Timing Our Next Investment Property

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Mr. BFS and I paid off our first home in early 2013.  It has become a nice rental property.  Now we are considering when to buy another one… Getting Pre-Approved for Another Home Loan Our first step in this process was to look around at home loan requirements since the whole idea would have been moot if we couldn’t secure a mortgage.  When it was obvious that the interest rates are doable for us and that we had 20% for a down payment, I applied for an investment property home loan.  We were pre-approved within a couple of days. Keep in mind that being pre-approved for a home loan is way easier than actually getting a home loan, BUT it is an important step. Finding Our Next Investment Property Our next property will need to fit a very specific set of requirements.  We are looking for something within a half hour of our current home.  It also needs to be at least 1600 square feet and have at least 3 bedrooms and 2 bathrooms.  Easy parking is also a must.  Lastly, we are looking for something built somewhat recently – no earlier than 2000-2001. In our area, a home like … Read more

5-Year Progress Check

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal. Just for fun, I decided to compare my budget today; to the budget I had in place 5-years ago.  This exercise isn’t something that I do on a regular basis.  It was prompted by a discussion I had with a coworker.  She is in the process of buying a house and that got me to thinking back on saving and buying my first house.  As I have said before, I have made decent progress over the past several years in managing my finances better.  How much better you might ask?  Let’s take a look. Income Five years ago, I had been with my current company for about 5 months.  My salary at the time was $79,000 a year.  Having a dependable income was precisely why I had left my previous job 5 months earlier.  The old job was commission based and I wasn’t a very good salesman.  Today, my annual salary is $95,000 a year … Read more

Mortgage Rates: Buy or Refinance Now (Or Else!)

LBalke

The following is a staff writer post from Libby Balke. She’s an amazing writer, work-at-home mother of two, and has been married almost 8 years. Please leave any questions or comments below for either Libby or Crystal. I hope you’re reading that title as a sarcastic, farcical headline, otherwise you probably think I’m a raving lunatic or a bossy jerk. But the fact is, I’ve read a gazillion news articles over the past few weeks admonishing would-be homeowners and those thinking about refinancing to do it rightthissecond or risk skyrocketing mortgage rates. “Skyrocketing mortgage rates?” I found myself asking after reading a series of these doomsday articles. How high would mortgage rates go? 7%? 8%? 10%? My parents remember buying their first home together almost 35 years ago with a 12% rate – was this the future of mortgages in America, I wondered? Then I read this from CNBC: “Everyone is FREAKED OUT about the possibility that mortgage rates–which are roughly tied to 10-year Treasury yields–could go through the roof. How much? They’re four percent now, but everyone is concerned they could go to six percent.” I want you to focus on the last two words of that sentence: six … Read more

Starting Your Nest Egg: Investing In Your Marriage

The following is a staff writer post from Libby Balke. She’s an amazing writer, work-at-home mother of two, and has been married almost 8 years. Please leave any questions or comments below for either Libby or Crystal. We’d been married for exactly eight hours when we left the reception hall and headed to the honeymoon suite a few floors above the ballroom where we’d just finished dancing the night away with our families and closest friends. My new husband helped me slip out of my ridiculously large wedding gown and we climbed into bed. But what you probably think happened next didn’t happen. At least not then. We had more important things to do first. In the corner of the suite was a luggage trolley with all our wedding gifts piled on top of it. Like kids on Christmas morning, my husband and I dove headfirst into those cards and packages. 60 minutes later, we were the proud owners of eight place settings of Fiesta Ware, more wine and beer glasses than I cared to count, and enough towels of various sizes to furnish a dozen bathrooms. We were also $5,400 richer. Starting an Emergency Fund Was Our Priority At … Read more

How I Spent My Inheritance

The following is a staff writer post from MikeS.  MikeS is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal. Overall, I have made significant progress on my finances in 2013.  I am in a much more secure position now, than when the year began.  This is primarily due to large (to me at least) infusions of cash I received during the year.  The infusions came in 2 big waves, the first in the March/April time frame and the last coming in December.  The first wave was a combination of a performance bonus from work and the second was part of the inheritance I received from my mother’s estate.  The second was the remaining amount from the inheritance.  In total, they represented almost half of my normal annual salary.  Naturally, I was curious to see how it all ended up being allocated. Debt First up, I eliminated three debts.  The first was leftover medical expenses from when my son was born back in 2011.  I had hoped that I would be able to pay off … Read more

Wall Street Firms and New Investors

by Clarita via MorgueFile

Wall Street firms are wrong concerning how you should invest when you are just starting out Guest Post by: Wealth Effect Blogger The textbook approach for someone who is new to investing and far from retirement is to invest aggressively because in the event of a loss you have time for your account to recover before you need the money for retirement. This might be theoretically correct but it is based on the major assumption that your behavior will not change even as your investments are rising or falling. I find this hard to believe. Think back to when you first started to drive. Were you told “there is the gas pedal and there is the brake pedal now jump on the freeway” or did you start driving slowly on surface streets then gradually build up your experience by driving at different speeds and in different environments (lots of traffic, no traffic, day, night, etc.) This concept is called compounding experiences: taking what you learned from one experience and applying it to the next. I’ve further found that compounding experiences works best for me when I am able to absorb lesson upon lesson over time rather than trying to learn … Read more

Is Forex an Option?

As I mentioned recently, now that we have paid off our consumer and student loan debt, I plan to put the bulk of our new savings into a portfolio with an asset allocation that suits our long-term goals. I am pretty risk-averse and more sensitive to losing money than making it, so I will probably lean to a bit on the conservative side. I also mentioned that I am likely to keep another small pot of money for fun – speculative trading in stocks and other commodities. Forex trading could be an option for that money.   What is Forex? Basically, the term “forex” means “foreign exchange market” or FX or currency market. This is a global marketplace where people buy and sell currency. It is a decentralized system that allows companies who operate across borders to convert money into the currency they need, maybe their “home” currency. In addition to assisting with trade and investing, the Forex market allows people like you and me to speculate by trading currency pairs – basically a spread bet between two currencies like the US Dollar and the Euro – and guessing whether they will rise or fall against each other.   Why … Read more