In Retirement, Work At Your Own Pace. Plus Our RV Update.

Remember back a few days when I said I was very tired and I didn’t want to do any more chores around the house? (click here) I felt it was just time to let things go. For a while, anyway.

Well, a few days have passed and my mood, strength and attitude have changed. I did a little bit at a time BUT I have managed to somehow do all the chores that were pilling up and causing me to stress out. In retirement, as we age, we can still do everything we want BUT at a different pace. We need NOT to be so hard on ourselves (guilty!) and just take our time. It’ll all get done. Eventually.

edge
I weeded, as best as I could, my two front garden patches that sit under my front home windows. Is it perfect? Probably not BUT it looks a whole lot better. I’m happy!
deck
It rained last night BUT before it did I managed to straighten out my deck. I got the rug finally centered and aligned (it had bothered me the whole summer!) I vacuumed the deck and weeded my container garden.  Anyway, the deck looks more balanced and I’m happy!
floor
I woke up this morning and had the energy needed to finally wash the kitchen and dining room floors as well as the long hallway. Listened to my faves on Spotify, got in to a productive mood and washed away. I’m happy!
rv stuff
Next up: over the weekend DH and I are going to get all our old RVing stuff back into our new RV. We didn’t have to buy a thing except a larger, 12 cup Mr. Coffee pot ($17.88). We transferred our newish short queen, Tempurpedic mattress over to the new rig. We’re probably going to test run it this weekend and camp out in our 3.5 acre back yard!
new RV
Last up: how did we manage to afford and buy a brand new 2020 RV? It’s really nobody’s business but I realize that’s not fair to my readers.

We were able to afford and finance our brand new RV a few ways. First up, I am NOT a financial expert. I can not and will not ever give out financial advice. I will only tell you what we did. What works for us may not work for you. Also, we both know that going into debt in retirement is a serious no-no! I emphatically express NOT to do this. The only way we are able to do this is because we have the cash ready and available to pay for our new rig, in full, ASAP, in case of a calamity or upheaval. In this current financial environment however, with the low and lower interest rates being offered, we seriously thought about NOT exposing our own money. We decided to use THEIR (the banks) money instead of our own.

When I sold my Florida condo two years ago, I invested 90% of that money in a callable CD paying 4.25%. Hubs and I got a nice, hefty monthly interest check each and every month. However, now that the Feds have finally lowered interest rates, the callable CD got called. Bummer. Have you seen the paltry CD rates being offered now? Hubs and I did some research PLUS on the advice of a reliable source (don’t you just love that expression?) we invested a percentage of our condo money into a 10 year corporate bond paying close to 4% (BBB+ rated but not FDIC, so its all at risk, but the corporation has been around for a very long time and hopefully for the next 10 years). The remaining percentage we invested back into those paltry CDs (2.55% FDIC). We’ll still be receiving about the same monthly interest amount as before. Before we made any new investments, however, we were able to extract $5,000 cash to put in to our emergency liquid, money market fund (paying 1.75% FDIC).

DH and I have come to the conclusion that over the past years, we had made serious mistakes paying cash for everything. We’ve seriously depleted our retirement saving accounts paying cash for every single thing! Paying cash for cars and houses works out good ONLY if you’re going to keep the darn things for like forever. Which is what we did. We’ve since opted for those zero interest credit card loans and paid whatever we bought, over time, at zero percent. We paid the same amount the product sold for, but over time, instead of all at once. This system IMHO doesn’t work for RVs. RVs are traded in all the time. Lifestyles and needs change. So do RVs.

I sold my Newport RI beach house at an $87,000 “loss”. If I had a mortgage, there would have been no actual loss. Just a “paper loss”. I would have just come out with less money when I sold. Duh! Thankfully, when we bought our last RV, the Hummingbird, we financed it at 5.75%. The payments were $140 a month, over 2 years meant we laid out $3360. Combine that amount with the $1,500 down payment and we only paid out of pocket $4,860. That’s all that came out of our savings account: $4,860. The Hummingbird had a retail value of $17,500 but because we bought it in Michigan (right down the road from where it was manufactured) we only paid $12,500. Right now, on the open retail market, the Hummingbird can sell for $13,000. In other words, we were NOT upside down on the loan PLUS the Hummingbird retained a high trade in value IMHO. In addition, when we applied the Hummingbird as our down payment on the new 2020 Rockwood Mini Lite RV, we got a sales tax break.

Our current new 2020 RV has an original sales price of $32,000 and believe me, many, many buyers pay this amount. Don’t ask me how DH and I did it. We were in negotiations with the dealer for over 3 hours. There was no way they were letting us go without a sale. There was no way we were going to make a sale unless we got the purchase price we wanted AND the trade-in value we wanted too. Both DH and I have FICO scores in the 800s, plus we have the cash and the determination to get what we want. We’re the type of people RV dealers want. We can close a deal. BUT it had to be the way WE wanted it to be. NOT the other way around.

