Personal Finances – My Journey From The Beginning Up To This Blog Post

I am planning on continuing posting on my current situation financially.  I’ve had very interesting ups and downs.  More often than not at the very same time of course.  That’s what happens with finances.  Great things happen and you pay, right?  Bad things happen and you pay too.  Well, hopefully by reading this you will take the words of advice I will give and use them so that you don’t have to make the same mistakes I’ve made.

I’m 27 years old right now.  5 years ago, I owned a condo and rented a bedroom out to a friend.  I knew a lot about finances and that’s how I could own my own place when I was 22.  I was making about $36K a year then.  Many things happened all at once then.  My funds were depleted from a down payment and buying all the furniture I needed.  I guess you could say I was still living healthy.  I was very smart when it came to handling and investing money (was doing it since my parents could sign for me), but all my knowledge was to the tune of having money.  I was not knowledgeable when it came to not having money.

5 Years Ago – Started To Get Burried In Debt

Well, then things changed.  There were multiple things that hit me all at once.  Me and a couple friends went to Florida and we bought a timeshare (believe me it’s the worse investment on the planet).  Of course the salesperson conned us into thinking it was great and we could even make money off it.  This last week I finally got it completely paid off, but there are still yearly maintenance fees.  I’ve tried reselling it.  It didn’t work.  At this point, I don’t have hope for it anymore and I’m willing to give it away.  My friends still want it though it’s never been used.  I am thinking of getting a attorney to do a quit claim deed on it to take my name off, and leave it to my friends to stop the bleeding.  This was the first thing.

Second, a place gave me a check for $4,000.  An obvious mistake.  I told them what they did and they insisted it was mine.  At the same time, the escrow from my property taxes was paid to me, twice!  They wouldn’t take the second one back, and my escrow wasn’t claiming any negative amount.  So, I was leery of both these things.  Months past, maybe 4 months and by that time I thought if someone was missing money you think it would have been caught by now with all of the monthly statements and auditing that takes place.  So, I started to get things that I needed at that point.  The same month both of them asked for the payments back.  I had nothing I could do except put everything I could on credit and pay them both back with checks.

4 Years Ago – Big Time Debt

Immediately following this I got engaged and married.  Since both of our parents aren’t rich, we paid for most of the wedding, the rings, the honeymoon, etc.  I had no choice but to put this on credit.  We tried to keep expenses down as much as possible.  And then she moved in and had to find a job which took a while and didn’t help the situation.  About 6 months into being married we were $24K in debt.  And about 6 months after that, both our cars died… completely.  So, we leased two cars.  I knew buying was better, but all I could do was lease.  To this day, we have never missed a payment on anything, but it was hard at times.  We started paying off debt as much as possible, but we had no emergency fund, so any issue that came up had to go on credit.  I would advice having an emergency amount, regardless of how much debt you owe.  At this time, my FICO was around 625 – the lowest it’s ever been.

I started balancing amounts on different cards so the debt to available credit ratios were as low as they could be.  Now, this has changed from a single debt ratio per card being looked at to your complete debt ratio.  One thing that helped me was getting a Shaw’s Jewelers card.  They weren’t as strict and the gave me $10K available credit.  I never used it and it helped me greatly because now it looked like I was handling my debt better because of how much available credit wasn’t being used.

3 Years Ago – Starting to Look Better

Well, luckily, I set a budget and we stayed to it the best we could.  I started to make more money at work because a threatened to leave my place if they were not going to pay me what they said they would when doing a position change I never got compensated for and what anyone else was offering me.  I later left still because of the fact of being swindled for years and made more elsewhere.  We started to get a handle on everything.  We got the debt down to $14K in about a year and a half.

2 Years Ago – Bought a House

Then we decided to move to a house instead of a condo, and the payments were the same, but I didn’t anticipate all the extra costs.  More space means more heat and electricity, sewer and water, buying everything to keep a yard up.  I thought about these things, but didn’t think beyond say getting a lawnmower and a snowblower for outdoor work.  You need much more equipment than that.  So, when writing everything down on a budget it worked out, and I had a misc. category, but didn’t expect to miss so much that would be needed.  From the sale of the condo and buying our house, we were able to get down to $5K in debt, which then shot back up to $10K after all the house extras.  According to my wife’s logic, more rooms means we need more stuff.  Still $4K less than before the move.  After that I packed all the credit cards away.  They are not to be used anymore.  Some that have been paid off, closed my accounts because of inactivity (that felt good).

3 Months Ago Until Now – Moving Again

We ended up not liking the middle of nowhere (which my wife was use to as a child, but had in a few short years become accustomed to everything being so close in the condo).  Myself having grown up in the city, found the middle of nowhere to out of touch.  And we decided if we were going to think about having any kids later it would help to be close to family too.  Of course when we bought the house I made sure that the place was undervalued, so even in this horrible market we were able to get our money back on the house, but we didn’t make a profit.  Basically the realtor made our profit.  While we were selling the house some unexpected medical bills came up and insisted we pay them immediately (don’t they usually offer payments?).  That got tacked onto our debt bringing it to $11.5K.  In the midst of moving out and moving into a new place we stayed with my parents and got some of the debt paid off.

So, here we are today, in the middle of moving to a new house (our second house, third place) that’s close to friends, family and life.  Were’ getting a short sale (at 90% of it’s current bottom of the market value, and 75% of it’s fair market value).  We’re closing on it in less than a week.  We have $8.5K left in revolving debt.  I could pay most of it off at this point, but that would deplete our cushion money.  And I’m making more than double what I was when we got married.  My FICO score is now 800.  I will continue on our plan to pay off debt and should be debt free in a little over a year, and credit cards will be banished for good.  One will be kept locked up for back up, but I plan to never use them again.

The Future

I am now looking to create multiple streams of passive income now.  I studied real estate investing and attended meetings.  That is really what I would like to pursue in the future, using creative techniques to start out.  But, even though with creative techniques you don’t need much money in hand, I don’t want to get caught in the middle of something and not have the extra cash to hold me over.  I’m not about to make a mistake like that.

So, I’m starting out with internet marketing which costs pocket change to start and provides passive income also.  It’s seems fairly simple, especially since I’ve always been a computer geek.  That is my current job – being a geek.  I am starting to do this through adsense and some affiliate marketing.  I just started this month.

I am also pursuing building wealth through a great website startup (the first of it’s kind) and currently looking for sweat equity partners.  We will see which area will get most of my attention and hours, but I see it as tiers (internet marketing, internet startup, and real estate investing) based off of the initial investment and backup supply needed, but all 3 have great cash on cash returns.  Very little down and a lot back.

I will document my journey here.  I’m sure it will have it’s ups and downs, and I’m not afraid of sharing them with everyone.  I’ve made a lot of money off stocks in the past and can share a lot of knowledge there, even doing some daytrading, but what I’m focused on is passive income now.  I’m looking for certainty and not gambling or educated guesses like the stock market.

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