All Forum Posts by: Karen M.

The minute they get a job, we'll start talking about Roths.  The kids aren't quite old enough to work for me, and I have to get going if I'm going to develop a business that can pay them. :)  I thought rentals would be perfect for the teenage years, 3 boys to help with painting and lawn mowing and all those things. However, I don't know if that is where we will end up or not.  If I become a realtor, I might be able to have them work as assistants, but I want them to have meaningful work and they might have better learning experiences working for other, tougher bosses.  It's at least 3-4 years away, so we'll see.  It's exciting!  The kids are definitely going to need to learn to work, work hard, and understand that there are a lot of people out there who work very hard for very little money, so that they have a good understanding of life, and so they have some motivation to handle money wisely.

When I was young and clueless, and had not lived on my own very long, I did not know about water running in toilets.  I let a toilet run when I was living in an upper duplex.  The landlord came to check it after getting a large water bill.  (The water was in their name, and they paid it, I have no idea how much it was.)

Teach your tenant, and this may be something to mention to people during your move in talk -- you are responsible for utilities -- our toilet is in good operating condition, but be aware of this common problem with toilets (or any others) so it doesn't become a problem during your tenancy and cost you money.  Show them how the tank works if they are clueless.   BTW, here's a plunger. :)  

Hi Everyone,

I have been interested in real estate investing for a couple years, but have decided NOT to pursue buying rental homes at this time.  I have three young kids and decided it would be easier to invest in stocks for many reasons (liquidity, diversification, not taking on debt, not managing tenants, etc.)  The kind of properties I want to own are beyond my means!

However, I am considering selling real estate as a J-O-B.  Right now I am a fitness instructor and I teach 10 classes a week, and I am a mom.  I have a great schedule but I am not bringing in much money for our family. 

I am considering getting a real estate license and selling homes for a living.  I might even want to be a "part time" real estate agent.  I am concerned about balancing family life with selling real estate, however-- I don't need to watch TV.  I do need to keep the fridge full and the kids on task at school and at home.

I think the benefits would be great - I would get to know our market very well and develop skills related to real estate, and I would be able to save 100% of my income and put it towards either stock or real estate investments.

Please tell me about the reality of being an agent, and getting started. 

What kind of budget would you set for startup costs?

How do you see the retail real estate market changing?  What will life be like for retail agents in 5 or 10 years?  (Edit to add: I live in a market that is good for rentals and could possibly help investors here.  The only caveat is that I expect to be selective on neighborhoods and safety.) 

What sucks about being a real estate agent?  I was effectively talked out of land lording by Bigger Pockets star, Ben Leybovich -- and that was very helpful!  Land lording likely doesn't suit my personality right now, it's too much money, too much debt, too many headaches.  Being an agent will have headaches, but it seems easier. What's your input? 

Thanks so much,
Karen

 Hey Cal, my reason for choosing the UTMA and Coverdell is to give my children exposure to stock investing.  I am a stock-picker, and so that's what I like to do, and they will get to see the results of those investments over time.  Another stock-based vehicle for savings for kids are DRIP plans.  Here is a great post on DRIPs from Joshua Kennon's blog.  Great example of regular savings:
DRIP investing

Hi Zach,

You are so smart to know your savings rate.  My answer is, I don't know.  Perhaps this should be my 2016 New years resolution.

I am a fan of MMM and ERE and think it is valuable to understand needs vs. wants, and to spend on the things that bring the most happiness and usefulness to your life. 

In 2015, we began working with monthly budgets, inspired by daily Dave Ramsey podcasts.  My husband and I are still practicing our budgeting skills - it is not easy and we are not in a real groove yet.  Speaking of which, time to start a January 2016 budget. 

I have been pretty good about controlling spending, but we go in waves -- a month or two of simplicity and then a binge month.  And I don't mean BINGE, but we will loosen up.  For example, I bought 3 down coats on Ebay in anticipation of winter.  I don't need 3 down coats, and will probably sell one, but a nice warm coat or two is an OK thing to have. I have been hunting for a great pair of snow boots.  In our spending I am trying to get great satisfaction and value, and I am trying to bargain shop and buy used. 

In 2015 we bought a very nice car for cash.  But we do not buy very many cars, and my husband is absolutely thrilled with the vehicle.   It could have been a down payment on a cheap house, or a very nice chunk of stock.  But he has a nice car now.  We allow ourselves to spend once in a while, and we follow Dave Ramsey's advice of buying used and buying at a level that fits our income level. 

Nice car does not add up to a big savings rate. 

We are doing OK and we are saving, but there is a lot further to go if we wanted to get to a maximum savings rate.  We could probably live on 50% of income or less. We do not have enough income to get down to 10%.  I am looking forward to MMM's 2015 spending report.  I should get back at that bare bones budget.  It is fun to practice, and challenging to practice. 

