| Real Life Strategies for Building Wealth
Yep, this is our house; not kidding!

Yep, this is our house; not kidding!

Last night I woke up to the sound of a consistent and disturbing drip; and the nearest tub is far enough from my bed that I couldn’t hear it even if I wanted to. There was no other option: the drip had to come from the ceiling!

Dragging myself out of bed and making sufficient noise to wake up the dead – so there was no way John could stay asleep – I found a bucket to put under the drip and went back to sleep with a clear acceptance: yep, we need a new roof. Which is a great nuisance and will affect the way in which our ‘capital’ accumulation phase’ progresses.

On the one hand, needing a new roof didn’t come as a complete surprise – our house is 110 years old and we have a leak in one of the rooms on the top floor; unfortunately the room we decorated last autumn. This one is pretty lame though – it is like a whispered wish compared to the shouted command of last night. And as we all know ‘whispered wishes’ can be ignored and postponed; shouted commands have to be obeyed.

We’ve been getting ready to have the roof done: we’ve had three quotes and two of these almost sent me straight to see my shrink:

  • one was for about £22,000 ($34,000) and John found mistakes in it;
  • one was by a company recommended to me by a colleague: ‘they do a good job and are not expensive’ – she said. Well, these people come, saw and quoted a price that was 4 times what they charged my colleague at £19,000 ($29,000). Our roof is a bit bigger than hers but no way it is four time bigger.

Instead of going to see my therapist, I just has a tantrum shouting ‘no way’ (cheaper and very effective but do it when on your own)! We’ll get a bit of local work done so that the leak stops and then we’ll do the whole roof when we can find a reasonable company that will quote not based on assumptions of our wealth (year, our house is rather large and in a nice part of town, so people do assume a bit…) but the job.

Then, we heard from the guy who’s company has done loads of work on our house in the last three years; mainly inside but he does roofs as well. He is amazing: with a degree in computer sciences, he is an example of project management, quality control and a builder with whom I discuss politics, investing, literature and almost anything I could think about: and his whole crew listen to classical music while working. As to the workmanship – well, this is great as well.

This quote is more acceptable at slightly under £12,000 ($18,500 and people have been already around to measure for scaffolding, to look at the roof again etc. In other words, we were going to do it anyway so why was I so irate last night?

Because I still thought we have a choice to do it next summer and because I was thinking about the money!

We have the money and won’t need to borrow to do this rather large job on the house. But…

  • Most of what we have liquid at the moment is in an ISA and I was hoping that we can fill in the other one as well (we have the right to two ISAs) – it is making a bit in interest and it is tax free. If we take money out of it we can’t replace it this financial year.
  • We have been building ‘capital’ to invest – this is eating quite a bit into it.

On the positive,

  • we are lucky this didn’t happen a year ago, when we were still paying off our debt fast;
  • changing the roof is a good investment; John reckons that the value of the house will go up by double what we pay for the roof; and
  • I most probably would have managed to sell the apartment and land from my inheritance by the time the bill hits.

All in all, I have accepted that we are not simply owners but also custodians of this lovely house; and it is our duty to keep it in good condition. Having a bucket in the middle of the bedroom is not an option!

Now, let me move to the articles on the internet that caught my attention.

On Prairie Eco-Thrifter, Miranda published an article discussing 6 steps to a more successful career. Very interesting read and it all makes sense: decide where you are, what bugs you, where you want to be and figure out ways to get from where you are to where you want to be. What I’ve noticed though, is that in this – like many other things – ‘the Devil is in the detail’. For instance, most people don’t have any idea where they wish to be.

Len Penzo has started a fascinating series of articles by guests who manage to live on $40,000 (£26,000) or less. Go read them! Teach us a thing or two about living full, wealthy lives on less and some are very inspirational.

Mr. Money Mustache published an article listing jobs that pay over $50,000 (£32,500) without a degree. I can see where he is coming from and the article is written with the usual conviction – his voice on the internet is not a flute; it is more like a big, deep and loud didgeridoo. The message is clear but please do reflect on ‘the melody’ – the difference between having one of the jobs on his list and having some of the ones you can have with education (and degree) is that most of Mr. Money Mustache’s suggestions are stagnate – you’ll earn a bit over £50,000 till you stop working.

Have you noticed that one of the things we have most problems with is facing our image in the mirror; or in my case looking at photographs of myself? Well, we should look in the mirror! The Financial Samurai discussed how important it is to be able to tell ourselves some truths; like ‘you need a haircut’ or ‘there isn’t much wrong with making more money’. Read the article, it is worth it – one of those that make you think. I noticed, for instance, that I’ll add ‘you are not working ‘smart’ enough’.

You already know what I think about Paula Pant but let me tell you again: one of the personal finance bloggers certainly worth visiting regularly. She doesn’t swim with the crowd which fill my heart with joy and my head with ideas every time I stop by Afford Anything. One of her latest articles tell you straight not to skimp on your health. Oh, and is a wonderful and subversive attack on pointless extreme frugality.

Before I get seriously carried way with all this great stuff on the web, let me tell you how did The Money Principle do?

We have been included in the following personal finance carnivals:

Y akezie Carnival at Money Reasons
Finance Carn. for Young Adults at Cash Cow Couple
Carnival of Retirement at Fat Guy,Skinny Wallet

Carnival of MoneyPros at PF Carny
Carn. of Financial Camaraderie at PF Carny
Carnival of Retirement at Gen Y Finance Journey

Thanks! I am also thinking that it is probably time for us to start hosting and put back into the blogging community – probably will do after the summer.

Now that the ‘serious’ business is over here are two snippets for fun and erudition (remember, this is another way to say that one has loads of generally useless but fascinating knowledge):

In the UK, we have no portraits of women on our banknotes; which is interesting given that women have contributed, and continue to contribute, much to the wellbeing and success of this country. It was worse – there was a decision by the Bank of England that there won’t be any. Then three months ago, Caroline Criado-Perez started a petition on Change.org and collected 35,000 supporters. The result? Jane Austin’s face will be on the new £10 note (oh, and John thought that there are women better known than Jane but when I asked him who he had to think about it).

Strippers seem to be the ‘flavour’ of the week in personal finance. Did you hear the story of Tara Mishra who in fifteen years of work (well, all kinds of things that strippers do) saved $1,074,900 (£697,758). She did pay all her taxes but still kept it in cash. To cut a long story short, she decided to invest the money in a night club in New Jersey and asked her friends to transport it there; problem is the cash was confiscated by the police in Nebraska and we heard the story only because after a year of legal battle Tara managed to get it back. But the takeaway is that Tara:

  • Saved $111,000 (£73,000) every year for fifteen years (not necessarily equally distributed but still very impressive);
  • Grossed about $2.5 million (£1,625,161) over the fifteen years – this is $166,667 (£108,344) annual gross income; and
  • Had the sense to invest in a booming business (a night club, possibly including pole dancing).

Guys, remind me that it is ‘impossible’ to pay off £100,000 worth of debt in three years! Though, thinking about it, this lady’s income kicks the cr*p out of my professorial salary! May be I am in the wrong kind of business but it is a bit late to question that.

This is all for now; speak soon.