This article is by staff writer Kristin Wong.

Maybe it’s because I’m getting older, or maybe it’s that I’m in a better financial place than I was just a few years ago, but lately, I’ve been thinking a lot more about giving back.

In recent years, it’s becoming more important to me to be socially conscious and charitable. I’m secure, I’m healthy, and I’m free. That contentment seems to urge me to check in on the rest of the world.

Or, maybe it’s coming from a more selfish place.

According to a new research paper from Harvard Business School, spending money on others makes us happy.

Giving makes us happier

The paper, titled, “Prosocial Spending and Happiness,” was published this year in Current Directions in Psychological Science. In it, psychologists write:

“Although a great deal of research has shown that people with more money are somewhat happier than are people with less money, our research demonstrates that how people spend their money also matters for their happiness. In particular… people who spend money on others report more happiness.”

The researchers cite a 2008 study they conducted. Subjects were given $5 or $20 to spend by the end of the day. Half of the participants were told to buy themselves something nice. The other half were instructed to use the money to help somebody in need.

Results found that the givers reported greater happiness:

“That evening, people who had been assigned to spend the money on someone else reported happier moods over the course of the day than did those people assigned to spend the money on themselves.”

Other research seems to suggest that feeling happiness after giving is an innate trait. In 2012, one of the researchers, Lara Aknin, conducted a study that involved toddlers under the age of 2. Aknin found that when toddlers gave away crackers to a puppet, they “exhibited more happiness” than when they kept the crackers for themselves.

Of course, it’s not that simple. Conflicting studies have found that giving back doesn’t always increase happiness. For example, a 2010 study found that people only felt happier about giving money away when they had a choice of how much to give.

Overall, the paper suggested that organizations can appeal to possible donors by maximizing “the emotional benefits of giving.” Basically, make people feel happy about giving.

But whether it makes us happy or not, giving is important. I have to admit, I feel a bit selfish for only thinking about the plight of others now that my own life is in order. Maybe you have to look out for yourself before you can look out for others.

But even if you don’t have a lot of resources, there are ways to give.

Support social enterprise

Unless companies make big, disgusting headlines, most people don’t pay much attention to business ethics and social enterprise. Forbes discussed this topic recently. They reported on a survey that found many American consumers (30 percent) want to start buying from socially responsible companies. But at the same time, most of these consumers aren’t familiar with social enterprise, the concept of a business making “improvements in human and environmental well-being, rather than maximizing profits for external shareholders.” (Thanks, Wikipedia.)

Forbes reports that the poll was conducted by Good.Must.Grow, an organization “aimed at social enterprises and nonprofits that also uses money from after-tax profits to help nonprofits pay for marketing services they couldn’t otherwise afford.”

Becoming a more socially conscious consumer is probably the simplest way to give back when you don’t have much to give. Next time you make a purchase, find a company that will use some of the profit for good. Purchase from a “buy-one-give-one” company. Of course, being a socially conscious consumer does take some research and an open mind.

Oh, and maybe a small sacrifice in frugality.

“What’s more, many consumers also seemed to be more interested in getting a good deal than making a difference,” Forbes reports.

I’m all for a good deal, but as J.D. wrote, “Money gives you more options, but happiness makes life worth living.” If making a difference makes you happy, then it might be worth it to forgo a good deal for the benefit of social enterprise.

Redeem your credit card rewards

It’s not for everyone, but some of us like to earn rewards on our credit cards by using them for our expenses, and then pay off the balance in full each month.

Instead of redeeming your rewards for cash, consider redeeming them for a charitable donation, if your rewards program offers that option.

Volunteer

Of course, if you don’t have a lot of money, but you do have some time, volunteering is the way to go. Perhaps selfishly, it’s also probably the most gratifying way to give back. VolunteerMatch is a website that helps you find volunteer opportunities in your area.

Get crafty

This is very cool. In an article about supporting charities without donating money, Mental Floss found quite a few organizations that need handmade items. If you want to volunteer on your own time, you can knit blankets for shelter animals, for example. Or you can assemble Chemocaps for cancer victims.

There are multitudes of ways to give back when you have limited resources. You can donate blood, cut your hair, or clean out your closets and give the items to Goodwill.

Maybe you’re like me and you suddenly feel a social responsibility because you’re grateful for your health and well-being. Maybe it makes you happy to see others benefit from your help. Maybe you want to give back simply because you believe it’s the right thing to do. Regardless of our intention, there’s a lot of need in the world.

Do you give back? If so, how?

