Monday, July 6, 2009

Financial Freedom in One (Not) Easy Step

Like the rest of the U.S. this weekend, I was thinking about independence. (Okay, and beer and snack foods, but really, independence was the thing I thought about the most.) I was specifically thinking about financial independence, and how that relates to creating a life where you can spend all your time on things that matter.

Last week we talked about the baby steps that add up, and in the financial realm that can be brown-bagging your lunch or canceling cable. But if you want to make a lasting impact on your financial independence, you have to also tackle the big expenses, and I’m guessing your biggest one is housing. (Please don’t say it’s cocaine, because that will just make me sad.)

This might seem totally wackadoo, but the best financial move you can make for the long term is this:

Get rid of your housing payment.

Put that keyboard down and hear me out. I don’t mean this month or next year or even in five years. I’m talking about making this the One Giant Financial Goal of Your Life. You could be like Sisyphus finally pushing that boulder over the top of the mountain. Pure freedom.

If you’re young and/or renting, this concept might seem especially ridiculous. But I was once young and renting, and I did it. I had a big hit of luck that made my story move a lot faster, but the basic premise is the same.

My First House

I lived in the Bay Area for almost 15 years, and toward the end had built a successful consulting business. (I was in my early-30s.) I worked all the time and was making more money than I ever had, which still wasn’t a lot, but for me it was plenty. I was tired of paying rent and knew it was now or never, so I held my breath and jumped into the insane Bay Area real estate market.

I ran the numbers to see how much mortgage I could afford, which wasn’t much in that overpriced market, so I bought a tiny, cute house in a decent neighborhood in Oakland, and took out a 15-year mortgage, which meant a slightly higher monthly payment but way less interest paid over the term of the loan.

LESSON: Give yourself a budget (mine was 33% of my income) and stick to it. Don’t buy the best house, buy a pretty good house. (I would have loved a stylish condo in the city, but it was out of my price range.)

I fixed up my little bungalow and hung on for five years as the neighborhood improved, then hired a fantastic real estate agent and sold. For a lot more than I paid.

(The insane Bay Area real estate market is the part that sped up my story, but even if it would have taken a lot longer, my steps would have been the same. And I didn’t make a million bucks or anything – this isn’t that great of a story.)

LESSON: Do the work yourself, be patient, and find experts to help you.

My Second House

Now I was ready to get out of the Bay Area and move to Taos (with its much cheaper housing market). What I didn’t do was take the money and say, Well, I could buy an even nicer house and have a regular-sized mortgage. Nothing extravagant, maybe a couple hundred thousand. It’s the American way, for crying out loud! It wouldn’t kill me, I’d just have to work full-time, but look at the place I could get! In fact, I’m sure I need those steam showers and extra bedrooms! I do! Because I might have a party and everyone will want to sleep over! And take a steam shower!

I looked at one place in the mountains that was big, with all the extras, on five acres. I drooled openly. I looked at a gorgeous smaller house in town where I could walk to the Plaza and the grocery store and my beloved Taos Inn. After putting a lot of money down I still would have had a “reasonable” mortgage. Wasn’t it worth it to have a gorgeous house with all the trimmings?

No. It wasn’t.

I ended up buying a very nice, but modest, house north of town. It’s got a terrible road and schizophrenic internet and phone access. I have fantastic neighbors and the house is just big enough. And I don’t have a mortgage.

(Again – put the keyboard down. It can be done.)

LESSON: Stick to your budget! Go for less than you think you can afford.

This is getting long, so I’ll try to wrap up. Even if you’re a in a normal, non-Bay Area housing market and starting from scratch, here’s what you can do:

1. Buy a house you can afford. Consider buying even less house than you can afford.
2. Take out a 15-year mortgage.
3. Throw all your extra cash at the payment. Even if you put an extra $100 in every month, you can reduce those 15 years by a big chunk.
4. Make that last payment and either live there as long as you want, or sell the house and buy something else free and clear. Voila. No housing payment.

I’m simplifying, but not by much, and obviously, there are a lot of baby steps involved here, too. If you’re not ready to buy yet – you’ve got other debt to pay off first, you haven’t saved enough for a down payment – this will take longer. Everything worthwhile takes time. And if you already have a house, consider refinancing to a 15-year and at the very least, pick up on step 3 above.

And before you complain that my story is one in a million, it’s not. I know other people that have done this – different situations, same end result. Same freedom to pursue a Life on the High Wire. What do you think?

Thursday, July 2, 2009

If Those Bentleys Run on French Fry Oil, That’s Another Story

Reader Margosita’s recent comment got me thinking about this process of building a dream life. It looks different for all of us, but I’m guessing nine times out of ten, the life you envision is possible. Champagne Wishes & Caviar Dreams may be good for a TV show, but the people I know want something simpler: safe, comfortable housing, enough money for good food, the occasional treat, and travel, and time to pursue meaningful projects. (Which could be starting a band, writing a book, or building houses in Sri Lanka.)

