7 Not-So-Obvious Reasons You Need a Library Card

“I need to get a library card,” a friend told me last night after I explained that she could read a book she had saved in her Amazon wish list by downloading it through the Libby app. I had just finished listening to it on my phone. When I shared with her how to set up a Libby account, I assumed that she had a library card. I assumed everyone did. But they don’t.

There are so many amazing benefits to getting that free piece of plastic that go beyond just walking into a building that smells like history coming alive and walking out with a hardcover book or two. From saving hundreds of dollars to helping you start a side hustle, the library is a wealth of resources that every person needs to tap into. So, if you haven’t yet applied for a library card or you haven’t been using your local library for its many purposes, read on to find out the world you’re about to unlock by filling out a simple short application.

Why You Need a Library Card…

1. Major Money Savings

Between myself and my four children, we go through over 30 books per week, most of them are children’s books that my kids do not want to read more than a couple times before looking for another subject or character to read about. I’d be buying books constantly to keep up. Thankfully, we’re able to load up on dozens of books every two weeks from our local library. When we check out, there’s a summary at the bottom of our receipt that shows how much money we saved at that visit and how much we’ve saved so far this year. On September 14th, 9 months into the year, our check out receipt revealed that we’ve saved $1,310 on books this year… BUT that was on just one of our accounts. On another one of our cards, the savings is listed as $746. We have two additional accounts, so it really adds up to over $4,000 in savings per year, assuming I’d actually buy that many books for my children, which brings me to reason #2…

2. No Budget Limits

For most things in life, we’re limited by our budget or affordability, but at the library, expendable income bears no weight on how many items or which types you can take home. If you’re interested in the newest best seller that would cost $35 new at the book store, it’s yours (if available), If you have a voracious young reader at home, you don’t have to limit him or her to one book at a time due to budget restraints.

3. Free Classes for Adults

Have you ever browsed the list of classes your local library offers? Have you checked libraries in nearby neighborhoods? I just did a quick search of the 5 libraries closest to my home, and here are just a handful of the skills I could learn for free:

• Spanish or French
• Qigong
• Budgeting/Financial Planning
• Emergency Preparedness
• Designing with Inkspace
• Gardening Secrets
• Genealogy

4. Free Kids’ Activities

Need an indoor activity outside of the home for your kiddo? Check your library first. Every library offers story times and crafts for young children. Most libraries also offer book clubs, robotics meet-ups, lego fun, and other after-school events for grade school children and teenagers.

Libraries also host many free, fun, family-oriented events, such as petting zoos, dinosaur talks, summer reading parties, cooking competitions, movie nights, live music, and so on.

5. Cheap Office Services

Libraries offer free wi-fi and computer access (reservations usually required). Most also have printing services for a nominal fee and the latest design software or educational apps for you to try before you buy.

Use your local library before driving all the way back to your office or to the overpriced, overcrowded copy and print shop.

6. Enter Fun Contests and Win Cool Prizes

“I just won a kindle!”, I announced to my family after a quick phone call from a librarian. I had entered a contest the library offered that asked me to track my reading for a month on a bingo card. All I did was place an “X” on a card each time I read a certain type of article, book, or periodical. I returned my card, and a week later, I had a brand new kindle in my hands.

Libraries offer fun contests for both children and adults throughout the year, but they’re especially exciting during the summer months. You might be asked to enter a book review or a creative poem. You might just have to track your reading hours or the number of books your child has read. You might just have to leave a public comment on a jar. These contests are simple, and the prizes are fantastic! Over the last decade, my family has won restaurant gift certificates, two kindles, pool passes, dozens of toys, children’s books, free ice cream, and tickets to professional sporting events. Walk in to your local library, read the bulletins or flyers on the check out desk, and enter to win!

7. Find Affordable Gifts

Your local library probably has a room with books for purchase at a very low price or for a minimal donation. You can find books from every niche to give to your family and friends. Not only are you saving a significant amount of money and time by shopping at your library, but you’re also able to give a gift that is very personalized to your loved ones’ interests.

Many libraries also host huge book sales a couple times per year as a fundraiser. It’s a win-win … you get great gifts for others at a highly discounted price and the library can keep offering all the amazing opportunities listed above.

Bonus Benefit: The library can be a natural laxative.

