Financial Freedumb and Brownie

So sitting in a shoebox sized box next to my desk are all my receipts over the past few months. I usually shred them, but that takes way too long although my dog loves chasing each set of papers I send through the shredder…Trying to rip a piece of the paper before it makes it in is like a game for him. I tried making a fire, but that’s just too much of a mess and takes too long. Maybe I should just put all my receipts in Brownie’s crate so he can rip them apart. Haha…That’s an idea I never thought of. Seriously, what to do? I’m debating just tossing them in the trash. I mean they only have the last 4 digits of my credit card number now.

For expensive purchases, I’ve been scanning receipts and storing them on my computer. So much less clutter…well I still end up keeping the paper receipts lol. I guess my thinking is that since I’m so disorganized, the chances of finding my receipts are greater by having them in two locations.

What do you do with your old receipts? How long do you keep them?

How much is living in a certain location worth? The weather, the people, the culture, the activities available, the neighborhoods, the schools, the history between you and the place you call home…how much is it all worth?

In my post, “My Home: The Budget Is Set” SingleMa makes an interesting comment:

Depending on where you live, you may not have a choice, but my first thought when I read this post is…Dang, that’s a lot of money to spend on your first house!! 

Yes, it is a lot of money, and I do have a choice. We all do right? What if I moved to another island? What if I moved to another state? What if I moved to another country all together? In the end it does come down to how much home really means to me.

I couldn’t imagine moving away permanently. And it’s not that I haven’t tried because I have lived away from home for 4 years. I’ve been there and done that. So I do have a choice, but my choice is to stay here. It’s my home. My friends, my family, the people, and the food! Priceless.

Taking a deeper look into my future home purchase, I realized I need to think about specifics…the financial specifics. I wrote about my realistic dream home earlier, but with my current income and savings, what can I really afford to purchase without affecting my standard of living, my emergency fund, and being able to fund home improvements and other fees associated with home ownership?

Considering my current liquid assets of about $100,000, I’ll make an assumption that I can save about $30-50k more in a years time–when I plan to purchase. This is less than my current year-end goal of $100k, but I’m going to assume I don’t make my goal to be conservative. This means I should be able to comfortably afford a downpayment within the range of $110-130k. This would leave me $20k of cash on hand. One of my requirements is a 20% down payment, so the homes I can purchase would be $550-650k. In Honolulu, HI, that doesn’t leave me much to choose from.

During my prequalification, I was given the okay to purchase a home up to $700k with a $70k deposit assuming I use a 80/10/10 loan.

1st Mortgage: $560,000 (30yr fixed)
2nd Mortgage: $70,000 (15yr fixed)
Deposit: $70,000

There’s no way I’m going to do that. In some ways, I wish I didn’t see this loan because it makes the “bad decision” even more possible.

So the bottom line is I know the price range of homes I can afford, which is $550-650k. I’m going to stick to this range. Unless some ridiculous mansion is available for 800k…then maybe I’ll stretch.

I’ve decided to start a new series called, “My Home.” In this series, I hope to detail the steps I’m taking to purchase my future home including anything and everything I learn along the way like researching other bloggers posts, online house hunting, the mortgage process, including mortgage rates and closing costs, and whatever else I have yet to discover. This is my first home so everything I learn is new.

I’ve written posts on my ideal practical home, some classes I’ve taken on the purchasing process, pre-qualification, a ‘home buyer’s checklist,’ and the role of the realtor, but everything is disorganized, and I think it would be beneficial to record the process for my future reference and for my readers. For all posts in my series, just click here.

Without your input, this endeavor would be pointless, so please criticize and comment, good or bad, on anything and everything. That’s one of the awesome benefits of blogging, reader participation.

Really, it’s that easy, if I say buy ABC. Sell it! If I say sell XYZ, buy it! That’s usually the case when I invest. Trust me you could make fortunes by doing exactly the opposite of what I do.

Everytime I decide to sell or buy stocks, the stocks usually do exactly the opposite of what I expected. For example, take Sony (SNE). I bought at around $35.00, held on for over a year, and finally sold in Dec 05 @ $36.00. Immediately after I sold, SNE shot up to $50 in 2 months. Another example, Hawaiian Airlines (HA). I bought HA in Jan 06 for $3.50 and sold about a month later at $3.40. A loss. Just 2 months after I sold, HA shot up to $5.00!

Now let’s hypothesize about my asset reallocation plans which were scheduled to occur on May 1 but didn’t…had I bought 100 shares of each stock…Would my normal investment trend hold true? I would not be shocked to find out that I would have gained 10%. Or would my luck be changing and my portfolio be negative? Highly unlikely.

For the sake of simplicity, 100 shares of each stock is much easier than calculatting the same dollar amount of each stock…so here goes…

today’s value / # shares / $amount / may 1 value / $change / (%)

IBM
80.02 May 22 100 $8,002.00 81.93 -$191.00 (-2.33%)

RTN
46.11 May 22 100 $4,611.00 43.69 $242.00 (5.54%)

VZ
30.79 May 22 100 $3,079.00 32.81 -$202.00 (-6.16%)

WMT
47.35 May 22 100 $4,735.00 45.77 $158.00 (3.45%)

GE
34.07 May 22 100 $3,407.00 33.89 $18.00 (0.53%)

MMM
83.73 May 22 100 $8,373.00 80.97 $276.00 (3.41%)

DD
42.38 May 22 100 $4,238.00 43.30 -$92.00 (-2.12%)

PG
54.28 May 22 100 $5,428.00 56.60 -$232.00 (-4.10%)

JNJ
59.86 May 22 100 $5,986.00 57.91 $195.00 (3.37%)

Hold your breath! I would be up $172.00 (0.36%). But wait, subtract commissions, (9x$7=$63), and my gain would be $109.00. Wow! Had I invested, my luck would have changed! Rrrright, just hold on until next month, when I check it out again…Oh, I’ll probably be down a couple grand. Hah. Wow, $1000 on black please! Place your bets on red! Trust me.