11/10/2016 at 11:43 am #5494
My name is Donna and my husband and I live in Northern VA (Warrenton). I’ve been selling on ebay since 2001. Actually started with half.com selling books in 2001. This was great for a couple of years but then the market started getting saturated. About that time I also started selling miscellaneous items on ebay. This lasted until about 2005 and I got busy working my regular job. Started selling again on ebay back in 2012 and then found Scavenger Live which has helped me make it over the ups and downs that come along with selling long term.
My husband and I have been self-employed (no employees) since 1989. We do software development and web sites primarily for 2 clients now. We’ve seen a lot of changes over the last 25plus years. Over the last few years we’ve cut back on the amount of regular work we do. Having F-You money really helps so that you don’t have to deal with clients that are a pain in the neck. I’ve been going back to selling on ebay as a way to keep busy and pay for my yard sailing habit! Our daughter has 1.5 years left before graduation from college (ODU) and then we’ll have more breathing room with our finances.
I love this site and want to thank Jay & Ryanne for all the info that they’ve passed on to everyone on their site. I also want to thank you for doing the Jim Collins interview. Once I heard his interview and bought his book we’ve totally simplified our retirement finances.
11/10/2016 at 12:21 pm #5503
Welcome Donna. We’re practically neighbors since we’re just on the other side of the Blue Ridge Mountains from you.
Just curious how you have simplified your finances. Did you just move to an index fund?
11/10/2016 at 12:43 pm #5508
We had been using a money manager for the last 10-12 years. He managed our SEP IRAs for us. He had our accounts spread over 10 different mutual funds. I never felt like I could figure out what/why we were investing in the various ones but I figured he knew. The last couple of years though I’d been wanting to move these accounts under Vanguard but was hesitant because I wasn’t sure I would be able to manage them. This summer we took the plunge and moved all of our SEP IRA money to SEP IRAs under Vanguard. So now we only have 3 accounts, all under Vanguard. My husband and I each have SEP IRAs, we each have ROTH IRAs and we have a joint non-retirement account. This is so much easier to manage and understand. Our money manager was very nice and it was hard to pull the plug but paying him 1.5%/year to manage our money just wasn’t worth it compared to Vanguard. We’ve been investing with Vanguard since 1999 so I was very familiar with how they worked. It was just making the leap to managing everything ourselves that was the tricky part.
Also within the Vanguard accounts we only use Vanguard Total Stock Mkt, Vanguard Total Bond Mkt, and Wellesley Balanced fund
11/10/2016 at 1:34 pm #5514
Can you give me a brief understanding of SEP IRA?
–Is this an extra IRA that self-employed people can open?
–Is the SEP IRA in addition to your ROTH IRA?
–Are your contributions all tax deductible?
–How much can you put in each year?
11/10/2016 at 2:10 pm #5517
The SEP IRA is money our “employer” puts into the SEP IRA account. The amount of money you can contribute is based on the amount of money you declare as “income”. So for us we are an S-corp and we have W2 income that we declare. Then we can contribute up to 25% of that value into the SEP IRA. Our accountant just tells us how much we can contribute for the year. I would ask your accountant about using the SEP IRA. The money contributed to the SEP is tax deductible.
Since the SEP IRA money is considered employer contribution we can still fund our ROTH accounts. These are funded with employee money instead of employer money.
I’m sure your accountant could explain it better than I can.
11/10/2016 at 2:43 pm #5521
Understood. It’s on my list of things to ask our accountant this year.
A couple more questions:
–Do you guys pay your self a salary?
–Do you handle your own accounting and just give numbers to your accountant at the end of the year? or does your accountant do your monthly numbers and do “payroll”?
11/10/2016 at 3:00 pm #5523
We do our month to month accounting in QuickBooks. Since we don’t have employees there’s really not that much we need during the year. Then at the end of the year we give the accountant our quickbook numbers and she does a quick calculation as to what our W2 amount will be. She does this to make sure we’ve paid in enough taxes through the year plus she can tell us how much we can add to the SEP to maximize our contributions. We make monthly tax payments. This number is based on the income we brought in the previous year. Then she does the actual taxes for us by April 15. Eventually we may go back to doing our own taxes but as long as we’re bringing in money through the S-corp I don’t see that happening
As far as salary goes we don’t have a real salary like you would at a job. In the past we’ve taken out a “salary” but that amount is just what we need to live on and is not based on the income that came in that month. Now that the houses are paid off and we have no other debt we just take out a minimal amount for the bills.
At the end of the year, our accountant calculates what our W2 number is based on the income that came into our business for that year. This number has no real bearing on what we take out for our living expenses. Since we’re an S-corp all the income from the business passes through to our personal income tax.
11/10/2016 at 3:08 pm #5525
I’m impressed by how organized you guys are. And have paid off your home. Wow.
