Building a Patio - Part 1

My wife and I live in Orlando, FL. We have a modest home with a reasonably sized back yard, which is fenced in from our neighbors on all sides. But, we didn't have a patio. What good is having a house in Florida, where it is sunny almost every day, without having a patio? We thought about building a deck but decided that we didn't want the deck to become a large projectile during a tornado or hurricane. So, patio it was.

Being the frugal guy that I am and wanting to learn more about home improvement, I decided to build the patio myself. So I started my research. We decided to build a concrete paver patio in an L shape. I figured it would be pretty easy to find all the materials. I was wrong. There are a ton of patio contractors out there that would love to quote you a price and build your patio but surprisingly few places to buy the materials yourself.

There are five main materials that go into building a patio. They are:

• Landscape fabric - Landscape fabric isn't mandatory, but you can lay it down on the bare dirt after you have finished your excavation and help ensure that no weeds come up through your patio. Make sure you put it only on the bare dirt and NOT between the limestone and mason sand layers!


• Crushed limestone - There are a bunch of websites that talk about the different types of rock that you can use as a base rock for a patio. I went with a 1/4" crushed limestone that the lady at the rock yard said that most people use for patios (many websites recommend 3/8"). It seems to have compacted quite well.


• Mason (or Leveling) Sand - If you buy this at Home Depot, it is called Leveling Sand and they sell it by the bag. Many other places call it masonry or mason sand. It is an extremely fine sand that is used on top of the limestone and between the cracks in the pavers once they are laid.


• Paver edging - You want to make sure that you get paver edging and not landscape or garden edging. Paver edging is typically much more flat than other types of edging so that the paver lay directly against the edging.
• Pavers - Yes, you need pavers! They come in all shapes, sizes, and cuts so choose them according to your liking.

As far as buying the materials:

• I bought the landscape fabric and pavers from Home Depot. I did find out later that there is a place, Paver Systems, in Orlando that has a large collection of pavers and does sell them to the public but they do not have a showroom in Orlando. Their only showroom is in Jacksonville. Besides Paver Systems, I only know of Home Depot and Lowe's as paver dealers in central Florida.
• I had to buy the mason sand from Home Depot as well. I'm pretty sure they charge twice as much when compared to going directly to a sand yard, but I didn't have a truck and no company will deliver less than about 6-8 tons of material. I only needed a little over a ton so I ordered the bags of sand from Home Depot and had them deliver the sand at the same time as the pavers.
• I bought the crushed limestone from Florida Rock (407-858-5416). I had 8 tons of limestone @ $36.50/ton+tax+delivery delivered by them and the process went very smoothly.
• I went to Paver Systems to buy the paver edging. Home Depot and Lowe's only had landscape edging. Paver Systems is a dealer of Snap Edge products, which sells the appropriate type of edging.
• The final, big cost of the project was a dumpster. We needed somewhere to put the excavated dirt. We found AFAB Orlando, a family owned dumpster rental business. The owners were super nice. They rented us a dumpster for $275.00 for seven days, which included drop off and pickup. Remember to ask for a dumpster with doors on one end. You can't throw wheelbarrows of dirt over the side of the dumpster!

That takes care of the main materials needed for the patio. In my next post, I'll discuss some of the other tools and materials needed for building the patio and the planning that the wife and I did to figure out the size and layout of the patio.

Buying a Home - Inspections

I tend to think most people walk through a house for sale like I do. Check out the place for about 15 minutes, analyze paint colors, look for obvious cracks, check out the landscaping, look for stains in the carpets, and leave. That's a great way to know if you like the place and whether or not you want to make an offer. And, it's a great start. However, this does not qualify as an "inspection." Here are a couple inspection tips from my trip through buying a home.


The first tip applies before you sign your offer sheet. It is customary to build in time for home inspections. You should ALWAYS include this contingency. Not only is it a way to ensure you are buying a house without major problems; it is also a way to get out of your contract if something else is worrying you about the purchase. We built in 10 days in our offer. However, keep in mind that 10 days are calendar days, not business days. So if you have an offer accepted on Saturday you really only have 6 business days to get all your inspections done. Regardless of how tight your timeline is to get the inspections done make sure the clause is in your contract.

The next tip...get quality inspectors. I cannot recommend this enough. As I mentioned in my previous post one of the things that our realtor really helped us out with is in picking an inspector. She recommended a company that was awesome! The home inspector checked every corner of the house including the slab, the crawl space, the water pressure, polarity in the outlets, etc. And, the best part is that when it was all done he sent a full report with color photos of every defect he found. That's what you want in an inspection. You want a detailed report that not only lets you form a decision whether or not to move forward with the purchase but also gives you an idea of the repairs you need to perform in the future. I recommend getting a termite inspection and if you're area is prone to mold get a mold inspection. The $1000 you'll spend on those three inspections is well worth it when you consider the thousands you could end up spending fixing a foundation, rewiring, replumbing, or fixing one of hundreds of other problems that you could find days, months, or years after closing.

Buying a Home - The Realtor

The first posting on my experience buying my first home deals with using a realtor to assist with the purchase. We decided to use a realtor because, well, we knew nothing about buying a home, the processes, the paperwork, the intricate details. We started out by finding a realtor in the local area, giving her some details about what we were looking for, and having her send us a list of homes that met most of our criteria. We'd go out on random Sundays, tour a bunch of homes, sometimes over 10 at a time, but we weren't in a hurry and didn't want to spend that much time looking around and so that whole process sort of died out.

