What Can you do with $1,400 a Month?

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I don’t know about you, but for me, not much. But according to the Social Security Administration, that is approximately the average monthly benefits that retired seniors were receiving as of December of 2016. This highlights the importance of having limited reliance on Social Security income later in life. It is no longer enough to have something to supplement Social Security, but it is looking more and more like Social Security itself is the supplement rather than the main source of income. Currently, we spend a third of that amount in my household for food per month. It is imperative that we plan appropriately if we want to maintain a decent standard of living. We do not have to live lavish lifestyles, while that would be nice, but it would also be rather unfortunate if we worked for 40+ years and ended up living in squalor in our old age.

Although I am relatively young, I place great value in planning for retirement. After all, due to the effects of compounding, time is not only of the essence, time is our friend, so we must start early. The more time we have, the more opportunities there are both for growth and for recovery in the event of a downturn. The time is now to build that solid nest egg. Barring an accident or illness, I have at least another 30 years of work left in me, 31 to be exact. I have been actively saving for retirement since June 2007. That is 41 years of full time work where wise lifestyle choices and prudent investments will come together to ensure that I live the life that I earned throughout my working career. Note that I didn’t say the life that I wanted. Because when it comes to being retired, you don’t get the life you want, you get the life you deserve. As harsh as it sounds, it is our reality.

Different practices both as a result of changes in our political landscape and employers’ decreased willingness to contribute to their employees lifestyle, has drastically modified retirement outcomes. There are fewer and fewer pension options for people who dedicate their lives to serving the public or helping advance companies. Most of our futures now depend on market volatility. Even those with pensions are now beginning to supplement their defined benefits with additional investments in 401ks or 403bs.

I know there is an older segment of our population that reasonably had expectations for a pension since that was the practice at the time. Unfortunately, things started changing later in their careers and they did not have the time to save enough to bridge the unanticipated gap. There are also changing factors like longer life expectancy that plays a significant role in the “nasty surprise” our seniors face when they began to outlive their funds. For example my former roommate actually told me that her grandmother outlived her retirement funds by 14 years. While she may have planned, she didn’t necessary plan to live to be 90 because back when she was in the working world, that was unheard of.

So we’ve identified the problem, but what steps are we taking to make sure we don’t fall victim to a lack of planning? Here’s what I’m doing:

Traditional IRA: I rolled over my 401k into a traditional IRA from a previous job approximately 3 years ago and today I contribute to it monthly.

401k: Unfortunately, this new job no longer offers a match but I can still save pre-tax so I started out by contributing $25 a pay period and increased it gradually until it reached 10% of my income.

Pension: I am eligible for a pension at age 55 if I work at least 10 years and the amount I am eligible to receive increases every year I work past the 10 years. I will most likely work at least the 10 years to ensure that I become eligible.

Real Estate Sales (Today): Selling real estate is a way of boosting my Social Security Income because the Self-Employment Tax that I pay out of my real estate income contributes to my social security payments.

Real Estate Sales (Later): I also plan to continue doing part time real estate sales a few years after I retire from my regular job. This will supplement my retirement income for the first 5-7 years delaying any distributions I will have to take to allow my investments to grow further.

Rental Properties: They are the gift that keep on giving. They don’t require much effort. As I get older, I will probably spend more money to outsource some of the services so I will no longer have to deal with tenants, but by then, my mortgage will be gone and my rents will likely increase so I don’t anticipate a significant drop in my margins.

Reduce Expenses: I will be doing my best to avoid debt, I will consider downsizing to one car, and my living expenses should decrease significantly as the mortgage on our primary residence will be gone.

What are you doing?