Have you seen that Seinfeld episode during which George takes a book into the bathroom soon after entering the library, and then the book gets “flagged”, after which he’s forced to purchase the expensive book and then can’t find anyone to take it from him? I still laugh at just the thought of that moment when he squawks to the librarian, “What do you mean it’s flagged?!”

This might be a bit of TMI, but the library laxative has been an unexplained truth in the life of my children. I don’t think we’ve made it through a single library visit in the last 6 years without at least one child needing to gooooo. So, if all of the other convincing reasons in this post don’t send you straight to the membership desk at your community library, keep this last tip in mind to create an even greater sense of urgency.

If you’re looking for more ways to live a frugal life with your family without sacrificing all the fun, check out my step by step guide to financial freedom.

Words to Live By in the FIRE Movement

In the famous, life-changing book, Rich Dad Poor Dad, author Robert Kiyosaki shared in Chapter 2 that financial literacy is what sets the rich apart from the middle class and the poor. I agree completely, but there’s A LOT to learn. In my previous article, Day 18 of Financial Freedom in 2021, I defined a list of terms to get acquainted with when developing your personal finance vocabulary. Understanding different retirement investment vehicles, tax terms, and the basic steps of financial independence is important, but there are additional terms that many people in the FIRE community use quite often.

I repeatedly hear the following words or phrases from individuals who have reached financial independence, and while technical vocabulary is important, these seem to be the ones to truly live by.

“Simple Life”

Many FI families emphasize living life to the full but in a more simplistic way. It’s not necessary to fill your home with excess material goods, travel to the hottest tourist locations, stay in 5-star hotels, live in the biggest house in the neighborhood, or drive the newest luxury SUV to have an abundant life. The happiness factor on all of these things fades.

What makes life full is the people in it and the experiences you have. Think of someone you look up to, maybe a grandparent or neighbor or civil rights leader. What do you admire about that person? Is it their stuff or what they did/do with the life they were given?

I admired my aunt who lived in Michigan. She was a devout woman who worked as a special education teacher and served her church community multiple days per week, including bringing communion to elderly residents in a nursing home. My aunt didn’t travel much except to visit our family occasionally, and she lived in the same house for nearly 40 years. She raised two boys on her own and lived with a debilitating kidney disease for many years before she passed. Despite all of that, she was able to retire early and paid off her house. I don’t remember much of what she had in that house other than several crosses and religious paintings, but I remember fondly how much joy I felt while staying there. My aunt was always happy. Every day in her simple life seemed joyful, and it was contagious. Her frugal life had a greater impact than the life of luxury and debt that I see many people living today.

“Community”

Relying on a community of like-minded individuals is a common thread in the FI culture. I often hear FI folks speak of how much they rely on their neighbors and close friends for help with babysitting or carpool, to participate in clothing and toy swaps, to agree to share meals in each other’s homes rather than going out to a popular restaurants, and for support on common goals.

If financial independence is a goal of yours, then a community of Joneses, and those chasing after them, won’t do you much good. You need to find a community of Frugalwoods, Money Mustaches, Rich Dads, and Mad Fientists, along with some kind and like-minded neighbors. There are Facebook groups and meetups related to the topics of minimalism, frugal living, financial independence, swapping, and cheap travel that can be great places to start when looking for the type of community mentioned above.

“Lucky” or “Blessed”

Gratitude is one of the biggest mindset shifts necessary to achieve financial independence. Being grateful for and recognizing the blessed life you already have is the first step in financial freedom, in my opinion. I practice daily gratitude in prayer, and if you listen to podcasts or read blogs from people who have already reached FI, most of them write down what they’re grateful for at least once per day. They also mention often how lucky they are for buying real estate when they did, investing early, having college paid for by their parents, finding an influential book during a turning point in their lives, for meeting the man or woman who gladly walks this FI journey alongside them, and so on. In the FI community, I hear very little bragging yet a whole lot of thankfulness.

Photo by Gabby K on Pexels.com

“No Regret”

Mistakes are only failures if you don’t learn from them. A common thread in the FI community is that people are willing to share their mistakes and what they learned with anyone willing to listen. They don’t dwell on or regret their errors in judgment but rather celebrate them for helping to move them along on a better path toward financial freedom.

