The Law does work!

Water damage

Back in February, I wrote to my Congressman concerning the increase in my flood insurance for UFUO #2.  The cost of insurance had increased almost 400%.  According to the law, that was illegal.  I wasn’t sure how to proceed, so I emailed my insurance carrier and my congressman.  No one had any answers for me except “well, it looks like the insurance company is correct”.

Well, without any warning, I received a check and a letter explaining that the law (which was in effect when I paid my premium) restricted the premium to only 18% over my previous premium.  The check was for the difference (with the full 18% increase in place).

I’m not sure why it took so long for me to receive the money, why the only answer to my emails was “it is what it is”, but it all ended up working out in the end.

I still have to figure out if they can again increase the insurance 18% again this year, or if I’m spared that increase.

(Photo credit: water911damage.com)

Flip/Life/?? Update

Hey all,  Sorry for the lack of posts for the past month.  It’s been a crazy month since my last post.

Woooahhhh

 

Here’s a quick recap:

May 5, Meet with my friend who just graduated from the local MBA program
May 8, PSU re-opens the application process for Fall 2014; open period closes June 1
May 5-15, Consult with my significant other regarding going back to school in 2015
May 15, I learn about the MBA opening
May 15, (After learning of the opening) consult significant other regarding starting school in 2014
May 20, Sign up for GMATs on May 25
May 20 – May 24, Cram for GMATs
May 25, Take GMATs, Receive 660, 10 pts higher than average entering student’s GMATs (Minor party in my head)
May 29, Submit final application
June 1, Wait to hear about my application
June 1 (afternoon), Feel like I’ve come off a two week bender
June 2, Receive an invitation for an interview on June 6th
June 2-5, Panic realizing that I had sent my last white collared shirt to Goodwill.
June 5, Purchase ‘business’ clothes and ask to borrow Brother-in-Law’s shoes and tie (See below)

Yes, I didn't recognize myself

Yes, I didn’t recognize myself either

June 6, Interview; Told to expect to hear something “Definitely by June 30, maybe within two weeks.  First contact will be by email.”
June 7, Send a ‘Thank-you’ note for the interview, admitting I was nervous.
June  8, Wonder what I said wrong during the interview, remind myself that I could wait until June 30, so continue the nose-to-the-grindstone routine
June 10, Decide to go for a run in my favorite place in PA (Rothrock).  Upon returning to my car, see that I missed a phone call…call was from a University extension number.  I listened to the message.  It was from my interviewer advising that I “check my email as early as possible.”
June 10, 30 minutes past last entry, Check email using Sheetz free internet connection.  I received an invitation to attend school in the fall

-pause-

June 10, 1 minute past previous entry, Hoot and holler (to no one as my car windows are closed).  Decide to splurge and get two milkshakes (one for myself, one for my wife).  Drive home to deliver good news to her.
June 11, Inform day-job that I’ve been accepted; promptly told that my entire division would be shut down
June 12, Informed that my division wouldn’t be shut down but rather put on 12-months notice: Generate significant revenue or else…
June 13, Received an email from my investors to schedule a visit to the site (mild panic); Scheduled for June 21
June 14 – June 20, Try to pack as many hours at the flip as possible
June 21, Investors arrive to view the flip.

This takes us up to the present.  I was incredibly concerned/nervous/scared about the investor visit today.  I have done my best to pack my days with as many hours at the flip as possible.  We started the day with lunch.  We discussed business, my daughter, business, and more business.

I had scheduled a tour of some area homes that may fit a profile for the investors.  After touring five homes, none really stoked the investor’s interests, so we headed to the flip.

To prolong my agony, the investors asked that we look at some additional potential flip-able homes.  I obliged.  We came up with a list of five properties to pursue and see what kind of business we can drum up.  I did my best to prolong this period of time before heading to the flip.

After driving through town for as long as possible, I had to head to the flip.  We’re behind schedule (original schedule had us relisting on May 1), we’re over budget (but not too bad…I think????), and I’m hoping to keep the investors happy.  We showed up at the flip, turned off the car, and headed for the door.  Once inside, I immediately began to point out the flaws in the house.  I figured that I should show what’s wrong with it and let them jump on me.  We walked through the entire home, tested the new bathrooms, discussed paint colors (apparently I have a California sense of style as the entire house isn’t beige) and I laid out the schedule until the house would be back on market.