In the meantime I found a wonderful website, ZipRealty. They don't cover all areas of the nation but lucky for me one of the areas they do cover is Orlando. The beauty of ZipRealty is that they give you all of the details you can find on national sites like realtor.com or local sites such as an individual realty company site, but they also provide additional details that some sites don't want you to know. For example, they list not only the current asking price of the house but also any price changes over time, both increases and decreases. They allow you to search across a wide range of criteria including bringing back only those houses that have had at least one price reduction. They show you how long a house has been on the market. And, my favorite feature of all is that they will sometimes find a house that was listed, deactivated, and relisted (it's not ethical but realtors will do this sometimes to reset the # of days on the market for a house) and they'll show the true number of days that the house has been on the market across all listings.

Once I found and started utilizing ZipRealty's website, the core value of having a realtor disappeared. Now, instead of her finding us homes to look at, I was finding the homes and telling her that we wanted to see them. In fact, the house we ended up buying we found without our realtor, we viewed without our realtor, and our realtor didn't even know about it until we called her because we wanted her to make an offer.

Our realtor assisted with the paperwork for the offer letter and talked with the selling realtor to relay our prices as we negotiated with the owner. However, once the offer was accepted there wasn't much remaining for our realtor to do. Before I sound like our realtor didn't do anything I will give her some credit. She recommended both a home inspector, who turned out to be fabulous, and she recommended an insurance broker, who was able to get us a decent premium on our homeowners policy. Besides that, we talked with her a couple times between the offer acceptance and closing, but she didn't do many other things besides show up at closing and take her commission.

Do I think we needed a realtor for our first time home buying experience? Yes. Would I recommend a realtor to others who are going through this for the first time? Yes. However, will I ever use a full-commission realtor in the future for any of my home purchases? No. I will either get a real estate attorney involved to handle the necessary paperwork or I will find a discount realtor that handles only the paperwork for a reduced commission. For those of you in the market for a home, check out Redfin. They are not in all markets yet but they are a discount online realtor that will handle the paperwork of buying a home and give you a kickback of 1% on the typical 3% buyer's realtor commission.

With new websites, such as ZipRealty, and discount realtors, such as Redfin, traditional realtors are going to have to find new and useful ways to serve the needs of home buyers or they are going to find themselves with less and less business and many will need to find a new career.

We Bought A House!

If you've read the last few real estate entries in my blog about the horrible market for buying and selling homes not only in Orlando but nationwide then this is probably the last blog post title that you expected to see from me. But, it's true. On July 13, 2007 (Friday the 13th) my fiancee and I closed on a house in Orlando. It's a very basic 3 bed, 2 bath one story house built in 1947. So why after all of my thoughts about how bad the market is in Orlando did I go out and buy a place in the same market? Glad you asked.

1. Location, Location, Location - That's the first thing they teach you in real estate school, right? This house is located on a street with very light traffic and it is half a block from "downtown" College Park, which keeps expanding with new shops and restaurants every month. Also, while other streets around it have already had most of the older, run down homes torn down and new construction put in its place, this street is still waiting for that to happen. I think that spells opportunity in the future.


2. Local Comp Sales - I studied the local comps in the area and we purchased our house for about $50/sq. ft. less than the current comps. I think it is important that I note that I looked at current comps, within the last 3 months, and not ones from early 2006. Sure, the market may continue to drop in Orlando, but I feel confident that for the price I picked this house up at I never have to worry about being upside down in it.


3. Solid Home - My fiancee and I had looked at a number of homes over the last 6-8 months and many of them were priced low because of the numerous problems they contained. However, this home, for being built in 1947, is in surprisingly good shape. I contribute most of that to the previous owner, who took very good care of the place and didn't let it fall into disrepair even after he moved across the country to California and rented it out for a short time. Sure, it has its issues that we will have to address, but it truly is move-in ready.

I think my next blog post or two will be in regards to what I learned in the course of buying a home. Having gone through it for the first time I think there are things I want to put in writing for both anyone reading this blog as well as myself so I can look back and remember what I did and didn't do the next time around.

Oh, and if you're wondering, do I think the Orlando housing market is still in horrible shape and posed to linger in this downturn for at least another year and probably longer? Yep. But, in the mean time, I'm going to watch the down turn from my new front porch

I'm Investing In Omaha. Yes, Omaha.

I've lived in Chicago, Southern California, and Orlando in the last 5 years so of course the market I know best is Omaha. No, actually, I, like many people, don't know anything about Omaha. I've driven through there a few times but that's about it. So why am I writing about Omaha on a blog about personal finance?

The reason I am writing about Omaha is FNBO Direct. FNBO Direct is offering a 6.00% APY savings account. I had previously written about Emigrant Direct and their 5.15% account (currently it is at 5.05% APY) but FNBO Direct has made me a convert. I do not change accounts often. It's a pain to fill out the applications, wait for the approvals, transfer funds from one savings account to my checking account and out to the other savings account, not to mention the small hit against my credit record. But, the reates just keep getting better and better. I started with ING Direct when they offered 4+%, switched to Emigrant Direct when they offered more than 5%, and now I am with FNBO Direct at 6% APY. With inflation still at a moderate level and with the dollar tanking worldwide it's a good idea to make what you can with the money you have.