Welby Accely openly shares how he was scammed multiple times and cheated out of hundreds of thousands of dollars before he became a successful real estate investor. He doesn’t regret these poor decisions. They made him stronger and taught him what NOT to do. He attributes his current success to learning from those mistakes.

What I love so much about the FI movement is not just the freedom that financial independence offers but the positive mindset and meaningful lifestyle it encourages. While developing the strategies of living on less money than you make, investing the difference, and making your money work for you are essential to financial independence, the phrases mentioned in this post (and the attitudes they represent) are what truly make this movement worthwhile.

Adjusting the Budget for Job Loss, Planned or Unplanned

Do I need to find another part-time job?

Job loss was one of the biggest realized fears that crept in after the COVID-19 shut-downs in March of 2020. Many people were forced to adjust their lives and their budgets due to being furloughed or laid off with short notice. Thankfully, along with the loss of those jobs came higher and extended unemployment benefits, economic stimulus packages, relief from eviction or foreclosure, and fewer opportunities to spend money. Who knew that after mass lay-offs around the country that now, a year later, there’d be a shortage of labor, not jobs! A large percentage of the workforce learned how to adjust to one income or a lower income and have now chosen to be unemployed, with or without the government benefits.

In my situation, the business my mother and I started about 15 years ago managed to stay afloat through the pandemic, but the effects it’s had long-term on both of us, as well as our client caseload, may lead our business down a path of never fully recovering. We are considering closing our family therapy practice for good. This is a combination of forced and chosen job loss, for which I now have to adjust our family budget.

Over the many years, I’ve slowly reduced the number of hours I put into the business and also the amount of my pay. I have a very flexible schedule and work exclusively from home, which has been such a blessing at the current stage of my family. I still have two preschoolers at home with me three days per week and two older children with very busy extracurricular schedules. The paycheck has been smaller than when our business was at its prime and our caseload was overflowing, but the extra money has been essential to getting us ahead in our journey toward FI. We’ve been able to contribute the full amount of my part-time income to investing and charitable giving, while meeting all of our living expenses with my husband’s salary. Now, we will have to make cuts as my mother and I move closer to closing the doors to our practice for good.

My total take-home pay is currently $1,910 per month. $1,700 of that goes toward my ROTH contribution (averaging out to $500/month but invested as a lump sum at the beginning of the year) as well as my husband’s and my combined contribution to our joint brokerage account ($1,200 automatically invested into VTSAX monthly). The other $210 is set aside to make charitable contributions of our choice each month. This giving is in addition to tithing.

The last thing I want to do is cut out our investing or our giving when I lose that monthly income. Whether we’re a one-income or two-income household, we still plan to hit FIRE by 50 (or hopefully sooner). Continuing our current rate of investing is essential to meeting that goal. So, I now have to make some tough decisions about where to reduce our spending or whether to take on more work to replace that income.

I can also take into consideration the cash flow we are receiving from our rental properties, if that’s where the money is best served right now. However, we’d ideally like to put all our cash flow this year toward reserve funds or future real estate investing.

So, I decided to dedicate a slow, rainy, unseasonable cold morning at home to analyze our current expenses and determine where I can “find” as much of that $1,910 per month in our budget. There is a strong possibility that my final paycheck will come in June, so we will need a total of $11,460 for the last 6 months of the year to make up for the loss. That’s a big chunk of change!

Our annual budget was my first place to look. I discovered that I had budgeted some overages in our savings categories above the contributions mentioned above. Because we already have a 12-month emergency fund, plus money set aside to buy our next two vehicles in cash, I decided to re-allocate the $1,000/month going into our online savings account. That adds up to $6,000 over the 6 months that I’d be without my part-time income.

Then, I reviewed what I had budgeted for a new life insurance policy this year and what we actually spent. After reading about life insurance options, listening to a couple podcasts on the topic, and doing some comparison shopping, we were able to secure a term life policy for my husband for much less than we had budgeted. We had $860 set aside for that new policy (as a supplement to the one offered through his W-2 job), but we only spent $380 and paid in full. Therefore, we had a surplus of $480 in that category. Additionally, we’ve already pre-paid for all of the kids’ summer activities and camps, as well as the registration fee and August tuition for our preschooler, leaving us with no child care costs for the summer. We will not have to pay the $749 monthly preschool tuition for three months, and we can remove the $300/month we’ve been budgeting for kids’ activities and camps. That leaves us with another $3,147. A few additional cuts include a decrease in cell service fees for a savings of $100/month by switching to Mint Mobile; cancellation of Camp Gladiator membership for a savings of $79/month; and cancellation of private horn lessons now that our eldest daughter will be receiving additional band instruction each day at her public high school for a savings of $100/month. These three changes add up to $1,674.

