We Bought A House
In my first year at StartupVille, I was smacked, unexpectedly, with a 15 mile commute that took about 35 minutes each way. A few times a week, due to a traffic accident or construction, this would turn into an hour or more, making the total amount of work-related time spent in my car about seven hours a week.
Also, my girlfriend and I were living in a 700 sq. foot apartment together, and felt a little constrained by space.
The solution for both of these problems seemed to be to buy a house together, which we did in early 2008.
You’re probably aware that there was a big housing market boom between 2000 and 2006. By 2007, the market had slowed down, with many areas losing value. Although this was good news for us and anyone else looking to buy, we didn’t make the decision to own a home for financial gain. In fact, many experts were still predicting that homes would continue to fall in price, i.e. the floor in real estate had not yet been reached. (Turns out, they were right.)
We targeted smaller, well maintained homes in a very specific location — one which offered an improved commute to my current job with StartupVille, but perhaps more importantly was situated in a place that made it easy to travel to multiple job hubs. I live in Massachusetts and the prime technology parks are along I-95, in the Cambridge area, downtown Boston, and west of Boston in suburban towns Natick and Framingham.
I figured: I’ve had three jobs, and every single one of them — three out of three, for Cthulu’s sake, has moved. SoftwareCompany went to Denver. FinancialCompany’s IT department shifted from Boston to the sticks. And now StartupVille’s offices have relocated, too. It’s only a matter of time before I either get moved again, or have to find employment with another company, and I want to be in a place that’s commutable to other locations.
Unfortunately, the area equidistant to these employment hubs and close to StartupVille was insanely expensive, but we pushed forward anyways, figuring that a) houses in desirable areas are more likely to retain value through slumps, b) we’re not going to get a huge place anyways, which will keep the cost down a bit, and c) the freedom and flexibility in terms of being able to work for employers in multiple areas without a backbreaking commute was worth it.
Put simply, I’d realized that most people in my age group were switching jobs every 3-4 years and so I figured: I’ve got at least a few more GenericCompanies to work for before I hit the end of my FI journey. Better be ready for the switch when it comes.
So we did it. In early 2008, with the US housing market coming down and the stock markets showing the initial phases of weakness following the run-up of the previous few years, we bought a 3BR 1500 sq. ft place for 650K. (Yes, I know, this is a ridiculous amount of money for a so-called frugal person to spend on a house.)
As expected, living in the target area did wonders for our commute. My girlfriend in particular was thrilled about the change. Prior to the move it was taking her about an hour and a half to get into Boston. She’d share the 30 minutes in the car with me from our apartment to StartupVille, and then transfer to public transit to get the rest of the way into the city. Reverse the process to get home, and you have one very long day, resulting in one very irritable SO.
In the new place, I was able to drop her off in just two minutes — there was a commuter rail station less than a mile away from our home. Plus, the trip itself was shorter. She instantly got about an hour and fifteen minutes of her life back every day.
On my end, I was able to cruise up to StartupVille in under fifteen minutes each way. Also, I had suddenly reversed direction on the highway, going north instead of south, and there were fewer cars moving in my direction. This made the flow of traffic more predictable: there was less start-and-stop jerkiness and the frequency of backups and accidents encountered went down from an average of three to a little over one per week.
Total hours commuting reduced from over seven to under three. It was a day of victory for sanity.
The Financials
I’ll cut right to the chase.
From a strictly financial perspective, buying a home was not a good decision over renting. If we’d managed to get a place in the 400K range, it could have been closer to a wash, but not at our 650K price point.
But it was difficult to find a home that met our criteria in our target area for under 650. Originally we started looking in the 500K range but this line crept up as we searched. We wanted the extra bedroom in case we had children. We wanted to live on a street without yellow lines, if possible, because bypassing traffic would be slower and safer. And we justified the price creep because the last thing we wanted to do was buy a place, pop two or three kids out, and feel like we already had to move again, just three or four years down the line. (At the time, we thought kids were likely in our future.)
As it turned out, we don’t have children and we’ve spent quite a bit of money on space we don’t use.
