Savings Journey: November 2018

Yah, that's a lot of blue!

This month was awesome for saving, and very nearly the most I've ever saved in my entire recorded life... if it hadn't been for that damn giant blue segment up there. My car needed its registration and insurance and inspection and fines paid, a yearly Dubai tradition. I had predicted that I would do that in December, but the way the holiday fell, I didn't think the local equivalent of the DMV would be open before my time was up on December 4, so I had to get it done in November.

And I wish I could go without a car again, honestly. Mr. Money Mustache gets under your skin, and so far this year I've paid nearly $6200 in car related expenses, about $3000 in car payments, and the rest for gas, insurance, etc. But, I love my apartment and my neighborhood, both of which are about 10 miles from my job, which is not on any public transport line. Also, if I didn't have my car, I couldn't get my instrument or band mates to various gigs all over the UAE. At some point in the future I'd like to get back to being carless, but until life sees its way to arranging itself like that, it's car and expense for me.

The good news: I saved the second most I've ever saved! Over 16,000 AED, over $4,400! If it hadn't been for the car stuff I would have been over 20,000 AED! That's a purely psychological milestone, but I would have liked to have hit it. That was over 61% as a savings rate, because my income jumped from side hustles, but expenses were higher from car stuff, so the savings rate actually dropped a bit from previous months.

So far in this school year, I've saved over 40,000 AED (around $11,000), in just 3 months! My target was between 21,000 and 30,000 AED for that time period, based on my low and high goals, so to exceed that by 10,000 -19,000 AED is awesome! This has led to lots of questions of "What can I do with this money?" and I think my answer is rental real estate.

I know, I know, I decided in my "Real Estate Experiment" that I would go for REITs, and I did! I bought $10,000 of the REIT. It's dropped in value, with rising interest rates, but it's spitting out nice dividends every month. But a lot has happened since then!

I got a recommendation of a good Turnkey Real Estate broker in Memphis, James Wachob with Memphis Investment Properties from an old room mate of mine, Aaron Partee, himself a Memphis Real Estate expert. I found a lender who has told me I can pay 10% down and finance the rest with Highland Residential Mortgages. That means I could get into a decent property and pay closing costs for around $15,000. Which means, that with the extra money I've saved in the last 3 months, that I could realistically be a landlord in a month or so, if the right deal presented itself! I know lots of people struggle with Real Estate, but I think that if I keep my expectations realistic, this could be a great way forward for me.

It was really discouraging when I wrote my last Net Worth check post, because I had saved $7,000, but my net worth had only gone up $2,000 because of the drop in the market. I want something I can exert more control over, and have someone else pay my mortgage on and provide a little cash flow. If things go right (a big if, I know, but it works for a lot of people), for a $15,000 investment, I could be having a mortgage pay down of $400 plus around $150 of cash flow, plus tax incentives every month. Every month that's like $600 or so of increase to my net worth, instead of the wild fluctuations of a very expensive stock market.

I'm going to continue my Real Estate theoretical education, but there's no substitute for actually doing a deal and getting "boots on the ground" experience. I think that right time is now, I just need about $4,000 more saved up and then I'll be able to start that real world scholarship.

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