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I Create my own Sales

While I have a 9-5 where someone else tells me what to do and how to do it, I like to see myself as a “boss” in every other aspect of my life. I make my own schedule with my real estate work, I set my own prices for my rental properties, I determine what stocks I want to invest in, and sometimes, I create my own sales. I can’t always wait for a retailer to decide they want to unload a product. And while I’m at the prime of my life, I am past the stage of my life where it is acceptable for me to get trampled at black Friday sales. Yet, I refuse to pay full price for anything. So how do I reconcile the two? Here’s a story…

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My husband is an Oakley fan. I don’t know if he was always partial to their sunglasses or if it’s a by-product of his military service, but Oakleys are to him what Hondas are to me: when it’s time to upgrade, you just get a better model of the exact same make and style. So when the lenses of his sunglasses were scratched beyond recognition after 3-4 years of use, we went on the hunt for a pair of lenses (since the glasses are custom built, you can just replace whatever parts are damaged without purchasing a new pair). Unfortunately, the model that he has was no longer manufactured by the company and thus, parts were not available. They had a 2.0 version that was very similar but the newer parts were too big to fit into the old glasses.

I don’t know if most people know this but Oakley offers a trade-in program where you give them your old pair and they give you 25% off any new pair you purchase. So he built a new pair of sunglasses that are very similar to the ones he wished to replaced, albeit a little bit bigger, and the total price came out to $200. With the trade-in discount of 25% off, we got $50 off the price for a total $150. We then charged that $150 to our American Express card which had a $30 cash back for Oakley in the form of a statement credit. That statement credit hit almost immediately (I got a phone alert that it had been processed as soon as the transaction posted), so we ended up paying a total of $120 for a pair of $200 sunglasses, and to top it all off, we got 150 rewards points towards our points balance that we will use as we see fit going forward. Just in case you were not keeping up with the math, that’s the equivalent of 40% off. We did not have to wait in line or get pepper sprayed like Walmart unruly shoppers.

Nothing we wanted at the store was on sale, but we got a great deal anyway because every decision we make and every time we pull out our wallet, it’s a very deliberate move. There are no impulse buys or last minute decisions. Everything is well-planned.  Do you ever hear the phrase: “If you fail to plan, you plan to fail?” It’s not just a cliche.

Kors & Choo: A Case Study in Brand Marketing

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If you don’t know by now, Michael Kors will be acquiring Jimmy Choos in a billion-dollar deal. The news broke late Monday and I heard it on the radio while driving to work on Tuesday. Perhaps I’m not well informed, but this has to be one of the most mismatched, or should I say backwards, mergers I’ve witnessed since I started actively paying attention to financial markets in the past few years. It would have made more sense for JC to acquire MK.

These 2 brands have such differing target markets and styles that I can’t imagine how this will be sustainable in the long run. Already Jimmy Choo fans are outraged by the deal as they find MK to be too “low brow” for their high end tastes. Some statements have been more “politically” correct in their prediction that the shoes will be made in China and will be of lower quality, while others have gone full scorched earth with statements like “ew… MK is so ghetto.” I think it goes without saying that perceptions of both brands will change, like anything that meets the intersection of class and money. There is an equal chance that MK might be viewed favorably than there is the possibility that JC’s stock might be lowered. After all, with JC’s London roots, royalty was a contributing factor to its popularity. The question becomes which force will be more powerful than the next.

I think Michael Kors and co. are well aware that they cannot produce Jimmy Choos with the same quality that they produce their existing product and expect to retain the same luster that made the company an attractive acquisition in the first place. At the same time, regardless of the standards they maintain, they do not have control of how the elite customers of JC will perceive the MK brand association with their beloved luxury footwear. All the quality reassurances in the world will not be sufficient to deter snobs from jumping ship. At the same time, I think this has the potential to be a powerful lesson in brand association for the rest of us.

We have a front row seat to the strategy that their senior management will take to keep the MK brand from becoming toxic to JC at the very least. And ideally, they may even market it well enough to improve the public’s view of MK. I encourage everyone to watch this closely because whether or not we own companies, we can all learn the importance of PR genius because we market ourselves every day to the rest of the world. We are our own brand and we put our best foot forward daily to keep our won social stock high.

