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Surviving my first 42 months as an accidental landlord

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On October 15, 2019

In Uncategorized

600 Sq Ft of laminated floor for the weekend of hell!

The moment I dreaded for years came like a freight train this past summer.

For someone who became an accidental landlord the idea of switching tenants, renovating a property to turn it around ASAP, finding a new tenant and covering expenses without rent coming in can be simply terrifying and overwhelming.
This past summer as the kids were playing outside silhouetted by beautiful sunset I received the dreaded call. It wasn’t a leaky faucet or AC this time. My tenant was calling me to tell me that she couldn’t afford the rent anymore.
This was quite a surprise because I had not raised the rent for 46 months, but according to her she couldn’t afford my rent and she was moving. She didn’t want to sign any termination letter until she secured something and I agreed to give her a week. After all, she had been a great tenant, I thought. 
One week turned into two, and at the end of that second week, I had to tell her she would have to be responsible for another month of rent because I also needed some time to find a new tenant.
One day later, she changes her mind and decides she wants to stay with me until the spring of 2020. Apparently she was unable to find anything because her newly-wed husband has an eviction on his record. According to her, the eviction was not really his. He was living with his wife and 4+ kids, they got in a fight and he left. His wife found a different man but they didn’t continue paying rent and got evicted.
At this time I am thinking to myself  that the eviction is the least of my concerns, but rather, this guy walked out of his kids’ lives like nothing. Meanwhile, my tenant must think that she is a great catch taht would make the guy stick around to help her raise her own 4 kids. Crazy!!!

Through all these years, well 3 1/2, we have been up and down with our rental bank account. Before starting looking into the idea of financial independence and exploiting the concept of frugality we were at the mercy of different storms of expenses. However, once that we started setting up certain financial goals and educating ourselves about our finances, we realized that $500 in monthly cashflow was not bad for our rental but a hefty emergency fund was necessary to survive a vacancy, tenant damages and renovations.

So, we set off to build a decent fund. By the time that my tenant called me with her plan our account was not quite there( close to 6k) but we had about just enough to withstand switching tenants and a vacant month. Hence, when changed her mind and wanted to backpedal to stay with me I took it as an opportunity; sometimes you need that push to jump off the cliff. It wasn’t just because I wanted them out, but she had already said they couldn’t afford rent. Besides, I was noticing that the property was starting to deteriorate as a result of negligence. Lots of carpet stains from coffee spills and another beverages. The negligence kills me though! One time I asked her about a stain and she candidly responded: “we just didn’t get around to clean it.” WTF!!!!!
Besides from the damages, the new guy she married and not being able to afford rent there was also the fact that I was charging the same rent from three years back. Market value comps in my area suggested an increase of about 26%. I needed that! Taxes had crept in and the $500 cashflow was reduced to only $300.

Being a landlord for the Section 8 program

In case you don’t know, Section 8 is the government program that helps families in need with housing. In a nutshell, the way it works is by giving participants subsidy, many times referred to as a voucher, based on their income. The more you make the more you pay and the less you earn the more subsidy you receive. It also depends on the number of dependents you may have.

Why do I rent t section 8?

Plain and simple because I don’t get one phone call that is not Section 8. When we first started renting our property I refused to accept any Section 8 participants afraid of all the horror stories ( In my county you can decline Section 8). Although, it is easy for participants to not qualify as renters because usually their financial situation sends a quick alert to any background or credit check service.
On the other hand, when we started it was our way out of the neighborhood that had rapidly declined after the financial cataclysm of 2008.
We started being picky about who to rent to but once we found the house and neighborhood we wanted we had to move quick. We had to get someone in there and without knowing much about the numbers to operate a rental, $500 in cash-flow monthly seemed manageable.
I was able to pull a contract from the internet and before I knew it I was tumbling down the pipe to become a Section 8 landlord.
The first 6 months were nerve-wrecking but the rent was always there on time, so I couldn’t complain; until the end.

What I wish I knew about Section 8

First of all, I have to say that it is not as bad as people make it seem. It really depends on the tenant you are working with. I have heard worse stories about non-section 8 -renters. You have to screen your tenant and get a feel for what kind of people you are dealing with. Poor or rich, I am sure you agree that you can find people are pieces of s*** in both groups. I have heard many stories of people not renting through Section 8 and destroying properties terribly. They get pissed and feel they are being taken advantage of and, of course, the only way to get back to the landlord is by trashing the place.
On the financial aspect, Section 8 can be terrific. The money will always be there with the exception of the tenant’s portion that you’ll have to collect. Getting that portion of the money will depend directly on the quality of the tenant you have chosen.
The one thing that sucked for me but I blame it on my ignorance and lack of understanding the navigation of the program, is that I was stuck with the same rent for years.

Why?
Well, not even a year after Trump got into office they started cutting funds for the Section 8 program. With that came a moratorium for landlords that prohibited the rent of current tenants to be increased. I thought that I was stuck with the same rent regardless if the tenant was the same or not. I thought I could not raise the rent. Period! I didn’t quite understand that my contract was a year contract though and after that, it turns into a month to month contract. The only requirement was a 30-day notice to the tenant.

When my tenant called me saying she was moving, she mentioned that she was able to get out of the contract as long as she gave me a 30-day notice. That prompted me to ask a lot of questions to my tenant’s section 8 case manager and was able to clarify a lot of things that I didn’t quite understand before.
For example, I didn’t know that if I really wanted to increase my rent all I had to do was wait out the firs year, get the tenant out and get a different one. You may be asking why to get rid of the tenant if it’s a good tenant? Well, because they would not give more money or a larger voucher to a tenant to stay with the same landlord. However, if the tenant goes  somewhere else the voucher amount is adjusted to market value; usually Section 8 follows the criteria of the Small Area Fair Market Rents to adjust the money amount given to their participants. Fair or not, that is the way it works.

Sometimes, of course, it is worth it sacrificing a little bit of money for the comfort of knowing that your rent will be there and that your tenant won’t let you down. That was a bit of my situation too. I didn’t care so much about making a killing in rent as I just wanted to make sure I didn’t have the property vacant. I was afraid of not being able to have the funds to go through the process of switching tenants.

A nice tenant turned into a dragon

Well, needless to say, trust nobody! I think I did fairly a good job screening my first tenant. But I did a terrible job allowing someone else moving in with her and being added to the lease. I can’t be sure( I am speculating) about this and I really give a crap… but I am convinced that the man my tenant married wrecked her finances. I should have screened the guy with a background check and credit report. You can’t expect a credit score of 700+ but a credit report it’s really a window to look into the character and level of responsibility an individual has. Do they have debt? Most likely. Are they making payments? Maybe. Do they have a victim story for everything in their report? Possibly. I personally feel that when there is a story for every blemish in the credit report, most likely than not they will include me in their story once we are done doing business. I do believe that we can all be down on our luck at some point, but when it’s all about “it’s not my fault, they are blaming me for something I didn’t do, etc” I move on and far away as soon as possible.

