'm having a hard time thinking about giving away $223k for momentary gain.

We would be netting maybe $35k if we sold.

The problem is you're bad at math.  If you were any good at it you wouldn't be in this mess in the first place. 


Sent from my iPhone using Tapatalk

^for real.  You need to expand your knowledge of investments, opportunity costs, and such.  The above is such an over simplification of your rental situation.  Are you accounting for the new roof?  How about the 2 new water heaters, new furnaces, new paint, new carpet, new driveway, other new roof, tenant damage, vacancies, new bathrooms, new kitchen appliances.  All of these things have a usable life that will expire at least once in the next 30 years.  Did you look into the possible investments you could make with that money?  Even if you were to save up and put 20% down on a multi family property, you could come out way ahead depending on your market. 

If only someone had written a blog post about selling stuff you wouldn't buy right now...hmmm.

Oh, yeah. 

http://www.mrmoneymustache.com/2015/07/02/if-you-wouldnt-buy-it-you-should-probably-sell-it/

It's a good read, if someone hasn't linked it before.

Do you think I'm a moron? That's an open question to everyone, as that's the vibe I'm getting.

I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.

We lived in that house, and as such, everything is new.

We tore the house down to its studs.

It has brand new dry wall (2012). Brand new subfloors (2012). Brand new carpets (2013). Brand new tile (2013). Brand new bathroom (2013). Brand new 30 yr rated furnace (2014). Brand new hot water heater (2015). Brand new driveway (2013). Brand new recessed lighting and ceilings (2012). Brand new ceiled concrete floor in the basement (2012). Brand new flex tube water pipes (2012). Brand new vents (2012). Brand new concrete patio in the backyard (2012). Brand new siding (2013). Brand new stove and refrigerator - both stainless steel (2014).

The only thing that isn't new is the roof and that's because we ran out of money.

I didn't over simplify anything. The fact is that nothing is going to need to be replaced, other than the roof, for a very long time.

As far as opportunity cost. How are we going to make any investments with that money??

The money we get from the sale would pay off our debt. Not go toward an investment.

And the very most the debt could extrapolate to, even at 25% interest, is a sum many times less than the nearly 250k we would be given up.

If you have a difference of opinion, fine. But don't ever insult my intelligence.

[Iplawyer]

Doing the math on the rental.

$500 * 12 months * 6 years = $36,000
$650 * 12 months * 24 years = $187,200
.................................TOTAL = $223,200

I'm having a hard time thinking about giving away $223k for momentary gain.

We would be netting maybe $35k if we sold.

I was wondering why the rental wasn't on the market yet after having all weekend to get it listed.  You simply don't want to SELL it - I think because you are scared as shit to lose the $500 you are stealing from it right now every month.

What you fail to account for in your math is that you AREN'T making $500 per month on the rental.  You owe $16K in property taxes (almost 3 years at $500 a month to pay that off) and it needs a new roof (who knows how many years at $500 per month that is) and what about  it sits for 3 months empty when you are trying to find a renter? 

It would be one thing if you were putting that $500 a month into an investment account, the roof was in good repair, and the back taxes were not owed - then you would have a fund to pay for issues and non rental months and maybe it would be an ongoing investment.  YOU ARE NOT THERE.  GET THE RENTAL ON THE MARKET BY THE END OF THE DAY. You have already spent the money that is in the "equity" in this house. 

[Malum Prohibitum]

Where we live, the town sells unpaid tax liens to a 3rd party collection agency.

We asked the collection agency if they could take the house and they said yes, but probably won't because we don't owe a lot.

They said we could put 10% down and pay monthly as well.

I am going to let you in on a little secret.

Here is how these companies make money.  There are two options.  (A) the owner redeems the property, in which case the company gets a really good interest rate on the money it used to pay the taxes, or (B) the company gets the property.

I personally know persons who have built millions in net worth mainly by getting the property.  They look at getting their money back with interest as a downside to this business.  Their goal is always to buy tax liens that are small in relation to the value of the property and thus grow their net worth very quickly.

There is just a teeny-tiny chance* that the person to whom you spoke on the phone has a vested interest in encouraging you not to freak out and redeem your property.









*By teeny-tiny chance, I mean that there is absolutely no incentive for them to want you to redeem your property.  They are really out to obtain properties.  So, the teeny-tiny here is something close to 100%.  I was being facetious.

[The beatles]

Malum Prohibitum - I think you are confusing the two houses.  The rental has no mortgage; therefore the taxes and insurance are the responsibility of the owner.  The house they are living in has a mortgage.

  If that were the case, then the solution is easy.  Sell the big house and live in the rental house.  Even with a 25k HELOC and 9k in taxes owed, that is still probably the best solution.

This was actually our original thought, but after speaking to a realtor and breaking down the numbers, we would be losing money on the sale and we literally dont have the money to make up the difference.

[Malum Prohibitum]

Do you think I'm a moron?

I have two degrees. One, oddly enough as the jokes create themselves, is in finance. The other degree (graduate degree) is the field of work I am in so I don't want to say it. But suffice it to say, I'm not an idiot.

According to Thomas Stanley, the profession that most grossly UNDERaccumulates wealth in relation to income is . . . drum roll please . . . doctors.


Do you think doctors are morons?  Are they idiots?  After all, they have degrees!


There is no relationship to your IQ and your net worth today. 

The only thing that matters is your savings rate.  This is the percentage of your net income that you do not spend.  Do you even know what yours is?  Your college degrees will not tell you what it is.  Your IQ will not, either.  My grandparents did not graduate high school, but they had huge savings rates.  Yours probably did, too.

I am guessing it is this pride at your degrees and intelligence that is standing in the way of your financial success.  Learn to listen to some people who may have been where you are but turned it around.  They may have degrees, too.  They may not.  But learn what you can from those who have succeeded in having high savings rates.