Additionally, we spent significant amounts on improvements — about 60K over the seven years we’ve owned the house. Most of the updates are justifiable — replacement windows and doors, insulation and attic sealing, removal of through-the-wall AC units, a new roof, a new heating system (the old oil boiler was 40 years old and ready to die), new kitchen appliances (the original microwave and stove died on us in year 5), and so on. We didn’t do anything completely impractical like build an amusement park in our backyard, but still, the costs added up.
Our home is valued around 750K at this point so we’ll make some of our money back when we sell, but in the end we’ll take a net loss of perhaps 30-40K.
I have mixed feelings about the experience of home ownership. There are times when the additional space was valuable (example: hosting events such as Thanksgiving and Christmas) but most of the time, having that additional square footage registered in my brain as being shockingly wasteful.
Another unexpected benefit of owning is that I’ve had an opportunity to learn a wide range of DIY skills — simple plumbing and electrical, painting, tile and toilet and vanity installation, landscaping, gutter cleaning, and so on. There are only a few things I won’t do — attic insulation and air sealing come to mind here.
I’m not saying I regret buying the house. We’ve been here for a decent chunk of time, interest rates have been low which keep our monthly payments down, and there are lots of good memories here.
But memories can be created anywhere.
If you’re considering a home purchase yourself, I strongly recommend you read jlcollinsnh’s blog post on Why Your House Is a Terrible Investment.
Living a FI 
Hi, I love your writing and this blog is rapidly becoming one of my favourites. I am glad I am not alone in enjoying doing *nothing* and liking pottering about. It’s very difficult to explain to people though. That’s why some blogs etc are a bit of a refuge in a crazy consumerist world. Please keep writing… You are very good at it.
Thanks for the kind words. It *is* hard to explain that you’re okay with doing very little and just enjoying being alive without work or too many other distractions. A lot of people have trouble with this idea. For years I tried fairly hard to pretend that I liked working and being ultra busy but, truth is, I really don’t. (God knows I’ve had my share of years where I did nothing but work… glad that’s just about over.) Keep up the “pottering” – that makes me happy.
I can relate to your comment about being judgmental about other people who are not as financially saavy. I have found myself constantly internally judging my coworkers and friends, even more so as I become closer to FI, and it makes me feel like a toxic person. Maybe this is just part of my personality that I have to live with and try to keep under control.
Right, I frequently wish I could turn that part of me off (the judging.) The best I’ve found I can do is a) catch myself thinking these thoughts and b) intentionally push them aside and continue to pay attention to the moment. It’s very difficult to make this level of awareness go away entirely. Fact is, you’re an expert in personal finance, and experts in any field can’t help but notice details in their areas of focus — whether they want to or not. All of that being said, it can get in the way of relationships sometimes. Might be one of the very few negative aspects of FIRE.
Sorry to hear about the infertility woes. We’re not even in the same category (having children should be possible–with assistance), but it was still very disappointing and frustrating. I can’t even imagine what it would be like to have no control whatsoever 😦
My sister in law has two children (boys), and we’re spending a lot of time with them. It’s not a perfect substitute for having some of our own, but they’re pretty awesome to hang around. Sorry about your own challenges in this area – it sounds like you have options to explore, which is encouraging.
Wow, what a bizarre situation waiting out the startup company’s survival/failure… I was on a sinking ship (along with my husband, who I met at work) and we both bailed after a certain point. They were discussing outsourcing our main work to India (with disastrous results, I might add) and I broke down and jumped ship shortly before it got to that point, but the husband held on for almost 2 before finding a better place… and the company was dissolved within 6 months after he’d left. We weren’t FI at that point, so not really much choice, but it does make me wonder if we’d have stayed and rode it down if we had been FI. I heard that there was a nice little severance package – but only about a month’s worth of pay, so not enough incentive to hang on.
And the kid thing. Been there, done that, and still beyond angry at the fact that we can’t have children. And punch-in-the-gut bonus – blew lots of money in the process of just trying. Much sympathy and empathy for you and your wife.
Hey FG. I’m really sorry to hear about your own, as you put it, ‘kid thing’ troubles. I don’t think you ever really get over it — you eventually just learn to deal with the disappointment. Re: outsourcing, I find it interesting how many frustrating experiences overlap between jobs and industries. I know that it saves companies money, but there’s a significant cost in terms of morale, productivity, and service. It was smart of you to leave when you did. Just another reason to want to achieve FI, so you no longer have to worry about your current company pulling the same moves and putting your job at risk. FI means your job != your survival, which is a rare and awesome achievement. From what I understand, you’re practically there.
