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Money Walks: The New Credit Rules

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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.

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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.

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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.

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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?

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BLU Phones: A Review

Blu phoneI needed a new phone for work.  I’m still smack dab in the middle of 2 year contract so my phone upgrade time is still significant.  So what’s a girl to do?

My requirements:

  • New
  • Good call quality
  • Smart Phone
  • Works on the AT&T network
  • Less than $100 (It’s now more expensive on Amazon.)

That’s a all order for a phone.  I really didn’t think I would find anything.  I mean, even new old-school flip phones are like $250.  It’s crazy.  So… I was skeptical when I came across BLU phones on Amazon.  But great need (and a 4 star Amazon rating) overpowered my skepticism so I dove in to learn as much as I could.  By the way, this review is not paid.  I didn’t get a free phone or any compensation for this review.  I just want to share my experience.  

 What I found:

After reading what seemed like thousands of reviews I noticed trends.

I read “great phone for the price” on both positive and negative reviews.  That phrase was said over and over again.  Great phone for the price!  Always with that qualifier, “for the price”.  I guess I can’t expect miracles in an $80 smart phone.

The most common complaints were about the camera and the memory.  Apparently the camera isn’t very good.  There were also lots of comments about lack of memory.  Many people said that if they have too many apps open that the phone will start to force close some of them.  Luckily neither of these complaints are something I care about in a work phone.  I have a nice expensive phone that takes great pictures and I only want to run 3 apps on the work phone anyways.  So the common complaint weren’t a big deal for me.  

The uncommon complaints however were giving me pause.  A few people said that the phone drops a lot of calls.  This I can’t deal with.  I take all the phone calls for a busy landscaping company.  At the height of summer I might get 100 calls a day.  I can’t be dropping customer calls.  No, that’s a deal breaker.  A few other people said the phone turns off or reboots randomly.  Again, deal breaker.  I need the phone to be reliable.  Too many people are depending on that phone ringing.  If customers can’t reach us then we go out of business.  No go.

My experience

At the end of the day I laid $85 on the line and gave the BLU Advance a whirl.  I’ve had the phone for about 3 weeks and overall I’m pretty happy with it.  I haven’t had a memory problem but I don’t stress the memory.  I run a weather app, a voicemail app, and an app that puts the phone on and off silently automatically. That’s it. So really, I don’t give the memory too much to handle.  I also haven’t taken pictures with the phone so I can’t comment on the camera.

At first the phone was dropping pretty much every call.  It dropped 4 of the first 5 calls.  I was about to pack it up with less than an hours use but then I figured out the problem.  You know when you put the phone to your ear how the screen turns off so you don’t push buttons with your cheek?  That wasn’t happening.  The screen would flash on and off.  I could see it in the corner of my eye.  So I tried to train myself to hold the phone away from my face.  But that is hard to do, and I often have to hold the phone with my shoulder.

My husband suggested turning the screen off manually with the side button after I answer the phone.  That works.  I’ve gotten in the habit of answering then shutting off the screen before saying “Hello”.  It’s not perfect, but it works.  No more dropped calls.  I don’t think the screen problem is an issue on every phone.  I’m sure these phones are made someplace cheap so the quality can be hit and miss.  I got a bad one, but I found the work around.

I was also having the problem with the phone randomly shutting off.  Then I realized it wasn’t random.  Everyday at 8:30 AM the phone would shut off.  I thought “could that be a setting?” so I went hunting.  Sure enough I found a setting in the phone where it was a choice to have the phone shut off every day at a specified time.  Why 8:30 AM is the default I have no idea.  But I unchecked that option and now it’s fine.

So, once I figured out the phones quirks it turns out to be a nice little phone.  It certainly works for what I need.  It’s a great phone… for the price!

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resources

You can’t out earn your spending.  The only way to become wealthy is to save and invest the money you earn.  I don’t care if you make a million dollars a year.  If you spend $1.2 million a year you will not be wealthy.  You might live a high lifestyle sure, but you will not be building wealth.  When that income stops you will be on the street.

25% of people who earn $100,000 are living paycheck to paycheck.  Pro-athletes go broke in retirement.  Celebrities are bankrupt when their show gets canceled.  It happens all the time.

It doesn’t matter how much money you make.  If you don’t use it properly you will never be rich.

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