Help a reader out

Got this letter from a fellow PDITF reader….

My husband and I own a condo in the SF Bay Area. We bought a 1bd condo at what (we thought) was the bottom of the market (sad face). We’re currently under water on the place about $30-$40K. We recently started snowballing our debt and the only remaining debt is about $3k of student loans due to be paid off in the next 2 months or so. Here’s our dilemma: after building 6 mo. of expenses in savings, should we:

1) start paying off the condo? Keeping with our current snowball amount ($3k) we could have the joint paid off in 2016! Problem is, we also plan on having children in the next few years and the maximum time we’ll live here is about 4 more years (although we’re open to using as a rental property), but we will likely stay in the area.


2) start saving the 3k/investing the 3k? We are embarrassingly naive about investing in general and have no stocks/bonds/MM accounts other than our 401K…

We just don’t want to pour money into a house when we know it’s not our long term home, but we also want to make a savvy financial decision.

Advice from you/your readers would be hugely appreciated! Many, many thanks!


The first thing that stood out to me about Courtney’s letter was this: “We are embarrassingly naive about investing in general and have no stocks/bonds/MM accounts other than our 401K”. Girl, it’s time to get educated and start investing. You need to have, at minimum, a basic understanding of the different investment vehicles available to you. That way YOU can decide if you’d rather invest or pay down the mortgage. You can’t make a decision until you know what all your options are.

I’m a fan of Vanguard mutual funds. Some love bonds. Others invest in individual stocks. I’d recommend scowering some PF blogs that really dive in to the ‘meat and potatoes’ of investing, so you and your hubby can choose the plan that’s best for you.

How much should you be investing? The general rule is at least 10% of your gross income, but probably some where closer to 15% if possible. I don’t know how much of your gross income is going in to your 401k plans, but if you’re investing less than 10%, I’d say your first plan of action (once your free of the student loan) should be to up your retirement contributions.

Unfortunately, I can’t really tell you what you should do with your discretionary income (save or pay down mortgage), because I have no clue what the real estate market in S.F. will look like in four years. If you think the markets are going up, up, up…it makes sense to pay down the mortgage a bit and let your equity appreciate. If you think the market is going down, down, down…it’s probably better to put your cash in the bank so it doesn’t lose value.

It doesn’t really sound like you are too sure what your life is going to look like 2-5 years from now. You may have a kid (you might not), your condo might go up in value (it might not), you might rent out your place (you might not). Until you really have a solid idea when you’ll be moving and when you’ll be having kids, I’d recommend putting your discretionary income in the bank. Cash gives you flexibility. If at any point down the road you decide you’d rather pay down your mortgage, you can always pull cash from your savings to do so.

I’m just one man though, and I’m definitely no real estate (or investing) expert. Let’s see what other PDITF readers would recommend doing in your situation. How bout it y’all, what do you think Courtney should do? Pay down the mortgage or build up cash savings?

Ask and you shall receive.

Ask and you shall receive. That’s our new motto anways. Two years ago Girl Ninja and I had to do one of the hardest things we’ve ever done; Ask our friends/family for money. We volunteer for a high school ministry here in San Diego called Young Life. Most of the kids we’ve gotten to know over the last few years, come from low income (I’m talking like REALLY poor) families. Every winter, we try and take a group of kids to camp in Utah for a five day snowboard/ski trip. Can you believe the majority of these kids have never seen snow!

Most of the kids that come to Young Life want to go on the trip, the only problem is they can’t afford it. Throughout the year we’ll host fund raising events like car washes, selling raffle tickets, auctions, etc hoping to raise enough funds to reduce the cost of camp to a more reasonable level, like $100.

Two years ago, after some pretty unsuccessful fund raising campaigns, us leaders decided to reach out to family and friends and try and raise a little more. Here’s how a typical phone conversation went…

Me: Hey mom.

Mom: Hey Ninja, my most favorite child of all time, what’s going on?

Me: Well I’m calling to see if you think you and Dad Ninja could sponsor a kid to Young Life camp.

Mom: We would love to sponsor a kid.

Me: Thanks

Mom: No problem son. Dad Ninja and I think you are the most wonderful son in the world. We are honored to be called your parents.

Asking my parents for money was easy. It’s my parents, I knew that I could pretty much guilt them in to supporting me. It was having to reach out to my friends that freaked me out a little bit. How was I suppose to ask my friends to donate money to kids they’ve never even met? Thankfully, I have some pretty awesome friends, and just about every one of them was able to provide at least some financial support to our area.

Girl Ninja and I learned a lot that day and are glad we went through the experience of asking people for money (although we hope we don’t have to do it again anytime soon). We now know what it’s like, and we feel better prepared to help those that ask us for help.

It’s for this reason, we’ve decided to ALWAYS give money to friends and family when asked for charitable contributions. We know it isn’t easy for them to ask us, so the least we could do is help them out.

– Friend raising money for a breast cancer walk? Give ’em money.

