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stock marktTwo kinds of people who make big mistakes in the market. There are the ones who are too scared to invest and the ones who invest with no fear at all.  Here are three tips that will help you overcome your fear… or lack of fear.

You aren’t going to beat the market

Regular folks, like you and me, aren’t going to beat the market year after year. We just aren’t, and the harder we try the more likely it will be that we actually get lower returns than we would have if we just buy and hold. Most of the investment talk out there is for those people who think they can beat the market. All the magazines, websites, books, TV shows, and talking heads are there for people who are trying to beat the market. Buying and holding doesn’t get much press because it’s pretty boring. But boring is just what you need when it comes to investing. Drama = Risk

So if you can’t beat the market then that means the best you can do is to match the market. Go up when the market goes up. Go down when the market goes down. A mutual fund that matches market returns is pretty great thing in my book.

The market will go up over a long period of time

If you are going to invest in the stock market with a buy and hold position you need to truly believe that the market will go up over time. Not necessarily over the course of one year, but over a long period of time. Say 5 or more years. If you are invested in a mutual fund that tracks the stock market as a whole and you plan on holding that investment for 10 years then you can feel pretty confident that you will come out on top.

A great way to invest over a period of time is with dollar cost averaging. Putting small amounts of money into your mutual fund each month allows you to take advantage of the dips in the market. It’s not a bad thing when prices drop. If you have faith that the stock market will rise over time then price dips are nothing more than the stock market going on sale.

If you need the money in the next 5 years it should not be in the market

Ever hear the story of the person who had to put off retiring because they lost money in the stock market?  Or the little old lady who is destitute now because her retirement accounts dropped in value.  Guess what?  That money shouldn’t have been the stock market to begin with! If a drop in the market would be devastating to your entire financial plan then that money should be protected.

It’s not a big deal if the market takes a hit when you don’t need the money for 5 or more years. You have plenty of time to recover from any ups and downs in the market.  You want to go into the market slowly with dollar cost averaging and leave the market slowly too.

If you keep these concepts in mind when you go into the market you will save yourself a lot of headaches down the road.

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Hard Water Costs Money

Our house was built about 10 years ago.  We were the first people to live here.  Which is nice because we know the entire history of our house.  What’s not so nice is that everything is the same age, so now after 10 years things are breaking all at once.  We have very hard water here in Phoenix which leads to pipe and faucet issues.  Anything that deals with water needs to be replace frequently due to limescale build up.

Leaking Hose Faucet

The hose faucet outside is another dripper.  It’s always wet out there which is not only wasting water but drawing bugs.  They know they can always get a drink under my hose faucet.  Drips bring crickets and crickets bring scorpions.  Maybe I just need some Megaseal for now until I can get a plumber out here.

Dripping Bathroom Faucet

My bathroom faucets are 10 years old.  Maybe in other places faucets last for more than 10 years but not here.  They drip constantly.  It’s been going on so long that the hard water is actually eating away at the sink.  So now not only do I need to replace the faucets I need new sinks too!  That was just due to my own laziness.

The Leaky Shower

My worst dripper is the shower.  Even though we replace our shower head about once a year it’s leaking like crazy.  And the scary part is that it’s not coming from the shower head itself but from the pipe that leads up to the shower head.  Which means a plumber, or at least a handy man.  I’m afraid to know how much water is being wasted.  A lot.

Leaking Showers Melbourne

The Water Heater

All of this makes me really worried about my hot water heater.  How well can it still be working when it’s clear every other water item in my house needs to be replaced?  I’m really just waiting for the day when my garage floods.  We try to keep stuff off the floor in the garage just in case.  We know it’s going to happen one of these days.  Everytime another neighbor replaces their water heater I know I’m that much closer to the day mine goes out.

I guess it’s time to call a plumber!



Money Walks: The New Credit Rules


The Cost of a Dog Fight

20141004_090119I have a little terrier named Captain Jack.  We adopted Captain Jack in February from a pet rescue that had found him on the street.  His body was rail thin but his heart was bursting.  He is such a sweetie and fit right into our family.  We plumped him up with food and love.

