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Congratulations! You’ve found the love of your life and now it’s time to plan the wedding of your dreams.
But before you dive headfirst into wedding planning bliss, there’s one crucial factor that can make or break your perfect day – the budget.
Don’t let financial stress rain on your parade!
In this ultimate guide, we’ll take you through a step-by-step journey of wedding budgeting 101, showing you how to finance every aspect of your special day without compromising on style or sentiment.
Get ready to say “I do” to a financially savvy wedding planning adventure like no other!
When planning your wedding, it is important to have a budget in mind. Wedding budgets can vary greatly depending on the size and type of wedding, but there are some general tips to follow when calculating your expenditures.
The most important factor to consider when budgeting for your wedding is the number of guests you will be inviting. If you are planning a small wedding with only a few close friends or family members, you will likely be able to spend less than if you are inviting dozens of people. Another factor to consider is the location and type of venue you are planning to use. If you have chosen a destination wedding, costs may be higher than if the ceremony and reception are held at home.
Once you have an accurate estimate of how much money you will need, it is time to start thinking about expenses. There are many different things that can be included in your wedding budget, from flowers to catering services and of course, finding the perfect wedding rings Melbourne (or wherever you may be from). It is important to remember that not all expenses need to be paid upfront; some can be deferred until later in the process, such as hiring a DJ or photographer. Once everything has been accounted for, it is time to start saving! A good way to start saving money is by creating a budget and sticking to it as closely as possible. This not only helps keep track of where your money is going, but also ensures that allocating funds towards specific items isn’t influenced by emotional factors.
When planning your wedding, one of the most important decisions you will make is how much it will cost. Here, we provide a step-by-step guide to financing the perfect day.
Decide on Your Wedding Budget
The first step in wedding budgeting is to figure out what you can afford. This involves taking into account both your personal and financial constraints. Once you have an estimate, you can begin to identify specific costs associated with your chosen wedding venue, catering, flowers, music and more.
Save for the Wedding
Once you know how much money you have available, it’s time to start saving. You can sock away money each month towards your wedding expenses or set up a special savings account dedicated solely to the event. If you are married outside of North America, be sure to factor in currency fluctuations when planning your budget.
Get a Loan for the Big Day
If you don’t have enough saved up already, consider getting a loan for your wedding. A good option is to look into personal loans from private lenders or banks that specialize in weddings finances. Interest rates on loans typically range between 6% and 12%, so make sure to compare rates before making a decision.
Use Credit Cards Wisely for Wedding Expenses
Another way to get cash quickly for your wedding expenses is to use credit cards judiciously – as long as you keep track of your spending and pay off your card in full each month. Be sure to read the terms and conditions of your card before signing up, as some cards have increased fees for using them for wedding-related expenses.
Make Payments Plans for the Big Day
If you do not have enough saved up, or if you are having trouble paying off your credit cards in full each month, another option is to make payments over time. You can work with a wedding planner or lender to set up a payment plan that works for both of you.
Remember, wedding planning is an investment in your happiness. By following these tips, you can put yourself in a better position to have the perfect day.
Shop around for deals.
There are often discounts available on wedding items if you buy them in bulk or through special promotional offers.
Consider hiring a professional coordinator.
Not everyone is comfortable planning a large event like a wedding on their own, which is where a professional coordinator can come in handy. A coordinator can help you stay organized and keep costs down by providing tips and advice along the way.
Accept donations from friends and family members.
Many couples choose to offer donations in lieu of gifts at their weddings – this allows everyone involved to spend their money more wisely without feeling too guilty!
Congratulations on planning your dream wedding! Before you know it, it’ll be here – and so will the big financial questions: How much should we budget for the ceremony and reception? What are our options for nontraditional wedding ceremonies or receptions? Where can we find affordable rental venues? We hope that our advice will help make your daydreaming into a reality. Thank you for reading!
Becoming more confident at work can have a great benefit for your career. In this post, you’ll learn 6 things you can do to be confident in work and life.
Self-confidence is an important trait to have in all aspects of life. Specific to the workplace, self-confidence can affect your communication skills, your decision-making ability, your overall job performance, and your job satisfaction.
Confidence is also a highly visible character trait. Your colleagues will notice your self confidence, or lack of. It may help to build trust in your skills and abilities.