We’re not talking a 15,000-square-foot mansion and fleet of Bentleys. (Of course now that I say that someone will pop up and say, In fact, Deonne, that is exactly the Life on the High Wire I dream of. Overbuilt real estate and the ability to drain Kuwait of its oil reserves with one trip to the mall. To which I’d very kindly respond, What the f*** is wrong with you?)

In reality, you’re probably already on the path to your LOTHW. Your job isn’t terrible, and maybe it’s teaching you skills you can do something more interesting with later on. Or you love your volunteer gig as a reading tutor, but need to figure out how to translate that into paid work. Maybe you’ve even saved up a little money, but aren’t exactly sure what to do with it.

Good. That’s a start.

I’m a huge believer in the power of the Baby Step. One small move toward your goal. Then another. I’ve got a lot on my plate this year – work, teaching, studying – but here’s what I’m doing right now to get closer to my writing and traveling dream life:

Writing

Decide on a form for my thesis. Memoir, or collection of personal essays? Pick the one that has the most juice, the one I’m most interested in spending the next year with. Then start. For now, just start.

Travel

Travel takes money. Since I’m not sure how I’ll earn more (yet), I’ll start with cutting expenses. So, no shopping. No meals out. No more book buying unless it’s for class, and even then, I’m hitting the library first. I live pretty simply as it is, but this will help, and won’t be a big hardship with that travel carrot dangling out front.

What about you? What baby step could you take right now to get you closer to your Life on the High Wire? Let us know in the comments, and enjoy the long weekend.

Monday, June 29, 2009

What It Takes To (Fill in the Blank) – And I’d Tend to That Arm Sooner Than Later

The latest issue of Poets & Writers has an article called “Six New Novelists: On What It Takes to Write and Publish a Debut.” Each novelist was asked if he or she had any advice for emerging writers, but their advice could be applied to any creative pursuit, whether it’s a novel or a new business. Here’s what they said:

Nicola Keegan: Never give up. I actually had people who love me give me the “you are no longer a spring chicken” speech. [Keegan is 44.] I can only imagine what writers are hearing now, in this world, at this time. Don’t listen. Writing is good. Doing something good is good. Never. Give. Up.

Reif Larsen: In my travels I’ve talked to so many people who have a novel in their back pocket, and they’ll talk about it and talk about it. There are a lot of really great writers out there, but what separates the real writers from the rest is finding the time to do it. Life is so complicated and so many things come up – give yourself permission to set up a sacred space and say to yourself, “My arm has to be falling off in order to interrupt this,” which takes a certain amount of courage and craziness….Have some self-belief that it will be worth it in the long run and keep on trucking.

Ru Freeman: To discover what might actually be a story, you simply have to begin to write. If it takes you to a place that interests you, then you are in luck. If it gets to a point and then won’t tell you what happens next, put it aside. Begin again.

Joshua Mohr: …it’s really important to let yourself make mistakes on the page. Don’t worry about being clean in your early drafts. Don’t think too much. Just write.

Ali Sethi: Finishing a book is easy. It’s starting a book that ought to be difficult. Always ask yourself: Why am I writing this story? What do I want people to consider, understand, accept?

Joanna Smith Rakoff: You must make your book the absolute center of your life. Doesn’t matter if you have kids, aging parents, a demanding job. The novel has to take precedence.

So,

- In the brainstorming stage, ask yourself – why this project?
- After you’ve got the idea, jump in feet first.
- It’s okay to stumble. (Boldness and vision requires it, don’t you think?)
- Be persistent and focused.
- Remember: Doing something good is good. (My favorite.)

What would you add to the list?

P.S. Thursday’s post sparked an interesting conversation, so check out the comments!

Thursday, June 25, 2009

But if There Were Cute Cabana Boys, That Might Be Different

My friend Erika posted a helpful article on her blog Practicing Writing, and it got me thinking about Day Jobs.

Many people love their jobs. They could be nurses or gardeners or accountants, but they trot off to work with a spring in their step and love spending the majority of their time every week earning that paycheck.

This is not what I’m talking about. A Day Job is a job you don’t have any passion for, but hey, it pays the bills.

My first full-time job was as a legal secretary when I was 19. It paid more than I’d ever earned before ($1300 a month), and I showed up in my skirts and hose to take phone messages, transcribe Dictaphone tapes, and work on a computer that had a black screen with yellow type and ran only one program. I was there Monday through Friday, 8:00 to 5:00, with an hour for lunch.

(Skirts and hose!)

