Accountant by Day

Becoming a landlord is a popular way to make some side income. Especially with the current low mortgage rates available, landlords who buy into the market now may realize the greatest benefits of their investment in the future, when the housing market has recovered, renters are willing to pay high rates for their property, while the landlord continues to pay the same low mortgage interest! Data provided by the National Multi Housing Council shows that over one-third of American households rent, rather than own, their dwelling.

My first mortgage payment came out of my bank account on May 1st. The required payment is $986.06 - $369.96 towards escrow, and $616.13 towards the mortgage. For this first payment, $200.38 went to principal, and $415.75 went to interest. Crazy to see how much I’m paying in interest per month… I rounded up to $1,000 each payment, so I am putting an extra $13.92 towards principal each month. According to the mortgage company’s “amortization estimator” my maturity date, if I make the required 360 payments, will be 4/1/2042.

Turns out that it’s a bit tricky taking photos while walking the dog on a holiday. People kept sneaking up behind us. Not too happy with the set of shots today, but here they are: Shady sidewalks are a must-have during the summer. Above, some dogwoods keep the sun off this patch of sidewalk.  A little weed growing in the community garden. A head of green lettuce in the community garden.

Keep this research in mind when you're out shopping. Signs for a SALE! can confuse your rational thinking. There are many ways to budget - I use a monthly budget divided into several categories of spending; RB40 and his wife give themselves weekly allowances; Jacob at Early Retirement Extreme pretty much just doesn’t spend any money. If your budget doesn’t seem to be working for you, and you reach the end of every month realizing that you blew your budget again and aren’t really sure why, don’t give up!

We don’t have a mentoring culture at the firm I work at. I suspect that this may be a wide-spread problem, but I’m sure that there are firms that do a better job at this. Evidence of lack of mentoring culture: Only 2 of the 6 partners on our team within the firm take staff out to lunch regularly. One of these partners takes people on his team, plus a random selection of other staff at least once per month during our non-busy season.

Merry Christmas to my fellow savers and accountants! Did you get everything you hoped for under your tree this Christmas? My sister and I had similar ideas - I made and dried homemade pasta as gifts, and my sister made chocolate truffles for all of us! We used almost the exact same type of containers to present our gifts in too! I gave my mother a book on setting up her new vegetable garden, which will used largely by me as I’m supposed to be in charge of the vegetables.

I love tweaking my budget and setting up spreadsheets of projections - how much money do I need if I retire at 65? How about at 45? How much house can I afford if I have a $10,000 downpayment? What if I save $20,000 for a downpayment? Sometimes I find myself wasting hours of the day coming up with a “better system” to track my cash flows. I know some people save every receipt and enter each one into Quicken or Excel each week.

I would love to have nothing on my desk but my monitors, keyboard, mouse, and tea mug. However, I am sorry to admit - I have a messy desk! I collect sticky notes with note on them, pens and highlighters and pencils. I have unfiled papers, and papers for which there exists no file. On my bookshelf I have old Master Tax Guides that were there when I moved into the office, and which I have never used because there is a digital version.

So, I wrote in December that my monthly escrow payment would be dropping in March, and that I had 14 more months of prepaying $575 a month so that PMI would be dropped. Since then, I’ve learned that PMI won’t be dropped until I get my mortgage balance down to the required amount AND I have paid PMI for 5 years. So even if I got the balance down next year, they wouldn’t drop PMI for another year after that.

I wrote a draft mortgage update post in March, summarizing total payoff since I bought my house 2 years ago in March 2012. I was so depressed by how little I have paid off that I never ended up posting it. I have increased my prepayments even more since then, so maybe it’s time to take a quick look back now. My balance started at 133,039 in March 2012. I paid only 3.