My tenant went from being reasonable and understanding to “you had a plan to get me and my family out.” The scary part of dealing with people who are under desperation and financial pressure that jeopardizes their family stability is that they are capable of anything, and the only thing they have to get back you as a landlord is by trashing the property.
My property wasn’t purposefully trashed; I don’t think. But my tenant was simply negligent in many regards that took a huge toll on her security deposit. I think that I did a pretty good job negotiating her situation, making her understand that all the shit happening in her life was not my fault and that I was nothing but flexible and accommodating to her needs. I never lost my cool, and she really pressed my buttons. 
There is always that feeling and animosity towards landlords of  “you are putting me and my family on the street, you a jerk. You have so much money and you are hurting us.” You know, the victim story. As if I had chosen to take my family to Disney for a week and honeymoon in the Bahamas even when I don’t have money for rent! So freaking crazy! That’s what my tenant did.
**If you are receiving the benefit of Section 8 and you find yourself reading this post, please take advantage of the benefit to secure your tomorrow. Don’t blow the fucking money on crap and expensive trips; don’t be an idiot**

Slay the fucking dragon!!

So I quickly realized that my tenant was trying to use some intimidation by telling me that I should be aware of how some people simply destroys properties when they are not pleased or when landlords get them out.
I could not just park it outside of the house to watch what they were up to, but what I was able to do was to bring a “potential tenant” every week on their last 30 days. That’s right. I would show the property to friends, and potential tenants so that I would keep popping in at least weekly.
At first, she objected making it difficult and going as far as to tell me she didnt’ feel comfortable letting me in her home. What that fuck!!! Until finally I had to tell her that my only obligation with her was a 24 hour notice. That was my gently way of telling her “go screw yourself!” She was rather unpleasant the few times I visited but I was able to assess damages and more importantly check if they were moving out or not.
Going into the last month she wanted to play the “I don’t have the rent for next month” card. She wanted to use the security deposit as the last month rent, which I said absolutely not. You never do that. My response to her was very clear, “if you don’t have the money on the first of the month this all out of my hands and my lawyer will handle it; he is ready to file for eviction, but I really don’t want to do that to you and your family. You know how hard it is to find a place with an eviction in your record. Please don’t do this to your kids. Make sure you have the money on the first.” She had it.
In regard to possible damages to the property, my response was also straight forward “my insurance will cover anything exceeding the security deposit. However, if I notice any damage caused on purpose I will file a police report and I can assure you that nobody will ever rent to you, not to mention that you will lose your Section 8 benefit.”

I don’t like be a dick but it does bother me when people think that they can use their street smart shit to push you around.

Where am I at now?

Well, the property was completely renovated. Was it a pain in the ass? Yes.
I spent about 40 hours of work and roundabout $2,600 replacing all the trashed carpet, retouching paint, trim, replacing a vanity and blinds, plus doing some major cleaning.

I thought they had scraped the tile pattern off. But no, it was still there just submerged in filth.


The worst was a tile floor that was so bad that we had to buffer it with a Dremel tool. It had some sort of wax or hair product mixed with filth sedimented to the tile. Disgusting! Needless to say, I kept her security deposit. I am debating if I should contact her to try to arrange payment, which I am sure won’t happen, and then proceed with a collection agency; just to make sure it goes on her record. She really pissed me off towards the end!
I can’t stand the victim attitude she was trying to use to manipulate me.
The property was up and running in two weeks and I just got a new tenant. The cash flow went from $366 to $766. We needed this increase badly!

New Procedures

I made my contract tighter. More specific language about my right to get into the property with just a 24-hour notice. I am including a check-out list of procedures at the moment of signing the lease. Tenant has to read it and sign it, so it’s clear what my expectations are at the moment of moving out. I adjusted my late fees, and more importantly, I front-loaded my tenant with “this deal is not forever. At some point, you will move on, or I might need you out of the property. I am nice and I will be there when you need me but this is a business not a charity organization. I need my money on time.”
If there is anybody new joining the family on the lease they need to pay for a criminal background check and credit report, and there is not guaranteed that I will continue renting to them upon receiving the report.

Tools every landlord and techniques must use!

The place looks awesome! What you all think?!!

You need the right tool for the job, they say. Well, the one tool that saved me tons of time and it is well worth the $18 it cost me, is… drum roll!!
The Ridgid Miter Trim Cutter. This tool is like a set of pliers with different angles to snap the quarter round trim that goes along the perimeter of every room where you might install new flooring. Using this tool that I first hesitated to buy allowed me to cut the trim for three rooms, a hallway and a living room in almost two hours. It is absolutely a must!

An air compressor comes also handy to attach the trim to the baseboard. I have been using the Home Depot Porter Cable combo that comes with three guns and a stapler and no disappointment yet.

Last but not least, in the paint department, it is worth mentioning that the fewer colors you have around your rental house the better. Since our rental was initially our home we had quite a few color combinations. It could be simpler, but it is not a problem thanks to a little bit of planning. Every time I used a different color I took a picture of the barcode with the color formula on top of the can or container. Thanks to that, every time I want to retouch the walls I just get myself a $2.99 sample. I bring a picture of the color label, which now I have saved in my Google drive, and the Home Depot associate makes it right there for me. Rather than painting the whole house I just go around retouching the walls with some Dollar Tree brushes and I get the job done for easily under $50.

This has been a long post, but I don’t get to write that often because I am so extremely busy with the kids. Nonetheless, I wanted to share my landlord experience with others. Hopefully, you pick up a couple of ideas here that may serve you on your journey of real estate investing.
I am not a super experienced investor or claim to be one. I am just a regular Joe who is trying t make those dollars go the farthest so that I can reach my financial independence relatively early.
If you have any tip or comment I would love to hear it. All points are always well taken.

Why you should take long road trips with your spouse or significant other

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On June 24, 2019

In Uncategorized

If you have at least one kid, you know that your time is limited. Your day is full of requests from sippy cups to “take me to the park” or “can you drive me to my friend’s house” if your kids are older; we are actually just breaking through that one.

Now, with four kids life can really feel upside down at times. Very quickly you learn that even using the bathroom for a few minutes is a privilege. A moment that allows you to think and straighten your thoughts quickly fades into breaking up the next fight or accommodate everybody’s requests.

