Wednesday, September 19, 2007

The two house crunch and negative cash flow

It's quite challenging waiting for our other home to sell while at the same time paying a hefty mortgage in Chicago.

Something quite painful - eats up all of our savings and then costs us a bit extra.
I'm still working out our monthly run rate, with so many one time, move in expenses occuring it's hard to separate the one timers from ongoing. I think we're at a negateive $1300 per month.

The current situation makes it very difficult to:

a. think about future investing plans
b. look positively about future savings

I had been expecting a decent raise this summer, especially after the fantastic performance i had in my current job - a management change seems to have removed that possibility. Substantial raises at our firm seem more realisticly grounded in promotions than performance - frustrating for me.

I've analyzed our reserves and we can go a very long time if we need to do so (at negative $1300 per month) however, it also means that improvements and capital expenditures are put off or minimized. That is also very frustrating. My wife would really like to furnish the house.

One thing for sure, she has a raise contractually scheduled for next September that will cover our hole (after taxes too), however, I'd like to think that we'll have something sooner. I just hope it doesn't require changing jobs.

It seems in the world of big corporations your performance matters less than 'paying your time'. It's very demotivating.

Although we can justify the negative cash flow (as something that's temporary and will see an increase in income to cover it), I hate being in this position.

Regards, makingourway

3 comments:

2million said...

I agree very demovitating. Have gone through the same thing s few years ago.

Stick with it -- surely the NC house will sell within the next 6mos. Worst case you sell for a loss, but your cash flow will improve.

My Road to Wealth said...

I am so sorry this happens. I can understand though. It seems like promotion or change job are the only ways to get big raise. 3% a year raise is not even enough after adjusting for inflation. It seems to be life is going backward. I am in a same position too. But I probably won't change job for at least couple years.

makingourway said...

$2M, I think you're right. Just need to stick with it. Shame to see about $3k per month plus additional carrying costs (insurance, lawn care, utilities...) bleed out.
My realtor recently mentioned turning off the water to save $30-$50 on bills. I'm a little anxious about that - maybe a visitor might use a toilet? Would be a mess.

My Road, my goal is to quit my job at the end of next year if I can't achieve my goals. We'll see what happens. My predecessor threatened to quit his job if he didn't get a $50k raise. Received a $35k raise and was happy.

Regards,
makingourway