Sunday, October 7, 2018

Pet Insurance- Part 2

My partner and I happen to be the proud "parents" of a long-haired Himalayan cat named Petunia.  Her legs are too short for her to jump on things.  She doesn't scratch at things for reasons unknown, and she has no desire to see the world outside of our apartment.  In fact, when we were in the moving truck, moving across the country, she just laid there.  No carrier needed.  Free as a bird, with moving truck doors wide open, she sat, making literally no move toward the door.  She's lived that street life, and has no desire to go back.  Nowadays she is perfectly content to sleep in the three places that she has claimed as her own, and leave everything well enough alone.  It's pretty amazing really.  I'm pretty sure she was designed particularly for me.  While pet ownership comes naturally to my partner, I'm another story.  I'm not a natural animal lover, and left to my own devices, would probably never have a pet.  That being said, Petunia is so mellow that it's pretty easy for me to enjoy her.

Now, we all know that pet ownership comes with some responsibility, both financially and labor-wise. While living in Portland, Oregon, we got Petunia set up on a wellness plan (kitty insurance).  We paid a monthly fee and in return could take her in for unlimited office visits, and certain services were available to her on an annual basis for no extra cost.  Other services would be discounted.  Her wellness plan worked at any of the pet hospitals in their chain.  We had wonderful experiences with the vets and the hospital in general. So much so that we reestablished a membership with the same organization when we relocated to Manhattan.  Really, we were thrilled that this group was in both places.  The Manhattan location was a little inconvenient for us, but we had saved so much money with them over the years, it was worth it...  That is....until it wasn't.

Fast forward.

My partner and I operate on a teacher schedule and try to take Petunia in for regular items roughly twice a year.  Once on winter break, and again on a summer break.  As soon as we were out of school for the year in June, I called to make an appointment for some of the things she has done on a semi-regular basis.  No one answered.  I leave a voicemail.  No one returns it.  I call again and get a human being.  They tell me that they need to check with a manager about scheduling her appointment.  Due to some of Petunia's medical history, they wanted to be sure that they could have everything in place that was necessary for her appointment.  I am informed that she will speak with a manager about our scheduling options, and call me back no later than the next day.

The next day came...and went... No phone call.  I leave another message.  Crickets chirp.  July comes, my kitty insurance fee is deducted. August comes, my kitty insurance is deducted.  Meanwhile, no appointments are scheduled or confirmed, and no phone calls are returned.

By the end of August, we had gotten a referral from a friend for a vet in the neighborhood that she and her husband really like...a vet that listens (and schedules appointments).  So, we called in and got an appointment for the very next day.  The vet is literally three blocks away which saves a ton of time!  We canceled her wellness plan and paid out of pocket for this appointment.  Now that we have determined that we want to continue using this particular vet and clinic, we will look for another type of insurance plan and evaluate whether or not it is going to save us money.  While I am still in favor of pet insurance, it became incredibly clear that the wellness plan that had worked for us for so long, was no longer serving us well.

I am a huge advocate of the "set it and forget it" strategy when it comes to saving money, but it is really important to periodically reevaluate products and services that you use regularly.  Something may have been serving you incredibly well for a very long time, but it may no longer be of value.  If that's the case, it's time to move on.

As for Petunia, she's happy with her new vet, and has returned to the very important job of holding down the couch.

For further reading, see Pet Insurance.

Thursday, August 9, 2018

Book Review & Financial Application: The Four Agreements

The Four Agreements by Don Miguel Ruiz is a book of Toltec wisdom which promises to be a practical guide to Personal Freedom, a promise on which it delivers.  To provide a frame of reference, the Toltec, are an ancient tribal group whose geographical roots may be found in the area just north of Mexico City.  The Four Agreements is typically referenced in the personal growth or self-help sections of the bookstore, moreover; I feel that it's offerings might be useful in the personal finance space, and additionally supports the work I've been doing around the Law of Attraction (although Ruiz never uses this term in his book).

Ruiz's book is literally structured to provide the reader with four agreements per Toltec philosophy, that we should live by in order to acquire personal freedom.  One quotation by Ruiz that really spoke to me is found on page 35, "Whenever we hear an opinion and believe it, we make an agreement, and it becomes a part of our belief system."  That statement really knocked the wind out of my sail because it provides the explanation for so many of the deeply ingrained beliefs I've had surrounding money (among other things) for as long as I can remember.