In the midst of all the commotion you might find yourself isolated from your spouse even when she or he is just a couple of feet away. Sometimes it’s hard to find the time to talk and when you do you may be so freaking tired that it might simply not happen.

But how about if when your conversation finally happens you realize that your spouse is living the FIRE dream? Quite settled in FIRE-ville trying to find purpose in life, pondering what is important for her and talking about causes that are meaningful to her?

Here is the best: She doesn’t even blog or reads about finances. She has never visited the Mr. Money Mustache corner or listened to any podcast! Your money or Your Life means nothing to her!

It seems like my wife is living the FIREd life

It’s summer 2019 and this is our third summer sending our oldest kids off to camp. Actually we drive to drop them off. This year trying to be economical and sticking to the budget we decided we could keep two kids with the grandparents as we took the trip 5.5 hours away, drop them off, turn around and get back for a total of eleven hours in the car. We thought it would be a good time for us to talk and catch up with no kids in the mix.

We started the trip talking about random things, such as, of course, the kids, but quickly the conversation turned into our retirement plans.

If you have read some of my other posts you know that I am planning on retiring in 2029. You can read My Blueprint and find out the details.

On my end, I really don’t want to stop working but I do want to work for myself. I want to free myself from the shackles of working for money. I want to not have to worry about pissing off my boss because the scores are X and not Z. Or because Jimmy is reading 105 words per minute instead of 106; therefore, he is not college and career ready.

My wife though, is a different story. She gave up her dreams of teaching as soon as we had or first child. She had just completed her master’s program through UIC (University of Illinois at Chicago), had a full-time teaching position and after a month of dealing with daycare issues we decided we couldn’t do it anymore. Leaving our baby in the hands of someone who was doing what we were meant to do as parents in exchange of money didn’t make sense anymore. And so we went from having two professional salaries of about 36K each, to just that; thirty six thousand dollars. We were barely having enough to cover our mortgage and basic expenses. No more money to eat out and frivolous spending. We were getting clothes donations for our baby through a nonprofit organization. We were tight.

My wife didn’t work anymore out of the house. Our second kid was born and it wasn’t even a question. She wanted to have that special time of being there for them and we simply made it work. We went from two cars to one, to cut expenses in transportation, made our own bread, granola, did some canning, lots of DIYs were on me, and the bottom line was: it worked out! We even survived 2008.

Now our kids are older, but we also have two more, with the youngest being almost KG age. This may be a turning point for my wife to decide if she wants to go back to work or continue staying home. We both agree that just because the kids are all in school doesn’t mean that there is no need for anybody being home and regroup or plan the logistics of the day.

Regardless, our current situation and opportunity to talk during our trip opened up a window to think about possibilities. My first thought was, would she want to go back to the school system and be a teacher? She immediately confirmed what I thought with a quick “NO.” What came after that was what really surprised me. In her first few sentences she made clear that she wanted to work on something where she could help others and didn’t have to have a boss breathing down her neck. She said she wanted to work for a cause that she really believed in.

I found all the things she said fascinating because after doing so much reading and pondering about FIRE, these are very valid points that are important to find purpose and consequently bring happiness in life. She wasn’t even considering a job per se where she could earn an income. She was even thinking about some volunteering time working with kids at a hospital in our area.

My big Aha! Moment

As the conversation continued, I let her know how cool it was that she had the freedom to think about work in those terms. Money in the form of salary was not a concern, she wanted to do something she believed in, something she found purposeful, with flexibility, and she wants to help others.

I told her immediately “you are making me feel what it must be like to be FIREd. That is the FIRE mentality!”

After our conversation there was a pause in me to digest all this, and almost to rejoice the moment.

Granted, financially speaking we are not there yet. We still need my paycheck. BUT we are making all the needed changes and putting in all the work to make things happen in 2029.

In retrospect, as I read other people’s stories and learn more about finances, I can see how trying to FIRE may be frustrating. We want things to happen quick. Sometimes we make changes and they don’t seem to make any difference or may not be as significant as we wish. But changes in our behavior as consumers and in our relationship with money do make a difference.

In our case, thanks to small changes we have gone from receiving clothes donations for our first child to being potentially 10 years away from retirement.

Which also brings me back to one of my favorite quotes:

“journey of a thousand miles starts with one step”

Lao Tzu

Practicing gratitude

Along with all this reflection is the mindful practice of being grateful for what we (You and I) have.
I could find things I can complain about and feel sorry for my self because I am not FIREd yet, or I am not traveling the world like many people in the FIRE community. However, I choose to see my glass half full.
When I think about work, sure I would love to live an endless summer adventure and be fully retired. But when I think about our current situation I couldn’t think of a better scenario. My wife has never had to work and she has been able to spend one of the most precious times of her life with our kids. She is under no stress of putting up with a prick as a boss threatening to fire her and jeopardize her family financial stability. She is happy. And our kids love having mom home.
On my end, I am the bread winner but I get to spend the summers with my kids and all other holidays. When they are in school , I am in school too. I work until 3:30 PM; sometimes 4:00. My commute is ten minutes.
Out of the 52 weeks of the year, I work about 39 of them. 185 days a year. In other words, I can kind of consider myself part-time retired. I work half of the year.
I could certainly leverage my way into more real estate to make things happen quicker by investing more but this may also open the flood-gates to a world of stress. I really do not think the trade off is worth it.

I am saying all this not with the intention of bragging or setting up my life as a reference to others. I try not to compare my life to others. That’s the worst we can do.
Rather I invite you to reflect and always search for the silver lining in your life.
I would love to hear what’s your ideal work situation once you reach financial independence? How long will your path be to reach your number? And please share some of those silver linings in your life as you pursue FIRE.

How to get your car insurance for almost half price

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On June 14, 2019

In Uncategorized

    Do you ever find yourself frustrated because after reading so many articles about saving money you realize that you are already doing all the tricks under the sunt? Sometimes I wish I was the latte drinker, so I could just cut it out and save a ton. We budget, plan meals for six, get down with almost every DIY out there, side hustle, etc, etc, etc. At the end, we feel like there is no much more we can do other than keep riding towards FIREville slowly and steady.

