Alpha Centauri 2

Community => Recreation Commons => Topic started by: Rusty Edge on January 11, 2016, 06:56:39 pm

Title: Life Changing Money.
Post by: Rusty Edge on January 11, 2016, 06:56:39 pm

I live in a Power Ball state. The jackpot hit a new record last week and didn't pay out, but it has gathered news attention, and people are talking about it. Potential lump sum payment of over half a billion dollars.

Life Changing Money.

Normally I profess that lotteries are taxes for people who are bad at math. There have been previous  times when a lottery reached a new record and we bought a ticket for the hell of it. There are things we could do with a windfall that we wouldn't do otherwise. My wife was a chief accounting officer. She knows the value of a dollar , and she knows the value of a billion dollars.
It was fun to speculate what we would do with various amounts. I get that. That's kind of the point to this thread. What would you do with a big windfall? Somebody nearby hit enough numbers to win $50 K , not a bad consolation prize.

This one doesn't excite me because, in short, it's life changing money, and mostly, I like my life the way it is. The things I don't like are mostly medical, and there's little anyone can do about it.

Title: Re: Life Changing Money.
Post by: Unorthodox on January 11, 2016, 07:25:52 pm

"Life Changing" can happen with much lower $ than billions. 

Basically living it with the inlaw's passing.  Though not the way one wants to go about getting money...

So, hundreds of thousands:  Pay down debts, invest for kids schoolin, etc. 

2 million:  Open a restaurant.  (probably not, in reality.  still low enough to focus on paying off the house, hEt quitting, etc)

Hundreds of Millions?  Wonder how much of the Raiders I could buy...

Title: Re: Life Changing Money.
Post by: Rusty Edge on January 11, 2016, 09:50:48 pm

Quote from: Unorthodox on January 11, 2016, 07:25:52 pm

So, hundreds of thousands:  Pay down debts, invest for kids schoolin, etc. 

2 million:  Open a restaurant.  (probably not, in reality.  still low enough to focus on paying off the house, hEt quitting, etc)

Hundreds of Millions?  Wonder how much of the Raiders I could buy...

It's a great feeling to pay down and pay off debts.  You really that appreciate when you lose a job or get hospitalized, not to have that stress.

Open a restaurant? Hmm. Tempting. Not the sort of business you want to have if you can't be there to keep an eye on things. I would love to open a Jimmy John's in the airport, just to prove it would make money, and for the convenience of having  quick service and fresh food.  Then I would probably give it to my niece, who works part time in one. She might not manage it herself, but she could oversee it.

The place I would like to hang out in myself is Famous Dave's. I love the food and the music, and I like the décor and the scents. I could hang out in one without  pigging out every day. It's sort of like dark chocolate- delicious, but satisfying. Probably couldn't do that with a French or seafood place. I could remotely watch video of one, too.


Buying The Raiders? That sounds cool. I'm sure you could become a major partner, even if egos wouldn't let you have a controlling interest. I was more interested in college ball, probably because I lived closer to a major college than a major league city. I didn't think in those terms.


My wife says that with that kind of money we could take a world cruise to lie low for a while, and pay people to box up our house contents and re-locate them in the meantime. I said - but we wouldn't have our pets. She said we can charter a yacht. Okay. I love Fjords, and I've never been to New Zeeland or Scandinavia.

Title: Re: Life Changing Money.
Post by: Unorthodox on January 11, 2016, 10:22:30 pm

Yep I'd open an Uno's bar and grill here in Utah. 

Likely Layton area. 

Been 10+ years with that idea.  Being the anchor store would give me certain franchising rights to Utah...

Title: Re: Life Changing Money.
Post by: Rusty Edge on January 13, 2016, 01:01:13 am

With the $100s of millions to spare, I would like to sponsor vaccine research.
Boomers like me got the chicken pox. The virus embedded in the nerves, and is re-appearing as shingles, Bell's Palsy, Meniere's, etc. No fun. Hopefully the chicken pox vaccine will greatly modify, if not eliminate that.

More recently we have developed a human papilloma virus vaccine, that should prevent a lot of throat and uterine cancer.

