Selling My Apartment

I realized I never wrote in much detail about selling my apartment, and it's now been over a year since that happened!
As a refresher, I had owned the apartment for a couple of years when I met Sweetie. Once Sweetie came along, I gradually started to spend less and less time there, to the point where I was almost never home and kept a lot of things at Sweetie's place. This made me a bit sad, as buying my own home had been a milestone for me, financially and emotionally-- it felt great to have that independence. But as Sweetie and I gradually got to the point of being committed to each other and wanting to live together, it began to seem very indulgent to hang onto this extra apartment that I was basically using for storage. Yet I found it a bit difficult to take any action to change things until a situation fell into my lap-- a friend of a friend needed a place to stay temporarily. It started out as just being for a couple of months, which seemed like the perfect chance to test the waters and make a little money. It worked out well, and turned into a full year arrangement, and during that time, I didn't really miss having my own space. It was actually a relief not to have to visit it weekly to check on things. But being a landlord brought a few other headaches-- somehow having to repair the heat or the toilet seemed a bit more annoying when I was doing it for someone other than myself! Although I realized I could make a decent profit as a landlord, I decided to try to sell the place when my tenants told me they'd be moving out.

From doing some research about the market, things seemed pretty good. And I had actually already had an offer from an interested party, an investor who already owned another unit in the building. I emailed him to see if he was still interested, and he was-- until he couldn't get a mortgage. I figured it wasn't that surprising that banks might not want too many units in the building to be owned by an absentee landlord, so I didn't think too much of it, and took the next step, which was asking my Facebook friends if anyone wanted to buy an apartment!
I kind of knew the "for sale by owner" thing could bring some headaches, but it also seemed worth a try. I was sure that my apartment would sell for more than I'd paid, but I worried that a 6% fee might eat up a lot of the profit. So I was happy when I immediately had some interest from some college friends who I hadn't been in close touch with in recent years. I had all the worries you'd expect about mixing friendship and business, but it also seemed like the friendship was at arm's length enough that it wouldn't cause any big problems. There was a bit of negotiation, but we pretty quickly agreed to what seemed like a fair price, and got our lawyers talking.

And then... they couldn't get a mortgage either. This started to worry me a bit-- their finances were good but they weren't rolling in dough (or they wouldn't have wanted my apartment anyway!). It wasn't that they couldn't qualify for a mortgage, it was that there was an issue with the building. Because I'd changed my address on my taxes, I'd tipped the owner-occupancy rate under 50%, and in the climate of recent years with banks being so much more cautious after the financial crisis, this and a couple other quirks of the building seemed to make it challenging. It was a bit of a surprise, as some another unit in the building had just sold and those new buyers had managed to get a mortgage. But now that 2 potential buyers had bitten the dust, I decided it was time to get a broker involved....

Stay tuned for part 2 of this post later this week!

It Gets Better

You may have seen a series of videos that have been popping up on You Tube over the last couple of months with the theme "It Gets Better." They're mainly directed at teens and young adults who may be feeling suicidal because of bullying due to their sexual orientation (actual or perceived). In the videos, various celebrities such as Project Runway's Tim Gunn talk about how they struggled with the same kind of misery yet eventually got through it and lead happy lives today.

There are so many reasons that being young can suck-- you haven't figured out your life yet, you haven't figured out who your true friends are, and half the people around you who feel the same way cope with it by being really mean to anyone who seems vulnerable. But another thing that can be especially miserable for young people is worrying about money.

If I could send a You Tube video to my younger self... well, first of all, I'd only shoot it from the waist up so she wouldn't be shocked at how big her butt was going to get. But otherwise, I'd have a lot of reassuring things to say to her. When I was much younger, I didn't know what I wanted to do but had some vague sense that I'd be really awesome at whatever it was. I didn't really have any idea what that might mean in terms of supporting myself.

But by the time I graduated from college, I realized I wasn't particularly awesome at anything and had no great prospects for making money. Facing that sudden responsibility scared me to death. It wasn't that I was totally clueless about money-- I'd grown up in a family where money was always a source of anxiety, so I knew I needed to make money and save a lot of it. But in those first few years, that was so hard to do.
Then once my career started to settle in, it was easier to save, but I was aware that every year passing meant I'd have less time to reach my goals. And as I thought more and more about the realities of this country's economy and my place in it, it became harder and harder to imagine that I could ever get to a point where my financial life would feel comfortable.