    With that said, sometimes you do hear advices from different bloggers and podcasters in the FIRE community that stick with you and kind of become part of your toolbox. One of those tools that always has stuck with me was the words of J. Money at budgetsaresexy.com who I heard once saying “make sure you challenge every expense in your budget.” Yes, budgets can be a pain at the beginning but once you got yours down it becomes the most eye-opening experience financially speaking. Not only you realize where your hard-earned salary is going but it also helps you to project how much you will need in future months, as well as it can give you a starting point in your FI journey( I did it to figure out My Plan)

     Anyway, 2018 was a great year for my family. We managed to stay completely out of credit card debt, and we got used to budget and track our income. We also managed to pay cash for a brand-new roof and keep our saving ratio untouched.

    We have gone through each item in that budget scrutinizing how much we are spending in each category and how we can either cut back in expenses or tame the wildest beast called “miscellaneous.”

    Now, some expenses are a true pain in the Arsch. Why? Because they are time consuming. They require research, looking up terms and lingo that you are not familiar with and sometimes you even do some reading your state laws to make an educated decision.

    For a while, I have had my eyes on our car insurance. It seemed to me that $100 a month, $1,200 a year for two cars was too much; just as a speculative observation. Regardless, I was thirsty for some more savings and $100 a month seemed like an opportunity to challenge. But again, I needed time to do my due research and shop around for better options. I didn’t want to call my agent without knowing exactly what is in my coverage and end up confused and intimidated with all the jargon.

    With the arrival of my teacher summer break this was on top of my priority list.

    As I mentioned before we were paying $100 monthly for two cars. We have a Corolla 2004 (177k) and a Dodge Caravan 2005(140K). Our lives unfold within a 15-mile radius. We haven’t had tickets in more than 6-7 years. My expectation was to lower that bill to maybe $80. That would have made me very happy.

    The Results

    Starting July 2019 we will be paying only $40 a month for both cars, which will save our family $720 yearly. Another added bonus this was that we realized we never added our new (used) car to the policy. That would have been a huge disaster if one of us would have gotten into an accident!
    Let me explain. We used to have a Grand Caravan that died with a transmission problem and we went on to buy another used Caravan; notice it’s not Grand Caravan but just Caravan. Since the insurance card still said Caravan the needed change went unnoticed. We have 4 kids, super busy tending to them and we missed that. No excuse though. It was a terrible oversight.

    This makes me reflect on the importance of looking carefully into all these things. Many times we all tend to pay things as we go and we don’t question much.

    It’s scary to think that if we would have gotten in a car accident with that car, we could have been found ourselves in a predicament with no insurance to cover for damages, potentially sued, etc, just because we did not make a simple phone call to change it.

    Straightening this up is probably the greatest saving of all!

    Slaying $100 beast: What we had and what we have now!

    Well, in terms of liability everything stayed the same. Our coverage for our liability under “Bodily Injury” stayed 100K for each person involved, 300K each occurrence. This is what my coverage would be if I get in a car accident and someone gets hurt. My insurance will cover that amount.

    Under property damage, which would pay damages to other vehicle I wanted to cut back. However, it seems to be a preset with the “Bodily Injury”coverage I mentioned before and there was no additional cost. So I kept that. My reasoning for trying to cut back was the fact that the average cost for a brand new vehicle in the U.S. is 36K. I figured, I could go with half the coverage for property damage (50K, rather than 100K) and save some but it wasn’t possible. So that stayed at 100K as it was.

    The Truth

    I care less about our cars. That is the bottom line. I don’t brag about my cars or are a topic of conversation unless I am talking about savings, FIRE or if I am bragging about how many miles they have; now that last one is a badge of honor.

    To me our cars are temporary vehicles to go from point A to point B. They are old cars that have served us well, but I have no emotional attachment with them.

    This came up as I was talking to our agent and we were going through what they call comprehensive coverage. If you look at your policy, which I highly recommend, you will find a section that says”Uninsured Motorists Insurance Limits.” Under this section you may find the comprehensive insurance coverage; at least with Allstate that’s how they call it. Basically, it means that you will be covered for some categories in the given case that the other driver’s insurance coverage is not enough to pay for damages.

    Now, what they call comprehensive coverage is kind of camouflaged in the same section. Our agent explained to me that this is what would cover us if a branch falls on the car and breaks the windshield, or the car is in a hail storm (it just happened a week ago), the car gets broken in or hit by lightning, etc. Well, the problem is that there is a deductible that comes with that coverage and it is $500. It is also costing us $20. Not much, but I like how $20 extra look in my bank account.

    The other money pit was the auto collision insurance for uninsured motorist. In other words, if I get in a car accident and the other driver is at fault and his/her insurance is not enough to cover my damage my insurance will kick in. Sincerely, I am not interested in this for the same reason I mentioned before. We have old cars. The most we could get for our cars is around 2K and this coverage was costing us $114.

    Finally there was the “automobile medical payments” for underinsured motorist. This works in a similar way as the “auto collision.”
    In the given case I get hurt or one of my car passengers, if the other driver at fault is underinsured to cover medical expenses my insurance would kick in and cover my medical expenses. This sounds great and plays with your emotions too, but we have a terrific health insurance through my school district. If I end up in a hospital due to a car accident my health insurance would pay. So, auf wiedersehen with that too!
    There were few other fees that were eliminated with the comprehensive insurance change.

    So, our new car insurance monthly fee will be $40 instead of $100.

    Latest update

    Since I started writing this post and looking into the numbers something didn’t seem quite right. I was told I was going to pay $40, but looking at the statement for the next billing cycle it says 320.58. Divided by 6 months it comes up to $53. $13 difference.

    I had to call again to clarify and this is what’s happening. For the next two months we will pay $40, after that it will be $53.

    Bummer! Still god savings but not as good as it once seemed.

    However, in the conversation my agent told me that I could get a 10% discount if I pay six months in advance instead of installments. That would bring my premium to $288 for six months ( $48 monthly in my budget).

    But wait there is more. If I go paperless, they will give me another 5% off. The premium would be $272 every six months ($45 in my budget or insurance bucket).

    Car Insurance Before After
    Pemium $600 $320
    10% Discount for paying 6 months   -$32
    5% Discount for going paperless   -$16
    Total $600 $272
    Six months savings   $328
    1 year savings $656
    Cost opportunity for 20 years at 8% return $32,421

    Side story

    As I was looking into all this, I had to go into our van’s glove box to get the policy number on the insurance card. Sure enough the one I found was expired. I told my wife to make sure she had the updated one. At some point she had to leave, the kids are fighting over who sits where, who walks out the door first, etc. She forgets about the card.

    Five minutes later, she calls me to tell me she was pulled over because one of the headlights wasn’t working and she has no insurance card. Really? I couldn’t make this up.

    Luckily, since I went through all the trouble of creating for the first time my login with our insurance company I was able to pull it up right away on the screen, take a picture and text it to her. Luckily, we got only a warning ticket.