There are a lot of problematic viruses that having a vaccine for would be of great potential use, eliminating a pesky problem disease, and maybe putting a dent in certain cancers, too. Particularly in the measles, herpes, mononucleosis, Epstien-Barr group. That's what I would like to see happen for humanity.

------------------------------------------------

And another thing.  That lake resort where we go fishing every year used to belong to my wife's family. The family tends to complain about certain things the current owners do, and with a few million, I'd be tempted to buy it back and give it to one of the younger generation. They love the place.

Title: Re: Life Changing Money.
Post by: Rusty Edge on January 13, 2016, 07:23:43 pm

Once upon a time, my brother won some lottery money. Several thousand, I think. He took me on a trip to Iceland and Scotland.

Title: Re: Life Changing Money.
Post by: Buster's Uncle on January 15, 2016, 01:38:35 am

I mostly think of this in terms of enough money that no medical problem could possibly clean me out.  Call it ten million.

Title: Re: Life Changing Money.
Post by: Rusty Edge on January 15, 2016, 04:01:55 am

Well, we finished out of the money, so no disruptions to my fairly comfortable life.

My wife did very much like the idea of buying the fishing resort back into the family, though.

Title: Re: Life Changing Money.
Post by: vonbach on January 15, 2016, 11:52:35 am

Honestly I don't know what I'd do with a fortune like that.

Title: Re: Life Changing Money.
Post by: Metaliturtle on July 21, 2025, 05:13:27 am

My thoughts on this have changed as I've dug into investing, wealth management, and income properties.  10-15 years ago when I was going through my divorce and paying lawyers with cash advances on credit cards I was budgeted to the penny, summers were good because I could live off rice and whatever my friends gardens had too much of, winters saw me at every church food event in the area and you bet your ass I wanted the leftovers.

Then I got a small raise, 3%. It wasn't much but it was enough, I started putting $25 a paycheck into a savings account for 1. emergencies or 2. Life-changing investments.  This is where I started looking for opportunities.  Cell plan was $85/mo with Sprint, I switched to Ting and it went to $30, now I could do $5 per paycheck into a savings for my kid, upped my paycheck savings from $25-$35 and the rest of the savings went into an allowance account that I could piss away on whatever I wanted (for a while it just went to pay down credit cards).

I met a guy who biked everywhere, even in the winter, in Wisconsin.  I did the math on how much it cost me in gas to drive to work every day, it was $3, or $6 if I drove home for my lunch break.  Some days I needed the car because I had my kid, but the other days I didn't, so my first spend from the 'emergency' money was on a bike, a high-quality daily rider from Europe, and I'd put $5 into the emergency account every time I rode it to work.  I also got a bit healthier, and in a few months the bike had 'paid' for itself and my emergency fund was growing.  My ultimate goal was to have $500 set aside for everything I was responsible for that eats, so that was me, my kid, my car and my apartment (it ate rent and utility bills).

I'd look for every opportunity to optimize, I tracked what I paid for non-perishables, and would tap the emergency fund when I saw a dip in price so I could buy as much as I could store of things like Toilet Paper, trash bags, toothbrushes, deodorant, razor blades.  I looked at 50% off coupons like returns on investments if it was for something I'd buy anyways.  My favorite were the $3 off any item that they used to do for deodorant and shampoo, because the store I went to had travel sizes for $1 and I could use the other $2 towards the rest of my grocery order.  I think it took me about 4 months to have a 2-year or more supply of non-perishables, plus 3 months worth of canned food.  This 'security' gave me the guts to request a raise at work, which was granted, 20%.

The raise negotiation was a little tense, I got a little bit fearful that my higher pay would make me an easy target if there was a layoff, so I took the entire increase and put it into that savings until I had 6 months' of living expenses at the standard I was living.  Once I hit that then I started paying off my credit cards aggressively, lowest balance card to highest balance card, adding the snowball to the minimum payments I was making.

It was around this time that I started dating again, and I met my now wife, when she moved in with me she started paying half the rent, and we alternated who bought groceries for the week.  We alternated monthly bills as well.  I threw all that savings to the credit cards too, and she was better at the coupons than I was, we started getting fuel points then with our grocery purchases so when one of us needed gas we'd both go to the gas station and use the points to fill both vehicles. 