Also, I’ve resolved to going back to at-home haircuts for all the males in my household, which amounts to a savings of $85/month. That will provide us an extra $510 through the end of 2021.

The total amount “found” in our annual and monthly budgets to make up for the loss of $11,460 in income is $11,811!! I was able to complete this analysis in less than half an hour using the detailed spreadsheets I keep for our family’s income and expenses. With the conclusions drawn, it will not be necessary for me to find other part-time work to replace my lost income for the second half of the year! We can continue making substantial progress toward our FI goals without sacrificing what’s important to our family or seeking additional sources of income.

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Many people fear that having detailed budgets and tracking expenses will limit their spending and, therefore, their happiness. However, I find that these practices provide the opposite: freedom! And for me, freedom with my time (and my family’s time) is the ultimate goal of pursuing financial independence.

If you find yourself in a similar position, either preparing to leave your current job or fearing that you might lose yours at any moment, I definitely suggest tracking every dollar you spend, if you haven’t started doing that already. Once you have a framework, finding places to make cuts is pretty easy.

If you’re already a great budgeter, think of your income loss as a total dollar amount through the end of the year instead of what you need to cut or save each month. Recognizing that there are annual expenses/allocations that might be easier to cut than your monthly ones might give you a little room to breathe (and spend) when the expected or unexpected happens.

For more specific ideas on where to make big cuts, check out 9 Ways to Save this year.

Too Much Cash: A Good Problem to Have

The pandemic of 2020 has had many unexpected effects on everyone’s finances. One way or another, I’m guessing your financial life has changed since March of 2020.

Unfortunately, many people lost their jobs, their businesses, and their ability to pay their rent or mortgages. It’s been devastating to hear these stories. Thankfully, there’s been relief over the last year in the form of higher and extended unemployment benefits, moratoriums on evictions and foreclosures, stimulus money from the government in the mail, and help from several charitable organizations. I know there are many people still struggling, for whom I pray and have added more in our personal giving budget to go toward.

For many others, though, this past year has allowed them to reassess their spending habits and make major changes toward saving. It’s allowed many to sell their homes for significant profits and/or finance a home with unprecedented low interest rates. Additionally, after its initial fall, the stock market has left many people with realized gains far beyond what they’d imagined.

Because of these significant changes in 2020 that have carried over into 2021, many Americans are finding themselves with a really good problem to have: too much cash and what to do with all of it. Most personal finance experts believe that keeping extra cash under your mattress or sitting in a simple checking/savings account for a long period of time is equivalent to losing on an investment or burning a percentage of that cash in your fire place.

Due to inflation, your dollars today will be worth significantly less than in the future … and I’m not talking about the distant future. According to the rule of 72, at an average 3% rate of inflation, your cash today will be worth HALF its value in 24 years (72/3 = 24). So, if that money you have lying around isn’t making you more money (at a rate greater than inflation), it’s essentially making you less money. Therefore, you need a plan for that cash.

If you’ve unexpectedly found yourself in this position of holding onto money in excess of your emergency fund (or specifically saving for a large purchase), it’s time to figure out where to put it. My husband and I are in this boat with you, so I’ve done a bit of research to determine our best options for what to do with that surplus in the bank account…

Invest in Index Funds

We have seen over 20% returns in the past couple years on our VTSAX (Vanguard index fund) investment. In addition to our monthly contributions, we often invest our family budget surpluses in this index fund through our joint brokerage account (after our ROTH IRAs have been maxed out). This might be the easiest way to invest, and it’s truly passive. But we still have a large cash cushion that we haven’t dumped into an index fund because we’d prefer to diversify and …