Karen

Hi James!

Is this a new area of Bigger Pockets? I have been gone for a while and I love that there is a personal finance section.

I have 3 sons and we are auto-depositing every month into our state 529 plan in Wisconsin.    Wisconsin gives some state income tax break and that's why I chose our in-state plan.  Overall it has been OK, and I'm happy that we are auto-contributing so that it always gets done, and contributing to college savings is part of every day life.

Vanguard is excellent and if we did not receive tax savings, I would seek out a plan that uses their funds. 

I also have a Coverdell Education Savings account for each child with Charles Schwab. In this account, I can contribute $2k per year per child, and invest those funds directly in company stocks. It's not a lot of money, but it will add up over time, and it works a lot like a ROTH IRA where you use pre-tax dollars and the growth does not get taxed. (Next year's contributions are already saved up so January 1, I will deposit for the kids, and I will deposit for our own ROTH IRAs.) There are some income limits on Coverdell.

I am not involved in real estate investing at this time, although I like real estate and might like RE investments in the future to diversify our holdings. 

If I had a RE portfolio, I might consider using rental cash flow to pay college costs as they happen.  It depends on your financial situation and your goals.

The real estate folks here may have more specific advice about using real estate to fund a college goal that I am not familiar with. 

Kudos to you for saving for your children's education.  Starting early should make a difference for your family. 

Side note, I used the website savingforcollege.com to estimate the future costs of college. I made a spreadsheet and estimated the costs for in-state public school tuition.  Then I made it our goal to save for about 80% of the college costs.   The kids can work or we can help pay the rest through our regular income.  Also by the time the kids are in school, our mortgage will be paid off and we should have more disposable income to help if needed.

I also have Vanguard UTMA accounts established for my kids.  These are not big balance accounts, but I will make contributions on their birthdays and at Christmas.  This money is money that they own and they can use for whatever -- maybe they will sit on the savings or use it for a future home purchase. 

My big advice is to -- DO IT NOW!  Don't let the time slip away from you.  I should have started a little earlier with my kids. (We were making small little contributions, but this year I got serious about figuring the costs and we significantly increased our deposits.  We should have kicked in more, sooner.)

Blessings to your family!

Karen

Hi Brian,

Job losses can be so hard on a person.  If this has been only a few months, it may be a down period in your renter's life.  I tend to think that given your long history, a little compassion and understanding is good.  Please pray for your tenant's well being.  You want this person to succeed in life because his success contributes to your success, and he has been "on your team" for a very long time.

Sometimes I've heard people refer to thinking of their tenants as employees.  Now if you had a 10 year employee who came upon hard times, a personal loss, you would still expect their work be done but you would also have a kind attitude toward the person. 

For your business relationship, it is important to be kind and professional.  If the place is getting too messy, then you need to inform him that the place is too messy and ask for him to clean things up.  I do not know what you mean by super fragile -- I do not know how often you have conversations with him or how deep your relationship is on a neighborly level.

Job concerns + health concerns equals a lot of stress. Imagine yourself in his shoes. 
Try to be kind and encouraging, but at the same time, maintain your expectations.  I hope that you get some good advice and support here to assist you.  

You can only evict for certain reasons, so be clear about what your reasons are if you go down that path.  You are wise to consider the health of your tenant and a thoughtful approach will hopefully benefit both of you. 

Some churches have outreach programs and support programs for people going through touch times.  You may want to reach out to your church or churches in the area to ask if they have anyone who would be willing to connect with your tenant and help him get some help, some hope, or both.  

Good luck!!

If you are talking about the average new person,  the average new person will not follow through in a real estate investment, particularly one they cannot afford. Everybody who is looking will look at properties that are too big and too expensive. Isn't that just the way it goes?  When I look at properties, I look at the nicer ones, in the nicer neighborhoods, it's what I like.  But I am not buying any properties at this time, I am daydreaming.  

Observe what people are actually doing, not what they talk about, as your indicators. :)  

What an enticing post title!

Although I have a lot of interest in real estate, for now, I am a stock market investor.  My stock market investing friends have this saying --- my crystal ball is broken. Who knows what will happen next?  

But it is our job to prepare the best we can for *any* situation.  I appreciate what other posters have said about sticking to the fundamentals.

I have heard several financial people (Dave Ramsey, Jim Cramer) comment on rising rents. There is a change happening in how people are living.  Did you know that 70% of households are living paycheck to paycheck?  That supports renting too.  

All I know is that things always are changing.  It is good to contemplate what is going on in the world.  

As for China, I believe we will stay on good terms with China, we are an important trade partner. 

Best wishes to all for 2016! 

Kim, I am so sorry you are dealing with this, and I will pray for you and for this situation you are dealing with.  I hope there is a way to get rid of the tenant.  Best of luck!