So far I am pleased with FNBO Direct. They made the application process simple, their website is laid out well for the most part (I'm not a big fan of the Transfers section), and they have comprehensive security measures in place. According to their website the 6% APY is valid at least until September 28, 2007 so even if it drops a bit after that point I will have still gotten a full four months of the rate.

Give it a try. If you are going to save you might as well save wisely.

Orlando Housing Update: Status Quo

So what has happened since my last couple posts? To put it simply, nothing. Lower sales numbers, lower house prices, lower expectation for a recovery. The only thing rising are the number of houses for sale. It has been amazing to watch the number of houses on the market explode over the last couple months. I run numbers each week of houses for sale in select Orlando zip codes and the trend is up, way up.

One new trend that I am noticing in the area are large price drops on select homes. In just the last three weeks I have noticed at least three homes in various parts of the city, all originally listed for between $350,000 and $450,000 drop in price anywhere from $60,000 to $75,000 in one fell swoop. Sure, there are still homeowners dropping prices a couple grand at a time but for others the desperation is setting in.

As for the fiancee and myself, we're still sitting on the sideline. I can't see purchasing a house for 2005 prices (yes, no longer 2006 prices) when all around are thousands of homes for sale dropping in price everyday. It doesn't mean we're not looking and making offers when we find deals where we think we can buy a place for 2003 prices; we're just taking our time. I suggest everyone else in the Orlando market do the same.

Orlando Housing Tipping Point #1

I saw this day coming for a while now. I could see it happening; I just didn't know when they would make the move. Today was the day.

To what am I referring? I am talking about the home for sale at 2802 Kemper Ave, Orlando, FL 32814. Why is this house any different from the other homes for sale in the Orlando area? Sure, it's one of the nicer homes in the downtown Orlando area. It's a 3BR/2BA 1,740 sq.ft. single family home, built in 2005. It's located in Baldwin Park, which is one of the newer Orlando communities and also one of the most unique. Baldwin Park was formed after the closure of an old naval base. It's one of the rare places in Orlando where you can buy new condos, townhomes, and single family homes and not be 15 miles or more from downtown and not have a 30+ minute commute to work.

But, that information isn't what makes this home special. What makes this home at 2802 Kemper special is that it is the first single family home in Baldwin Park to have a listing price below $400,000 since the housing market turned. Sure, for Orlando, that is still a lot of money for a 1,700 sq.ft. house but in Baldwin Park that is a milestone. This is a neighborhood where 1,700 sq.ft. townhomes will go for $400-500K, that is, until now.

It's been a long road for 2802 Kemper. Thanks to the internet I am able to dig up some data on this home. It was purchaed on July 14, 2005 for $358,300 by Dang Nguyet. Less than a year and a half later, Dang decided that it was time to sell the house, since he had never lived in it anyway. The original listing price? $479,000. Somehow the house was suddenly worth 30% more in only 16 months. Unfortunately, for Dang, buyers didn't share his belief that the house was worth that much.

Since November the house price has been lowered a total of five times, including,

• $479,000 to $449,000
• $449,000 to $429,000
• $429,000 to $419,000
• $419,000 to $400,009
• $400,009 to $389,900

Even if Dang sells the house for the current full listing price, which won't happen, after the 6% realtor fee is taken out plus any sort of closing costs and such, he would be lucky to break even on the deal. Of course, this house will be lucky to sell for $350-360K, which means that he will lose money on his "investment."

This isn't the last house that is going to cost someone money at Baldwin Park. This market has a way to go to correct itself. In the meantime, I'm going to go pay my monthly rent, sit at the apartment pool with a cool drink, and bide my time.

Housing Market 2007: Up or Down? I Know Which Way I'm Leaning

It's strange how quickly I got pulled into the whole game. Last month, I spotted a house in Thornton Park, one of Orlando's historic neighborhoods. It was listed at what I thought was a very reasonable price. My fiance and I called up our realtor, checked it out, and all-of-a-sudden we were making an offer on this place. We eventually ended up pulling out of the deal. While the house seemed like a decent deal it would have required us pouring money into it to repair the plumbing and some of the structural, assuming that the seller's took care of the wiring upgrades.

After that we found ourselves checking out more homes, identifying more possibilities. We made another offer last weekend and, perhaps fortunately for us, the seller took another offer that just happened to come in on the same day. Why do I think we may have been fortunate?

I think housing is in for another rough year. I just don't know who is going to buy the inventory that is out there at the prices that people are asking. There is $1 TRILLION in ARMs that will reset this year. 1 TRILLION DOLLARS! What are all of these people going to do? Sure, some will hang on to their homes and keep making their inflated payments. But, many of these people, who figured they would sell and get out with a nice profit, will find that there is no one to sell to; that the house they bought in 2004 is now worth less than when they bought it.

The National Association of Realtors (NAR) is trying to spin the news to make it sound like the housing bust is slowing down. Remember, these are the same people whose job it is to sell you a house. It's interesting to see how they do it. When the housing boom was happening, the NAR would release statements stating how home prices had risen vs. the previous YEAR. If you look in the news these days you'll see how their statements now talk about home sales are up vs. the last MONTH. They can't compare vs. last year any longer because then they would have to talk about how home sales are still 15+% lower than last year. Be careful who you listen to in the news.

