My SHINY Nickels

Live Smart. Save Money. Retire Early.

I Learned My First Business Lesson in 7th Grade. It Wasn’t In The Classroom.

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Credit: abovethelaw.com

[It’s Randy this time around.  Occasionally he steals the keyboard.  Enjoy.]

In seventh grade I walked about a mile and a half to school on most days.  This was way back in the mid-seventies (yes, I’m that old).  Back in those days, the school lunch tray cost forty-five cents (stop looking so shocked, okay?  I already said I’m old!)  My mom would give me a dollar each day for lunch plus a treat at the school snack bar. This snack bar also served burgers, fries, hot dogs, etc.

But this “good” food was way out of my dollar-a-day price range.  I had to get creative.

Conveniently, there was a 7-Eleven on my way to school. I would stop in each morning and spend all of my lunch money on candy.  (Before you start judging, no, I didn’t eat candy for lunch.)

I bought it to sell.

Picking the Right Products

I didn’t buy just any candy.  I needed something I could buy fairly cheap and sell at a higher price, that would sell easily.  The perfect product was Now and Laters.  Do you remember those waxy fruit-flavored chews that last a long time?  Yeah, those.

They were perfect.  First, they were cheap.  I could buy a 7-piece pack for 10 cents.   Second, they were popular.  I would usually sell out long before lunch time.

Demographics, Supply and Demand

Who were my customers?  A whole bunch of kids with lunch money.  Sure they could get candy at the snack bar, but for that they had to wait for lunch.  Most kids barely got out the door with a piece of toast for breakfast.  So they were hungry long before lunch rolled around.  And hunger makes people do irrational things.

These kids were trapped at school with no other options until the snack bar opened at lunch time.  The snack bar did have some good options for sweets.  They had all kinds of pastry products and candy bars.  Most were at least fifty cents.

Now you may be wondering if other kids tried to copy my business model.  A few did, but they were never as consistent as I was.  I had a lot of loyal, regular customers.  (Did you read that?  A 7th-grader with “regular” customers.  I still find that funny.)

Pricing Your Product for Optimum Sales

So, what did I charge?  I broke the 7-piece packs apart and sold them for ten cents a piece.  Anybody can afford to spend a dime.  You could probably go for a short walk and find that much laying on the street.  My price was affordable and at ten cents a piece, I had potential to earn a $6.00 profit from my initial dollar.

I may have been able to double my price and earn a lot more, but hey, I was a kid and wasn’t thinking about higher profits.  I just wanted a snack bar lunch and money for the arcade on the way home.

What’s Eating Away At Your Profits?

In my case, it was me.  I had a backpack full of candy, I was a kid, so of course I’m going to eat into my profits. (In most cases, once I had sold enough to get what I wanted from the snack bar, I just ate the rest.  Again, I was aiming for the short-term game. Oh well.)  My favorite at the snack bar was Hostess Suzy-Q’s.  Remember those? They used to be awesome. The filling would be so thick it would run all over as you ate them. Now the cream is so thin you barely see it in the package.

The Lost Potential

Man, if only I had been able to see the business potential instead of just being satisfied with that darned Suzy-Q.  I could have scaled it up into a serious profit beast.  I could have branched out with multiple sellers where I would take half their profits for supplying the candy.  Can you see it?  I show up in the morning with a case of Now and Laters. Distribute product to my sellers. Collect my share of the profits at lunch. I would have been able to buy my own 7-eleven at 17.

But it’s not all lost.  Looking back, I see that I naturally fell into entrepreneurship without any outside influence teaching me how.  I knew I wanted the “good” lunches the snack bar offered. Getting my parents to spring for it wasn’t going to happen. It was junk compared to the school provided lunches.

I had to figure out my own way.  (There’s a reason why they say that necessity is the mother of invention.)

My mother has told me many times that she’s not surprised at all that I’m a business owner.  I guess I had the entrepreneurial spirit in me all along.

Check Out Our Guest Post Over at 1500Days.com!

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Truth:  I frequently get requests from other bloggers to guest post on my blog.

Another Truth:  I’ve never allowed anyone to guest post on my blog, and I almost never agree to guest post on someone else’s.

But there are a few rare exceptions to those rules.  If you want to post on my blog (or vice versa), I must know more about you than just your Twitter handle, and you must be super-cool-awesome.  (Bonus points if I’ve met you in real life.)

The married duo that blogs over at 1500Days.com easily passed those tests, and while we met because of a blogger conference, the friendship transcended the online space, and we count our time spent with them (and their kids!) among some of our life highlights.