I love that discussion you had with your manager about your stash. I recently had a conversation with one of my coworkers that went like this.
Coworker: So how long could you last if you lost your job?
Me: Well it’s hard to say….if I cut way back, maybe two possibly two and a half……..
Coworker: Months????
Me: Decades.
The expression on people’s face is always same….total confusion. I just smile inside and carrying on with my day.
MDP
There was not one part of that conversation I didn’t like.
Have you considered adoption or fostering? Just curious.
I am miserable – depressed, want to set the place on fire miserable – when there’s nothing to do at work. I HATE standing around and pretending to work, partly because it’s usually just busy enough my bosses will bitch if, gasp, I talk with another co worker. Fuck retail.
Can you tell I love my job?
Sorry work sucks to that extent. Prior to landing office-jobs, I worked retail in spurts through high school and college, and being idle in that sort of environment is definitely more difficult. In some jobs, you can, in the privacy of your cube, fritter away time. But I still remember in retail that if there’s nothing to do you still need to stand around on the floor and wait. This makes time pass agonizingly slowly. Totally feel your pain. Re: adoption, not seriously, no. The truth is we spend most free weekends with my SIL and kids (our nephews) and somehow that helps a lot — two adorable boys, 6 and 8 now, old enough to play foursquare with, young enough to not yet be embarrassed about hanging out with an aunt and uncle 🙂
I got a good chuckle from your reference to playing Four Square with your nephews. (Though maybe you are referring to some app?) At the risk of revealing my online identity, I can say that I was Four-Square champ for two days one summer at the youth center growing up. You likely heard of me. 🙂
Just to confirm how loyal livingafi was to StartupVille, I will let the readers know that we used to hang out pretty often during this period (and still do). Since I have kids we would stay in most of the time. I remember a night when StartupVille was in its death throes. LoyalEmployee already knew that the sale to Mega was done and didn’t tell me. I work at Mega, doing something unrelated, but still I was surprised that he could keep it in. The next morning I checked Y! And saw the news that the acquisition occurred.
I should mention too that I worked at SoftwareCompany as well. I started in 2004, right as livingafi was leaving. And just for completeness, my other option at the time was at FinancialCompany, so when that didn’t work out, I think you can guess who I passed that opportunity on to… To say the least I find the irony that we have hop-skipped jobs over 10 years remarkable, and pretty accidental. Given my similarity, it’s great to have a friend that is doing this. I am getting a free education (price of a couple beers, bought in NH). Glad to read these and see how things are moving along.
I love that you had such a positive impact on your manager. My husband also had Tea Time on his calendar for a while at his previous job – I think it did great things for morale to get together just to shoot the breeze.
I’m in a Do Nothing job now and it’s pretty sweet. I consider looking for a place closer to home once in a while (half an hour on Rte 3 and 128 each way) but there’s no way I could find something this cushy.
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Like thegoblinchief, working at a job with no work makes me depressed beyond belief. So drained and de-energized! Gah.
Anyways, I’m definitely enjoying passing the time by reading your blog. Thanks!!
Side note: not sure if you cover this later, but did you have a totally mustachian wedding, or did the union ding the bank account a little bit??
We spent about 2K on our wedding with thirty-ish people which is a decent amount per head — we kept costs down by instead being sure to not invite too many humans. Immediate family and inner circle friends only. She didn’t want a nice ring, though, so I saved money there. “Let’s buy a house with that money instead,” she said. That’s my kind of woman 😉
BTW, sorry to hear about your own job-related woes. Keep your head up, though, you’re on a path that will lead you out of this. And you can always look for other opportunities along the way. God knows I did.
Wow, well done! We spent $7k on a 50-people wedding (open bar – need I say more?) but with the generousity of our guests, ended up breaking even.
In four months I’m moving to a bigger city with more opportunity, so I’ll be into a new job soon enough 🙂 Your experiences definitely inspire me! Many thanks.