    Can we call that a $150 savings?

    Conclusion

    This is still unfolding and hope the savings remain the same through the year.

    The discount was not as good as I thought it was at first but saving $656 a year I think it is still good enough to be happy about it. I think it is terrific. Especially when I never can find where to cut more than what we already have cut.

    The lesson though, is we all need to find the time within our busy schedules to scrutinize our expenses. There are hidden fees everywhere, and we just pay them sometimes because we don’t question them in the first place. We get used to paying the same amount month after month and we never look back to unveil hidden fees or things that we simply do not need or want to pay for.

    Fees that sometimes are disguised with a “recurring fee” label or “billing origination fee.” A cloud storing fee or any other label they can come up with to charge you more. Companies know exactly how to play these word games and appeal to your emotions to achieve their ultimate goal: take the most they can from you.

    Another lesson from all this is the importance of staying on top of anything that has the potential to become a legal issue or lawsuit against you. All it took me to figure out exactly what I have in my coverage was a phone call and a bit of time. Logging into your insurance company’s website will provide you with most of the information you need to know.

    Last but not least, like the cool dude with the mohawk ( J. Money, that is) says: Challenge every single expense.

    Have you been able to rack up any good savings after reading other blogger’s recommendations? Feel free to share any mega savings you’ve gotten or over-sighted for years.

    *** Disclaimer: This post is simply my opinion based on my own experiences. By no means this intends to be a recommendation of what you should do. I am not a professional or financial adviser and take no responsibility for other people’s actions after reading this. Seek professional advice.***

    Illegal immigration: A national sham

    By

    On May 26, 2019

    In Uncategorized

    Image result for immigration sign

    Alright. This will probably be my most political post ever. Although my intention is not to get into an argument about who is better or best, if Democrats or Republicans. Everybody has their reasons to vote one way or the other and although I do have my own political perspective I will not try to convince you one way or the other. All I know, is that some things gotta change and what I am about to share with you is one of them.
    Needless to say if you have been reading my posts, you know that I am in the teaching business. By now, after 16 years in the profession I have helped many students and their families, most of them immigrants. Sometimes these families may or not have a legal immigration status but this doesn’t mean that their kids can’t go to school and receive an education. Sometimes the family may not have a legal status but the kids are U.S. born, which makes them U.S. citizens by “Jus Soil,” which grants automatic citizenship and right to the land where one is born.
    I know. This is controversial. But that is the law. I don’t make the rules. Many people would call this BS and would agree to deny the right to citizenship to these kids. The counterpart of “jus soil” would be “jus sanguinis” which establishes the right to citizenship based on the citizenship of the parents.
    Some people would argue that welcoming immigrants is a core value and part of the foundation of the United States.

    “Give me your tired, your poor,
    Your huddled masses yearning to breathe free,
    The wretched refuse of your teeming shore.
    Send these, the homeless, tempest-tossed to me,
    I lift my lamp beside the golden door!”

    Statue of Liberty poem by Emma Lazarus

    Regardless of immigration status the one thing I see in immigrants coming to the United States is a tremendous drive to push their kids to give them opportunities that otherwise they would not have had in their home country. They are very hard working people, resilient, and always living with their glass half full despite of inhabiting in the shadows, as cogs of the economic system.
    These illegal immigrants that many times get blamed for the bad and the worse are also an important contribution to the economy.
    Disclaimer before you stop reading: I am not advocating for open borders and letting everybody into our schools, using our social programs and living on welfare, yada, yada, yada. However, I do want to ask you to put yourself in the shoes of one of these families who lives surrounded by the lack of opportunities, basic needs such as food and water. Many times harassed by gangs, drug cartels, threatened with rape and death. Ask yourself if you wouldn’t do whatever it takes to get your family to a better place if you were in that situation? I would. I would do whatever it is necessary to keep my family safe and to provide for them. There are situations when the line between what is legal or not gets blurred by the need of survival.
    If you feel entitled to a better life than others just because you were born in a privileged country, ask yourself what have you done to deserve better than others? Has your contribution or your family’s been such that it has made your country what it is today? Has your contribution to your country been that invaluable that otherwise it would not be what it is without it? Most likely the response to this is a flat NO. Most people’s contribution to society doesn’t go beyond holding a 9-5 job, paying taxes, social security and spending money; which is not much different than what Illegal immigrants do as well.

    A vicious cycle

    This might be as much of a surprise to you as it is for me, but many people do not know that besides doing the jobs that nobody wants to do for cheaper, illegal immigrants also contribute towards the economy. Not only by paying taxes but also contributing to social security.
    Let me explain. Once someone overstays a visa or crosses the border illegally the firs thing the will need to get a job is a social security number. Since you can’t get one unless you have a legal resident status most people use one that doesn’t belong to them. Once they are hired by any company, with each paycheck federal and state taxes will be withheld as well as contributions to social security; without hope of any benefits in the future.
    If the individual chooses to work for cash most likely than not this person will report income every year through an individual tax identification number, also known as ITIN number. Why? Because there is always the hope that an opportunity for naturalizing or gaining residency might come and people fear that paying taxes every year will be a requirement to be eligible.

    Can we straighten things up?

    The one thing that both political parties agree upon is the need for immigration reform. The question is not if we will have immigration reform but rather, how would that look like? Are we talking about deporting more than eleven million people after repossessing their assets in a holocaust-look-alike situation? Or are we talking about granting a citizenship path to everybody without any vetting, forgetting about all the other thousands of people waiting in line for a visa number? How about those children who came to the country at a very early age, who don’t even speak their parents’ native language and think of the United States as the only country they know as home?
    Can the economy bare deporting such a large group of people without any consequences? According to pundits this would be a strong wind blow to a dwindling system already dancing on a tight rope.


    If all undocumented immigrants were deported today, next year’s Social Security trust funds would have approximately $13 billion less for benefit payouts. It’s a considerable loss of dollars, especially when it’s projected that the Social Security funds will be depleted by 2034.
    According to New American Economy, undocumented immigrants contributed  $13 billion into the Social Security funds in 2016 and $3 billion to Medicare. Three years prior, the Chief Actuary of the Social Security Administration, Stephen Goss, wrote a report that estimated undocumented immigrants contributed $12 billion into Social Security.”

    https://www.marketplace.org/2019/01/28/undocumented-immigrants-quietly-pay-billions-social-security-and-receive-no/

    In other words these people work all their lives in a low paying job, they are allowed to put money into the system, they live in the shadows of a fake identity but they can’t ever receive any benefit as far as retirement is concerned.

