Good advice

I found this article today... It mentions a pretty good idea, putting a list of goals for the year in the mail to yourself and reading it on years end with the idea that you will then have perspective on what you did or did not meet... kind of a letter to the future or a time capsule of goals.

Keep in mind that the article is financial in nature, but the general idea is a great one. Much of the thoughs cross over to what I'm trying to accomplish with this blog. Enjoy.

-Don

Just a quick note about second mortgages and doing a home refinance.

This isn't about my life... yet. I do plan on evaluating the need for a refinance in my future, as I have in the past. But this post is about my sister and how she is looking at things in a slightly skewed perspective.

One of the things that I've done several times in the past to get things re-aligned is to refinance my house/houses. I've done this because it has always made sense at the time to do so. Ultimately each time I've refinanced, I have sunk a few thousand dollars into the new balance of the mortgage, but the math always worked out to the better side in the situation that I was in. I've never done this to get any money out of the house. I've always aimed towards a lower interest rate or a better set of terms... never to "cash out".

Just some advice for you - Do your math first.

When a mortgage company rolls the points into a loan, you are paying interest on those points. Do your math before you sign on the dotted line. When applying for a mortgage, take the amount you save per month, divide your total closing costs by that amount. Divide the number that you come up with by 12. The final number is the number of years that you need to stay in your house before you actually save any money at all by getting the new mortgage.

Now... Sometimes, it just makes sense to buy more than you can normally afford. If housing costs are going up... way up... then equity will surely follow and you can always refinance later at a cheaper rate or even sell out and move somewhere cheaper.

Just think first.

Lets talk about old friends

We all have friends that we have known over time. Sometimes these friends seem like the best ones in the world when we are around them, often, it seems like they will always be around.

Friends are transient.

I don't mean that in a bad way. Friends just come and go. Often, not by your or their choosing. Things just add up one day to a parting of ways. The really sad thing about this is that sometimes, with friends that aren't best friends... Friends that are just good friends - they can go away without even so much as a goodbye. You never say goodbye because you don't intend that last time you saw them to be "the" last time you would ever see them.

They move... You move... You get busy.

That last one was my excuse. I've been so busy over the last three years that pure exhaustion prevented me from keeping up the friendships that I really should not have left in the weeds.

So now I have a lot of work to do. I've got a ton of friends in Omaha that I do keep up with, but not as well as I should.

I've also got some people down here that I should follow up with... some that I don't even know how to get hold of.

How does one get hold of someone when you don't know where they are and their last known email and phone numbers are all dead?

Suggestions?

Visitors

Not the kind that come from outer space... the kind that come from Omaha, Nebraska. My sister and nephew came down this past few days and we had a great time. I had her down so that we could work on some details for a family business that we have, but also just to visit and spend time together. It was great to see them.

In the process, I've learned a couple things. First, it's much easier to have a clean house if there are not a lot of things in it. Second, sometimes the best tips in life come from the movies. (a tip in itself that sort of came from "grand canyon", a movie) - The tip I'm referring to is about toys, and I got this from the Great movie "Toy Story" made by one of my favorite companies, Pixar. In toy story, the toys have an innate fear of not being played with.

My nephew played with the toys that I've saved since childhood - saved mostly because my mom saved them and they wandered down here when she passed away - but also saved because they might be valuable (star wars toys, micronauts, all manner of other collectable and fun things.)

These toys might bring in a combined value of a thousand bucks if I slaved over selling them on eBay. If they were in great shape.

The truth is, when I looked at these items it was obvious they needed playing with. They still have value, but I think the value of giving them to a boy to play with is far greater than that of a few dollars for a good deal of effort.

Of course, I may keep luke's landspeeder.

Update: Just for fun I've added this google video of a couple minutes of fun had while cleaning... silly I know.

goodwill update

As I mentioned before, eBay was my original assumed outlet for most of the stuff around the house that I wanted to get rid of. As it turns out, Goodwill was much easier and will actually bring me more return in the end anyway - even if the return is in the form of a tax deduction.

So far, we have donated almost 20 full sized garbage bags and several boxes/large items to Goodwill. I've been documenting everything that we are donating with pictures, taking detailed pictures of each item/set of items to make sure that if there were questions during any potential audit, that I could answer them with proof.

I must say however, that the feeling that we are getting from the process of giving is continuing to be much better than the sum of the potential tax deduction. The lightness of being that comes from being freed from the shackles of things that are no longer needed and the knowledge that we are doing good for those less fortunate is truly great.

Poignant Discovery

So... while cleaning this weekend, Sue uncovers a copy of Simplify Your Life : 100 Ways to Slow Down and Enjoy the Things That Really Matter (the link goes to the Amazon product page)

While neither Sue nor I have read this book before, a quick glance through the book reveals that the things that I've been planning to work through are already outlined (for the most part) in a book that already resides on our shelves. This is a Best selling book written on the subject that this blog is mostly about. Very odd coincidence I think - Not that the book exists, but that we own it and have apparently been waiting for just the right time to rediscover it at the time in our lives when it would be most useful.