Their blog is so entertaining that laughter will often leave my brain space and actually come out of my mouth.  They bring the full-on ugly laugh out of me.  Not only are they funny, but also super-smart, especially when it comes to money and toy dinosaurs (that last part will make sense if you start reading their blog).  They’ve also reached their million-dollar investment goal, so to say they’re inspiring is an understatement.

So when Mr.1500 asks you to write a guest post, you say “heck yeah!” and start writing.   He specifically asked me to talk about the launch of our other website, Laundromats101.com. (A resource website for people looking into ownership of self-service laundries or existing owners.)

If you want to check it out, the link is here:  My Guest Post on 1500Days.com

(One Last Truth:  My guest post was over a month ago, and I’m just now getting around to mentioning it.  So shoot me.)

Meanwhile, we’ve been working on some new posts!  Here’s what we’ve got in the works…

  • We have another online business on the horizon, that we’re pretty excited about…
  • We’ll divulge some details on how our first online business at Laundromats101.com is doing; the income, how we built it, growth strategies…
  • We finished a DIY major bathroom remodel; there will be before/after pics, construction details, you know the deal around here…

So stay tuned!

Change Is the Only Consistent Thing Around Here.

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identitycrisis

What can I say? We’re human.  We change our minds.

This last June, we announced that this blog would be moving in a different direction.  And that’s true.  But not completely.  Well, hold on, let me just start by giving you some backstory.

The Backstory

When we started blogging about our purchase of the laundromats back in November 2014, we started seeing some significant growth in traffic.  Then in March 2015, we posted “We Bought a Laundromat and It’s All About the Numbers“, and since then that little post has been viewed 70,000+ times (yeah, we were pretty blown away when we looked it up).

In fact, that one post has actually risen to the front page on Google when someone searches for information about purchasing a laundromat. (Go ahead, try it.  Open up Google and type something like “how to buy a laundromat” or “how much money do laundromats make”, and more than likely, we’re in the Top 5 and in some cases, we’re #1.)

Without even trying, we’ve become a resource for other people wanting to do the same thing we did; buy a semi-passive business and become laundromat owners.

That’s originally why we decided to change the direction of this blog. We wanted to give our readers more of what they wanted.  More laundromats.

Deep Thoughts and Late Nights

But…after a lot of discussion and research and some more discussion, we are giving the land of laundromats it’s own site.  I mean, when you think about it, who comes to a personal finance blog looking to start up a brick and mortar business?

So…we’ve launched Laundromats101.com!

new_logo_bottom_crop

We have spent the last few months working hard to build a site we can be proud of.  Our aim is to be the go-to landing spot for entrepreuneurs and investors interested in purchasing, managing and profiting with laundromats.

Since we published our latest guide to laundromat investing, sales have taken off and our own forecasts have been exceeded.  The website felt like a natural next step, and we feel really lucky that this opportunity to add another income stream to our portfolio has basically fallen into our lap.

So, What Does This All Mean?

This blog, MyShinyNickels.com, will continue to document our journey to financial independence; including our experience in earning income online.  The laundromat-oriented content will then move to the new site once we launch.  Since the book is producing a decent income, our goal is to make Laundromats101.com the free resource we wish we had when we started out ourselves.

So, if you want to find out more about owning your own laundromat, subscribe and bookmark our new site at Laundromats101.com.  To continue watching our journey to financial independence, and a behind-the-scenes look at building a website that produces income, stay right here at MyShinyNickels.com.

A Big Thank You

Lastly, for those faithful readers who have been here through it all…from the first post about our financial independence journey, through the “laundromat phase”, and now back again…

THANK YOU.

Thank you for sticking with this sometimes schizophrenic blog that has an occasional identity crisis.

Thank you for the opportunity you’ve given us to branch out and create something new.

Thank you for supporting us and reminding us why we do this.

We’re looking forward to continuing this blog and making it everything it was intended to be, while giving our “laundromat kingdom” it’s rightful place on the interwebs at Laundromats101.com.    Until next time…

Cheers!

randy_laura_sign

Yes, I’m Alive. Just Busy. But Here’s a Life Update.

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Let me start by calming your fears.  No, I wasn’t kidnapped by a drug lord.  No, I didn’t go off-grid and join a commune.  And no, I didn’t join the witness protection program and change my name to Consuela Banana Hammock.  (Only fans of the show “Friends” will get that last one, and, you’re welcome.)