But in the years that I've been writing this blog (about 5 1/2), I somehow turned a corner. I advanced in my career, bought my own home, saw my retirement savings grow a lot, and built up additional savings and investments. I watched myself like a hawk, calculating budgets and projecting various scenarios of what my net worth might be by retirement... but then I started to let it go a little, when I realized I could relax and put my finances a bit more on auto-pilot.

This is not to say that I'm somehow "done" with what I need to achieve financially. I have to keep saving, investing and increasing my earnings. A lot could still go wrong in terms of the economy and the real estate market in ways that could really set me back. I could be hurt by things I have no control over. But I finally feel like I have a good sense of my goals, and I think I can reach them. In terms of how I manage my own life, I've found a kind of balance, and what's more important, I have a faith in my ability to take care of myself that I didn't have when I was younger. Things did get better.

The Freedom to Ignore Money

I think part of the reason I haven't been posting much is that concerns other than money have been more prominent in my life lately. This is probably a good thing. The reason I started this blog in the first place was that so many concerns in my life seemed to relate to money in some way-- family, relationships, career, friends, housing, creativity, etc. That is still the case in many respects, but the money stuff has fallen more into the background.

My father's death really highlighted this. In the months before he died I'd really been at a high anxiety level about my mother's spending, their budget, and how ends would ever meet. Then when he went into the hospital, I couldn't help thinking about how my mother's compulsion to spend money fixing up the house related to the cause of his accident. But after he died, it was like my anxiety just evaporated. You'd think I would have been even more anxious-- after all, this means my mother's income is cut in half way earlier than we expected it to be, so she'll be spending down her savings even sooner. But there will be time later to worry about that, and right now we just need to be at peace.

I'm still very conscious of money, of course, but it's like I'm floating above it a bit right now. And this in itself is part of what I've always aspired to in how I manage my finances: the freedom not to worry. Sometimes financial security means you can put things on auto-pilot a bit, at least for a little while. My dad left my mother well-enough provided for that we don't have to panic, even if we will have to be careful and make some changes within the next few years. And my own finances are such that I don't have to be hyper-vigilant about them right now. My income exceeds my expenses, I have a good cushion of cash in the bank, and my investments are muddling along as well as can be expected in line with overall market conditions. I still need to worry about whether I am saving enough money to meet my long-term retirement goals, and ignoring that is definitely not something to take lightly, but right now, I can give myself a bit of a break.

I've obviously been giving this blog a break too! I've been thinking about different ways to approach it, perhaps writing more substantive posts less frequently rather than posting lots of quick links and commentary-- we'll see. Thank you to everyone for all your kind words and sticking with me through good times and bad!

Origins of Family Money

How would you feel if your family had some money from somewhat dishonest origins?
I was talking to a friend about her family background-- it's a fascinating story. One of her ancestors invented some sort of patent medicine and made a fairly large amount of money selling it before such things became frowned upon. Later generations of the family made a living in more legitimate ways, but certainly with the help of that ancestor's money.
Another branch of the family also had some money, but in this case, they were immigrants to the US who started a business that is still run by family members today, though not a branch that my friend is directly related to. There was a bit of a power struggle in the family, and my friend's branch was forced out, and possibly not paid their fair share of the company's value.
We got to talking about this because of a shared interest in genealogy. My friend's mother was very interested in learning more about her family background, but seemed a bit ashamed that there may have been some scandal in her family's past having to do with her ancestor selling fake medicine. But they dug up a lot of information about how active he was in his church and social and charitable activities, which made her feel a bit better about it. Nonetheless, she'd lived most of her life kind of turning away from a background of privilege, doing a lot of volunteer work and living very frugally. Her own children were brought up knowing they had a very small trust fund left by their grandparents, but other than that, they lived a normal, comfortable but not luxurious, upper middle class life. Their college educations were paid for, but other than that they had no handouts.
Money passed down in families can have all sorts of strange effects-- people can feel burdened by it, especially if they have qualms about its origins. Have you ever found yourself in that situation, or known someone else who has?