The most interesting things is that the order in which we started "simplifying" our life was the order that the book introduced them as well. I wonder if there is some universally understood truth behind this?

Taxes

I mentioned the other day that there were some tax deductions that I was going to need to think of.

I came across this article today that spells out some very good information on several options. Mentioned in the article are several options, including: standard IRA options, SEP IRA, Savings incentive match plan, Keogh plan, Solo Defined Benefit plan and the self employed 401k that I mentioned the other day.

I plan to scour this for more info as soon as my copy of TurboTax arrives and I dive deep into the dance with the federal government over who gets my money ;-)

get the article here at the Motley Fool

By the way, for those of you who don't know the Motley Fool. I recommend it. They have great information presented in a way that really makes investing fun.

Taking a day off

We took a day off of cleaning last night. It feels good to have gotten this far and we felt it necessary to free up some time to sit in front of the television and veg-out for a bit.

So with that in mind, let's discuss taxes, because that is probably the biggest thing on the list in terms of importance.

This year we have a tax issue - Despite our best efforts, we've managed to actually make some money this year and that means that Uncle Sam will eventually come knocking and want his "cut"

As you have read in previous posts, we are donating to Goodwill as a way to get deductions for this year’s taxes. But that isn't all that we are doing. We are also working on the following:

1. There is repair work that we need to have pre-paid this year at our rental house - Keep in mind that only "repairs" are fully deductible this year, "improvements" like a new roof are depreciable over time and are worth far less as a deduction now.

2. Selling off losing stocks before years end. We'll do this even if we like the stock so that we can "capture" the loss. You are allowed to take a loss on any stock that you sell so long as you do not re-purchase that same stock for at least one month after your sale. Often, you can purchase the stock back for the same price if you sell at the appropriate time. Stock losses that you capture in this way are used to offset gains from other sales and will also allow for up to a $3000 deduction from your regular taxes if yu have more losses than gains.

3. Retirement saving. Almost everyone knows that putting money in an IRA (Individual Retirement Account) will allow them to defer taxes until a later date, but not many know that there is also the ability for a self employed person (or someone who has a self-owned business) to invest a considerable amount of money in their retirement through an individual 401k (information can be found here: http://mutualfunds.about.com/cs/retirement/a/individual401k.htm

4. Paying mortgage payments early. By paying mortgage payments early, you are in effect borrowing from next years deductions, but compared to paying money to the government, this is certainly a better option.

5. Buying equipment for business use. Since we still have some personally owned business, we can still use the gain that we have to offset purchases that we need to make. A new 2000.00 computer is nearly half price when you consider that it reduces your take bill by your tax rate if you owe taxes. Since we need to upgrade some stuff, now is the time.

Remember that if you are replacing equipment, you can donate this for a deduction as well. If you intend to use the old equipment for personal use or sell it, you will most likely need to re-capture some of the value, so put this transition of use off until next year if at all possible.

There are others, but I'll be covering all of these tax issues in detail as the months progress. I just wanted to get you thinking about these things before the end of the year.

By the way… just a small disclaimer for the legally minded. I’m not a tax attorney... I don’t even play one on TV… so if you take my advice on taxes, use common sense and double check anything I tell you with a real tax professional.

eBay or Goodwill?

When I started this, I listed the disposal method in order of importance. My thoughts were that the best gain from my old stuff was going to be from eBay. After all, money in the hand is better than none right?

Wrong.

After doing research on eBay for the most recent selling prices on the items that I wanted to get rid of, I found that the amounts were just not worth it. The effort that I would have to go though, plus the time that I would have to devote would ultimately mean that I was working cheap for no reward.

So we took as much as we could to Goodwill.

So far, 10 full size garbage bags of clothes, 2 boxes of computer equipment and a excersize bike. All in good condition or working order.

Why Goodwill instead of eBay?:

eBay: eBay would have taken approximately 20-30 hours of Listing, emailing, boxing and shipping. Assuming that I could get someone interested enough in my old suit jackets, t-shirts and such. Probable return: a few hundred dollars

Goodwill: All over in a single afternoon. I've given away ten bags of itemized clothing, computer items and equipment, all of which good for a deduction off my taxes.

Even if we assume the "value" of the clothing at $1.00 per item we've already managed most of what we would have gotten with eBay – except, instead of a check, we get a deduction.

Realistically, we probably walked away with a couple thousand of dollars in donated items in this trip. If your tax rate is 33%, a thousand dollars of donated items saves you 333.00 off your taxes.

If you add in the saved time that would have been spent boxing, shipping and listing along with other hassles, you can see how this method really added up to a better idea.

