Solar Update – April 2017

solar-panels

My favorite time of year has come! The days are longer, the snow seems to be gone for good, and birds are chirping on my way to work. Spring is upon us. I’ve always loved spring and summer, but now I have even more reasons to embrace the seasons. No, not just because the kids are out of school and there will be less traffic. Because it’s sun season! As you know, we got some solar panels last summer and we enjoyed many months of free electricity. It was truly a sad day when I had to pay for my first electric bill in months after the start of a frigid winter. These things will spoil you…

But the sun always shine eventually and, boy is it shining! My March 2017 electric bill was $38. We are retiring the heating for the season and thus expecting a much lower utility usage, until late June when we have to kick on the AC. Even then, I’m thinking that the 12-13 hours of sunlight that summers in New England graces us with should be sufficient to offset the worse of the damage. I might have reached the electric bill break even point. If so, I am looking forward to negative balances (I don’t say that very often) for many months to come so I can run my heat for free in November.

Let’s raise our glasses to sunny days, tax credits, and free electricity.

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No One Tells You How They Do It

They will only tell you that they did it.

We all have that secretive side. We grow up valuing privacy & learning not to tip our hand. We are also raised to be ashamed of our mistakes and failures. Letting them define us, damage our self esteem, and allowing people, who were too gutless to even try something new, to be our judges.

This usually means that by the time we hear of a leadership or entrepreneurial  story, it has achieved great success and the less glamorous early history of struggle, rejection, and bad decisions is swept under the rug. This unfortunately sets impossible expectations of instant easy success to observers, and by the time anyone notices, the misleading version  has been told for so long that no one knows the truth anymore. Either that, or the person behind the story likes the version being told and makes no real attempt at correction.

Everyone has a blog when they’re a millionaire or once they’ve retired at 30. No one brings you along for the journey so you can see the struggle of coupon clipping, fighting with your spouse about not buying those shoes or taking that trip. No one tells you about the uncertainty they faced taking on some risky ventures, buying a particular stock or quitting their job. They want to be in the public eye only after they’ve achieved enough success to continuously control the narrative & present the version that shows no set backs. The entrepreneurs only talk about the boost in sales after going viral on twitter. No mention of the sleepless nights because they couldn’t make ends meet. The weight loss journeys are of before and after pictures with no actual journey complete with plateaus and weight gain being documented.

No one wants to take money advice from a broke blogger just like you wouldn’t take advice on how to run a bank from the CEO of Wells Fargo. But there is a difference between telling a story of hope and taking a journey. A journey is a path. Not a destination. Don’t tell people about your sales only after you’ve reached a million. Show them the months you were in the red. Let them know some days no one bought anything from you. Tell them because those who come before you need to know that, overspending once isn’t going to completely derail their early retirement dreams. Tell them so they know that the slow start to their internet business is not an mandatory death sentence. Tell them before they start thinking Rome was built in a day.

Know what you don’t know

It takes a while to figure out the things you don’t know. If we’re lucky, we learn them by observing other people and go into our first experience well prepared. If we are not very lucky, we learn the hard way by making stupid costly mistakes. But those mistakes don’t need to be repeated. We just need to do better going forward and I bet that once your ignorance starts costing you some money, you’ll remember the rules just fine.

Here are somethings I didn’t know, wish I knew and now know:

1) When you’re allowed to deduct your mortgage interest from your taxes, that also includes any points and prepaid interests you paid for the year you bought the property. Not just your subsequent monthly payments.

2) You can negotiate everything with any vendor. Not just the local mom & pop’s.

3) YOu don’t need the extended warranty. The only thing that usually breaks is always the one thing they don’t cover.

4) Insurance preys on our worst frears. Be well insured but be insured to your financial capabilities. You will be grateful for insurance when things go wrong, and trust me they will. However, they go wrong rarely (unless you’re very unlucky), so f you have more than 6 months worth of living expenses, don’t pay more per month on a $300-500 deductible if the $1,000 deductible won’t put you in the poor house. You can afford the deductible and the extra payment to the insurance company can be put to better use.

5) If no one depends on you for their livelihood, don’t buy excessive life insurance. Have enough for your family to settle your estate. A single childless person whose parents are self-sufficient doesn’t need $1 million in coverage. Who are you leaving that money for?

6) Be consistent. It is the key to success. Nothing you will ever do in life will happen instantly. Be consistent and be patient. Results take time.

7) Pick your battles. Not every war is worth fight and some wars have repercussions that last for years. The world is a big place but in networking circles, it’s microscopic.

8) Nothing lasts forever. In good times, prepare for rainy days and in bad times know that it is only temporary. I’ve been through some really tough personal times but I pushed ahead because I knew things would get better. At the same time, I’ve spent all my years since college “stacking chips for rainy days”. While I can’t control everything that happens to me personally, I can control my financial situation through adequate insurance, increasing income, saving and planning ahead.

What wisdom have your years brought you?