Prey to Play: Exploiting Black Misinformation

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In a country built on a legacy of race-based abuse and marginalization, it should be a surprise to no one that segregation was the norm until HUD decided to outlaw discriminatory norms that after several decades (excluding centuries of slavery since “property” cannot own property) of people of color, mainly blacks, being locked out of financial markets. Then redlining moved from exclusionary practices to predation. As recently as the early 2000s, communities of color were still targets for predatory lending practices, which do nothing to alleviate the inequalities we continue to witness between different demographics regarding generational wealth. However, I am becoming just as alarmed by the defeatist attitude and victim mentality of some black people as I am outraged by the systematic and oppressive treatment perpetuated by powerful institutions.

Thanks to the internet, everyone, including myself, has a soap box. High speed internet and free platforms has given rise to a multitude of different social justice movements, of which, many are catalysts for change, some are questionable and some others I find without merit. Among those that I find to be without merit, are those that really call for what seems to be throwing in the towel and making no efforts toward self-improvement because after all, the boot is on our neck, so why should we even bother breathing? Let’s just hold our breath and die right here. While this might be a simplistic summarization of it all, I struggle to extract any other point from the message when the systemic oppression is continuously highlighted with any educational effort made to provide solutions to the problem.

“We are kept out of financial markets! We don’t own homes! We don’t have infrastructure in our neighborhood! We don’t have retirement accounts!”

But, there is no effort to save, to attend a home buyer class, to build a business to request a pamphlet from the employer about what 401k plans are available. Meanwhile, anyone who makes an attempt at providing the information is quickly labeled “classist”, tool of white supremacy and is bombarded with an overwhelming list of excuses reasons why they can’t get a job, save money, have decent credit, own a home, travel, etc.

Everyone is complaining about what are real problems, but do so without seeking real answers. Identifying the concerns are a first step but not even half of the battle. Education followed by action are still necessary to reverse course. Although, sometimes I can’t help but wonder if the e-SJWs actually want to see changes.

They might very well be afraid because struggle, while uncomfortable, is not unknown so there might be a sense of safety there. Struggle can be used as a crutch to escape accountability. At the same time, there is also the possibility that they might  run out of discussion topics that will generate adequate traffic to their pages and build their following. That pool of fans is actually a critical source of donation money for those who chose to crowdfund their lives rather than work. If their entire platform is built on enumerating the ills of the community, what will they talk about when most people have taken definitive steps towards self-improvement? To me, that in itself is a form of exploitation. That is the equivalent of not teaching a man to fish, not even giving him a fish, but instead, complaining about how hungry you both are just because you want company. It is unfair and self-serving to keep people ignorant in order to build a platform off their misinformation. With the accessibility of the internet and the amount of people willing to provide the right information for next to nothing, it would probably be less work-intensive, and definitely be less abusive, to get a job than to keep our peers misinformed.

We shouldn’t encourage mediocrity just because the playing field is not leveled. Just because we can’t close the gap, doesn’t mean we shouldn’t try and bridge it. After all, the world doesn’t end with us after we are gone. There are still future generations for whom we can make the world a little better. Our forefathers who fought for freedom did not get to live to see integration, but they laid the ground work for the civil rights movement. Doing anything less than putting up a good fight is regression. We have to do better. Black exploitation isn’t suddenly fashionable because the perpetrator is not white.

Loyalty: How We Treat Ourselves for Less

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One of the most common overspending traps that we fall into is the idea that we deserve that (expensive) purse, that (overpriced) gadget, or that trip to Hawaii. While that is a slippery slope to getting off track financially, we should still seek to have balance in our lives. Budgeting can quickly become a chore if we find ourselves giving it all up without receiving anything in return. That’s why it’s important to treat ourselves. But what is the best way to do it?

In our case, we make it a point to maximize our loyalty rewards program. We find a service provider we are happy with in a couple of categories and study their rewards program to see how we could best benefit. In our case, we have the trifecta of travel. My husband is an avid traveler. Personally, I’m not a fan of airplanes so my fear of flying often overrides my curiosity to see the world. However, we find the balance between satisfying his wanderlust and my desire for firm ground. Even with moderation, travel still remains our most expensive hobby. As a result, we have found creative ways to manage costs.