I’ve just been, well, busy.  And, if I can be completely honest, I was a little burned out for a while.  Over the last few months, I’ve been swarmed with emails and blog comments, many saying variations of “I want to buy a laundromat.  Can you help me?”  Or worse, those that ask questions that I’ve already discussed in a blog post somewhere.  Urgh.

Some I’ve responded to, and some I haven’t.  I just don’t have the time to get to all of them.  And if I did, my kids would go unfed and I would start to look like Tom Hanks in “Castaway” from lack of consistent bathing.  (So if you wrote and I haven’t responded, I’m sorry.  Sort of.)

castaway

Don’t get me wrong, I love my readers in whatever form they come.  But after a while, I began to feel like “the laundromat lady”.  I was even starting to get quasi-hate mail that said “I wrote you a week ago, and you never answered me.  I need answers.  Are you going to respond???”  As if I owe people something.  So I stepped away for a while.

So What’s The Latest?

It’s the end of the year, so I figured it was time to give an update on life, finances, and laundromats.  I’ll start with the first one.

Life

Life is busy, but fairly normal.  I recently took a sabbatical (possibly permanently) from all social media.  It was taking up time and space that is better used elsewhere.  And two months in, I don’t miss it a bit.

Our second oldest turned 18 recently, and she now has a job, and the independence that comes with having her own car.  In fact, I’ve started calling her “Sasquatch”; I’m told she exists, but sightings are rare and undocumented.

And as you may remember from my last post, my husband Randy left his stressful, exhausting management job a few months ago, and retired at the age of 49.   It’s great having him home (and awake past 6pm), and seeing him so relaxed and rejuvenated.  He’s even started taking drum lessons, something he’s wanted to do for years.

As for me, I got a long-awaited promotion at work to Manager of Client Analytics.  Woot.

Finances

With Randy retiring, it meant going down to one income (mine), but our living expenses were already less than what I make anyway, and I make pretty good money, so it hasn’t been much of a change.  We do have less money for splurges than we used to, but I still wouldn’t change a thing.

As far as our progress towards financial independence goes, our savings have slowed down some.  When Randy was working, he was investing his entire paycheck, so the laundromat income has now had to fill some of that savings gap. But, we’re still investing some of the profits back into the business itself.  So once the laundromat remodel is completely done (we’re close!), we’ll be able to deposit more into our investment accounts.

And I still need to do a new Net Worth calculation to see where we’re at, but I’m admittedly a little nervous about the number I’m going to see.  But I’ll eventually put on my big girl pants and do it.

The Laundromat(s)

When I last checked in, we were in escrow to buy a second laundromat, located about 20 minutes away.  The seller was willing to carry the financing, and we were approved by the landlord to acquire the lease, so we thought things were fine and dandy and set to close.

But…then the landlord decided to dig into their toolbox, find a wrench, and throw it into things.  They wanted to change the way the water bills were handled for the shopping center, which would have increased the expenses for the laundromat by about $600 a month (resulting in a loss of $7,200 in net income annually).

They had no plans to lower the rent to compensate for the additional water expense, and implementing the billing change was taking f-o-r-e-v-e-r, delaying the purchase of the laundromat.  So after 5 months of waiting, with our cash sitting idle and uninvested, and no end in sight, we withdrew our offer.

But just a few weeks later, we found another laundromat for sale. Only 5 minutes from our house.  It’s a real fixer-upper, but we negotiated the price down to the point that we could pay cash for it.  (Details to come once we close escrow.) We’ve already been approved by the landlord to acquire the lease, and yesterday we wired the final funds from our investment account.  We take possession on January 1st.

We have plans to completely gut the place and bring in new (or new-to-us) machines, and perform a full cosmetic overhaul.  So I’m sure I’ll be sharing some dramatic before-and-after shots in the future as we remodel the place.  We’ve got our work cut out for us, and it will likely take at least 6 months to a year to get it all done, but we couldn’t pass up the opportunity.  It’s a calculated risk, and we hope that it pays off.

Well, I better wrap this up, I’ve got a holiday party to get to and I’m sure you’ve had your fill of me by now.  If I don’t pipe up again before the end of the year, have a safe, wonderful, thankful Christmas holiday and New Year.  2015 treated us very well, and I’m hoping that 2016 surpasses all of our expectations.

Until next time…

 

The Decision to Quit: An Interview with Mr.Nickels

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“A bad manager can take a good staff and destroy it,

causing the best employees to flee

and the remainder to lose all motivation.”

Last time, I talked about a major decision my husband had to make: Quit his job and let our savings rate take a hit, or find less toxic employment.  His job was slowly killing him, and our quality of life was suffering.  He didn’t like either of the options we discussed, so we created a third option: Buy a second laundromat.

