Mid Year Update on 2013 Goals

Publicly posting my intentions helps me stay accountable.  I list my goals, past and present, here.  Let's review my plans for 2013:

• Lose 30 pounds. Start: 230 Current: 233

 My weight hasn't really changed.  After some initially encouraging results following our move to Clearwater in August, I've struggled to control my eating.  I am happily much more active now and exercise on my bicycle regularly.  But I still have a sweet tooth.

• Increase net worth $75,000. 

My net worth goal will be met because of the inheritance I am receiving, but the intentions of my goal were to grow my existing assets by $75,000.  Excluding the inheritance I am only up about $15,000.  I am falling short because of unexpected expenses and vacancies at my rental properties.

• Reduce utilities expense 10%.

While cutting my utilities is a noble goal, I think there are other areas in my financial life that make a bigger impact to my future.  In the first half of 2012 I spent $274.22 on electricity and $137.36 on gas (TOTAL:  $411.58).  In 2013, I spent $383.93 on electricity.  We do not have gas at our Florida home.  We have slightly reduced our usage but not by 10%.  I will probably scratch this "goal" and just be mindful of our spending.

• Reduce debt to $350,000 (or $300,000 if my tenants exercise their lease-purchase option.

Since most of my inheritance is in a Beneficiary IRA, I will keep my debt reduction goal as is (although I did use nearly $20,000 of the inheritance towards debt reduction).  Currently my total debt is $366,334, a reduction of $30,982 from 12/31/2012.  I will meet this goal by yearend.

• Purchase one piece of real estate. 

I am currently in the market for my next rental property.  I'm not aggressively pursuing this goal, but just last month I looked at a couple properties.

Meandering Home

What a week it has been.  Since last Wednesday I have earned over $1,200 from mystery shopping.  Tonight I checked into a motel in rural south Alabama; I will make it back to Clearwater some time tomorrow night.

The foundation of the shops were vehicle service visits.  I have completed 14 and will do the final 2 tomorrow.  The scheduler who helped me with creating the route has already asked if I would be up for another trip in the next couple of weeks.  Most of the visits have been easy.  At one of the shops the mechanic broke off the metal stud that holds one of the bolts that secures my tires.  Even though it almost certainly was due to the mechanic's power tools, I ended up footing the nearly $100 charge to replace the stud.  I tried to get reimbursed for that but the mystery shopping company said "No go."

I've done several other shops to fill in my time and may have even more deadline gas stations to do on the way home.  I am waiting for the company to approve my incentive request.

Of course, I put this trip together because one of my tenants passed away and I needed to work on that property.  Her fiance is someone I have known for quite some time.  He doesn't have many options for alternative housing but does understand he cannot stay at the house.  The whole situation is complicated, but I am helping him out and will leave it at that.  Seeing his emotional state (and accompanying tears) brought out my softer side.

Nonetheless, I have to return soon to continue working on the townhouse.  This eight day trip was enough for one time and I am ready to be home, even if only for a few days.  I imagine next week I will cobble together another route and make it back to Birmingham, but nothing is concrete right now.

End of Quarter = Mystery Shopping Road Trip

The middle part of June has been dreadfully slow, but I suspected there would be a pickup in activity as the second quarter comes to a close.  I am leaving this morning on a combined mystery shopping/rental property road trip.  I won't return home until Wednesday of next week.

The foundation for my trip will be tire rotations.  Sixteen of them.  Each shop has been bonused for a  fee ranging from $66 to $86, plus full reimbursement for the service.  I like these shops for two reasons:  first, the shop usually includes a free multi-point inspection of my vehicle.  Ever needed a second opinion?  Well, I am getting 15 second opinions.  It lets me know if there are any valid issues that require repair.  Second, the shops are at car dealerships, most of whom offer free Internet.  While waiting on my vehicle I can usually complete a large part of my report on site.

I am also completing several gas station audits.  My goal will be to get free gas for the entire trip.  I will pick up other shops as I stumble upon them.

The reason I was able to create this route was because I need to go to Birmingham.  I'm beginning to really dislike managing my rental properties remotely, but I am committed to doing the best I can to keep happy, paying tenants in my houses.  One of my tenants passed away earlier this month, so I have the unfortunate task of cleaning out her townhouse and getting it ready to rent again.  She died in the house, so I am hoping there are no stinky surprises waiting for me.  Her boyfriend, a long time acquaintance of mine, was there when it happened so fortunately the coroner removed the body promptly.  Needless to say, that property is getting all new floors, new paint and a thorough scrubbing.  I have never dealt with this type of situation but I know if I were looking for a new home I would be especially concerned with cleanliness after such an event.

Customer Impact - A Mystery Shopping Company that Gets It

I have been shopping with Customer Impact (http://www.customerimpactinfo.com/) for several years.  In 2007 Marketforce purchased a company called Speedmark, but they were mostly interested in the national chains.  Three principals from Speedmark broke off to form Customer Impact.  They took the regional chains with them, which happened to be concentrated in the fine dining sector.

