Saturday Links! July 18, 2014

For Americans Seeking Affordable Degrees, German Schools Beckon by Soraya Nelson, npr.org. Why hasn’t the United States been able to figure out education while almost every other first-world nation has? It’s mind-boggling, and also sad because I’m one of those millions with student loan debt.

Jobs That Will Pay Back Your Student Loans, mrandmrsbudgets.com. If moving to Germany isn’t your thing, there are a lot of other options that don’t require you to graduate with crippling debt.

Perfection Is The Enemy Of Frugality, Mrs. Frugalwoods, frugalwoods.com. If perfection is the enemy of good, it’s also the enemy of frugality. Also remember: Advertisers create need, and that’s part of the problem for anyone trying to be frugal. The Frugalwoods’ (Frugalwoods’s? English is weird.) blog is one of my favorites and always a great one for inspiration on how to live contrary to how most people seem to live.

3 Ways to Get Help With Your Down Payment, femmefrugality.org. There are lots of ways to get a mortgage, and you absolutely don’t need 20% for your home, especially if you are a first time home buyer. I wish I had this information about four years ago!

BONUS: What I’ve been listening to this week:

Have I linked to Cobalt Cranes before? If so, they’re worth repeating. From California, but they recently made a stop through West Palm Beach. Pretty cool!

Photo: Think roaches are annoying? This is a Cuban Anole, a rather large, aggressive lizard that lives in my banana trees. This one is about a foot and a half long. When he shows up on the porch I have to chase him off with a palm frond which he usually attacks pretty viciously until I coax him away from humans. #tropicalproblems 

Saturday Links! July 4, 2015

Mortgage as a Forced Savings Account to Build Wealth by Financial Samurai. An interesting way to think about your mortgage is as a savings account that you absolutely have to put money into. An upside to buying a house is that your asset will probably appreciate as you’re saving, but the downside is that your savings account probably isn’t very liquid.

What Would Happen If We All Stopped Paying Our Student Loans, Together? by Jennifer Schaffer, Vice. An interesting take on the student debt problem wich involves forming what looks like a “debt union”. Really, it’s about using a “debt strike” as a tool to promote social change, because there is definitely a problem that no one seems willing to address on their own.

Yo ho, yo ho, an FI life for me! by Mr. 1500, 1500days.com. “FI” stands for “Financially Independent” in case you were wondering; Mr. 1500 is on a 1500-day mission to build a portfolio large enough to retire on. He touches on one of my pet peeves about retiring early: people asking you if you’ll just be bored once you don’t have to work anymore. ABSOLUTELY NOT. There’s so much to do! I think people that are afraid of this are more likely to have this happen to them.

BONUS! What I’m listening to this week:

The late-90s Britpop resurgence had some gems in it, and not all of them were Oasis.

Photo: I grew this pineapple in my back yard. It’s huge! It’s almost like I’m living in Hawaii!

Saturday Links!

Permission to Let Go by Joshua Fields Millburn & Ryan Nicodemus, theminimalists.com. These guys are pioneers in the minimalism movement, and they always find a nuanced way to tell you that it’s ok to let your stuff go, to live intentionally and simply, and to make room for what matters in your life.

The Great Mortgage Payoff  by marciab, Proceed Until Apprehended. I’m in the beginning stages of my own mortgage and I’ve been throwing a lot of extra cash at the principal. I’ve never really bought into the idea of “good debt” and it’s great to see other people who have kept going with the goal of being debt-free, even if it’s with something “good” like a house.

Is It Better to Rent or Buy? Mortage-vs-Renting calculator at the New York Times. I’ve written about my own house and a little about how I calculated whether to rent or own, and it’s good to see that this calculator also says that I should definitely have bought a place.

BONUS: I’ve been going a little old school this week.

Photo: It’s rainy season in West Palm Beach. We have two seasons here, “rainy” from June to October, and “dry” from November to May. Also sometimes referred to as “really hot” and “not quite as hot”. During the rainy season, you can expect storms like this every day in the afternoon for at least an hour. 

I Own a House

Although I guess it would be a little more accurate to say that I own a very very small percentage of a house and the bank owns the rest. That is the state of my life for the foreseeable future, until I pay it off or sell it. But I’m convinced that, for me, this is the best option and is certainly preferrable to renting.

I’d like to point out that there’s no right way to live a minimalist life. Some minimalists rent. Others own. But my goal is to own a house free-and-clear as soon as possible, which will either allow me to pocket all of my paychecks and retire early or allow me freedom to take on another job and not have to worry about a potential reduction in salary. Maybe I could even be a full-time writer!

In West Palm Beach, a mortgage can have about the same monthly payment as renting an apartment, so for me that’s a no brainer. Better my money go to my own investments than disappear paying for the privilege of living in someone else’s.

Not everyone agrees with this though, and I’ve seen some fancy ways to calculate the difference between owning a house vs. renting, or fancy ways to calculate if you’d be better off renting vs. owning, but to me it just comes down to freedom. How do you see yourself being the most free, finances aside? If it’s owning a house without owing money to a bank, and living there with the security of knowing you’re debt-free, then taking a mortgage out and buying a house is for you. But if you feel more free not being tied down anywhere, and you want to move around a lot, then renting is the way to go.

The house I live in now is actually my second house, so I’m no stranger to home ownership. The major difference between the two is that the first house I bought to flip and make some money on (which enabled me to afford to buy the house I have now), and the house I live in now is exactly the one I want to live in, in a great neighborhood by the beach, and it’s in a city that I love. I could live here my whole life and be happy; I’m in walking distance of a great downtown scene and it’s easy to go surfing.

The last apartment I lived in wasn’t bad, either, but it didn’t suit me. It was a high rise in the center of downtown with a beautiful view of the city. Every time I sent rent to my landlords, though, I knew I would never see that money again. That was the driving factor behind owning a house again, because every time you make a house payment, you’re essentially putting that money in a bank account (your house) that you can get back eventually (by selling the house).

Although some of the money does disappear (taxes, insurance, repairs, etc), I get a lot more freedom. I have a garage that I can use to work on any of my projects, without having to take an elevator ride up to an apartment every time I forget a tool. I don’t have to struggle to fit my 9’4″ surfboard in the elevator when the surf’s up. I don’t have to schedule the elevator when I want to move furniture (I have a lot against elevators). I can do whatever I want with the property, which is great for me because I like having projects to work on and my house (built in 1949) is certainly something that’ll need work. Oh, and you can write your mortgage interest off on your taxes, too, so that’s a bonus.

The one downside of having a mortgage is that it is something that ties you down somewhere. So if you’re making this decision, make sure it’s a place that you’ll either want to live in for a while, or that the real estate market will favor you if you decide to sell it quickly.

I also make efforts to pay my house off faster than the 30-year mortgage suggests I should. By paying an extra principle payment a month (which is pretty cheap in the beginning of a mortgage) I’ll be able to cut the mortgage in half, saving about $50,000 in interest. Also, since I have mortgage insurance (it’s a common misconception that you have to have 20% to put down on a house) this strategy will save me about $5,000 in private mortgage insurance payments by allowing me to get rid of this insurance after five years instead of ten. I’ll probably try to get rid of this quicker if I can, though.

The bottom line here is that you can look for blog posts that will tell you that renting is better, or owning is better, and to be honest I think that everyone who writes one way or the other is just trying to justify the decision they’ve made. They both have perks, and it’s up to you to figure out what’s best for your life.

Photo: The backyard of my Key West-style house in West Palm Beach. I’m a big fan of the foliage.