Friday, August 16, 2013

Looking for New Goals and Motivation

My primary goal is still to semi-retire as early as possible. My situation keeps changing but at the moment, I think the fastest way to do this is to rent out my house so that I have 2 rental properties which will together bring in $1,200 a month after expenses. So, I need to make a snake-proof living space out on my property and track down a reliable water delivery service. I have $15,000 in savings. Some of that is for property maintenance and emergencies. Some I can use to fix up the property. I found a tow truck driver who will tow my old cars to my house in town for $100 a piece. It will be easier to sell them if people don't have to meet me at a remote location and they don't have to tow them down a scary dirt road. The quote for tearing down and hauling away my old garage is $2,500. That's $1,000 cheaper than I expected. I can get a 10'x20' shed built for $6,000 on the old garage slab and turn it in to a tiny house. A block wall built on the perimeter of the garage slab will give my dogs a snake-proof yard. I'll get started on clearing out the garage when the weather get cooler. 

In order keep my rental proceeds, I will have to pay off my house. I owe $70,000. I've been playing with my mortgage payoff spreadsheet today. If you have been reading my blog for long, you know I love my mortgage payoff spreadsheet.  I got the spread sheet from here: Get Rich Slowly's Amortization Calculator  It helps me stay focused and is a great motivator. It worked really well for paying off my first mortgage. If I pay an extra $1,000 a month on my mortgage, I can pay it off in 4 years and 10 months. I really want to have it paid in 4 years or earlier. If I pay $1,200 extra per month, I can have it paid off in 4 years and 2 months. I think I should aim for that. My regular budgeted amount per month for my expenses is $1,500 which includes my normal mortgage payment. I will have $200 extra per month for savings or for spending. There's always something to buy like birthday presents or, um...kitchen cabinets for my house. The master bath needs a new cabinet too, and paint and... but I can do that a little bit at a time. My business doesn't need much investment right now. I just need to sell stuff so that I can buy more stuff to sell. 

I think it is a good plan. 4 more years of office work doesn't sound that great and I don't know if I can actually stick with it for that long but it sounds much better than waiting 24 more years when I will be 65. This plan assumes I will live in this house for 4 more years so if I am able to move out and find a good renter then I will have more money to use for my payoff plan.  And who knows, maybe my business will start bringing in a profit and then I can really speed up my plan.  

11 comments:

Lizzie Dinawi said...

I think its an excellent idea. You sounded happier out in the desert even with the various problems. Just need the fairy houses to take off now!

Dave said...

I don't know, Daizy. You had your share of headaches dealing with one renter, even with a property management company. Now you want to have two properties being rented out and double your somewhat erratic rental income along with doubling your headaches?

You were so glad to get out of that old living space and move into a house which enabled you to take for granted the things everyone else can take for granted (mainly steady, running water). It just seems odd to me that you would take a step backward and return to that life you so badly wanted to get rid of, even in the name of (semi-)retiring early.

Might you be able to rent out your old, old place, even for a low price, just to generate some income while enabling you to continue living in your current place?

Tessie said...

I think it's a good plan, too.

Four years goes by super fast. And you will have a lot to show for it.

It's fun to think about! "Where will I be four years from now? Hmmmmm...."

Daizy said...

I certainly had more to write about when I lived in the desert, Lizzie. I must be too spoiled now.

Daizy said...

Well, Dave, even though I complained about the management company, they do make renting much easier than doing it myself. Renting out my old place would be a major headache. There are too many things that can go wrong and I could be sued. I am studying up on solutions to the problems that I had before like packrats, fencing and water. Next time I will have water delivered and I will hook up a pump for the laundry so that I won't have to carry buckets of water (as fun as that was). I will have 4 years to work on making the place livable. The other problem was having a full time job while living out there. It didn't give me much time to work on fixing things. Hopefully, when I do move back out there, I won't have a full time job and I will have a nice savings account.

Daizy said...

Thanks, Tessie. A lot can happen in 4 years for sure. At least my plans are flexible.

Petunia 100 said...

Daizy, how does your 401k factor into your retirement plans? Will you use it to supplement your rental income?

Daizy said...

Petunia, I'm planning on my 401K to give me flexibility later on. It's still almost 20 years before I can touch it so I'm not thinking about it too much.

Petunia 100 said...

Are you aware that you can access your tax-deferred monies at any age without penalty (you still pay the tax) by following 72t rules? You give up the flexibility of withdrawing whatever amount you decide you need, instead you must draw down based on your life expectency.

It's an option. :)

Petunia 100 said...

Here's a calculator, in case you are interested in learning more:

http://www.bankrate.com/calculators/retirement/72-t-distribution-calculator.aspx

Daizy said...

I don't think I knew about 72T or maybe I didn't pay attention because my 401k is so small. If I raided it at 45 I would only get $500 a month. I better keep 72T as a last resort.