Confidence in your work can also boost the morale of the team, especially when you are in a managing or supervising role!
Luckily there are some techniques you can implement immediately at work to improve your self-confidence.
In this article, I’m going to share with you 6 steps you can use to build confidence in your life and work.
The 6 steps you can use to become more confident are the following:
While this article focuses on your professional life, you should also realize that these principles could be applied to other parts of life, such as relationships, health, and money!
Let’s dive in to each of these specific tips! 🙂
Using affirmations is one of the most underrated self-improvement techniques out there, and one of my favorites.
An affirmation is quite simply just a statement of truth. The power of positive thinking through making affirmations effectively convinces yourself that you are someone great, that you will do something today.
Affirmations are best made in the morning before work. You can self-reflect using your phone, pen and paper, or just by talking to yourself. Here are some examples of affirmations that involve your professional career:
You may notice three similarities with the above affirmations. These will help you write affirmations of your own:
Don’t forget that these can be made for other areas of your life, such as personal finance or fitness. I encourage you to give these confidence-boosting affirmations a try. You may be surprised at how effective they can be!
You will not be able to change yourself and build self-confidence all at once. It still takes time, no matter how hard you try.
In that case, you should work smart, not hard. Small improvements on a daily basis can have tremendous results in the long term. Improving 1% every day means you are improving 7.2% per week, 36.1% per month, and 3778.3% per year! This is exactly why I think focus and consistency outperforms hard work.
In the workplace, daily accomplishments may look like:
A daily planner is a surprisingly effective tool for tracking consistent small accomplishments. I recommend writing down a couple career related tasks at the beginning of the day, and review the list at the end of the day to see what you accomplished.
Remember, your daily accomplishments don’t have to be limited to your professional life! Going to the gym is a great daily accomplishment, and so is having a “no spend day” where you make no unnecessary purchases.
3. Know When to Ask For Help to Get AdviceKnowing when to ask for help may seem counter intuitive at first. How can needing help be a confidence builder?
Part of self-confidence is knowing your current limitations, not just your strengths. Failure to do so may make you overconfident. If you don’t know something, accept that you don’t currently know it, and proceed to figure it out.
“If somebody offers you an amazing opportunity but you are not sure you can do it, say yes – then learn how to do it later!” – Richard Branson
This applies to both knowing how to do something, and knowing about something as well. You should be asking questions and learning all the time during your career.
You should also share knowledge with others! Being confident enough in your knowledge and abilities to teach others is a powerful trait.
You may be afraid to ask questions early on in your career. You may be afraid of looking clueless or incompetent as well; this is common especially when starting a new job. These feelings are normal, but you need to overcome them.
It is better to ask questions and possibly be annoying, than not ask questions and possibly make costly mistakes.
One way to improve confidence in yourself is to literally improve yourself. Developing a new skill can be very rewarding, both personally and financially! The harder the skill, the more income you can earn.
Technical skills are always in high demand, especially coding. Picking up a relatively easy to learn language such as Python, Java, C++ , or even Visual Basic can set you apart from others in your field (assuming this is not a skill that is already a requirement in your field.)
People with soft skills tend to be “a dime a dozen”, but they are still essential. You can have the best technical skills in the world but no one will want to work with you if you have zero soft skills (especially communication).
Luckily, soft skills can always be improved! These skills are highly correlated with self-confidence.
For example, someone who has self-confidence is more likely to excel at public speaking, negotiation, etc., and vice versa.
Building these skills through practice is a great way to build self-confidence, since they are so interconnected.
5. Know Your Worth to Get Paid AppropriatelyKnow your worth, and then add tax!
Being underpaid is discouraging. Many people sadly take what they can get when it comes to new jobs or pay raises, being too afraid to negotiate with the employer. This in turn can lower job satisfaction and even possibly your self worth.
If this sounds like you then you have a big hurdle to leap, however it is worth it. In fact, it is the best way to increase your income with no side hustle!
How do you know how much you deserve to be paid? My favorite tool is payscale.com. This site has the biggest data pool of salary information on the web to dig into.
Follow the instructions and enter as much information as you are comfortable inputting; the more information, the more accurate the answer.
With this newfound information, you can see if you are being paid what you’re really worth.
