Author Topic: Finally got my  (Read 12307 times)

SpendyMcSpend

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Finally got my
« on: January 01, 2013, 11:36:58 AM »
net worth above $0 this year.  $69,000 in 401k, $6,000 cash and $55,000 in student loans.  So it's at about $20,000.

My "debt is an emergency"!  Must remember this.



plantingourpennies

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Re: Finally got my
« Reply #1 on: January 01, 2013, 12:15:12 PM »
Came in for the answer, wasn't disappointed.

The first 20K is the hardest Meadow, and you're on your way =)

Best,
Mr. Pop

Honest Abe

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Re: Finally got my
« Reply #2 on: January 01, 2013, 12:42:14 PM »
Congrats!!! Such a huge accomplishment!

stigto

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Re: Finally got my
« Reply #3 on: January 01, 2013, 02:06:47 PM »
Congrats! You're not in the hole anymore. This is a big turnaround!

Miaow1

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Re: Finally got my
« Reply #4 on: January 01, 2013, 02:08:24 PM »
First Congratulations. This is a tremendous accomplishment

I'm curious why did one of the readers say the first 20K is the hardest. Do others agree with this statement.

arebelspy

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Re: Finally got my
« Reply #5 on: January 01, 2013, 03:34:51 PM »
First Congratulations. This is a tremendous accomplishment

I'm curious why did one of the readers say the first 20K is the hardest. Do others agree with this statement.

I've always heard the first million is the hardest, but I suppose it's all relative.

As far as the first 20k being hardest, I suppose it depends on how much debt you started with.

Going from debt to no debt though is a big change - paying interest versus receiving interest is such a change one could see how getting out of debt and going to 0 (or 20k, or whatever) is the hardest.
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
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happy

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Re: Finally got my
« Reply #6 on: January 01, 2013, 05:57:10 PM »
Congratulations OP, that is fantastic.


I'm not sure that there's any magic about 20k either, but its certainly true that taking the first steps and sticking with them long enough to see progress is the hardest part.

c

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Re: Finally got my
« Reply #7 on: January 01, 2013, 06:32:45 PM »

I've always heard the first million is the hardest, but I suppose it's all relative.


The other day I read someone say "I'm working on my second million, I've given up on the first".

Congrats on a positive networth, that's a huge milestone!

N

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Re: Finally got my
« Reply #8 on: January 01, 2013, 06:53:10 PM »
congrats!!!

nice job!

Nords

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Re: Finally got my
« Reply #9 on: January 01, 2013, 09:27:29 PM »
Quote
“Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth.  Making the first million was the next big hurdle.  To do that a person must consistently underspend his income. ” – Page 242, Damn Right!  Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger by Janet Lowe

I've always heard the first million is the hardest, but I suppose it's all relative.
The other day I read someone say "I'm working on my second million, I've given up on the first".
Hey, one outta two wins all sorts of batting awards in baseball...

keith

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Re: Finally got my
« Reply #10 on: January 02, 2013, 02:00:59 AM »
The first part of digging out of debt is certainly the hardest, assuming any sort of large amount. Certainly as arebelspy mentioned you have interest working against you.

Also its tough having so many liabilities (monthly payments) to be responsible for. Its hard to focus a lot of money/energy on targeting any single debt if you several other payment obligations.

Once you clear a debt you get that momentum and things get progressively easier.

kythuen

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Re: Finally got my
« Reply #11 on: January 02, 2013, 08:27:11 AM »
I find that what's hardest is the waiting.  Now that I can see my way clear of my student loan debt, I want it all gone right now.  I like looking at the amounts I'm going to pay and watching the numbers go down.  But the time between paychecks (dates when I can make monster payments!) seems to get longer and longer...

James

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Re: Finally got my
« Reply #12 on: January 02, 2013, 09:57:05 AM »
Congrats!  And thanks much for posting this, I hadn't looked yet and was pleased to see our investments increased by $80,000 this year.  This was offset by a reduction in my estimated value of the house we are trying to sell by $50,000, but the value was actually lost a couple years ago, I just didn't know it at the time.  We can make a lot of improvements to our investment rate if we can sell our damn house, hopefully that will happen this year.  Actual contributions to retirement this year was only about $50,000, the rest was market growth so it's encouraging to see the snowball picking up momentum as Keith pointed out.

The other day I read someone say "I'm working on my second million, I've given up on the first".

Speaking of giving up millions, I did quick math and figure I've made over $1.7 million in my life so far, with only about $300,000 in savings/investments to show for it...  very sad, hoping to make my next million count a lot more in that regard!

Another Reader

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Re: Finally got my
« Reply #13 on: January 02, 2013, 10:31:33 AM »
James:

Your house has been in the market for a very long time, even for where you live.  If it has not sold and you are not getting showings and offers, the house is overpriced.  What you think it should be worth and what the market will pay are obviously very different. 

In your shoes, I would get the two or three best agents in your area in to look at the house and get their opinions of the proper list and sales price.  Then cancel the current listing, pick the agent that's realistic about price and is easy to work with, and get the house sold.

If you are not going to sell until you get a particular price, take the house off the market until the prices go up to that level.  An agent keeps a listing like this so they can sell something else to the folks that call on the "For Sale" sign, because they know they are not going to sell your house.  In my view, you are kidding yourself about selling it and wasting your time making moving plans (dreams).

