Is what I’m doing stupid? Personally and financially

[Jeff Castro]

Is what I’m doing stupid? Please, all opinions welcome.

I’ve turned our first home into a short term rental property. Mortgage is $3,000 and I’m making around $1,000 after all expenses. It’s been steady and I’m booked pretty much the rest of the year.

Goal is to save enough to put 20% down on a higher end investment property in San Diego area as our 2nd property. The idea was to save money living with in laws and make money from home.

I have a family of 5 and it’s been tough living with in laws.

I’ve been thinking of renting a home for around $2,000 but we wouldn’t have any furniture since it’s being used by short term rental. I would need to buy at least some basic furniture and appliances. Like washer dryer, tables, couch, etc.

What is the best financial move here? Is it better to move back to my short term rental home and just save slowly or is it better to rent a house that is cheaper than my mortgage plus the extra income from short term rental? Downside is having to buy some furniture and appliances if i were to rent.

Please, any advice is appreciated.

[Account Closed]

For a little sacrifice today you can live like a king in the future. You are 100% on the right track for being successful. You are making the right choices to make a better life-style for you family for the near future and beyond. I admire the fact that you have something inside that most people don't have since you are questioning whether or not you should sacrifice your life-style today for a better future.

In Grant Cardone's book,'Be Obsessed Or Be Average' he certainly explains the way my family lives and how we spend our money. His philosophies are very similar to mine both for the way he lives and the way he preaches about investing in multi-unit properties. 

I own about 140 properties, but I live in a commercial building built in 1904 with my wife and two children, My two kids live in offices and my wife and I have a bed in the middle of the main entrance room. We have zero furniture. No couches, no dressers no kitchen tables and all our floors are plain concrete. We have two full bathrooms in the building and two 1/2 baths. We store all our clothing on shelves in a large bathroom. I love it! No dresser drawers to keep opening and closing. 

For food, about 99% of what we eat is Cream of Wheat for breakfast, homemade chili every day, a lot of rice and a lot of fruits and vegetables. We almost never eat fast food nor in restaurants. That saves a ton of cash every year. We don't stay away from restaurants because of the cost. We stay away because we would rather bring what we like to eat everywhere we go in thermos bottles and it is like being on a romantic picnic every day vs. sitting and waiting in noisy restaurants.  

We never purchased cribs nor furniture for our two children. They slept on mattresses on the concrete floor until they were about 10 years old.

It is not that we are crazy.  We love the simple way of life where we don't try to impress ourselves or other people with materials things. We enjoy bicycle riding almost every day and we have a house near Las Vegas where we take breaks about 6 times every years.

It is obvious that I don't care about what others think about the way we live. My children are happy and both are doing very well in college. They don't smoke, drink nor do drugs and that is the most important thing for us.

Everyone knows that the lack of money and/or the overspending of money are the biggest causes of problems with relationships. We save hundreds of thousands of dollars by living the way we do and our reward is we have enough money today that we can do whatever we want to do. Our children are still in college and we already set them up with enough real estate so they never have to work a day in their life. But, the strange thing is our children are more frugal than their parents. Our 19-years old son went to Japan this summer and we gave his $1,000 for spending money. He came back with $950. Of course, he never gave us back the money. He put it in his bank account.

I think it is sad that so many people think they need to buy so many things to be happy, or have to buy things to make other people happy. 

Live in a cardboard box as long as your family is safe, happy, healthy and gets a good education! 

One option a lot of frugal people do is they are purchasing beat up motor homes and finding places to park them. You can purchase some used 30-footers for $5,000 to $10,000. They have a kitchen bathroom and sleep up to 8 people. We have a gas station a mile from my place where the owner lives in about a 16-foor motor home he parks at the gas station. He also owns some rental properties. Smart!!!