We wound up applying for a mortgage and buying a house together, I chose a minimal downpayment to protect the savings we'd accumulated, and our 30-year mortgage was only $200/mo more than rent.  What a joy that I was able to call $200 (only) when 2 years prior it would've been life-altering money.  With the house we didn't go nuts with decorating or any of the things couples usually do when they combine spaces, I think we bought a kitchen table with 4 chairs for $160 from Walmart (we still use it, it's our table today).  I tapped into the emergency fund to buy that woman a ring and pay off my last credit card in July of that year. 

A year after that we got married, and with that came a substantial windfall from the wedding gifts, mostly cash, we rented a boat and got married on a river with my in-laws hosting the reception at their place, the whole thing paid for itself and was a blast.  On my kid's 5th birthday I started putting money into the stock market to get a better return as my emergency fund wasn't paying much interest, and I also maxed out my 401k contributions that year as I was living nearly as cheaply as when I could barely afford food.

We trucked along like that for a while, dealing with the unexpected homeowner costs of storm damage, chimney leaks, replacing windows on our old house, and replacing furnace and water heater.  We got ripped off by a contractor we hired to paint the house so we got to pay for that twice!  None of it was a real problem because of the emergency fund we'd built.  Then Covid hit. 

Suddenly we weren't going anywhere but work, we'd actually planned a vacation that was put on hold, and we got pregnant after several miscarriages.  The hospital was awesome during covid because we didn't have visitors every 2 minutes, and it was a great time of bonding for my wife and I with our new daughter.  We came home and I was able to take 12 weeks off on intermittent leave for paternity leave after my wife's 12 weeks was up (this let me work 3 days a week for basically the rest of the year).  I used the time to dig into our finances as I was very concerned about a disruption like covid causing us to lose jobs that we were still very reliant upon, and I looked into rental real-estate as we're in a college town as an independent income source.

My wife wanted a new house before she'd be ok with me getting into rentals so we bought a new house that summer, and when we sold our old house I had the seed money for rentals.  Wound up finding a licensed electrician at a real estate meet-up and we formed a company.  For a while we were just putting money into the business bank account to build up a war chest, and in 2022 wound up purchasing a duplex and a triplex.

In 2023 we were able to increase rents and buy a single family home from a lady going through a divorce, allowing her to stay in the house with her kids but pay rent to us instead of having to move her family and lose the house.

In 2024 the lady bought her house back from us at a greater price than we'd paid for it, and we rolled that profit into another duplex, my wife and I also had our second kid around this time and I'd gotten a better job.

So now I look back on life-changing money being that tiny raise that bought me breathing room, and focusing on long-term returns on my money being the best way to spend it. 

What would I do if I won the lottery now?  I'd pay off all the properties, I'd invest in an S&P 500 ETF, and I'd get to go to every school function, field trip, concert etc.  I would buy more rental properties and hire someone else to manage them for me at an excellent salary, and as far as family would know, we quit our jobs to manage rentals.

Title: Re: Life Changing Money.
Post by: Buster's Uncle on July 21, 2025, 03:12:09 pm

If you like doing all that stuff, I guess that's right for you - it makes sense.  -For me though, I wonder if chasing investments beyond eliminating any debt wouldn't be a source of not-worth-it stress which would be life-changing in a bad way.

Quote from: Unorthodox on January 11, 2016, 10:22:30 pm

Yep I'd open an Uno's bar and grill here in Utah. 

Likely Layton area. 

Been 10+ years with that idea.  Being the anchor store would give me certain franchising rights to Utah...

I'm pretty sure I've never seen you say, but I'd have sworn you didn't drink, so I find this odd...

Title: Re: Life Changing Money.
Post by: Unorthodox on July 22, 2025, 08:15:43 pm

Quote from: Buster's Uncle on July 21, 2025, 03:12:09 pm

If you like doing all that stuff, I guess that's right for you - it makes sense.  -For me though, I wonder if chasing investments beyond eliminating any debt wouldn't be a source of not-worth-it stress which would be life-changing in a bad way.