I’ll get to the end of the story: we got our new RV for $20,600. We got enough money on our trade in, that it was almost awash with our original loan balance. For the new rig, we only put down $500 new cash, which the dealer matched with another $500, making the down payment $1000. The dealer needed another $1,200 from us to make the loan ratio look more presentable to the bank so that we would qualify for the very low rate of 3.99%. No worries. We did NOT take one more cent out of our savings. Since we are now going to stay at a trailer/RV park in Florida there was no need for me to keep the state park reservations. I cancelled all the Florida state park reservations and got a refund of $1,600. I used that credit towards the $1,200 deposit as well as the $67 new registration fee. The remaining credit was used towards the deposit for the trailer/RV park. We’re reserved for three winter months (January, February and March 2020 @$20 a day) vs the two months we were going to stay at the Florida state parks (with only a water and electric hook up, plus we had to move every 14 days @$34 a day) We get full hook up (sewer, electricity, water) at this new RV Park, plus we don’t have to move AND this is our actual view from our patio:

sun set view florida
This is our actual sunrise AND sunset view from our new Florida RV site. I’m happy.

 

 

20 comments

  1. Hi Cindi, I never have traded something with a loan outstanding in for a replacement so I am curious what happened to the approximately $8000 loan you still owed in payments on the Hummingbird ? How much longer did you need to extend paying the increased monthly payments on the new RV?
    Did you get a chance to read the email on the math on my new car purchase? I also want to use leverage and use the banks money so I took the .9 % loan while the monthly preferred stock dividends pay the car payments, property tax, and some of my auto insurance which makes it lower then it was on my 2007 Jetta. I also sold some and harvested some capital gains then repurchase this preferred stock and another preferred stock paying 14%. . All done in my Roth so no tax consequence. Sorry your callable CD got called. That’s why I told you earlier to take advantage when it value you could sale it was greater then it’s par value to make a profit like I had done. I don’t own any corporate bonds as I get better dividends from preferred stocks and REITs. Sincerely, Lara

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    • Lara, we had a very small balance still due on the Hummingbird once all was figured out, because we got a very good trade in value. Also we got a good low price on the new Rockwood, so I had them add the balance left over on the Hummingbird into the new purchase. The Hummingbird loan was 5.75%. The new loan is 3.99%. Was this a smart thing to do? Probably not. But I’m pressed for time because my husband’s health is questionable and his time is limited. He and I want to enjoy our remaining time together. I know this sounds morbid and sad but that’s what we both decided to do. We’re at the end of our lives, so to speak and logic gets tossed out the window. The whole exchange is costing us $87 more than before (loan plus insurance). We can deal with that.
      When we sell our home in 2.5 years, we will pay off the new RV loan balance. That’s our plan. We do eventually have to move out of here but we have to wait till Nick turns 65, on Medicare & Social Security.
      Selling my CD never would have produced much gains. It never rose above at least one monthly interest payment so why would I have sold and lost that interest? It was great while it lasted, that’s for sure!
      I can’t do stocks. I just don’t understand them. I tried again yesterday to figure them out but just can not grasp the concept. I understand CDs, bonds, real estate, etc and that’s what I stick with: what I know. Besides, there is so much talk of volatility in the stock market. This isn’t the time for ME to dabble.
      I’ll have to look over your email again regarding your car. You are very right doing your trades under your ROTH because there are no tax consequences.
      I’m looking for guaranteed income now. I’m studying and learning about safe investments. There aren’t many. In any event, even if I did nothing, I have enough cash to simply withdraw annually which would last me for the next 35 years. I doubt either one of us will be living that long. So, I’m not too concerned anymore.

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      • Different strokes for different folks. I totally understand doing more fun things together while you can.
        Preferred stocks are different then regular stocks they are issued new at $25 or $50 and a set dividend rate paid monthly, quarterly, semi-annually. They then trade in a range which is what you pay to buy them. If they are called you get the $25 or $50 face value, so I try to buy more that are lower then this👍. I like Citi Preferred and It usually list the preferred C.N is my favorite C.J C.K . I also like MTBCP and NBR.PRA. Almost all banks have preferred stocks and they pay over 5% usually. I also buy low and sell high for capital gains. Before the ex dividend date it is at its high after the dividend pay date it is at it’s low usually. Doing the two I have average 18-20% gains since May 2018. Lara

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      • Lara, as I have always said about you, you are a genius IMHO. You rock, girl! You are just amazing. You should give courses or do a podcast. I’d be the first one to sign up!

