Tag Archives: Washington DC

Financial Freedom, Real Estate

American homes are now $1,100 per month storage units

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American homes are becoming expensive storage units.

A house is not a home unless it contains food and fire for the mind as well as the body. – Benjamin Franklin

According to Zillow, the median home price in the United States is $200,000 across the country.

According to CNBC, in other cities across America, the price of a home is even higher.

That’s not too bad.

However, considering that the median income is $50,000 buying a home can be tough.

That would mean to purchase a home, based on the median price, you would have to spend up to four times the average median income!

Um. Hold up. I do not want to be house rich, cash poor. So, I suggest that people wait to buy until you can afford a decent down payment.

Lately, I have heard a lot of stories from friends, colleagues, and acquaintances about their desire to purchase a home.

I am all for it. I want what they want. It’s the American Dream after all, isn’t it?

Not according to some.

There are quite a few financial experts and self-made millionaires that feel a home is a liability and not an asset.

Unfortunately, in many ways a home is a liability. Unless it gives you money, its taking it from you.

Let’s examine this further shall we.

HOME OR STORAGE UNIT

Times have changed.

I remember when one parent would work and the other would stay home and take care of home. One working parent was able to put food on the table and provide for a family of four or five.

You could come home after working your nine-to-five and enjoy spending time with your family. You could eat dinner together and just enjoy relaxing in your home.

There were less cars on the road as many families in the 1950’s had only one car. There were not four licensed drivers and three cars.

Then in the 1980’s we went to two cars. And families were still able to put food on the table and take a yearly vacation.

If you want to have some additional confirmation and perspective on how times have changed, watch the scene in the film Back to the Future where Marty (played by Michael J. Fox) from 1985 says we have two televisions and listen for the responses from his family from 1955.

That’s right. One home, one car, one television. Simple, right. The good old days.

Well, those days are long gone for most folks.

It now takes most families having two incomes. And that is just to make ends meet. Many Americans are now living check to check.

It is not uncommon today to have two working parents.

Not only that, but to have one parent working multiple jobs.

For some people, it has gotten so bad that they are practically (or literally for some folks in Silicon Valley) living in their cars.

People go out, earn the money, and then spend upwards of 50% of take home pay on housing.

And that is after taxes (net not gross).

With housing prices in cities going for $500,000 or more, most of your paycheck is gone.

And yes, homes are going for half a million in various parts of the country. That is fact, not fiction.

According to Zillow, the median list price in Washington, DC is $568,600.

According to CNBC, in other cities across America, the price of a home is even higher.

Now working adults have to move further away from their jobs to find affordable housing. As to earn a decent salary usually means longer commutes, when you work in the city.

I live in the Washington, DC Metropolitan area. It is not unusual for someone to regularly have a one-hour commute.

The DC area has the second-longest average commute with an average travel time of 46 minutes or just under 25 minutes per one-way commute.

Let’s do a little math.

You start your day at 5 am. Get to work by 8 am. Put in the customary 8 hours. Travel back home and get there by 6 pm. Eat dinner, hug the kids, watch the evening news, and get ready for bed at 9 pm. Get the standard 8 hours and then do it all over again until Friday at 5 pm.

If you calculate through all that time, you will see you only spent about 5 + 8 = 13 hours at home and eight of them while you were asleep!

Oh, and don’t forget the weekend trips to the wine bars, parties, and regular outings or errands. Yep, again that is all time spent away from home.

You are not really utilizing and enjoying this home you are working so hard for. It has become a pit stop on the way to the work, the grocery store, the dry cleaners, soccer practice, and the trips to the Caribbean.

Basically, your home is storing your stuff.

You are either gone, going away from home or asleep most of the time your there.

Mighty expensive digs to be fronting as your own personal hotel, if you ask me.

Now let’s look at the cost of buying and furnishing a home.

BUYING THE AMERICAN DREAM

Not so long ago, families bought starter homes with hopes of trading up later when finances permitted to get their dream home.

Now, I hear more folks buying the dream home as the starter home.

So, instead of buying a condo or townhouse, people are getting 5-bedroom single family homes as the forever home.

Well, guess what? Dreams costs…. A lot.

Not only are homebuyers ponying up bigger down payments and closing costs for this mini Mansion, but also have to furnish it.

Trips to Ikea and Pottery Barn are being replaced with expensive interior designers and Havertys.

Not to mention, the costly window treatments ($500 per window), replacing new carpets with newer carpets, custom chef’s kitchen, fancy gas range, custom back splash, French doors, custom king bed, home office with Vizio or MacBook laptop, and the pool furniture.

And don’t forget buying a state of the art sound system for the man cave.

After going through every room, you spend enough dough to put one kid through college furnishing your new home.

Let’s add it up.

