Monthly Archives: September 2012
This morning, I paid off my 2008 Mazda3 about 9 months early. I wasn’t planning on it. But paying off the car significantly reduced my debt to income ratio, which is more important to lenders than your total debt, the number I have been fixating on. I had to drain all of my savings, and I’m also a little worried I won’t have enough money for rent on Monday, but I always scrape together enough to pay all of my obligations (I was saying I wanted my debt repayment to be a little harder and I definitely made that true this week). The savings was just sitting there earning a low interest while my car was costing me much more in interest charges. So I just went for it. I now have $270 per month less in minimum debt payments, and that money will go straight into paying off my highest interest credit card. And having an improved credit score and financial profile brings me that much closer to my dreams of being a business owner and real estate owner. My banker even told me that I would probably prequalify to buy something under $250K, but we all know I am not prepared for that, especially without a 20% down payment and another $5K for all of the incrementals that come after buying a place. But I’ve continued with putting money into savings automatically as well as large chunks from my side businesses. Doing a payoff like the car had a big impact on my situation (and mentally I feel all kinds of giddy thinking I don’t have a car payment this month), so I’ll continue to save but regularly use chunks of that money ($500 increments) to go towards debt. I’m still doing irregular debt updates, so here it is:
Total Remaining Debt: $23,068
Next week I am going to post exactly how much interest I paid over the life of the loan (4 years and 3 months) and some of the costs of owning the car. I love cost breakdowns!
Have you made any unexpected big moves lately? Let me know and have a great weekend!
I’ve been wrongly accused of “always thinking of some crazy scheme to make money.” Sure, I’m always thinking about how to make money, but that’s because it’s fascinating that there are so many different ways to make money and sometimes, they all seem like a lot of fun. So I started the BILO: Business I‘d Like to Own series. In case you missed the first edition, I looked at seasonal restaurants as a viable business if you are willing to go hard and work 20 hours for a few months out of the year.
My next BILO subject was right under my nose: owning and operating a conference, special event (like a marathon or gala) or a festival. We all go to festivals (LA has the Avocado Festival and Strawberry Festival to name a couple) and marathons are becoming increasingly popular (the brand-new New Year’s Half-Marathon in Downtown LA is sure to sell out quickly, with tickets up to $110 and set to increase in a week). And then there are the crazy special events, like the 60,000 people who showed up at Burning Man this year, an event in its 26th year with stats like this:
The outfit that stages the festival, BlackRock City LLC, is now a $23 million-per-year concern with 40 full-time employees, hundreds of volunteers, and a nonprofit art foundation that doles out grants.
-Outside Magazine article, October 2012
The amount of organization and sophistication now required for Burning Man to be a success is a full-scale operation. Marathons can also become your full-time business (an acquaintance who started a marathon just two years ago has made it his full-time job). It’s a business that definitely BILO-worthy, but I think on the smaller scale would be where most people could reasonably start, like this year’s Financal Blogger Conference.
FinCon is in its second year, and both editions of the conference have been extremely successful. I was going to do the usual examination of what it takes to make this business successful and what factors most people forget to consider, but FinCon creator and owner, Phil Taylor of PT Money, already did an in-depth review of everything about FinCon12, including a breakdown of the numbers from both 2011 and 2012. As he says, he made over $35,000 in profit this year, compared to just over $11,000 in its inaugural year. There was an increase of $85,000 in sponsorships this year, and sponsors took some valuable real estate in the form of short presentations ahead of keynote speakers. Phil’s review of the conference is seriously in-depth and he was also kind enough to respond to a few of my questions just for BILO. The following interview is an American Debt Project exclusive!
Interview with Phil Taylor (PT Money), Owner of the Financial Blogger Conference
ADP: In the first two years of FinCon, your attendees, out of their own enthusiasm for the event, did a lot to promote the conference and ensure its success. How do you envision your marketing of the conference going forward?
PT: You’re right. This conference would be nothing without the energy from the core group of financial bloggers who drive the enthusiasm for this event using Twitter, online forums, and even their blogs. I’m forever indebted to them and I will do my best to be a good steward of my position as organizer. Therefore, it’s critical that I keep my finger on the pulse of the community. I need to know what they are thinking, what they want at FinCon both on-stage and off. I also need to know how I can better connect them with the people they need to connect with and help them learn the things they want to learn while at FinCon. I do this by utilizing post-conference surveys to see what they want next, and by making them a part of the on-stage content selection for next year. I’m even considering an advisory panel to help bring in ideas from key stakeholders (bloggers, exhibitors, press, etc.).
- As our community of independent financial bloggers naturally grows, and
- As authors, columnists, freelancers, CPAs and CFPs, and others (who are interested in using blogging (or new media) as a way to reach a broader audience) come into the fold.
ADP: What has been the best perk of being a conference owner?
ADP: What advice would you give to someone considering starting their own special event?
PT: My biggest piece of advice is to tap into an already engaged community. Find the people that naturally want to be together and make it happen for them. Other than that, make sure you pay good people that you trust to help you pull it all together.
I’d like to thank Phil for being so generous with his time to give such excellent answers to my questions. Conference ownership can be financially lucrative, but as we can see from FinCon, it’s also a labor of love. I don’t think anyone doubts that Phil truly enjoys bringing everyone together for this event because it’s also a ton of work, throughout the year and during the conference. He made a good amount for his efforts this year, but will be reinvesting some of that money into next year’s conference. And with great goals to keep the conference relevant and personal for bloggers, FinCon may not become as big as Burning Man anytime soon, but that’s OK. FinCon showcases the parts of business ownership that I love: the ability to make something new, to be creative and flexible in order to generate revenue, and to find a way to use what you know to provide something new and valuable to an existing market.