Part of me thinks that I might be missing the bottom of the market and that I should buy now before the real buying season begins. But, a larger part of me comes back to the same question. Who is going to buy all of these houses?! I look around Orlando and see all of these concrete block homes in older neighborhoods listed for $279,000. Let's say you want to buy that place and have 10% to put down (which is a stretch these days but let's say it anyway). With a 30 year mortgage at 6.5% your monthly payment would be $1586/month, just for the principal and interest. Assume your property taxes run about $360/mo. (calculated on the Orange County appraiser's website) and insurance, which everyone knows is fun in Florida, runs you another $200/mo. You're looking at a monthly payment $2146. Over 12 months that will run you $25,752 in mortgage payments. That is after tax money. If you pay about 40% of your salary in taxes, you would need to make $42,920/year just to pay for your house. As of the 2000 census the median family income in Orlando was $40,648. That's all the money this family has, for food, clothing, vehicles, everything. So, the average person in Orlando can't buy the average house in their town. That, to me, seems like a big problem.

Where does that leave us? That leaves us with one group of people that bought a house and now can't pay for it and another group of people that would love to buy a house but have been priced out of the market. Either the group of people that can't afford to buy a home need to get huge raises in 2007 or housing prices have to fall. My money is not on the house.

Beware Of Real Estate Listing Fraud

With the recent turn of the tides in real estate I guess it was just a matter of time before a house listing like this one popped up.

I was browsing the Orlando home listings the other day and came across this description for a house listed at $368,000:

Reduced $62,000 for immediate sale! -- this is an incredible price for 2,424 sq.Ft. With apartment. Located in highly desired area!Completely remodeled: hardwood floors,brand new carpet,ceramic tile,new kitchen,large covered patio,2 fireplaces,warrantyreduced $62,000 for immediate sale! -- this is an incredible price for 2,424 sq.Ft. With apartment. Located in highly desired area!Completely remodeled: hardwood floors,brand new carpet,ceramic tile,new kitchen,large covered patio,2 fireplaces,warranty. At this new price this is an incredible investment opportunity!

Wow, I thought. Reduced $62,000?! This housing market is really turning fast. And, then I looked at the details a little closer. This house, 2820 Raeford Rd, 32806, was listed on October 9 at $430,000. On October 10 it was dropped to $368,000. ONE DAY!!! As far as I can figure either the seller or the agent decided that they could get a sucker to buy this place on the description alone.

So I went to zillow.com to see how great of a deal this really is. This "incredible investment opportunity" at $368,000 is estimated by Zillow at $275,547. Doesn't seem like an incredible opportunity to me. So I checked the comp sales on Zillow. A house at 2455 Raeford, just down the road, with basically the same number of square feet, sold for $235,000, just two months ago.

I really hope no one buys into this fraud. I know that I will never buy anything from agent, MARK ALLEN, or his agency, ERA SELECT INTERNATIONAL. There is a supposed "Code of Ethics" that realtors are supposed to follow. I don't see anything ethical about this listing. Buyer beware.

Eastward Ho!

In case you didn't notice in the header of my blog I recently moved to Orlando, FL. I loved living in Southern California. How can you not love a place where it is sunny all the time, the beach is on one side of you, and the mountains are on the other? I moved from 75 and sunny to 95 and hot. But, this is a finance blog, and, face it, California is EXPENSIVE. Wow, is it expensive. And I'm not only talking about the 1000 sq. ft. houses in the desert that people pay $450,000 for. It's the house, it's the German import in the garage, it's the $3.50 gas, and it's the high state taxes (not to mention having the privilege of paying for everyone that is unemployed in the state).

So now I'm in Orlando, in the Sunshine State. Frankly, I never thought I would enjoy living in Florida. I've never been a fan of heat and humidity and all people think when they hear Florida is that it is full of old people. Well, I've been here two months now and I haven't found that to be the case. Sure, there are plenty of developments for "active adults" but the apartment complex I live in is filled with young people, both single and married. The heat is bothersome but it gives you an excuse to go and check out a matinee on a weekend day.

One of the parts of Florida I've enjoyed the most about Florida is the reduced cost of living. Now, don't get me wrong. You can read articles all of the time in the newspapers around the state about a high cost of living. I'm sure if you move here from Iowa or Montana that is the case. But I'm here from California and it's great.

How is Florida different from California? I used to pay a couple hundred dollars every other week in state taxes in addition to the unemployment insurance tax they levy on everyone working in the state. Now I pay $0. No state income tax. I paid $1500 a month for a 900 sq. ft. 2 bed/2 bath apartment in California. In Orlando, I pay $1150 a month for an 1100 sq. ft. 2 bed/2bath place. I used to pay $150 per year for my car registration. Now I pay around $50. They tax everything in the grocery store in Cali. In Florida, food items are tax free.

It's not only the obvious cost savings in Florida. It is the change in culture. In California there is always the pressure to keep up with the Jones'. As I mentioned at the beginning of this post everyone in Cali wants a big house, an expensive car, designer clothes, etc. In Florida, it's more relaxed. No, not trashy, relaxed. People live in average houses and don't mind driving domestic cars.

I have really enjoyed my time in Florida so far. As long as the hurricanes stay away I can definitely see myself calling Orlando home for a while to come.

Increase Your Savings Rate The Easy Way

In today's economy inflation is back. I don't have any scientific way to prove this to you, I don't have the economics background for that. If you want to see data you can check out numerous websites, or, for a background of what inflation is, what it includes, and how it's calculated you can go to the US Department of Labor's Consumer Price Index website and find out about all the ins and outs of inflation.