We discussed my successes (good purchase price, locating good contractors), and my failures (timing to get back on market, insistence to handle as much of the project as I’ve decided to handle (too much), the hiring of my first contractor).  I was expecting to be told that my investors were finished with this experiment, that they had bigger fish to fry and that I was small fry (pun intended).

As I expected, we discussed my failures to quickly turn this flip.  My labor savings have eliminated the return of a quick sale.  My investors did admit that they’re not happy with the length of time the flip has taken.  I was OK with that assessment.

I was unprepared for the next statement from the investors:

“We’re really happy with how you’ve handled this investment and we’re happy that you’ve learned from your mistakes.  We expected mistakes and it seems that you’re aware of the mistakes you’ve made.  We want to move forward with additional investments with you.  We’ve got $X to move forward with you.”

[I had to pick up my jaw from the floor; both for the size of the investment as well as the fact that they didn’t immediately end our agreement because of the timing if the flip.]

Needless to say, it’s been a crazy month: I’m getting ready to leave my day job to head back to school; I’m in the middle of a house flip; my investors aren’t angry, they want to do more work with me; probably the craziest thing is that I feel good about all the changes, I’m not fearful of the future at all.  I’m not even six full months into 2014 and I’ve blown all of my goals out of the water.  Yet I’m OK with that.  I sincerely feel that I’ll come out in a better place now than when I originally set those goals.

This past month has shown me that these next two years will be incredibly crazy, but will be worth it.  I know I can design, frame, wire, plumb, insulate and paint homes.  Even if I fall flat on my face after these next two years, I can still fall back on these hard skills that I have.  Even if the ‘business’ world doesn’t see my abilities, I know I can attract investors, I can deliver on my promises (maybe a few days late..), and I have the drive to see the craziest ideas through to their culmination.  However, I plan to use the next two years to learn the hard ‘business’ skills to allow me to skillfully lead any company in the future.

Warren Buffett, Elon Musk, Ashish Thakkar, Jeff Bezos, Richard Branson…here I come.  Who’s along for the ride?

 

Another quick update – sort of unrelated to REI

I’m still working on my B-school application.  GMAT books no longer decorate my kitchen table.  I’m no longer pondering “if X = y*sin(xy)+tan(z), What is the value of C?”**  It took my brain about two days to fully recover from the GMAT exam that I took on Saturday.  PSU’s average is 645, I scored a 660 (I’m slightly better than average mom!)  I’m now recovered and pounding the keyboard, writing my essays.

Everything is due Friday.  I’m trying to wrap everything up by tomorrow (Thursday), just so that in case I miss something, I’ve got 24 hours to correct any oversight.

The flip is SLOWLY moving forward.  The carpeting is ordered (measurements on June 2), basement is mostly clean, yard has been trimmed back (Thanks Rick!), and I should be able to start painting trim on Friday night (I’ll have a 6-pack of a really good IPA if anyone wants to join me).

Other than that, I fixed a sink drain and hose bib this past weekend.  The home owner had ‘repaired’ the drain with packing tape (!).  The hose bib was a crazy amalgamation of CPVC, galvanized, copper and one black iron coupling.  Yes, it was a mess.  All those various types of pipe were found in a 1′ run of pipe.  I cut that mess out and took the wuss’s way out: I used Shark Bites for my ball valve and female FTP connector.  So much for my nice MAP gas torch.

But it was quick.

In about ten minutes, I had shut off the water, removed the bad pipe, installed the new pipe and turned the water back on.  The expense for the Shark Bite connections are totally worth it.  Had I used typical solder connections, I would have been there for at least thirty minutes.

Back to writing essays…

 

**Not a real question on the GMAT

 

Blast from the past

Need more proof the past repeats itself?

“Although interest rates have subsided from the 1981-82 peak, the low and slowly changing interest rates of former years are plainly gone with the wind, as are the former government decreed limits on interest rate competition for savings accounts and the favoritism for [investment institutions] over banks. But an agency of the U.S. Government (…) continues to insure savings accounts in the [investment institution] industry, just as it did before. The result may well be bolder and bolder conduct by many [investment institutions]. A sort of Gresham’s Law (“bad loan practice drives out good”) may take effect for fully competitive but deposit-insured institutions, through increased copying by cautions institutions of whatever apparent-high-yield loan and investment strategies seem to allow competitors to bid away their savings accounts and yet report substantial earnings. If so, if “bold conduct drives our conservative conduct,” there eventually could be widespread insolvencies caused by bold credit extensions come to grief.