But having him quit prematurely is a bit risky.  The whole thing could fall apart, our savings rate would tank and our early retirement plan would be in jeopardy.

But we realized it is no longer about early retirement, or savings rates or laundromats. It is much bigger than that.

He needs his life back.

But as I promised, I wanted to get his perspective on this whole quitting thing, and what finally pushed him from…‘I can last a few more years’…to…‘I can’t last another day’.

Let’s dig in.

Me: So, it seems like your job sucks.  What went wrong?

Mr. Nickels: Have you seen the movie “Horrible Bosses”? That title alone should clue you in.  Plus, working 50 to 55 hours a week is taking up too much of my life. And I have no time to have a normal life. I could deal with the hours and the shift, but combine that with the dismal working conditions and it’s no longer worth the money.

Me: If you quit your job, what are you most looking forward to?

Mr. Nickels: Regaining my life.

Me: What scares you?

Mr. Nickels: Being responsible for the destruction of our early retirement plan. I am basically retiring, but I don’t want to delay your freedom.

Me: What do you miss the most with your current job?

Mr. Nickels: Well, since I’m married to you, I have to say spending my evenings with you. I hate going to bed 4 to 5 hours before you do. I feel like I miss a lot of family time.

I also miss running. Before I took a job starting at 3am, I would run in the mornings before work. You know I love running on the American River Parkway. It’s less than a mile from our house, so many trees, and of course views of the river as I run. I can’t safely run at two in the morning and by the time I get home, I am usually exhausted.  How many times did you catch me dozing off while on my computer?  (Me: That is true.  You know those cute videos of kids falling asleep at the kitchen table, and they face-plant into their spaghetti?  Replace the spaghetti with my husband’s MacBook and you can imagine what I’d witness on a daily basis.)

Me: Why are you so worried about our early retirement plans?

Mr. Nickels: With a second store, we can pretty easily replace my income, but originally I wanted to use the extra income to build our retirement accounts that much faster. I just don’t want our plans to be in jeopardy.  I do believe we will increase our income even more when we start advertising, but as with anything financial, it’s not a sure thing.

Me: What caused the shift from ‘I can last a few more years’ to ‘I can’t last another day’?

Mr. Nickels: It was actually a few things, really.

We had just come home from our cruise to Alaska. It was Sunday night, and I was dreading going back to work. Actually, there isn’t a word I can use to really describe it. ‘Dread’ is the best I can come up with and I felt it all the way deep down in my gut.

I’d spent a week of quality time with my family; no stress, no boss, no early hours. Just knowing I had to go back to work was giving me a dull headache.

The feelings were starting to creep in…

…then within a few days of being back to work, I read the post “Yo Ho, Yo Ho an FI Life for Me” by a buddy of mine over on 1500Days.com.

He described how he was closing in on the finish line. He’d reached his million-dollar mark and was getting ready to pull the trigger and quit his job. He was looking forward to what the next chapter of his life would look like, and how he planned to spend his work-free days. He’s only 41!

And while his post made me deeply envious, it was also severely depressing. Don’t get me wrong; he’s my friend and I couldn’t be more happy for him. But it highlighted my own situation, making me think…“I can’t do this for another 5 years. It’s not fair to my wife, my health, my kids.”

I decided to comment on my friend’s post:

His reply “…and I’ll bet it arrives sooner than you think it will…” turned out to be almost prophetic. We didn’t know it at the time, but he was right.

So…with a taste of freedom, a job I hated, and a friend’s announcement of imminent retirement all occurring within a 72-hour window, I couldn’t take it anymore.

Something needed to change.

So I quit.

I gave my two-week notice, and on Friday, August 28th, I turned off my computer, pushed in my desk chair, and left work for the very last time.

The purchase of the second laundromat continues, and we should be closing escrow in a few weeks.

We’re taking a leap, and I couldn’t be happier.

Mr. Spock Would Say That Emotional Investing Is Not Logical

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[It’s Mr. Nickels at the keyboard today.  I may not write much, but when I do, I usually have something to say.]

The final tactic we used to get the price of the laundromat down to our purchase price of $105,000 actually started early last year.   In pursuit of that earlier investment, we developed a mindset that allowed us to negotiate from a position of power, by removing emotions from the equation.   Not only did we learn to project a ‘take-it-or-leave-it’ attitude, we actually believed it.

Because, as Spock would probably say, emotions are irrelevant.

Lets go back…..

