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My Plans for December’s Grand

Well, I have to admit that I was a little pessimistic for the month of December.  I didn’t really expect to make $1000 for the month from my blog, Cash Flow Mantra.  It was already a little on the slow side so I figured with the holidays coming up that traffic and activity would fall off quite a bit as people enjoyed and spent time with family and friends.

So imagine my surprise when a strong week for revenue actually pushed me above and beyond a grand for the month of December!  And we still have a full week to go (not that I am expecting anything anyway, but still).

What Am I Doing With the Money?

Right now, I am looking to pay off debt in order to increase my monthly cash flow and have been using my earnings from blogging to do just that.  I have already paid off one of my credit cards.  So I figured that I would be using the next chunk of money to pay off a business line of credit.

However, one of the benefits of being a personal financial blogger is that I am constantly reading other blogs and learning new things.  One of the things that caught my eye was some information about PMI, or private mortgage insurance.  This is often required by creditors when you make less than a 20% down payment on a piece of real estate.

Now, I don’t have PMI on any of my properties except for one rental property that I own.  I put 10% down several years back.  Well, the information that I learned was that once you have 22% equity in the property, banks are required to eliminate the PMI.  I figured I was pretty close to the required amount of equity after these several years so I found the closing information for the exact purchase price and also checked my outstanding mortgage balance.

It turns out that I was at 21% equity.  In other words, I had 79% of the mortgage balance outstanding which was only 1% away from the point of being able to eliminate PMI.  I figured out how much it would take to do this and the total amount was $960!  December’s $1000 from blogging will be enough to get rid of my private mortgage insurance.

Now you might think that paying off a credit line with 18% interest would be a good deal, and you would be right (coincidentally the balance of the credit line is about $950).  But I am actually paying $66 per month for the private mortgage insurance which is $792 over the course of a year.  My cash on cash return for my $960 investment is then 82.5% which is a tremendous return on that investment!

Plus, that $66 per month is just like passive income.  I am doing very little to establish this cash flow increase and can use it to start paying off the credit line.  Needless to say, I am pretty excited for several reasons:

  1. That I was able to make $1000 for the month of December from blogging which I was doing anyway
  2. That I was able to learn something about PMI just by being well read proving that knowledge is profitable
  3. That I will be able to pay off enough of my mortgage to eliminate $66 in monthly costs which can be used for other purposes
  4. That I was able to share this information with you and hopefully help someone as another blogger helped me to see this opportunity

I hadn’t planned on another post prior to the official launch of the blog on January 2nd, but I was so excited that I just had to share!  Be sure to come back in January and keep coming back for potentially life changing information.  And please feel free to comment, share, and ask questions.

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Upcoming post:  How to Make $1000 Per Month as a Blogger by Derek


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