This article is about Frugality, Giving

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Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.’s non-financial writing can be found at More Than Money.

Eight years ago today, I started a new blog. Inspired by the success of a popular post at my personal site, I sat down to create what I thought would be the first personal finance blog on the Internet. (I was wrong, of course; there were plenty of similar blogs before mine.) I had no idea what I was getting myself into.

In the beginning…
In April 2006, I was still deep in debt. I’d begun to turn things around, but I still felt overwhelmed by how much I owed. I was also still selling custom boxes for my family’s box factory, doing half-ass work at a job I hated. My personal blog had a modest audience (mostly friends and family who didn’t mind reading about my obsessions with cats, computers, and comics), and I figured it’d be fun to start another blog: a blog about money.

Now, eight years later, my life has changed completely.

  • In December 2007, I paid off the last of my consumer debt. At last, after 20 years, the burden was gone.
  • In March 2008, I quit my day job. Since then, I’ve been writing full-time.
  • In April 2009, I sold Get Rich Slowly, a move that allowed me to focus more on the writing and editing while off-loading the business stuff to somebody else. For the past five years, GRS has been owned by somebody other than me.
  • At first, I wrote solely for Get Rich Slowly. Gradually, though, I branched out. I wrote Your Money: The Missing Manual. I have a monthly column in Entrepreneur magazine (and had a weekly column at the Time magazine website until the workload became too great). And I’ve contributed to NPR, CNN, the Time website, CNBC, and many other books and magazines.
  • In the autumn of 2012, I “retired” from this site to write full-time at my personal site. This allowed me to spend more time working on other projects, such as public-speaking appearances and my upcoming guide on how to become the chief financial officer of your own life.
  • Last fall, after one year away, I “un-retired” from Get Rich Slowly. I found I still had things to say, so I returned to write a few times each month.

When I started this blog, I didn’t have a coherent financial philosophy. I was making things up as I went. I read books and blogs and magazine articles — basically, I read everything about money I could find. In time, I developed a set of personal financial guidelines.

The Get Rich Slowly Philosophy
Based on my research — and my experience with what does and doesn’t work — I’ve compiled a list of 15 tenets that form the basis of everything I write. Some of these rules draw on age-old wisdom: “Saving must be a priority” is just the ancient truth that you’ve got to “pay yourself first,” for example. But other rules — such as “do what works for you”  — I came up with on my own.

The Get Rich Slowly philosophy comprises these 15 tenets:

  1. Money is more about mind than it is about math. That is, financial success is more about mastering the mental game of money than about understanding the numbers. The math of personal finance is simple — spend less than you earn. It’s controlling your habits and emotions that’s difficult.
  2. The road to wealth is paved with goals. Without financial goals, you have no direction. If you have no direction, it’s easy to spend money on things you’ll regret later. But if you’re saving for a house, your daughter’s college education, or a trip to Europe, your goal will keep you focused, making it easier to spend on what’s important and ignore the things that aren’t.
  3. To build wealth, you must spend less than you earn. Basic math, yes, but it’s important. Successful personal finance is all about building positive cash flow. By decreasing your spending while increasing your income, you can get out of debt and build wealth.
  4. Saving must be a priority. Before you pay your bills, before you buy groceries, before you do anything else, you should set aside some part of your income. If you have to start small, start small. Even $25 a month is good. As you earn more and develop better habits, save as much as possible. (My ex-wife saves nearly a third of her paycheck!)
  5. Small amounts matter. Your everyday habits have a huge impact on your financial success. Frugality and thrift help build good habits, and make a real difference over time. Plus, there are tons of opportunities to flex your frugal muscles.
  6. Large amounts matter, too. It’s good to clip coupons and to save money on groceries, but it’s even better to save on the big stuff like buying a car or a house. By making smart choices on big-ticket items, you can save thousands of dollars at once.
  7. Slow and steady wins the race. The most successful folks are those who work longest and hardest at things they love to do. So try to find ways to make frugality fun, and recognize that you’re in this for the long haul. You’re making a lifestyle change, not looking for a quick fix.
  8. The perfect is the enemy of the good. Too many people never get started putting their finances in order because they don’t know that the “best” first step is. Don’t worry about getting things exactly right — just choose a good option and do something to get started.
  9. Failure is okay. Everyone makes mistakes — even billionaires like Warren Buffett. Don’t let one slip-up drag you down. One key difference between those who succeed and those who don’t is the ability to recover from a setback and keep marching toward a goal. Use failures to learn what not to do next time.
  10. Do what works for you. Each of us is different. We have different goals, personalities, and experiences. We each need to find the tools and techniques that are effective for our own situations. There’s no one right way to save, invest, pay off debt, or buy a house — and don’t believe anyone who tells you there is. Experiment until you find methods that are effective for you.
  11. You can have anything you want — but you can’t have everything you want. Being smart with money isn’t about giving up your plasma TV or your daily latte. It’s about setting priorities and managing expectations, about choosing to spend only on the things that matter to you, while cutting costs on the things that don’t.
  12. Financial balance lets you enjoy tomorrow and today. You don’t have to choose between spending today and saving for tomorrow. You can do both. Strive for moderation in all things: Pursue your goals, but don’t forget frugality; be frugal, but don’t forget your goals.
  13. Action beats inaction. It’s easy to put things off, but the sooner you start moving toward your goals, the easier they’ll be to reach. It’s better to start with small steps today than to wait for that someday when you’ll be able to make great strides. Get moving.
  14. Nobody cares more about your money than you do. The advice that others give you is almost always in their best interest, which may or may not be the same as your best interest. Don’t do what others tell you just because they hold a position of authority or seem to have a persuasive argument. Do your own research, get advice from a variety of sources, and in the end, make your own decisions based on your own goals and values.
  15. It’s more important to be happy than it is to be rich. Don’t be obsessed with money — it won’t buy you happiness. Sure, money will give you more options in life, but true wealth is about something more. True wealth is about relationships, good health, and ongoing self-improvement.