Finally, don’t forget to look the part. Take care of yourself, your appearance, and your workspace. You don’t need to wear designer clothing, but you should at least wear high-quality and presentable clothes that you feel good about yourself in.
Your workspace is also a reflection of yourself, especially if you work in an office.
Next time you work, come in a little early to the office and organize your desk. Clean out unnecessary stuff and old paperwork.
By tidying up, you can help your productivity, and make you feel mentally organized and capable as well. After all, you are a product of your environment!
With these 6 steps to becoming more confident, you can start showing confidence at work and building the career you dream of building.
Although this post focused on your professional life, many of these concepts can be applied to other parts of life as well.
Affirmations can set a positive mindset for whatever you will do, and tracking your daily accomplishments will reward you for it.
Asking questions will help you avoid making costly mistakes anywhere in life, and expand your skill set in the process!
Finally, feeling good about your appearance and your environment will lead to great things, whether it be at work or out with friends.
Thank you for reading!
In today’s financial landscape, a no-credit-check loan has emerged as a seemingly ideal remedy for individuals grappling with poor credit scores or a complete lack of credit history. The allure of accessing funds without the burden of credit scrutiny is undeniable, prompting many to wonder about the actual borrowing potential in such scenarios.
If you find yourself intrigued by the notion of no credit check loans and are eager to discover the extent of financial assistance they can offer, this all-encompassing guide is tailored precisely to your needs. Here, we shall delve into the diverse array of loan options available that bypass credit checks and shed light on the maximum amounts that can be secured through these channels.
Payday loans are a popular option for those who need quick cash. These loans typically require no credit check, making them accessible to those with bad credit or no credit history at all. The amount you can borrow with a payday loan varies from state to state. In most states, the maximum amount you can borrow with a payday loan is between $300 and $500. However, in some states, the maximum amount can go up to $1,500.
Loans like CreditNinja $500 loans are a popular payday loan option. These loans require no credit check and provide borrowers with up to $500 in cash. With a streamlined and effortless application process, borrowers can swiftly access the funds they need, often receiving the money as early as the following business day.
Installment loans are a versatile loan option that offers borrowers a convenient way to secure funds without necessarily requiring a credit check. With this type of loan, you can borrow a specific sum and repay it over time through monthly installments until the entire amount, along with interest, is paid off. The actual loan amount accessible through an installment loan will depend on several factors, including the lender’s policies, and your income level and credit history.
One noteworthy aspect of installment loans is that many lenders don’t impose a strict maximum borrowing limit. Instead, they assess your financial situation and ability to repay when determining how much you can borrow. Installment loans like these can be a great way to make large purchases that normally wouldn’t be feasible with a credit card or paid off with savings. Furthermore providers like LendForAll make the application process simple and cater for those with lower credit scores so that loans are accessible to a wider group of people who require some kind of capital for whatever life throws their way.
For those seeking a loan option without the need for a credit check, personal loans present a flexible solution. These loans can be utilized for various purposes, including debt consolidation, home improvements, or covering medical expenses. Similar to installment loans, the amount you can borrow through a personal loan hinges on factors like the lending institution’s policies and your income and credit history.
Unlike installment loans, personal loans typically have specific maximum borrowing amounts set by the lenders. The cap on the loan sum can vary but is commonly seen to go up to $35,000 or more. It’s crucial to understand that, similar to installment loans, personal loans often carry higher interest rates than traditional loans. Consequently, while you may have access to a larger loan amount with a personal loan, the higher interest rates could lead to a larger total repayment in the long run.
Title loans offer a unique loan option that requires borrowers to provide collateral in the form of their vehicle. The advantage of title loans is that they generally don’t necessitate a credit check, making them accessible even to individuals with poor credit or no credit history. The loan amount accessible through a title loan is determined by the value of your vehicle.
Typically, title loan lenders offer loans amounting to about 50% of your vehicle’s appraised value. For instance, if your vehicle is valued at $10,000, you might be eligible to borrow up to $5,000 with a title loan. However, it’s crucial to be aware that title loans come with relatively high interest rates and fees. Failing to repay the loan as agreed could result in the loss of your vehicle, as it serves as collateral to secure the loan.
There are various loan options available that require no credit check. The amount you can borrow with these loans varies depending on the lender’s policies, your income, and your credit history. It’s important to carefully consider the risks and costs associated with each loan option before applying. However, if you need quick cash and have poor credit or no credit history, these loans may be a viable option.
