Andy Hough

Covid-19 Plan C: Buy a House

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My initial plan for this summer was to spend a week in Japan, followed by a couple of months in Thailand, then coming home in September by way of Hong Kong and London. That would have made an around the world trip. Due to the travel restrictions caused by the global pandemic, all of those plans had to be scrapped.

My plan B was to hike the Appalachian Trail instead. I’ve hiked the AT all the way to the Massachusetts/Vermont border. Both MA and VT are currently requiring out of state visitors to quarantine for 14 days. That requirement makes hiking the AT a no go for me. Perhaps those restrictions will be lifted later this year, but for now continuing my section hike of the AT isn’t an option.

This left me with plan C, which is buying a house with my mom. We were going to look into buying a house together when I returned from my overseas trip. Since that trip didn’t happen we went ahead with the house buying plan.

We should be closing on the new home this Thursday. My mom’s house already sold a couple of weeks ago leaving us homeless until we close on the new house. We’ve been staying at my aunt’s house since it didn’t make sense to rent a place for such a short term and we didn’t want to actually be homeless. Hopefully, everything will go smoothly and we can finish moving on Friday. It will be nice to be in a permanent home again.

The house is a small upgrade from my mom’s previous house. She sold her old house for $135,000 and we’re buying the new house for $170,000. Where I live $170k can buy a pretty nice house. The new house is also in a much nicer neighborhood so it should appreciate faster than the old house.

The proceeds from the sale of the old house are being used as a down payment on the new house and we’re taking out a $50,000 mortgage for the rest. I’ll be responsible for paying the mortgage, which will be about $350 a month since we got a 15-year mortgage and won’t have escrow. That’s a good deal since it is cheaper than rent. I’ll also be getting 50% equity in the new house. I’m basically getting my inheritance early. The equity in the new house minus the mortgage liability will result in about a $35,000 increase in my net worth. That isn’t money I can spend today, but someday it will be a nice nest egg.

My mom is wanting to pay off the mortgage quickly. I’m thinking we should be able to pay it off in 7 or 8 years, if not sooner. By the time mortgage is paid, I’ll hopefully be ready to retire. Not having a house payment would make it much easier to retire. A lot can change in 7 or 8 years so we will see what happens.

I’ll write another post once the house purchase and move-in has been completed.

May Income – $5300.25

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Here is a breakdown of my income for May.

Interest$16.20
Amazon FBA$25.97
Unemployment$3248.00
Cashback$25.82
Online $228.71
Dividends$13.11
Job$1742.44
Total$5300.25

My income for May was surprisingly up quite a bit compared to the previous month. Considering my expenses were only $1346 for the month, my income to expense ratio was great.

My Amazon FBA side hustle made a profit for the first time in a few months. . Amazon finally allowed non -essential items to be sent in and I sold a few items.

Dividend income was down a bit. This was expected since I sold some of my dividend stocks in April and May is an off month for dividend payments. If you sign up using my Robinhood referral link we will both get one share of free stock. Thanks to anyone who signs up using my link. Every little bit helps.

I made $228.71 in online income from renewing some ads. I haven’t had any new ads placed in quite a while, but luckily I do still have one business that keeps renewing their ads. I probably won’t make any more income from the blog the rest of the year unless I start promoting some affiliate items.

Job income was down quite a bit since I only worked two weeks out of the month. I’ve been laid off three times since the office was shut down due to the virus. I’m currently laid off and not sure when they will have work for me again.

Unemployment was the major contributor to my income in May. It is pretty crazy that I currently make more from unemployment than I do working as an attorney. I was paid four weeks of unemployment in May since my two weeks of unemployment in April wasn’t paid until May.

Income for this month will be lower since I won’t have a back payment of unemployment to boost the total. Income should still greatly exceed expenses so I can’t complain.

How was your month?

May Expenses – $1346.40

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Here is a breakdown of my expenses for May.

Household$819.66
Rent$304.66
Entertainment$0
Transportation$16.46
Food$124.25
Travel($11.20)
Phone$42.57
Health$50
Total$1346.40

My May expenses were high compared to last month’s extremely low expenses. My necessary expenses were actually quite low. My expenses for the month were only high due to making cash gifts.

I didn’t have any entertainment expense at all again this month. With everything being closed there is nowhere for me to go to spend money on entertainment.

Transportation expense was for $20 of gas and $6.46 for a flat tire repair kit. My auto insurance company issued me a $10 refund reducing this small total even more. That is about as low as this expense can get as long as I still have a car.

My travel expense for the month was negative $11.20. I received a refund of taxes from cancelling a couple of flights. I’m waiting for a refund of taxes from a third cancelled flight. Since I don’t know when I’ll be allowed to travel to the countries I want to visit I’m not yet making any travel plans. I doubt I’ll spend any money on travel this month.

My food expense went up quite a bit. I had way too many takeout meals and I wasn’t as good at only buying bargains as I was in April. This expense is still pretty low compared to my average spending over the last couple of years. I think I’ll be able to reduce this expense a little this month.

My phone bill was higher than normal. This was due to having to use my phone as a hotspot. We had a big storm earlier in the month which left us with no power and no internet for three days. Since I needed internet to work my doc review job, I used my phone as a hotspot for a few hours. The rest of the time I went to my aunt’s house and worked from there. Spending a bit more on my phone bill made sense since it allowed me to earn a lot more than the extra data cost.

