J.D. Roth, Author at Money Boss

Your Personal Board of Directors

by J.D. Roth on 28 April 2017 19 Comments

Real life has been a whirlwind recently. It sometimes takes me and Kim a while to make a decision, but once we do decide, we shift into high gear. So, after nine months of discussing the idea and another month of actual planning, we’ve spent the past ten days in a mad rush to prep our home for sale.

This morning, the listing for our condo went live.

Buying and selling real estate can be a complicated process. For one, it’s a major financial move — often the highest-dollar move the average person will make in her lifetime. For another, there are tons of legal considerations. Plus, there are always psychological and emotional issues to consider — even when you’re doing your best to make rational decisions like a money boss.

Fortunately, we have a Portland-area real-estate agent we trust. Andi — a former personal-finance blogger — helped me buy this place in 2013. Since then, Kim and I have become friends with her and her husband. Andi knows us. She drinks beer with us. She reads Money Boss. She understands what we value. She understands our motivations and goals.

Because of this, she’s not only able to help guide our hunt for a not-so-big house, but also to give us good advice about how to sell the condo. With her aid, we set up a series of checklists to guide our preparation. She tells us what to do when. She also does a great job of managing my neurotic tendencies during the process. We feel confident that Andi is “on our team”.

Your Personal Board of Directors

Andi isn’t the only person on my financial team. Over the past 25 years, I’ve built a small group of trusted advisors. If I’m the money boss — both the CEO and the CFO of JD, Inc. — then these folks are like my board of directors. They have specialized knowledge that I don’t. They help me make (and keep) more money.

Here are the other experts who sit on the board of directors for JD, Inc.: [Read more…]

The Quest for the Not-So-Big House

by J.D. Roth on 18 April 2017 51 Comments

Kim and I have spent the past couple of weeks hunting for a new house. While it’s true that we love many things about our current place — great neighbors, great neighborhood, great views, great walkability — we’ve come to realize that it no longer fits our lifestyle and goals.

When I bought this condo in 2013, I was newly divorced and newly dating. It seemed like a sweet bachelor pad. When Kim moved in, things weren’t perfect but we made do because the condo still mostly reflected our values. But something happened during our 15-month RV tour of the United States. When we arrived home, we realized that we had changed.

After living together so long in a tiny space, our condo seems ginormous.
City life, which had once seemed vibrant and exciting, now feels rushed and overwhelming.
We both crave the slower country lifestyle in which we were raised. We want space and time to do outdoorsy things.
Plus, now we have pets, animals that long to be outside instead of stuck in an apartment all day.

So, we’ve started shopping for a new place to live. Our ideal home is smaller (which, to us, means less than 1500 square feet) and on about an acre of land close to Portland. Finding a place with land isn’t as difficult as we thought it might be, but finding a smaller home is tough.

There are roughly 30 small homes on more than an acre in the Portland area. Of these, 21 are within our budget. There are more than 300 houses over 1500 square feet on large lots. Thirty of these are within our budget. (Overall, there are 604 homes under 1500 square feet available in Portland; there are 2396 homes larger than that for sale.)

The bottom line: Houses are huge nowadays.

Bigger Is NOT Always Better

How big have homes become?

According to the U.S. Census Bureau, the median size for a new home built in 1973 was 1525 square feet. By 2015, that number had jumped to 2467 square feet. During those 44 years, kitchen sizes have doubled, ceilings have risen more than a foot, and bedrooms have grown by more than 50 square feet.

But home sizes are ballooning even as households are shrinking! The average household had 2.9 people in 1973. In 2015, the average household had 2.5 people. Forty years ago, we had 526 square feet of living space per person; today, we have 987 square feet of living space per person — and that’s increasing every year.

This seems crazy. Why do we need such huge houses? What’s the point? And do homeowners truly consider the costs when they choose to buy big? A larger home doesn’t just carry a larger purchase price. It costs more to maintain. It costs more to light, to heat, and to furnish. For too many people, big homes are the destroyer of dreams. (I’m not joking. I truly believe this.)

This year, I’ve been running the numbers for my own life. It’s been surprising to find how much it costs for me to live in what is ostensibly a paid-for condo. With a $570/month HOA payment and a $6282.71 property tax obligation, I’m on the hook for nearly $1100 per month! Before utilities! To live in a place I own outright!

That’s too much.

So, Kim and I are searching for a not-so-big house. [Read more…]

March 2017 by the Numbers

by J.D. Roth on 14 April 2017 18 Comments

Here’s the third installment in my 2017 project to document my actual spending habits. After returning home from my year-long RV adventure, I wanted to get a feel for how much I spend each month. It doesn’t feel like I spend a lot — but is that feeling correct? This project is an attempt to document how Kim and I actually live. Once we have some real numbers, then we can start to make changes for the better.