Gentrification: If You can’t Beat ’em, Join ’em

As a woman of color who grew up in an unmistakable “hood” in Boston (one of the fast-becoming least affordable cities in this country), friends and family who live in the inner city are part of my circle of friends. As developers big and small start noticing under valued neighborhood due to rising costs and decreasing space in the more desirable parts of town, the vilification of gentrifyers on my Facebook timeline is becoming a weekly occurrence.

My friends and I who grew up in the types of neighborhoods people in college made fun of us for being from (“do you have a bulletproof vest? Haha”) are now watching bike-riding, latte-drinking, kale chips-eating, Lulu Lemon-wearing hipsters shun long commutes, downsize and seek culture in some of the few the places our moderate-income families could afford decades ago. In fact, what makes it more comical is knowing the history of Boston. It becomes laughable when we see these people flocking back to pay $650-700k for a 3-bedroom walk-up condo in the same area their parents fought so hard to get away from after schools were integrated. Many times, on their way out, families would sell at a loss just to get rid of a property in an “undesirable” area as soon as the demographic change became obvious. Today, these same children, who needed protection or a “better” environment, are back and paying $2,000 a month in rent for a 2-bedroom 1-bath on the same block. We are looking at white flight all over again. Except, this time, the flight is coming from the opposite direction.

On the surface it would make sense why people would be upset. Taxes are going up, your landlord is raising the rent and the local businesses are becoming less affordable as aging community pillars, who can’t convince their children to take over, are forced to sell to a new comer who opens a concept snack bar that only sells $10 smoothies and $5 avocado toast. But if we think about it critically we have to agree to share some of the blame.

I understand the reality of economic disparity and the ever increasing gap it creates. I know that poverty is a difficult cycle to break, as it requires more than hard work, because it is not simply a by-product of laziness. In an inherently biased system designed to favor the rich, malign the underprivileged and support segregation in all forms, the less fortunate must be multi-talented to succeed. They have to remain stoic in the face of discrimination and underestimation. They have to face people who think less of them on a regular basis and leave each interaction with their self-esteem intact. They have to learn to do things to get them ahead in life on their own, that they couldn’t learn from their parents (managing personal finances, learning to invest, navigating the tax laws to their advantage). I get it. I’ve been there. But there are enough ‘hood success stories to demonstrate that it is not entirely impossible to achieve greatness in the face of adversity. So I have a question. Not for those who struggle still and haven’t been able to do better, but for those who have. I guess my question to all you now successful former hood dwellers: why didn’t YOU revitalize your neighborhood?

I am guilty of the same thing you are. As soon as I had enough for 20% down I moved. Not just from the neighborhood. I left the city altogether for another city in the same metro area. I couldn’t get far away enough from my old neighborhood. The parking situation during snow emergencies was a nightmare. The cat-calling as I walked home from the train station was constant. It was a food desert and I had to drive 10-15 minutes to the nearest reasonable grocery store (compared my current town, where I have 3 grocery stores, including a Whole Foods, within 15 minutes of my house). Crime of all kinds and severity was rampant. There were no dating prospects. What did I do to improve the neighborhood? The same thing the rest of you did: nothing. I took my money, my tax base and my upwardly mobile status to another area that contributed nothing to my upbringing.

You were in the neighborhood before the hipsters arrived. You had the advantage of being a local guy/gal done good and having their trust, but you didn’t buy there. You declined the offer to take over grandma’s house, because it’s in the stigmatized part of town, and are dismayed when auntie sells it to a nerdy looking fast-talker in a cheap suit who renovates and sells for triple the price.

Gentrification is not overnight. It is slow moving and takes time. Did you pay attention to who is moving in, both in terms of residents and businesses? Did you watch how many homes are being converted? If you did, it wouldn’t have taken long to realize you were sitting on a gold mine. And while you may not have the same opportunities as Mr. Developper to buy out the whole block one home at a time, you could have held on to what you already had. You could have been a landlord to at least one of those kids whose parents thought they were too good to go to school with you. But you left. In part because you actually began to believe that doing well meant you too were becoming to good for the ‘hood.

I did too. So what gives me the right to get on a soap box? I’m buying back. I’m looking for my investment opportunities in the neighborhoods that are well on their way to being gentrified but not quite done. My search is taking me on the block of over-priced gleaming condos where people with messenger bags walk home from the train station after work, head buried in iPhones posting “#urbanarchitecture” on Instagram. But I’m hunting for the ones that haven’t been renovated yet and will be giving my business only to the locals. I’m formulating my plan, you should too. The suburbs aren’t dying but people don’t get married at 21 anymore, and they need a place to live until they get married and can no longer avoid yard work. There is time.

If you’re mad about gentrification, here’s some advice: buy back or shut up.

Marriage is a Business

“When a man loves a woman…”

Did I get your attention? Good. That’s kind of what I was going for. Now that you’re here, I can get something off my chest that I’ve been carrying around for a few weeks, maybe months.

Nothing makes my ass itch like when I see someone, usually on social media make a comment along the lines of: “marriage is just a pice of paper.” If you’re wondering why someone’s simple opinion (which they are entitled to) would bother me so much, allow me to explain. The issue isn’t their opinion, but the sheer ignorance that their opinion exposes.