In the past, I thought “do what works for you” was the most important tenet in this list. It was this site’s unofficial motto. Recently, though, the site’s theme has changed. Now the core value here is “nobody cares more about your money than you do.” Smart money management is all about taking an active role in your financial future, about becoming your own financial guru.

The Stages of Personal Finance

A few years ago, I tried to outline what I called the “phases of personal finance”.” These are the stages people pass through in their relationship with money.

  • In the zeroth stage of personal finance, a person doesn’t exercise any sort of financial skills at all. Often, he isn’t even aware that he should. He uses money without thinking. And, more often than not, he lives reactively, spending in response to outside forces.
  • The first stage of personal finance is all about learning the basics: understanding compound interest, reducing debt, beginning to save.
  • The second stage involves putting the basics into practice: choosing to live frugally, saving in earnest, and pursuing financial goals.
  • The third stage means doing more of the same — continuing on the path to financial success. But it’s here that you can start asking yourself why you’re doing this. Why are you saving? What’s next? It’s here that you begin enjoying the fruits of your labors while continuing to save for the future.
  • The final stage of money management is Financial Independence, as defined in Your Money or Your Life. This is the point at which you have “enough” and then some.

Though I haven’t revisited these stages, I think about them every time I write an article. Maybe it’s time for me to cover them again?

Now, as we do every year, let’s take a trip through the GRS time-machine.

Get Rich Slowly: Year One
When I started Get Rich Slowly, I made several posts per day, most of which were short summaries of things I’d read elsewhere or glimpses at interesting personal-finance products and tools. It was several months before I found the pattern that lasted for the next several years: two posts per day, with the early post being a longer entry.

Most of these early articles were about my personal history, and about the tools and techniques I was using to get out of debt. Here are some of my favorite from that first year:

  • The Entrepreneurial Spirit, a Tribute to My Father — My father was an entrepreneur. He was always starting businesses. He was always selling things.
  • The Worst Job I Ever Had — I made some poor choices at the end of my college career; as a result, I graduated without a prospect for work. No matter — I lived off my credit cards for a few months, basking in the glow of adulthood. Eventually I realized that I needed to find a job.
  • Money Blueprints: What Our Parents Taught Us About Money — I had dinner with two friends from high school last night. We shared good wine, good food, and, especially, good conversation. We talked about how we perceived money when we were younger.
  • Which Online High-Yield Savings Account is Best? — The most-commented post ever on this site, and one folks refer to again and again. It’s not story-oriented, but is simply a resource for finding a good online bank.

Get Rich Slowly: Year Two
The second year of this site saw a creative explosion. As the GRS community grew, it fed me new ideas. And as I defeated debt after debt, I found inspiration all around me. Success with personal finance led to success in other areas of my life. By the end of 2007, I’d managed to pay off the last of my consumer debt; a few months later, I quit the day job to blog full time.

