Author Topic: Property improvements vs savings rate  (Read 3574 times)

Syonyk

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Property improvements vs savings rate
« on: August 14, 2017, 08:54:31 PM »
Does anyone else struggle with "property improvements vs savings rate" when they're doing math?

We bought a house quite near family a year or two ago, and due to me being a bum (taking three months between jobs) weren't able to get a mortgage, so ended up paying cash.  Manufactured, so not stunningly expensive, but it still emptied out the funds we had saved for property improvements.

This means that the various improvements (gravel for the driveway, a carport, a proper storage shed, solar, garden beds, etc) are happening as we have funds - and, mostly, about as soon as we have funds.  I've also been having to buy the proper equipment for the area - a tractor, various string trimmers, etc.  So our savings rate, with all of this, is basically zero right now, and will be for another year or two as we sink money into the property.

I'm doing what I can by myself, but I lack things like earth moving equipment, and storage containers aren't particularly cheap either (about $4k for a 40').  The stuff should last just about forever once it's in place, so I'm not worried about it, and some of it should have a nice payback (rainwater storage to avoid pumping deep water, solar, etc), but my savings rate right now is flat, has been flat for a year and a half, and is likely to remain so for another 2 years.

Is this a sane path?  Stuff needs to be done, and I'd like to get it done as soon as possible. :)

deborah

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Re: Property improvements vs savings rate
« Reply #1 on: August 14, 2017, 09:48:23 PM »
Depends on NEEDS vs WANTS - what is really necessary? anything else can wait.

Syonyk

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Re: Property improvements vs savings rate
« Reply #2 on: August 14, 2017, 10:00:01 PM »
How would you balance waiting on things with a solid payback plan, though?

I value energy independence and being able to grow stuff locally.

deborah

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Re: Property improvements vs savings rate
« Reply #3 on: August 14, 2017, 10:15:24 PM »
As someone who grows all their own veges, I don't understand how various things are necessary for this endevour. It appears to me that you are just buying things for the sake of it. A garden bed takes work, a spade, and seeds - and that's about it. Not a tractor, a car port, a gravel driveway... A tractor is not a solid payback plan for vegetables.

There are plenty of things you can do to reduce your energy expenditure before you go solar. For instance, a sheet over the outside of a window stops the sun turning the window into a heater, and reduces summer temperatures inside, which also reduces your air conditioning costs. It may be ugly, but it works. I spent a couple of hundred dollars and reduced ALL utility bills by half.

Syonyk

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Re: Property improvements vs savings rate
« Reply #4 on: August 14, 2017, 10:46:56 PM »
The tractor is to clear the driveway in the winter and, eventually, to try and disc cheatgrass under. It has nothing to do with the gardens.

The carport and such are to keep the sun off the vehicles - they bake right now which isn't great for them. And that whole set needs to be done at once because the storage buildings are going to be wrapped around the carport. I don't trust our dust accumulator for another winter and the dust buildup is really hard on everything we have in the temporary shed.

calimom

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Re: Property improvements vs savings rate
« Reply #5 on: August 14, 2017, 10:56:36 PM »
Depends on NEEDS vs WANTS - what is really necessary? anything else can wait.

Pretty much this. You can go on forever with "but we needů."

deborah

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Re: Property improvements vs savings rate
« Reply #6 on: August 14, 2017, 11:12:04 PM »
Sounds like all you NEED is a spade and a shovel. A mustashian has one (singular) vehicle - not a plural number. That vehicle can also be protected with a car cover of some description. The buildings can wait. It is good to wait. When you wait you realise that there are more efficient and better positioning of buildings, and that what you actually need is different to what you initially envisaged. It took me 7 years before I started modifying my buildings - and in that time, my thoughts had changed completely.

Laura33

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Re: Property improvements vs savings rate
« Reply #7 on: August 15, 2017, 06:31:29 AM »
Is it sane?  Depends entirely on what your goals are, doesn't it?  Do the math on how long you're going to need to keep your savings on hold, and how long that sets back your FIRE date, considering any real cost savings associated with your changes (i.e., don't fool yourself with rosy scenarios, and consider the extra costs that will offset those savings, like fuel for the tractor).  Are you happy with the result?  Also, take a hard look at your current list of wants:  once you have all of those things, will those things themselves trigger other wants?  E.g., now that you have the tractor for managing snow, will you start wanting various other attachments to help you "make better use" of other parts of your property?