Flights: We stick with one airline as much as possible. That allows us to rack up miles and a certain number of trips in order to gain a certain status with the airlines. We also have the option of buying tickets with our miles or transferring them to partner loyalty programs. We have racked up thousands of miles with JetBlue and are saving them towards a future trip.

Lodging: Although we spend very little time there, a hotel is one of the most important part of any trip. Not only is it the most expensive, but it is a matter of comfort. We are fans of everything Marriott. They aren’t always the cheapest but as Gold members two years running, we enjoy having high speed internet at no additional charge, early check in, late checkout, bonus points towards future stays, complementary breakfast, welcome snack, discounted rates etc. We also like the general consistency that the brand provides all over the world. Sure, we have gone to Marriott brands or properties where the rooms have been smaller, but the service has always been impeccable and there have been no concerns about the cleanliness. And since both my husband and I travel for work, we make sure that we earn points with every business trip by staying at Marriott properties; points we use to subsidize our pleasure trips.

Credit Card: As American Express members who use the Premier Gold Rewards card, we benefit from no foreign fees on overseas purchases and can take advantage of statement credits ($75) for certain hotel spending and in-flight purchases and checked baggage ($100) that all but wipe away the $195 annual fee. That is in addition to bonus points in certain spending category. Using our AmEx for every purchase allows us to earn points an accelerated pace that we can later redeem for statement credits to offset our spending or AmEx gift cards.

This combination of loyalty programs, including our willingness to actively bargain hut, has been our ticket to cheap travel.

Have you thought about how you can treat yourself for less?

Screen, Screen, Screen: The Real Estate Professional’s Protection Against Scammers & Time Wasters

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Disclaimer: Any resemblance to actual luxury wives, persons living or dead, or actual events is purely coincidental.

Location, location, location? If you’re a buyer yes. If you’re a real estate agent, due diligence might be your mantra. There have been stories in the news for decades about real estate agents setting up their final appointments unbeknownst to them. There are some very sick and dangerous people out there. I’ve seen cold and/or vintage cases on Investigation Discovery just like I’ve seen modern cases play out in real time on the news. Fortunately, I find that agents are becoming more aware of the importance of not doing blind showings. Furthermore, access to technology has given us the resources required to separate our personal lives from our professional lives. We can use email to get acquainted (and leave a paper trail), have a google voice number, use a PO Box or use office sharing (for smaller operations) to avoid linking any of our activities to our primary residences. Some agents have even begun to arm themselves to various degrees (mace, guns, knives) and the team model is becoming more popular, giving us strength in numbers. But not every dishonest inquiry will lead to physical harm. How do we protect ourselves against scammers?

With real estate being an appointment-based business, it means that efficiency is the key to success. We cannot afford to waste time on buyers who are unrealistic about their purchasing power. Or worse, waste time on those with no purchasing power at all, but simply seek photo-ops for social media attention where likes feed their egos but not their empty lives. I’ve had my fair share of time wasted and I will tell you it is incredibly painful. You can’t help but think of all the serious clients you missed talking & spending time with those who did not buy anything or bought elsewhere. However it can also be a liability to both your overall livelihood and your short term income.

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I was recently made aware that our resident dollar store Kardashians were claiming to be renovating a recently acquired multimillion-dollar mansion that was at some point the residence of actor/comedian Katt Williams. Perhaps in a desperate attempt to discredit my previous post about their true socio-economic status as routinely evicted squatters, they reached an apex in the web of lies they spun aggressively and without much foresight. They posted pictures and videos of the property online, including showing children playing in the pool. This would normally be very convincing, because, how many people get to hang out by a pool on 10 acres of land near prime real estate if we don’t have access to the upper echelon? Except, the pictures combined with the knowledge that the home was the residence of a celebrity, only made it easier for people to track down. The issue is that the home in question is still for sale. It was for sale at the time this post was written and it was definitely for sale when the pictures were being shared online last week showing children in the pool, while they claimed that they were settling in and renovating.