There is one important thing to remember when you donate items: You must get a receipt for the items, no exception. The IRS requires receipts for donations, and for items over $500.00, you are only allowed to deduct what the charity intends to get from the item. (turns out that people were deducting junk cars and taking off the full blue book value – no more of that I think)

It’s a good idea to ask the charity what they intend to do with your donation. In my case, it's easy, since I can go right in to Goodwill and look at what similar items sell for.

Of course, I haven’t even added in the intangible benefit of just feeling great to have given something to a great charity. That feeling alone would have been worth it. Maybe if I keep this up long enough, I can clean up a bit of bad Karma while I’m at it.

Cell Phones

Bear with me for a short diversion.

Part of cleaning up our lives is also about minimizing expenses. This week, we consolidated our cell phone services.

Sue has had Verizon for a while now, but I've been on T-Mobile. I used to use a ton of minutes, and geared my cell plan towards that goal. But when I went in and looked at the actual minutes used, my recent activity was nowhere near what I am paying for.

My T-Mobile bill was set up for 5000 anytime minutes, with CDMA and WIFI Hotspots included. It was set up this way due to some $700.00 phone bills that I had a couple years ago. The problem is that I’ve been steadily using less and less of my minutes recently. So much so that it just no longer made sense to have access to that much time.

On top of all that, I have some pretty specialized uses for my cell phone. I use a lot of the internets and require a PocketPC or Palm based phone for regular access.

So, here are the steps that I followed:

1. Figure out what is important to have on the account (internet, minutes, etc.)
2. Determine the likely number of minutes.
3. Find the best plan possible.
4. Find and research the best phone possible.

Since Sue was already on Verizon, and we liked their coverage, the choice to consider them was very easy. The coverage was always better when we compared her phone with my T-Mobile coverage. There were very few times that I would have coverage and she would not. Most often, We would have to finish calls on her phone when they dropped out on mine. (can you hear me now ;-)

I also looked at the other contenders, but in the end, Verizon’s known entity won out.

Sue and I selected phones and ordered them for ASAP delivery. Within the next couple of days, our service is transferred and we’ve managed to save $70.00 a month between us. Throw in some extra features that I previously did not have like EVDO Dial Up Networking (through a hack) and a really great browser in the phone (Picsel) and I feel good that we have come out way ahead.

Here is what we ended up with:

Verizon Family plan 1400 minutes
Samsung i730 with unlimited EVDO and 1000 text messages. – This is a far better “Phone” than the hp 6315 that I had prior. I can actually use this one for making calls without explaining the echo and crappy signal to the other person on the line.
Sue’s Phone (for the life of me, I do not know what she chose)

My hope is that we don’t start overshooting our minutes unexpectedly, but I guess that is the risk you take.

Progress is good

Tonight, I've gone through the last if the boxes in the Office/newly minted bedroom. I've kept more than I thought I would based on size alone, but overall, I've probably thrown out or plan to ebay/donate more than I've kept, so I feel pretty good.

Of course, there is still a lot of work to do in this room. The ebay pile has to go online this weekend to test the theory that ebay will be worthwhile for getting rid of stuff.

I also have to go through some of the boxes that I've put off until later (some three hundred discs that I chose not to individually load at this time ;-) and a huge box of photos. The photos will be fun, they range from my grandparents to old girlfriends to childhood friends. My hope is that someday, I'll be able to digitize all of these photos so that they can join the rest of my photos in my iPhoto library.

Does anyone know a good service that would do this automatically? This has to exist somewhere.

Cleaning out the closets

Last night we ran through most of the required "closet cleaning" and changing it from storage to somewhere that we might be able to put clothes.

So far, I've been going under the following model:

1. Set aside a pile for Ebay items
2. Set aside a pile for tax deductible items
3. Fill as many garbage bags as possible.
4. Shuffle everything else.

Ebay: My first go at determining the value of the Ebay items has left me with the belief that Ebay will probably bring little to no return on most of the items that I'm assuming have value, so I'll probably re-adjust what goes in that pile significantly.

I'll probably start having the laptop running in the room from now on so that I can check value as I'm sorting through the items and make sure that I'm not wasting too much time.

Tax Deductible: The tax deductible items are also piling up and so far my research has only given me a little hope that this will add up for me. I do have several computers, laptops, programs and such that will hopefully give me a pretty good deduction.

Trash: So far this category is the big winner. Sue and I have filled 6 full sized trash bags and one smaller bag with things that are going straight to the dump.

Shuffling: as we are digging through the detritus, we are uncovering things that I've needed for a while but could not find, things that really need attention and things that are worth keeping. My hope is that we will eventually go through this pile twice to make sure that it is as small as possible.

I think the progress is going well for now and I'm happy overall with how this effort is making me feel. It's like a huge weight being lifted off my shoulders.