Sound familiar?  Banking ‘crisis’ of 2007 maybe?  This was a letter from Charlie Munger to shareholders of Wesco in 1984.  My use of ‘investment institutions’ was a replacement for ‘savings and loan’ in Mr. Munger’s letter.

Ignore history at your own peril.

 

TV Time and FI

Somewhere on the internet, Einstein is quoted “Compound interest is the most powerful force in the universe.”  Now typically, when we think of compound interest, we think of money.  If we invest $1 today and wait (and wait and wait and wait), we will have many multiples of $1 at some point in the future.  The longer we don’t touch that $1, the more money we will have in the future.

In the business world, a common refrain we hear is “Time is money”.  Usually there is a boss standing over an underling demanding the underling(s) stop goofing off and start working, because someone is losing money because time is being spent/wasted.

Just like 1+1=2 is the same as 2=1+1, we can say that “Money is Time”.  We can then take “Money is Time” and insert this into Einstein’s equation, we see that just like money, time also compounds.  If we spend time now, we will reap the benefits in the future.

I know you’re probably wondering how Einstein and “Time is Money” are in any way related to TV time, I say: damn the torpedoes and read on.  

Sometimes, on a late Friday night, when I’m tired, my hands are covered in paint and all I want is to crawl into bed, I wonder why I put all this time into my real estate business.  Some Saturday mornings, when I’m up at 6am so I can make coffee, go for a run and head to a rental to smash some radiators, I remind myself that I believe that time compounds.  My actions today directly affect my abilities to do things in the future.

Recently, I came across a horrifying statistic: American adults watch almost 1,100 hours of TV per year.  I wanted to verify the statistic, so I went to the Bureau of Labor Statistics (fascinating website if you’re into stats).  Well, on the BLS website, I found 2012’s numbers and I was again horrified.  According to the BLS:

“–

Watching TV was the leisure activity that occupied the most time
    (2.8 hours per day), accounting for about half of leisure time, on
    average, for those age 15 and over. Socializing, such as visiting 
    with friends or attending or hosting social events, was the next most
    common leisure activity, accounting for nearly three-quarters of an
    hour per day. (See table 1.)

 “

bls.com; accessed 4/22/14

Those 2.8 hours per day are not per work day or per weekend day, that’s per day, 7 days a week, 365 days per year (366 every four years).  So in 2012, the average adult watched 1,022 hours of TV.  That’s a part time job that someone spent in front of the TV, every year.  That’s the average American adult.  If we assume an average life span of 76 years and an American ‘adult’ constitutes anyone 16 and older, the average ‘adult’ will watch 7 years of TV in their lifetime.  That’s 7 years watching TV 24 hours per day.

Let’s assume a more reasonable TV marathon in which the adult in question watches 16 hours of TV and sleeps 8 hours.  That person will sit in front of a TV for 10.5 years.

That. is. insane.

Think about the opportunity cost lost because of some flashing lights on a box in your house.  Think about the great books that aren’t read because of the TV.  How about the great artists who we lose because they can’t devote their time to their art because of their TV addiction.

TV was never an important part of my life (luckily I had parents that only allowed us to watch Bill Nye the Science Guy, Marty Stouffer’s Wild America, and The Wonder Years…sometimes the X-Files).  My wife and I had cable for a few years when we were married, but during one of our financial diets, we decided to get rid of cable.

I admit, it took a while (like two or three years) for my desire to watch TV to totally subside.  Every Fall, as the leaves get crackly under foot and the air gets crisp, I still think of the college football I’m missing, but that’s really it.  I don’t miss anything else on TV.  Even then, watching college ball with others is infinitely better than watching by myself (plus I can knock off the #1 and #2 leisure activity at once).

We do still have a TV in the house and subscribe to Netflix, but that’s it.  At this point, we don’t even know how we would have time to watch any TV.  My wife is constantly chasing a toddler around the house, I’m working my day job (~2,100 hrs per year) with an additional 750 to 1,000 hours spent on my real estate investment business.  We literally don’t have any time to sit and watch TV.

I’m going to sound like an old fart here, but I think America is losing it’s edge not because we are lazy, but because we are glued to the boob-tube.  Think of how many new jobs would be created if the average American didn’t sit around watching TV.  I think about my own business.  As I work to get closer to FI, I will be buying more rental properties or flips.  Sure, I will spent my 1,022 hours working on the rehabs, but those 1,022 hours will get me so much closer to FI than sitting in front of TV will.

So tell me, am I an old fart?