  • Money is hard to come by.
  • We don't have enough.
  • We'll never pay this off.
  • Everyone has debt.
  • No one retires before 70 nowadays.
  • It's too hard to retire early.
  • It's hard to get ahead.
These are all examples of things we've heard from either our own internal dialogue or other people that we make agreements about.  We've either heard or said them so many times that we've made an agreement that they are true.  Once we've done this, and they've entered into our belief systems (and subsequently the Ego), we've just sealed our fate...


We hear what others have to say, but refuse to take it completely to heart.  Just because someone makes a statement that reflects their belief system such as "It's too hard to retire early," doesn't mean it applies to us!  I'm sure Mr Ruiz would agree with me that it would be nice if they didn't believe or say this in the first place!  Regardless, if we can hear the things others say, and decide actively to disallow their idea into our own belief systems, we can avoid making an agreement that the same is true of our experience.

But what of the agreements we already have that aren't working for us?  Ruiz seems to suggest that we consider what it is that provides fuel for such agreements.  What fuels a belief that "It's too hard to retire early."  This belief certainly isn't serving us well.  It doesn't make use feel good, nor does it improve our lives in any way.  In all honestly, it seems as though this belief is fear-based largely.  In fact, if we go through a number of these examples, I would wager that fear or some other such negative emotion provides its fuel.  Once we've identified what is fueling this harmful belief, Ruiz suggests that elimination of this negative agreement is as simple as starvation.  If we can limit or eliminate the negative emotion, the limiting belief can no longer thrive, and eventually, it will go away.  This eliminates it from our Ego-selves and leaves space for us to replace the limiting belief with one that is aligned with our true desires.

There is so much more to Don Miguel Ruiz's book The Four Agreements that is a treasury mine for self-discovery.  This is just my own analysis and application of just a few of its lessons from a personal finance standpoint.  I highly recommend that you pick up a copy of this book and come to your own conclusion.

Have you read The Four Agreements?  What are your thoughts about its lessons and the application of this Toltec wisdom to our financial lives?

Friday, April 6, 2018

Goal Update: Letting my Intuition Drive

As some of you might very well remember, I posted some goals in my 2018 Goals article.  I spoke a bit about my belief in Law of Attraction and how it has influenced my goals for this year.  I wanted to quickly check in to let you know how it's going so far.

Quick Recap:
You've probably heard that "birds of a feather flock together" or that you should "do unto others as you would have done onto you" or a plethora of phrases of the like.  Well, that's basically the Law of Attraction:  Like attracts like.  When we worry, we attract more things to worry about.  When we feel hopeful and positive, we find things creeping into our lives to feel hopeful and positive about.

Because of the believe in this universal law, I decided that I wanted to set a goal that was related to things I feel really great about.  Every time I make a move that relates to that goal, I want to increase that wonderful feeling.  If like attracts like, it seems as though more positive experiences should be continually coming into my experience by virtue of the fact that I am continually take inspired actions that make me feel really good about a goal that I also have wonderful feelings about.  This is what I call, positive momentum.

The Money Saving Goal:
A few days after I posted those goals, I woke up one morning with a number stuck in my head (for what appeared to be no apparent reason).  I had a feeling that my intuition was guiding me to the dollar amount I should be saving.  This number is nearly four times the amount that I had ever saved in a year before, so to say I had a difficult time staving off my own resistance to it is a grand understatement.  For the next couple of days, I worked on lowering that resistance.  Whenever the question "How" popped into my mind, I would more or less push it back out. "Bad Personal Finance Lady! You should always be concerned about the 'How?' shouldn't you?"  Well, maybe not.  I've already educated myself about virtually every strategy under the sun.  Is it really necessary to worry and stress about each move I make? Or might it be a better idea to trust in all of my knowledge and give my head (AKA my ego) a bit of a break and let my intuition take over for a while. What will happen?  Will my intuition somehow fail to tap into the years of financial knowledge I've build up?  I somehow doubt it, but let's find out.

What happened in January:
I told my partner about this "goal" of mine which basically translates into "goal of ours," and to my surprise, she didn't really have much reaction.  She more or less agreed with me and wanted to know how this would alter the monthly plan we already had in place.  The answer is that it doesn't, not really anyway.  Rather than rapidly paying something down, we are literally going to be dumping everything into one of our savings buckets, which I will monitor to survey it's progress.