Quote from: Unorthodox on January 11, 2016, 10:22:30 pm

Yep I'd open an Uno's bar and grill here in Utah. 

Likely Layton area. 

Been 10+ years with that idea.  Being the anchor store would give me certain franchising rights to Utah...

I'm pretty sure I've never seen you say, but I'd have sworn you didn't drink, so I find this odd...

I don't eat fish.  Smoked salmon for Alena's birthday.  What's the confusion? 

https://www.unos.com/locations.php

menu puts straight up competition to applebees and chilis that are everywhere around here.  Chicago style pizza is enough unusual here to make it stand out here locally at the same time.  Franchises also sell frozen versions of the pizza which is a unique revenue stream, and can partner with local store chains to do so, which is why being the first one with those rights in Utah would be big.   

(info based off a solid 15 year old info from when I was seriously looking at it. 

I can drink A drink here or there, and there's a very few mixed drinks I actually enjoy as well.  I can never get/be drunk, and generally don't want to be around those that are.  Even moreso since the gall bladder was removed, drinks trigger dumping syndrome, so I kinda have to plan ahead, and plan a diet for the whole day beforehand to have that one drink to not be exploding a poor toilet.   

Title: Re: Life Changing Money.
Post by: Buster's Uncle on July 22, 2025, 08:29:47 pm

Well, maybe as catchy as 'bar and grill' is, you want to leave out the bar part, then.

Do you mean can't get drunk, or shouldn't?  I seem to be a cheap tipsy, but have never managed full-on drunk, notwithstanding trying a tad in my renfair days.  Once I was satisfied that the tipsy didn't unleash a monster, I wasn't very curious about the rest, and haven't touched a drop of the stuff in [counts] 25 years.  Didn't want to.  Never really saw what all the shouting was about...

Title: Re: Life Changing Money.
Post by: Unorthodox on July 22, 2025, 09:57:47 pm

I'd be miserable with the runs long before I got started feeling drunk.  I'm sure theoretically possible to actually become drunk with severe stupidity.

Like I can get one drink in me with pre-planning and just have a slightly painful movement the next morning.  Without planning, or trying a second, you got about 20 minutes before I have to go. 

Quote

Dumping Syndrome:
.
This condition occurs when food, especially high-sugar or high-fat foods, moves too quickly from the stomach into the small intestine. This rapid movement can trigger a variety of symptoms, including nausea, vomiting, diarrhea, abdominal cramps, dizziness, and heart palpitations.
Gallbladder Removal:
.
Gallbladder removal can increase the risk of developing dumping syndrome

Why do I care if the name is Uno's Bar and Grill (only incidentally a play on my forum name, actual franchise name, like Chilis bar and grill)?

Title: Re: Life Changing Money.
Post by: Buster's Uncle on July 22, 2025, 10:07:00 pm

[shrugs]Dunno; is there a bar in Chillis?  If not, is it really annoying to the staff having to explain that all the time?  It would be, for sure.

Title: Re: Life Changing Money.
Post by: Unorthodox on July 22, 2025, 11:39:43 pm

Only chilis without a bar I’ve seen is in happy valley.  Maybe it’s an Utah rebellion thing since the Zion curtain was laid low.  (Used to be no bars allowed in a restaurant. Removed to not look stoopid at the Olympics).

Title: Re: Life Changing Money.
Post by: Metaliturtle on July 22, 2025, 11:40:34 pm

Over here in Wisconsin, it's very hard to find non-drinkers, I keep a few NA beers in the truck because lunch beer is very much a thing, and a late lunch rolls into 3pm happy hour and at that point you're locked in for the night.  Chili's has a bar here but maybe not all of them?  Most restaurants that are local are also bar forward here.  I definitely could sit with a buddy and do a case of 30 Busch Lights in an afternoon.  I've seen pukey the clown and I've done a shot before work to even out a hangover... very glad I quit.

Title: Re: Life Changing Money.
Post by: Buster's Uncle on July 22, 2025, 11:51:40 pm

I'm very glad you quit.  I'm your friend, you know.