As I've been doing the "busywork" required for this step, I've been thinking about possible steps that are required later that I may not have thought of. If you have any ideas to add to this list, please give me a hand.

1. Decide whether to keep my rental house, and if so, get a new mortgage that is longer term.
2. Decide whether to get rid of my older motorcycle.
3. Should I get rid of things that I might need again or should I plan on replacing them with better items if I ever do need them?

More tomorrow.

Only ankle deep and yet...

It seems like it is taking forever to get through the first room.

We started cleaning in the bedroom. The thinking was that it is the highest room in the house, the farthest north, etc… Well, ok... We chose it randomly.

But, it was a good choice.

This room has not always been the bedroom. In fact, it has served as my office/storeroom for most of the last five years. Furthermore, for three of those five, my life and work have been so tightly integrated that I've literally been sleeping in my office.

There are at least 7 computers, three monitors, two full closets of junk and one rather large desk covered with everything you need to conduct business taking up far too much space where an otherwise perfectly good living space should be. Cleaning it up will be difficult, but certainly necessary.

Now is probably a good time to give you a little background history so I don't look like some kind of work-addicted freak.

I'm one of those Internet entrepreneurs that you have read about. It is even slightly possible that you have read "specifically" about me, I've been in a small stack of magazines and books on one topic or another ranging from type to interface design, though the likelihood of your having prior knowledge of my existence is minimal.

As comes with this kind of territory, I've always been a hard worker when I’ve chosen to work. I’ve also always been one to gravitate towards an entrepreneurial “opportunity.” When I come across one.

Three years ago, I signed on as Chief Creative Officer with a company called Sidereus Technology and have been putting in somewhere around 16 hours a day on average for the last three years in order to help build the company's technology and serve the clients that we've had. Furthermore, two years ago, I brought my girlfriend Sue to work for them as well. With both of us in the same company, we worked around the clock in hopes of things paying off big.

They say that life is what happens while you are busy doing other things - I say that life is what passes you by when you are working in the internets.

So, like I said… the room has some “stuff“ in it – Three solid years of stuff that we have just been too busy to sort through or clean.

Day two and three

The "first step" aspect of this quest is going well. After having lived in a way that has made me unable to devote any time to maintaining my personal space for so long, my thoughts were that the task ahead was probably insurmountable. But it's really fulfilling to see the progress and that makes the work much easier.

As they say, the journey of a thousand miles begins with just one step.

I've been taking pictures and hope to post them so that you can see the progress as it happens. I know that at this point, it looks like someone cleaning thier house, but stick with me... there is so much more to come.

thanks,

Don

"First Post" and reason for being.

Did you ever look around and realize that you just have too much crap in your life? I mean... loads of it. Everywhere you look filled with things that you now realize do nothing for you other than holding down the crap that sits below it?

Well... this pretty much describes the picture of the house that I now sit in. I'd like to say that it isn't my fault, but that wouldn't be the truth. Oh, I have my excuses... lots of them. I'll even entertain you with them over the next few posts, but the bottom line is that I let this happen.

What I'm deciding to do about it now is somehow slightly different than usual... Usually when I get this feeling of dread, I move some stuff and move some more stuff and maybe things get cleaned up a bit and I generally forget about the overwhelming mounds of unnecessary things and settle back into a calm day to day world where the amount of stuff that I have seems acceptable...

Today, this task will be handled differently. I’m starting this blog about the experience and holding myself responsible to the task at hand by sharing it with the world.

What does cleaning up my life mean?

I think it means more than just spring-cleaning.

I think it means finding out everything unnecessary and eliminating it… Further, I think it extends to repairing and improving my house, my mind and my body. Take this a step further and you will find the need for repairing old friendships and becoming a better person.

My mom did all of this right before she passed away.

I’d like to start sooner…

First off I will need a mission.

Obviously the first item on the list is easy… Get rid of the crap.

But the list is longer than that – As I said before, I have my reasons for getting to this point. And I will need to identify and rectify those problems as well if I’m going to even hope that I can make any “gutter cleaning” stick for more than a short time.

So, lets fill out the list.

1. Remove from my possession and house any item that does not serve an identifiable and valuable service. (I’m sure that I’ll have to narrow this down sooner or later. For now, this will do.)
2. Convert as many of those items to positive income, or when that is not possible, to a tax-deductible donation or genuinely needed non-deductible donation.
3. Discover and repair all broken items or problems in my home.

And of course, the really hard ones will follow those.

4. Figure out what causes the malaise in the first place and stop as much as possible of the malignant behavior.
5. Fix any personal damage I have caused to others.
6. Re-kindle old friendships that are worth having.

I think that is enough for now. It’s a good mission start, and while it is a bit of a challenge and does seem a bit daunting at first, I think that if taken in stages this could be done without as much effort as one might think.

Wish me luck.

-Don