I couldn’t care less about being a legal secretary, or even a lawyer, but I did it because it paid what for me then was a lot of money. I ended up working there two years, and overall it was a fine experience. (Except for having to dodge the partner who wrote me sexually suggestive letters, stared at me from his office, and kept trying to kiss me. That was not so fine.)

The job served its purpose, which was money. Money is very, very important.

So to earn money you have a Day Job, sure, and maybe you feel like you have a pretty good thing going. I mean, it could be a lot worse, right? You could be working in a slaughterhouse, for example. (Apologies if I've offended any slaughterhouse employee readers, though I'm guessing they’re over at www.sufferingandgore.com.)

So you slog through the days and figure you’ll hang on and cram your real life into the nights and weekends. The problem with that is that usually it’s not nearly enough time to do what you want to do, or better yet, to do what you should be doing, which is using your talents (because that’s usually what you’re passionate about) to the fullest. You’re operating at only quarter capacity.

It makes me want to cry when I see someone who’s too exhausted from his or her day job to ever get around to writing that novel or launching that brilliant business idea. It’s a loss for them and us.

We all do things in our own time, and God knows it’s taken me years to get comfortable with the idea that I don’t need a Day Job to survive. (I currently work part-time for an indie publisher, and it’s a great experience. My values are in synch with my employer’s, and one goal when I moved to New York was to learn about publishing from the inside, which is what I’m doing. This one, thankfully, is not a Day Job.)

Next week we’ll talk about how you start building a bridge to a different kind of life, but for now I want to leave you with a question: If you could do anything at all, what would it be? (No fair saying Win the lottery, or Lie on a beach all day. Trust me, the beach would get boring after about a week, and sand has a funny way of lodging where you can’t reach.)

I mean it, what would your life look like? I’m not saying it won’t take sacrifice and hard work, and I’m not saying it will happen this month or even this year, but you can make it happen. I’ll remind you of my mantra: Life is short. Don’t wait.

You shouldn’t either.

Monday, June 22, 2009

Grant Applications, Malbec, and Stalking

It makes my job easier when smart people share what they know. To follow up on Thursday’s post about grants for writers and artists, two excellent resources on how to write a successful application are on B.J. Epstein’s website and Mira’s List. (Thanks to Erika for pointing out the first one.)

Like I’ve said, I’m thinking a lot lately about how to build this into a better blog. The experts give all kinds of advice, including writing headlines like Earn a Six-Figure Income in Less Time Than It Takes to Microwave Popcorn! Or, Get Paul Rudd as Your Boyfriend AND Finally Lose Those Last Five Pounds!

(I’m sorry if it’s unfeminist of me to say that. You are beautiful with your five – or whatever – extra pounds. I do not feel entirely beautiful with mine. Sigh.)

But those kinds of posts just aren’t my style. I aim to share info you can use, to make this site rich in content, but also to continue to ramble about the world and my place in it, in the hope that this combo will help you live your own LOTHW. (I even changed my “about me” over on the left to reflect this new focus.)

I’d like a lot more conversation with you, because I suspect you have a lot to teach me and the rest of us about making this crazy life work, so keep posting in the comments and emailing me your thoughts and questions. (You’ve already got me off to a good start on ideas for posts, thank you.)

I’m also wondering where I fit into the blogosphere, when lifestyle design gurus like Tim Ferriss and Chris Guillebeau are covering similar ground. The concern is that since they’re discussing self-employment and travel so well, for example, what do I bring to the party? (Other than my sparkling personality and a bottle of delicious, midpriced Malbec.) What sets my experience and knowledge apart?

In other words, why me?

Good lord. Where did I put that Malbec?

I’m a single woman with no kids and no debt. I’ve had lots of adventures and plan to have a lot more. I’m completely unencumbered and facing the second half of my life. Now what?

For me right this second, the Now What is to once and for all say, I’m never going to take another job that traps me in an office every day, or take one I don’t care about just because it offers a paycheck and I'm feeling anxious about money. I'll figure out a different way.

To be fair, I’ve done a pretty good job of this so far, but I’m ready to bump it up a notch. That’s what I bring to the party.

What about you? Where do you want to go next?

P.S. I’m on Twitter. I know, I know. I’ve been bucking it so hard you’d think it wasn’t a website but a piece of snake meat dipped in cod liver oil, but smart people have said, Really, it’s a great way to connect with people, so I’m trying it. And following someone on Twitter feels like stalking for the non-malicious set, so that’s good. God knows I’m all for safe stalking.

If you’re on Twitter, come find me. I’m @deonnekahler.

Thursday, June 18, 2009

Five Grant Resources for Writers and Artists

Or, There is Such a Thing as a Free Lunch. If you ignore the acres of paperwork involved.