More on Dealing with Mom

This comment on yesterday's post really struck me:

do you think there's a way to do things differently, so you're not 'enabling' her self-sabotaging spending habits? I mean, we all can learn and change, no matter how old we are. Believing that it's just fine to spend an extra $100 - $250 so you have more time to get ready and put on makeup for a flight -- that's just not in tune with reality, especially in this economy.

This is very true. The idea of spending $200 to have time to put on makeup-- well, it's pretty terrible. Of course, it's a bit more complicated than that. I'm worried about my mom-- she is under such stress living with my father, and I think she is really suffering from anxiety and depression. My mother has always been a very cheery person, always trying to see the bright side of things, but she's been so subdued and distracted the last few times I've spoken to her. I think depression is why she is finding it so hard to drag herself out of bed in the morning, and if she still cares about how she looks, maybe that's kind of a good sign.

But I do think my mother would be happier if she could get a grip on her finances and gain a little independence. When is financial "tough love" appropriate? Am I enabling her? What is the right balance between trying to guide her towards more financially responsible habits and trying to just be supportive to someone who is having a rough time? And is there ever a time when it's just "too late?"

That is how I feel about my mother, that it's kind of too late: she's in her mid-60s, she spent almost her entire life taking care of her children and husband, and her own mother, and now her grandchildren too. She wanted to be a housewife and have a husband pay the bills, in the traditional mold. After a life like that, it's a bit of a raw deal to expect someone to suddenly be independent and take care of herself. She's not equipped for it-- it would be like setting a highly-bred toy poodle loose in the wilderness and expecting it to survive on its own. Of course people are not poodles, and my mother, like any human being, can sometimes have surprising resilience. But right now I think she's really worn down.

It always just makes me so sad that she and my dad can't just relax and enjoy this time of their life the way I see the parents of many of my friends doing. I can't help but wonder what went wrong. Where did the money go? Did my father make less money than we thought? Did he not invest what he had well enough? Did my mother really spend too much? Did my dad overspend on his own interests too? Did paying for my sister's and my college education do them in? Did their health problems have a financial impact? Did my parents' marital incompatibility make money just one weapon in their ongoing skirmishes?

I suppose the answer to all these questions could be yes. But how is that so different from other people? I thought my parents did a lot of things right. What did other people do right that they didn't? What can I do right that they didn't?

The Wealth Gap in Relationships: Too Big? Too Small?

Here's a question I've been thinking about, regarding financial inequality in relationships: if you were going to have a partner who made more money than you, what kind of difference would you be comfortable with? If you made $75,000 a year, do you think it would be harder to be with someone who made $150,000 a year, or $1 million a year? Would the source of their income make a difference, i.e. whether they worked for it, or inherited a big nest egg? How might this change depending on the actual incomes involved? Is the difference between someone making $25,000 a year and someone making $75,000 a year going to cause more or less stress than the difference between people making $100,000 and $300,000? And does it make a difference if the relationship is gay or straight, and whether it's a man or a woman who makes the higher amount?

Let's say you were seeing someone who made more money than you. You don't know exactly how much more, but guess it is maybe two or even three times your own income, but not more than that. You want to feel like there is a balance in terms of who pays for things, but can sometimes feel like the person who makes more should pay more. But you're both considered middle-class. Maybe one of you is more upper middle class, and enjoys a few extra luxuries with that extra money, but you're both in a position where you work hard to make money, worry about saving enough to support your retirement, and feel like you are surrounded by people who make more money than you.

Then let's consider this alternative: you're seeing someone who was born into a wealthy family. They have some sort of trust fund whose income will comfortably and even luxuriously support them for the rest of their life. You yourself are solidly middle class, with some savings and a decent job, but no hope of ever inheriting any significant wealth. You might not be experiencing any financial hardship, but you know you have to be careful about money in order to stay financially secure.