If inflation is coming back you need to fight it. If the government is going to keep increasing interest rates you need to counteract it as much as you can. How is that possible? By taking that money that you have stashed away in your checking account and moving it into one of the many high interest savings accounts that have popped up recently.

About a year ago I saw a billboard while driving that advertised an ING Direct savings account that, at the time, had an Annual Percentage Yield (APY) of around 3.00%. What is an APY? If you want a technical reference, check out this Wikipedia link, but basically it is your interest rate. It ends up being a bit higher than the interest rate because it takes into account that the interest accrued in your account throughout the year accrues interest itself through the rest of the year in addition to your original principal.

When I saw the billboard I, of course, went out to the internet and found that it really was exactly how the billboard claimed, no strings attached. As long as I had $1 in my account I would accrue 3% interest. Here I was with money stuck in my checking account, accruing 0.25%, and I was missing out on this deal. I opened an account the same night and I was off and running.

A year later, as interest rates for borrowing keep going higher and higher, I maintain that these high-interest savings accounts are the way to go. In the last year I have switched from ING Direct to Emigrant Direct. Why? For no better reason than for the last six months Emigrant Direct has been at or near the top of yields given by banks. To check out the highest savings accounts rates nationally go to Bankrate.com. I highly recommend Emigrant Direct's savings account. The website isn't the fanciest in the world (I did get a letter in the mail recently that they are upgrading it in July) but it does everything you need it to do including recurring deposits from your checking account for those of you that wouldn't put money away otherwise.

You might be tempted to put your money into CDs instead of savings accounts but in today's economy I would recommend against it, at least for now. While the fed is raising interest rates, and they have been for a year and a half now, you risk having your CD rate of return being passed by your savings account midway through your term and you won't be able to move your money into your savings account. If the government does stop raising rates I might drop some money into a CD but it won't be anything longer than a six month CD for right now.

Emigrant Direct just increased my savings rate to 5.00% the other day. To have money in a completely liquid state earning that savings rate is a great thing. If you haven't heard about these savings accounts before now or if you've been hesitant to open up an account go out there and do it. We could all use a little more money in our savings and if we're going to tie it up in a bank we might as well make something in return.

My Summer Vacation At The World Cup

I made it back from Germany after two weeks of football, beer, sausage, and a few pretty darn good pretzels and all I can say is, "It was awesome!!!" Wow, what an experience. My favorite part was the three United States games that I got to see live. I have never been in that type of crazy soccer setting before and it beats anything we have, fan-wise in American sports. I wrote in my last post about how the US fans stood for the entire Italy game. Well, we repeated the act during the Ghana game. And, it wasn't just standing and clapping. There were chants going on the entire game (and a few pleads from the fans for a goal). The atmosphere was electric from an hour before the start of the game until well after it ended. Sure, there was disappointment on everyones' faces when the US didn't advance but that was outdone by the pure joy that everyone felt being in the atmosphere of the World Cup.

I must say that one thing I was really impressed with was the country of Germany and how they handled everything related to the World Cup. The logistics of handling such an event are mindboggling yet they had more brochures, more street signs, more signs at the train station, more everything, to just help people get around. I was worried about getting a train after the Italy game since we had to make it from Kaiserslautern to Heidelberg at 11PM at night and the regular schedule only had one train running after the game. No worries, they thought ahead and ran, I'm not kidding, about 7 extra trains, on 80 KM route just to get people home. The security outside the stadium was impressive. In Kaiserslautern, they had over 150 security lines to check people coming into the stadium! Elsewhere in the country from the hotels to the restaurants to the bars everyone was helpful in how to get around the country and experience it in the best way possible. I really appreciate how much work Germany put into organizing the World Cup and don't know if they could have done it any better.

As for the US squad, they had a tough time. I thought I'd take a moment and put down of my thoughts about some of the players:

Landon Donovan - a.k.a. The Invisible Man. Where was Landon? This guy had a breakout tournament during 2002 really putting his name on the map. But then, in 2006, everytime I saw someone handling the ball in the midfield it was Reyna. I truthfully don't know where he went, but I feel like his lack of time around the ball hurt our chances to get the ball in and around the goal.

D'Marcus Beasley - a.k.a. Dr. Jekyll and Mr. Hyde. If Beasley never wears the colors of Team USA again I might be OK with that, then again, I might not. I don't get this guy. In the Ghana and Italy games most of the time I wasn't sure if Beasley knew he was on the field. Any time he got the ball he would either lose it, pass it back to the guy he got it from, or pass it to someone really close, never looking to do anything big with it. Then all-of-a-sudden you'd see him rush after a ball, tackle it from a defender, or take on three guys and get through them. Too inconsistent for me and just doesn't seem to have the fire to play the whole game with consistency.

Kasey Keller - Disappointing. Here was a goalie that I thought was solid, that I had seen make big saves in the past, and he just didn't have it. There are at least 2, if not 3, of the five goals that opponents scored (PK not included) that I feel Keller should have saved. For example, the first goal in the Ghana game. Sure the guy had a breakaway but that's a save that you need your goalie to make in the World Cup. Those are saves that help your team to advance. Is Keller losing a step with age? Maybe...

