What to Do with $100K?

What to Do with $100K
I have a confession to make.

For the past 3 months, I’ve had a nice chunk of change sitting in my….online savings account. Oh, the my-money-is-doing-next-to-nothing-for-me horror!

Closing Friday; Jetting off Saturday

In June, I sold my condo for $30K over the asking price, thanks to making a great investment in a foreclosed condo three years ago and a bit of luck from the Boston real estate market. When closing came in August, I had bigger “fish to fry” as I was about to embark on my trip around the world. Literally, closing was on Friday and I was set to jet off to Fiji the very next day.

Needless to say, I did little more than transfer the sum of the six-figure check I received at closing from my checking account to my online savings account. Of course, I did have every intention of figuring out what to do with the money as I had downtime during my travels. But as life would have it, I promptly paid no attention to the money and concentrated on fully immersing myself in my adventures; I figured that things would work themselves out when I returned home.

The thing is, I returned home over 5 weeks ago…and the money is still sitting there.

Counting My Blessings

Now don’t get me wrong, I realize that I’m in a very fortunate position. Some people are pinching pennies with a bare bones budget just to get by. Others are drowning in credit card debt. Even more are concerned with various budget-drains such as health crises, unemployment, etc.

And to those people, I say hold on. Stay strong and steady your resolve to reach better days. Remember that after every storm, the sun always returns–and shines just a little bit brighter.

I was there; I know exactly what you’re going through. I know what’s it like to have $1 to my name, to be nearly homeless, and to feel as if your world is closing in around you. Throughout all of the various challenges I’ve faced in my life, one thing remains constant: My positive, can-do attitude has afforded me strength, resilience, and opportunities beyond my wildest dreams.

Looking back at the crazy ride this year (and my overall financial journey) has been, I’m incredibly grateful. If you’re looking for proof that hard work does indeed pay off, take a walk through some of the archives here. Hopefully, you’ll find some inspiration along the way that will help you count your own blessings (and figure out how to turn things around in a positive way).

What to Do with $100K?

After some calculations about what I’d like to keep in my e-fund, travel funds, and an extra “I’m a freelancer” cushion, I have roughly $100K to work with. And quite frankly, it still sort of makes my jaw drop to realize that I’m able to type this, let alone make such big financial decisions.

I’ll admit that there’s a large part of me that wants to squirrel this money away in the safest ways possible because it literally represents a lifetime of hard work to get to this point. More than luck with a real estate sale, this money is a testament to how far I’ve come: From the credit card debt-ridden college grad with small town roots to the debt-free woman living in the big city.

But then there’s the flipside…

I’m a personal finance blogger; I should be doing something more with my money! I should be investing smartly and increasing my returns! I need to make my money work hard for me!

Yeah.

What to do with $100K? I’m really not sure. What I do know is that I’m a bit paralyzed from an interesting mix of excitement, fear, skepticism, disbelief, and confusion. I’m not sure if I want to purchase an investment property (I’m purposely renting for the next year as I found an incredible deal that’s allowing me to pursue more lucrative freelancing opportunities without being locked into a Boston-sized mortgage again), invest in stock, hire a financial planner, or just go nuts with CDs and bonds (yay, safety!).

I’d love to hear your suggestions and experiences with investing larger sums of money. What did you/they do? Any specific do/don’t strategies are appreciated!  :)

What Would You Do with $100K?

Want to Avoid Becoming House Poor? Choose Your Mortgage Wisely

Want to Avoid Becoming House Poor? Choose Your Mortgage Wisely If you’re in the market for a new home, it can be tempting to lay all the cards on the table and go for the most house you can afford. If you’re financially fit enough to afford this massive expense, go for it.

But if you don’t have a sizable down payment, long-term savings, and retirement wrapped up before you sign on the dotted line, that new mortgage could be your ticket to becoming house poor.

A Definition of House Poor

As described by Investopedia, house poor is a phrase commonly used to describe people that spend so much money on their housing expenses that they have little to nothing left to pay for their other needs. Essentially, if you’re house poor, you’ve purchased more home than you can afford, no matter how creative you are with your budgeting method.