Some of the best stories from this site’s second year include:

  • The Power of Yes: A Simple Way to Get More Out of Life — For much of my adult life I’ve been shackled by fear. I’ve been afraid to try new things, afraid to meet new people, afraid of doing anything that might lead to failure. This fear confined me to a narrow comfort zone. Recently, however, I made a single small change that has helped me to overcome my fear, and allowed me to get more out of life.
  • You Are Your Own Worst Enemy — My friend Gillian called the other day– she’s been having money trouble and was looking for help. “I’m not really a financial advisor,” I told her. “I write about money, and I try to help people at my website, but I’m not qualified to coach you one-on-one. ” Still, she’s a friend, so I resolved to at least give her some advice.
  • Free at Last! Saying Good-Bye to 20 Years of Debt –  It took a lot of time and effort, but these actions have finally paid off. Today I wrote a check for the last of my consumer debt. I’m now debt-free, except for my mortgage. I’ve been walking around in a happy little haze all day long.
  • Luck is No Accident: 10 Ways to Get More Out of Work and Life — Dale Carnegie once said, “Happiness doesn’t depend on any external conditions — it is governed by your mental attitude.” Some people might dismiss this as bunk, but research bears it out. Don’t worry about circumstances beyond your control. Learn to control the things you can, including your reaction to the world around you. How you respond to an unfortunate event is often more important than the event itself.

Get Rich Slowly: Year Three
The third year of Get Rich Slowly was turbulent, though most of this occurred behind the scenes. The blog grew rapidly, and I realized it had turned from a hobby to a business. This was both a blessing and a curse. I felt like there was way too much for one man to take care of, so I began to cast around for solutions.

Meanwhile, I found it difficult to find financial balance. I’d been pinching pennies for a long time in order to pay off my debt, and it was tough for me to loosen up. With your help, I eventually realized it was okay to use money to have a little fun. To add to this year’s ups and downs, my best friend died. This had a profound impact on my life and on this blog.

Here are some of the top stories from Get Rich Slowly Year Three:

  • A Real Millionaire Next Door –  Kris and I love our neighbors. One of our favorite neighbors is the old guy next door. Let’s call him John. He’s a man who has lived the philosophy I’ve adopted for myself, who has lived the philosophy I espouse on this website. He’s lived this life and has been successful. He’s a man who is happy and fulfilled. He’s a real-life millionaire next door.
  • You Can’t Always Get What You Want — It’s okay to have something in your life that you hate. And it’s okay to have something you want. It’s natural. The problem is that once you get that thing, you’re just going to hate something else, you’re just going to want something more. It’s not want that’s the problem, but the habit of constantly satisfying wants.
  • The Razor’s Edge: Lessons in True Wealth — My friend Sparky made what I thought were odd choices. He lived like a monk while at home so that he could spend his money on travel and other things that were important to him. This article describes the lessons he taught me.
  • How to Build Confidence and Destroy Fear –  Without self-confidence, we have a tendency to make poor decisions. We make choices based on fear instead of what’s best for us. If you lack confidence, you might fill your life with self-destructive behavior. You might work at a job you hate. You may allow yourself to get deep in debt. You may find yourself moving from one bad relationship to another. Without confidence, you don’t allow yourself to pursue your dreams. Here are a few courage-building techniques I’ve picked up over the years.

Get Rich Slowly: Year Four
My fourth year at Get Rich Slowly was one of great personal fulfillment — and great personal struggle. As a result of my best friend’s death, I made some big behind-the-scenes changes so that I could free some time to pursue other life goals. First, though, I wrote Your Money: The Missing Manual, which consumed six months of my life (and led me to gain 20 pounds).

One of the most notable changes this year was the addition of staff writers. This helped take the load off my shoulders, and introduced some new voices around here. The blog also moved to a “one long article a day” format, which most people seem to prefer.

Great articles from Year Four include:

  • How to Negotiate Your Salary — I don’t think people spend enough time looking for ways to boost their income. Learning how to negotiate your salary is one of the best ways to improve your financial well-being.
  • Understanding the Federal Budget and The Truth About Taxes — We cannot have informed discussions about taxes and government spending if we don’t have the baseline information. Because my own education on this subject is weak, and because I want GRS readers to be informed, I spent 12 hours last week researching a variety of tax topics. These two articles record my attempts to discover that baseline information.
  • The Paradox of Choice and the Dangers of Perfection — While it’s true that some choice is a good thing, too much is not. It’s easy to pick the best option from a pool of three, but it’s difficult to find the perfect choice in a pool of 30. “Perfect” is a moving target. It’s better to make a solid decision today than a perfect decision next week.
  • Spend Based on Who You Are, Not Who You Want to Be — Buy things as rewards, not because you expect merely having them will change who you are. Another way to think of it: Buy things as you need them instead of buying them with the expectation that you’ll use them.