Flip update

Tired on Sunday

Hey everyone.  Sorry I’ve been quite absent this past week, it’s been a LONG week for me.  To start things off, my wife (and daughter) were out of town, assisting my mother-in-law for the week.  Then, my immune system decided to take a vacation.  It got rough enough that I even took a sick day from work (I think I’ve only taken three in 9 years of work).

We were insulating a house at work this week (not a bad week to be sick), but the insulation job was SLOOOOWW.  What should have taken about two days to complete took a little over five days (I say ‘a little over’, because we are going back on Monday).  Rather than be a simple retrofit insulation job where we drill a hole in a wall, insert a 1.25″ tube and fill with insulation, we encountered 1.5″ of stucco over 1.5″ of wood lath.  We had to rent a dry-core drill bit and rent an SD-Max drill.  You may have no clue what I’m talking about, and honestly, neither did I until Monday when we rented the drill and dry-core bit.  The dry-core bit is a drill bit made for going through cement.  The bit is about 18″ long, has about six teeth at the end and a funky spiral pattern on the side.  The bit costs $180 (that’s not a typo).

The drill the bit fits on is a hammer drill.  Picture a mini-jackhammer.  This drill was about 30lbs without the drill bit (another 2lbs or so).  You may say “32lbs??? What, are these construction guys wimps?”  Well, we had to do the drilling while standing on a 16′ extension ladder.  Needless to say, our center of gravity was off to begin with, then to we decided to throw it a further 32lbs out of whack.

No one got hurt, it was just a LONG week at work.

Then I had to manage our house flip.  In an awesome twist of fate, my day job’s insulation job (with the mini-jackhammer) was literally located in the backyard of my house flip.  At lunch, I walked 50′ into the backdoor of my flip to meet with the contractor and answer questions (if any) or simply see what he was up to during the previous day.

On Monday, I saw the following situation:

Yes, a bunch of seemingly random studs, some acrylic shower/tub liners and red/blue PEX pipe.  However, even when I saw this, the contractor kept telling me “April 1, we’ll be finished inside and working on the roof.”  I kept thinking “yeah….right.  You and some special army will finish this work.”

Well, my contractor called in Seal Team 6 to get the work finished.  I’m not sure how he did it, but he did.  These pictures were taken on Sunday:

Somehow the dude pulled out all the stops and got both bathrooms (and the kitchen) to the point of painting by Saturday.

I’m B-L-O-W-N–A-W-A-Y with the effort he put into it.  On Saturday, I again asked him if we were over or under budget.  He conferred with his partner and they both agreed that they are still under budget (not exactly sure how).  We’ll be meeting on Friday to discuss budget and see how over/under we really are.  I’m hoping I’m not swimming naked with the tide going out…

Anyway, last week was long for me…this upcoming week will be long for me.  I’ve got a full week of work and have to get the house painted with my partner (and if there’s time, get the kitchen flooring installed).  Our investors are coming on on Saturday to see the progress, so I need to get a bunch completed by then.

As tired as I am currently (as in: right at this moment), my investors have told me that they are ready to buy the next house to flip (I keep telling them to sell the first one!).  I may be beat right now, but it certainly feels great to have investors who are willing to take on project #2.  (Deep down, it makes me wonder: could I get paid to work the flips (as a day job) as well as maintain ownership of the project (splitting the profits)…the thoughts are in the back of my head…)

Drive to 5 Update

Keep Calm

I’ve got a goal this year that I am calling my Drive to Five.  Essentially, I’ve got a goal to be in a position to receive $500/year in dividends (qualified and/or ordinary).  This $500/year is ‘forward looking’ meaning that on Dec 31, 2014, I need to own stocks which would pay a minimum of $500/year in dividends from Dec 31 2014 to Dec 31 2015.

Just like you’re not supposed to put all your eggs in one basket (stock), one of my unstated goals for FI is to have a few diverse streams of income, the anchor being the rentals.  In an ideal world, when I hit FI, I would like my stock portfolio to pay out a minimum of $5,000 annually.

This year, I started with about $82/year in dividends.  With my most recent purchases of KMI and SDRL, my annual total is up to about $116, a 40% gain.  The $116/year isn’t a huge sum of money, but I’d bet that if I came to you once a year and asked for $116, there would be a pause before you answered!

