A home at last!

The week of Dec14-21st was very disappointing. With redfin as our realtor, we had seen several houses each day of the week, and had come away disappointed and defeated. But in that week I learnt a few things.

1. A SFH was out of the question in our price point, at least one that was anywhere near decent.
2. We really wanted a modern turn-key home.
3. Andrew was not going to school for another 4 years. (Grade 1)

We dropped the school as a criterion, taking on the risk of potentially having to pay for private school till we sold this home. We also learnt that new communities require you to show up with your agent on day 1. Armed with this knowledge we started to look at another set of homes. And on the first day we came across what will hopefully, ( at the time of this writing, we are in escrow ) become our home on Feb 6th, 2015.

The overall trade off is nice home and community at the expense of commute and schools for Andrew. The second tradeoff was totally unexpected and we hope to make it right if the markets permit it in 4-5 years. As of today, the area around the community is fairly industrial, but a large tract of it is being developed into a residential and retail hub. There are some dense condos coming up around the back of our lot, which could affect the pricing of the area. The village oak mall will have a big impact on the desirability of the area. In our best case scenario, in a few years

• The condos end up housing professionals and not end up being really cheap rentals
• The Village oak complex gets some upscale tenants. 
• Some green belt is developed.
• And our community gets built as planned and continues to sell. 

The last is the one I am most worried about, the value of our house will depend strongly on continued demand for at least 2-3 years. 

The credit from Redfin and Lennar were unexpected when I first started planning all this and I would consider that a windfall. I am hoping to convince myself that I should use that to buy a car I want. I will make a call in March 2015 after things settle down a bit. 

Sending A to pre-school is priority.  Furnishing the house is also a priority. I want to start a 5-6 year span with new things. 

On the flip side, I don't want to be sitting on my HELOC and I project paying off all of it by mid 2017. This will then set me in a good position to start hacking away at the principal on my first lien. I may retain the first and build equity in other ways, because I will consider the primary at a tax adjusted rate of ~ 2.2%. Instead, I should build diversified equity, and if my ARM resets high, I should plan to put a dent in the  principal at that time. 

I plan to start tracking interest rates after I close, something in the ballpark of 3.125 / 3.25 would work for me, but I am not counting on this. If it does happen, It will make the short term better. 

A big chunk of my cash flow management this year will depend on my ability to adjust my W4 pretty aggressively.

==UPDATE==
We are still on track for the Feb 6th . We are hoping to set  the move out date to Feb9th. I am hoping there are no hiccups along the way.  We bought the first pieces of furniture. And I should start planning the packing and movers in a few weeks.

32

I turned 32 yesterday. I had made plans to take Tina and mom to Arcadia. It is an upmarket place in San Jose downtown. For the first time ever, we left Andrew with a babysitter, Rachna and Rakesh were very kind and offered the services of theirs. We dropped him off and arrived at Arcadia. There I was pleasantly surprised to see everyone there.

Dinner was great. I was tired from staying up till 3 the last night. But I was glad that Tina surprised me. I was happy to be surrounded by friends who cared . Went out for a couple of drinks with the boys.

Its not been the best year. The stresses of providing for my family on my own coupled with the work pressure has been too great. I am trying to be more happier and more positive. I resolve to be happier. to not make a big deal of my frustrations. To downplay the anger that comes from not being in control. Those things will be challenge plenty.

I hope I will have an easier year next year. I really need a break at work. Looking forward to my india trip.

The focus for the coming year is following through on the plans that have been in play for a year and a half. Put together a down payment. It is definitely one of the most stressful things that I have ever been required to do. The only thing that comes close was my time in Michigan. The difference now is that I am older, and part of the stress is the disappointment that comes with this realization that I am not where I thought I would be.  I wonder if its because I am too risk averse. Or if my expectations are too high. This year, most certainly, I pushed my risk threshold with investing. I was not rewarded.
I was however, somewhat happy with my decision to change jobs. I risked access to free time. I risked my peace of mind. The move to apple has played out on its assumptions. And that is a very good thing. The not so nice thing is that its still not enough to make me comfortable.

I need to have faith that it will work out.  And I need to ensure that I don't squander my 30s in the pursuit of future happiness without partaking in it in the present.

Staring into the middle

What is financial security?

It is the condition where a person's monetary needs are met for a sufficiently large amount of time despite loss of employment. In the extreme case, it is exemplified by the person never having to work a day in his life and yet being able to pursue his desires. 

For me, securing this elusive condition has been the goal of my life for the past ten years or so. And long before I was consciously pursuing this objective, society in general was unwittingly or deliberately preparing me for that very goal. Being born into a middle class family with limited means, but with enough access to education, put me in a fairly solid platform. The only thing in the way were the other millions of individual with equal or better footing.

While I was in school, I used to compete with other kids simply because of the bragging rights. Well before I even knew what financial security meant, I was taught to be jealous of "that kid" who came first in class. It may even be natural for us to want to be the best, but there was no dearth of social cues and censures to help develop this form of modified "penis-envy". 

Year later, I still find myself drifting into that way of thinking. Grades are replaced by physical assets, pay, rates of returns on investments etc. There was however a moment of epiphany that I experienced several years back. I had competed for years, done things I thoroughly hated, (studying for example) , gotten some rewards, and yet felt exactly the same. Perhaps I did feel some sense of positive accomplishment by the time I was in my mid-twenties, but still I was far from achieving the hallowed goal.

I am now in a place where I find it clearly self defeating to be locked in a struggle to secure the entire remainder of one's life. The present slips away and as you look back you find that there was little your quest for security bought for you.

The recent debates surrounding the fiscal cliff in the US, brought back to memory some rant I had blogged   a few years back. The rant was largely about social class and my grappling with my mediocrity in the larger scheme of things. The legislative choice to burden those earning 450K or more also attributes them with a superlative social tag of the "uber-wealthy". The recognition of that level of wealth and opulence also makes one wonder how they fit in the world around them. In this specific case, of course, there is a sense of relief in the fact that your tax bill is somewhat not affected.  But it is also a reminder that after all these years of struggle, all I have done is secured myself a place in the middle.