personal finance

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In Praise of Humble Beginnings

June 15, 2015 by Harlan 10 Comments

I was reading an article called “How to invest even if you’re treading water financially” via Get Rich Slowly and a certain part jumped out at me (bolding and links mine):

“Don’t despise small beginnings.
The first steps in any endeavor are humble. Gustave Eiffel, famous today for his tower in Paris and the Statue of Liberty, started as an unpaid assistant in a foundry. Setting aside $10 a month might feel meaningless: “What difference can that ever make?” That’s wrong. It makes a difference in many ways:

It breaks the ice. You’ll never again wrestle with the question: Should I start?
It forms a base: It is easier to add a dollar to an existing savings account than it is to start with just one dollar.
It creates a habit.
And best of all, it sets in motion the power of compound interest.”

Start somewhere

Getting FIREd Up

June 14, 2015 by Harlan 9 Comments

Also see:

This is an out-of-control flaming emergency, according to Mr. Money Mustache

I have an out-of-control flaming emergency, according to Mr. Money Mustache

I recently wrote about life changes that I thought might happen… soon.

Well, even though Mercury was retrograde, nothing stopped chugging along. In fact, everything got a swift kick in the butt. And now life is different.

I’ve been getting used to the new rhythm. It feels so different. And it’s given me a chance to review where I’m at and how I want to move forward.

What is FIRE?

The 10% Plan: Save 10 Percent of Everything You Make

May 6, 2015 by Harlan 10 Comments

10% of everything!

I’ve started a new savings routine that is blowing me out of the water. That sounds weird to say, but it’s true. It’s an idea I directly lifted from a book called “The Automatic Millionaire” by David Bach.

The crux of the idea is that you put 10% of everything you make into a savings or retirement account. Everything.

If someone hands you a dollar, you put a dime into savings. You make $1,000, well, $100 goes into your savings account. 10%, all the time. From the savings account, you can distribute the money in a few ways:

Leave it in there to serve as a cushion (it’s a good idea to have 3-6 months of expenses saved)
Transfer to IRA
Save up for a goal (down payment on a car/house, repairs/renovations, etc)
Pay down student loans or other debts
Simply save it for peace of mind

After I read “The Automatic Millionaire” I started putting this into practice. It’s been about 2 months by now, and I’m kind of amazed at how much I’ve already been able to save – automatically.

It also signaled a shift in my mindset.

It meant creating a new habit loop.
It meant exploring new goals.
And most important of all, it was a demonstration of commitment toward my own future.

Why 10%?

Airbnb by the Numbers: Q1 Update

March 25, 2015 by Harlan 16 Comments

Also see:

A few of you guys have asked for an update on my Airbnbs. There is a strong, thriving, and supportive community of Airbnb hosts here in NYC that I am happy to be a part of. My original articles about my foray in Airbnb were meant to analyze the financial investment/business sense behind setting it up, and were met with a good amount of interest. I received some messages spurred by curiosity, some seeking advice, and others that were downright nasty (which is fine).

The atmosphere surrounding Airbnb in New York is definitely a hot topic, and I deal with that on a daily basis. For the purposes of this article, I’m gonna treat it as I do daily: as a business, by a passionate traveler for other passionate travelers.

Tax time

Using credit cards + REDbird to pay off large debts – and earn major points

January 30, 2015 by Harlan 16 Comments

This topic came up a lot last night at the NYC Miles and Points Meetup, so I thought I’d do a post about it.

Lots of people were planning to use REDbird + points/miles credit cards to pay off large sums of debt, meet minimum spend requirements, and reach threshold bonuses offered by certain credit cards.

It’s an incredibly easy but effective idea.

Run all your bill payments through REDbird

REDbird

REDbird lets you load up $5,000 per month – for free – using a points or miles credit card.

If you max that out for a year, that’s $60,000 run through a credit card.

My own personal example is my student loan. I’m so tired of it hanging over my head and I’m about ready to turn around and kick that sucker in the face – but I’m gonna get a free vacation out of it!

For roundness or whatever, let’s say you owe $50,000 to:

Student loans
Your car payment
A mortgage
Medical bills
Credit cards
Or any or company or even person

You can add any company as a payee on the REDbird website.

At the top of the site, hover over “Pay & Transfer” and a dropdown menu will appear.

Where to add payees

From there, click “Add Payee” and get rockin’ and rollin’.

What you get out of it

Smart Debt: Is carrying a balance ever a good idea?

January 22, 2015 by Harlan 12 Comments

Ahem: text-heavy post ahead!

The toolbox

Recently, I was talking to a friend about getting the Airbnbs up and going. We were weighing the pros and cons of charging the upfront costs (~$7,000) to a credit card and carrying the balance until the business became profitable – usually 1-2 months in this case.

He said, yes, of course it’s worth it. It’s “smart debt.”

Let me think about that…

It got me thinking about this hobby and all the points and miles we love to earn.

The points and miles cards we all hold earn us, obviously, point and miles. But, beyond that, they are important financial tools. Your credit is one of your most important assets, and I feel no one talks about the credit cards as an avenue for anything beyond earning points and miles – and that avenue is great – but by extending us credit, the banks open up other opportunities for us.