    You may say though, that they use social programs, “drain the system,” etc. However, you can’t receive any social program benefit unless you have a legal status that can be proved. No Medicaid, Medicare or ACA. I know this from personal experience. You may receive donations from organizations that focus on helping immigrants but not from the government. On the other hand, if there are children who have been born in the U.S. to parents with illegal status, the children are eligible to receive services because they are considered American citizens by “jus soli”. I am sorry, I don’t make the rules. I know what you might be thinking!

    The system is broken

    I am sure you have heard that before, but just because it’s broken doesn’t mean that nothing can be done. Many people think that the problem is a matter of choice by saying ” well, illegals just don’t want to nationalize.” That is not true. You just can’t go to the closest immigration office and say ” I want to be a citizen” and done; you are on your way.
    To be a citizen of the United States there are really few options besides being born in the country. You can be granted residency if you are transferred or hired by a company in the states. Also if you are an investor with 500K to a 1M to invest in the country you can be granted the so called green card (No green anymore). If you have any special talent, like playing baseball professionally (of course) may grant you residency.
    Other than that, getting married to an American citizen (my case) or being petitioned by a family member could also help you. However, petitions for family members may take 14 years or more depending on the country of origin.
    In the meantime, political parties and politicians reach for visceral feelings pandering to their respective bases trying to fork up votes in the next election and nothing really gets done.

    A true story

    Recently I received an email from a former student asking me for observation hours, which is a common practice in education. After realizing that I am so old now that my students are becoming adults I gladly accepted by letting her know she was welcome at any time.
    After many conversations about education I remembered that she had come to the U.S. as a third grader without a lick of English. I remembered that during a writing exercise I had to basically stop to hear the account of this kid describing her crossing through the border. She described how her family had been brought to the border by some men and how they had to run and hide. Later, they had to spend sometime hiding in the basement of a house with other people until someone picked them up. She retold this story in a mix of fears and emotions as if it was some sort of scary but fun adventure she and her family survived. Almost as if it was a clip of Roberto Benigni’s Life is Beautiful.
    Now she is a confident 19 year old, totally fluent in English, full of dreams and ambitions. She is attending college and is passionate about making a difference and working with kids. Unfortunately, even when she has been living in the states most of her life she is still considered an illegal immigrant, which will decimate her chances of getting hired by any school district.
    Should she continue on the path to become a teacher in hopes that an opportunity for naturalization will come her way from the political arena? Or maybe she will fall in love with an American citizen that will grant her legal status? Or should she choose a different career path that will allow her to work in any part of the world, such as computer science, web design, accounting, engineering, etc?
    Could you imagine the feeling of a 19 year old that has done everything right to achieve and chase the American dream being told “F*** you! You don’t belong here, it doesn’t matter how hard you try you will never get a chance in the country you call home!”
    These are the kids that we have invested in and prepared to join our workforce. Why have we granted a K-12 education to all these kids if they are destined to live in the outskirts of prosperity?

    Solution

    I don’t think the solution is that complicated but I highly doubt that any politician will do what is needed fearing consequences in the polls.
    I think it is fair to realize that perpetuating illegal immigration can’t be part of the solution. Keeping people down and living in the shadows contributing to a broken system is not fair to anybody.
    I also think that deporting 11 million people will carry a financial and moral consequence that we are not willing to deal with; at least most of the population.
    At this point, I think the only solution is to offer a path to citizenship to those who are already here, following the necessary vetting process to ensure our communities’ safety.
    Also, some sort of linking between social security numbers and local state IDs should help tremendously to prevent identity theft. No more people using somebody else’s number.
    I think it is fair for schools and other institutions to demand documentation that shows a law abiding status. Most countries do it.
    Having more control on illegal immigration will allow to grant more visas to political asylum seekers, the visa lottery program, family members and petitioners backlogged in the immigration system.
    It will not be perfect but definitely better than what it is now.

    What do you think will be a good idea to fix the immigration system? Feel free to share your thoughts. As long as they are objective they will be well received. I don’t do well with one sided fanatical and tribal thoughts. Keep it real.


    7 things you can do to become handy and save thousands of dollars

    By

    On April 25, 2019

    In Uncategorized

    Being handy is a consequence of being money driven.

    Has it ever happened to you that you are about to come out of a month victorious, with no one unexpected expense in the budget and BAM! There it goes! The muffler starts making sounds. You don’t even want to take it to the shop because you know you will not come out of there without spending less than $350; being conservative.

    You know how it goes. You take the car in, they tell you they’ll check what’s wrong and let you know in a few. Meanwhile you are in the waiting room mortified, invoking any higher being to intervene on how much the repair is going to cost.

    The verdict: Yes, the muffler needs to be replaced but also the catalytic converter is about to go and there is a funky noise coming out of a bearing, which they highly recommend to replace. Now your previous guess of maybe $350 has rapidly faded away and morphed into$700. From that point on, there is no holding back for a big F@#$!!!!! Why me?

    In your mind there is always that lingering idea of “I wish I could just fix this myself?” But right away the same thought links to another automatic thought of “I’m not handy. I have no idea how to do it.”

    The truth

    Ok. Take it from someone that has been bestowed with the handyman title. Nobody is born handy. I wasn’t jumping my dad’s car when I was five, ten or twelve. I never fixed anything until I had no option and I was in desperate need to do it. And even until today I would say I am not necessarily handy but money driven. There are some things that now I have done them so many times, that yes, I can say they come easy. But more often than not I am trying to fix something for the first time and struggling.

    How do you become handy? Well, I tell you a quick story that became my Handy 101 crash-course. I used to have a 1964 Land Rover Defender. It was all I could afford back then in the late 90’s. I loved that car, but the engine was in such bad shape that it required a liter or liter and a half of oil per week. Whenever I put my foot on the gas it was like a octopus escaping its predator; a curtain of black smoke would cover my path.

    The time came when it overheated and the engine seized without ever turning again. I did not have the money to fix it; what seems like it has become the common denominator of my life. Maybe, and only maybe I thought I could afford to buy the parts.

    Close to where I lived there was an area where mechanics would gather and work on the street for a more affordable price than a regular shop. They had taken over a corner where they always showed up and would fix any car brought to them. It was significantly cheaper, but still expensive for someone in his early 20’s.

    It occurred to me that the difficult part of the job was to re-assemble everything. In my mind that’s what required the skills. After all, unscrewing bolts anybody can do right? I knew enough about mechanics to remember “righty tighty, lefty loosy.” So, I figured, if I can convince any mechanic to put the engine back together for me, I should be able to get the job done for half the price if I can take it apart myself. After all, I thought, all I have to do is wherever I see a bolt or screw I would just get it out. “Fair enough,” I said. Talked to one guy and he agreed. I got myself a deal!

