Personal Finances — Update

by Jay on July 11, 2010

It’s been a while since I wrote about my finances. Since Midlife Beginnings was originally a personal finance blog, and since I have found in the past that writing about my finances helps me to quantify them and keep them under control, I will spend some time writing about my current status.

A couple years ago I was more disciplined about my monthly blogging, but less disciplined about my finances. I had about $40,000 in credit card debt, a $25,000 retirement loan, and was making roughly $75,000 per year, with a $15,000 bonus on top of that.

Then, I figured out how to make money selling books on Amazon and raised my net income (after taxes) by another $3,000 per month. This gave me what I needed to pay my credit cards off quickly and, in less than 6 months, I was debt free except for $5,000 which I had on a 0% Interest for life account.

Over the past few months, that all changed, though it was for a good cause. I have purchased a condominium. Now I have about $450k in mortgage debt, as well as a $30k loan against my retirement plan which helped with the down payment. I have also put about $12k on my credit card for furniture and other things which my new condo needed. I also burned through most of my savings to pay closing costs, etc.

In other words, finances are tight again. Instead of being $65k in debt, I am now about half a million in debt. But have a condo, it’s furnished, and I have everything I need to survive. I’m still making $80k from my day job (though the bonus has been tiny for the past couple of years), and I’m still pulling in $3-5k per month from my Amazon business. I had always thought of my Amazon business as somewhat unreliable, but the truth is, I’ve averaged 3-5k every month for the past 2 years, so I guess I can count on it, at least for the next few months. I’m working like a dog, but expect that in another 8-12 months I will have paid off all of my non-mortgage-related debt and will have started rebuilding my savings cushion.

Buying your first piece of real estate will really change your finances, and not always for the better. All of my friends who have bought real estate complained about having no money to do things for the first couple of years. Now I know exactly what they meant. I’m even watching my grocery bill these days, the one place where I never economized in the past. But there is a satisfaction that comes from owning your own home. Sure, I know that I can’t count on the value of my condo going up for a few years, but I can handle the monthly payments. It’s big enough, quiet, solidly built, comfortable, and I like the neighborhood. I don’t intend to go anywhere for a while.

Over the next few days I’ll write about some of the ways I’m finding to cut my spending. I’m also trying to drum up some ideas for expanding my Amazon business, like selling other items and selling on other venues.

{ 1 comment… read it below or add one }

Jake Stichler July 12, 2010 at 3:12 am

Ever since I read this post, I’ve been doing some heavy research on book selling (as I’ve been looking for a business idea like this lately). I’m wondering if there are any tools you use when you’re out scouting, and what methodology you use to decide to buy (or not buy) particular books. I’d super appreciate getting some tips and pointers. Please, email me if you find the time to do so.

Cheers,
Jake

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