Because I’m a nerd, I’m tracking more than just my money this year. In fact, I have a total of six different spreadsheets to tabulate different aspects of my life. I can tell you, for instance, that I gained 1.2 pounds in March — and I’m okay with that. (Kim and I did a lot of entertaining, especially around my birthday.) But I won’t be okay with a 1.2 pound gain in April.

Transportation

Here are my transportation numbers for March. In 2017, I’m tracking every mile I move in and around Portland. (I’m not logging mileage for out-of-state vacations or business trips; that’d be too complicated.) Here’s the spreadsheet:

March 2017 Transportation Stats

While January and February had similar numbers, March looked very different.

I walked more total miles in March than either of the previous months, yet walking made up a lower percentage of my total transportation. That’s because Kim and I drove to the Oregon coast to spend a couple of nights evaluating a potential rental property. That trip accounted for 248.8 of the 410.6 miles in the Mini in March. Without that adventure, things look relatively normal. (We have a trip to central Oregon this month, so that’s going to throw off numbers even more!)

Because of our weekend vacation, I averaged 21.05 miles per day in March (up from 13-14 in January and February). In March, I walked 4.64 miles per day (versus 4.29 miles/day in February and 4.40 miles/day in January). [Read more…]

Two Great Online Retirement Calculators

by J.D. Roth on 12 April 2017 8 Comments

By now you know that I’m picky when it comes to online retirement calculators. Most of them suck. When computing how much to save for retirement, they tend to focus on current income rather than current spending. Plus, many of them have other problems — like arbitrarily deciding that you shouldn’t save more than 40% of your monthly income.

CNN retirement calculator

Last summer, I shared five online retirement calculators that actually provide meaningful results: cFIREsim, FIRECalc 3.0, the early retirement calculator from NetWorthify, the retirement income calculator from T. Rowe Price, and Bankrate’s retirement income calculator.

Since August, I’ve discovered discovered two more tools that I’m happy to recommend. Today I want to share brief reviews of the Personal Capital retirement planner and the retirement planning tool from NewRetirement. Both of them are awesome. [Read more…]

The Joys of a Walkable Neighborhood

by J.D. Roth on 10 April 2017 14 Comments

Over the weekend, Kim and I began our hunt for a new home. We spent several hours combing local listings on Zillow and Redfin. We flagged the homes that looked interesting to us. Because I’m a total nerd, I compiled a spreadsheet of our absolute faves, listing important stats like price, home size, lot size, and — perhaps most important of all — walk score.

Househunting Spreadsheet

In the olden days, I picked my homes based on emotion. When my ex-wife and I bought our old farmhouse in 2004, that decision was rushed and irrational. I liked the idea of the place. I liked the large yard (two-thirds of an acre close in to Portland), the hundred-year-old house, and the cute hobbit-hole window in the living room. I didn’t consider the massive amount of lawnmowing and yardwork. And I didn’t pay attention to the fact that I’d have to drive almost anywhere I wanted to go.

A Driver’s Life

When Kris and I moved into that drafty old house, we did a lot of driving. At the time, I was still working for the family box factory. Every morning, I spent half an hour driving twenty miles to work. Every evening, I did the reverse commute. We drove to buy groceries. We drove to visit friends. We drove to go out to dinner. I did go for walks through the neighborhood, but those were leisurely strolls without any particular purpose.

After I chose to become a money boss, I paid closer attention to my transportation costs. I looked for ways to drive less and walk more. At the time, I found that 90% of my driving was to the following locations:

The gym, which was 8.5 miles (20 minutes) from home. It took 40 minutes to get there via a 2.5-mile pedestrian trail (which required illegally crossing a railroad bridge). I could bike the 8.5-mile route in 40 minutes.
The nearest town, which was three miles (ten minutes of driving) from the house. It took 48 minutes to make the walk and 18 minutes to bike.
The grocery store, which was one mile (five minutes driving) from home. Walking took me 15 minutes; biking took me six.
Downtown Portland, which was ten miles (20 minutes) from home. Walking took three hours (I timed it once!), but biking took just 45 minutes.

Based on these times and distances, I changed my habits. I still drove to Portland most of the time, and I often drove to the nearby town. But since it took no longer than driving, I started biking to the grocery store. And when I had time — which was almost always — I walked to the gym instead of biking or driving. (Every time I crossed that railroad bridge, I thought of Stand By Me!) [Read more…]