Home purchase price: $400,000 (approved for this amount)

Living Room Furniture: $10,000

Dining Room Furniture: $5,000

Bed Room Furniture: $8,000

Man Cave: $3,000

Kitchen remodel: $9,000

Office Furniture: $3,000

And you budgeted $240,000 for the home and $15,000 for the furnishings. With a total of $255,000.

However, what was spend was this: $438,000

That’s a difference of $183,000!

You could buy another house for that amount. You could then keep one and rent out the other. Merely a suggestion.

STORAGE UNITS FOR $1,100 PER MONTH

You read that right.

That comes out to $13,200 per year.

You’re essentially paying the bank thousands of dollars annually for you to literally have a place to store your hat box.

If you invest money in the stock market over 30 years and get a 7% return, you could have over $600,000 squirreled away!

Forget what lenders say you can afford. Do what you know you can afford.

Don’t be led astray from your budget. Stick to it. This will help you prosper and thrive instead of just survive.

Moral of the story: Don’t let your dreams be bigger than your wallet.

College, Film Reviews

Money and Life Lessons I Learned from Disney’s film National Treasure

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An investment in knowledge pays the best interest. – Benjamin Franklin

It has been so long that I had almost forgotten this gem of a film released by Disney in 2004 called National Treasure starring Nicolas Cage. He plays a historian, Benjamin Franklin Gates, on the hunt for a fabled national treasure hidden in America that was told as a secret to one of his ancestors in 1832 by Charles Carroll.  The secret was the first clue (the secret lies with Charlotte) to the treasure and this is where the story begins.

After finding the first clue, it then leads to another, this time it’s to an invisible map the Declaration of Independence, which was signed on July 4, 1776. And here begins the adventure and the life lessons.

GET A GOOD EDUCATION

After hearing the secret of the treasure from his grandfather, Gates goes on to become an expert in history as he recites historical facts, data, and events in American history with ease throughout the film. It was also at one point stated that he had various degrees from top colleges such as Georgetown and Brown University.

His educational and historical prowess is evident during the film to be quite extensive. This makes him very important to those who want the knowledge he has. His education and skills also helps him get out of all types of jams and sticky situations in the film. His expertise in literature, culture, science and history also drives the movie forward as he informs the audience of how he plans his next move why and with what tools he needs to succeed. His street smarts and brains are what keeps him alive. I learned from this that the value of a good education is priceless.

SHARE RESOURCES AND KNOWLEDGE

Gates is constantly figuring out his next move and is usually one step ahead of everyone else. However, he always shares what he knows. This allows people to put faith and trust in him, which was necessary for his success.

At one point in the film, he does not know something, but his comrade does (Justin Bartha). This enables them to keep moving toward their goal. Therefore, it goes to show that knowing is not enough, but you must also apply and at times ask for help. Shared knowledge brings more gains that keeping it to yourself.

CARE FOR OTHERS

Throughout the film, he makes sure to ask the woman (Diane Kruger) he is with if she is hurt or hungry. He tells people to be careful and to watch their step. He does all he can to keep his father out of trouble or in any harm’s way. He also shows great respect and that he cares for the people around him. They, in turn, watch out for and care for him.

Gates kept good people and characters around him. He surrounded himself with capable people. If you ever saw the film The Fast and the Furious: Tokyo Drift, there is a scene when Han says he needs good people and character around him. He also said you make decisions and you don’t look back. Words of wisdom to live by. It’s gems like that people need to hear.

A LITTLE COMMON SENSE GOES A LONG WAY

In the film, while they are on their way from Washington, DC to Philadelphia, Gates says they need to buy new clothes to look less conspicuous. His companions agree, but one states they have no money. He then tells them that he has taken a book off his father’s shelf called Common Sense, which was written by Thomas Paine during the Revolutionary War in 1776. Paine is also famous for writing the American Crisis and this sentence: THESE are the times that try men’s souls.

Inside the book, there is money. Gates says his father usually tucks away a small stash of hundreds in there. Bravo, how very smart of his father. They say hide it in the books, as that is the last place most people will look, if you are trying to keep something hidden.

I learned here that even small amounts of money can you help out, if you are in a pinch. And remember cash is king. People can turn you down for credit, but people welcome cash with open arms.  In one scene, a sales girl was hesitant to give back a hundred dollar bill he paid the clothes with, but conceded when he offered something of value in exchange. And he just wanted to borrow it to look at the back of the bill! Do not ever downplay the power of cold, hard cash.

THE STATUS QUO

Later in the film, Gates is in a bind. The bad guys (Sean Bean) find him and use his friends and leverage to do their bidding. He is reminded that their usefulness exists in keeping the status quo. One the bad guys get what they need, then they are no longer useful. Therefore, they do all they can to keep the state of affairs ever in their favor. Much like the motto of The Hunger Games: May the odds be ever in your favour. This film starred Jennifer Lawrence as Katniss Everdeen.  And the motto was said repeatedly by Effie Trinket (played by Elizabeth Banks). Trust me, you will need them to be as no one wants the odds stacked against them.