The reality is that all of this is consumption.  It's tricky, because property "feels" like an investment -- hey, I can sell it and get my money back, and if I improve it it will be worth more!  That goes double for the kinds of things you are doing:  they feel very Mustachian, because they will help you either save money long-term (e.g., solar) and/or be more self-sufficient (e.g., "I have a tractor so I can take care of my own driveway and property!").  But the reality is that you are throwing money at your property to make it the kind of place you want to live.  Which is fine -- heck, I'm the last one to criticize that, given that I just built a garage -- but it's still consumption.  So evaluate it as such.

Tl;dr:  The kind of things you are doing are a Mustachian version of consumption, but they are still consumption.  And that's fine, as long as it fits into your larger plans -- just don't fool yourself into categorizing it as "investing" or "saving money."   

Syonyk

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Re: Property improvements vs savings rate
« Reply #8 on: August 15, 2017, 08:47:25 AM »
Sounds like all you NEED is a spade and a shovel. A mustashian has one (singular) vehicle - not a plural number. That vehicle can also be protected with a car cover of some description. The buildings can wait. It is good to wait. When you wait you realise that there are more efficient and better positioning of buildings, and that what you actually need is different to what you initially envisaged. It took me 7 years before I started modifying my buildings - and in that time, my thoughts had changed completely.

Do you live in a rural area or a city?

One car and a shovel means we don't leave the property all winter once the snow starts drifting up.  Clearing an eighth mile of gravel driveway with a shovel every time it snows also means I quit my job to have the time for it, since it rapidly turns to ice if it sits... Getting someone out to plow the driveway isn't an option - or, if it is, likely more than I paid for the tractor per winter.

It's not a new tractor. It's 75 years old and comes with all the attachments I'm likely to use, though I'm considering a PTO generator for emergency power.

The storage buildings are part of the car cover plan - we plan to use the house, shipping container, and garden shed to box in a carport to get closer to a full garage without the cost of a full garage. But once some of those are in, we can't get others in easily so it has to happen mostly at once.

MBot

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Re: Property improvements vs savings rate
« Reply #9 on: August 15, 2017, 02:18:51 PM »
I hear you, OP.

For us there has been some short term change of priorities. We accept a lower savings rate because we had to waterproof the stone basement, for example.

Is it a WANT? Yeah. I value not living in a house that smells like mildew damp the basement or filled with spiders and millipedes. Having it done a few years ago was 100% worth it for the enormous decrease in bugs alone, not to mention that the house smells nice now. But we did do it with the most amount of work ourselves and only hiring out what we had to.

So things like an old tractor and such are helpful for you. I would write down how many man-Hours/cost-of-living quality improvements each make vs the cost of NOT doing it.

And if possible I would try ONE season with minimal investment and see what happens. You may find the minimum is fine. You may find what you really need is surprising

For me a backyard garden in our current property has often been more trouble than value. The front yard is amazing, and everything grows there. Just hard work needed.

In the backyard? Everything I carefully raised from traded free seeds this spring died after our unusual rains this year (and our lower property compared to other houses.) if I made no changes, continuing to garden alone won't be worth it, but building some cheap raised beds out of scrap may make it great next year 

Syonyk

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Re: Property improvements vs savings rate
« Reply #10 on: August 15, 2017, 02:26:49 PM »
And if possible I would try ONE season with minimal investment and see what happens. You may find the minimum is fine. You may find what you really need is surprising

We did that.  Since nobody really had full ownership on the tractor (at least, not anyone who was using it), I discovered it quit right around 0F.  Of course, right after a heavy snow storm with heavy drifting, and it took me about 15 minutes to get to the top of the driveway with the truck, and I barely made that.  It involved a lot more running start and bash than I really like to do with my vehicles.  So me actually owning it means I can maintain it to my standards, which are "I need it running in the winter" standards.

And the sun on the vehicles is just brutal.  They cook in the summer and get very dusty throughout.  The dust is also certainly not doing any of my property equipment any favors either.

MBot

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Re: Property improvements vs savings rate
« Reply #11 on: August 15, 2017, 10:39:55 PM »
And if possible I would try ONE season with minimal investment and see what happens. You may find the minimum is fine. You may find what you really need is surprising

We did that.  Since nobody really had full ownership on the tractor (at least, not anyone who was using it), I discovered it quit right around 0F.  Of course, right after a heavy snow storm with heavy drifting, and it took me about 15 minutes to get to the top of the driveway with the truck, and I barely made that.  It involved a lot more running start and bash than I really like to do with my vehicles.  So me actually owning it means I can maintain it to my standards, which are "I need it running in the winter" standards.

And the sun on the vehicles is just brutal.  They cook in the summer and get very dusty throughout.  The dust is also certainly not doing any of my property equipment any favors either.