We had a large chunk of money in investments and thought it would be smart to diversify and move some of that money into investments we had more control over.

Our first strategy was to try to get into the real estate rental market. We had a friend that was a retired real estate agent, so we reached out to her to find an agent to help us find the right property. Laura reached out to the agent and told him what we were looking for.

We wanted a distressed property in a middle class neighborhood that could give us nice returns. I also wanted the area to be decent enough that I didn’t feel like I needed to pack heat to go fix a toilet. We had a few houses that we wanted to look at, about 10 miles north of us.  A few days later we met up with the agent and went through the houses on our list.

On that first outing, all of the properties were more distressed than we were comfortable with.  Hmmm.

Where, Oh Where is Our Realtor?

A week passed and we hadn’t heard a thing from our realtor.  To say that he wasn’t helpful is an understatement.  But we had found a few more houses on our own that we wanted to look at so we called him again to set up a time to see them. On this trip out, we finally found the one we wanted to make an offer on. It was a duplex with a two bedroom-one bath in the front and a one bedroom-one bath in the rear. It was distressed, but nothing that we weren’t comfortable with.

When we went to look at the back unit, the gate to get in was locked. He couldn’t find the combination and I had to climb the rickety fence to get into the unit.  Laura refused to climb over, so we relied on my observations and pictures to evaluate it.

While looking at the property, our realtor gets a phone call and tells us he needs to leave. He tells us to lock up when we’re done. (Yeah, we thought it was strange too. And probably not legal. Whatever.) We decided to make an offer. We called up the agent, and he sent over the fact sheet with the property details.  (Remember that locked gate? Yeah, the combination was right there on the fact sheet the realtor had the whole time. No comment.)

The asking price was $97,000. We made an offer of $91,000 and crossed our fingers.

Our Realtor Sucks!

We found out that our realtor didn’t submit our offer for two days.  When he called us back, he let us know there was now an investment group from the bay area that was interested in the property too. (Of course there is.) We were asked to submit our best and final offer. The investment group made their offer sight unseen.

Unfortunately, or fortunately, we lost out on that property. We did find out later that our offer was technically higher than the accepted offer, but we wanted help with closing costs, and we can only assume they went with the deeper pockets.

When our realtor called with the bad news, he apologized for not being more active and attentive with us. He admitted he didn’t take us seriously until he realized we were actually going to make an offer.  (No, we will not be using his services again.)

In the end, I admit we were disappointed, but we knew if it was the right thing for us, it would have happened. There was no emotion involved.  We weren’t going to pay more than it was worth.  This was a totally different attitude than we’ve had in the past.

On to the Land of Laundry

We were moving on to better things….and along came the laundromat in our neighborhood. Early last year, the price was at $150,000. By the time we came into the picture, the price had dropped to $129,500. Our initial offer was for $119,500. Our offer was accepted and we moved into the due diligence stage of the purchase.

The Key to Negotiations…Research, Research, and More Research…and the Right Attitude

When negotiating, the more you know, the better your position. I’ve said it before, Laura is an information sponge. When she is interested in a subject, she will research it until she knows everything about it inside out. So why did we drop our offer to $105,000?  Laura noticed a sudden drop in the rent for 2014, but couldn’t determine why. It was actually the landlord that answered our question. He sent the seller an email and we were copied.

In the email, the landlord said that the seller would have to catch up on his back rent and late charges, as he hadn’t been paying his full rent for most of the year. Wait, what? Not paying his full rent? This was a little slippery on the sellers part, and it had quite an impact on our cash flow calculations.  (In other words, the annual net profit dropped, which means the value of the business went down too.)

I called our broker and sent the seller an email asking for an explanation. That happened on a Thursday, and we had plans to be away that weekend. (After months of nothing but laundry on the brain, we needed a mental break.) But now with the recent news, it wasn’t much of a mental break after all.

Anger Management

By that Sunday, we hadn’t received any response, and we were very angry about the whole situation (let’s face it, I was pissed!). We really thought this was the end of this journey. On Sunday afternoon, we went to a local coffee shop to relax before our drive home. I broke out my laptop and wrote a lengthy email to the broker.

Some key points I brought up besides the latest slipperiness (is that a word?):

We thought the laundromat had a lot of potential, but we would not pay for potential.

The current lease was above market rates. We had negotiated the renewal back down to market rates, but we still had to assume the stinky current lease and ride it out for three years.

In the industry there is a calculation for determining value. I presented our revised calculation, and made our final offer of $105,000. Take it or leave it.