Home insurance is a crucial aspect of protecting your most valuable asset. While many homeowners understand the importance of insuring their homes, some overlook certain coverage options that provide maximum protection and peace of mind. In this article, you’ll learn about the coverage options that should always be part of any home insurance and how you can tailor them to your needs and circumstances.
When considering home insurance, it’s essential to prioritize dwelling coverage, as it forms the foundation of your policy. This coverage protects the structure of your home, including walls, roof, and foundation, against various perils such as fire, windstorms, and vandalism.
To ensure comprehensive dwelling coverage, assess the cost of rebuilding your home in the event of a total loss. Or, if you’re not sure how to go about it, find a recommended website that allows you to build your own insurance policy with the coverage you want while being guided by experts throughout the whole process.
Another essential component of home insurance is personal property coverage, which safeguards your belongings inside your home. When your possessions are stolen, damaged, or lost, you can use this coverage to replace your belongings without spending out of pocket. Here are some important aspects of personal property coverage to consider:
By understanding your personal property coverage, you can have peace of mind, knowing that your treasured possessions are safeguarded, no matter where they are located.
The liability coverage safeguards your financial well-being when held responsible for bodily injury or property damage to others. For instance, a lawsuit was filed after your guest slipped and fell on your icy driveway and sustained physical injury. You can use this coverage to pay for legal costs or the medical expenses you are liable for.
Additionally, liability coverage can protect you in situations outside of your property. For example, if you accidentally damage your neighbor’s fence or car, it can pay for the repairs or replacement costs.
The limits of liability coverage are typically stated in your policy and represent the maximum amount your insurance company will pay in case of a covered liability claim. It’s crucial to review these limits and ensure they provide adequate protection. Higher liability limits are generally recommended, as they offer greater financial security and help protect your assets in the event of a significant liability claim.
If you can’t live in your property due to a covered loss, additional living expenses (ALE) coverage provides financial support. It covers the cost of temporary housing, meals, and other necessary expenses while your home is being repaired or rebuilt.
Like the other coverage options, reviewing the ALE limits in your policy is important. That way, you can ensure they’re sufficient to support your living expenses during the restoration period.
This coverage option is an often overlooked but essential component of home insurance. It protects you from the unexpected costs of rebuilding or repairing your homes to comply with current building codes or regulations.
Building codes and regulations are continuously updated to improve safety standards and ensure structures meet modern requirements. If your home is significantly damaged or destroyed, local authorities may require you to rebuild or repair your home in compliance with current codes. It can include electrical systems upgrades, fire suppression systems installations, or the addition of energy-efficient features. With ordinance or law coverage, you’ll receive financial aid for these upgrades.
Conclusion
Home insurance is a crucial safeguard for your house and other valuable assets from various unforeseen events. However, it’s important to understand the different coverage options available to choose the right ones for your needs. Some essential coverage options include dwelling coverage, personal property coverage, liability coverage, additional living expenses, and ordinance or law coverage.
Understanding your policy and reviewing it regularly with your insurance provider is also essential. It will help ensure that your coverage is adequate and that you’re aware of any changes to your policy.
Navigating the unpredictable seas of the real estate market can often feel like an endless game of chance.
With income primarily based on commissions, real estate agents must tackle unique financial challenges. Ensuring future financial security requires meticulous planning and strategizing.
One robust approach is to pair a comprehensive life insurance policy with a solid retirement plan. This combination is not merely beneficial but becomes an essential instrument for agents to secure their financial future and find peace of mind in their chosen career path.
Life insurance is one of the most important aspects of financial planning among real estate agents. It provides a safety net, ensuring that your loved ones are not burdened by any debts or loss of income in the event of your untimely demise. For real estate agents, where income can fluctuate dramatically, this is especially vital.
There’s a plethora of life insurance types available, from term life and whole life to universal and variable life. The key is to choose a policy that aligns with your financial circumstances and long-term goals. Many agents find term life insurance appealing due to its affordability and straightforwardness. However, others may opt for whole life insurance for its cash value component, which can serve as an additional savings or investment vehicle.