Title: Re: Life Changing Money.
Post by: Metaliturtle on July 23, 2025, 12:10:44 am

Quote from: Buster's Uncle on July 21, 2025, 03:12:09 pm

If you like doing all that stuff, I guess that's right for you - it makes sense.  -For me though, I wonder if chasing investments beyond eliminating any debt wouldn't be a source of not-worth-it stress which would be life-changing in a bad way.

I hear this, to be honest if I could figure out how to get my wife to be my sugar momma and be a stay at home dad I'd jump at the chance, but she's way better at parenting marathon style, and I'm way better at earning, and since we want our little people to have the best shot at pursuing their dreams, I go out and earn.  It's stressful, it's hard, the big wins are rare, but the process is mostly automated.  If I were able to hop back in time with the knowledge that my kids would be the ones that I got regardless of my actions, there is little beyond buying bitcoin at $10 (The first time I considered it but then passed because I didn't understand how it worked enough to be comfortable putting my money into it).

The problem I'm really trying to solve is "How can I keep this lifestyle for the people who depend on me if my employment were to disappear tomorrow?"  I recognized 5 years ago that the things I was good at were quickly being replaced by computers, and view my work with farmers as the best opportunity to keep the skills useful since farmers are slow adopters of new tech, but my company is planning a 10% staff reduction every year for the next 5, so I can fight with the others, or I can get along with the others and live off 40% of what I make and put the other 60% to work for me.

With the rental company, my whole focus is on systems, every unit gets the same paint color, same appliances, same carpet, same furnace when we replace them, we pay for software that lets tenants pay rent electronically and charge extra if they want to pay by check.  We have a system for move-in, move-out, showings, turns, property improvement planning, and property acquisition.  When something new comes along we discuss, make a call, and when it's more or less settled down we write out a procedure based on what went well and what we could've done better.  When we disagree, each of us has areas of expertise we've agreed to where the expert makes the final call.

Our tenants understand that if they break something we'll charge them for the fix, but if something is old or worn out we replace it for free with something better and new, each unit gets a new appliance or similar improvement at lease renewals or turns.  We will pay outgoing and former tenants $100 if they refer someone to us who winds up renting.  I'm proud to say that we provide affordable housing for 80 souls if we count the pets in a town where we know most of the people or are a person removed from them.  We tip our contractors cash and stay out of their way when they do work for us, so they answer our phone calls first.  Right now every penny we make goes back into the business, but we're about 3-4 more properties away from being able to replace our personal incomes with just the business, and for 3 years' of existence we're very proud of that fact.

Title: Re: Life Changing Money.
Post by: Buster's Uncle on July 23, 2025, 12:35:32 am

Well, this all sounds great.  Efficiency always pays, and it sounds like you have a priority of playing square with your tenants, and it's good long-term business practice to try to make people glad they did business with you.

On a point of wisdom, remember to love your daughters and your wife enough to take care of you.  Anything for your wimminz, yes, but if Daddy ain't happy, ain't NObody happy for long.  Don't let the rat race trap you, and always value your own time and peace of mind - money can't always buy those things.

Title: Re: Life Changing Money.
Post by: Metaliturtle on July 23, 2025, 03:08:52 am

Quote from: Buster's Uncle on July 23, 2025, 12:35:32 am

Well, this all sounds great.  Efficiency always pays, and it sounds like you have a priority of playing square with your tenants, and it's good long-term business practice to try to make people glad they did business with you.

On a point of wisdom, remember to love your daughters and your wife enough to take care of you.  Anything for your wimminz, yes, but if Daddy ain't happy, ain't NObody happy for long.  Don't let the rat race trap you, and always value your own time and peace of mind - money can't always buy those things.

100% The time/income with the rentals is dramatically better than the 9-5, and business partner's wife and kids get along with mine, it's way more fun painting and cleaning for a couple days every 6 months to increase our net worth by $40k each, than it is to work the 9-5s for as long as it takes to earn the same. We do take full advantage of the tax system/write-offs etc.  We pay the accountant well.  Doubling our units may add a week of work but the trade-off in time with families and flexibility to pursue our passion projects the rest of the time is why everyone's on board.