I think the tractor is a good example. If something saves you 300 hours of shoveling over 4 months, what are those 300 hours worth to you? Or if it avoids $300 of depreciation a year on your vehicles? Maybe the tractor is worth it (and it sure sounds like it!) but your vehicles (in most climates) are gonna bake in summer and freeze in winter anyway.

eg. I'm in a much colder part of Canada with heavier precipitation than most. We get a LOT of snow.

I don't need to park inside. Even though we got 15+ feet of snow last year, I can still get by with shoveling instead of snowblowing... but my property is TINY. If I had a double driveway or bigger a snowblower would save me dozens of hours of wrok every week.

That said, I still don't need to park inside a garage. But if I lived on a farm where blowing snow could half-cover my vehicle and there are no windbreaks beside me? I might.

Only you know how much time/effort is saved by putting these things in now. And it sounds like you've been through enough to calculate "this saves me X amount of work/time and is worth it". There's no use in saving $300 if it takes you 100 hours of misery, because your time is worth more than $3 an hour.  If you can legitimately point to that sort of thing, it can really help take the sting out of "I have to make this purchase." and reframe it to "I can use my time in productive and valuable ways instead."

If it's a 5-minute thing like scraping the ice off all the windows and letting the car warm up enough that the windshield de-fogs... then you already know you should just do it :) and you don't need us to say so.

Fishindude

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Re: Property improvements vs savings rate
« Reply #12 on: August 16, 2017, 07:24:23 AM »
Glad you could pay cash for the place, but sounds like you've bit off a little more than you can chew.
I live in very similar rural conditions and understand all of these things you want.  I've fought the long gravel driveway and snow, have a tractor, raised beds and barns.  All this stuff is great for country living, but cutting your retirement savings to buy "stuff" is silly.   What you really need is more income.   What about taking on some overtime or a second job to pay for some of these things you desire?

And don't waste the money on "cheap" or old tractors, lawn mowers, tools, etc.  Battling to keep that junk running isn't worth it.   Wait until you can pay cash for good stuff, until then rent, borrow or do without.

Syonyk

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Re: Property improvements vs savings rate
« Reply #13 on: August 16, 2017, 09:36:57 AM »
That said, I still don't need to park inside a garage. But if I lived on a farm where blowing snow could half-cover my vehicle and there are no windbreaks beside me? I might.

...

If it's a 5-minute thing like scraping the ice off all the windows and letting the car warm up enough that the windshield de-fogs... then you already know you should just do it :) and you don't need us to say so.

The carport is going to be "covered," not "inside" - though it will be mostly boxed in by the surrounding structures so it should mostly keep the snow off.  Or accumulate it... one of the two.  I'll probably put some tarp doors up for keeping snow and dust out.

The main concern there is just the sun.  We have really strong sun all summer long, and I'd rather not destroy the insides of cars sitting in it long term - I plan to keep our current vehicles on the road just about forever.

Glad you could pay cash for the place, but sounds like you've bit off a little more than you can chew.

A bit.  The cash we had marked for property improvements all went into purchasing the house.

Quote
What you really need is more income.   What about taking on some overtime or a second job to pay for some of these things you desire?

My secondary income stream is Spring-heavy.  People in the middle of the summer aren't replacing ebike batteries, but I'm booked all spring with my spare time building batteries.  Overtime isn't an option.

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And don't waste the money on "cheap" or old tractors, lawn mowers, tools, etc.  Battling to keep that junk running isn't worth it.   Wait until you can pay cash for good stuff, until then rent, borrow or do without.

The tractor isn't "junk" - it's just not been well maintained for winter use.  It'll be fine once I go through it - compression is good, the body and mechanicals are fine, it just needs a carb rebuild, some exhaust manifold work, and a few other things.

"Renting a tractor to clear the driveway" when you can't get out of the driveway in the first place is sort of a problem. ;)

Syonyk

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Re: Property improvements vs savings rate
« Reply #14 on: August 19, 2017, 01:59:02 PM »
Better idea.

Fuck not taking on debt. Get the 15k gallon rainwater tank installed, the lines trenched, the high power pumps installed, a deluge system, and the fire monitors installed so I can deal with our hillside better next time.

Apparently "every 10-15 years" historically is about every 2-3 now for our hillside catching fire.

And I'm salting the damned earth for better defensible space around the borders. Cutting fire breaks doesn't work nearly as well as I'd hoped. Slows it down briefly and that's about it. And doesn't help much when the fire comes from the wrong direction.