Get Rich Slowly: Year Five
In its fifth year, I finally admitted the truth: Get Rich Slowly was no longer about me. Get Rich Slowly is a group blog. Mine is the strongest voice, and I provide the editorial vision, but the multi-author format is here to stay.

This format allows me to incorporate more reader voices. I’ve said all along that you folks are what make Get Rich Slowly great. It’s not me. It’s not the other writers. It’s the community that has grown around this site. I love how freely everyone shares their tips, stories, and experiences. It’s fantastic. Over the past couple of years, I’ve worked to make your voice more prominent on this site, incorporating features like Reader Stories and regular Ask the Readers questions. Lately, I’ve made a couple of other small changes, such as introducing follow-ups to past discussions and making a conscious effort to weave continuity from post-to-post.

Here are some of my favorite stories from Year Five of GRS:

Get Rich Slowly: Year Six
This site’s sixth year was characterized by change, especially in my personal life. This personal change bled into the blog itself, and not always in good ways. As I felt, so did Get Rich Slowly. These growing pains were exciting and scary, both at once. During this year, I wrote less at this site, but many of my articles were more intensely personal than ever before.

Here are some of my most important stories from Year Six:

  • Drama in Real Life: A Place for Mom – My mother has struggled with mental health problems for over a decade. After a few years of increasingly erratic behavior, my family finally had to take action, we had to help her find a new place to live where she could receive constant supervision.
  • America’s Love-Hate Relationship with Wealth — While writing about money here at Get Rich Slowly for six years, I noticed that people in general (and Americans in particular) have a complex love-hate relationship with wealth. People want to be rich — but they’re suspicious of those who already are.
  • A Place of My Own — The toughest blog post I’ve ever had to write: After months of hinting at things, I revealed that my wife and I were getting a divorce, and that I’d moved into an apartment of my own. This post explored some of the implications of that decision. (For the record: Kris and I continue to work to maintain our friendship.)
  • How and Why I Sold Get Rich Slowly — After years of ignoring offers to buy this site, a close friend’s death (and a fear of burnout) prompted me to sell the blog. This post explains how and why I did so.
  • This I Believe: 43 Lessons from 43 Years — My favorite post of the year: I shared the lessons I’d accumulated throughout my life in the hopes that I could help you lead a happier, more productive life.

Get Rich Slowly: Year Seven
During the seventh year of Get Rich Slowly, I retired. Or, more properly, I took a sabbatical. I’d grown weary of writing about money day in and day out. Plus, I needed to get my personal life in order. And, of course, I wanted to spend my time writing at More Than Money. So in October 2012, I took a break. Before I left, though, I wrote some good stuff. (Plus I popped in now and then to share guest articles.)

Here’s the best stuff from Year Seven:

Get Rich Slowly: Year Eight
Year Eight was a hell of a lot of fun. After my year off, I came back rested and ready to write about money. Part of this was because I’d spent a week in Ecuador discussing personal and financial freedom with Mr. Money Mustache and a bunch of other smart folks. I realized that there still are new things to say about money, and new goals to share with readers. This was the year I realized the importance of saving rate and began my push to get people to manage their personal finances as if they were running a business. It was a good year, and it was tough to choose my favorite articles.

That said, here are a handful of my favorites from the past 12 months:

  • You Are the Boss of You: How to Find Success With Money and Life — My first post back at this site was a sounding call for personal responsibility. I’ve always said that nobody cares more about your money than you do. But during my year off to think deep thoughts, I’d come to realize that nobody cares more about you than you do. The key to success — in every area of life — is to understand that you control your own destiny. I love this article. I was just thinking of it today…
  • Thoughts on Financial and Personal Independence — After a week in Ecuador filled with “crazy rich person talk,” I felt like my entire financial philosophy had been put into a blender, scrambled, and then reformed into something different. It still contained the same components as before, but it was better. This article offered some of the best insights I had on my trip.
  • How I Sold My Comic Books (and Why) — After collecting comics my entire life, I sold my entire collection. This article — which is just a story without any moral — describes what it was like to gather them, sort them, and sell them online. It was fun to write and, apparently, it’s fun to read.
  • What Are Savings For? — Last November, I wrote about a meeting with my financial adviser. In that article, I made an off-hand comment about spending a lot on travel. Many readers were worried that I’d “relapsed” and was in danger of falling into debt. In “What Are Savings For?” I argued that money is a tool. It’s not an end in and of itself. Once you have it, there’s no sense hoarding it. It ought to be spent to help you achieve your goals and dreams.
  • Several of my recent articles were actually stealth excerpts from Be Your Own CFO, the guide included in the new Get Rich Slowly course, which will be released a week from today. I used this blog to noodle with ideas that I was working on for the larger project. Examples of this include:

    Revised versions of these ideas and articles appear in Be Your Own CFO.

