Kids and Money

Five Ways My Toddler is an Early Conservationist

Her Daddy’s Influence

My husband is a minimalist. One of his life philosophies is we should consume to live and not live to consume. When he shops, he chooses quality over quantity. If time is not a constraint, he prefers to try to fix a broken object rather than getting a replacement. About 10 years ago, he stopped eating red meat. Each day, he’s mindful of the carbon footprints he leaves behind. I’m not there yet to meet him.

Her Mommy is Doing Her Part

I consider myself a conservationist in some areas of life, but not so much so in other areas. During the early years in our marriage, I had accumulated a lot of disposable stuff, which to this date, I’m still working to declutter. I’ve certainly gotten better in the past year. I used to think having a lot of things filling up the home is comforting. Thanks to my husband’s influence, I see the freedom living in a clutter-free home.

Sometimes, my husband and I still don’t see eye to eye on what we deem necessary. However, I do have some qualities my husband admires and he takes pride in that. He likes that (1) I am a smart shopper and that I negotiate prices; (2) I have general ideas of what most things should cost and I only buy when the price seems right; (3) I never feel like I have to have something right away (if it’s something I need, I look for alternatives); and (4) I think of purchases in terms of lifetime (amortized) costs. 

early conservationist

Together, We Are Stronger

I also don’t like to waste. My husband and I feel disgusted by the amount of stuff and food some people causally discard. This is very evident each time we go out to eat. Sometimes, we would see half a plate of food being left on the table that will soon go into the trash can. We also see a lot of waste in public places, too. Do people really need three pieces of napkin to dry two hands? Why take up two plastic bags when two heads of cabbages can easily fit into one bag? Why throw away an otherwise perfectly fine sweater when a yarn came loose? Does a toddler really need 10 pairs of pants to rotate through a season? The list can go on and on.

At home, we practice conservation. We aren’t perfect, but we try to use up stuff to the last drop if we can. When we do have to throw things away because they’ve gone bad, I don’t feel good inside. It’s not usually about the money, although that stinks, too (at our tax bracket, for each dollar we waste we would have to earn almost $1.75 extra). It’s the fundamentals of being wasteful that bothers me. “Why didn’t we eat the avocado the day before when it was still good? And now, we’ve to throw it in the trash can.”

I certainly want my daughter to grow up and be a conservationist but haven’t put much thought into teaching her about this concept or way of life. I was going to wait until she’s three or four. To my surprise, lately I’ve been noticing small behaviors from her that might show she’s already on her way.

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Real Estate Investing

Not Knowing the State Landlord/Tenant Laws Almost Caused Us a Potential Eviction Case

Landlord and Tenant Laws

As a real estate investor doing buy and hold, you need to fully educate yourself on the state landlord/tenant laws where you are investing. Skipping this step or doing incomplete homework can be costly and messy. This almost happened to my husband and I. I’m glad we were being extra cautious (not giving into our emotions) and took the time to perform due diligence.

landlord tenant laws

Having lived in two states, I noticed that the landlord/tenant laws vary from state to state. To further complicate things, these real estate laws can also vary from county to county. Once we narrowed down the locations where we want to do buy & hold, I spent hours on the web researching landlord/tenant laws applicable to those particular areas. I also had my husband read those laws. We only proceeded to make offers after we’ve decided that the areas we’re interested in are landlord-friendly. Yet, we soon learned that despite having put in 10 plus hours of research on the web reading and familiarizing ourselves with the laws, we still didn’t get the complete picture.

The Story

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Kids and Money

8 Ways to Help Your Child Build Social Skills and Develop Social Competence

My Concern as a Parent Using Informal Day Care

I have been using informal day care (such as in-home care) since my daughter was 8-months-old. For a few months, it was just my daughter and her child care provider at home. On the one hand, I’m aware of the many benefits using informal care (both for my daughter and my marriage). My daughter enjoys the undivided attention she gets. She acquires amazing skills every day. All in all, we have strong reasons choosing to spend 35% of our monthly expenses on child care (I wrote about this in an older article).

On the other hand, being a professional working in the early care and early education field (I also did research in this area while in graduate school), I am always being fed with information about the long list of advantages sending my child to a formal day care setting (such as licensed day care and child care centers). One of the areas these settings generally do well in is providing enrolled children opportunities to build social skills throughout the day.

social skills

When it’s just my daughter and her child care provider, my daughter is missing out on those opportunities. As such, I think a lot about how to prepare my daughter for formal school (and the social world). How can I facilitate or structure my daughter’s day so that there are opportunities for her to interact in a group setting with her peers, meanwhile developing her social skills and reinforcing those skills.

Until my husband and I are ready to send our daughter to a formal day care where she’d be interacting with other children around her age, I am constantly looking for opportunities for her to be in a group setting.

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Financial Freedom, Financial Planning, Investment, Money Habits, Retirement Planning

December 2016 Non-W2 Income Report

We’re sharing our non-W2 incomes on the blog not to brag. We want to show you what is financially possible. If you’ve read some of my previous articles (such here, here, here and here), you know that both my husband and I have been saving aggressively over the past decade. Our savings rate ranged from 55% to 75%. This was true even when our combined income was below $100,000. The total passive income number you’ll be seeing here is the result of a decade of financial discipline and strategic investing. We took no shortcuts nor did we stumble upon great luck.

december 2016 income report

In our household, our biggest financial goal currently is to build up our non-W2 income. Sometime in the near future, my husband and I will want to leave our W-2 employment. At that time, we want our annual non-W2 income to cover our annual expenses. Ideally, we prefer 95% to 100% of expenses will be covered by our passive income sources (such as from dividends and interest payments from stocks and bonds and income from rental properties) and anything beyond that would be a bonus/extra cushion. We are certainly not there yet; we currently have enough passive income to cover our basic expenses. This is the reason we’re looking into rental properties to fill the gap (click here to read my rental property investing series where I share our journey on this new adventure).

Part of financial planning is financial tracking.

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Financial Planning, Real Estate Investing

Cash on Cash Return on Investment

Cash on Cash Return on Investment

When analyzing real estate deals, one of your biggest concerns should be the rate of return (also known as return on investment or ROI). What is the percentage return on the capital invested? One metric many real estate investors like to use is Cash on Cash Return on Investment (CoCRoI). It is the amount of cash flow you receive relative to the amount of money you pay out-of-pocket for the property.

CoCRoI = Pretax Annual Cash Flow / Cash Out-of-Pocket

cash on cash return on investment

If you have had an interest savings account and/or investing in the stock market (such as holding dividend yielding stocks and interest yielding bonds), you might be familiar with CoCRoI. For instance, if you invest $1,000 in a stock that pays out $30 in annual dividends, your CoCRoI on that $1,000 is 3% of your capital invested. Likewise, if you pay $1,000 cash out-of-pocket to acquire a property that generates $50 in cash flow annually, your CoCRoI yield is 5%.

Being able to draw this parallel across different investments (or asset classes) is pretty cool, right? You can easily compare rates of return on rental property investing to lending and investing in the stock market. Knowing that the stock market historically returns 7% to 8% annually, is a Cash on Cash Return yield of 6% on an investment property a good return (keep in mind that different asset classes have different levels of risk and CoCRoI doesn’t account for relative risk factors)? As a newbie real estate investor (but a somewhat seasoned stock market investor), I certainly appreciate this familiarity.

Factors that Can Influence the Cash on Cash Return Yield

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