Every night I take him for a walk before bed.  One night a few weeks ago we were on our last lap around our neighborhood and there was a family up ahead with a pit bull that I had never seen before.  This dog was not on a leash.  I should have just turned around and gone back inside right then.  But I didn’t.  I crossed the street to avoid them and both Captain and the pit bull were all barky at each other but they had the pit bull by the collar so we made it past without incident.

The Fight


Unfortunately I encountered them again.  I crossed the street to avoid them again only this time I wasn’t so lucky.  Before I know it the pit bull is halfway across the street and moving fast.  I pull up on the leash to try to keep Captain away from this aggressive dog.  That probably wasn’t the best move, but it was my first reaction.  The pit bull grabbed Captain out of the air and started to shake him.  My dog was just a grey blur going back and forth.

All I knew at that moment was that he needed to stop shaking Captain.  The bite itself isn’t that big of a deal.  It’s the shaking that does all the damage.  I knew he was going to kill my dog if this continued.  So I made another genius decision and dove onto the pit bull.

Next thing I knew I was lying on the ground with the pit bull in a head lock.  He let go of Captain and the owners grabbed his collar and held him back.  I grabbed my dog and ran home.

Now for actual good decisions.  I’m a total disaster when I walk through the door, all dirty and shaking from adrenaline.  I tell my husband to get in the car and go find the people.  I wanted them to be held responsible.  While he was gone I looked up a 24 hour emergency vet.

The Medical Bills

Captain jack after vet

The vet wasn’t concerned for my dog’s life which was a huge relief.  He was bitten on the leg. If he had been bitten by the head or chest the vet said he wouldn’t have lived.  So picking him up by the leash probably wasn’t so bad after all, it protected the vital parts.  Twelve hours, $890 worth of stitches, and three prescriptions later we were back home.

My husband had spoken to the owners and they seemed very sorry and willing to cover the costs.  But niceties don’t pay my bills.

The Aftermath


I called Animal Control because I wanted to make an official report that there is a vicious dog in my neighborhood.  I also felt it was my best chance of actually getting reimbursed for my medical bills.   I found out I had three options:

  • Do nothing and hope they are good people and pay.
  • Give the owner a written warning, which does nothing for getting me paid.
  • Give the owner a ticket, which will force them to go to court and pay a fine.  But again, this does nothing for getting me paid.

I decided to have Animal Control give them a ticket.  If they go to court and plead guilty for “dog at large” they will have to pay a fine and then I can sue them for my medical bills.  If they plead not guilty then I can have a hearing where I ask for reimbursement of medical bills.

When Animal Control went over to talk to them they said they would pay my bills.  She knew that was my main goal so she held back on the ticket to see what they do.  They were saying all the right things, and did seem like they were really going to pay.  But words are not money.

20141004_090025Yesterday I got a text from the owners that they had $300 for me.  Surprise!  They said they would give me another $300 next week and then the final balance on the week after that.  They also have put the pit bull down.

I have to say I’m shocked.  They actually did the right thing.  Sadly, that’s a pretty rare thing these days it seems.  Their actions and words helped heal the anger I had.  They were sincerely sorry, admitted wrong doing, and while they can’t go back in time they did everything they could do to make it right.

That’s huge.  I actually have respect rather than hate for them because of how they acted after the fight.  That’s a lesson that I can carry with me, long after the stitches heal.


Pay Off Rental Property or Save For The Next One?

Should I focus on paying off my rental or use the money to get better returns?

My hubby and I are in a fun financial position at the moment. By the end of September we will fully fund or emergency fund. Which means we will have 6 months of expenses specifically set aside for job loss or other unexpected event. We will then take the money we are currently saving into our e-fund and move it over to our Roth IRAs. Doing that will mean we will also be maxing our our Roths. ($5,500 annually per person) Which is amazing!!!  I’m so excited.