The company uses the Sassie software platform, which is one of the most widely used mystery shopping reporting systems.  Payments are made via Paypal near the end of the month following completion of the shop.  From what I can tell, shops are offered throughout most of the United States.

The company provides a fee with all its shops.  These days, many restaurant shops are offered as reimbursement-only, but you can always count on a fee in addition to your reimbursement with this company.  It's a gentle nudge that reminds you how valuable your report is to the client.

Narrative is required with the reports, but it's nothing out of the ordinary.  The editors are thorough but fair.  They expect a solid report, but won't berate you if they have to contact you about something you forgot to include in the written report.

I wanted to point out something that happened to me recently.  I completed the first shop at a restaurant for a small chain they just added.  The chain's other locations offer full service dining during the lunch hour, but the location I visited provided counter service.  Having never dined at the restaurant, I had no idea until I got there.  I proceeded with the shop anyway and submitted my report as best I could considering it was drafted for a full service experience.  A staff member from Customer Impact contacted me, apologizing as they were just as surprised as I had been.  He asked if I could help with some additional information so that they could revise the report to be more relevant to the venue.  I was not required to re-enter my report.  Instead, the contact phoned me and asked me about the restaurant and my experience.  When my shop was evaluated, I received a 10/10 AND a $5 bonus (on top of the $12 fee) for the additional time I provided to clarify things.

Customer Impact treats its shoppers right while providing solid work for its clients.  As more and more companies provide a watered-down "commodity" product, it's refreshing to see there are others who treat their shoppers and clients like partners.  Strong partnerships always yield better results.

I Sold My Car to Carmax (again)

Should I sell my car to CARMAX?  Should I sell my car on ebay?  Should I sell my car on Craigslist?  These were the questions I asked as I prepared to sell my 2007 Toyota Corolla.  Back in 2011, I sold my 2009 Pontiac G5 to CARMAX.  I knew from that experience how easy and straightforward the process is:  bring in your car and a sales consultant will ask you a few questions.  Then an appraiser will test drive the car and look it over.  You will have a firm offer in less than 30 minutes that is valid for 7 days.

As I debated how to sell my car, I focused on a few considerations:

• What does Kelly Blue Book say my car is worth?
• How much effort do I want to put into selling the car?
• What if the buyer changes his mind and I have to deal with that headache?

Before taking the car to CARMAX, I went online to review the estimate KBB offered.  They have a Private Party Value as well as a Trade In Value.  I don't see why it is necessary to have two; the difference between them is comprised of the dealer's costs and profit for taking your car and selling it for you.  If I sell to CARMAX, I don't have to deal with out of state buyers, ebay fees, multiple test drives, or preparing the car to sell.

Obviously the next big item is price.  How much is my car worth?  The Corolla has been a real workhorse.  175,000 miles in little more than six years.   The dealership I bought it from wrecked it back in 2007 (just a few months after I bought it), so there was some damage that had to be repaired.  I ran under a chain gate once, snapping off the antennae, scratching the windshield (which is now cracked) and damaging the roof.  A friend of mine burned some cigarettes in the roof when he was drunk.  It's mechanically in excellent shape, but aesthetically she's pretty ugly.

Based on kbb.com, the Fair Condition value for Trade In is $2,382.  The Fair Condition value in a Private Party transaction is $4,032.  I was offered $3,000 by CARMAX.  I accepted.

Quest for Motivation

I did a route of gas station mystery shops in Tallahassee yesterday.  I booked a cheap motel room for the night and am headed back to Clearwater this morning.  I have an oil change shop to do on the way.  It pays a $20 fee and reimburses for the oil change.

One of the reasons I put together this little trip was so that I could have some windshield time.  My boss at the software company turned me on to that.  Where else can your thoughts and dreams go uninterrupted than in the confines of a car, driving 250 miles of mostly nothingness?

Lately I have been overwhelmed by annoying tasks.  They shouldn't be annoying, but I guess anything you don't want to do but have to do will be that way until you get the job done.  At home I have been trying to repair the S-10, whose Check Engine light won't cut off.  I replaced a couple of oxygen sensors.  There is still one old sensor left to replace, which I've been putting off because of how hard it is to get to it.  If that fails to rectify things, I may need to replace the catalytic converter.  Lately I've debated just taking the truck into the shop.  There is no easy way for me to diagnose the exact problem (only that there are about 5 possibilities) and I am ready for it to be done.

Then there are the rental properties.  Those have quickly been spiraling downhill.  It started with having to evict my deadbeat tenant.  Several thousands of dollars in repairs and upgrades later, that townhouse is now listed with a management company and is ready to rent.  Of my five townhouses, I have two tenants who have fallen behind on their rent.  I'm not ready to give up on them, but not having that income is definitely annoying.  The condo I just rented is another situation which I may explain later.  I want to give my new tenants the benefit of the doubt, but I feel I was mislead when I rented to them.  To top it off, one of my tenants died last week. I knew her well - for all the wrong reasons.  Her only salvation was she was my only Section 8 tenant and the rent was always paid on time without hassle.  Unfortunately, her boyfriend, who doesn't work, seems to think it is okay to continue living there.  Since I have known him for nearly 15 years and he has helped me with physical labor from time to time, I don't want to just kick him to the curb.  I feel like I should at least help him get into a shelter.  It's complicated.

