Save Money Archives

Justine’s investing journey

Hi everyone! I am Justine and I am the Founder of Live With Plum, the homebuying guide for the modern women. I started Live With Plum after going through my own real estate journey and seeing how little resources there were for homebuyers, especially first-time home owners. Also, as a single millennial woman of color, there weren’t many wealth buildingx stories that looked like mine even though we are a substantial and growing segment of homeowners in America. In this article, I will discuss my own home buying journey of how I looked at real estate as part of my overall investment strategy.

First unit – start small and learn the process

The first apartment I bought was at 25, right after I graduated from business school and was eager to lay down some roots after moving around too much previously. I had a short timeline (since I was uncomfortably couch surfing with friends) and a small budget since I have never bought a home and was slightly risk averse. After weeks of exhaustive searching, I found a tiny 300 sqft studio in Gramercy and made a full price offer.

My thought process for this purchase was more like a primary resident though I also took note of the investment opportunity. Over the years, I’ve come to see how most people, when prioritizing the criteria of their search, purchase only with an eye to live but don’t fully consider the investment side of it. I chose my unit because I wanted to live in it and also could see the rental value. I was also particular about the sublet policies since this was an apartment building, which means it typically has a handbook for owners to follow. In NYC, many apartments are cooperatives with strict rules towards subletting so it was a rare find to find one that allowed unlimited sublets after 2 years of primary residence.

My lesson learned from this first purchase was to understand the target market for the unit, in term of who you will rent to and who you will sell to. The reason why the apartment was cheap (in NYC terms) is because the unit was barely bigger than a walk-in closet but I knew that if I wanted to live there, then someone else of my similar background would also want to live there and it would not be a problem when selling or renting. I eventually rented it out then sold it for a comfortable profit, both times to other single women seeking starter apartments, proving my hypothesis right.

Second unit – location is half the battle

I repeated many aspects of my first purchase for the second one, including making a modest purchase (by NYC standards) of a studio and again in a coop building with a liberal sublet policy. The biggest difference was that this time I decided to purchase in an upcoming neighborhood instead of an already established one. Specifically, I purchased my unit in Hudson Yards which is one of the largest private real estate development in the United States by area. Though I had to live with the downsides of constant construction, I knew that was the hallmark of an area that will appreciate rapidly.

With this purchase, I learned how to identify up and coming neighborhoods to invest in for the longer term. One way of doing this is understanding and investing where the commercial money is going. These development plans are made many years in advance and are public knowledge. For example, construction for Hudson Yards started in 2012, four years before I purchased my apartment, which still benefited from the appreciation.

Especially if investing out of state, you can also identify demographic trends of a city by looking at census data, where trends like millennials leaving urban cities will emerge.

Third unit – keep doing what works

Following on with my investment strategy of identifying up and coming neighborhoods, I decided to search for a property in Jersey City which has lower dollar per square foot than NYC but still relatively easy access via the Path train. My hypothesis was that over time, more people would seek cheaper pricing than NYC but still want access to it, thereby choosing to live in Jersey City and the gap in price per square foot would reduce.

This was the first time I purchased in a different state, which meant that I had to file taxes separately. While not a big deal in the long run, in hindsight, if you are not a full-time investor, it probably makes sense to keep everything as streamlined as possible.

Fourth unit – taking on bigger risks

After completing 3 successful transactions, I was ready to take on more risks and purchased my largest property in 2019, which was a 3-bedroom apartment in the South Bronx. Area-wise, I kept with the hypothesis of rising neighborhoods but kept diversifying on the actual neighborhood.

While I chose to live in this apartment, I decided to rent out 2 of the 3 bedrooms to creation additional sources of income. At the end, the rent (market rate) from my 2 tenants covered the mortgage and homeowner association fees for the apartment, so I ended up living for free through something commonly known as house hacking.

I probably will not continue having roommates in the longer term as I get older and want more privacy, but this is a good way of living within your means in an high cost of living city.

Reflecting back on my journey, I am proud of the work I put in and absolutely believe that a successful investor is the product of experience and the willingness to test. My biggest learnings and advice are:

Start small and start early: if you are more risk averse at the start like I was, then start small but most importantly just start
Keep doing what works: once you identify something that works for you, keep at it!
Take risks along the way: though I advocate to start small, once you have more experience, this allows you to take more risks
Enjoy the process: it will be a lot of work but remember to have fun along the way

How to save big on Amazon automatically

By Frugaling Leave a Comment

Around here, we often talk about how being frugal does not necessarily mean not spending any money, but rather getting the best value for your hard earned cash. Frugality is not self deprivation and misery, it is spending money on what makes you happier, more comfortable, and generally improves your quality of life.