Title: Re: Life Changing Money.
Post by: Buster's Uncle on July 23, 2025, 03:19:44 am

You make a convincing case.

Title: Re: Life Changing Money.
Post by: Rusty Edge on July 26, 2025, 05:36:44 am

Quote from: Metaliturtle on July 23, 2025, 03:08:52 am

[

100% The time/income with the rentals is dramatically better than the 9-5, and business partner's wife and kids get along with mine, it's way more fun painting and cleaning for a couple days every 6 months to increase our net worth by $40k each, than it is to work the 9-5s for as long as it takes to earn the same. We do take full advantage of the tax system/write-offs etc.  We pay the accountant well.  Doubling our units may add a week of work but the trade-off in time with families and flexibility to pursue our passion projects the rest of the time is why everyone's on board.

I often think about you and wonder how you are doing.  Usually when I walk past the Tayberry plant that that you once said you wanted a cutting from.  ( Sadly one of our WI winter relapses did it in this year while I was away.)  I'm glad to hear that you succeeded! My wife would say that you should pay down the card with the highest interest rate first, but I understand the allure of the sense of accomplishment gained from paying any card off, and if early success motivates you that's a good thing.

My Wells Fargo 401K has been invested in S&P 500 funds, and they usually outperform everything else available on a 5 year or longer horizon. I have diversified it into a NASDAQ index fund as well.   

My brother's boss asked his dad to take his college fund and invest in apartments in a university town, and then took a construction job while recycling apartment income into more apartments. He went on to become a young millionaire with his own rental and commercial remodeling business. 

I know somebody else that has a rental business in Florida university town. They bought in during Great Recession. It's a sound idea. Glad that you are making it work for yourself and are able to provide for your kids.

Did you meet your wife through your cat sitting enterprise?

Title: Re: Life Changing Money.
Post by: Metaliturtle on July 27, 2025, 08:31:38 pm

Quote from: Rusty Edge on July 26, 2025, 05:36:44 am

Quote from: Metaliturtle on July 23, 2025, 03:08:52 am

[

100% The time/income with the rentals is dramatically better than the 9-5, and business partner's wife and kids get along with mine, it's way more fun painting and cleaning for a couple days every 6 months to increase our net worth by $40k each, than it is to work the 9-5s for as long as it takes to earn the same. We do take full advantage of the tax system/write-offs etc.  We pay the accountant well.  Doubling our units may add a week of work but the trade-off in time with families and flexibility to pursue our passion projects the rest of the time is why everyone's on board.

I often think about you and wonder how you are doing.  Usually when I walk past the Tayberry plant that that you once said you wanted a cutting from.  ( Sadly one of our WI winter relapses did it in this year while I was away.)  I'm glad to hear that you succeeded! My wife would say that you should pay down the card with the highest interest rate first, but I understand the allure of the sense of accomplishment gained from paying any card off, and if early success motivates you that's a good thing.

My Wells Fargo 401K has been invested in S&P 500 funds, and they usually outperform everything else available on a 5 year or longer horizon. I have diversified it into a NASDAQ index fund as well.   

My brother's boss asked his dad to take his college fund and invest in apartments in a university town, and then took a construction job while recycling apartment income into more apartments. He went on to become a young millionaire with his own rental and commercial remodeling business. 

I know somebody else that has a rental business in Florida university town. They bought in during Great Recession. It's a sound idea. Glad that you are making it work for yourself and are able to provide for your kids.

Did you meet your wife through your cat sitting enterprise?

I am doing better than I could hope or expect, thank you for thinking about me Rusty!  No worries about the plant, my gardening time consists of running the mower once a week while the 4 year-old wreaks havoc on the yard with sticks.

S&P 500 and NASDAQ funds I highly recommend if you'd rather be hands off with stuff. I've had the luxury of 20 years in banking and employer reimbursement for continuing ed courses and materials, as well as flexibility to read work-related books without too much pushback, even with that, it took me 17 years of prep and some lucky circumstances to get me to pull the trigger on real-estate.