Buy Real Estate

I’m not going to lie to you. Buying real estate in this hot 2021 market is TOUGH. We’ve lost out on 5 deals in one town over the past 3 months. However, we’re determined to keep trying, so we have a significant amount of cash set aside to meet our goal of closing on 3 doors this year. Now that we’re already nearing the end of the first quarter of this year and entering the really busy real estate season, though, we recognize that 3 doors might be a pipe dream. So, maybe we can remain involved in real estate if we …

Become a Hard Money Lender

A return of 7-12% sounds pretty promising. This is what most private money lenders charge investors for doing a financing deal without using a bank or typical lender. The hard/private money lender is responsible for vetting the investor he/she is lending to, doing the underwriting, setting the terms of the contract, providing a large lump sum, and chasing the money if it’s not all paid according to contracted terms. So, although private money lending is considered passive income, it still requires quite a bit of work upfront and the possibility of following up afterward if terms are not met. This option still sounds good to us, and we may move forward with the steps to get started soon, but we’ve also thought that another way to diversify our portfolio might be to…

Back a Business

We know of several businesses who have struggled during the 2020 shut-downs, but the ones that have stayed afloat have incredible ideas for reaching more customers and expanding their online presence. They have the plans, infrastructure, staff, and products, but they may not have the funding. With a loan from a local independent investor, like ourselves, they can hit the ground running and pay a contractually-agreed-upon return on our investment when their business plan pans out. This may be one of the riskier ways to invest our cash surplus, so we’ve also considered that we could …

Turn a Fun Purchase into an Income-Producing Asset

Our family often talks about owning an RV for extended road trips or a temporary homeschooling adventure. However, we will not make a large purchase like this without a plan to rent it out when we’re not using it. We could either park the RV on land and rent it out via Air BnB or we could offer our super cool ride to friends and friends of friends at a reasonable rate so they could experience their own road tripping adventures.

Here are a few other ideas to turn a personal purchase into an investment:

• If you’re buying a heavy-duty truck for work, hunting, or family use, consider renting it out to others to haul items or complete their own home projects.
• If you’re buying a cool woodworking tool to build furniture or make unique decor as a hobby, consider offering the tool up for a fee to people nearby to prepare for their own projects. (Or sell extras of your creations.)
• If you’re buying a fancy snow cone or cotton candy maker for a party, use it in the future to sell goodies at local festivals or near the neighborhood pool (with a permit).
• If you’ve decided to splurge on a commercial-grade carpet cleaner after too many pet and toddler accidents, rent it out to neighbors for a lower fee than what the stores charge. Make your own non-toxic cleaners to go with it as well.

(For each of these ideas, check with your insurance agent regarding coverage/liability before renting out your assets.)

Sometimes, the idea of someone else using an item that’s special can leave us a little unsure, so another option is to …

Invest in Self-Growth

A great way to spend extra cash is to develop more skills that allow for greater income potential in the future. This might include going back to school, taking unique online adult courses, or paying a mentor to teach how to advance in a specific career. These are exciting options and definitely worthwhile if you know you’ll put the skills learned to use right away. My husband and I would love to learn more about renovating an historic home and doing a remodel mostly ourselves. However, we’re quite overwhelmed with raising four kids and keeping up with our current schedules, so this may not be our best choice currently.

There is one investment option, though, that we’ve both agreed is the best for personal growth, community improvement, and living out truths we take seriously, which is to…

Give Generously

I recently heard an amazing sermon by Mike Todd of Transformation Church. He speaks eloquently and passionately about being a purpose-chaser rather than a paper(money)-chaser. He said in his sermon, “God doesn’t have a problem with paper; he just wants priority!“ Our opportunities, finances, and blessings are the fruit after we’ve given His purposes priority.

Most believe that it’s better to give than to receive, and many also believe that true rewards (whether they be money or something even more valuable) only come after you’ve given from your heart. Therefore, this may be the best use of a cash surplus.

There are dozens of other ways to invest your extra cash, and because personal finance is truly personal, each person will likely have a different idea that resonates with him/her. The main thing to remember, though, is that while it’s a huge accomplishment to have saved a large sum of money, you don’t want it sitting around losing value for too long. Every dollar needs a job, and hopefully your surplus can provide more value to you in the future.