If you’re searching for the right life insurance policy, Assurance IQ quotes can help make things easy. This platform allows you to compare life insurance quotes from various providers, helping you choose a plan that best suits your needs and financial capabilities.
While life insurance covers the financial risk of untimely death, retirement planning is essential to cover the risk of outliving your savings. The unpredictable and often volatile nature of the real estate market makes having a well-thought-out retirement plan even more crucial for agents.
Depending on your specific circumstances and goals, you can consider various retirement plans. These include Individual Retirement Accounts (IRAs), Simplified Employee Pension IRAs (SEP IRAs), 401(k), and Roth IRAs. Planning for retirement early allows you to take advantage of compounding, potentially leading to substantial savings over time.
As a real estate agent, your income may fluctuate year by year, making it even more important to set up and contribute to a retirement fund consistently. Regardless of the state of the market, having money set aside in a dedicated retirement account can offer a sense of financial stability and assurance.
Additionally, consider diversification within your retirement portfolio. This can contribute to financial success. Don’t rely solely on the real estate market. Spread your investments across various asset classes to reduce risk and improve potential returns. This approach, coupled with diligent and consistent saving, will ensure that your golden years are just as prosperous and rewarding as your active working years.
Life insurance and retirement planning, while serving different purposes, can intertwine to form a comprehensive financial safety net for real estate agents. They complement each other, bolstering your financial stability from different angles and ensuring that you are well-prepared for various future scenarios.
Let’s look at some ways these two aspects interact. Some life insurance policies, like whole and universal life, have a cash value component. This component works like a savings account or investment vehicle within your policy. The cash value accrues interest over time and can be borrowed against or even withdrawn in times of need. This cash value growth can contribute towards your retirement savings, providing an additional layer of financial security.
Conversely, if you’ve done a good job with your retirement planning, you might find that you don’t need as much life insurance as initially thought. A substantial retirement fund can decrease your dependents’ need for replacement income if something happens to you, thereby allowing you to reduce your life insurance coverage and, in turn, your premiums.
Life insurance can hold considerable importance in estate planning for real estate professionals. Generally, the death benefit received by beneficiaries from a life insurance policy is exempt from taxation. This makes it an advantageous and tax-efficient means of transferring wealth to your heirs, or it can be used to address potential estate taxes that may be applicable to your retirement savings or other assets.
Moreover, life insurance can provide funds to cover end-of-life expenses or any lingering debts, preventing these costs from eating into your retirement savings. By strategically using life insurance and retirement planning, you can safeguard your financial future and create a lasting legacy for your loved ones.
Initiating a sound life insurance policy and retirement plan demands an accurate assessment of your financial health. For real estate agents, whose earnings can fluctuate, understanding income stability, current expenses, existing debts, and desired retirement lifestyle is key. These insights lay the foundation for selecting a life insurance plan that offers adequate coverage, aligns with long-term goals, and fits your budget.
Choosing the right retirement plan is equally essential. Factors such as income patterns, future goals, and risk tolerance come into play. Different options have unique tax implications, contribution limits, and withdrawal rules that need careful evaluation. A consultation with a financial advisor can provide valuable guidance in this process.
Remember, financial planning is a dynamic journey. As your career evolves and personal circumstances shift, so too should your life insurance and retirement plans. Regularly revisiting and adjusting these plans helps maintain a robust financial strategy, ensuring you are prepared for whatever the future holds.
Being a real estate agent can be financially rewarding but also brings unique challenges that demand careful planning. A well-crafted life insurance policy coupled with a comprehensive retirement plan can offer the financial stability and peace of mind that real estate agents deserve.
With today’s wealth of resources, exploring life insurance options and retirement planning strategies has never been easier. So, start today. Assess your current plans, compare options, and consider your long-term goals. Secure your future now because the best time to plan for tomorrow is today.
Are you ready to embark on an exciting journey into the world of gold investment? Whether you’re a seasoned investor looking to diversify your portfolio or a first-timer seeking a golden opportunity, this blog post is your ultimate guide.
Equipping you with the essential tips and golden rules, we will unveil the secrets that can turn your gold investment dreams into glittering reality. So fasten your seatbelts and get ready to uncover the path towards financial prosperity as we dive deeper into the realm of gold investing!
Gold bars and coins are the most popular types of gold investments.