Being house poor can pose significant financial problems throughout your future, but it can be avoided if you’re careful to evaluate all of your options when choosing your mortgage. Even in today’s competitive real estate market, it’s still vital to do all of your due diligence before signing on the dotted line.

Here are some considerations to make when choosing your mortgage:

Decide What Matters Most

There are tens, if not hundreds, of factors that impact the terms and conditions of your home loan. Before you even make contact with a bank or broker, you should first decide which of these factors are most important to you.

Do you care most about the APR? Are you concerned mostly with what your monthly payment will be? Perhaps you want to fully investigate all of the various fees encompassed in your closing costs.

Whatever matters to you most, decide that upfront and seek out a home loan that meets your personal requirements.

Shop Around and Conduct Interviews

Once you’ve decided which type of mortgage works best for you, you next need to determine which lender you’ll work with. This is not a time to be swayed by clever marketing tactics and sales pitches! Choosing a mortgage is a huge, potentially life-changing decision so now is the time to carefully select who will help you reach your goal of homeownership.

Don’t be afraid to be the squeaky wheel when conducting your research. And remember to pay attention to the details. If the broker is hard to get a hold of when you’re not yet a customer, do you really want to work with that person in the future?

One key consideration to ask about is the lender’s turnaround time. When you’re buying a home, your world is flush with deadlines and agreement windows. Don’t let a glitch with your mortgage broker be the deciding factor between closing or losing the house.

Additionally, ensure you understand all of the terms and conditions before you move forward to ensure you don’t find yourself in a house poor situation down the road. By working with a reputable mortgage company such as Newcastle Permanent, you’ll effectively be setting yourself up for financial success as you pay down your home loan and build equity in your investment.

What tips and tricks do you have for choosing a mortgage wisely?

How a Trip Around the World Changed My Views on Life and Money

TheHappyHomeownerBali A few months ago, I made a decision that has effectively changed my life.

An avid traveler with an insatiable desire to see the world, I decided that the best way to celebrate the changes I’ve made in my personal life (and to pull myself out of the writers block-ridden funk I was sliding into) was to make one of my biggest dreams become a reality: I decided to embark on a trip around the world.

Trip Preparations

After selling my condo and making a pretty decent profit in the process, I finally had the financial means to set off on this epic adventure. And with now being a full-time freelancer, I had the schedule freedom to jet off into the sunset without worry about vacation time, etc. With these logistical pieces in place, it seemed like the stars had aligned and there was no better time to move forward with the plan I’d dreamed about for so long.

In terms of planning, there really wasn’t much that went into it because I’d always had a running list of countries and places I wanted to visit. I simply sat down one night, pulled up a map of the world, and began searching for the best one-way flights to get me to where I wanted to go. After about a week of searching and planning, I had my route mapped out and my flights booked. I decided to leave the accommodations unbooked because I wanted the freedom to go wherever the wind and mood took me when I arrived at a given destination.

Life Lessons in the Strangest of Places

While I’ll recap more of the trip in future posts (there are A LOT of photos to share!), this post is dedicated to more of the reflections and lessons I picked up along the way. As I sit here at home typing this, it’s pretty exciting to realize that I did it–I worked my tail off to get to this point, and I grew even stronger as a person as I threw caution to the wind and set off on my journey without a single look back. Hands down, it was one of the most amazing experiences of my life, and it has changed me in ways that I’m still learning about.

Perhaps the biggest, most immediate changes have been my views on life as a whole. I’ll break it down further as this post goes on, but I found strength and inspiration in the strangest of places as I traveled around. From witnessing pure happiness on the face of a man who was walking barefoot down a dirt road in Bali with a giant pig in tow to the passion of the rioters I met along the way in Istanbul, each new experience shed insight into the kind of person I want to be and the kind of life I want to live.

People Over Things

In the past, I fell prey to a materialistic sense of self and living. Even now, I still find myself challenged by the behaviors and preferences of some of the people I know here in Boston. But after returning from my trip, I know without a shadow of a doubt that I am moving towards being a much less materialistic person. I’ve realized that the ‘Keeping up with the Jones’ mentality that I see in so many people here has virtually no appeal to me.

Yes, I still drive my BMW but that it because I absolutely love cars and driving. If you saw me, you’d see the girl with no makeup on, no purse (I put things in my pockets), and jeans and sneakers before you’d ever see someone upholding the status facade of having such a car.