We’re still in the early days of setting up a logical system to handle retirement savings as self-employed people. All our profit so far has gone into investing in rental property.
11/10/2016 at 3:36 pm #5530
Yeah you guys are creating your retirement by putting it into rental properties. That’s a good way to save for retirement too. I love to hear all the improvements you’re doing to your 2 rental properties.
Listening to people like Jim Collins and Mr Money Mustache is the way to go. They have a clear, easy to understand way to handle your money. I wish I had been following them since 2000. Back then I knew about investing in Vanguard but really was scared to take total control of our SEP. We began investing in Vanguard in 1999/2000 right when the tech bubble market crashed. We saw our investments go down but we just kept putting money in every month. By the time we started pulling the money out (2014/2015) these accounts had really grown since we had held it so long. We also invested in Vanguard REIT in 2009 during the recession and that really came back strong. But I still wasn’t smart enough to move our SEPs over into Vanguard.
In 2009 we became Financial Peace University coordinators and counselors. This got us motivated to having no debt. We pay cash for just about everything now. At that time we had 2 mortgages. Once we got on the band wagon we paid off our primary house and then a couple of years later we paid off a house we have down in Wallops Island VA (close to Chincoteague). We haven’t had a car payment since 2000. We have a 2000 Subaru Outback station wagon and a 2005 Prius. Knock on wood they’re still going great.
Once we get our daughter out of college we really won’t have any major expenses. Just 1.5 more years. We had saved enough for about 2.5 years of college in a 529 account for her and that’s just about used up. Now we’ll cash flow the rest of her college so she’ll come out without any student loans. This should give her a head start on her career.
11/10/2016 at 3:45 pm #5534
I love discussing saving money and paying off debt….in addition to all the talk of scavenging and selling. I think without being smart with our money, it doesn’t matter how many old shoes we sell on eBay.
For us, we’re trying to make sure every sale goes towards our goal of “early retirement”.
11/10/2016 at 4:00 pm #5537
Yes I love talking about money too. My favorite frugal book is the Complete Tightwad gazette. She really inspired me to push the limits on what’s acceptable frugality!
We both came from parents that were fairly frugal. Both sets of parents were good with money and used it as a tool. Neither set of parents spent a lot but they both have paid for homes and knew a little about investing. They did the things they enjoyed doing with their money but didn’t spend frivolously.
Hopefully we can pass on this knowledge to our daughter.
11/10/2016 at 12:47 pm #5509
Yeah we’re practically next door neighbors. We go through Luray/Woodstock whenever we go down to Tennessee (where my parents live) when we cut through to get to I81.
I think I’ve stopped at one of the thrift stores you guys go to. They were having a bag deal. I think it was $5/ bag but I didn’t have time to really look. I did find a mug outside for free though
11/12/2016 at 7:44 am #5653RyanneKeymaster
- Location: Virginia
i need to read this whole thread, but i wanted to ask what kind of web work you do? drupal, wordpress, another CMS? no CMS? design? just curious. you said software too, do you make apps?
11/12/2016 at 8:16 am #5661
We’re old school developers. I’m 55 and my husband is 58. The sites we’re working on use Classic ASP for some parts and .net with C++ for the newer parts. We’ve also developed a program that runs on PCs using Powerbuilder.
When we originally started our company (1989) we were developing in C but then moved to Powerbuilder in the late 90s. We developed several programs for different clients using Powerbuilder. We still have one client using a Powerbuilder program we developed to track their Grant Proposals. We’ll continue to support this client until they no longer have work for us. Sybase sold Powerbuilder to SAP but at that point support for Powerbuild was mostly dropped.
Since the internet didn’t exist back in 1989 we’ve had to evolve. Back in 2000 we started working on a site that basically collects statistics about certain companies. We were mainly putting a web front-end onto a database collection program. No fancy front end stuff, just basic tables etc. That’s how we started with Classic ASP and HTML. We still have a couple of modules that are under Classic ASP. Last year we ported one of the Classic ASP modules (originally developed in 2001) to .net with c++.
The nice thing about these 2 clients is we’ve been able to work from home basically for the last 10-12 years. Both clients are located in Arlington and we do have to go down every once in while but even then we can set what hours we need to be there so we can miss the traffic for the most part. Plus our Prius is grandfathered in to the HOV on I66 so when my husband has to come back during rush hour he can still use the HOV lane.
We’ll continue to support these 2 clients as long as they keep giving us tasks. The work we’ve been doing for them can be done around our schedules for the most part. But if these client go away we’re ready to go into full retirement mode. I’ll still sell on ebay and will increase the amount of time spent doing that but this is more to keep busy and fund my yard sailing habit than for money to live on.
The ScavengerLife blog has inspired me to continue to sell on ebay. It’s really easy to get burned out selling on ebay. But reading your blog has helped me keep going
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