Decisions, decisions

Compounders, as we come across properties that have a few of the elements we are looking for, we are finding one thing in common:

Abundance.

It's certainly a sellers market, and that definitely provides us with a number of choices. Searching homes in the areas we are looking for is a good opportunity to find out what exactly we want. In addition to that, you also get a great feel for a couple of things in terms of aesthetics and the power of modern technology.

We toured a 4 bedroom place on 5 acres. The pictures we saw had us sold. Drone footage of the land, the photos were just spectacular. Once we got there we hit things with a critical eye, realizing that the house itself was nice, but it wasn't exactly what we were looking for. It's isolated on a decent plot of land, sure, but most of the land is wooded and clearing it for the sake of raised beds is going to prove to be quite the chore. We found a couple cosmetic issues that may cause a few problems, in terms of raising the value of the property, or at a minimum holding it's value.

This property is going to house a couple small businesses, and due to the nature of those business, we are going to need an outbuilding. Something roughly 2,000 sq. feet and two stories. I'd prefer steel and modern materials with a few creature comforts in there, as we will be handling most of our business in there, as well as training and workouts. Ideally, I'd like it to be somewhat soundproof, or close to it. Work and workouts in that building, home is home.

Keep the two separate and you'll be just fine. There's a reason people put in a "home office" and the exercise equipment ends up being a fancy clothes hanger in your bedroom.

In short, the search continues, and with this market, we can play the game financially to get the best possible deal, but it's definitely tempting to jump on a property when you see it.

Play it smart. Plan and save, you'll be better off in the end.

You can get something close to what you want, and improve it yourself (sense of ownership), and end up saving some money in the process. Aim small, miss small, and you'll be able to improve the home around you, instead of having it fit someone else and their idea of what it should be.

Discipline Equals Freedom

Recently, my good friend Tom interviewed a gentleman by the name of Charles Hugh Smith on his site, Small Scale Life. Smith is a regular writer for Zero Hedge and got into a length discussion with Tom about several topics, one of which stuck out to me. The idea of "mincome".  As I've stated, in earlier posts, the financial process of buying a house with land in the country is a new move for me. I've always rented, and to have the ability to purchase a home with some land, start a business, and attempt to drive that business towards success is promising.  It takes a multitude of things to fall into place, all of which are guided by a phrase recently introduced to me by a Navy Seal named Jocko Willink. He runs a podcast available on itunes and stitcher. Par for the course for the elite Navy Seals, they're all very disciplined in everything they do. To Jocko, discipline equals freedom. I've adopted this motto for myself, because those guys are the best at what they do. It wouldn't be the worst idea to follow their mindset and pursue that discipline as well. I am banking on the fact that it will pay off, simply because their track record speaks for itself.

In the pursuit of the land we are looking for, this discipline comes with some hard choices to make. We want a ton of room, a ton of land...more, more, more!!! As we look deeper, go through the numbers, write it out on paper, we would be banking on additional income to even make the minimum mortgage payment. Instead of making this an emotional quick pick up, we've had to step back and realize that patience will pay off in the end, even for a couple taking on a large home buying project with additional responsibilities of land, business setup, taxes, etc. You need to have the discipline to realize when you're biting off more than you can chew. If you don't, you'll end up like tons of people in 2008 when the market crashed. Blame bankers all you'd like, but two people need to agree to a business contact, and if you're borrowing more than you know you can pay back, you did this to yourself.

Caveat Emptor indeed.

The embracing of the new motto hasn't been easy. I'm breaking old habits, realizing the goal is right there, it's a few months away, and as I watch the cash pile up for the down payment, it's really worth heading into work, working overtime, and planning to make this happen.  Sure, taxes are a pain in the ass, but they can be mitigated and the tax system is meant to be utilized by people to get the most benefit from it while paying "their fair share".

A coworker recently shared some great insight into buying that "dream home" right off the bat. This guy ended up $90k upside down on a house and is STILL making payments to rectify the situation. He went, as he put it, "too big, too soon" and ended up in over his head, working a ton of overtime to pay a mortgage for a house he was never at. That's not my intended goal. A few lessons came out of that:

1. Save. Save as much as you can to prepare for this. An emergency fund is great, but if you can work, save some of that. Pay yourself first and DON'T TOUCH IT.

2. Eliminate that debt*. A payment is a hindrance to you goals. Don't let that payment slow you down. Particularly, a car payment. Car payments keep people broke, and it's a commonly accepted theme that you "just live with the car payment". Look, I get it. I want a muscle car more than most guys, but I'm also not willing to pay $800 a month just to ride around in something like that unless I can brag about paying cash for the whole damn thing. I digress...

***The debt is a tricky thing, however. Dave Ramsey and I disagree on a few things, one of which is the idea of a credit score. Credit cards can be an incredibly powerful tool in keep that FICO score up. It's evil, but it's a necessary evil. Without getting too political, it's a game and you simply have to consider playing it. Try having a credit card with a recurring charge on it, let it hit your credit at 10-20 percent of available credit and keep it there. Make the minimum monthly payments and watch the score go up. Believe me, I've been doing it for less than a year and my score has gone up 120 points.

3. Make an informed decision about buying based on YOUR needs. You are spending a lot of time and money looking for a place to call "home". Traditions, love, memories, holidays, breakfast, lunch, and dinner are going to be there. Make it your own. Family will come and stay if you invite them, but don't buy a house considering the fact that your family members might not have enough room. That's a flexible thing, and you can always make time to accommodate, one way or another. No love will be lost, and there's always a way to convert a spare bedroom into an office/bedroom. No big deal, it'll happen.

4. Make sure you enjoy your home!!!! This one is important. Don't get in over your head and go big on a property that you can't afford. It causes a cascade effect. You work a ton of overtime to pay a mortgage you can barely afford and you've got 3 of the 5 rooms in the house empty. It doesn't have to be a lavish palace (unless you can afford that, in which case...kudos!), but it does have to be a home. This is your sanctuary, your castle. One thing I'm definitely going to be considering is the outdoor patio and relaxation spaces on our property. I want a place to sit, drink my morning coffee, watch the sun come up, and realize that all those brutal nights at work, all the overtime I suffered through, all the extra work I took on, helped me to get that deck, that coffee mug, that view, and the produce I'm growing on that property. I'll realize that I worked to feed those chickens to get the fresh eggs, and I can pick some fresh berries from the bushes to throw on that plate for my breakfast.

Discipline equals freedom because once you implement it, the freedom tastes just that little bit sweeter.

Until next time, stay focused and do things On Purpose, With Purpose.

J