#FinCon12: My Recap
I’ll keep it brief: I had an excellent time at FinCon. I could see why bloggers were so enthusiastic about the conference–it really was summer camp for blogs. I didn’t get back to my room earlier than 2 am on any night because I kept thinking, “I still want to talk to all these people!” and I got to meet lots of my blogging friends, from Jana, Erin, Andrea and Serendipity and my amazing roommate Marissa to new-to-me bloggers like Mike at The Fit World Traveler (he can give you real insider tips on getting the most out of your frequent flier miles plus I like anyone who uses the word “arbitrage” in casual conversation) and Agatha K, whose Ignite speech was so funny it made me do my silent laugh. Who else? Average Joe was anything but, See Debt Run and Frugal Portland were uber cute, and J.D. Roth was a Zen master. Every Keynote speaker did a great job and each meal was a chance to sit with someone new and find some common threads. I got some great advice from my friends at Wisebread and Ryan at Cash Money Life about affiliate advertising, which I will be implementing soon. Oh, and a word to the wise: never challenge the Financial Samurai to a tennis match when you haven’t played in two months!
Back to BILO: Would you consider starting a conference or special event? If you have one in mind you’d like to start, you don’t have to share the specifics but tell us why it would work. Do you like the planning and logistics aspect of owning an event?
I have been thinking lately that I don’t want to miss out on some real values in real estate because of my financial situation. I’ve done a lot over the past two years to improve how my personal financial statement stacks up when I finally apply for a mortgage and I definitely think I have made a few key improvements which matter to lenders like:
- Shown a track record of regular employment, and have been at my current job for over two years
- Reduced my Debt to Income ratio by both decreasing my debt and increasing my income
- Have at least 10% if not 20% for a down payment, depending on just how much of a “fixer” I want to buy
You guys know I really love real estate. I check the MLS listings on a daily basis. I try to figure out all kinds of scenarios that don’t necessarily apply to me, like whether I would be eligible for a refinance if I did have a home. And the good news is that completing a California or Florida refinance is not as arduous as it was even two or three years ago. The best way to find the most competitive mortgage or refinance rates is to do your own research and ask the tough questions. If you know what all of your costs are and have accounted for contingencies such as not being able to close within the original estimate or deciding to switch from a 30-year to a 15-year loan, then you will be able to complete a refinance in a reasonable amount of time and get the best rate possible. In the case of some first-time homebuyers, you might find a more favorable rate awaits you after a year or two of your first home purchase. Your credit history will have improved considerably with regular, on-time mortgage payments, and your score should have improved as well. Refinancing can seem like a long process, but when you consider the possibility of immediately saving thousands of dollars, both in the near and long-term, then refinancing at historic low rates becomes a no-brainer.
Have you done a refinance lately? What was the best part of the entire experience? Any tips to share for newbies considering their first refinance?
I was thinking about the way I used to feel about spending money:
“I have to buy a gift for my second cousin visiting for the summer”
“I have to buy new shoes so I can start stepping up my appearance at work.”
“I should take this person out for lunch”
“I have to go visit this person because it’s been a while.”
“I have to get my eyebrows done because I look like a disheveled bear otherwise.” (Wait, this last one’s still true and totally neccesary).
Each instance above is something that I used to regularly say to myself and then promptly be stressed out by the thought because I didn’t have any extra money. I was supposedly doing something thoughtful for someone, but I was doing it out of this overwhelming sense of obligation to people which mostly stems from me never, ever wanting to upset people. But it’s been about two years now where I feel a lot less obligated to do anything just because I think I should or it seems like the right thing to do. Instead, I try to do stuff because I want to or because it serves a definite purpose. I take a friend out because I just want to catch up and see how they are, not because I am doing an obligatory 3-month check-in. And I don’t have to buy anything when it comes to clothes and shoes- I have a packed closet and not having brand new shoes is not going to hurt my appearance (although those crazy eyebrows might). But the main point is, a lot of the stress we feel about money can be self-inflicted. We don’t have to do anything: you don’t have to spend a minimum of $50 per person on Christmas gifts, you don’t have to have a wedding with 150 guests, you don’t have to buy new clothes for work or a job interview.
One recent example made me laugh. My boyfriend has one of those powerful man-crushes on his iPhone. I personally don’t even like my iPhone (given to me by work) all that much. If I ever have to get my own smartphone, I want an Android. But he really loves his iPhone and I noticed that he cracked about 25% of the screen in July. He asked if we had an upgrade available. Yes, I said, we’ve had one since April. I thought he was going to go get a new phone. Two years ago when he shattered that iPhone, we were at the mall the next day getting a still-under-warranty replacement for $100. I remember feeling stressed because it was $100 we didn’t have and spent anyways. And you know what I saw yesterday? His cracked but fully functional iPhone still in use! By him! And this from the guy who used to spend hundreds, if not thousands (low thousands, I think) on a night out in Old San Juan or New York. He’s been insisting to me that he has embraced the frugal mindset, which I usually scoff at and point to his $5 Starbucks white mocha. But shoot. He doesn’t even seem to notice that he’s living with a cracked iPhone. He’s not feeling obligated to go out and buy a new phone because this one works just fine. It made my day yesterday. (Now just don’t go and contradict me by pre-ordering an iPhone 5!)
We all have feelings of obligation, some financial and some simply things we think we have to do. They can be a guide or a place to start, but living your life out of a sense of obligation will not allow you to be creative and consider all kinds of different paths. And you’ll feel resentment that you put there, not anybody else (I did this a lot). I only recently discovered Mr. Money Mustache. He shows people how to stop thinking in the normal, accepted patterns. And he’s having a blast.
What about you? Have you had any obligations that you created for yourself and later resented? Any changes in things in you think you have to spend money on?