What’s next?
What does the future hold for Get Rich Slowly? And for me? I’m even less sure of that. For now, I’ll keep writing about money at GRS a couple of times per month. Plus, at More Than Money I’m in the middle of a year-long series of articles about overcoming fear, choosing happiness, and achieving freedom. Readers seem to love the posts, and I certainly enjoy the conversation.

Next week, of course, I’ll be launching the Get Rich Slowly course, which includes the Be Your Own CFO guide. After that, I have no major projects on the horizon. A few speaking engagements, yes, and continued meetings with readers. But I’m gradually tapering my responsibilities so that Kim and I can take an extended vacation in 2015. I’ve decided that, for me, 2015 will be the Year of Nothing! I can’t wait!

Thank you for eight great years! I’m happy to have helped so many people, and I appreciate how much you have helped me. I look forward to continuing this journey together.


This article is by staff writer Honey Smith.

In November, we thought we’d reached the last straw in terms of the condo we have been renting. We’d had numerous problems with our place and our landlord (namely, not fixing things when they broke — major or minor). However we ultimately decided that, although the right choice wasn’t obvious, there were too many aspects of our lives up in the air to move at that moment.

Then, on December 30, our landlord told us that they weren’t going to be able to refinance our property. The condo we live in was going into foreclosure. The auction was scheduled for December 31.

This is my and Jake’s foreclosure experience as tenants. As you will see, there are lots of variables when it comes to foreclosures, and “your mileage may vary.” Whether you are a tenant or an owner, pay attention to all the documents you are given and consult an attorney or tenant advocate if you have questions about your specific situation.

The first thing you will do is wait. And wait.

Our condo has been on the brink of foreclosure for years. According to MSN, while default technically begins when the first payment is missed, it is usually 90 days before a “notice of default” is given. Even then, the homeowner gets another 90 days, called the reinstatement period, to bring their loan up to date. If that doesn’t happen, a trustee’s sale is scheduled and the property is auctioned.

We received our first notice of trustee’s sale in July 2012, which means at that point our landlord had likely missed 6 months’ worth of payments. They were able to bring the home out of foreclosure at that time, though we don’t know if they refinanced or what that process was like. Are there any GRS readers who have been through a foreclosure from the owner’s side and know how to redeem a property once a trustee’s sale has been scheduled? I’d love to see a reader story about this that is more up to date than this GRS foreclosure story from 2008.

We received our next notice of trustee’s sale in November 2013, mentioned at the very beginning of this article. However, the trustee’s sale was postponed three times before finally taking place in mid-February. During this time we followed the status of the sale of the property on our county recorder’s website and on Auction.com.

During this time, we also found out that our landlords had listed the condo as their primary residence to avoid our city’s rental tax. This meant that the bank was trying to reach the owner at our address. They even sent people to the house a couple of times, though they were all perfectly pleasant when they met us and we explained that we were just the tenants.

After the trustee’s sale

About two weeks after the trustee’s sale finally took place (check out this reader’s story about buying a foreclosure on the courthouse steps), we came home to a notice taped to our front door. Our property was now owned by Freddie Mac.

The note on the door was relatively chipper in tone: If this home has been lost to foreclosure, you have options, it advised. According to the 2009 Protecting Tenants at Foreclosure Act (PTFA), those options are:

  1. Rent the home under your current lease while Freddie Mac markets and sells the property. Since we were already month to month, this wasn’t an option for us.

  2. Rent the home under the Freddie Mac Rental Program. This option is available for both former homeowners as well as current tenants. Essentially, it is a month-to-month lease while the home is marketed and sold.

  3. Accept cash to relocate to a new home. If you move out by a date set by Freddie Mac, you are eligible for cash for relocation expenses.

The note on the door said we would be contacted by an attorney within 30 days and at that time we’d have to let them know our decision. We kicked our home search into high gear at this point, aided by the fact that Jake had accepted a new job and we now knew the geographic location and budget that would work for us.

Four weeks later (March 27, I think), we got a certified letter with forms to indicate the option we were choosing. Far from the optimism of the first notice, this time Freddie Mac meant business. Eviction proceedings have begun! it announced. To avoid eviction, please select one of the options outlined to you and return the appropriate paperwork within 10 days.