Fuel your FIRE: Your Why for Financial Freedom

Financial Freedom in 2021! Take Action: Day 30

Wow! We made it to Day 30! I calculated that I’ve written (and you’ve read) over 25,000 words in the last month. That’s enough words to fill 1/3 of a novel, and all of them were about saving money and investing for the purposes of financial freedom.

But why?

In my post titled, What Does Financial Freedom Mean to You?, I summarized what motivated me to jump on board with the FIRE movement:

“Financial freedom allows the ability to let go…

of maintaining a specific image; of an addiction to other people’s lives; of the shackles of material goods; of the restrictions placed on me by others; of saying ‘yes’ when I want to say ‘no’; of saying ‘no’ when I want to say ‘yes’; of negative relationships; of working to achieve someone else’s dream.

It provides the option to linger…

with a baby in my arms; in bed all morning with my husband; on the floor in my kids’ playroom as they set up a tea party; at church after service or maybe on a Wednesday; on a restaurant patio with a friend; at a beautiful beach all day; in my sister’s living room catching up on a favorite TV show; at my mom’s house sipping coffee; at my children’s favorite museum; on the hiking trail or in the river at a state park.

It affords the privilege of indecisiveness…

on whether to build a forever home, buy an investment property… or both; on whether to volunteer in local church ministries, start the business I’ve always dreamed of… or both; on whether to do travel homeschooling, keep my kids in public school… or both; on learning to play golf, participating in an over-40 soccer league… or both; on whether to write a book, start or podcast… or both.

It commands the responsibility to give…

financial literacy lessons to my children; personal finance advice to the young and old; donations to charitable organizations; more time to important projects; opportunities to the underprivileged so that they can break the cycle of poverty; gifts to my church; more of me to those I love.”

It’s this final paragraph that makes the FIRE movement especially appealing, not just for myself, but for the entire community too. I recently heard that while others might see an individual’s push toward financial independence and early retirement as a selfish, greedy move, the truth is that most people in the community want to use their freedom for greater good.

Those who’ve reached FIRE write blogs to help others improve their money situations. They host podcasts and share the best tips available. They write books to make investing easier. They teach classes for free to the under-privileged, under-educated, and under-represented. They run fix-it clinics, start buy-nothing sites, and inspire minimalist movements. FIRE people don’t keep this to themselves; they share what they know and encourage others to make the best use of their money as well.

Consider the type of people who truly subscribe to the Financial Independence Retire Early life. These people are often intelligent, motivated, educated, persistent, goal-driven, risk-tolerant, and innovative. When people with these qualities are freed from the daily grind, their talents can then be put toward philanthropy and changing the world we live in.

Take action today on Day 30 by determining what fuels your FIRE and decide what good you could do in the world if earning a regular paycheck was no longer a top priority.

Thank you so much for going on this 30-day journey of action steps toward financial freedom with me! I truly hope it’s been helpful and that you’d be willing to share these tips with others.

I invite you to subscribe to this blog and follow Frugal_with_Four on Instagram. I’m looking forward to sharing so much more on living this frugal yet wonderful life with you.

Thanks for reading!!

Our First Rental Property Deal: The Challenges and Rewards

Just over two months ago, my husband and I bought our first rental property! Adding real estate investing to our portfolio is step #9 in our plan to reach FIRE by 50, so we are stoked that we were able to get started in the infamous year of 2020. I turned 41 this year; my husband turned 40. We still haven’t decided if our age deadline of 50 refers to his milestone birthday or mine, but we figure we have about 10 years to develop a strong real estate portfolio.

At my 40th Bday party…
let the FIRE countdown begin!

It all started with a little podcast called Bigger Pockets Money, which introduced me to several personal finance strategies and books to read, while also making real estate investing sound very appealing. I quickly decided that it had to be a part of our early retirement plan, but the extent of my knowledge only came from buying and selling a few primary residences in my life. So, I had to dive in! Thankfully, the free resources available are endless. About 50 podcast episodes and a dozen books later, I felt like we were ready. I started analyzing deals daily, constantly texted my realtor with questions about available properties, and talked my husband’s ear off about the next best Texas town in which to invest.

After months of research, analysis, and attending random open houses in the cities and towns we heard were the fastest growing, it hit us that we were out of our league. There are a lot of big dogs out there in the investing world, and the competition is fierce. Houses sold sight unseen, and several deals went into bidding wars. Out. Of. Our. League.