With those two things handled it frees up our “extra” money to focus on building wealth outside of retirement accounts.  I’ve decided I want to invest in real estate.

My gut reaction was to put all extra money towards the $60,000 mortgage on our rental house.   If we do that we could have that house paid off in three years or less.   Sounds like a no-brainer, right?

Here’s the kicker: the principal and interest payment on this house is only $246 per month.  (The whole payment is only $411 including taxes and insurance.) So when we pay the house off it will only increase our cash flow by $246 per month.  I’d be spending $60,000 to make an additional $246 per month.  That makes no sense.  I can use that $60,000 for something else that will give much better returns.

It’s a tough choice.  I’ve been going round and round with it.  Should I work to get out of debt or should I maximize my returns.  Risk vs. Reward.

To help make the decision I went back to my long term goals.  Ultimately, I want to be totally debt free when I retire in 10 – 15 years. I was thinking I could only pay what I need to pay in order to have both houses paid off in 10 years, and then I’ll invest anything left over in additional real estate.

Doing so leaves me with about $460 left over of “extra” money per month.  Pushing my payoff date to 15 years, rather than 10, would make a difference but I’d rather play it conservatively. I like having a built in safety net so if something goes wrong I can still hit my goals.

$460 a month is not that exciting to me.  I’m not going to conquer the world with that.  Plus the thought of NOT paying off the rental mortgage makes me sad.

So, after much thought and discussion I have decided to focus on paying off the rental mortgage.  I’ll take my guaranteed 5% return and stay on the safer side of risk. Besides, if I change my mind I can always take out another mortgage.  Getting into debt is always easier than getting out if it!

Photo Credit: MarkMoz12

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The New Rules of Credit

They are changing the rules of credit.  I was thinking about it on my walk the other day so I made you a video.  Hope you like it.


having the money

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Should I Upgrade to Spray Foam Insulation?

b36d70d48ebf4896ab8af9b0fcf8ff44Summer.  In most places in the country that’s a good thing.  In Phoenix it means hiding indoors and getting burned by your steering wheel.   Our summers aren’t about picnics and backyard water balloon fights.  They are more about finding dark air conditioned rooms, i.e; the movies and bowling.

It’s also when our electric bills hit their all time highs.  $375 a  month anyone?  One problem we have at my house is that the newer houses aren’t that well insulated.  Not like the old fashioned brick homes.  Those things will keep the sun out.  But stucco and styrofoam don’t do all that much.  They didn’t even require city inspections for insulation until 2013.  My house was built in 2004 so shoot, I’m not even guaranteed to HAVE insulation.  There are companies that will come and squirt that foam insulation into the walls and attic.  We’ve seriously been thinking about doing that.  They say it will save us up to 50% of our electric bills.  I’m guessing that’s for summer time only though.  It’s not going to make it less expensive to watch the entire series of Breaking Bad in one sitting.  Ok, maybe two sittings.

I dug out an old electric bill to see our usage.  It’s not an exact science but I figured out that we use roughly 1,000 kWh per month extra in the summer.  That’s an average of the 6 hot months over the 6 not hot months.  (1,766 average from May – Oct. vs 733 average Nov – Apr.)  Ok, so let’s say that spray foam will save us half of the extra electricity in the summer.  So we would use about 500 kWh less per month for the 6 summer months, or 3,000 kWh less per year.  Following me?

What about the winter?  We don’t really use our heat.  We might turn it on at night in Jan and Feb just to make sure the kids stay warm but it’s not even worth calculating.  It’s very minimal.

Ok, back to our savings.  At about 11 cents per kWh I would save about $330 per year.  We plan to be in this house for about 10 more years.

That gives me a lifetime savings of roughly $3,000.  I doubt that installing spray foam is cheaper than that.  I probably wouldn’t ever make back my money.  I would be saving energy though.  But according to this energy conversion calculator it would still take me 403 years to save up the 1.21 Gigawatts that I need to power my time machine.