    Image result for righty tighty

    Hours later I was going at it. Learning along the way what seemed to be the fuel pump, starter, valves, timing chain, etc. After being covered in grease for about a week I got it all out. Looking at the gallery of metal and greasy pieces all around my family’s condo I was ready to move on to the next step, as I was supposed to; but another idea came to me. ” Taking the engine apart wasn’t as bad as I thought it would be.” I could remember exactly how everything was supposed to go together. I knew the sequential order of the whole engine. I thought I could put it back together.

    What happened next? I was opening new parts, taking some of the parts to be bored and properly sized, and in about two more weeks the car was running. I had a few difficulties along the way due to the fact that it was a British car and I was following a manual for American cars; the timing chain set up was different. But with a bit of extra help the car was running in no time. You can’t imagine my sense of accomplishment! I was elated!

    Image result for defender 1964 engine series 1
    Land Rover Defender 1964. Mine never looked in such a pristine condition though.

    From that experience, I realized that with a little bit of patience and willingness to problem solve situations the possibilities for savings are endless.

    You don’t have to be handy. You must be just willing to do what it takes. Especially in this day in age we live in, all it takes is your cell phone to find information about fixing anything you want.

    I have fixed dryers using YouTube; that was a one time deal. I had not a clue.
    Our AC broke last year; I swapped the motor and capacitor for less than $100. I had no clue what the capacitor was and I still, quite frankly, don’t know. I had to ask my neighbor to help me with the wiring and watch several videos. I had no clue. It was my first time.

    I regularly do our brakes. The first time was a whole day nightmare. Now it takes me about an hour per wheel.

    I have replaced our mufflers a couple of times for less than $100, using Rockauto.com- awesome prices and delivered to my door.

    Fences, painting, table building, boat building, furniture making, and the list goes on.

    Please, dont think I am bragging. I simply want to share my take on this idea of being handy because I know how much unexpected repairs cost, and how much you can save if you are willing to try fixing some things. I know how it feels when you have a budget and these unexpected expenses come after you like raging zombies and you have no defense.

    I actually don’t think that we could have afforded our current financial situation if it wasn’t for that “handy-ness” or will to give it a try solving all these unexpected repairs. It can be frustrating, and I would be the first one to say that nothing is easy; there is always the broken bolt or stuck piece that will make you get very creative with your vocabulary, but it is possible. If other people can fix things, so can you. You can also be handy.

    7 things to become handy and start saving thousands of dollars!!

    Dare to try
    Make sure that you are safe at all times. Getting under cars or dealing with electricity ( My weak link) can be dangerous. Make sure you are using all the necessary precautions. With that said, do your due research and give it a go.

    The web got your back
    In these days you can find a tutorial for absolutely anything. Do your research before you tackle the job. It will make your life easier. By the time you decide to face the beast you know exactly what weapons you will need.

    Be patient with yourself
    It will require more time than what it takes a professional to do the job but the more you do it the easier it will get. Don’t despair. You may need a break, coffee and words of self-encouragement before going at it again. Your grit will be tested to its limit sometimes, but there is an end to it and if you persevere you will win.

    Help others
    By helping others you get a chance to learn new skills and even make mistakes. There is no learning if there are not failures along the way. Plus, your friends, neighbors and family members will love you. With that said, if you are getting into unknown territory be clear and let people know that you are willing to try but you do not want to be responsible if something doesn’t go as planned; it’s up to them. Don’t bite more than you can chew.

    Don’t spend a fortune on tools
    Remember you are trying to save money. Don’t go crazy spending thousands of dollars to save few bucks. When it is a job that becomes a routine every so often it may justify spending few extra dollars buying a tool that will make the job easier; otherwise it’s not worth it. Don’ t buy a car lift for a one time job.

    Buy used
    Don’t forget you can buy like-new used tools for a fraction of their original cost; plus you will save yourself the sales tax. Apps like Facebook Marketplace or Craigslist may be all you need to help you find the tool you need.

    Don’t listen to the nay sayers
    Like with everything else, there are always those people that won’t ever try to do anything and can’t conceive that others will . They will tell you all the possible bad things that can go wrong and have no hopes on you, themselves or anybody. They prefer paying whatever, and using their credit cards because they feel that by paying they are protected against any failure. They could not accept that if something goes wrong it’s their own damn fault.

    I hope you find this helpful and encouraging to start saving some serious money.

    Have you ever scored some great savings by fixing something at home? Would you mind sharing? What helped you or didn’t?

    How can someone retire on a teacher (or similar) salary?

    By

    On April 19, 2019

    In Uncategorized

    When should I start thinking about retirement? Am I too young to retire? How do you plan your retirement? How do other people do it? How much money do I need to retire? Most people seem to work until 65, do I have to wait until 65 to retire?

    ***Disclaimer: If you are not a teacher, simply substitute 403B for 401K, and the same applies.***

    All these are questions that teachers ask themselves most of the times when they are about halfway in their careers, few years before retirement age or in those days when we feel we can’t do one more day of dealing with behaviors, parents or administrators.

    Unfortunately, the answer to all those questions it is not a one answer fits all scenario; and will depend greatly on your location as well as your expectations. Let me explain:

    First of all, teaching salaries will vary greatly according to the state and district you work for. While some states and districts pay decent living wages, some others would make it difficult to live on one income and sustain a family.

    https://www.niche.com/blog/teacher-salaries-in-america/

    Comparisons between public and private school salaries can also be very discrepant. Most public institutions will offer their employees a pension program as well as a 403B plan, whereas private institutions may be more limited in this aspect.

    But wherever you are, you need to plan your retirement and make the necessary financial decisions at your reach to make it happen accordingly.

    It is never too late to plan your retirement as a teacher ( It’s more like, it’s never too early)

    One of the big problems that I see among teachers particularly at the elementary level is that we are so devoted to the profession that we forget to talk about money. It’s all about the kids teachers say.

    Well, yes. It is all about the kids, but you should also do what is best for yourself and your family.

    If there is one thing I could tell my younger self today is “why didn’t you figure out earlier what your FI number was? If you haven’t heard of the FIRE community, FI stands for Financial independent. RE stands for retire early.

    Planning your retirement may seem like a daunting task, deserving of financial advisers, accountants and even maybe a shaman to grant the kind of financial security we feel will set us free as we sail into the sunset. The reality though is that there is nobody that can do more for us than what we can do for ourselves. The good thing is that the math is relatively simple.