Additionally, the “See and Be Seen” crowd does nothing for me–I’d much rather cook a meal at home with my friends than spend $100+ at the newest, “hottest” restaurant no matter how much of a ‘foodie’ I might think I am, and I don’t need to buy my friends rounds and rounds of drinks to prove my friendship. Going out on a Friday night still happens, but it doesn’t come with a $200+ tab with it because I place much more value on the act of being with friends–it’s the experiences I want, not the expensive accoutrement.

Being Happy with What You Have and Who You Are

This applies to not only the things I have–it’s more about the idea of what I do for work, how I fill my free time, how I live my life on a daily basis, and my sense of self. Gone are the days of being a doormat for other people, comparing myself to others, and evading insecurities by spending. I find myself much more confident and directed now.

I know who I am and what I want, and I’m now living my life with eyes wide open as I ‘go for it’ in every sense of the phrase. I’m building a life that I’m proud of–one that is balanced and healthy and whole. I’ve learned from my mistakes, and I’ve challenged myself to not only recognize what I’ve done wrong in the past, but to push myself to grow and change for the future. This realized strength, security, and esteem in myself is the catalyst for a lifelong happiness of just. being. me. and it’s all been further solidified by my experiences throughout this trip.

Witnessing True Happiness

When I was in Fiji, I was fortunate to be able to visit one of the villages of the local people. While I was struck by the level of poverty at which these people live, I was more intrigued by how they seemed to be genuinely happy.

For instance, take the woman who was cutting reeds on the beach. She looked to be at least 70 years old, and she was working with such intensity that I couldn’t fathom how she operates like that on a daily basis. When I later found out that she’s been doing that same kind of work for over 45 years, I was awestruck.

The creature comforts we have here in the states simply don’t exist for Fijian villagers. Everything they have, they make themselves from the land they live on. Even with these logistical challenges, the biggest difference is that they do it without sadness, bitterness, or shame–they live their life with authenticity, awareness, and helpfulness not because they have to, but because they want to. They are a wonderfully welcoming, proud group of people and this interaction alone left such an incredible mark on me.

Money Isn’t Everything

The central theme of my trip was to explore the areas I’ve dreamed about visiting, but I also wanted to soak in as much of the culture and people as I could. As I traveled from place to place (13 countries and 30,000+ miles), I began to realize one very simple idea that I’ve known for a while but hadn’t fully formed until I took this trip: Money isn’t everything. In fact, money can be the root of unhappiness and destruction if it isn’t managed correctly and understood completely.

The man with the pig that I referenced above walked along the street with the biggest smile on his face; laughing and waving hello to those he was passing. This was in sharp contrast to the female tourist I later saw who was loudly complaining about having to walk around while she was surrounded by the natural beauty of Bali (with one heck of an expensive camera around her neck!). These two encounters sort of summed up what I’ve always known: Money can’t buy happiness.

As I recently wrote in an article for another website I work for, “While money is a priority and a main source of stress on many levels, it doesn’t dictate these peoples’ sense of self, confidence, or priorities in their lives.” The difference between the man with the pig and the woman with the camera was that he had far more genuine appreciation for life itself. He wasn’t bogged down by possessions and expectations and the quest for more. He simply enjoyed his walk down the road with his fuzzy farm friend in tow. And really, which of these two people would you rather be? The happy man or the disenchanted woman?

Keeping the Emphasis on Life

As I continue to process my experiences on this trip, the main takeaway for me is that life shouldn’t be all about the money. Yes, I need to eat and have a place to sleep, but I don’t need to have the latest and greatest of everything. And I certainly don’t need to fuel my life through the constant quest for more money or keeping appearances with materialistic, superficial people.

What we need to do is to stop, take a look around, and be thankful for the non-monetary blessings in our lives. When you strip away the money, the fancy cars, and the nice clothes, what do you have? If there isn’t substance below the surface, are you truly living a happy life as a happy person? I think my new friends in Bali are on to something—walking barefoot down a dirt road isn’t all that bad when you have a true smile that radiates sunshine and happiness firmly affixed to your face. :)
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The Yakezie Carnival: Fall is Here Edition

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