Eddie Pope - Done. Eddie Pope has seen his last action for Team USA. He was too slow to handle the teams during qualifying and he was too slow to handle the teams in the World Cup. Eddie Pope has had a long, and distinguished career for the US but it's time to move on. Fortunately, for us, we have a more than suitable replacement, my next player, Oguchi Onyewu.

Gooch - Fantastic. Wow, what a beast. It's too bad that the refs give out so many fouls just because one guy is bigger than another guy. That still doesn't stop Gooch from getting over guys for headers or moving guys out of the way on their way to goal. The foul that led to a PK in the Ghana game was a travesty but in no way overshadows the strong play from Onyewu throughout all three games. Watch out in 2006, he is going to be a great one.

Brian McBride - MFP. Most Frustrating Player. It was painful to watch a guy with absolutely no skills with the ball receive a pass and then have no idea what to do with it. How many times did he try that little chip pass in the Czech Republic game? Too many. How many times did he succeed with it? 0. He was just horrible. I watch these other teams and their forwards and realize why we only scored one goal (by a midfielder) in the three games.

Claudio Reyna - Solid. You may not agree with me, but I feel like Claudio had a solid WC. Yes, he got beat, and beat bad on the first goal in the Ghana game which led to his career-ending injury, in a roundabout way, but I liked that he constantly went to space in the middle of the field and gave the defensive backs and outside midfielders someone to feed the ball to. If only we had another center midfielder...Donovan??? Donovan???

Clint Dempsey - Superstar in the making. Clint had a great World Cup and at least he was able to finish off a ball in the box unlike some others mentioned above (see McBride). My buddy, Sean, mentioned that he liked Dempsey before the World Cup and he was right. Probably the best footwork of anyone on the squad and at least he was willing to take on a guy and beat him...On that point, why didn't we try to beat anyone on the dribble? Wow, that was frustrating. We would see a guy in front of us and automatically pass. We have to get better with out footwork so that we can beat at least one guy and open up more opportunities down the field!! But I digress, Clint, solid all around.

Others that I liked during the World Cup - Eddie Johnson (didn't get enough time on the field), Steve Cherundolo, and Jimmy Conrad

Others that I feel caused me undue stress during the World Cup - Bobby Convey (a great disappointment since I really liked him before the tourney) and Eddie Lewis

The USA drew a tough group, didn't play to their potential, and got beat. Like Bruce said we don't have a team that can compete and win the World Cup right now. But we're getting there. South Africa 2010 is less than four years away!

Go USA!

A World Cup Classic

I would write a longer entry but I am in Belgium and the keys on the keyboard are not where they are on an English keyboard so bear with me...

A classic...one for the ages...at least for US Soccer. The scoreboard had it as a tie but everyone in Fritz Walter Stadium on Saturday night knew who won the match between Italy and the US. Thats right. I wont discuss the first game against the Czechs. They beat us handily, we looked terrible, and thats that.

But last night we dominated and as much as I hate pointing at officials every once in a while you end up with a ref who uses his control of the game, or lack thereof, to influence the outcome. It happened last night and on a stage like the Weltmeistershaft (World Cup in Deutsch) it is the greatest of travesties. The Italian fans knew it too. Not a smile amongst the throngs of them after the game. They knew they were outplayed and snuck out with a point.

I think one of the most unbelievable parts of the evening were the US fans. Sure, there may only be 20,000 soccer fans in America but they were all there last night and in my area we stood and cheered the ENTIRE game. That does not happen in any American sport and it was outstanding. The only time I have ben a part of such enthusiasm like that in America was during my days at Notre Dame when the students would stand for the whole game. I am sure it was a great game on TV but to be there, truly awesome.

One more game left for me and I am hoping for a win and at least one goal scored by a US player before I leave. But I will have the memories of the Italy game for many years to come and wow, what a game!

Heading To Germany!!!

I know, I usually write about personal finance but for the next two weeks personal finance takes a break as I head to Germany for the World Cup! Can't wait to meet others from around the world, sample some great beer, and watch world class soccer. I'll try to blog from time-to-time as I find myself in an internet cafe. More personal finance blog entries to come but for now, GO USA!!!

I Am Conservative...I Am American...I Am Scared

My post from last night started out with this title and was meant to be this post. Then, a couple sentences in, I went off on the tangent that eventually became my previous post. And so, after 24 hours, I digress...

First, let me point out that the first part of this post's title is, "I Am Conservative." Not "I Am A Conservative." I am not a politics junkie. Half the time I forget which side is left and which is right. I find that between work, life, and trying to learn more about personal finance that I have more than enough to fill my day.

I am a scared American. I just realized this in the past week. Perhaps if I had taken finance or economics classes or if my financial awakening had happened sooner I would have been scared long before now. As it is I became scared last week as I started to read the new book by Bill Bonner and Addison Wiggin, Empire of Debt.

Now I am the last one to try and argue anyone on the subject of economics. As I stated above, I didn't take any economics classes in college and I've never read a book about even the most basic economic concepts. But that hasn't stopped me from understanding what Mr. Bonner and Mr. Addison are saying. We are living in a country that has accepted debt as the norm. The lifestyle that we have all become used to is based on it. Unfortunately the only way to support our current habits is to borrow more and more. From whom are we borrowing you ask? From the same people that we also pay to make most of our goods and provide many of our services, the majority of which comes from China.

