Announcements

I’ve now been living in my (really my mom’s) new house for a little over a week. The house buying process was not without a few bumps in the road. We’ll be dealing with some of those bumps for a while.

Just three days before the original closing date the mortgage company did my employment verification and since I wasn’t employed with my employer at that time, my name had to be taken off the mortgage and closing was pushed back a week. That was a bummer for me. I ended up being rehired just one day after closing. The timing didn’t quite work out for me there.

We will add my name to the title once the mortgage has been paid off. Alternatively, we’ll add my name to the title if we’re able to refinance and add my name to the mortgage. It seems unlikely that a refinance will make sense though. We have a 3.375% APR. We were told we didn’t qualify for a lower interest rate due to the small ($50k) size of the mortgage. The small mortgage means it probably won’t be worth paying the required fees to refinance the mortgage.

Although my name isn’t on the mortgage I will be paying it. The payments are only $357 a month for 15 years which makes it cheap rent for me. We hope to have the mortgage paid off well before the 15 years are up. My mom will be paying the property taxes and insurance which are a little less than $175 a month. My mom volunteered to also pay the utilities if I match that payment with an extra mortgage payment.

The house looks pretty nice from the front. However, when we moved in the inside was filthy and the backyard was a mess and full of junk. It was in the purchase contract that the seller had to remove the junk in the backyard, but he just didn’t do it. He also refused to make a financial concession for failing to fulfill his contractual duty to clear the back yard. The realtors didn’t want to lose the sale and they hired and paid for a cleaning lady to do a quick clean of the house and for someone to haul off the junk from the back yard. That improved things a lot, but we still had a lot of work to do to get things to what we consider an acceptable level. We’ll have projects for months to get things how we would like them.

For now buying the house gives me a permanent home and cheap rent. Sometime in the future it will provide me with a bit of a financial windfall. Even with the bumps in the road I think buying the house with my mom was a good idea and will benefit both of us.

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.

Before I get to how the Coronavirus has affected me, I want to acknowledge how lucky I am. Nobody that I personally know has gotten sick or died from the virus. My sympathies go out to those who have truly suffered during this crisis.

The virus is affecting me financially. I was laid off, as was everyone else, from my full-time job. They have completely closed the office for an indefinite time. This was a bit of a surprise, as one day we were working like normal and the next everybody was told not to come into the office. I was planning on quitting this job in April, but missing out on a little over a month’s pay will hurt my finances.

Luckily, I have been working a second job and that job is still going strong. It is only 15 hours a week, but luckily I have arranged my life that my monthly expenses are less than my earnings from my part-time job. I’m also lucky that I can work my part-time job from home. The part-time job was supposed to end in April. Now that the tax filing deadline has been extended I’m not sure when it will end.

Another thing working in my favor is that I have saved a few thousand dollars for my trip to Asia this Summer. That money may end up being my emergency fund to live on for the rest of the year instead.

I had two trips planned for this year. My first trip was going to be a hiking trip on the Appalachian Trail at the end of April. The flight for that trip hasn’t been canceled yet. I doubt it will be safe to hike by the end of April, but for now I’m just waiting to see how things change. The airline hasn’t offered a refund or free change on my flight yet so I’m not going to cancel the flight ahead of time in hopes that they will eventually offer a refund or free cancellation for my flight.

My second trip was going to be a trip to Asia. The plan was to fly to Japan at the beginning of June for a few days, then fly to Thailand with a layover in Singapore. This trip appears unlikely to happen. Singapore isn’t currently allowing any foreigners to transit through their airport. Thailand is requiring foreigners to have a certificate of good health before they are allowed into the country. It isn’t really possible to get that certificate right now since doctors have much more important things to attend to right now. Neither of my flights for this trip have been cancelled by the airlines yet. Again, I’m not going to cancel the flights ahead of time in hopes that the airlines will eventually offer a refund or free cancellation for my flights.

The stock market plunge has hit my retirement savings hard. I haven’t looked at my balances for a couple of weeks, but I know they are even lower than when I last checked. Right before the stock market started to tank, I added $4,000 to my IRA in order to increase my tax refund. That ended up being bad timing. I’ve added $200 to my taxable dividend stock account this month to try to buy some bargains. I want to add more, but I also want to conserve my savings. I have a little over $1k left to max out my IRA contribution limit for 2019 and I’m undecided if I should contribute the additional $1k. Since the filing deadline has been extended until July 15, I have a few more months to make up my mind.

