The Other Stuff

So, I’ve had about a million things to write about, but not a lot of time to write about them because I was… um… doing them. So let’s see what I can remember here.

Got Spamlookup installed on the server and removed DBSL. Hopefully this will stem the tide of trackback spam we’ve been getting. I was planning on disabling trackback, but we’ll see how this goes first.

I’ve spent a lot of time over the last month reading and thinking about money stuff. Now that I am making decent money, and not living paycheck to paycheck, I figured it was about time to start getting things in order. I figure its about time to get a house, so I’ve started saving up for the down instead of buying a $4000k camera that I’ve really wanted. I did a little examination, and were it not for the appreciate rate here in Phoenix, it would be about a $100 difference between renting and buying. But considering for the area I want to live in a 6% appreciation rate is a massive underestimation, it more than makes buying a home worth it.

Of course, this assumes that the dollar doesn’t go into a hard crash and Japan and China let us fall on our asses which would spike the interest and inflation rates and depress stocks and the housing market. If the housing market softened, AZ would probably still have some degree of appreciation, just not as crazy as it is now. So I’m not terribly worried about it. I am curious about one thing though. Why would anyone in an appreciating housing market with an eye to sell within 5-10 years pay any principal toward a house?

Principal is an investment, but it’s one with no return. Your house appreciates if you’re in a good market sure, but that has nothing to do with the principal you have invested. And essentially, principal is money that is non-liquid, earning no return. Seems like you’d be better off investing what you would pay in principal into any stable investment that yields interest. Of course, if you have depreciation on your house, you could end up in a sorry state, but as long as you’re saving the principal payments you would otherwise be making and it’s relatively liquid, it seems like you could meet any shortfall if you needed to sell the place at a loss. If it was a huge loss, you’d be out of luck anyway, principal or no. You still have to pay your loan.

Looks like for this market, almost everyone is going with ARM loans anyway, which have the same APR as interest only. If you can find an investment that currently pays off 5% you can probably end up reducing the cost of ownership on the house along with your tax benefit. So that might be the way I go when I get a down payment saved up.

I was considering paying off the roughly $2k in credit card debt I have, but instead I got a 0% interest credit card from citibank and transfered the balances. Both of my cards had jacked up the APR north of 20% due to lame online payment processing which processes the payments late, and rather than argue with them about it, I was going to pay them off. So now instead that debt is parked at 0% on citibank, and I’m moving the payoff money into a CapitalOne high yield savings account at 3.15% APY along with my other cash savings.

I’m also planning on getting my 401k rolling and getting some of those pre-tax dollars out of my paycheck. For the time being, I’m going to put in 6% which is the most my employer will match, and then see what the yield is. If it’s doing well, I’ll crank that up. Making how much I do, and filing as a single individual, it could end up reducing the tax benefit of buying a house if I put in too much. Of course then could just buy a bigger house.

Kelli and I certainly don’t live like kings, but I’ve also been looking for ways to reduce expenses and control spending so that I can move the money off into savings or investments. Compound interest is a powerful ally even on small amounts of money. I’m planning on eBaying some stuff I have lying around the house that I don’t use as well. No point in having the stuff take up space.

Ok, this is officially a long post now. That should be enough for you guys to chew on for the moment.

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