1+2+3=4
a story to post from ghostsniper via comments
New Maff
We spent more money today than in the past 6 months.
(house was paid off last Dec)
First, the income tax, both fed and state, went out in certified mail.
20+ years ago we got slammed between the criminal IRS and the criminal USPS with the result being a $1300 penalty for not paying our taxes on time even though we did. We sent them in by the regular mail like we always did before. But the USPS dragged it’s feets and the IRS didn’t receive the payment until after the deadline. We tried, but found out, you simply cannot argue with the criminals. I’ll not disclose how much was sent today because the very though ignites all my fibers.
Next up.
The vehicle insurance for 2 rides. I pay by the year because it’s less expensive overall. Almost a thou. Then, about 2 months ago very high winds tore through here and knocked over 2 white pine trees about 100′ tall. One hit the ground but the other one got hung up on a 40 degree angle in a very large beech tree. Very dangerous, and our power pole was within the arc.
So:
1 cherry picker
2 trees
3 experienced doods
4 thousand of my favorite legal tenders
made the problem go away.
We’re not used to the idea of spending that kinda money, and not getting anything for it. We already owned the trees, and we still have them, but they are now cut up and no longer live and function like the did for all of their lives. So yeah, money for nuthin and the sticks for free. or sumfink like that…
Anyway, the doods did a good job, took only about 3 hours, and though we paid them with a check, I gave them a $100 cash tip.
Further, the owner asked what I do and I told him I’m an arky and he said he may have some work for me. So there’s that.
Well at least your house is paid off!
So you got that going for you.
Which is nice.
Don’t get me wrong….paying off your house (or other debt) is Yuuuge. I remember what an accomplishment I felt when the principal paid against our mortgage was greater than the interest. And when we finally made that last payment, the weight lifted off of you is hard to describe.
But when you own your home, if that home declines in value, that loss is all yours.
Last sentence is interesting.
“declines in value”
WHAT value? The assessed value? That’s simply a “made up” number that is used to determine how much the tax thief steals from you and has no basis in reality.
Potential sales value? Again, a made up number that may or may not end up being true. Usually not.
20 years ago our current house was listed at $165k, we countered with $150k, they countered with $158k and we shook hands. Last month the tax assessor said our house is worth $343k. So where is the value in all of this? We won’t know until we and the new owners shake hands.
Now, having said all of that. A rule of thumb in the real estate industry (I was a licensed real estate agent in Florida but I never worked in that capacity. I took the course and the test (94%) for the learning experience – which I have found valuable many times) is 2.5.
What that means is, whatever the homes selling price is, and if the buyer has a 30 year fixed rate loan, when the 360th payment has been made (end of 30 years) the total amount paid is about 2.5 times the selling price.
In our case above, the selling price was $158k and using the 2.5 rule, we paid a total of (158 x 2.5) $395k. Now compare that to the assessed value of $343k. Strictly by the numbers, we lost big time in this deal.
But in all real estate deals it’s the details that make the diff.
Just one of the many details that are built-in is the fact that we had to live somewhere. If we had been renting for the entire 30 years, and if the rent was fixed the whole time at $1000/mth, at the end of 30 years we’d be backwards $360k, and have absolutely nothing to show for it.
I stand by the assertion that in order for a person to get ahead in life they absolutely MUST have a mortgage on a dwelling. The potential benefits far, far outweigh the cost.
Slightly off the path.
I’ve been thinking about writing something on a subject that never seems to go away. The cost of homes to first home buyers. The media likes to fan them flames and most of it is, surprise, surprise, a bold faced lie.
Pay off your mortgage. Suffer it until it is done. When wife and I got down to the last $20K we got plum mad dog mean with extra principal payments and got it paid off. Liquor store job and gun range job helped. I even took a picture of myself dropping the last payment in the mail box. Felt like I got an enormous raise the next month. We go out to eat more often now, but we invest much of the difference.
Our house has gone up in value which only means I am paying more property tax. If the house goes down in value it makes no difference to me. My next move is the graveyard. If it turns into long term care prior to that, then wife and I have insurance for that. Buy catastrophic health insurance to limit your annual out of pocket costs to the hospital. Protect your assets.
I feel your pain, my friend. We’ve had a very expensive (for us) six months too.
Today the IRS and Arizona Department of Revenue got their slices of my hide. Together, it was nearly 8 Large. My withholding hasn’t been right in some time, but this year the bill was more than usual, although the additional was expected. The financial planner has us transitioning some of our IRA money into Roth IRA which means that the amount shifted from one bucket to another is now taxable income and the Taxman must be paid. I’ve posted this before, but this week it seems apt again…..the 1040 Blues.
Additionally,
I am the son of high-school graduates, and I fully realize the position in which I find myself. Every 4-, 5-, or 6-weeks we were spending $2-4000 more than we normally spend. I am fortunate….extremely fortunate….that I can afford these extra expenses, but as I say that, they’re still hard to stomach. They mean that the Bucket List Travel that Mrs azlib wants to get to will have to be put off until next year. And as we’ve seen with our cat and dog, we don’t know how many “next years” that we have remaining.
Strangely enough the past 2 years have plagued us with unnormal expenses too and I’m getting tired of it. We’re not wealthy folk and live very miserly. Fall 2004, $4k for a new furnace and plenum. Last spring, $1800 for entire brake system on my wife’s ride that only gets driven about 500-1000 miles a year. Last fall I had to remove and replace 1200sf of deck boards on our north deck only to find out about have the floor joists were rotted and needed replaced. I did the work myself (took 6 weeks – I’m old now) and the materials cost $3k. Oh yeah, new washing machine (2nd one in 3 years) $800. And a bunch of littler stuff. It’s never ending.
Sorry about your kee-kee. I knew there were issues. Our oldest, Tawny Autumn, is some how still hanging on but just barely. She has been my wifes constant focus for months now. Tawny’s mind is still sharp but her body is dying. She’s down to about 5 lbs now, skin and bones and looking scruffy. When I walk into the room she immediately lights up and starts flicking her tail. I get down on the floor and start luvvin all over her. It’s difficult to see her this way. I fully expect her to give out any time now. It’s like we’ve been living on the edge with her since Dec.
I have another leaking window. A big one. 12′ 2X4s to be reassembled as scaffolding soon. Once the siding is off, we will find out how bad the leaking was.
Peel N Stick flashing is your friend.
The surface must be ABSOLUTELY clean.
$5.28 for a gallon of off road diesel for a tractor that drinks 8 gallons per hour under load.