And most importantly, we were not emotionally attached to being business owners. If this fell through, we would find another investment.

That attitude/thought process we had in the end was huge. We really were at peace with it and kept our emotions out of it. If it happened, great! If not, something better would come along. We were both totally prepared to walk away. Without that attitude, if we had let emotion creep in, we would have paid way too much and possibly struggled because of it.

We didn’t get a response until that Monday night, but our final offer was accepted.

Keep Calm and Use Your Head

As I write this, we are almost a month in, and all the numbers are right in line with our projections. It makes me think back to when we were deep in debt. Most of our spending was done with emotion and not logical thought. We have come a long way since then in how we view our purchases.  And we couldn’t be happier.

 

“Insufficient facts always invite danger.” –  Spock

Star Trek: The Original Series, “Space Seed”

We’re Getting an Unexpected Windfall…What Would YOU Do With It?

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Every once in a while, a sweet little cash angel may drop an unexpected gift in your lap.  Sometimes it’s just $20 from a coat pocket, or a crisp $100 bill laying on the ground (this actually happened to me).  But if you’re lucky, it turns out to be a whole lot more than that.

On Monday we received a letter in the mail.  It was from Kodak, my husband’s former employer, asking if he wanted to cash out his pension benefit.  It’s not a large pension, but it would have provided a fixed $6,600 annual payment once he turned 65.   Now they want to cash us out with a lump sum.

Hmmmm.  Interesting.

Turns out we have 3 options:

  1. Take the lump sum in cash (which means a 20% tax withholding and a 10% early withdrawal penalty)
  2. Receive the annuity as originally intended
  3. Take the lump sum and roll it directly over to another qualified retirement plan (no tax withholding or penalties)

So how much is this unexpected chunk of money they’re offering?  

$32,050.20

And with unexpected chunks of money, come decisions.

Decision #1

Take the lump sum in cash?  No way.  Uncle Sam will take 20% in taxes right off the top, as well as a 10% early withdrawal penalty because Randy is not at least 59 ½.  (And… we could still have a huge bill come tax time depending on which tax bracket that extra cash pushes us into. Ack.)

Leave things as they are and just receive a monthly check?  No thanks.  We can invest the entire lump sum ourselves, and get a better return than if we took the monthly annuity option.  So that leaves us with…

Roll over the entire lump sum into another qualified retirement plan?  Yes, please.

Why?

We don’t want a single cent to go to Uncle Sam…yet.   We want every dollar working for us, growing over time.  When it’s time to withdraw, the government will get their cut.  But for now, we want tax-free growth.

And in order to accept the lump sum without that tax withholding or the early withdrawal penalty, it must be transferred to another tax-deferred plan such as a Traditional IRA or a 401k.

Decision #2

Traditional IRA or Randy’s current employer 401k?

If we roll it over to a Traditional IRA, we can’t make (penalty-free) withdrawals until he turns 59 ½, but the IRA will allow us access to all of the low-fee index funds we want to invest in.  If we roll it over to his 401k, he can withdraw the money beginning the year he turns 55, but our investment options are limited to only those his employer offers.

So…drum roll…we’re going to take the lump sum and roll it over to a Traditional IRA.

We’ll have enough saved in other accessible accounts when we begin our early retirement that we shouldn’t need to access this money (or the money it generates) until after he turns 59 ½.  So we’ll open a Traditional IRA, invest the cash in solid index funds and let it marinate for a while.

The decision, for us, was fairly easy.  We looked at each scenario logically, and determined that we would get the most benefit from rolling it into a Traditional IRA.

Why I Am Telling You This Less-Than-Fascinating Tidbit of Our Life

As I said, the decision for us was pretty easy.  A little bit of math and a long-term wealth-building outlook, and we had our answer.

But the sad truth is that for others who find themselves with a lump sum of cash, the decision is made with emotions, not logic.  They don’t have the luxury of sitting back and deciding how this windfall could benefit them long-term.  They can’t see beyond next week,  let alone 5…10…20 years from now.

When your financial life is in chaos, you just take the cash (and the 30% tax/penalty hit) and run.  Maybe there’s unpaid credit card bills, or you’re behind on your mortgage.  So you cash out to get yourself back above water.  Or worse, you see a big shiny car/boat/thing-a-ma-jiggy that has your name on it.

(Now, just so I’m clear, if you’ve got debt, and your intent is to pay it down and become debt-free, then cashing out and paying it down (or off!) is the best thing you can do.)

But my real point is that when your financial life is in order, you can make the decision using logic, allowing that windfall to really work for you. 