    The first thing you need to have in place is a budget or a system to track your yearly expenses. This will help you pinpoint easily what your biggest expenses are, what your non-negotiable or non-discretionary expenses are. How much income do you need to live and cover your expenses for a week, a month, a year?  Likewise, I think it is helpful to have your expenses classified as discretionary or non-discretionary expenses.

    Discretionary expenses are those things that you may not want to cut out of your life but you know you will still see another dawn even if you part ways with, let’s say,  your cable subscription. Likewise, a gym membership, eating out, cellphone bills, kids activities, any random and impulsive purchase you may have in any particular month are eligible to bulk that list of expenses.

    Non-discretionary expenses are your basics, such as groceries, utilities, rent or mortgage, health insurance, or any other expense that is truly indispensable in your life.

    I also like to add a miscellaneous section for the financial misfortunes of each month, such as car repairs, birthday presents our kids get invited to, house repairs, donations, etc. You get the idea.

    Once you have an idea of what you need yearly to live comfortably and what things you are willing to give up to make your retirement happen, you can start drafting a plan as to where that money will come from.

    For teachers, the answer may be fairly simple. If you don’t have investments and you are just counting on your pension you have to figure out how much that pension will be and when you will be able to start collecting it.

    All across the country, there is a tremendous push for increasing the retirement age for teachers from 60 to 65 years old. The easiest and fastest way to figure this out is by calling your teacher pension fund and ask. They are usually very helpful and can present different scenarios for you with very accurate calculations. For sure they will also have a minimum years of service.

    Then the next question is, will your pension suffice your financial needs according to your current budget and its projection into the future when you are planning to retire?

    If it doesn’t, you have to make up the difference with supplement income. Likewise, if you are not entitled to a pension through the school or district you work for you need to worry about funding your future life with the product of your investments.

    How do you fund or supplement your retirement?

    Well, everything goes here. If you are entrepreneurial and have been planning to start a business, that might be it.

    However, the easiest way and, I would say, the no-brainer for every single teacher out there is through index fund investments. If you have the option to enroll in a 403B plan through your district you should definitely take advantage of it. Working diligently towards maximizing your contributions will be invaluable at the time of retirement.

    How does 403B plan work?

    In a nutshell, you decide how much money you would like to contribute out of each paycheck you receive. The funds will automatically be transferred to the investment company you have selected through your school district or organization, without paying any taxes. Usually, as Fidelity does, these companies have preset portfolios with a decent mix of stocks and bonds according to your retirement age, as a way to make it easy for investors. You also have the option of moving your savings from one fund to another, but if you don’t know much or are intimidated by the market, presets can be life savers; one less decision to make!

    As 2019 the maximum contribution per year for 403B contributions is set at $19,000.

    You also receive a tremendous tax advantage. By contributing to your gold egg nest you also lower your taxable income. That’s right, Uncle Sam wants you to save, and to encourage you they let you pay less tax; in other words, no tax on the amount you put away, and also your contribution will lower your adjusted gross income. It’s a win-win situation.

    How does my 403B plan grow?

    Unlike bank accounts, your 403B savings will have tremendous potential for growth. By investing in a 403B plan your savings will be tied to the stock market. In the last decades, the return has been around an average of 7%.

    Also, the cool thing about investing in your 403B is that you will reap the benefits of compound interests. Which means that if in the first year you manage to contribute $10,000, the following year that amount at a 7% return will increase to $10,700. Now you have extra $700 that will be ready to work for you right away and earn another 7%. In addition to those yields, hopefully, you will be able to continue with new yearly contributions.

    Using my favorite but simple interest compound calculator you can see that starting from $0 and maxing out your 403B contributions it will take 23 years to accumulate over a million dollars.

    Saving a million dollars
    http://www.moneychimp.com/calculator/compound_interest_calculator.htm

    How long could my investment last?

    According to a study by Trinity University if you use a rate of 4% as a safe withdrawal rate your savings will be likely to outlive you; which I am sure your family will also appreciate.

    Putting it all together

    1. The most important thing in my humble opinion is to figure out how much money you will need to cover your living expenses at the time you are planning to retire.
    2. Second, you need to determine where you are financially. That is your starting point in your financial journey. Don’t feel bad for what you don’t have or haven’t done. Just the fact that you are thinking about this and planning your future should make you feel good.
    3. Set financial goals every year for yourself and your family. Be it paying off a credit card or student loan. Maybe going after your mortgage. All these things will increase your net worth and get you closer to financial independence.

    A journey of a thousand miles starts with one step- Lao Tsu

    What do you have so far? Do you have a pension? What is the age requirement to start collecting? Not enough? How much more do you need?Have you invested? If not, how much will you have to invest to secure your golden years?

    Last but not least, if you do need to supplement your income the 4% rule is a good rule of thumb to get going. Remember, 4% is the safe withdrawal rate. With that said, for each 40K needed you will need one million dollars invested.

    For the purpose of this conversation, let’s say you need about 30K to cover your basic expenses. Let’s also add some spending room to go on vacations and short trips with your significant other or even kids. Let’s generously round up to 45K total that you will need yearly.

    If your pension grants you 30K with maybe the minimum requirement of years of service, all you have to make up for is 15K. Which 400K in investments should grant you comfortably.

    Saving for your retirement through 403B plans
    http://www.moneychimp.com/calculator/compound_interest_calculator.htm

    Contributing 10K yearly, starting from zero should take you there in about 20 years. However, if you increase your contributions, that time can be trimmed back many years.

    I know, stashing away 10K or more might sound like a lot, especially if you are spending frivolously in brand new cars, brand-name clothes, happy hours, season tickets and all those things that leave you right at the beginning of the hedonic treadmill. But it’s not impossible!

    The most important of all is to start. Do not wait!!! Time is the most valuable resource when investing.

    With that said there are also many expenses in your life that can be challenged to increase the gap between what you earn and what you make. You want that gap to widen as far apart as possible to give you more room for increasing your investments.

    Conclusion

    If you are on your very first year of work you may not be thinking about retirement yet but there is nothing wrong with the thought of finding the shortest path to freedom. A time in your life when you will pick and choose what you want to do. Don’t feel guilty or selfish for leaving your profession. After all, there are many ways in which you can participate as a valuable member of your community. It’s not the job that gives you value as a person. It’s you and who you are that gives value to any job.

    Chasing financial independence will help you see the big picture. It will push you towards making a plan to reach goals; your own goals, not somebody else’s. There is more to life than exchanging time for money. But it depends on what we do with our money if we get to see what that something else is.

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