Since the last post I have had my birthday and turned 30. Well, I officially have less than 10 years to reach my goal now. I had a good birthday but I do officially feel like a grownup now which doesn’t make me happy, but thankfully this crazy summer is finally coming to an end. So I have ran into a couple of challenges on the retirement front lately, nothing insurmountable, but definitely speed bumps I need to avoid in the future.
The first challenge, my new clunker. With the property in the mountains I decided I needed to add a more versatile vehicle to the inventory for winter access. I happened upon a 1979 Ford Bronco at what I perceived was a value ($2800). It looked tough, definitely had some wear, but I was told it was in good mechanical shape. After a month or so of not finding the time to fix the brake lights and reverse lights I resigned to taking it to a mechanic. Of course, that day the truck wouldn’t start, so I had to tow it to the mechanic. Long story short, the truck is back at the mechanic again this week and we are at about $5k in repairs. This doesn’t include the shocks I need and probably tires, so let’s add another $2k for that. Moral of the story is to figure out how much you can afford to spend on a vehicle and buy the best you can for the money, so you don’t end up with a $10,000 30 year old rust bucket that can’t pass emissions. The painful part is that all of this money I throwing at this problem should be going towards my retirement goal.
Second challenge, I had to inactivate my real estate license. There was an issue with the MLS and my broker being a member and me not so unless I coughed up $600 (a pittance really compared to the Bronco) a year to join, my broker was going to have issues. So the easiest solution was just to let my license fall to inactive status. This doesn’t hurt me too much, since I wasn’t really practicing, but I did like picking up referral checks here and there. But, I wasn’t making enough to make the membership worthwhile.
Now the final challenge… the housing market. My original plan was to sell my house (back in April) and start construction on the mountain house. Unfortunately, home values in New Mexico are down and not going to get better anytime soon. According to an article in BusinessWeek they are predicting an 8.5% drop this year and 6% drop by 2012. I think they are saying it will be down 6% on top of the 8% we are currently sitting at. I haven’t applied these numbers to my house, but I have been evaluating listings in my area and it doesn’t look good. Currently, my house is worth about $40k less than I owe, which isn’t good, but it is actually worse than that because for me to break even (just loan wise) I have to charge about 110% what I owe. This mean I need about a 28% gain to get out of this house and if the market isn’t picking up until after 2012, I better get used to living in my current residence.
Even with these recent challenges I’m still pretty upbeat and just trying set the right path forward from here. It looks like I will have some time to save up for the new house, in the mean time I can pay off my car and hopefully get the Bronco in working condition. Only problem is I like to keep my momentum going, but right now looks like it is the time to pause and catch your breath before the next ascent. I can use a little pause right now, no complaints.