– Friend’s kid selling candy bars to raise money for a school trip? We’ll buy a box.

– Friend trying to provide clean water to people in another country? Count us in!

Don’t get me wrong. I’m not saying we’ll donate to every solicitation we receive (especially any annoying mailers). But what we will do is SUPPORT those that are close to us. We see this “rule” as a friendly (pun intended) reminder to be generous with the income we’ve been given.

Have you ever been asked (by a friend or family member) to donate/sponsor/give to an organization or charity? Did you do it? Do you buy lemonade from the local neighborhood kids that set up their stands in the summer? What giving/donating guidelines do you operate by?

Humble Pie

Humble Pie

A few weeks ago Girl Ninja and I joined a young couple’s Bible study. We’ve really grown to appreciate each of the couples in the group. The meetings typically wrap up with a time for prayer requests. Last night, as each person/couple was making their needs known, I noticed a common theme. Many 20 something couples face some  serious struggles.

While I am worrying about what savings account will give me the best interest rate, there are people wondering if they’ll still have a job tomorrow or if they’ll have enough in their checking account to pay rent. This is when I was force fed some humble pie.

Girl Ninja and I have no debt. Our income is far higher than I ever would have anticipated. We have a decent chunk in savings. And we are adequately preparing for the future.

What am I worrying for!? Does it really matter if my savings account earns 1.3% interest instead of 1.7%? Do I really need to stress over a home purchase that is three (or more) years away? Heck no  I don’t, but sadly, I do.

Don’t get me wrong, I’m not saying that one shouldn’t look to the future, make plans, etc. We all need to be doing that. But what we don’t need to be doing is worrying about worrying about having to worry.

Girl Ninja and I have set up contingency plans for one reason: So we DON’T have to worry. But guess what? I still do!

I stressed about not  having a fully funded E-fund so I focused on that, once that was knocked out I began worrying that we weren’t saving enough for a down payment, so I increased our savings percentage. Only to become stressed that I NOW feel like I’m  over saving and not doing a good enough job enjoying life.

This weeks Bible study served as a much needed reminder that Girl Ninja and I are in a very different place than the typical newlywed young couple. We need to remember the small things, be responsible with what we have, and be generous with our excess.

This was my “welcome back to reality” pimp slap across the face this week. Have you had one recently? Do you get so caught up in yourself that you forget to have compassion for others? Do you know any good/honest/hardworking people that are doing their best, but are struggling to make ends meet?

p.s. J Money at Budgets Are Sexy obviously has had similar convictions as he recently announced his newest project Love Drop. It’s pretty awesome!

Setting the bar… low

I’m not sure if I have incredibly low standards for myself, or if I am just freakin’ awesome. It’s quite possible, it’s a little bit of both. On January 1st each year, I make predictions as to what I think my financial progress will be over the calendar year. I also like to check in on that progress and blog about it (you can see last years goals here).

Below is a screenshot of my 2010 goals:

I don’t need to run through each of my accounts and tell you where they currently stand because I already do that in my monthly Net Worth Updates. And if you saw the most recent update you would know I just broke the $49,000 barrier. This means I met my 2010 goal three months earlier than anticipated. Last year, I met my goal by July.

I don’t know if I should pat myself on the back for a job well done, or kick myself in the face for setting the bar low.  This is not a good habit to get in to. Don’t get me wrong, I am excited about breaking my goal, but I need to figure out how to make next years loftier, but realistic.

And this leads to me begging you readers for advice/recommendations. How the heck do you make goals, so that they are attainable AND ambitious. I think at this point I want to fail in meeting 2011’s goals (but still be close enough I can be happy with my progress). I never thought I’d be upset about reaching a goal early, but if it becomes a reoccurring theme, then that means I am aiming low. And the only time I like to “aim low” is when I’m peeing while standing. Hook a Ninja up, and give me some words of wisdom 🙂

On a side note, to make sure I do not reach all of my goals in 2011, I am adding a few more to the list…

Steal a car and drive it off a cliff, but jump out at the last minute
Put my Personal Finance rap on iTunes.
Buy a dog
Give said dog laser eyes and name him Xenon Warrior Princess
Tell a judge “You want the truth? You can’t handle the truth!”
Arrest the moon

What’s your number?

My savings account is with Bank of America. On the main page of the website BoA has a calculator that predicts how much you will have waiting for retirement (after answering a couple quick questions). I pretty much love financial calculators. They help me set up a game plan to reach a goal.

………Awkward Transition………

I wrote about my decision to beef up my savings account, even though I have more than six months of expenses in it? Why? Six months isn’t enough to make me feel all warm and fuzzy inside. I’ve been fortunate enough to never have to use my savings account for anything….ever. I’m not ignorant, however. I know one day my car will break down, or I’ll lose my job, or maybe get struck by lightning (that would be kind of sweet).

Something unexpected is going to happen to just about each one of. The larger the savings account, the less impact the unanticipated expense will have. There are a couple traditional recommendations for savings accounts.