Let me try to explain how I understand this whole issue in layman's terms, of course. The government doesn't have enough money to support all of the programs, pay for all of the people it employs, and basically run the government as it is today. So over time, to come up with the money, they borrow other peoples' money, mainly by issuing bonds. These bonds are sometimes purchased by you and me as Americans. Ever buy a Savings Bond? Exactly. But, the majority of bonds these days are purchased by foreign entities. These entities lend the US money and the US pays back interest on the bonds and eventually pays back the bonds themselves. The people buying the bonds are trusting that the US dollar is reasonably strong and will not collapse since that would make their bonds useless. However, this constant borrowing can't last forever. US debt is skyrocketing and all it would take is for a decent percentage of the bond holders to want to sell their bonds back to the US to cause chaos in America. The dollar would become worthless, prices would skyrocket, and who knows what else would happen.

You may ask, "Is that anything I really need to worry about? The dollar is fine, right?" Well, maybe, but if you look at some of the signs, maybe not. We already have a housing bubble on our hands that may cause us some problems in the upcoming years. There are also signs that people are already losing faith in the dollar. Gold, for instance, is at a 25 year high. People who used to sink their money into the US dollar are investing in gold pushing its price higher. Look at how the dollar is faring against the Canadian dollar and the Euro. I know when I was in high school and anyone went to Canada we used to joke that things were so much cheaper because 1 US dollar would get you 2 Canadian. Take a look at it today. 1 US dollar will get you about 1.15 Canadian.

The scariest parts of all are the 1)no one in Washington seems to want to cut back on spending and 2)I have no idea how we can trim things like the trade deficit when other countries can manufacture goods at such a lower price. We seem to have a problem saying no. We are constantly spending money all over the world. Now, please don't get me wrong. I'm not saying we should always abandon countries that are in need. But, we need to think about how much help we can really afford to give while not jeoparding our own country at the same time. We're always the first country to jump in and help because we see ourselves as the "richest country in the world." Yes, we might still be, but for how much longer? And, who among us really wants to see cutbacks in programs that we've come to depend on?

I'm very proud to be an American. Whenever I leave the country and travel it's always great to return home. But we have some serious problems that no one seems to want to address. And the thought of what could happen tomorrow...that is what scares me the most.

The New, Frugal Me

That's right. Over the last year I've determined one thing...I would like to have financial stability as I grow older. Sure, everyone thinks that but apparently many, many people don't practice it. The national savings rate is floating between slightly positive, zero, and negative. How do people expect to grow old, retire, and relax when they are spending their 20s, 30s, and 40s spending more than they earn? Sure, some people will say that they have put their money into their house. And that was great for the last 5 years. And, I guess if you were smart enough to invest in stocks starting in 1995 and switch to real estate in 2000 then it's been a great 10 year run. But, as we saw with the stock bust in 2000-2001 and the possible housing troubles on the horizon, those moments don't last forever (no matter how many realtors want people to believe that housing prices will go up 15% a year until 2020)

After reading and thinking about it, this all has scared me (financially) straight. I see way too many people driving a car way too expensive for them, wearing clothes they really don't need, eating out multiple times a week or eating at the finest establishments, or even just going to a bar a couple times a week and throwing down $100 or more per visit. I can't blame them. I was the same way. I bought a car that was more than I should have bought. I bought expensive clothes that I wore once or twice and never again. I went out and bought numerous drinks at the bar and more. Sure, it was fun, but that expensive fun is over.

It's not that I don't have fun anymore but now I go out to casual dining places with friends and I buy clothes that I like and I know I will wear. I even sold my car and am driving a much less expensive car. The car still gets me where I need to go. So what if I can't beat the next guy off the line? If I can retire a year before him in 30 years or so, that's fine with me.

If it sounds like a boring existence to you then you are probably still enjoying the "finer" things in life. And let me say, if you can do that and still retire at 50 with a healthy nest egg then congratulations. All I know is that in the last year I have managed to save almost 3 times as much as I saved in my first 4 years out of college (not counting my 401k). Looking down the road, that feels pretty darn good.

The Housing "Bubble"

I have to write something about this housing phenomenon that is going on right now. As a resident of Southern California since 2002 I have watched (from the sidelines) as house prices have exploded, with many places doubling and, in some cases, tripling in value. As median home prices (the figure where half of the houses sold for more and half for less) soared from $300,000 to $400,000 to $500,000 and eventually to $600,000 in August of last year it seemed obvious that this trend had to stop at some point. I have what I think is a decent paying job and there was no way I could buy even an older condo at the present prices. Home prices were going up at 20%+ per year and I can tell you for sure that my salary wasn't following the same trend.

Well, it looks like the end may be here. Affordability is at an all time low with only 7% of the people in LA able to buy a house at the current median price. More and more houses are on the market and sitting there for months instead of weeks. And, finally, house prices are starting to drop.

Every couple weeks the Orange County Register, the newspaper in Orange County, publishes a graphic showing the latest details on Orange County home prices and sales. The one posted most recently shows a startling graph at the bottom of the graphic (view the graph here). You'll see that the median home prices dropped by $20,000 in just the last couple weeks. Also note that the median prices of new homes is now lower than than the median price of resale homes. Now I'm no housing genius but I know that if I had a choice I'd take a new home if it was going to be less than a house that someone else had already lived in. Why are the new home prices dropping faster? Because builders are trying to unload their inventory and cash out while regular people (and the flippers out there) don't want to accept that they can't make their quick buck so they will keep hanging on and keep losing money until they are forced to sell.