If you can, your goal is to always have a strategic plan to win. One of the greatest military leaders of all time, Napoleon Bonaparte, was well aware of battle strategy. During his time, he dethroned the king and queen (Marie Antoinette) of France during the French Revolution. His goal was to be emperor himself. However, short of funds he decided to sell the French controlled territory in America, known as the Louisiana Purchase in 1803.  Although, the United States could have said no, they decided to get the funds together in order to double the size of the country. The U.S. paid $15 million dollars and would go on to eventually have enough territories to create seven, and later, 15 states. I learned when opportunity knocks, answer the door.

PAY ATTENTION TO YOUR SURROUNDINGS

At various times within the film, he assesses the situation and surroundings to get out of numerous scrapes. Every time he was in some sort of trouble or missing a piece of the puzzle, he with the help of his companions figured a way out or an answer to a clue. Paying attention to your surroundings and telling the truth can help keep you safe. For example,

  • He knew that a ship was buried in the artic based on climate change and where to look for it
  • Saw that a barrel was being safeguarded by a deceased ship captain
  • Solved various riddles and clues throughout the film
  • Was aware of a smuggling cargo hold in an old ship
  • Noticed an incomplete coin collection in the office of a would be ally and used this information to get on this person’s good side and lower her defenses
  • Saw an opportunity to get access to the Declaration due to a 70th anniversary party advertised at the Smithsonian
  • Bought a duplicate Declaration just in case of any trouble as a way to safety precaution
  • Knew to watch for signs of activity from afar and to then park blocks away from his father’s house for fear of being followed
  • Bought new clothes to appear less conspicuous
  • Separated the map (lock) from the glasses (key)
  • When in federal custody he told the truth and received goodwill treatment
  • Recovered items that were clues and kept them in his possession (which would come in handy later)
  • Avoided danger at all costs
  • Delegating tasks such as asking a young boy to access the Silence Dogood letters written by Benjamin Franklin to avoid detection from the FBI
  • Always left little to no trace of his existence when plotting schemes such as putting the brick back where he found it
  • Did not knowingly try to put anyone in harm’s way and avoided loss of life
  • Knowing that when spelunking in caves that the explorers would create second opening in case of cave ins or other danger as a means of escape
  • Recognizing that using the clue piece was how to open a secret door (the secret lies with Charlotte, literally)

ALWAYS HAVE A PLAN

When the bad guys need more help as their knowledge is not as vast as Gates, they then turn to him for assistance. This kept the ball in Gates court and the status quo on his side because he knew things they didn’t know. Once it was evident that he was the one in control, he exploited this opportunity and used it to his advantage to win. I learned that in life you need to acquire knowledge and skills, keep learning, apply what you know, be useful, and always have a goal or plan for success.

FORGIVENESS

Once they are abandoned and left by the henchmen, they then look for a way out. Thinking it is the route to the treasure. When it is not, they are thoroughly disappointed. Gates, very thoughtfully, apologizes to this friends. They forgive him.

This reminded me of an old saying I heard: To err is human, to forgive is divine. This saying is from “An Essay on Criticism,” Part II, 1711 by English poet Alexander Pope.

GIVE IT TO THE PEOPLE

It is not enough to have abundance, if there is no one to share it with. Too much should not be held by one person. The founding fathers believed the same thing about government: Give it to the people.

When Gates had the opportunity to give, he did so. He decided to give the wealth he had from the knowledge he had gained to the people. Therefore, there is no common good to be had by being miserly, stingy, or hoarding. Give what you have and give freely without looking for anything in return. Earn what is yours, keep what you need, and then give the rest away.

WHAT IS LIFE WITHOUT A LITTLE WHIMSY

You will notice in the film certain times when they are playful or funny. Although, they were in serious situations, they still made time to laugh now and then. One of my favorite scenes is when he covertly and illegally goes into the room for the Declaration and once he walks in, points to the camera as his friend looks on. This was funny because it signaled to his friend that his plan could be done and that as serious as things were he could still keep it lighthearted. Sometimes, in life you just have to smile or laugh at yourself.

It’s like Sheldon Cooper said, on The Big Bang Theory, after he decided to to drink hot chocolate in months with an R in them: “What’s life without a little whimsy.” Indeed. Not very much fun.

HARD WORK = REWARD$

By the end of the film, Gates turns down a 10% finder’s fee. Instead, he requests only a 1% fee for his services. His friend is upset by this. However, you will see what that 1% has gotten them.

Although, it took him 30 years, he was able to reap the benefits and rewards for all of his acquired knowledge and hard work. He also garnered the respect of his peers, family, friends, and colleagues.

From this I learned that nothing can replace hard work. You have to give it everything you have because success takes no less than everything you’ve got. You must believe in yourself, even when nobody else does. Prove people wrong. Work for what you want. Do the right thing as it is its own reward. However, that reward may take years. But do not give up. The journey is more satisfying than winning.