Readers’ Questions Answered

by Millionaire Mommy Next Door on January 12, 2009

in Mailbag

Are you still renting? Will you ever buy a home again?

Yes, we’re still renting. We’ve been renting since we sold our last home in May 2003 in anticipation of the housing market crash. As home prices plummet in today’s market, we’re watching the price-to-rent ratios. When this number drops once again to long-term historical norms, we’ll consider buying. I have been keeping my eye out for real estate bargains. Cash is king in this market, and we have plenty of cash sitting on the sidelines. I’m watching the fundamentals and ratios that indicate housing affordability. I expect housing prices to continue falling for at least the next year or two. (A common consensus appears to expect an additional 15-20% national average price drop.) Therefore, I’d need to find a seller anxious to unload at a steep discount to convince me to buy today.

Eventually, we’d like to build our own home again. We’ve been collecting photos and ideas for our “dream home”: we’re envisioning a not-so-big (1500 sq. ft.) house filled with interesting architectural details, lots of natural light, cheerful colors, renewable resource products, off-the-grid energy, and perhaps enough room for a pony and a few chickens in the backyard.

In the meantime, we’re looking to downsize into a mere 230 feet… on wheels! When our current lease expires this summer, we’d like to travel the country for awhile in an RV. (Anyone selling a used 28′-29′ Airstream with rear bedroom and mid-bath?)

How is your portfolio currently invested?

Since my investment style is to follow momentum trends, I’ve been moving out of stock mutual funds and into cash since early 2008.  86% of our investment portfolio is parked in FDIC-insured banks; the balance is invested in a variety of Upgrader funds. When the markets show upward momentum again, I’ll move my cash incrementally into the new market leaders as they emerge.

{ 14 comments… read them below or add one }

Middle Way January 12, 2009 at 3:43 pm

Exciting times in store for you! As they say, opportunities favour those who are prepared!

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Chung Nguyen January 12, 2009 at 4:15 pm

I get the RSS feed so I haven’t been to your blog recently. It looks great and the photo with your daughter … so adorable!

Your dream home sounds sublime. I can’t understand why people – oftentimes small families with less than four people – need something like 3,000 square feet of living space. With that much room, I’m guessing you can easily keep the horses indoors!

Good luck with daughter #2. (:

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Mike Farris January 12, 2009 at 8:00 pm

I got lucky and put my money in safer investment like bonds at the beginning of 2008.

I love your blog and your mission. People like you inspire me.

Be well and prosper,
Mike

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Alice January 12, 2009 at 10:25 pm

Good luck with all of those! Exciting times ahead, to be sure. I’ll be interested to hear about how some of those projects go!

And thank you for updating us on your SIL – I hope that there is better news soon, and I understand why it needs to be an off-the-blog topic at this point.

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Debbie January 13, 2009 at 5:18 am

I’m sorry to hear that your sister-in-law is still missing. The RV and daughter #2 news is exciting.

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HIB January 13, 2009 at 7:59 am

It sounds like to have a fun and full year ahead. You’ll have to let us all know of your journeys. In regards to traveling, are you guys going all over the country or are you going to concentrate in an area of the country. Sounds like fun!
-HIB

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Moyra January 13, 2009 at 8:02 am

love the idea of cutting loose and travelling for a summer. your blog – which I found last year has been a total inspiration in my life. Not that we are selling up and following slavishly what you say – our lives are different. But I loved the living rich idea, its really transformed the way I live and how happy I am. We are moving towards being in credit (apart from the mortgage – but that is our story and dream – and its not big!!) and living according to our values – I have been particularly inspired by your reading list – your money or your life, wishcraft – both really excellent books. I also recommend the 4 hour work week – all about maximising your paid work into as little time as possible. Anyway – best of luck with the second adoption. I am a new mum too, and I am absolutely loving it.

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SonyaAnn January 13, 2009 at 8:57 am

I love your blog! And your daughter is too cute. I’m so happy for you & you inspire me to continue down the frugal path. My goal is to one day live a life similar to yours. Thank you for your honesty and your openness, it helps more than you will ever know.

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Rita Bradley January 13, 2009 at 9:06 am

I’m single and 43 and the timing has never worked out for me to buy a home. If prices come down more I may buy a condo in a couple of years OR live in an RV (after my children leave home). I’m not old enough to retire yet and run around the country so it would be interesting to see where I would park it!

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Amanda @ The Mom Crowd January 13, 2009 at 3:26 pm

So exciting! My husband can work anywhere with internet. We have often talked about traveling for a few months with an RV. Soon. We still need to kick Sallie Mae out of the house and I am due with our second in a few weeks. I can’t wait to follow your journey!

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Moneymonk January 14, 2009 at 11:53 am

I moved 25% of my retirement to cash. I plan to reinvest maybe in March.

Too volatile right now. I not investing at all for now.

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Bright Star January 14, 2009 at 9:47 pm

I like the daily habit of high priority and then fun tasks – somehow the fun tasks on my list never get done.

Daughter # 2 is exciting news – are you looking at China again?

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admin January 14, 2009 at 10:02 pm

Thanks, everyone, for the supportive comments.

Bright Star, I tend to be the other way around lately — I’ve been neglecting the high priority tasks and playing too much…

China’s adoption waiting list is over 3 years long. DD#2 will probably come from Africa.

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Jerry January 23, 2009 at 2:50 pm

Your kid is adorable, and (I know you know this, but) your adoptions lead to changing lives forever. We are currently working with an American ophthalmologist here in SE Europe who donates her time to orphanages, and it gives a whole new appreciation for good adoptive families. Orphans here have virtually no insurance of anything good in their lives, and it can be overwhelming to see the quality of life available to them. Thanks for your website, and your example. I hope that things run very smoothly for bringing DD#2 home!
Jerry

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