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Archive for October, 2007

Planning to save for a replacement vehicle

October 25th, 2007 at 12:34 pm

This would be a four-wheeled automatic transmission covered automobile, large enough to accommodate two adults 70 and 71 inches tall and a boy who'll sprout from 48 inches to 73 inches over the time we own the car (barring accidents and repossession).

My ideas:
honda accord sedan EX-L
honda accord hybrid
toyota camry hybrid
toyota camry XLE
Nissan Maxima SL
Nissan Altima Hybrid
Nissan Altima 3.5 SL
Toyota Prius 4-Door Liftback

The credit union has repossessed autos, but not the makes and models listed above. I got the above from myproductadvisor.com. If I start saving now... maybe in 2009 or 2010 I'll have $20K set aside and can buy one in cash or finance for a 24-month period and pay it off in half the time.

'Getting Started in a Financially Secure Retirement'

October 23rd, 2007 at 03:00 pm

I am reading the above mentioned book, written by Henry K. "Bud" Hebeler, and I am already scared.

10-15% a year, which is what we were paying into our retirement, does not seem to be cutting it as a long-term strategy.

I'd share what I learned with my peers, but you good folk have the author and the title of the book now, so you can go borrow it from the library as I did, and I'm afeared of mentioning what I learned to my friends because the ones who care about this stuff have already retired, and I don't need to hear "oh that doesn't apply to me because I have a trust fund" nor the sobs of people I like when they reflect on their situations and regard them as hopeless.

I'm not out to make you cry -- like I mentioned, you're probably already retired or on track; or if you're only doing 15% in the 401(k) and maxing out the Roth IRA like me, you're just a few clicks away from learning how to change your consumption patterns so you can save more. I'm just saying I was complacent without good reason, and I'm now scared into making better decisions or cutting back further.

Right after I blow $678.11 on R-38 insulation for my attic.
------------------------------------
frequently I wonder if I'm the one in my peer group who's behind, and how I can catch up. I wish I had more friends I could discuss this openly with.

Riffs on the Living to 100 Calculator

October 23rd, 2007 at 01:23 pm

I took the Living to 100 Life Expectancy Quiz and despite my lack of exercise, and both my parents packing it in before either reached 65 the calculator gave me 90. I was projecting a death age of 70 (cancer) or 71 (car accident), the ages my non-smoking grandmothers died at. Then I could look at my retirement portfolio and say "hey, this is looking SWELL! Four cruises per year until I have my cardiac on the shuffleboard deck!"

I didn't lie on the quiz -- I intentionally answered honestly to get a shorter result. However, I've been eating healthier for the last year and am supplementing as prescribed.

Let me tell you something: Canada may have a lot going for it right now -- a strong economy, progressive government, strong commitment to globally competitive education, no wars for our kids to have to pay off -- yet the fact remains that my American in-laws, shortish and roundish they may be, are still alive and working and have been cancer-free, and my Canadian parents: tall and lean, retired early and were ashes after four years. Does education factor into this? Fewer stress factors?

The life expectancy result was 90 years. Sheesh. I DO have some money saved up: I just hope the US economy can rebound after twenty-five years... but Social Security is projected to be empty by 2042, which is too bad, because I know I could have used that monthly $1015 for a nice hot cup of 2042 coffee... if this calculator is a relatively good predictor I regret not having more children to shelter me in my dotage. I better start exercising so I can have a healthy body to lure the few septuagenarians... go swimming like Gertrude Ederle or mountain climbing like Leni Riefenstahl... but that'd be tough, because septuagenarian single guys are probably gay or divorced with too much trauma to remarry or they have longevity genes...

Ninety. Not looking so swell.

Visceral reaction: 'Where a home of their own is an elusive dream'

October 15th, 2007 at 07:41 pm

Read article

It’s no mystery to Dale and Darby Brennan why they have not realized their vision of the middle-class dream, despite seeing their income double to $70,000 in the past four years.
...
“We are doing all the right things with our money and I feel like the dream of owning a home is still so out of reach for us,” says Darby. “I don’t want a handout. I just feel like our middle-class income should be enough and it’s not.”