The options above were explained again, but this time there were dates included for the third option. If we moved out by April 9 (not possible for us), we’d get $3,000 in relocation assistance. If we moved out by May 9, we’d get $2,000 in relocation assistance. By that time we were far enough along in our search to feel comfortable opting for the relocation money (also known as “cash for keys”).

Thoughts about foreclosure from the tenant’s perspective

As a tenant, it was frustrating to have paid the rent on time and in full for almost five years, only to have the property enter foreclosure. The degree to which our landlords prevaricated, procrastinated, and (at times) outright lied to us did not do much for our faith in humanity! While obviously we don’t control their financial decisions, more open communication would have been appreciated. We found out about the trustee’s sale when the notice was taped to our door, for goodness’ sake!

I won’t fully relax until this all concludes in early May and we are safely ensconced in a new home. At this point, though, it does seem like everything is going to work out for the best, for us at least. We do suspect by some of the things our landlords said and did that they were using our rent to pay the mortgage on their own house, which may now be in jeopardy. There’s nothing we can do about that, however.

Clever readers may have deduced that we are essentially getting five months’ free rent and $2,000 in cash out of this deal. However, all this stress leaves me needing to take a deep breath, if not indulge in a cocktail! Even living with an attorney who understands the legalese and knowing that we were fully complying with the law, the uncertainty has weighed on me every moment of every day.

What’s next? Hopefully, everything will be settled and I’ll have an update and a new budget in early May!


Note: This article is from J.D. Roth, who founded Get Rich Slowly in 2006. J.D.’s non-financial writing can be found at More Than Money, where he recently wrote about how to be happy.

It was sunny last Friday afternoon, so I decided to go for a ride. Because Kim has been riding motorcycles all her life, I took a training class last August and now own a used Honda Rebel. When the weather’s nice in Portland, I like to do my errands on the bike so that I build skills and confidence.

My ex-wife had told me I ought to pick up mail from her house, so I rode down to visit Kris and the cats. When I got there, she wasn’t home. To kill time while I waited, I went across the street to say hello to my former neighbor, the real millionaire next door.

“Who can that be?” John blustered when I rang the doorbell. He’s a 77-year-old former shop teacher who spends summers on his boat in Alaska and winters doing volunteer carpentry on farms in New Zealand. But for a month in the spring and two months in the fall, he lives in the same home he’s owned for more than 50 years.


John and his beloved (but beat-up) boat.

“J.D.!” he beamed when he saw me standing there with my motorcycle helmet under my arm. “What the hell are you doing here?”

“I saw your used minivan in the carport, so I thought I’d stop in to see how things are going,” I said. He invited me in to sit with him at the kitchen table. “How are things?” I asked. And we began to chat.

Note: Because Get Rich Slowly is a family blog, I’ve toned down John’s colorful language. To get the full effect, use your imagination and substitute stronger words. (You should probably pretend that I said some too.)

What John’s been up to
“I’m sad that Kris’s co-worker was transferred to Bend,” John said. “She was a great roommate. I liked having her here. I liked how she took care of the yard. But I found another gal who’s going to move in next week. She’s a truck driver, and I think she’ll be handy to have around.”

Even though John is a millionaire, and even though he owns his home outright, he still prefers to live with a roommate. For one, that means somebody’s around to take care of the place as he’s gallivanting across the globe. For another, it brings in extra income. He doesn’t charge much for the place, but because he spends very little, it’s enough to pay for most of his personal pleasures. The modest rent is a win-win for both John and his renters.

“I was giving the new gal a tour of the place,” John said. “She asked me how to reach the top shelf in the kitchen cupboards. ‘Like this,’ I told her, and I pulled out the bottom drawer to act as a step-stool. She seemed surprised, but I told her I’ve been doing that for 40 years!” He laughed at the thought of it.

We talked for a while about John’s boat. In a couple of weeks, he’ll drive up to Seattle to prep Prime Time for the summer. Then he’ll make the slow way north to Petersburg in southeast Alaska.

“My girlfriend’s brother worked on a boat,” I said. “He was chef on a yacht. They spent time in Alaska and in Costa Rica. When I saw Doug at Christmas, I told him how you’d taken us to the hot springs on Baranof Island. He knew the place. I showed him video of the spot, and he loved it.”

We talked about whether Kim and I would ever join him for a week in Alaska. I said we might. I explained that recently she and I have been toying with the idea of buying a used RV, driving it around the U.S. and Canada, and then selling it when we’re finished. John nodded. “That’s a smart way to do it,” he said. “My son did that and ended up selling his RV for $1,000 more than he’d paid for it!”