Gold bars come in a variety of sizes from 1 gram to 1 kilogram. The most popular size is the 400 oz good delivery bar. Gold coins come in many different weights, but the most popular are the 1 oz American Gold Eagle and the 1 oz Canadian Gold Maple Leaf.
When it comes to investing in gold, there are many benefits that make this metal a wise choice for first-time investors. For starters, gold is a very stable investment. Unlike stocks and other investments that can fluctuate wildly in value, gold tends to maintain its value over time. This makes it a great choice for investors who want to protect their money from inflation.
Another benefit of investing in gold is that it is a very liquid asset. This means that it can be easily bought and sold, which is ideal for investors who may need to cash out their investment quickly. Gold is also a popular choice for investors because it is a tangible asset. This means that it has a real-world value that paper assets like stocks do not have.
Gold is a great diversification tool. Because it behaves differently than other investments, adding gold to your portfolio can help reduce your overall risk. For these reasons and more, investing in gold is an excellent choice for first-time investors. If you’re already an experienced investor it’s a great asset to add to the mix too, it’s easier than ever to move some of your investment into it too, the use of an ira gold transfer for example is one such method. A gold transfer takes your existing invested funds from your IRA and allows you to allocate a portion of the funds to gold, this can provide additional security against inflation and also helps to keep your eggs in multiple baskets without giving up more cash upfront.
Make sure that your gold is stored in a safe and secure location. This could be a safety deposit box at your bank or a home safe. Whichever option you choose, just be sure that your gold is well-protected from theft or damage.
In addition to choosing a safe storage option, you’ll also want to insure your gold investment against loss or damage. This can give you peace of mind in knowing that your investment is protected even if something happens to it. You can talk to your insurance agent about adding gold to your existing policy or purchasing a standalone policy for it.
Remember to keep an up-to-date inventory of your gold holdings. It’s also a good idea to take photos or videos of your gold so that you have a record of it in case anything happens to it. By following these tips, you can rest assured knowing that your gold investment is well-protected.
You can invest in a gold-mining company or buy shares of a gold Exchange-Traded Fund (ETF). Gold mutual funds invest in companies that mine and produce gold, giving you exposure to the metal without having to own it directly. ETFs track the price of gold and can be purchased through most online brokerages. Another option is to invest in gold streaming and royalty companies, which provide financing to gold miners in exchange for the right to stream gold production from their mines. These companies typically have low operating costs and high margins, providing investors with exposure to gold without the risks associated with mining companies.
The golden rules outlined here are essential tips for first-time gold investors, providing guidance on how to get started safely and securely. Time to start investing smartly in gold.
House hacking is an incredible way to improve your financial situation in your 20s and 30s. House hacking allowed me to pay down my debt, increase my savings, and grow as a personal.
In this post, you’ll see the true financial results from my house hacking experience.
From 2015 to 2019, I hacked my housing expenses by renting out multiple rooms to friends in my house.
House hacking is a great way to reduce your housing expenses, and also a great way to gain experience as a landlord.
Over the past 4 years, I’ve learned a ton and improved my financial situation greatly. For anyone in the early stages of building wealth, house hacking is definitely something to consider.
In this post, I want to share with you the financial results of my house hacking, talk about how expensive houses are, and give you some inspiration to consider house hacking.
Why I Decided to Sell vs. Rent My HouseBefore I get into the financial results of my house hacking, I want to talk about why I sold my house vs. wanting to potentially rent out my house.
I bought this property in 2015 for $287,900. Previously, it was a rental property and was renting for ~$1,900.
In 2018, I started having thoughts that I didn’t need as much space and wanted to downsize.
While the property was amazing, and definitely had potential to become a rental property again, I started to run the numbers and I wasn’t so sure it made since for my financial goals.
When I started looking at comparable houses in my neighborhood in 2018, I looked at my house and thought I could list it for sale somewhere in the $350,000 to $400,000 range.
At the time, my mortgage balance was sitting around $250,000, and with this sale price, I could get out a significant amount of equity from the property.
In terms of it being a rental, I think I could have rented it out for ~$2,200-$2,400 a month, and with a mortgage of $1,835 a month, I would be cash flow positive.
$400 a month is $4,800 a year in cash flow, and while this seems decent, when looking at the potential of what kind of cash I could get out, this didn’t seem like an no-brainer use of the capital.