Looking around on forums doesn’t seems to give me any idea of prices.  For those posters with houses my size the prices range from $3,000 to $7,000.   So even on the low end I’m not looking at good news.  I guess I’ll stick with the pink stuff for now.


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It’s Netflix for Clothes!

290374805_78930fc0c7_bI came across this the other day and it seems really cool.  The best way I can describe it is that it’s Netflix for clothes.

Think about that for a second.  I’ll wait…

While you’re thinking I’ll let you know that this review is not paid, but the link is a “refer a friend”  link to get an extra item for one month.

Ok, back to it… Maybe you’ve started a new job and don’t have the cash to go buy a new work wardrobe?  Night out on the town?  Special event coming up? Going on vacation?  Just don’t want to be seen twice in the same outfit… like ever?

It’s called Gwynnie Bee and it works like this, once you sign up you can put clothes into your closet.   Items are sent from your closet, you can keep your items for as long or as short as you like.  When you return and item another item is sent.  See… just like Netflix.

There are different level plans starting at $35 a month for one item at a time and going all the way up to $159 per month for 10 items out at a time, with stops along the way.

The size range is from 10- 32.  Which I like as well.  I think that’s cool that they are catering to what would be considered “larger” women even though the average size in the US is a 12 (last I checked).    I know finding amazing clothes for the bigger sizes can be a total buzz kill so it’s just another reason I’m in love with this idea.

I’m certainly not a style expert.  Not by a long shot but from what I can see the clothes are all super cute and they have a big selection as well.  I don’t think you would run out of clothes to wear!

My first thought, after this is so cool!, was “great, I’ll find something I can’t live without and then I’ll have to pay $35 a month for the rest of my life to keep it”.  But actually, you do have the option to purchase the clothes if you find something you adore.  I thought that the clothes would be outside my price range to buy but checking out their shop of retired items they don’t seem overly costly.  Granted you are buying used clothes.

Speaking of being well above my price range, I think that’s half the point.  This seems like a great way to level up your wardrobe for an affordable price.  Some added benefits are that you keep your closet clutter free because when you are done with the item for a while you can just send it back.  Getting it out of your closet.  Also, they wash the clothes!  So you get to skip out on a bit of laundry as well.

I’ve signed up for the free 30 day trial.  I’m undecided if I will keep it past the trial. I work from home so it’s hard to justify spending a lot on clothes.  I could stay in my PJs and no one would ever know.  So for that reason even the cheapest plan is more than I would like to spend.  I’m very interested in the concept though and if I worked somewhere where I had to dress up a lot I would be totally in.


Evaluate the Risks and Rewards

If you have ever talked about investing, there is no doubt that you discussed risks and rewards (whether you really knew you were talking about it or not). Typically, when you invest your money and you want a large return in a very short period of time, then you are most likely about to make a very risky investment. The opposite is true as well. If you want your investment to be very safe, then you can plan on earning very little with your investment. Let’s take a look at some common investments for the various areas of risk.

Cash Under the Mattress – Assuming that no one is going to break into your home and steal your cash, this is a very safe investment. You won’t lose any money with it under your mattress, but you also wouldn’t expect to gain any money with this method would you? This is a no risk, no reward scenario.

Savings Account – Bank accounts tend to be very safe investments. There is a slight chance that the bank will not be able to repay you, but the risk is very slim and will probably never happen. So, they pay you a return, but it is quite small. Low risk, low reward.

Bond Investing – When you buy a bond, this is typically a pretty safe investment. It’s a little riskier than a bank account, so the return is slightly more. Moderate low risk, moderate low return.

 Stock Investing – Stocks are a little riskier. Over time they tend to increase in value, but they can jump up and down and all over the place and there is no guarantee that you will make any money. Higher risk, higher reward.

Gambling – If you want a massive return on your investment, then you might want to head out to Caesar’s slots. Your risk is high, but your potential return is massive.

What kind of investor are you? Are you a safe investor or do you like risk?