Napkin math on S&P funds that I do is simple:  If I start with $20k to invest, and set it to compound, I plan for an 8% annual return, or about $1600 for the first year, and reinvest dividends until I need to live off the money.  If you work hard to set money aside, with a long enough runway, you will be a millionaire.  This is how I set money aside for my kids, the two younger ones get $1000/year invested, the 4-year old's investment is worth about 8k even though I've only put in 5k due to compounding.  (The older one's mom gets $1400/mo from me in child support so I don't save for her beyond a savings account to cover medical bills that come up during the year).

The math for rentals is a little more involved but I'll do the example of one of my properties.  Purchase price was $235,000.  Currently it has a 1-bed rented at $650, a 1-bed rented at $700, and a 3-bed rented at $1325, so total monthly rent is $2675/mo or $32,000/year.  Taxes and insurance are about $5800 combined so I'll call it $6k.  The loan is a 25-year term at 4.75% interest.  We had to put 20% down or $47,000, giving us a monthly payment of $1079.46 on a loan of $188,000.  Annualized, that payment is $12,960.  Rounding up again to account for changes to insurance or taxes, and setting aside $500/bedroom for potential maintenance costs and vacancy coverage gives the total cost for the building at $21,500 per year.  This leaves $10,500 a year in 'profit' for  the building.  Most people would divide that by the purchase price of $235,000 and say, "4.5% return is less than the stock market." This is technically true, except our investment was only the down payment, so the annual return on the $47,000 is actually 22%. It also doesn't take into account the growth from the principal paydown on the loan, and the increase in the property's value over the last 3 years, today that building is assessed at $300,000, and similar ones sell for closer to $350,000 in my town, which, after some paperwork, is the value that the bank gives to the building as an asset, or $38,000/year in annualized appreciation. It also doesn't account for the ability to increase rents, we increase rents by at least $50/mo anytime tenants move out, but we don't increase on our existing tenants until they've been there for 2 years. With 3 units in the building we assume $1200/year in income growth. Of our loan payment, annually about $4,320 goes to principal paydown. 

From a net worth perspective, our investment of $47,000 returns rent profit of $10,500, it's returned capital (building) appreciation of $38,000, annual rental increase of $1,200, and $4,320 of principal reduction on our loans, for a total of $54,020 in annual net worth change, or about 115% return for our efforts and using a week's vacation every year to flip units (clean, paint, repair, etc.).  We have the ability to borrow $140,000 against this property if we wanted to do a major renovation, or put a down payment on something else, or if we wanted, we could put that in our pockets, since it's borrowed money we don't pay taxes on it if we choose to go that route. 

Certainly we have some advantages over the average person, market knowledge, connections, skills, access to savings, good 9-5 employment, good health, but the steps we took to get there were all simple, the tricky part was mapping out the path.

As for my wife, I didn't meet her through cat-sitting, she messaged me on an online dating site and we just hit it off really well.  Our 9-year wedding anniversary is Wednesday.

Title: Re: Life Changing Money.
Post by: Buster's Uncle on July 27, 2025, 08:35:15 pm

Shall I whoop it up Wednesday on your behalf, or shall we take it as read?

Congrats, either way.

Title: Re: Life Changing Money.
Post by: Metaliturtle on July 27, 2025, 08:40:20 pm

Quote from: Buster's Uncle on July 27, 2025, 08:35:15 pm

Shall I whoop it up Wednesday on your behalf, or shall we take it as read?

Congrats, either way.

Thank you!  You're free to party any time, but as for me, I won't be around here that day unless I royally mess something up.

Title: Re: Life Changing Money.
Post by: Buster's Uncle on July 27, 2025, 08:46:59 pm

;lol

Title: Re: Life Changing Money.
Post by: Rusty Edge on July 29, 2025, 03:01:41 am

Happy Anniversary to you, Metaliturtle.
It's cool to see how you did that rental business.

Title: Re: Life Changing Money.
Post by: Metaliturtle on July 29, 2025, 05:09:34 am

Quote from: Rusty Edge on Today at 03:01:41 am

Happy Anniversary to you, Metaliturtle.
It's cool to see how you did that rental business.

Thanks Rusty! It's been a fun adventure for sure.