So, we finally decided to check out a sleepier town we’ve traveled to a few times on family road trips. I started looking up houses for sale and made a list of about a dozen I was interested in. Problem: Our realtor didn’t have access to the MLS there, and I wasn’t ready to involve a new realtor because we were still in the exploring phase. So, I took matters into my own hands. I spent an entire afternoon while one of my kids napped and the others played legos to call or email the listing agent on every single property. I politely asked if they’d be willing to show us their listing in a couple days. Most obliged despite my unconventional method, and we had 8 showings for that one Saturday.

This particular Saturday was during the dead heat of summer… in Texas … during a pandemic. So, we had no choice but to load all 4 of our kids into the minivan with the temperature gauge already reading 100 degrees by mid-morning. We promised them a fun day trip with just a few stops to look at houses. Thankfully, they bought into it, and we took off for the 2 hour trip. We had packed lunch boxes full of favorite snacks and plenty of treats, and we planned a stop at a super cool playground with a nearby hiking trail along a river.

By the time we made it to the first showing appointment, the car was a disaster, covered in snack wrappers, small toys, and countless coloring pages. Plus, our 3-year-old was fast asleep. My husband and I saw the first few houses in shifts. One of us had to stay in the car with the little guy. And of course, all three of the other children insisted on getting out, donned their masks, paraded through each home, and offered their unsolicited opinions. Our 4-year-old kept pointing out which room would be hers, no matter how many times we explained that we wouldn’t be living in these homes.

After hours of foundation issues, bad neighborhoods, major fixer-uppers, and an historic home with a busted lockbox, we made a quick kid-friendly pit stop for ice cream. At this point, the temp had reached 110 degrees outside, and our A/C was struggling to keep up. Everyone was exhausted. We debated whether it was worth it to see the last two houses. It felt like we had struck out in yet another Texas town.

Maybe it was the sugar high from the root beer floats or the sheer determination within, but we decided to forge ahead and see the last two houses. For our second to last appointment, we arrived to an obviously occupied home but no sign of a realtor anywhere. Soon after pulling up, a woman walked out onto the porch and gestured for us to come on in. The realtor was a man, so we knew this had to be someone living in the home. We double-checked the address, and it was correct. My eldest and I put our masks on and slowly approached the door. The house was beautiful, well-kept, and only a couple years old. It was even better on the inside, and the tour of the home was given to us by the current tenant who had just brought her first baby home from the NICU. We kept our distance, did a quick tour, and chatted outside a bit. My husband took his turn walking through the house, and as soon as he exited, we both gave each other THE look. This was it. We knew it.

Just at that moment, the listing agent arrived and gave us the whole story. We were questioning him about why this wonderful house with kind, paying tenants had been sitting on the market for 30 days, especially since the almost identical house next door sold in less than a week for full asking price.

It turns out that because the tenants in this home had a baby in the NICU for the whole month, no showings were being allowed… until that afternoon when we walked in! We asked the realtor several questions about how much rent the house was getting, why it was being sold, and whether the current tenants planned to stay. The answers couldn’t have been better, and we quickly realized that if another person were to walk through this house, we might lose our chance.

We called our realtor; she recommended a great local realtor in the area, and we put in an offer right away. The realtor she recommended specializes in rental properties, so as an added service, he also agreed to write up a new lease when we closed and to do all the negotiations/signing with the tenants, who did agree to stay.

We couldn’t believe it! After months and months of striking out, we finally hit a home run. We felt like this deal was the best scenario we could’ve imagined for our first rental property.

Here are all the numbers for those interested in deal analysis:

• Purchase Price: $175,000 (25% down, 3.65% APR)
• Monthly P&I: $598
• Taxes and Insurance: ~$420/month
• Additional expense: $50/month landscaping
• Rental Rate: $1510 monthly (including pet fees)

So far, everything has been great! We communicate with our tenants a few times per month, sometimes about the house, sometimes about our families. My husband has visited the house for a walk-through once since closing and asked the tenants if there are any concerns or any ideas for future improvements. This relationship has helped with on-time payments and upfront communication. We even get a picture of the check each month before it’s sent in the mail and sometimes a picture of their baby to accompany it.