Hoo boy, this is a huge topic (obviously – entire websites are dedicated to it) so I’m going to start with a short list of solid resources we can add to later. (Thanks to reader Kathy for the topic suggestion.)

Mira’s List

On her website, Mira says her goal is to help you find “Money, time and a place to create.” Hallelujah! Her list is my favorite, not only because it’s comprehensive and constantly growing, but Mira is affiliated with A Room of Her Own Foundation (AROHO), which puts on a retreat for women writers (I’m attending in August – hurray!) and awards the $50,000 Gift of Freedom prize to a woman writer every other year. I Heart AROHO.

Poets & Writers Magazine

The P&W website is chock full of resources for writers, including listings of contests, conferences, and residencies, as well as fun tools like a build-your-own submission calendar, and updates on winners. There’s also a free newsletter which is not only fat with information, but it serves as an email prompt to visit the website and see what’s new. If you’re a writer, this website’s not to be missed.

State Arts Boards

Don’t overlook your state arts board as a resource for money for your project. (In New Mexico it’s New Mexico Arts, for example.) These grants are usually far less competitive than federal grants, and my friend Summer, who is no slouch in the getting grants department, said her experience has been it’s best to start small (like with one of these) and work your way up to the big guns. Grantors, like the next two, often like to see that other (smaller) organizations have deemed you grant-worthy before handing over their cash.

National Endowment for the Arts

The big cheese in the creative grants world is the NEA, and though it’s extremely competitive it’s certainly worth a shot. Since the award amounts are big (they give a creative writing fellowship of $25k, for example) I’m guessing they’re looking for you to have an existing body of work, but they may support emerging artists and writers, too, if you can show great promise in your application. Dream large but have a backup plan, I say.

National Endowment for the Humanities

This one’s good for projects that have an educational or humanitarian bent, so if you’ve got an idea for a documentary about inner-city kids in Detroit, or a nonfiction book about saving the endangered herds of Giant Spotted Appletwizzlers (I was channeling Dr. Seuss for a second), the NEH is a possibility. (And if you are researching Giant Spotted Appletwizzlers, don’t forget to do a Google search to see if there are any nonprofits – say, the Giant Spotted Appletwizzler Foundation – that may be willing to give you a grant to do your work.)

Now that you have a start on researching available grants, the next logical question is how do you write a grant application that might actually get funded. I have no idea, but I plan to find out and let you know.

P.S. I’m toying with the idea of converting from Blogger to Wordpress – if anyone has tips or insights to offer this reasonably smart but not hugely tech savvy Mac user, I’d be grateful.

Monday, June 15, 2009

But No Cockroaches Anywhere, Because That Would Be Gross

I realize it’s been quiet at Life on the High Wire lately, but not for lack of activity. First off, can I just say I got straight A’s for the year? Woohoo!

(Full disclosure: I’m pretty sure you’d have to be a total horse’s ass to not get A’s in an MFA program, and since I am not, in fact, a horse’s ass – easy! – I got a 4.0. Considering my sad little undergrad GPA, this is terribly satisfying.)

Life is good. I finished my first year of grad school and now it’s summer in New York, but not Summer in New York, meaning we haven’t had to bust out our ice-filled underwear yet. I just spent a week in Taos hanging out with Mom and dear friends, which was heaven, since I’m still desperately in love with that big blue sky and all that lies under it.

I’ve been reading about lifestyle design and am starting to figure out how to continue my quest for a true Life on the High Wire, which means supporting myself post-grad without a day job, only pursuing work and projects that I’m passionate about. I have some ideas I’ll be sharing with you soon.

Meanwhile, I’d like to grow this blog into a supremely useful resource for folks wanting to join me on that path. Not that I won’t feel compelled to throw in the occasional post about mustard or share overheard conversations that inspire blog titles with inappropriate drug and sex references. I mean, come on. Life wouldn’t be worth living.

But I plan to start introducing more info and resources you can use, if you’re inclined to move toward your own LOTHW. For me that means taking on issues of money, psychology, lifestyle, travel, and work. My plan is to start figuring it out and sharing what I learn with you, so at least one of us isn’t tripping down the path toward personal and financial independence. (I’m happy to be the tripper, and am stocking up on Band-Aids.)

Any suggestions on what you’d like me to research, test drive, or explore, drop me an email or post in the comments. I’m pretty excited about life these days, and hope that wherever you are, you are too.

P.S. For fans of brainy yet accessible indie rock, don’t miss Neko Case’s latest album, Middle Cyclone. I’ve been a fan of Ms. Case’s for years and just got my hands on this one, which is near perfect. It’s got catchy songs, pretty songs, eerie intros, and as always, gorgeous vocals, top-notch songwriting, and interesting arrangements. Also, crickets. Lots and lots of crickets.