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  2. I get Guaranteed income in the form of dividends and sell for capital gains when I can sell for more then the dividends and can make a 10% gain on my cost. Lara

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    • What tax bracket are you in? What happens if the stocks go down? Or the companies go out of business? Companies are always reducing their dividends when the economy slows. We used to get dividends from Disney and Apple. Those weren’t always consistent. Who’d ever think that Apple would become non-existant and steadily declining? Again!
      Look at those folks who held GM, General Motors? Or GE, General Electric? Or IBM??? Companies aren’t as long term as we would like. That’s probably why you are constantly buying and selling?
      I still say that one of the best hedges against inflation and/or money running out in retirement is to have a side hustle. Thank goodness, no matter my age, I can still do computer/internet/social media work plus I monetized this blog. Am thinking of getting in to podcasting and doing more videos/vlogging. I’ll see.

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  3. Hi Cindi,

    Another great blog. I’m curious about your move. You mentioned that you’ll be selling your home in 2.5 years. Will you be buying another one?

    Lisa

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    • Yes, Lisa we will be buying another home but I don’t know what kind yet or where it will be located. Hubby wants a stand alone home NOT inside an HOA environment. I want a townhome with a garage inside a gated HOA community. The only thing we can agree on so far is that it will NOT be in Florida and it will NOT be a condo.
      So, we’re getting closer to an agreement.
      Thanks for asking.

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  4. I would be in the 15% tax bracket but I am doing Roth Conversion right now up to my Medicare limit to not have to pay supplemental premiums. So I pay some in The 22% bracket while there is a bracket that low to decrease my RMD when taxes go up. We contributed to 401k tax deferred thus saving paying 32% in federal and state income tax so this gives me 10% plus the 100% match in stock which value ended up tripling because of a takeover of the company. I know everyone complains now about administrative fees for 401k but when they started they were minimal. Lara

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    • Lara, you really know your stuff! I was just learning about all of this last night watching re-runs of Consuelo Mack ‘Wealth Watch’. You know exactly what to do!
      We’re in the 0% to 10% tax bracket. I know, we’re pathetic. But I function much better at that level. At least I can understand my little world. It’s very simple living.

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      • I was in that tax bracket for seven years. But this is really misleading. Would you believe in reality Since I turned 60 I pay zero out of my savings and assets! I just return some what the government sends me back to them. It’s not bad to finally not have to pay out of my pocket taxes. Lara

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    • I am buying and selling only when I have obtain certain predetermined Goals. I bought NBR-A preferred at a low and in five days it shot up $3 the yearly dividend so I sold making 17% in five days. It channels and I just bought again at a low. If the stock doesn’t move higher, in Nov less then three months from now, I will get 4% in dividends( cash). Lara

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      • Le sigh. I am very proud of you. It’s nice to know someone like you. You are very inspirational. I’m renting a few books out of the library regarding this. I’ll keep reading. Maybe one day it’ll just click!

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  5. Cindi, I have been mostly conservative in my investing but jump on the 2000 technology euphoria and lost a bundle. I was so conservative in 2007 mainly CDS that I didn’t really get a huge hit from stocks, I went into callable CDS way out to get yield. I tip toed into purchasing stocks starting again in 2009. And last May when one of my callable CDs got called is when I started investing in preferred stocks and REITs but I maintain a conservative mix. Knowledge is power. I am always educating myself too.
    If you do start investing again start small. Everyone has a different tolerance for volatility. Dividends smooth the ride, immensely. And can be used to reinvest or expenses. Sincerely, Lara

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    • Lara, I am going to invest and I am going to start small. This is the first time I actually have the time to sit, learn and then eventually do it. You are a big inspiration. I’ve been very good, in the past, on my hunches. One of them being Apple Computer! Who knew? Apparently, I did!
      Thanks for the advice.

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  6. You ladies are very smart. I am dumb as a sack of rocks when it comes to investing. I have no debt and two small, very cheap, paid for houses. I inherited one and I am leaving it to my son because he took care if his grandma. I am about to “tip toe” into CD’s and maybe Vanguard, just because I do not know what in the h@#+l I am doing….lol. I have a question, I would like to ladder CD’s, or maybe do some 30 yr treasury bonds for my kids. Do y’all know where I could go for the best informed about those??? Congrats on your new RV! Sounds like you found a cheaper place to stay in Florida, even cheaper than state and National Parks and I didn’t know there were places cheaper than those….awesome!!!

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    • Cindy I always recommend Fidelity. Vanguard is very good. Just call and ask to speak to an advisor. That person will help you accomplish your goals. Are you renting out one of the homes? That income would be perfect for extra retirement income.
      You’re not at all dumb. You’re smarter than you think. Just start reading investment books, watch some TV money shows and you’ll get the hang of it all.
      Best of luck!

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