A jumpstart towards building wealth.

So don’t wait and hope for a windfall to rescue you from your money troubles.   Get (or stay) debt-free now, so that if/when the sweet little cash angel drops a windfall in your lap, you can use it to really build wealth and be ahead of the game.

 

 

P.S.  Remember that $100 bill I found?  I was 18 years old, on vacation in Hawaii.  I was walking down a path to the beach at Hanauma Bay, and there it was, a fresh $100 bill just lying on the ground.  Not a soul was in sight, so I picked it up and stuffed it in my beach bag, with a grin a mile wide.

Fast forward to a few months ago, and I’m telling the story to my son.  With a look of excitement, he asked if I still had the $100 bill.  I told him, no, of course not, that was almost 20 years ago.  Then he stomped off and pouted, mad that I had spent it.  It was kinda funny, but I have to say I agree with him.  Sigh.

Thrift Stores Rule. But Don’t Buy The Underpants.

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Out of our four kids, there’s just the one boy. (Poor kid, surrounded in older sisters.) And he’s all boy. Dirt. Football. Boogers.

But even with all the dirt, football and boogers, you wanna know what’s super awesome about having a boy?

I can shop for his clothes anywhere I want, and without him present. 

The girls? That’s a different story.

Me: I bought this cute pink sweater for you today.
Girl Child: That’s not pink. That’s fuchsia. I don’t wear fuchsia anymore.
Me: You wore fuchsia yesterday.
Girl Child: I know. That was yesterday.

Clothes shopping with the girls requires large amounts of time, coupled with regularly scheduled 1/2 hour breaks, and a background in negotiation tactics.

With little dude, as long as there is nothing pink or ruffle-y involved, he’ll wear it.

So every fall and spring, just before the heat of summer and cold of winter hits Northern California, I make a stop at some of the nicer thrift stores in town to see if there are any good deals to be had before I head to the department stores to round out the seasonal wardrobe.

[Side note: Some folks are really freaked out by thrift stores. I was too, until I realized that the clothes they sell come from people like…me. I donate clothing to charities all the time, and where does it end up? Thrift stores. And I’m picky…I only visit the clean, organized ones.]

But this time, I scored big. In one trip, to the first store.

I found 5 pairs of name-brand basketball pants in excellent condition, and 5 name-brand t-shirts, all for the grand total of…

$32.33

It’s good stuff too…Puma, Quiksilver, O’Neill, Aeropostale, Adidas.

That’s an ENTIRE WEEK’S worth of clothes for a little over $30!

Moral of the story?  Thrift stores are awesome.

May the odds of finding something awesome be ever in your favor.  And avoid the underpants.

Do you shop at thrift stores? Like them?  Hate them?  Have you found anything amazing, or…um, interesting?

I Was Just in a Car Accident. And I Feel Fantastic.

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Yes you read that right.  Yesterday at about 5:19pm Pacific Standard Time, I plowed into the back of the car in front of me.  I claim only about 75% fault on this one.  (For the record, who accelerates into an intersection, and then suddenly comes to a smoking-tire, screeching halt???  Sorry, but that just had to be said.)

The other driver was in a steel cage otherwise known as a Jeep Commander, and I was in the Mercedes.  In case you’ve forgotten from my earlier post, my sweet little car looked like this the day I bought it.  Sigh.

June 2009 — The day we bought the Mercedes. I’m not sure what I was attempting to do with my leg here, but I guess that’s what I thought people did when they posed with their new car. Instead, I look like I’m missing a leg and that my torso is super-glued to the door frame. Fail.

The steel bumper of the Jeep ended up with a few tiny scratches, while my front grill crumpled in like a piece of tin foil.  It doesn’t look too bad, but something under my hood started smoking and I distinctly heard a “hiss” sound.  Hmmm.

So after getting out of our cars and doing the whole awkward “so-hey-our-cars-kinda-touched-each-other” back and forth, we pulled over and did an information switcheroo.  Thankfully, no one in either car was injured; my airbags didn’t even deploy.  And, the other driver was actually pretty nice and normal, so that’s a +1.

We parted ways, and the first thing I did was call my husband to tell him the news.

Then I called the insurance company.

The sweet lady over at Esurance laughed at my 75% self-proclaimed at-fault assessment.  I don’t know, maybe I thought between my sparkling personality and my insistence that the driver in front of me was a moron for accelerating and braking would help my cause.  Apparently not.

So, big surprise, I’m officially at fault, blah, blah, blah.  That’s not the reason I’m telling you all of this.