I probably just need to get off my butt and get to Birmingham.  Easier said than done.

My Frugal Miser - May Income: $31,518

May was a great month for income thanks to a rare windfall.  I received part of my inheritance, most of which I used to pay down one of my mortgages.  In fact, of the $19,900 I received after taxes, I used $17,600 towards one mortgage and the balance to pay other debt.

I had one empty property which is now available to rent.  I decided to spend a fairly significant amount of money in May on improvements, and am trying to get an extra $50 in rent based on those improvements.  I hardly did any mystery shopping and virtually all the income was from previous months.  This will show when I report my June mystery shopping income.


May Income

$2,149 Mystery Shopping
$7,043 Rental Income

$22,326 Other Sources

$31,518 Total Income for May

Notes:.  

• I don't include transactions in my retirement accounts.  This includes rental income, dividends and capital gains and losses.
• I include merchandising and hospitality work in the mystery shopping category since the companies that I shop for provide this extra side work. 

My Frugal Miser - May Expenses: $17,470

The month of May was painful.  I spent a significant amount rehabbing the vacant townhouse.  Much of this was an investment that should save me money over the long term.  For example, I replaced the carpet with laminate.  I also ripped out the linoleum in the bathroom and replaced it with ceramic tile.  Another large expense was for property insurance, which will be spread over May and June.

I wanted to keep my personal expenses under $1,500 in May.  I failed.

May Personal Expenses ($7,750)
Note:  $4,690 is directly related to Grandfather's Estate.  Excluding those, my May Personal Expenses would have been $3,060

$506 Auto ($143 for parts, $363 for fuel)

$44 Bank Fees
$10 Clothing
$98 Entertainment (movies, gambling, alcohol)
$231 Food
$10 Gifts Given

$525 Household/Housing/Home Repair
$159 Health and Dental Insurance
$0 Investment Expenses

$0 Medical/Dental
$2,469 Miscellaneous
$0 Personal Care

$12 Subscriptions
$2,221 Taxes

$95 Utilities
$1370 Vacation and Recreation

May Business Expenses ($9,720)

$1049 Mortgage Interest (rental properties)
$113 Interest on Debt (not including Mortgage Interest)
$8,558 Rental Properties - Maintenance and Repairs


Total May Expenses : $17,470

Notes

• I don't include principal payments in my expenses, only the interest portion of the monthly mortgage bills.
• Most of the Miscellaneous expenses were incurred on behalf of my grandfather's estate.  I had to retain a lawyer to settle probate, insure my grandfather's house, and pay for lawn service.
• The only vacation expense from May was during my visit to Omaha for the Berkshire Hathaway meeting.  I also spent $392 for a cruise we are taking at the end of September and $848 on two plane tickets for a trip to Las Vegas at the end of July.
• My rental properties cost me more than they brought in.  I spent $2,921 on insurance (more to come in June), $450 on a special assessment towards a new roof for the one condo I own, and more than $5,000 on improvements at the vacant townhouse.
• If I go through with my plan to sell the Corolla, my transportation budget should benefit significantly.

Bought a Scooter, Selling the Car

Piaggio Fly 50

If you asked me a month ago I would have told you I was planning to drive my 2007 Toyota Corolla until the wheels fall off.  But now, I am close to pulling the trigger on selling it.

I wouldn't be going completely carless, which is why this decision is easier to make.  My grandfather, who passed in April, owned a pickup truck that will be put in my name soon.  I don't need two cars, and having a truck is beneficial with my rental properties.

The next logical question you might ask is, why not just sell the car, keep the truck and be done with it?  Why do you need a scooter?  I want a scooter.  There, I said it.  Even the ultra frugal have material desires from time to time.  But from a practical standpoint, it also makes sense:

• The truck has terrible gas mileage - only clocking about 20 MPG on the highway and less in city driving.  My Piaggio Fly 50 averages 114 MPG. If I drive 100 miles per week on the scooter instead of the truck, I will save about $15/week on gas.  Annual Savings:  $800+  
• It is a 2002 model, so there is the cost of upkeep as well.  I estimate that upkeep on the truck is about $.20 per mile while the scooter is closer to $.02 per mile.  Based on 100 miles per week, the annual savings are $936.

My out the door cost for the scooter was $2,600.  That includes taxes, title and other government fees.  In less than two years the thing pays for itself.  As a bonus, I expect the proceeds from selling the Corolla will cover the cost of my scooter.

If that weren't enough, I'm even toying with the idea of selling the truck once the title is transferred to me and going vehicle-free.  There is an Enterprise within walking distance of my house, so why not just rent a car as needed?  Before I go that far I will have to do a cost-benefit analysis to make sure this makes financial sense.