I am kind of disappointed this morning since I found out yesterday that the refinance on the rental homes would not work. Apparently, my credit score is not good enough. Ever since 2008, it has been incredibly difficult to get credit so I will be focusing on getting out of debt instead.
Ultimately, it turns out that the net impact on the monthly cash flow won’t be all that different without the refinance. That is because I had to have 2 appraisals and one came in below the expected amount. As a result, I had set aside $10,000 to bring to closing in order to save about $650-$700 per month through decreased payments.
Now that the refinance won’t be going through, I will using that money to pay down a credit card balance in order to save over $2300 per year in interest. Once I get this card paid off which should be in the next few months, I will save almost $800 per month in cash flow which can be added back into the budget. So all is not lost with plan B.
Then once that card is paid off and I get a little more credit card debt eliminated, my credit score may very well be in a better place that I could refi the rental houses, decrease my interest rate and my term. I don’t anticipate rates moving up any time soon. I would think that I have a year or more to get a better interest rate.
If not and rates start to increase, that would mean that the economy is heating up which will only help my retirement account investments in the stock market. So I look at it as a win-win.
With this behind me for the time being, I can now focus on getting the business transaction complete and meeting my 2 goals for this year which are losing weight and paying off debt. In fact, I am about to launch a blog solely devoted to working my way out of debt which should bring some increased accountability and motivation to the equation.
I will let you know when it is up and running.
Here are the recent carnivals that have included articles from my blogs:
Wow, I can’t believe how busy it has been last week and this week. I will have to write a post about it sometime to explain what has been going on. Suffice it to say, that it is certainly interesting and will make for lots of good posts in the future. As a result of all that has been happening, I am just now getting to the obligatory goals post for 2013.
It should be a pretty easy post though, because I only have 2 main goals: Pay off some debt and lose some weight.
1. Pay Off Debt
I am having a new blog designed to help with this goal and will probably put more information on that site once it is up and running, but I am wanting to pay off quite a bit of debt this year which should help with the monthly cash flow. I have put together a spreadsheet and a plan and so far, January is going according to plan. It should be a lock for the first half of the year. I am a little more concerned as we get into summer.
You see, the plan is to pay off a certain amount of debt each month and maintain a cushion since my income can fluctuate somewhat from paycheck to paycheck and the budget is pretty tight although it is better than last year. I have enough in the cushion to make it through at least May even if the income comes up short or I have an emergency. But, I want to be able to continue the momentum as long as possible so I will be keeping a close eye on the extra funds.
2. Lose Weight
Unfortunately, yesterday I was the heaviest I have ever been in my adult life. Terrible, I know. I suspect that it has something to do with the amount of stress that the debt had been having on me throughout the last half of the year. Now that I have a little breathing room and a plan for creating more room, I should be able to focus more on my health. I do continue to lift weights and plan on playing softball in the spring and summer, so I have to get to a better playing weight by losing 15 pounds by May. That is only about a pound or a little more per week, so it should be quite feasible.
The way I look at it, focusing on just 2 main goals for 2013 will increase my odds of success. I really don’t have any blogging goals for this year since I am really just going to consider it a hobby and will write when I have something to say and feel like I have the time.
If what I am working on pans out, then I will have enough to do and can make money at the same time.
Since everyone is doing it, I figure why not review 2012. First, I will start with some goals I made for the year and see what I was able to accomplish.
Smart Financial Goals
Starting with the financial goals, I was not able to eliminate PMI on the rental house (yet). I looked into it during the first part of the year and found out that I would have to have a lot more equity to be able to do so. However, I have started the process of refinancing 5 of my rentals and will be able to eliminate private mortgage insurance with the refi. So, it may work out after all but in 13 months instead of 12. Grade B+
I also had a goal of paying off the business line of credit. This was in fact accomplished during the spring. However, one of the tenants lost the air conditioning in May and I had to put in a whole new unit to the tune of about $4500. Currently, the line of credit is not paid off. Grade C-
I also wanted to get the Discover Card paid off. I paid it off in November, although with other loan proceeds. Nevertheless, the interest rate is much lower. However, I recently got an offer in the mail for zero percent balance transfer with Discover for 6 months with no fees. So I paid a big chunk against another card. While not perfect, it is some progress. Grade B
I also made it a goal to make $30,000 through blogging this year. Not even close. I figure I will make slightly more than last year. Plus I made a profit. But it didn’t happen at all. I won’t give myself an F since I at least made something and didn’t cost myself anything. Grade D-
Smart Personal Goals
I did make some personal goals as well. I wanted to lose weight and get below 200 pounds. It didn’t happen. In fact, I am currently close to the highest I have ever been at 228. When I weighed at the end of the day, I was 229.2, but I had just eaten. This morning I was at 227.4. Obviously a BIG FAIL! This will become another goal this year. I may not hit 200 and won’t even set that as a goal, but I need to see something positive happen. Grade F-
As far as the de-cluttering goes, I did clean my closet. But my room is a mess. Much of it is from my daughter’s room when she moved to the basement. We have a foreign exchange student from China so had to clean out a bedroom and rearrange sleeping quarters on short notice so there is still residual chaos. We will work on it this year. Also, the basement and garage are improved but nowhere near where they should be. Grade C
Popular Posts Now, let’s take a look at the 5 most popular posts for CFM this year:
1. Does One Million Dollars Make You Rich?–This post was in response to someone who won the lottery and was still on food stamps. Now I am not sure that one million before taxes is enough to make one “rich”, but I do think that one million dollars after taxes can be used to create some decent cash flow. At least that is what I would do with it.
2. Warren Buffett, Intel, and Me–This was one of the most popular posts for 2011 as well. I guess when you make it to the first page of Google for people searching “Warren Buffett and Intel” which is what happened for a time, then your post is quite popular. However, now that he has sold his position, it is likely to get less press. I, too, sold out my position in Intel. I made about 7.5% capital gains on my Intel investment that I held for about a year. I also made 4% in dividends during that time. Not bad considering the time frame from late August 2011 to early September 2012. I would consider Intel again.
3. What Would I Do with $50,000–Again this is one of those posts which looks at my thoughts regarding investing and cash flow. Not that I have $50,000 lying around, but if I did, I would be working on getting some cash flow out of it. Currently, I would look at paying off some debt which would free up room in the budget and provide me with a guaranteed return.
4. CFM Celebrating 100 Posts with Cash Giveaway–Who doesn’t love winning cash? No wonder this post ended up being so popular. Unfortunately, earnings during the year didn’t keep up the pace that I would have liked, so I have been unable to conduct another giveaway. Maybe this year will end up being better.
5. Gotta Love Dividend Stocks–Investing and making money are some popular topics. I was making good progress on my dividend stock investing in my retirement account. Too bad that I had to pay some back taxes and cash that out. But now the taxes are paid and there is more room in the budget. Focusing on debt pay down during 2013 will be the plan.
Goals for 2013
I will be making and outlining my goals for 2013 over the next few days. I had hoped to get this post out a day or two sooner, but it didn’t happen. Nevertheless, I enjoyed the holidays so all is good.