Over the next few days, I kept noticing an urge to take a particular action.  It was incredibly strong, and made me feel wonderful every time I thought of it: raising my retirement contribution.  So, I hopped online, logged into my retirement account and raised my Roth 401K contribution by 3%.  The reason I chose 3% was because I didn't want it to feel like my paycheck suddenly changed by a lot (I use this trick frequently).  Ironically, this change kicked in right  as my paycheck "got a little larger" from the new tax plan. I basically had intuitively taken the amount "extra" I would have seen in my paycheck, and moved it to my retirement savings!  Win-win!

We also created a new savings bucket (savings account) and gave it a title that made us both feel super happy when we looked at it.  The goal in doing this was to make ourselves derive as much pleasure from transferring money into this account as possible.  We should all hope to derive just as much pleasure from saving money as many do from spending it.

I also created a savings countdown to hang on our wall.  The idea is to take the number of dollars you want to save, and break it into smaller savings goals that are represented by one digit blown up on a full size sheet of paper, and hung on your wall.

  • For example, if you're currently working on a $1000 savings goal, perhaps you will break that into 10 mini goals of $100 each. Print a piece of paper with the number 1 enlarged on it, then the number 2, then 3, and so on until you reach the number 10.  Stack the papers so that the number 1 is on the bottom, and 10 is on the top.  Hang it on the wall this way.  Make your deposits to savings as you would normally do.  Once you've saved that first hundred, you take of that number 10 paper, leaving only the 9 showing.  This is because you only have to save this $100 nine more times to reach your goal.  Once you save another hundred, you remove the 9 paper, you only have to do this 8 more times...
This strategy can be used on a savings goal of $1000, $10,000, or $100,000.  You can make each singular digit on each piece of paper represent $100, $1000, or any number you want.  The point is to literally watch the countdown and enjoy the anticipation of reaching 1, and then finally removing that number too.  I may also be failing to mention one additional, but important part...  What to do with the piece of paper once you remove it.  Well, in my house, we've torn it; we've crumbled it; we've thrown it across the room.  Anything that makes us happy in the moment really.  These goals are just as much about building emotional momentum as anything really!

Each payday, I've come home gleefully and announced that it was "Paper-tearing DAY!"  Then we both hop on our apps and quickly decide just how much we can eek out of our checking accounts and into our savings accounts, and let the transferring, and paper-tearing begin!

When we decided to go with this goal, we decided we'd aim to achieve it by the end of 2018.  By January 31st, we had accomplished 12.3% of our total savings goal!

Friday, March 30, 2018

"Buckets" of Money

While our current savings goal is one larger dollar amount, the truth is that we save our money into clearly defined buckets so that we keep ourselves organized in terms of the intended purpose of that money.  At this moment, those "buckets" don't actually have their own goals attached to them, so each month in monitoring our progress toward our goal, I total up the transfers that go into each "bucket."

These "buckets" are separate savings accounts, which we name things related to their function, with an emphasis on creating names that make us feel good emotionally (more of that creating positive momentum business I keep talking about).  Another reason why doing this makes me really happy is because I feel like I am supporting my own future desires.  Perhaps the best way to explain is to simply list the names of some of our buckets:

  • Holiday & Taxes
  • Vacation
  • Future
  • Freedom Fund (We each have our own separate version of this long term savings.)
  • Rental Savings
  • Roth 401K (We each have our own.)
  • Roth IRA (We each have our own.)
It makes me happy to know that  when the bill from the accountant comes in, it's payment is a quick transfer away.  I also like knowing that when I see a great deal on airfare to somewhere we've been eyeing, we can jump on it because they cash has already been stashed!  Our rental income direct deposits into the rental savings, and the mortgage comes directly out of it, leaving behind savings that can be used toward any repair or improvement needed.  All of the funds from our side gigs are deposited directly into our individual Freedom Fund accounts, long term savings; Future is where our long term joint savings lives.  Roth 401k and Roth IRA are both retirement accounts.  If I were going to organize it into short, medium, and long term oriented accounts, it might look more like this:

Short Term:
  • Holiday & Taxes
  • Vacation
  • Rental Savings
Long Term:
  • Future
  • Freedom Funds (hers and mine)
Extra Long Term:
  • Roth 401Ks (both of ours)
  • Roth IRAs (both of ours)
This sort of system may or may not feel right for you, but in my life, I find that it feels really good to not have to worry about whether or not I am hurting my long term savings by pulling money our for a "shorter term" need.  I plan on going on vacation.  I would feel terrible if I pulled money out of "Future" or "Freedom Fund" to do so, but if the money is sitting there in "Vacation," I feel great about it.  Perhaps this won't matter very much to some people because you could argue that the numbers will come out the same, but to me, the emotional impact and momentum is vastly different.