Yes, I'm punching you hard in the face.  You seem like a really nice guy that needs a little face punching help to make a real decision here.  Do you really want to move?  Reduce the price and make it happen.  Otherwise, make a plan that maximizes your happiness with where you are for a few years.

Nords

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Re: Finally got my
« Reply #14 on: January 02, 2013, 10:37:35 AM »
Speaking of giving up millions, I did quick math and figure I've made over $1.7 million in my life so far, with only about $300,000 in savings/investments to show for it...  very sad, hoping to make my next million count a lot more in that regard!
I think it's far more common that we realize, but most people never take the time to do the math.

Here's a story from a MMM reader who's earned $1.27M during his military career... and doesn't have much to show for it.  Yet:
http://the-military-guide.com/2013/01/02/guest-post-wednesday-my-military-career-savings-and-investment-story/

James

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Re: Finally got my
« Reply #15 on: January 02, 2013, 03:14:23 PM »
James:

Your house has been in the market for a very long time, even for where you live.  If it has not sold and you are not getting showings and offers, the house is overpriced.  What you think it should be worth and what the market will pay are obviously very different. 

In your shoes, I would get the two or three best agents in your area in to look at the house and get their opinions of the proper list and sales price.  Then cancel the current listing, pick the agent that's realistic about price and is easy to work with, and get the house sold.

If you are not going to sell until you get a particular price, take the house off the market until the prices go up to that level.  An agent keeps a listing like this so they can sell something else to the folks that call on the "For Sale" sign, because they know they are not going to sell your house.  In my view, you are kidding yourself about selling it and wasting your time making moving plans (dreams).

Yes, I'm punching you hard in the face.  You seem like a really nice guy that needs a little face punching help to make a real decision here.  Do you really want to move?  Reduce the price and make it happen.  Otherwise, make a plan that maximizes your happiness with where you are for a few years.


Thanks, I would give that same advice to someone who posted what I posted.  You are absolutely correct in general.  On the other hand, the local market is simply nonexistant for houses in our price range.  Not a single house has sold in the entire county in our price range for the past two years.  I think this will change as public opinion becomes more upbeat and there is a general belief that the bottom has been met and we are in a rising market again.  We are in a very rural area, so buyers for houses in this range are infrequent even in good times.  Waiting another year for a buyer makes more sense then dropping the price another $50,000 to force a sale, especially since the local market seems to be entering stronger recovery.  There are a number of docs and other high salary professionals entering the area as new hires, so there is a decent chance by waiting I'll get an offer I can live with.  I am already 25% down from what I paid for the house 4 years ago, and I'm sure I won't get asking price, but based on many factors I'm also sure I'm close to where I need to be.  There simply aren't any buyers right now unless I get crazy.  There is a limit to how much of a hit I can take up front, but I can easily afford the mortgage for the short term.  I have done the calculations (including maintenance, transportation, heating/cooling, rent in town, etc) and it is costing me $25,000 per year to live here rather than someplace small in town, so I'm definitely ready to accept any reasonable offer.  But financially I don't think it would be wise to all-out force a sale in my location.  In town or outside of any larger city I would absolutely agree with your advice though, and I'm open to the possibility that I'm still wrong.

James

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Re: Finally got my
« Reply #16 on: January 02, 2013, 03:29:09 PM »
Speaking of giving up millions, I did quick math and figure I've made over $1.7 million in my life so far, with only about $300,000 in savings/investments to show for it...  very sad, hoping to make my next million count a lot more in that regard!
I think it's far more common that we realize, but most people never take the time to do the math.

Here's a story from a MMM reader who's earned $1.27M during his military career... and doesn't have much to show for it.  Yet:
http://the-military-guide.com/2013/01/02/guest-post-wednesday-my-military-career-savings-and-investment-story/


Thanks much, that was a good read and very familiar.  I also was a hard worker and saver as a child, understood the value of being wise with money, and then I just let life get in the way and "went with the flow".  I have a lot more in retirement savings than the military guy in your link (he is just one year older than I am), but he has a very nice pension...  :)

Another Reader

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Re: Finally got my
« Reply #17 on: January 02, 2013, 03:55:50 PM »
How many showings in the last 90 days?  How many cooperating agents showed the property?  If you had maybe one or two showings to unqualified or uninterested buyers by your agent, you are nowhere near market value in your pricing.  How many other houses are for sale in your price range?  Are they equal to, superior to, or inferior to your house?  If 10 qualified doctor buyers were magically transferred to your local hospital, how many houses would they have to choose from?

You may well have lost 50 percent or more on this house.  It happens.  What evidence do you have that the local market is improving?  Are lower priced houses selling briskly?  What does the agent say the house would bring if you priced it to sell this spring?  You would not be "forcing" a sale if you priced near that level, you would be selling at market value.  The question becomes, how much are you willing to give up to move on with your life?  How long are you willing to wait at $25,000 a year in excess costs?  I know you are getting frustrated, because you are beginning to be a bit "complainypants" about not selling.
 
In your shoes, I would sit down with the spouse and review all your goals.  Then decide whether you want to get rid of this albatross and move on or be satisfied living with the increased operating costs and the pluses and minuses of staying in your current location for awhile.  Because if the title to this post were "Finally got my.....asking price," you could be waiting for several more years.