In which of these situations, if either, would you feel more comfortable saying "hey, you know what? I can't afford to do X, Y and Z, and if you want us to do it together, you're going to have to pay for it." Assuming that the wealthier member of the couple is willing to say "Of course I'll pay for X, Y, and Z. Doing it with you is more important to me than the money," could you just accept that, or would you feel guilty?

And on the flip side, what if YOU are the one making more money? What kind of gap would bother you if you were seeing someone who made less money? How much more money would you have to have before you would feel comfortable paying for more than your share, or would you pay for everything without even thinking about it?

We Want to Be Alone

I was thinking about how much our economy and technological development seems to be driven by the desire not to physically interact with other people. Think about it: we have gone from being entertained by plays and movies in theaters, to having TV sets in our living rooms, to watching video iPods. And with music: from concerts, to radios and stereos in the home, to Walkmans to iPods. Telephones used to have party lines, and there used to be more phone booths-- now we have cell phones. Now the internet gives us so many reasons to do things from the comfort and privacy of our own homes rather than among other people: shopping, dating, education...
Of course cars are a big one-- we've developed this American dream of having your own car, not taking public transportation. And the wealthier people get, the more they isolate themselves: owning yachts instead of going on cruise lines, taking private jets instead of flying commercial, building houses with pools and fitness rooms so they don't have to go to a gym.

Sometimes I feel pretty anti-social myself. Now that I have bought this apartment with outdoor space, I find myself wanting to stay home and enjoy it. I'm also keenly aware of needing to stay on my budget. So every weekend, I have this little inner debate: should I go out to a café for breakfast, or should I stay in and make my own coffee to save a few dollars? But even when I do go out to the café, it's not all that interactive, or even particularly interesting just for people-watching: everyone's just sitting there hunched over their laptops, with iPods on!

I'm Playing the World's Tiniest Violin...

This weekend, someone stole my newspaper on Saturday, so I didn't get to read my beloved Real Estate section. I bought the Saturday paper on the newsstand but it didn't contain the advance Sunday sections that home subscribers get, and these, of course, were not delivered with my Sunday paper. I was tempted to go and buy another copy just so I could read the RE articles, especially since this week featured the special "Key" magazine section. But then I remembered that I could read it online for free. I was still sort of tempted to spend the $4.50 or however much it is now, just because I like reading it on paper-- I guess I'm old-fashioned that way, but in the end I decided it wasn't worth it.

The Real Estate section is fascinating to me, not just because I am interested in the housing market, but because it is the section of the paper that really shows how differently New Yorkers live, and the skewed perception we have of ourselves, at least those of us who read the Times, etc. Every week in the RE section, you can read some priceless comments that just make it sound as if everyone in the world is just deprived if they have to live in anything less than a $750,000 one-bedroom apartment with a doorman and views of Central Park. If such an apartment even exists in that price range, that is!
The RE section is also quite the showcase for over-indulged children, as it seems rare for them to profile anyone under the age of 35 whose parents aren't paying at least part of their rent. This weekend's article, Buying with Help From Mom and Dad, is a classic. Here's my favorite quote:

More buyers are turning to therapists to help them work through how they feel about depending financially on their parents when they have carved out independent careers and lives. Dr. Richard Shadick, a Manhattan psychologist who works mainly with 20- and 30-something New Yorkers, said that “a good portion” of his cases focus on the problems of seeking financial help from parents to pay for housing.

Awww! Your parents bought you a million dollar apartment and you need therapy to cope with it! I only wish I had that kind of psychological problems!

The article discusses many of the reasons these people need therapy, besides their feelings of dependency: often parents buy their children apartments with strings attached, such as a stipulation that no boyfriends or girlfriends can move in, and that family visits must always be accomodated. And there is the young woman who is upset that her parents want to buy her all-new furniture to replace her funky vintage items-- again, a "problem" I think I could learn to live with!

Some of these parents do sign contracts with their kids and make sure there is some level of accountability and varying degrees of repaying the money. And to be fair, another main point of the article is that today's market is just so different from even 10 years ago, when young adults like me with halfway decent junior-level jobs actually could afford to buy entry-level apartments much more easily. But I can't help it, these kinds of stories still make me feel a bit ill.