A perturbed individual with some superb detective skills (not me) was able to unravel the entire story within 24 hours. It turned out that the husband has a real estate acquaintance who was able to give them access to the property and allowed them to get a little too comfortable in someone else’s home. It has yet to be determined whether or not the showing agent was another victim of their scamming ways or a wiling participant but he was certainly instrumental in the (attempted) trickery. But I will give him the benefit of the doubt for the sake of this post & show how his lack of screening may have opened him up to liability.

Listing Agent: Within reason, the listing agent is responsible for securing the property & protecting their client’s privacy. That is why many sellers demand accompanied showings for properties over a certain price point. A listing agreement is a contract with the seller. While your primary duty is to actively market & subsequently sell for the highest price, there is a certain expectation from the seller that you will do what you can to protect their most valuable asset when they hand you the keys. After all, the house has not yet been sold, which makes it still the property of the seller & often times, their homes. Many people still reside in houses that are on the market until 24-48 hours before closing. This stunt could have cost the agent the listing, which at over $3 million, would have been quite the payday. As a seller, there is no way that I would be comfortable with continuing a business relationship with someone who failed to protect my asset. What would have happened if they began squatting & had to be evicted?

Showing Agent: Within reason, a showing agent should take responsibility for the potential buyers they bring in. While you’re not responsible for an unruly child who bumps into an expensive lamp, I cannot imagine the lack of ethics & professionalism it takes to allow 2 children in a pool at a house that is actively being marketed for sale. While the showing agent cannot control where the footage subsequently ends up, it is a clear indication that at the very least, there were no boundaries established, and at worst, he might have been a willing participant. He runs the risk of being reprimanded by his managing broker or worse, be reported to the licensing board.

This had the potential of being a PR nightmare for both brokerage firms. Rogue showing agents giving known grifters access to high end properties & listing agents perceived as careless for not keeping an eye on the foot traffic. But, could this have been avoided? Absolutely. A little bit of screening could have prevented this egregious violation of  privacy.

First, interview your prospective buyers. An 30-minute long conversation might save you many hours of driving around people with no ability to buy or those whose tastes far exceed their financial capacity. Not to mention, lies are not very hard to detect. The more outrageous the story, the harder it is to keep it from unraveling. Ask questions and if you have any doubts, ask follow up questions.

Second, request documented proof. For anyone who will be financing their purchase, ask for a pre-qualification letter. Do not accept anything older than 3 months. The most important function is to make sure that you show them homes in their price range. If someone is qualified for up to $500k, there is no point in showing homes in the $650-700k range. The secondary purpose is to discourage any window shoppers or scammers for wasting your time. The people in question have been known to forge wedding dress receipts so this might not have deterred them, but the vast majority of con artists aren’t that committed to a scam and will likely move on to someone else who isn’t going to ask those questions. You can further protect yourself by requesting a letter with a phone number on it & the name of the loan officer who issued it. The possibility that you might call the financial institution to verify, should put forgers on ice.

Third, be ready for cash buyers. Not everyone finances a home purchase. Some really well-off people buy houses cash. Scammers might try and use that to try and circumvent the pre-qualification request. In that case, demand proof of funds. If it’s true, the seller will demand it anyway when they get an offer. If they aren’t comfortable enough to provide you with that information, perhaps, they should look to hire an agent they trust.

Fourth, sign a contract. In a previous post, I discussed my unwillingness to work for free & I presume you feel the same way. A buyer’s contract is your sole protection from someone making you do the leg work, picking your brain but buying from their cousin Deedee who’s efforts did not extend beyond completing the offer contract. That particular safeguard will not protect against scammers, but the hope is that all the other barriers will prevent you from getting to that point with a scammer anyway.

Finally, don’t be gullible. Discernment is a great asset and it is time we use it to its full capacity. You are a professional handling the most expensive transaction most people will ever make in their lives. You are not a follower of a fantasy social media account desperate for a fairy tale story. You are therefore held to a higher standard and it is unacceptable for you to see and yet ignore a multitude of red flags. Question the statements and behaviors you find suspicious.

It might seem difficult to implement these rules, especially when we are eager for business, but most clients will gladly provide the required information to ensure maximum efficiency. You just have to explain that it is for your protection as well as theirs. They are more likely to respect your professionalism & your time as you’ve demonstrated the value you place on your schedule.