Now, in starting up my side hustle, there was no way I wasn’t going to run all the expenses through a points or miles card, but I’d never considered the idea of not paying it back at the end of the billing cycle. I’m of the mindset of never paying a dime of interest – but is it OK, in certain situations, to carry a balance?

Smart debt

Airbnb First Month By the Numbers

December 4, 2014 by Harlan 13 Comments

Also see: I rented an Apartment to Airbnb in NYC

I have set up an Airbnb here in NYC as a new income stream.

There has been a lot of spilled ink about Airbnb lately, especially in New York where it is a VERY hot topic, to say the least. I work in real estate, so am particularly close to the issue.

I found an ideal one bedroom apartment in New York’s East Village neighborhood for $2,300 a month. And then I spent a lot of money on it. This post is about exploring the investment and starting up this side income stream with a focus on numbers. REAL numbers (except my electricity bill which I have to estimate.)

Cash outlay

I rented an Apartment to Airbnb in NYC

October 27, 2014 by Harlan 15 Comments

Also see: Airbnb First Month By the Numbers

Ladies and gentlemen, one of the craziest things I have ever done (other than using Airbnb as a verb in the title).

I just rented an apartment in Manhattan for the express purpose of listing it on Airbnb.

As some of you know, I work in real estate in New York, so I’m privy to rentals and have seen a lot of spilled ink on the whole Airbnb debate. It’s a very hot topic in the city right now.

I heard of an apartment in the East Village that was sitting there, easy approval, beautiful block, door was open if I wanted to go check it out.

A few people in my office have Airbnb apartments and seeing their calendars full of green (which means days booked) got me thinking.

So when I walked into that apartment, I quickly ran some numbers and just like that, decided to go for it.

Starting up

The Climb to Pay Off Debt and Be Financially Independent

August 13, 2013 by Harlan 1 Comment

I sent a payment today to my student loan company for $100. It felt like throwing a glass of water on a burning building. But that’s the exactly the attitude I’m trying to break.

Yes, right now, $100 toward my $47,584.54 student loan debt felt like taking a drop of water out of the ocean. But it’s $100 that’s out of the running for all that compound interest.

I’m trying to balance wanting to invest for the future, travel like a mofo, and get rid of all this damn debt. My student loan has an APR that will make you wince, so get ready for it: 6.75%. Any investment I could make may or may not have that type of return. But putting $100 in an investment account isn’t going to do me any good until I can wrangle the cost of my previous education.

It’s so weird that I could theoretically pay off this loan for the rest of my life. And I guess some people are OK with that. But I’m not. I want to get this debt off my plate ASAP. Even if I pay off $1000 a month, it’ll take 48 months, AKA 4 years – and that’s assuming no interest! It’s simply got to happen sooner than that.

I’m reading this book, Walden on Wheels, about Ken Ilgunas’ journey with this exact same thing. It’s such an inspiration. I highly encourage you to check it out.

I’m about to get real aggressive with this real fast. I know I’m not the first person to grapple with this crippled system, but until I get this debt outta here, I can’t feasibly invest for my future or buy a house. Once I get into the principal a bit, maybe I can balance my goals a little better. But not now. This is my first priority.

I listed some stuff on eBay, I’m selling my books, and I work part-time for a courier service which nets me about $1000 a month, in addition to my salary of $50,000 a year. But now that I’m in super payoff mode, I want to find a way to generate even more money. I’ve been wanting to get my CFP certification, which costs only about $5000. But that’s now five months of loan payments… and thinking in terms of loan payments is the mindset I have to be in for the next couple of years.

I can’t stop traveling. That’s why I have so many cards that generate points and let me go places for free. In fact, I’m off to Alaska next week (on American in economy, but except thoughts/trip report nonetheless!). There is marginal cost, even for free travel, but I have to seek new experiences or I’ll wither away inside.

I want to chronicle, as so many others have done, my climb up the mountain of raging student loan debt. This blog will hold me accountable, motivate me, and hopefully allow me to learn some nuggets of wisdom that I can pass along.

I’ll post regular “Financial Snapshots.” In a decade, I want my net worth to go from $-50,000 to $+500,000. Let’s do this.

Thanks for reading!

Financial Snapshot 8/10/13

August 10, 2013 by Harlan Leave A Comment

I use mint.com to keep track of my credit card accounts, IRAs, and student loans. My student loans are by far the bulk of my debt – about $50,000.

I currently have IRAs with two companies, Fidelity and USAA, and a brokerage account with Fidelity (the one my Fidelity Investment Rewards card plugs into). There’s about $4,000 among them.

My immediate goals are to pay down student loan debt, save up for a down payment on a house, and put the rest into an IRA until I max it out. This will definitely be a “slow and steady wins the race” kind of proposition.

My current salary is about $60,000 ($50,000 base + yearly bonus + reimbursements for healthcare).

My first Financial Snapshot. Really putting it all out there. Here goes nothin’…