Also, even though the location and house is amazing, there were upcoming repairs and challenges with the house. It was built in 1900 and needed some updates.
My decision came down to if I could get $50,000 to $100,000 out of the property via a sale, then I could potentially buy multiple rental properties, start a business, invest in stocks, etc. With these proceeds, I could potentially make more than $4,800 a year in cash flow – and not have to worry about property management of this property.
This lead me to wanting to sell vs. renting it out.
Below I’ve created a table with all of the housing related income and expenses I had over the last 4 years.
On the right, these are the sum of the sections, and to calculate profit, I’ve subtracted $44,000 (principal payoff) + $103,000 (housing expenses) from $158,000 (proceeds + rental income).As mentioned above, In 2015, I bought the house for $287,900, and using FHA, I put down 3.5% (and it ended up being more like 2% due to some fees).
With mortgage closing costs included, I started off on my house hacking journey with ~$10,400 into the property.
After moving in, I had 3 roommates join me. My initial mortgage payment was $1,820, and my monthly rental income was $1,650.
Increasing my income is a goal of mine, and with house hacking, I was able to accomplish this.
Over the next few years, friends and roommates moved in and out of the property, and also had a few housing improvements and repairs.
With all of this income and expense, I’ve looked to categorize it appropriately above.
Fast forward to July 2019, I decided to sell my house, and was able to sell for $375,000.
My mortgage balance when I sold was ~$245,000, and after agent commission and other fees, I walked away with roughly $110,000.
Tallying all of this up, over the 4 years of house hacking, I “made” just over $11,000 to live.
But I’ve left out where the cool part of house hacking comes in.
In the calculation above, I included the principal payoff as an expense. When you pay down the principal, yes, technically it is going back to you, but it’s not unlocked until you sell.
Since I’ve included the principal payoff as an expense, I need to make an adjustment to the final profit number.
I haven’t considered the opportunity cost of renting a place.
If I was to rent out the room I lived in for 4 years to myself, I would have charged $800 a month. Adding in $800 a month for 4 years, I actually “made” nearly $50,000 to live.
$50,000 over 4 years, or $12,500 a year to live.
As mentioned above, when I got my house, I paid $10,400 upfront (down payment and closing costs).
Looking at the final profit number, I made $12,500 a year for 4 years – a return on investment of 120.19% a year for 4 years.
Those are some ABSURD returns.
These kind of asymmetric pay-offs are what you need if you want to build wealth fast without having a lot of money.
Real estate has this type of potential, but there are also some other thoughts I want to reflect on and share with regards to real estate and house hacking.
While I made out really well on with my house hacking experience, there are a number of things which could have gone wrong, or also lead to much lower returns.
For one, I didn’t have any major repairs or accidents with my house.
For example, I could have easily had to repair the roof, replace a water heater or furnace, or dealt with water damage in the basement.
These things would have potentially cost thousands of dollars and also lead to headache and stress.
In addition to these potential repairs and damages, house prices are NOT guaranteed to always go up.
We live in a world with finite resources and finite space. Real estate is very cyclical and dependent on location and demand.
I happened to buy at a great time and rode some nice appreciation (33% in 4 years).
However, this might not be the case for other people who buy in other areas or at other times.
Finally, property taxes is another factor I want to discuss.
Property taxes keep going up all over the United States. As you may have noticed above, from 2016 (the first full year of living in my house) to 2018 (the last full year), my property taxes increased $1,500!
In 2019, they were set to be $5,200 – an increase of $2,200 in 3 years!
In 3 more years, would they be $7,400 a year? I have no idea, but depending on the area you live, this could definitely play into lower returns.
Again, I was pretty lucky with my house hacking, and am thankful for my experience. What do you think?
What are My Thoughts on House Hacking?I’m done with house hacking for now, but still believe it’s an amazing way to reduce your housing expenses and improve your financial situation.
House hacking allows you to cover some of your mortgage and increase your monthly cash flow.
One thing I should say, though, is house hacking is not for everyone.
As a 20-something person without a spouse or kids, I was able to take this risk.
However, you may not have as flexible of a situation as I did, and I want you to think critically before jumping into real estate.
There’s no guarantee that house hacking will work for you, but there is certainly great potential!
Thank you for reading 🙂