For example, here are a few items I never cut corners with: a mattress, kitchenware, and anything else I use on a daily basis. What is the point of life if you wake up sore and tired after a sleepless night in a terrible bed? Life is too short for that. You spend over a third of your day in your bed, your body deserves some serious rest. The same goes for kitchenware. Cooking every day with useless knives and sticky pans? No, thanks. The first thing I would do if I had such bad equipment would be to order take out, which completely ruins the frugality mindset.

So while this is technically not an investment, I consider spending extra on quality and durability a kind of investment. I want a low cost per use, not a low cost period. Using $5 bath towels for a month and throwing them away is way more wasteful than buying a fabulously comfortable $20 towel that will last you years, and be a source of joy every time you step out of the shower.

Still, while spending on quality is not an issue, a true frugalist will look for the best bargain while on the hunt for the perfect durable item. I used to google “coupon XYZ” every single time upon checkout, but thanks to technology, this is not something you need to do anymore. There are apps that will do all the hard work for you, scout the web for discounts and coupon codes, and automatically apply them for you at checkout.

Dealgogogo is one of them. This is a Chrome extension that is free to download, and focuses on Amazon coupons. The link will take you over to their landing page, where you can download the Chrome extension and start saving big on Amazon.

You can shop the deals on their own website, by category or by entering a particular brand in their search bar. For example, I went searching for kitchen utensils and it gave me a list of knife sets and other kitchen sets with a 10 to 50 per cent discount.

You can filter the deals by date, popularity, percentage discounted or find the ones offering free shipping.

But mostly, you can just make your life simple, add the extension and enjoy your savings. Why would you use the search feature? Well, if you are not set on a particular brand for an item you need, you may find that presenting the options in order of higher discount might bring to your attention a brand that may not have been featured like that in your Amazon search results.

Nevertheless, I’m all about automation and ease of use. Looking for coupons online can get tiresome. Especially when you are on Amazon already, and your cart is all full, and you really want to call it a day and proceed to payment. Having an extension doing all the hard work in the background takes away the frustration of expired coupons, or spending an hour to find a $0.50 off coupon.

You keep going with your life, and they tell you if you can save something or not. Easy.

The coupons in Dealgogogo’s database are all current, and they are directly approved by the sellers, so you know they will work. The deals are applied while you browse around on Amazon, without any work required on your side.

In order to start saving on Amazon, click here to install the Dealgogogo Chrome extension. Then sign up for a Dealgogogo account, and resume your Amazon shopping as usual.

Are you planning for your financial future? And a Wealthsimple UK review

By Frugaling Leave a Comment

They say the best time to plant a tree was 20 years ago, and the next best time is now. The same goes with investing. It is sometimes disheartening to see how other people are much further along on their path to financial independence, but if you don’t get started, you’ll never get there. The good news is, getting started is not that complicated, and even little amounts will add up over the years to a substantial nest egg.

For example, if you were to start today by investing just £100 a month, and do so religiously for the next 30 years, at 8% interest you would have about £150,000 for retirement. £100 a month is £25 a week, under £4 a day. If you think you have nothing left in your monthly budget to afford investing, think again. There may be a few ways to cut back on your expenses so you can plan for your financial future.

It can be as simple as doing an online search and getting a better deal on your utilities and broadband. Or packing your lunch to work. Or getting rid of that magazine subscription you never read. If you get started, and manage to save on these little things, chances are you will gain momentum and will find even more ways to save on daily items. Or tackle the big expenses, such as refinancing your mortgage for a lower rates. Rates are pretty low these days, and even a drop of a quarter of a point in interest can save you thousands of pounds, which you can in turn use to invest.

If you are able to increase your same £100 monthly contribution just 10% per year (£110 a month the next year, £121 the following year, etc.), you would retire with a nest egg of nearly half a million pounds! £480,223 to be exact. Now we’re talking.

Invest your raises and bonuses, and keep living on last year’s salary, and you could realistically save over a million pounds. A one time £5,000 raise or bonus invested in year one alone would turn into an extra £54,000 for retirement! And with pensions being pretty uncertain 30 years from now, no one but you can make sure you have the golden years you worked so hard for and deserve.

Now that we have covered ways to find extra money to invest, let’s talk about the investing part. A few years back, in order to invest, you had to really know what you were doing. Spend hours researching stocks, calling your bank to place a trade… this is all much easier nowadays. Robo advisors offer smart algorithms that will allocate your money based on your risk profile, and pretty much manage it automatically for you.

wealthsimple2

One such provider is Wealthsimple. Wealthsimple started up in Canada and in three years grew a client base of over 50,000 investors. They now manage over £1Billion of assets worldwide. As the name states, Wealthsimple makes investing straightforward and transparent.