Now, we’re ready to find the next one! We know not every deal will go this smoothly, and we anticipate that problems will come at some point, which is why we have 6 months of expenses in a separate bank account for this property alone. However, the momentum has started, and we don’t want to slow down. With a goal of 2 properties per year, we are constantly on the hunt.

I’ve recently adopted a mantra I heard in an interview with Robert Kiyosaki: “4 green houses and a hotel.” Hopefully we can play our own game of real-life monopoly within the next decade. Stay tuned to see if we win or go bankrupt trying! My current goal is to just land on my step-dad’s version of “free parking” a few times, where the player gets to collect a mix of Monopoly money and the real cash my step-dad tossed in to make the game more interesting.

We plan to play often with our kids as well. Now that our children have joined us on this journey, literally and figuratively, we’re hopeful that they’ll learn investment strategies and important aspects of personal finance much earlier than we did. We’ve also told them that these homes are a key factor in their future post-graduation. More details on that to come…

I hope you’ve enjoyed reading the story of the ups and downs of our first rental property investment. I can’t wait to share more with you in the future! Please subscribe for more posts on our FIRE by 50 journey and additional tips on living a frugal yet FULL life.

FIRE By 50… Starting at Age 40

Can it be done?

I had never heard of FI or FIRE until just before I turned 40 years old. At that point, I didn’t consider it a possibility for me and my family. I was turning FORTY. I was a stay-at-home mom. We have 4 children. We love to travel. Plus, my husband and I had recently chosen to move to an area with an esteemed school district and elevated home prices to match.

FIRE was not in our cards.

However, hearing about this movement and the different paths people chose to reach financial independence piqued my interest in a way that money and finances never had in the past. Money was simply a means to gain possessions, feed our family, and to pay for vacations. I had never considered money as a path to freedom….

But once my eyes were awakened to this idea, my brain couldn’t shut off. I made a list of books to read and devoured them quickly, often calling my husband mid-day, excitedly sharing new tidbits or strategies I had learned. I started binging podcast episodes and blogs during every free moment I had. I spent hours and hours learning. There seemed to be no end to the ideas and creative ways to completely change my life through better money management.

When it finally set in that maybe we could forge our own path to financial independence despite the obstacles I saw in our way, I scribbled down a list of requirements to get us to FI(RE) at 50. With that list staring me in the face, I was again inclined to say, “This isn’t in our cards.” But something stronger was tugging hard at me. It was an adorable toddler with bright blue eyes and blonde hair who was born with an innate spirit of adventure and risk-taking. As he tugged on my arm to lift him in my lap, I looked at that list in a whole new light. The fire in my belly surged and the smile on my face widened. I looked my baby boy in the eye and announced, “We’re going for it!”

Goals to reach FI by 50…

1. Track spending every month and maintain an annual and monthly budget.
2. Practice frugality consistently to decrease expenses and increase savings rate to at least 25%.
3. Pay off debt (car loan) and don’t take on any new debt (outside of mortgage).
4. Move savings/emergency fund to high yield savings account.
5. Invest additional savings in Index Funds.
6. Take part-time work for extra cash (me).
7. Sell primary residence for profit and set aside funds for real estate investing.
8. Buy new home with very low interest rate and in low tax rate neighborhood in same school district.
9. Purchase 1-2 cash-flowing rental properties per year for the next ten years.
10. Use equity or do cash-out refi of a few investment properties to fund college, technical education, or business start-up for each child.
11. Continue to decrease expenses as first two children graduate, then sell/downgrade home and purchase one with cash or practice geographic arbitrage.
12. Wes retires, and we live off of rental property income and investment dividends…

FINANCIAL INDEPENDENCE!

As of today, September 11th of 2020, almost two years into our journey, we’ve accomplished the first 8 goals and started on #9. We’re in the process of purchasing our first long-term rental property. I never thought we’d be this far along in such a short time, but I also recognize that the last several goals will be the hardest, especially finding ways to fund multiple rental properties and learning how best to manage them. But we’ve made it this far, so there’s no turning back now. I hope this blog and my readers can help to keep me accountable. Please share what’s worked for you.

Do the difficult things while they are easy and do the great things while they are small. A journey of a thousand miles must begin with a single step.

Lao Tzu