My health expense was $50 for a doctor visit. I probably won’t have any health expense this month.

Household expense was the big expense category for the month. I donated $300 to various charities as a way of giving back some of the stimulus money I received. This will also allow me to take a $300 charitable deduction on next year’s taxes. I also paid about $500 to buy new siding for my mom’s house. A couple of walls as well as the roof were damaged in the storm. Since the roof was nineteen years old, insurance didn’t cover the full cost of replacing the roof. I’m paying some of the expense of replacing the siding to help offset what she has to pay out of pocket.

Without the $800 of money I gave to others, my expenses would have been under $600. I will be paying more home repair expenses for my mom this month so my expense level will be even higher this month. Otherwise, I would expect to have a low expense month.

How was your month?

First 2020 Goal Achieved, Next Goal – Lose Weight

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In my December 2019 post about my goals for 2020 I stated that the only goal I was setting at that time was to save $10,000 in the first four months of 2020. A goal that I felt would be difficult, but achievable. I’m happy to say that I was able to achieve that goal.

I surpassed my goal of saving $10,000 and managed to save $12,384 in the first four months of 2020. The savings broke down as follows. I added $4397 of cash to my savings accounts. I added $778 to my doc review job 401k. I added $1217 to my tax job 401k. I added $4000 to my traditional IRA and $1992 to my Roth IRA.

The goal wasn’t as easy to achieve as it may look like from the results. I benefited greatly from two months out of the four months I was saving being months with five paydays. That isn’t usually the case. The $1200 stimulus check also provided a surprise boost to my savings. Without those two unexpected boosts I would have barely been able to save the $10,000. If I hadn’t set a goal of saving $10k in the first four months of the year I doubt I would have saved as much money as I did. This goal was successful in getting me to save more money.

In my previous goals post I stated that sometime in 2020 I’d set goals for losing weight and increasing my blog income. Now is the time that I’m setting my 2020 weight loss goal. The blog income goal will have to wait a little while longer since I think it is best for me to focus on one goal at a time.

Losing weight is a common goal of mine. It occurred to me the other day that I’ve been dealing with my weight for almost 25 years. In 1997 I lost 30 pounds in three months while living in Guatemala. Whenever, I’m living outside of the U.S., I find it easy to lose weight without even trying. The combination of walking more and not having access to all of the junk food and fast food I have in the U.S. leads to weight loss. After returning to the U.S. from Guatemala, I managed to keep the weight off for over six months. Then I started working as a blackjack dealer on the graveyard shift (3am to 11am) and quickly regained all the weight I lost plus some.

I’ve repeated that pattern a few times over the years. I will lose 20-30 pounds and then quickly regain the weight. Usually, when I’m losing weight it is due to special circumstances such as living in another country or hiking on the Appalachian Trail. Once I go back to my normal life I stop losing weight and start gaining weight. I’ve got to stop that cycle and learn how to lose weight and maintain my weight while living my normal life. I’m not sure how to do that yet.

To start on my weight loss goal I’ve made several bets with DietBet. Money has proven to be a motivator for me in the past. I made a Kickstarter bet which requires me to lose 4% of my bodyweight 9 (just under 9 pounds) in 30 days and a Transformer bet that requires me to lose 10% of my bodyweight (a little over 22 pounds) in 6 months.

My current plan for accomplishing these weight loss goals is simply to eat less and exercise more. I’ll refine that plan as I go. I want this change to be a permanent change so I don’t intend to use any weight loss methods that I don’t think I’ll be able to stick to in the long run. If you have any suggestions on what I should do to lose weight and keep it off, I’d be happy to hear them.

April Income – $4029.15

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Here is a breakdown of my income for April.

Interest$13.28
Amazon FBA($0.33)
Stimulus$1200
Cashback$6.03
Online $102.97
Dividends$15.01
Job$2658.77
Amazon Merch$4.42
Mystery Shop$7.00
Class Action$22
Total$4029.15

My income for April was down a bit compared to the previous month, but still quite solid. Considering my expenses were only $616 for the month, my income to expense ratio was great.

My Amazon FBA side hustle again made negative income for the month. Amazon isn’t allowing non -essential items to be sent in right now, and the few items I do have in stock aren’t selling. Once things open up again I’ll send in my remaining items.

Dividend income was down a bit. I sold some of my dividend stocks in my taxable account so that I could max out my Roth IRA account for 2019. That also allowed me to harvest some capital losses. Due to the sale my dividend income will go down more until I can buy some more stocks again. If you sign up using my Robinhood referral link we will both get one share of free stock. Thanks to anyone who signs up using my link. Every little bit helps.

I made $102.97 in online income from hitting the payout threshold for Adsense. That might be my only online income for the year. The domain name for Investorzblog.com is up for renewal this month. I’m considering letting it expire. If anyone is interested in purchasing the domain let me know.

Job income was down quite a bit since my tax job ended on April 16th. Although the tax filing deadline was extended my company didn’t extend the end date of my seasonal position. I was also out of work for a couple of weeks at my full-time job due to the general economic slowdown. I’m back at work now and my current project should last almost all this month. Hopefully, there will be another project after that.

The stimulus check added $1200 to my income. I got paid $7 for one mystery shop, $4.42 from Amazon Merch and I received $22 from a random class action settlement. None of those sources of income should repeat this month.

Income for this month will likely be down a little since I will only have one job. Income should still greatly exceed expenses so I can’t complain.

How was your month?