One more time

Many moons ago, I suffered a major set-back when the plumbing on my first investment property went haywire.  A lemon tree, the size of Mount Rushmore, was thirsty was decided my plumbing was a good source of water.  Tree roots extended almost the entire length of the pipe, from the house to the street.  Roughly 45 feet.

Once again my plumbing went haywire.

About a month ago, my cell phone rang with news from my tenants; their water wasn't draining.  The plumber snaked the line and sent a camera down to inspect what might have been the cause.  Nearly 30 feet of cast iron pipe looked good.  Four feet of clay pipe after that was broken.  When I asked the plumber how much to fix, he threw out $1750 without batting an eye.  Quotes thrown out with reckless abandon don't appeal to me.  For the moment, my tenants had running water so I wasn't pressed to have a repair job done right away.  I dismissed him and started negotiating with My Plumber.

The first plumber marked the spot of the breakage, which made it easier for My Plumber to find the busted pipe.  Within a few hours of work, a new pipe replaced it.  To test all the connections, we turned on the water in our house and in the tenants house.

Have you ever seen an underground waterfall?  I have now.

It appears whomever did the original plumbing on my new property was something of a Picasso when it came to laying down pipe.  Nothing artistic but definitely creative in a weird, sort of manic insane way.  Pipes cut into other pipes with no seal.  Rather than connecting, the pipes were shoved up against drains and literally buried in place.  When the My Plumber started to remove the dirt, the pipes started falling out.  I didn't know that cockroaches could live underground.  That was creepy.

At the end of the day, the extended repair work was only a few hundred dollars thanks to the generosity of my plumber.  I'm sure at some point he could have spanked me senseless, knowing that we needed to shower and use the toilet.  But he was cool, cut us a break, and was on his way.

This is now the second time I've had to pump money into a property where the plumbing was absolutely shot.  Next time I purchase something, I will have a plumber run a camera down the sewer line so I can inspect it personally.  It seems rather odd that both of my properties had major plumbing problems within the first two years of me being the owner.

Next time, I'll know better.

Weekly Budget - the better handle

One of my goals for this year is to get a better grip on my finances.  A friend of mine recommended doing a weekly budget instead of a monthly budget.  Monthly budgets never seem to work for me because try as I might, my reality never matches the projected monthly budget.

Why doesn't a monthly budget work for me?  I'm glad you asked.  My monthly budget shows, for instance, that I should have $500 left over at the end of the month.  But why do I find myself with three bills and yet only have enough money to pay two of them?  So I pay one late, or worse a check is overdrawn, and I'm suddenly paying late fees and overdraft penalties.  But my monthly budget said I would have $500 left over!

It's all a matter of when money flows in and out of of my checking account.  Let's view this from a weekly standpoint.

• Every other week, I get a pay check.
• Week 1 of every month, rent checks come in.
• Week 2 of every month, the mortgage payments are due.
• Week 4 of every month, credit card payments are due.
• Every week, $50 is spent on gas for the car.
• etc etc etc

To help explain this idea, please refer to the image on the right.  This is not my finances but something created for purposes of this article.  From here, you can see what time of the month certain expenses are due and more importantly when money comes in.

I built a sheet using Google docs.  Google docs has conditional formatting which means if my weekly checking balance ever goes below $100 then it turns yellow.  If it ever goes below $0, then it goes red.  This makes identifying problem weeks easy to find.

Here is where the power of this sheet comes into play.  Let's say that we are into Week 3 and the car breaks down.  Mr. Mechanic charges us $650 for the repairs.  A quick peak at our checking account shows that we have $1640 in our account so $650 won't be a problem.  We pay the $650, Mr. Mechanic screws us, and we go merrily on our way.  Later on when we plug $650 into the spreadsheet, the conditional formatting kicks in and we can see that all kinds of problems await us.  Click on the image to the left to see the impact.

You can see the advantage: you're in Week 3 but you already know you're going to have a problem in Week 4.  During Week 4, I only have four expenses: three credit cards and gas.  Well, I have to drive to work so keeping the car on blocks won't help.  So then I find myself having to choose which credit card won't be paid, which will bring about $100 or so in late fees.  Or should I abandon my goal of putting 10% into savings?

So what are our options?

• Delay putting money into savings by 1 week
• Pay minimum monthly payments on credit cards
• Wife and I can dine out for less than $100
• We shut off the cable tv in January, cutting the bill in half.

Within a few minutes, some simple decisions not only allowed us to pay all our bills but also maintain our goal which was to put 10% into savings.  The image on the right shows the few simple changes I made (in green) which allowed this to happen.

About 15 minutes every Sunday morning are all that's required to update the spreadsheet and see where potential problems may arise.  It also gives me a chance to think about possibilities of either decreasing expenses or increasing income.

Just in front of the wave

I apologize for not having something ready to go today.  Things are hectic at the moment.

I'll be back next week with more goodies.  I promise!

2009 Inventory

I'm interrupting the regularly scheduled program for my year-end review.

A good friend the other day asked me what I thought about 2009 overall.  One word came to mind: survival.

It was a tough year.

With the market as it is, just hanging on proved to be difficult for most people out there.  Or they just gave up, who knows.  More than a few times I thought about hanging it up, tossing the keys to the bank and just walking away.  But I'm stubborn, if anything, and thus my mentality has always been "If I go down then I go down swinging."

And I'm not done swinging.

The year was tough.  Every time I thought progress was made, I got smacked backwards.  It seemed every month brought a whole new set of challenges which required financial gymnastics in order to just make ends meet.  When I speak about challenges, the list starts with: broken appliances, car repairs, tenant moving out, plumbing problems . . .

Fortunately I'm surrrounded by a really solid group of good friends and a wife who tolerates my crazy life which speaks volumns of her patience and understanding.  She held my head straight when things got nutty.  And that's sometimes what I need.

When I look back at my goals I set for 2009, I realized that nothing there was ambitious.  Nothing was big.  Nothing listed could scared the crap out of me which in turn makes it crazy to even try.  But try I must and if nothing is there worth achieving I don't want to do it.  That's a fault but also one of my greatest strength.

As I look ahead into 2010, I can feel this year will be better.  It will be different.  And that spurs my optimism to new heights.

Cutting Cable Part 2: Plex Media Management

This is part 2 in my video series, regarding digital media management.

Cutting Cable Part 2: Plex Media Management from Clifford DuVernois on Vimeo.

Websites:

Plex:  http://www.plexapp.com

XBMC:  http://www.xbmc.org

Boxee:  http://www.boxee.com