What struck me about this whole darn thing was that my first thought (after determining there were no injuries, of course) was that I had no financial worries.  $1,000 deductible?  No problem.  Replace my car?  We can pay cash for a new one.   Getting in an accident is already stressful enough.  Knowing you have an emergency fund removes that extra unnecessary layer of anxiety.

The only part of this that is a wee bit sucky, is that this is my very first accident.  Ever.  Tomorrow is my 36th birthday, which would have meant 20 years of driving accident-free.  20 YEARS!  Oh well.  Guess I’ll start that clock over again.

My point is that money in the bank is more than just…well, money in the bank.  It gives you the gift of calm.  It gives you the gift of sleeping well at night.  So within minutes of the accident, I already had a pep in my step, and a grin on my face.  Considering what had just happened, I felt fantastic.

So do your future self a favor, and make sure you have an emergency fund.  And, drive safe my friends.

MyShinyNickels.com RE-LAUNCH!

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If you haven’t already noticed, the blog has gone through a re-birth of sorts.  A few days ago, amid the eery midnight glow of my laptop and with my fingers ground down to bloody stumps, I rolled out a whole new look for MyShinyNickels.com.  What triggered this re-decorating of my little internet home?  Grab a chair, and I’ll fill you in.

It all began Thursday of last week.  My husband and I were headed to a financial blogging convention called FinCon, held this year in New Orleans.  I’m a relatively new-ish blogger, and until now it’s been a little side hobby of mine.  But Johnny over at JohnnyMoneyseed.com convinced me to give FinCon a try; he promised it would be extremely inspiring at best and a really fun 3-day long party at worst.

Sign me up, Scotty (er, Johnny).

To keep this short and sweet, the conference was so much more than I anticipated.  I left feeling rejuvenated, but a bit challenged.  Many times during those few days we were asked why we write.  What we want out of this still-strange concept called ‘blogging’.  For a while it’s been ‘that-thing-I-do-at-night-when-I-have-a-spare-moment’ kind of deal, but I’ve realized that has to change.

This blog is my outlet, and the work I do here is something I’m extremely passionate about.  And yet I was letting my work-life-blog balance go all whack-a-doodle.  Work?  Not much I can do about that.  But life?  There is plenty of wiggle room there.  I needed to start setting boundaries.  Boundaries that would allow this blogging passion to become a larger part of my life.  My readers deserve it, and so do I.

So before I’d even boarded the plane back here to Sacramento, my cerebral cortex was buzzing.  Soon I was scribbling notes on the backs of pamphlets in the airport, and even those cute little Southwest Airlines beverage napkins were no match for my chicken-scratch frenzy.  I’m sure I drove my husband crazy during that 4-hour trip…

Me: “So, hey hey hey, I have this idea.  I’ll change out the header image…”

Him: [looking up from his iPad] “Hmmm, sounds good.”

[5 minutes later]

Me: “Hey babe, what do you think about re-focusing the…”

Him:  [looking up again from his iPad] “Sure, that would work.”

[5 minutes later]

Me: “What if I changed the navigation of the site so that it…”

Him:  [s-l-o-w-l-y craning his neck away from his iPad] “Yup. Sounds like a plan, dear.”

This pattern repeated itself for the remainder of our flight, and the poor guy was patient the entire time.   Needless to say, I’ve made a lot of changes, and there is plenty more to come.  A blogger’s work is never done, they say.  [Not sure if that’s something anyone has actually said, but it sounded good.]

My hope is that even with this blog getting a new look and moving in a new (but similar!) direction, my loyal readers will follow along with me, while new ones join in.  In the past this has been a ‘get-out-of-debt-and-retire-early’ blog.  But if I’m really true to myself and all the things I’m excited about, this blog is destined to be a whole lot more than that.  My favorite low-cost recipes, super-cool life “hacks”, simple living, lots of juicy DIY projects, traveling on the cheap, and of course the stories and real-life blunders (enjoy a sample here) that my readers have come to rely on.

And sometimes God’s timing of things is eerily perfect.  As I was pondering the whole work-life-blog balance this afternoon, something very fitting caught my ear.  The television had been turned down to a dull rumble in the background, but I heard Steve Harvey (of all people) quietly say, “Work is what you’re paid to do.  Your calling is what you were made to do.”  That’s precisely how I feel about this little blog I’ve created.  Showing others how to pursue a fulfilling and blissful life while being financially responsible is what I feel called to do.  

And who knew…Steve Harvey may be the next Dalai Lama.

 

You know it’s funny.  Don’t judge me.