As an introvert the social isolation hasn’t been that big of a deal for me. My two main activities outside of the home, other than work, were to go to the movies and to eat at a fast food restaurants while reading my magazines. Neither of those activities are an option now so I’m just staying home and watching Netflix and YouTube for my entertainment. My annual trip to Thailand basically fulfills my physical and mental needs for social interaction for the year. If I’m not able to go this year, I’ll have to figure something else out so I don’t get depressed.

Overall, things are not that bad. Although the Coronavirus has negatively affected me, I think I’m better off than most. How are you doing?

This post was originally planned in December and was going to be about my planned around the world trip for Summer 2020 and my other plans for 2020. I procrastinated so long on writing this post that current events have made the plans I was certain of in December 2019 to be rather doubtful now.

Last November I found a flight from Los Angeles to Tokyo for just 16k Delta Miles. That is a great bargain since the price is usually at least double. It was too good of a deal for me to pass up. Since I already had plans to hike on the Appalachian Trail (A.T.) right after the end of tax season I booked the ticket to Japan for the first week of June, giving me a little over a month to hike and prepare for my Japan trip. Since I was planning so early I was able to select a bulkhead seat for just $40. On a transpacific flight having the extra legroom that you get with a bulkhead seat is easily worth $40. My plan at that time was to buy a cheap ticket from Japan to Thailand leaving after about a week in Japan.

I had over 60k in Virgin Atlantic miles from a credit card signup so I started looking at my options to use those miles to get home from Thailand. The drawback to using Virgin Atlantic miles is that they tack on huge fees and surcharges from most destinations. After doing some research I discovered that I could fly with them from Hong Kong to London for just 22,500 miles and about $40 in fees. That gave me the idea to make this trip an around the world trip and I booked that flight leaving in early September.

Later I booked a flight from Japan to Singapore in business class on Japan Airlines. After a six hour layover I continue on from Singapore to Bangkok in Cathay Pacific business class. I was able to book both of these flights as one business class ticket using 30k American Airlines miles I had from another credit card sign up bonus. I thought this was a fantastic deal since it would be my first time experiencing long haul business class and I’d get to experience business class on two different airlines with highly rated business class. Additionally, I’d get to enjoy the business class lounge in Tokyo and Singapore. I also wanted to see Singapore Changi airport since it is a tourist attraction itself.

When I booked the first two flights I hadn’t even heard of the coronavirus. When I booked the third flight the coronavirus was in the news, but it didn’t seem like that big of a deal yet. Now it is a pretty big deal and might derail my travel plans for the Summer. I’ve delayed booking any more flights or hotels. It is still over two months before my trips begins so perhaps the situation will be better by then. I still plan on going on this trip as long as travel as still allowed to Japan and Thailand and the spread of the disease isn’t significantly worse there at that time. By the time I leave the coronavirus might be a bigger concern here in the U.S. then in the countries I’m visiting.

Although many airlines have announced fee waivers for ticket changes, none of them have extended the fee waiver to June yet. If I do decide it is unsafe to travel and have to cancel my trip I’m hoping they will have extended the fee waiver by then. All I can do now is wait and see what happens.

If I do cancel my Asia trip, I intend to extend my hiking trip. Instead of going one month, I will hike for two months. If I hike for two months, that should be long enough for me to finally finish hiking the A.T. I’d be pretty happy if I accomplished that. Also, if I cancel my Summer Asia trip, I intend to make an Asia trip in Winter instead. It would be nice to be in sunny Thailand while it is freezing back here in Missouri.

My other plan for 2020 is buying a house. My mom wants me to buy a house with her. She would basically be giving me the 1/3 of the house that I’d one day inherit now. I’d have a small mortgage to get me from being a 1/3 owner to a 1/2 owner. This would be a great deal for me financially. There are still a lot of details we need to figure out. We were planning to do this in the Fall after I returned from my trip. If I end up canceling my trip, we will buy the house sooner.

Although buying the house would be a good deal for me financially, I’m not 100% certain I want to do it. One reason for that is that I don’t especially want to live in that small town or even in Missouri. I’ve been wanting to live somewhere warmer, like Florida, for several years, but have never made the move. Buying a house would ensure that it would be a long time before I made that move. Another reason is that my mom can be rather bossy, and I can see her unilaterally making all the decisions regarding the house and coming up with lots of projects around the house for me to do. Overall, I think the positives of buying the house outweigh the negatives, but I’m going to think about it some more before making a final decision.

That is my 2020 plans for now, uncertain as they are. What are your 2020 plans? Would you visit Asia this summer?