1) If you have non-mortgage debt you only keep $1,000 in savings until you pay it all off. This is the Dave Ramsey plan. I totally understand the logic behind this, but it’s just not my style. A grand in the bank would make me break out in a cold sweat. I need more on hand to feel secure.

2) Three to six months in the bank. This was the method I subscribed to. I worked hard, spent little, and saved diligently. About four months ago, I accumulated enough to reach six months of expenses in the bank. It was quite an amazing feeling.

3) Do whatever the F you want plan. Maybe you’re allergic to saving money. If that’s the case, then you probably wont have any money in the bank, but you will surely have plenty of credit card debt. The “do-whatever-the-F-you-want” plan works both ways though. There are some people that are addicted to saving money. Every now and again, I’ll watch a little Suze Orman. Sometimes people call in and have like $250,000 in the bank. That’s a boatload of moolah.

So now, as always, I leave with a question to my wonderful bootylicious readers. What’s your number? How much green do you have to have in the bank to feel “secure.” I’ve put in my head that $30K would be a great number  (don’t ask me why, ’cause I have no logic). Let’s make it a two part question, what do you have in your savings and what would you ideally have it be at this point in your life. Don’t be a douche bag and say you want a bagillion dollars. Drop a line and let us all know what “your number” is 🙂

Fly finances (pun intended)

If I could be any animal I would be a house fly. Okay, not really, I’d probably be a fire breathing squirrel, but house fly would be second on my list. Yeah I know flies are pretty gross looking and only have an average life span of about a month, but they do have one thing going for them: persistency. Sure they are rather annoying, but ya can’t really say they lack commitment or dedication.

I was at the beach this weekend, trying to get my tan on, but a handful of flies were doing everything they could to prevent me from reaching ultimate relaxation. They’d buzz around me and land on my legs and stomach. I would try and swat at them, but they are just too darn quick and seemed to narrowly escape my hand each time. I think the flies got some sick pleasure out of taunting me, as they continued “touch and go” landings on my body. As annoyed as I was, I had to acknowledge the fact that these flies were persistent.  Even when facing certain death as I swatted at them, they never gave up on their mission: Annoy the crap out of Debt Ninja.

This may be a stretch, but hear me out… Our financial attitude should mimic that of a fly. When declaring war on debt, like so many of us have, we have to keep consistent and remain committed to our battle. Paying down my student loan is not exactly my idea of a good time, but committing to being aggressive and throwing all my extra money at it will surely benefit me in the long run.

I have a stated goal of getting out of debt and becoming a bagillionaire. A fly has a goal of bugging the crap out of me while I chill out on the beach. Sure our goals are different, but the only way to achieve them is remaining persistent. Just as I tried to stop the fly from reaching it’s goal (primarily by attempting to murder it), it’s important to be aware that our lenders are going to try and prevent us from becoming debt free. They’ll try and add late fees, increase our interest rates, and penalize the bajeezes out of us for sneezing. But we can not… I repeat, CAN NOT, let our creditors “swat” us to death. We will fight, persevere, and ultimately end up victorious. Let this be a lesson to you all, although flies may be gross, they can teach us a thing or two about managing our money.

A little look at this Ninja

Although I blog anonymously, I still try and put a little personality in to each blog post. If you’ve been following me for a while you probably know I have terrible grammar, I overuse the term “douche bag”, I have no financial credentials, and I’m 50% awesome and 50% awkward. In an attempt to further my blogging relationship with you all, I’m gonna use today’s blog post to share a little more about myself (consider this the blogging equivalent of reaching “second base”).

I’m a firm believer in setting and reaching personal goals. Sometimes my goals are serious (ie saving at least 15% of income for retirement), but I also like to set some fun goals. One such fun goal was to do a back flip. I know, it’s a pretty random goal and you might be wondering where did this desire came from? Well I had a friend that could do a backflip and I thought “Hey that’s freakin’ awesome, I want to do that.” Plus, I knew doing a backflip wasn’t going to be easy, and I always like a challenge. 

What good is a goal, if you don’t have to work to achieve it? Well I’m proud to say after a couple of intense backflipping sessions (with a spotter of course) the time came for me to clip my wings and fly, and fly this ninja did. I can now do a backflip. Yesterday, during another epic sunset, I got a little bored and was able to use the 10sec timer feature on my camera to snap this sweet little picture below….

Some of my other “not so serious” life goals include: buying a wiener dog and naming him Mr. Bojangles, getting shot (but not dying), and trying to avoid going bald. I feel like I have a pretty good idea what most of your personal finance goals are, so why don’t we lighten things up and share some silly goals? Do you want to own a kangaroo? Maybe you want to jump out of an airplane? Whatever your crazy awesome goals are, please take some time to share ’em with me, ’cause I want to know!

p.s. don’t get confused by the first picture….Mama Ninja is not a stripper….at least I don’t think she is????