When I first read this, and some incendiary statements recorded in the article, my head boiled over with a long diatribe, and then I remembered my readers deserve better. So read the above and know, that I live a few short miles from this family and when we bought here we were earning the same amount of money, and had a car loan, put at least 15% of our gross income into retirement plans, but didn't have children.

$1050 for house rent is EXCELLENT. I was thinking I could rent my house out for $1600. If I wanted to rent a house closer to the schools where I REALLY want my kid to go I'd be paying $1800-$2000 (two miles away).

$720 for TWO CHILDREN in daycare is EXCELLENT. I paid no less than $910 and for some months as high as $1095 for ONE CHILD for over five years.

They have TWO CARS. We have been a ONE CAR family since 2001, driving the same car since 1996. (Three vehicle family now, but still ONE CAR, plus a FlexCar membership for those winter months.)

They spend twice as much as we do for cell phones, and three times as much as we do for gasoline. Their utility bills are higher as well (and my house is going through some energy upgrades).

Median family income of $75,600 is for King County. These people do not live in either Seattle nor Bellevue. They live in Mountlake Terrace, in Snohomish County where the median family income is $65,273.

The Brennans’ street is the boundary between King County, where the median home price is $440,000, and Snohomish County, where it is $370,000. Even with a fat down payment in either county, which they don’t have, the Brennans wouldn’t qualify for a conventional mortgage on a median-priced home.


House prices have to come down. They are coming down, they're just not crashing here yet like they are elsewhere. I don't get this hotfooting and jumping up and down and wanting a house NOW NOW NOW and saying "I don't want a handout." I don't get the "we're not saving for retirement, we borrow for cars, we have children and student loans and we're doing everything right with our money" thinking.

WSU keeps a special set of statistics on housing affordability for first-time buyers. Those numbers are especially dismal, indicating that the average first-time home-buying family or individual couldn’t afford even 40 percent of the mortgage on a starter home in King County.


TRUE. Even without student loans, car payments and children, a family earning $70K could not buy a HOUSE. A two-bedroom condo out in Lynnwood or Everett, maybe right now. Heck, I can't buy a house where I live on $140K. Well, I could, but I wouldn't respect myself in the morning.

The problem for a lot of the middle class is a consumer mindset, says Dale, a devoted listener of talk radio who says he quickly transformed from a liberal Democrat to a conservative Republican after becoming a father and going to work in a small business.


Dale Brennan loves his job as the manager of a Seattle-area produce stand.
“Things are to be earned, not for instant gratification,” he explains. “It’s not what you have; it’s getting there.” That's fine with me, what I don't get is converting to a different political ideology because AFTER car loans, student loans and having babies, one decides personal responsibility is a good thing. Because "that other side" can't ever lay claim to personal responsibility. I'm probably irresponsible in spite of wanting to save up to buy a car, or pay off car loans early, and started retirement as soon as I had disposable income, and waited until I was financially 'okay' before having kids, because it's easier for Dale's brain to see people who don't agree with his political viewpoints as personally irresponsible.

I am envious that Darby Brennan can find time to bake bread and help the girls clean their room. We have not-so-hot furniture ourselves, and really modest electronics--so modest the thieves flashlight into our living room and can't see a stereo or TV or computer so they leave us alone. The $20 a month for entertainment is very ambitious too: I think we pay that per person per week. So buying thrift store clothing, making bread from scratch, and using one credit card for gas only: those are things I could certainly do for the benefit of the budget. But is that "doing everything right?"

We had assets equivalent to one year's salary when we bought. It's bad timing that the Brennans have to contend with: trying to accumulate money when rate cuts to bail out homeowners are disincentives to save.

This is like me going up to Vancouver, BC and saying 'guldarnit! Houses here go for $850K Canadian! I can't buy a house on $140K/year!' (No kidding! How about waiting for house prices to come down?)

I guess delayed gratification and being priced out of the market are not partisan issues.

Disclaimer: I do not earn $140K/yr. I just threw that number out because the Brennans' salary doubled over four years, and I wanted to make the point that in the Seattle area, families earning under $150K are priced out right now. If people are still buying homes, it's either because they're downsizing or they have inheritances or they earn in excess of $150K/year.