They charge a flat 0.7% fee, down to 0.5% if you invest over £100,000 with them. And readers get their first £10,000 managed for free for the first year. All you have to do is click the link at the end of this article to enjoy this offer.

The Wealthsimple Black tier for six figure investors comes complete with a private session with an advisor, and free VIP airport lounge access worldwide.

All Wealthsimple investors enjoy a diversified portfolio of low cost funds that match their investor profile, automatic rebalancing of their portfolio, and dividend reinvesting for further compounding.
You can also set up a direct debit and pretty much forget about it. As Warren Buffet says, you should spend what is left after saving, and not save what is left after spending, so ideally your direct debit would be set up at the beginning of the month when you get paid, and you would get used to living on what is left on your account.
With Wealthsimple, your cash is protected by the Financial Services Compensation Scheme up to £85,000. Your financial information is encrypted and kept secure.

For further growth of your nest egg, you should consider investing through and ISA, or Individual Savings Account. ISAs allow you to invest up to £20,000 this tax year, and your money will grow tax free for as long as you keep it there. So don’t overdo it at first, because if you withdraw money from your ISA, you can’t put it back in. Say you invest £15,000 and take out £5,000 to cover an emergency, then grow your savings back to £10,000, you would only be able to invest another £5,000 in your ISA until next April.

The same way, only invest money you can afford to leave through market ups and downs, so you do not need to withdraw it at a loss.

Once you have defined how much you are ready to invest as a lump sum and every month, simply sign up for an account, and answer a few questions to determine your ideal asset allocation. A conservative asset allocation will be mostly in bonds, while a growth allocation will focus on equities. The socially responsible investing option allows you to invest in companies that have stronger corporate governance, are committed to fair labour standards, or innovating in cleantech. You can rebalance at any time, and usually the more years you have before retirement, the more aggressive you can afford to be with your investments.

Ready? Click here to start investing with Wealthsimple and get your first £10,000 managed for free the first year.

Do you have the best credit score you can?

By Frugaling Leave a Comment

This post was sponsored by Lexington Law

I have met so many people who are what you can call penny wise and pound foolish. They will go through great effort to save a little bit of money, yet they will spend tremendous amounts of money on things that do not bring them high value. Like paying interest for example. There are a couple of ways you can reduce the cost of your debt. Did you know almost everything in life is negotiable? I have called lenders and asked them to reduce rate on my credit cards, put me on the new customer offer, or simply switched the debt to another lender, in order to get better terms. If you have decent credit, you can often get 0% balance transfer rates for a low fee.

But one of the best ways you can save a lot of money on borrowed money is if you have great credit. Even good credit will get you decent rates, but that little increment between good and stellar credit can save you thousands of dollars. And contrary to what you may think, it is not so hard to get your credit score up a few points.

First of all, you want to make sure all the records the credit agencies hold under your name are accurate. If that is not the case, you can reach out to them, or hire a company to set things straight. They may hold wrong information, or simply have records you are not even aware of, in the case of identity theft for example. Better avoid the bad surprises when you are in front of your banker trying to get a mortgage.

You can click here to Save $50 off Credit Repair Service – Applies to first-work fee for each spouse sign-up.

Once you have gotten your credit report repaired, the rest of the work relies on you. Building good habits to build a good credit score will help in turn build a solid foundation for your financial life. High interest debt will cripple you and prevent you from achieving other dreams. Yes, it may take a while and require sacrifices, but over the long term, it will be worth it.

There are different debt elimination techniques, such as the snowball or avalanche method, where you start by repaying the smallest debt you owe, or the one that carries the highest interest rate, and work your way from there, as you free up disposable income with every debt repaid. But the underlying goal is to make your payments on time, and pay off as much debt as you possibly can. This will translate as a strong credit history and increase your credit score over time.

If you get a new card, keeping the old one open will also help your credit, because you will have all the years of history on your side. Instead of keeping it inactive, make a small charge on it every month, and pay the balance in full.

Getting your score back up is a great idea before you apply for a mortgage or a personal loan. That will get you a better interest rate, which in turn will reduce the overall amount of debt you’ll have to pay. Remember to keep an eye on your credit regularly, as some information may be added without you knowing, and that can be detrimental to you being approved as a borrower.

Want to learn more? Get your Free E Book and Credit Consultation from Lexington Law