 

 

Selecting a Photographer

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2014 Engagement Session at the Boston Public Library

A photographer can make your wedding day really special. After all is said and done, a lot of your memories of that day will be a bit blurry. Whether it is being pulled in a million different directions, being really excited, or being on your 5th White Russian, many things and people will come together to sabotage any sharp memories you may have of your wedding . All you will have left will be the pictures. And no matter how sharp your memory is, you can’t be every where at once so it will be nice to have an idea of what your guests were up to when you weren’t around. This is definitely an area I would recommend you don’t skimp on or delegate to just anyone. Since we loved our photographer, I think we can share some tips on what we found worked for us.

  1. Let their work speak for itself: You must absolutely have a wide enough sample of the photographer’s work. Don’t settle for a few pictures, particularly not random ones. Ask for at least one album made up of an entire wedding. Why? Because if you take 2,000 pictures at 5 weddings, you can easily find 10 of them that are top notch. This doesn’t tell me anything about your ability to have great shots from start to finish at one event, it doesn’t tell me anything about your photographic style (candid? journalistic? combination?) and it doesn’t tell me how you perform in a variety of lightings. But seeing a whole wedding tells me all of those things. I will know how open you are to taking candid shots, how well you adapt to the different lighting as a result of the sun setting after taking pictures for 5 hours and it pretty much tells me if you totally suck.
  2. All work an no play makes for dull pictures: Find out if they know to have fun. If you hire a stale cracker of a photographer, you could end up with a wedding album full of stiff poses, forced smiles and no real story being told. If you get a fun photographer like we did, you will seem more relaxed in your pictures, everything will look natural and you can transition from traditional pictures, to candids and staged but fun shots that allow the real you to shine through. Remember, you will not only have this for the rest of your life, your children and grand-children will also be looking at them. It will be easier to convince them grandma knew how to get down back in the day if your wedding album has a bit of personality. The pictures will definitely give you some level of credibility!
  3. Have an engagement session: I cannot stress this enough. No matter how many selfies you take for your Instagram, nothing compares to having a stranger follow you around with a camera asking your to kiss your significant other. Having it happen for 5+ hours on your wedding day as all your relatives watch is kind of creepy. This is where the engagement session comes in. This is your opportunity to get familiar with your photographer’s personality and style, get used to being followed around with a camera and learn what works best for you. You can learn a lot from your engagement pictures: your most genuine smile, your best side, new poses etc. They are usually an hour which is just enough time to get a good set of pictures but not so long that you feel overwhelmed. Just because those pictures will not end up in your official wedding album, it doesn’t mean you shouldn’t take them seriously. We got so many great shots that we ended up using our engagement pictures everywhere we could. They were on our save-the-dates, our programs, and large canvases we had printed as part of our reception decor.
  4. Make sure you have the copyright to the pictures: Some wedding vendors love to nickel and dime you. They will quote you a “great” photography price only for you to find out after it’s too late that you have to pay an additional fee for the copyrights to be released to you. Photographers will sometimes give you a CD or website full of watermarked pictures that become essentially useless unless you pay them more money to unmark them. Furthermore, be aware that unmarked pictures do not automatically mean you are in the clear. You need to make sure that your right to the pictures are noted in your contract. From my experience with Walmart and other printing stores, they will not print pictures that they believe are professionally taken without the explicit permission of the photographer. The contract stating that you have the rights to the pictures is your most readily available ‘permission’. Call it the work of the photography lobby if you wish, but there are now several hurdles to printing your pictures  at a reasonable cost. Not having that permission could potentially mean you have hundreds of digital files you can’t frame or you might be force to shell out some bucks for a photo-printer.
  5. Make sure you are aware of all their fees: and act accordingly. My photographer charged $150 an hour PER photographer for any time over the contracted time. I had 2 photographers which would have resulted in an $300 charge (plus tax) if we were behind schedule. Knowing this steep price motivated me to keep things on schedule. I communicated that to all interest parties and stressed the importance of being on time. As a result everything was ready on time, yes, even the bride.