 

Disclosure: Long KMI and SDRL
Photo: logmycalls.com

Death and Taxes

Good ole Benny F. is credited with the quote “Nothing is sure in life except death and taxes.”  He may be right, but the quote puts tax season in a negative light.  There are parts of the tax code that I don’t like, but since I’ve been a landlord, I’ve actually look forward to tax season.

Last tax season, I didn’t really do anything to make my taxes more efficient.  I simply let the depreciation from my first property increase my tax return.  I had a few other things happen in 2012 (my daughter was born and a mortgage refi), but nothing really out of the ordinary.  However, I still received nearly $2,800 back from the Feds.  This $2,800 tells me a few things:

1) I was a fool and let the government have their way with my money throughout the year
2) I probably have more ways to cut back my taxes
3) Owning real estate really helps reduce taxes

424_426 Washington  [I don’t even have a picture of UFUO#3…that’s bad!]

With those pieces of information, I decided to increase my real estate holdings in 2013.  I purchased UFUO#2 and Duplex/UFUO#3.  I put about $8,000 into UFUO#2 rehabbing the place (resurrecting UFUO#2 from the brink of condemnation).  I haven’t done anything with UFUO#3 yet, but the property was fully rented when I purchased it, the tenants pay on time, they sometimes call about burned popcorn, but overall, they’re good residents.

The changes I made in 2013 were:

1) Reduce my withholding from my W2 day job (+$50/paycheck)
2) Save every freaking receipt to itemize every last expense (after compiling all the receipts, I realized I need to do better next year)
3) Track every mile I drive for HBS for the $0.55/mile back from the IRS (about 4,000 miles in 2013)
4) Make a plan for 2014 and adjust the budget for 2014 so I can come out even further ahead at tax time in 2015 (done, almost ready to execute)

My taxes are not complete yet, but (knock on wood) I’m feeling good about them.  I have more depreciation this year (~$2,400 or so v. $181 last year) and one of my units was vacant for 11 out of 12 months last year (UFUO#2, all while the rehab was happening).  I also realized that $5 if $5 and shouldn’t be left on the table, especially for the Feds to keep.  I had $5 remaining for my federal energy efficiency tax credit, so I decided to pull the ‘paid’ receipts to get that remaining $5.

Moving forward to 2014, I need to fully fund a traditional IRA in addition to an HSA.  Both are tax advantaged accounts, meaning my contributions will reduce my earnings for the year, which will further increase my tax return in 2015.  I need to do a better job tracking each and every receipt (they have to stop going through the washing machine!).  Lastly, I need to make sure that all items bought for business are bought on the business account.  There is a book I want to read regarding real estate investment (the closest library that has the book is about 1,000 miles away).  I was going to buy the book personally, but my wife reminded me that it is now a business expense rather than a personal expense.

Here’s to tax season 2015!

Updated Analysis of a Flip

Earlier I presented my numbers for the house flip that is currently under construction.  Those were my original numbers.  Here are some more up to date numbers as the project has progressed.  Some very experienced flippers would probably tell me that my original scope of work (SOW) was no good to begin with.  I’m actually operating under that notion anyway.  However, just because the scope of work was bad doesn’t mean the numbers were wrong.  Here are some updated numbers:

Original Estimate: Updated Projections
Item Cost
Property Purchase  $                 25,000 Property Purchase  $                 25,302
Kitchen Cabinets  $                    1,725 Credit for boiler  $                 (5,050)
Counter Tops  $                    6,480 Insurance Pmt  $                          88
Appliances  $                    1,350 Clean and prep of house  $                    2,542
Electrical repairs  $                    1,000 Kitchen Cabinets  $                       696
1st Floor refinish  $                    3,600 2 Bathroom and kit. Install  $                 11,380
2nd floor carpeting  $                    1,500 Add Alt: Roof Repair  $                    2,800
Bathroom update  $                    1,500 Interior paint  $                       750
Painting  $                       750 1st floor flooring repair  $                    3,600
Heating system  $                    1,000 2nd floor carpeting  $                    1,500
labor  $                    6,720 Boiler replacement  $                    4,000 No fuel switch
Contingency  $                    2,563 Appliances  $                    1,350
Add Alt: Exterior Paint  $                       500
Total:  $                 53,188 Contingency:  $                    2,500
Total:  $                 51,958

You’ll notice that the categories don’t quite line up.  For instance, the price for the two bathrooms does not really coincide with anything on my original estimate as we decided to add a 2nd bathroom into the project AFTER having closed on the house (not the best flipping strategy).  However, I believe I was conservative enough in my original estimates that I was able to bury the 2nd bathroom costs in the rest of the job.