There are a ton of "housing bubble" websites out there today. Heck, just go to blogger.com and run a search for "housing bubble" and look at all the results that come up. I just ran a search and there were 49,670 results just in blogger itself. I read some of the bubble blogs, they interest me. I'm not sure if all of their predictions will come true, but I do believe that there are a lot of people in trouble and that the explosion of the housing market followed by a collapse could stall the economies of many of the US' most populated areas.

If you're thinking about buying now, just be careful. Sure, the American dream is to own a home, but rents are much, much lower in most places than owning right now and with prices starting to trend downward you might be stuck with a house for 10 or more years before you can sell and cash out.

I'm a renter right now. I accept the fact that I missed this last boom. That doesn't mean that I have to jump in now at the same time. I'll just keep saving my money and getting ready for the next boom. And, when it comes around, I'll be ready.

Think Before You Dump...All Your Money Into Your 401(k)

Maybe I've just been noticing it more over the last few months or maybe it has really has undergone a new push, but it seems like everywhere I look I see the same three word phrase: "Maximize your 401(k)!" Just last week, CNN/Money reran an article about Smart Money Moves that included the quote:

Put as much as you possibly can into your 401(k).
Assuming a 7% return and a 50% match, upping your annual contribution by
a grand and maintaining that level for 30 years will add $153,110 (not a
misprint) to your nest egg.

I suppose most of this attention to 401(k)s is due to corporate America deciding, almost in unison, that it is fine to freeze all pension plans and put the onus on the individual employee to save for their future.

Perhaps I got lucky by only entering the workforce in 2000. Working at a small software consulting company I never had to worry about pensions, 401(k) was the only way to go. 401(k)s have numerous benefits. The money is gone before I ever have it in my hands, my company matches a portion of what I put in, and, best of all, I don't pay any taxes on it right now. Anyone who has the opportunity to invest in a company 401(k) should do so, as soon as possible, and should invest at least as much as their company will match to get the full benefit.

However, I don't necessarily agree that it's always a good idea to max out your 401(k). Why not? I think this because throughout a person's lifetime there are certain events that require planning and savings that could be harder to accomplish if all expendable cash is being pumped into a 401(k). For instance, I am saving right now to buy a house someday (after the housing bubble finishes bursting). A couple years ago I thought that I would be able to use some of the money in my 401(k) as a down payment on the house. Little did I know that that money is tied up and virually unavailable to me until many years from now. Sure, I could withdraw it now and pay a heavy penalty. I could even take out a 401(k) loan but then I would live in fear of losing my job and having to pay it back right away. Now that I am more knowledgeable I have scaled back my 401(k) a bit. I still invest enough to maximize my company's matching policy but now I put a little away into a decent interest-bearing savings account that I can use for that house.

So before you start investing in your 401(k), or even if you're already investing, take a step back and do some planning. If you can afford to maximize your 401(k) and still put a little away for other investments that come up along the way, by all means, do it! However, if you know of big investments coming up in the future just don't plan on using your 401(k) to fund it.

The Beginnings of My Financial Education

As I covered in my previous, and first, blog entry I am not a financial expert. So perhaps, at 28, I'm a little behind the ball in getting started with my financial education. I attribute part of this to the fact that I come from a family background where both of my parents are hard-working principals, one in an elementary school and one in a middle school. Their background in business is limited and therefore I didn't grow up in an environment where there was much discussion about business, finance, investing, etc. I don't harbor any resentments about this. My only wish is that they had someone teach them personal finance at an earlier point in their lives so that they could be in a better position today.

When I graduated from college and started at my first real job I took two important, but minimal steps. First, I immediately enrolled in my company's 401(k) plan and, second, I started to pay down my debt. I didn't do anything else because, frankly, I didn't know what else was out there. Over the next few blogs, I'll discuss each of these two points individually but for now I'll stick with the overview.

It wasn't until about six months ago that my real financial education began. By that time, I'd been out of college for five years. One day I picked up a book that had been gathering dust on my bookshelf, Rich Dad, Poor Dad, by Robert Kiyosaki. Now I know that many people have read this and the other books in the Rich Dad series and have varying views on the books themselves. That's fine with me. However, for me, this book opened up a whole new world of thinking. That book started my transformation from Joe Employee, saving a bit in a 401(k) and spending pretty much everything else, to someone researching, learning, and exploring new ways to make money everyday. You don't have to agree with everything that Mr. Kiyosaki writes in his book, but it has the ability to inspire and get you thinking about what could be. And, for that reason, I recommend it.

Financial Common Sense In The 21st Century

One of the comments that I will always remember from my dad growing up is, "Use common sense." A short comment, yes, but one that I feel is more important than ever when dealing with personal finance in the 21st century. I have created this blog to log my thoughts, note current events, and maybe even provide some guidance along the way about personal finance.

I am not an accountant, tax pro, certified financial planner, or anything of the sort. But, one thing that I am is a 28-year old trying to navigate my way through the forest of money options out there and trying to do the most with the little amount that I have.

I hope that if you read this blog and find something that you agree with, disagree with, or have questions about that you'll respond with comments. While part of this blog is to allow me to express some of my thoughts and distribute information, it is also my hope that this blog will allow me to learn new and better ideas to deal with personal finance.