A Lesson Twice Learned

Three posts in a day. Been a while since I did that. Well, June is just about over. I end the month with about $2500 total which definitely doesn’t feel good, but at least everything is back to normal. Property Chi is habitable again and property Charlie is more or less stable, as Kylie Ray paid her rent for June. She also bought a phone that has unlimited minutes, so hopefully it won’t be a massive pain in the ass to get in touch with her anymore. She made me nervous when she asked what she needed to do in case she wants to move out. Shit. I guess that settlement check will be coming in soon for her. I can’t blame her though. If I had a settlement check for $16,000 coming in, I wouldn’t want to live in property Charlie either. When she leaves, I’m not renovating the apartment. I’m just gonna replace the carpet, paint where I can, and buy kitchen appliances. That should be good enough to get a tenant.

Ever since I bought property Charlie, I've made a ton of mistakes. One of the biggest mistakes I didn’t mention too much is buying the Acura MDX. Don't get me wrong, I love that thing. It's a smooth ride and it saves me a ton of money on gas. I filled it up last week Wednesday, and I still have enough gas to last me until tomorrow night. That's 10 days between fill ups, while the GMC Jimmy made me fill up every 5 days, 6 tops. But it took over $3,000 to get it like that. I should have financed a brand new vehicle instead of buying a car that has already cost me more than 10k. I should never spend over $2000 in actual money when I can finance or do some kind of payment plan. My saved earnings are what I use for buying properties, and I should have learned my lesson a long time ago. Let’s take the MDX for example.

I bought the MDX for 7500, and then had to spend 3200 in repairs. That’s $10,700 of down payment money gone. Had I financed a brand new vehicle, say a 2013 Hyundai Santa Fe (or even a low mileage certified used car), I would be making monthly payments of under $300 with a sizeable down payment (maybe $4000). Financing would have me at a $4300 loss, but with vehicle repairs covered under warranty. That would leave me with an extra $6,400 in of down payment money towards my next property. This is just like the instance when I spent that $6000 to pay the IRS back in April of last year instead of going on a payment plan, which would have saved me thousands. That $6000 combined with the $6400 I would have saved on the car purchase, and I’m looking at a $12,400 loss. With an extra 12k, I could buy property Delta by May or June of next year instead of October/November. That’s an extra four to five months of working these awful jobs added on by not taking care of my finances the right way. Ugh!

I’m spending my down-payment money way too much, and not taking advantage of the banks’ money is just stupid. The goal for me is to buy properties, plain and simple. Once the properties are bought, my monthly income goes up. As my monthly income goes up, I can pay back debts like the IRS or car payments much faster. By using my down payment money for large purchases/debts, it takes longer to get that money back and, therefore, longer to purchase a property. It’s the reason why smart millionaires never buy expensive things in straight cash. The rich man doesn’t pay 1M of his own money for a 1M house. He spends 500k for the down payment, then takes the remaining 500k and invests it in different things that can make the payments. Let’s say he takes the remaining 500k and flips a few properties that make him 750k. He can now use his profit to pay off the house and still have 250k to play with. THAT’S how one plays the game.

Old Roger Dodger’s got to get it together. I’ve had to learn this lesson twice already. And a lesson twice learned wasn't learned the first time. This had better not happen again.    



P.S.: You know, I've been harping on and on about mistakes I've made ever since I bought property Charlie. Maybe I'll feel better if I list some of the good investments I've done:

Traded in the previous lawnmower under warranty for this one. Greenworks 40V 20-inch lawn mower. Dual blades and all battery operated. That means no gas fill ups, no tune-ups, no real maintenance required. It cuts so well that I actually look forward to mowing the lawn. It's lightweight, holds two batteries at once, lasts for over an hour, doesn't throw grass all over the place, and it's very easy to clean. Cost: $430. Savings: Um... no immediate savings I suppose.

Bought this when the Africans of property Chi said that their bathtubs were clogged. The plumbing people that did the sewer vent repair wanted to charge me $345 to snake both tubs. So I paid $6 for this at the supermarket. I snaked the drain with that red thingy, and then poured the liquids into the snaked pipes. All fixed. Cost: $6.00. Savings: $339.

My new favorite snack. Only costs two dollars plus tax, comes with six bars, and has a ton of fiber and protein with only 7g of sugar. It's less messy than the granola bars I used to buy, and I can warm them up between meals as a nice hot snack. Cost: $2. Savings: Well, 24 granola bars in a pack costs $6.99. I'd have to buy 4 of these to make it 24, which would be $8 plus tax. I lose a buck, but get a better snack that's much more filling.

 Nope, still feel like crap. Oh well, it was worth a shot.