What I’ve been up to
“So, tell me what you’ve been up to,” he said. “I haven’t seen you since you got home from Ecuador.”

“Well, I’ve spent most of the last six months on a new project,” I said. “It’s a guide to managing your money in the same way a business would.”

John looked puzzled, so I tried to explain.

“You see, I think that most people understand that a business has to make a profit to survive. Profit might not be the purpose of a business, but it’s the fuel that allows a business to pursue its goals. But most people don’t realize that the same idea applies to their own money. With this project, I’m trying to get people to act as the chief financial officer of their own life.”

“That’s a neat idea,” John said. “Will this be a book or something?”

“Not really a book,” I said. “We’re calling it a guide. And it’s all online. I just finished editing the 120-page book portion of the guide yesterday. But there’s also a year-long email series, 18 recorded interviews with financial experts, and all sorts of other stuff. It’s been a lot of work to pull together. In fact, I ought to be working on it now instead of talking to you.”

Be Your Own CFO
Be Your Own CFO is nearing completion! We plan to launch on April 22nd.

John made me promise to send him a copy when I’m finished. I’m curious to hear what he has to say about it. He’s been one of the biggest evangelists for Your Money: The Missing Manual, handing out copies to his friends and family and berating the local bookstore when they don’t have it in stock. (John’s support means more to me than any other endorsement, actually.)

Stock market or bust
“Say,” said John. “I’m finally back over a million bucks again. Boy, isn’t that something?” For a few years, his balance had dropped due to the market crash and because he’s been giving money to his family. (For instance, he paid off his grand-daughter’s student loans.)

On a whim, he pulled up the Fidelity website to check his numbers. “Will you look at that?” he said. “I lost $4,000 today.” He laughed.

“Don’t you worry about the ups and downs of the stock market?” I asked.

“Hell no! It’ll go up $8,000 tomorrow. I’ll tell you what. I was talking with one of those young guys at Fidelity once and he told me he’d never met anyone like me. ‘What do you mean?’ I asked. ‘Well, you don’t worry about your investments,’ the guy said. And I don’t. I set them up the way I want them and then I ignore them. I let them take care of themselves.”

He paused to think for a moment.

“You know, the last guy at Fidelity had me move my money to something more conservative. It was something like a 50-50 split between stocks and bonds. Fifty-fifty! Screw that. I’ve had too good results at the high-risk end. I moved it back. I made over $90,000 from my investments last year. That’s more money than I made when I was working!”

He grinned at the thought of it.

Quite a character
“Well, I should be going,” I said. “It looks like Kris and her boyfriend just got home.”

“I saw that Kris is remodeling her kitchen,” John said. “She told me she’s putting in granite countertops. I don’t know about that. That’s a good way to chip your dishes. I’ve had the same fricking Formica countertops for 40 years, and they work fine.”

I picked up my motorcycle helmet and moved to the door.

“You should come back next month,” John told me as I was leaving. “The cherry tree will be full of fruit and you’re welcome to pick whatever you want. Just hack off the branches and let them fall to the ground.”

“I’ll do that,” I said, remembering how Kris and I used to pick cherries and apples and grapes from his property. (She still does.) “Meanwhile, you have fun in Alaska. I’ll see you in September.”

I walked across the street to see Kris and her boyfriend. He was hooking up a new air compressor and Kris was getting ready to paint the kitchen. When she and I bought the house 10 years ago, she’d bemoaned the state of the kitchen. Now, at last, she’s found the time and the money to mold it to her image. She and her boyfriend have put down a new linoleum floor, are installing a built-in dishwasher (replacing the 30-year-old rollaway model we inherited with the house), and replacing the countertops. But they’re keeping the 90-year-old metal cabinets. “I like them,” Kris said. Her boyfriend shook his head; he thinks they’re a pain in the ass.

The new kitchen is nearing completion
Kris’s kitchen remodel is nearing completion!

“John doesn’t think you should install granite countertops,” I told her. “He says you’re going to chip your dishes.”

She laughed and shook her head. “John,” she said. “He’s a character.” Yes. Yes, he is. But I’m glad he is. And I’m glad I’ve known him for these past 10 years.

John is a great example of how to have a healthy relationship with money. One of these days — and it won’t be long — I’ll fly to Alaska with a video camera. While we take Prime Time out to catch halibut and salmon, I’ll ask John about his financial philosophy. How did he become a millionaire? That ought to make for entertaining viewing.


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