Marriage does not define the quality of your relationship. Marriage does not validate your relationship. Marriage =/= together forever. Marriage =/= will never leave me. Marriage does not translate to loyalty or honesty. HOWEVER! If marriage is just a piece of paper, so is your social security card, your paycheck, your health insurance, etc. Yet, I see none of these same people giving up on these things in droves. If you do, please call me because I have a bank account and routing number they can deposit all those unwanted “useless pieces of paper” checks.

As a married woman, my personal relationship with my husband is not dependent on the piece of paper we picked up from city hall for $25 on a warm June afternoon. But you know what doe depend on that piece of paper? Him giving me health insurance, me giving him dental.

Me knowing that, although he can leave, he has a responsibility enforceable by courts all over the world, towards me and any children we might have.

The security and piece of mind that, knowing we are each other’s beneficiaries of death benefits brings. Because if one of us drops dead, the immediate loss of income will not leave the other one homeless.

The $25 “piece of paper” allows us to be each other’s surrogate, which is crucial in a family of 2 working adults. He can legally speak on my behalf and I can do the same for him. That way, if I have a work obligation and can’t be present for something important, his word becomes as good as mine. Not because our relationship is superior to anyone else’s. But because our obligations became as intertwined as our interests.

So is marriage just a piece of paper? Of course. As long as you keep ignoring the financial, social, health, and legal benefits it affords us.

Why Your Sources of Income Matter

As a first generation American, I grew up in an immigrant family where working more than one job is the norm. In fact, if you google Caribbean people and multiple jobs, there are sufficient jokes on that topic to lend some credibility to the stereotype.

Watching several people in my family and close friends juggle their side hustles often temps me into seeking additional sources of income. However, what makes me different from most of those who modeled the weekday-weekend job lifestyle for me is that it would be a choice and not a necessity. As a highly educated and well-paid young professional with limited debt and a two-income household, I do not fit the profile of my elders who moved here with limited skills, no education or support system and no knowledge about their right or ability to negotiate their salary. They often had no choice but to pick up a part time job to bridge the gap left by the low-pay of their full time job. But that hasn’t stopped it. Since I’ve graduated college, I’ve worked part time on the side, not once, but twice because there are some real advantages to working 2 jobs. I’ll address my experiences in more detail at a later date. But first I want to talk about the limitations.

Besides being continuously busy, one of the other downsides to relying on a second job to either make ends meet, is the fact that you have officially maxed out your earning potential from a labor perspective.  If you work 5 days a week at your office job, and put 2 days in at the mall, you have no more time and energy to trade for money. At least, not if you want to sleep, have a good family life, and prevent your health from deteriorating.

On the other hand, if you invest in the stock market, write a book, or own rental property, you can increase your sources of income indefinitely, regardless of the time of day. Your options become limitless, save for available capital to invest.

Does that mean you shouldn’t pick up a second gig if you can? Of course not! In fact I encourage you to. But that should be a short-term goal. Perhaps a job you do to build enough capital to invest into building alternative income streams. Or maybe you can do something seasonal so you can indulge during the holidays without dipping into your day-to-day funds. Either way, my point is that a second job should never be a long-term or permanent strategy as it does not build wealth. It is merely a stepping stone to something greater as it creates disposable income to be put to good use.

My goal is to give myself 2 raises in 2017 that are not controlled by my full time employer. I will not accomplish that by get 2 side jobs. The first raise I’m going give myself will be in the form of a rent increase for my current rental property. My other raise will be once I acquire another cash flowing rental property where the income from rent will exceed all operating costs. I’m looking to bring in an extra $500/month.

Why do your sources of income matter? Because not many people can decide they will make an extra $6,000 a year without lengthening their work week. So you have to decide: how much more do you want to work?

You’re on Notice

 

long-term-unemployed

It wasn’t too long ago that I talked about the importance of never getting comfortable with your level or source(s) of income. I’m a big promoter of always seeking different income streams as well as seeing how you can get raises. Your ultimate goal should be to be in control of an amount of income that covers your cost of living. That’s true financial independence. That way, if you continue to work, you are working because you want to and you can stop at any time. Most importantly, if you’re involuntarily out of work, you’re not likely to be homeless in 3 months.

I also talked about my experience using a Bank of America ATM with a remote teller (Teller Asssist), and the potential threat they pose to many retail banking jobs.

Here it is: CNN is reporting that within the next 10 years, 30% of bank jobs could be obsolete. Very alarming.

These are routine repetitive jobs that we could anticipate being replaced. They are customer service jobs that provide an experience as well as a service. Well, I used one of these machines, and I got the experience. The woman on the screen was sufficiently pleasant and helpful for me to not care that we were interacting on camera rather than in person.

Technology has done it: using machines to provide services that could only be delivered in person. If you have a lower skilled job, this should be your wake up call. Save, invest and set yourself free from the bondage of debt. Otherwise, you might find yourself with a negative net worth an no income.