A few things to note:

1) There were no associated costs for demolition in the original estimate.  I had assumed the clean out would take two days.  I was wrong.  Apparently, to make a bathroom disappear takes approximately two weeks.
2) The boiler cost looks like a loss ($1,000 in original, $4,000 in the new projection).  However, if we factor in the credit for the boiler ($5,050) plus the original $1,000, I actually had $6,050 for a boiler and I am projecting $4,000, which is a $2,050 benefit to my budget.  The only problem is this: with the intense cold we had here, the boiler tripped off, the system refroze and instead of one cracked radiator, I have six cracked radiators.  Ouch.
3) I forgot to include counter top in my updated projections.  I had originally spec’d out 16 running feet at a cost of $40/SF for a total of $6,400.  I had assumed some high end solid counter material.  After talking with some other house flippers, who told me I could make a counter top of gold leaf for $6,400, I decided to look around.  I thought, “Hell, what’s granite cost?”  Well, actually not as much as I originally thought.  I can buy slabs of granite for $145/slab (72″ x 25.5″ x 1.25″) – the only catch is I have to buy four.  So, purchasing four granite slabs including shipping is about $900, I only need two slabs, so for this flip, the cost is $450 (do you have a need for two granite slabs?).  I then have to cut the slabs and round over the edges.  I have a plan for how to cut the slabs so it looks good.  Stay tuned for a future post.
4) As with any project, we’re beginning to experience project creep, meaning small items are beginning to pop up which add to the cost of the project.  For example: Because of the disappearing bathroom, the existing waste line is now at a really bad height.  So bad in fact that we have to cut the waste line in the BASEMENT and install an entirely new line up through the house.  It’s so easy to think “Well, it’s only an additional $25, let’s go ahead and do it.”  Well, if you do that six times over the course of 30 minutes (which is easy), you’ve blown $150 (I don’t make $300/hr, do you?).
5) I’ve taken the project creep mentality and applied it to materials.  The fart fan*/light combo allowance: $150/light.  I found a matching set on eBay for $20/ea.  This would represent a savings of $260 over my contractor’s allowance.

The last, but most import observation between my original numbers and the updated numbers is this, as my business partner pointed out when we finish with this house, there will not be one thing the homeowners will have to do after they buy the house.  Everything will have been addressed.  Two brand new bathrooms; a brand new kitchen; a new master suite; new flooring; new roofs; freshly painted.  What’s not to like?  Based on my projections, we will have accomplished all of that with the same original budget, meaning my profit margins are still intact.

How I saved $200 on my CSA membership

Credit Card Cash Back

 

I generally despise credit cards.  They are financial quicksand.  No matter how quickly you think you can pay them back, there is that ever present sucking sound as those damn cards continue to suck hard earned cash out of your bank account.  The sales pitch is always “Hey, we’ll give you 2% back on everything you spend!”  The card companies know that they’ll give 2% so long as they have you at 20% APR, or an eighteen point spread!  Eighteen points cash-on-cash is crazy.  I am generally willing to invest for 15% cash on cash return.

Well, I’m flirting with the devil.  We received an invitation in the mail to get a new credit card with a $200 signing bonus.  We needed to spend $500 within the first three months of having the card and we would receive 20,000 points, which is redeemable for $200.

I signed on the dotted line.  I knew we needed to purchase our CSA share for the summer.  For those of you that don’t know, CSA stands for Community Supported Agriculture.  We essentially prepay a farmer to produce our produce for a set period of time.  It is sort of an insurance policy for farmers.  They have their cash up front, so regardless of the year, they know they won’t lose the farm in the winter.

At the beginning of this year, we set a budget for all of 2014.  We knew we were going to purchase a CSA share this year, so I knew how much to set aside on a monthly basis so we were ready for the purchase.  Well, the credit card offer came along, and the ‘early bird special’ came for the CSA, a perfect match for the 2014 frugal budget.

I paid the $750 for the CSA (Yes, it’s a LOT of veggies…but it’s still expensive).  After paying for the CSA, I destroyed the card, so I can’t use it for anything else.  I was a little nervous waiting for the 20,000 points to post to my account as no communication from the Chase card services mentioned anything about the points except the initial teaser.  Well, we received our statement today and I actually eagerly opened the envelope and found…20,000 points applied to  my account, redeemable for $200.

The $200 will be applied to the CSA payment, for a net-out-of-pocket of $550 for the CSA.  Not too bad.