Do you organize your money into various buckets?  Do you prefer to keep everything in one place?

Monday, February 19, 2018

Landlording & Investing: Circle of Competence

Warren Buffet and Charlie Munger are among the world's best investors.   As are all of the panelists on the popular series Shark Tank.  There is one thing they all have in common when it comes to their investing practices.

They do not invest outside their circle of competence.

In fact, determining your circle of competence is the first step toward becoming a great investor.  What exactly does that mean?  Simple: Determine what you you actually understand or are capable of understanding.  Warren Buffet doesn't invest in technology.  It's just one of those things that are further outside the realm of his understanding than he cares for when it comes to investing.  The folks on Shark Tank frequently claim the same thing.  They say things like "I'm sorry, this is just not an industry that I'm comfortable with, and I can't help you."  If they aren't putting their money in things they don't understand, then why should you?

It's funny.  Today, people are either holding their money in savings accounts that earn them next to nothing, or they throw their money into investments that they don't really understand.  These both sound like fools errands to me.

Right now, my biggest investment is a rental property in Portland, Oregon.  I lived in Portland for many years.  I understand the real estate market there very well.  I have rented there; I have owned there; I have lived there.  I understand how much houses sell for, rent for..  I know which neighborhoods are good, bad, and ugly.  Portland real estate is definitely within my circle of competence.  I would definitely place another investment there if the other numbers made sense, because I am confident in my ability to actually determine whether or not the numbers make sense.  Unfortunately, right now, I don't really think the numbers in Portland real estate make sense for investing purposes (at least not for me; you should make your own determination).

"Circle of Competence" is one of the primary reasons real estate investors are so frequently only really looking into real estate in the town/city where they live.  It makes sense, right?  They live there, and they understand the basic real estate environment.  On one hand, this is pretty smart.  You definitely shouldn't invest in things you don't understand (Hello crash of 2008!).  On the other hand, the numbers have to make sense as well.  I know, I'm not actually telling you what numbers to look at yet, but I don't want this post to become a novel on its own, so we'll do that another time.  Regardless,  my point is that first, you need to understand what's in your circle of competence.  Then, you need to determine what the numbers need to look like to make sense before you pull the trigger.  Then, you wait.  Very little of an investor's time is spent actually making deals.  Most of it is involved in self-education and waiting.  I haven't pulled the trigger on an investment in some time...

If you're looking to determine your own circle of competence start by considering what businesses or industries do you frequent?  Do you understand how they work, or could you?  What cities or towns to you understand well enough in terms of real estate?  Once you have a list, use your smart phone to start following the stocks of companies that fit within your sphere.  Perhaps, you sign up for some real estate notifications so that you can keep up with the market in the cities/towns you understand.    You'll have more research to do, but this is a really great start.

I have determined my Circle of Competence in both real estate and the stock market.  Now, I am researching and waiting.  The brilliant part of this is that the research is helping to expand my Circle of Competence, and when the numbers look right on a piece of real estate or a stock I'm interested in, I will be ready to move!

Sunday, February 18, 2018

Make Every Dollar Count

Every single minute I spend working for money is a minute I am not doing something else.   I really wanted to say this to you all because that opening line represents the basis of my views on money and personal finance.  It also influences the majority of my financial choices and money moves.

Even if you like what you do for a living, there are probably times you'd like to be doing something else.  Maybe you'd prefer to work part-time, work via remote, or not work at all.  No judgement.  Just honest observations regarding the nature of work.  So, every minute you spend at your 9-5 is a minute you are not spending with your family, reading, meditating, or otherwise doing something else.  We're all losing these minutes of our lives, and it's pretty scary when you put it into those terms.  Some of these minutes are being traded for dollars.  Since I'm not being given more minutes, I had better make the dollars I'm getting count!

Every time I buy something, I think about trading minutes for it.  I almost bought gum the other day, but I stopped.  The truth is that even though gum is pretty cheap, I don't really like gum more than I like my minutes, and I don't actually need the gum.  So, it stayed in the store.

