Savings vs. Debt

Here’s a view of my long term behavior treating the mortgage payoff from the negative POV.

The first has no overlap, but the time scale is distorted.  It pretty clearly shows that once 2016 hits, I liquidate my EJ single account in order to pay off big chunks of mortgage.

long term debt payoff 1

The timescale is correct here, but the overlap is a little annoying to me.  Kind of interesting that it’s only in mid-2016 that I’m able to say I have as much invested as I have remaining mortgage debt.  When I pay off the condo, I’ll have zero debt, so nothing will be below the x axis.  Hooray!

In this graph you can see the 2016 liquidation / mortgage payoff, and there’s a nice purple tumor of Betterment savings (as well as a beefy USAA savings account) waiting to kill the rest.

debt and savings 2



Parent Saving vs Kid Saving


Using data from the British Household Panel Survey and Understanding Society, we examine the saving behaviour of individuals over time. Initially, we explore the determinants of the saving behaviour of children aged 11–15. Our findings suggest that parental allowances/pocket money (earnings from part-time work) lower (increase) the probability that a child saves. There is also evidence that the financial expectations of the head of household have an influence on their offspring’s saving behaviour, where children of optimistic parents have a lower probability of saving by approximately 2 percentage points. However, there is no evidence of an intergenerational correlation in savings behaviour: the saving behaviour of parents appears to have no bearing on the saving decisions of their offspring. We then go on to explore the implications of the saving behaviour of children for their savings decisions in later life, specifically when observed in early adulthood. We find that having saved as a child has a large positive influence both on the probability of saving on a monthly basis and on the amount saved as an adult. This finding is robust to alternative empirical strategies including IV analysis where the most conservative estimates show that having saved as a child increases the probability of saving during adulthood by 12 percentage points.


J. Ameriks, A. Caplin, J. Leahy

Wealth accumulation and the propensity to plan

The Quarterly Journal of Economics, 118 (2003), pp. 1007–1047

  • Abstract

    Why do similar households end up with very different levels of wealth? We show that differences in the attitudes and skills with which they approach financial planning are a significant factor. We use new and unique survey data to assess these differences and to measure each household’s “propensity to plan.” We show that those with a higher such propensity spend more time developing financial plans, and that this shift in planning is associated with increased wealth. These findings are consistent with broad psychological evidence concerning the beneficial impacts of planning on goal pursuit. Those with a high propensity to plan may be better able to control their spending, and thereby achieve their goal of wealth accumulation. We find direct evidence supporting this effortful self-control channel in the very strong relationship we uncover between the propensity to plan and budgeting behavior.

Ground Floor vs. 2nd Floor

Oddly, it doesn’t look like there’s much difference.  I generally thought the ground floor units sold for much less.  Kind of interesting that I haven’t yet found a single sale in 2010… b/c the market was down, and nobody wanted to take that big of a loss.

Historically, if we look at average prices, ground floor units average to $203,874 (34 sales) and second floor units average to $214,094 (32 sales), giving us a $10,220 difference.  Honestly, I thought it would be more like $50k difference.  It probably higher than $10k at the moment b/c prices are roughly double from their average.  Perhaps the premium is $20k.  That is supported by looking at the most recent sales, where a top floor unit went for $424k and a bottom floor went for $399k.

second floor.PNG1 bedroom willow glen creek.PNG

Priority changes

3 years before my turning point and three years after.  Shopping is all waste.  Whereas most of housing is savings via debt payoff.  Shopping was cut in half even as income went up.  Travel and food costs went up.  Uncategorized means I just wasn’t paying attention to mint as much in the first 3 years.  The number of transactions dropped to less than 20%.  I cut out 80% of the moments where I decided to spend money.  That helps with psychology.  As the frequency of saying yes to purchases drops, the resistance to wasteful spending increases.

Condo Comps

It’s been a little while since I updated this.  These are sales of the units in my complex that are the same layout as mine.  I don’t distinguish between 2nd floor and ground floor.  The second floor has vaulted ceilings, but the ground floor probably stays cooler in the summer.  Second floor usually sells for a little more (e.g. the top sales price below was for a second floor unit, but the yellow closest recent sale was a ground floor unit.)recent sales.PNG

We can see the market is inflated and I purchased it at a good price.  How good is that price, measuring by the fixed cost of property tax?

prop tax comparison 2017.PNG

My property taxes are the same as people who bought in the late 1980s and early 1990s.  Not the lowest (I suspect the 2013 sale was not an arms-length transaction), but definitely competitive.

And $/sq. ft.  I was lazy about adding recent comps, so I only added recent comps from my neighborhood.

price per sq. ft..PNG