Each time I get a paycheck, I feel a tremendous sense of urgency to make a very smart choice with it, because it represents a lot of my minutes, minutes I'm not actually getting back.  The less debt I have, the less minutes I have to trade someone for dollars each month...AND if I'm really smart with my dollars, I can invest them in a way that will create more dollars without me trading any additional minutes to get them.  So, my goal is to need a very minimal number of dollars on a monthly basis.  My other goal is to use my dollars to create enough of a passive income stream to allow me to stop trading my precious minutes for dollars.

Thank you for going down the philosophical rabbit hole with me today.  If you've ever thought of money in this way,  or it made you consider your own philosophy of money, feel free to leave a comment.

Sunday, January 21, 2018

Why you should FREEZE your Credit now!

Earlier this fall news broke of a data breach at credit reporting giant Equifax.  It has been estimated that some 143 million consumers may have been impacted by this epic security failure:  social security numbers, addresses, credit card information, all potentially leaked.  Consumers were then asked to go to a special website set up by Equifax to let them know whether or not they "may have been" impacted by the incident.

Note to consumer:  You were probably impacted.

I don't care what their website says.  If 143 million people were impacted, why would I assume I wouldn't be?  It would be a little naive, wouldn't it? I mean, let's think about it?  The same agency that allowed my information to be leaked in the first place is asking me to trust that they have a handle on knowing exactly who was impacted and to what extent?  Furthermore, I am supposed to blindly trust that they have a grip on cleaning up the aftermath?  Sorry Equifax (not sorry)!

Just out of curiosity, I did use their system to check whether or not my information "might be" at risk.  I wasn't even successful at finding out.  Their system must have been so busy that it couldn't handle all of the consumer traffic it was getting.  So, I didn't actually get an answer.

I was in the middle of a mortgage refi at the time, so my credit was definitely being utilized.  A few weeks down the road, I received a letter from AT&T stating they were "helping with the Equifax investigation" (though they hadn't been hacked themselves), and that I "might have" been impacted.

Gee, tell me something I don't already know!  If 143 MILLION consumers were impacted, I already know I "might have" been as well.

Equifax has oh so generously offered free services to help with the clean up:  credit monitoring services, etc.  If you have credit monitoring, you can use it to lock and unlock your report with the agency.  Sounds great, right?  Not so fast!  While the credit bureaus are pushing the credit lock, I wouldn't be too fast to jump on board.

First off, a credit lock and a credit freeze look like the same thing in basic function.  They make your credit report inaccessible to anyone trying to get credit using your information because you basically locked/froze your report.

A credit freeze is a tool that is guaranteed by the law (yes, the government is involved, so this gives you some further protection.  A credit lock is not guaranteed by the government or law in any way.  It is an agreement between you and the credit bureau.  Which do you trust more:  the law or the credit bureau that did a poor job of handling your personal information in the first place?  Additionally, if you opt for a credit lock, what is that bureau going to put in the fine print for you to agree to?  Did they leave a clause that allows them to change the terms of the agreement on you whenever they see fit?  Are they asking you to agree that you will not hold them responsible (legally) if someone happens to steal your identity?  Do you see where I am going with this?

A credit freeze can seem like a bit of a pain.  You have to freeze it with each of the three bureaus separately, and there may be a fee at each of them.  Those fees are regulated by individual states and are generally fairly inexpensive.  But honestly, does it really matter?  If someone said, "Hey, you can either pay ten bucks or have your credit stolen." Would you actually be worried about the ten bucks?

When you initiate a credit freeze you will get a PIN.  You have to use the PIN in order to lift a freeze when that time comes.  There might also be a fee each time you freeze and unfreeze your credit report.  All of these things might seem unpleasant, but having your credit stolen seems entirely more unpleasant as far as I'm concerned.

Listen, I can't tell you what YOU should do, but I will tell you what I did.

I don't like the credit lock.  I have more faith in the legal status of the credit freeze.  So, I froze my credit at all three bureaus (only after pulling and carefully checking all three reports for free).  In my opinion, it is too dangerous to leave it open at this point.  Too many numbers have been compromised, and I hate to sound paranoid, but it seems more like a matter of "when" someone tries to gain access rather than "if."  I'm not playing around when it comes to my financial future.

As a side note:  I wasn't charged a fee when I performed the freeze.  That being said, I don't know the details of this being free or how long that offer might be available, but I thought it worthy of mention.

Have you used a credit freeze?  Do you plan to use one?  Feel free to share your perspective in the comments below.