Tag: Hoarding

Do You Have A Storage Unit Problem?

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How much is enough? It’s a common question Investors ask when planning for retirement. Financial planners offer several rules of thumb about how much is enough, like the 4% of your assets rule or 80% of your employment income. One of my indicators is storage units; you have more than you need if you rent a few units.

There are thirteen storage units within a ten-mile radius of my home. Thirteen! I grew up in Los Angeles, a city of excess, and I don’t recall seeing more than one or two. However, we now live in a consumer-driven society, and we can’t stop buying, especially with Amazon’s help. And the more we purchase, the more space we need to store our goods. We are building more barns rather than living with less.

As the giving season draws near, consider culling your stuff and donating it to organizations that support others. If you have not used your treadmill or Peloton since the outbreak of COVID, give them away. Do you rent a unit full of work clothes that you will never wear again now that you’re working from home? How about boxes of books you plan to read again someday or an extra appliance or two? Are you still holding on to your daughter’s crib though she is now working full-time in another city? If so, unlock your storage unit and get rid of your junk. In addition to helping others with your charitable donations, you can eliminate your storage unit expense, allowing you to save and invest more money.

Managing multiple storage units is stressful because you must keep track of your items, combinations, and payments. It’s complex, and eliminating clutter can simplify your life. Spend time taking inventory of your items and separate them into three piles: keep, donate, and trash. After you have compiled your list, review your keep pile once more, and then give it away. Also, your kids don’t want to inherit the items you have hoarded for the past few decades.

Here are a few organizations you can call to donate your old items.

  • The Salvation Army
  • Goodwill
  • Habitat for Humanity
  • The Arc
  • Dress for Success Austin
  • Project Smile

In addition to the list above, check with your local church or civic organization like Rotary or Kiwanis, as they may offer services for donating items.

As my family and I have moved around the country, we lopped off about a thousand square feet with each move, so we needed to eliminate items we couldn’t store in our home. At first, it was challenging to give stuff away, but it became easier with each move, and we no longer miss the items we donated to others. In fact, it’s been liberating. If we can do it, so can you!

For the longest time, I thought I needed to be more organized. Now I know I just needed less stuff. ~ Alysa Bajenaru

September 12, 2022

Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management, located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so you can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM’s custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on the level of your assets. We have waived our financial planning fee for the remainder of the year, so your cost is $0.00.

Note: Investments are not guaranteed and do involve risk. Your returns may differ from those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation. Options involve risk and aren’t suitable for every investor. I must confess; however, we rented a storage unit when we moved our daughter into her new home, but it was temporary.

Storage Wars.

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Driving around my extended neighborhood I noticed several large storage units.    A quick Google search for storage units near my house netted about twenty facilities with more being built.  Storage units cater to people who suffer from affluenza or hoarding.   If you depend on a storage facility, you have too much junk and it may be time for you to part company with your precious items.

If you’ve watched an episode or two of Storage Wars, you know people covet some crazy items.  However, most items are standard like bed frames, mattresses, dresser-drawers, mirrors and other household goods.  Do you still need to keep your T.V. trays, eight-track tape player or rotary phone?

In financial terms, more stuff means higher expenses.   The higher your household expenses are the more assets you’ll need to retire.   The math is simple.  If you’re annual expenses are $50,000, you need about $2 million in assets to retire.   If your expenses jump to $100,000, you need about $ 4 million.

The ability to reduce your expenses will give you the luxury to retire sooner with fewer assets.   A $10,000 cut from your expenses equates to $250,000 less in assets.

Here are few tips you can employ to help you dig out from your pile of stuff.

  1. Take an inventory of the items you want and the items you need.
  2. Donate the items you want to your favorite charity. This will help others in need and give you a tax deduction.
  3. Sell your items at a garage sale. One man’s trash is another man’s treasure.   Can you generate a few nickels from your swag?
  4. Track your monthly and annual expenses. This can be done on Excel or Mint.com.  A strong budget will allow you to make better financial decisions about your future.
  5. Eliminate the storage unit. A 10 x 10 climate controlled storage unit will cost about $175 per month or $2,100 per year.
  6. Are you an empty nester? Can you reduce your household footprint?  Downsizing to a smaller home will take a huge chunk out of your expenses.  A smaller home yields less stuff.
  7. Save your money. After you’ve eliminated some expenses invest your savings.   Let’s say you can save $500 per month because of your cost cutting.   Investing $500 per month at 7% will be worth about $86,500 in ten years.
  8. Start today and do not procrastinate. The sooner you start digging through your pile of things the better your financial future will be!

My wife and I attacked our excess a few years ago and it has been liberating.   The freedom we received from less junk and lower expenses has allowed us to do more with less.

“Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal.  But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also. ~ Matthew 6:19-21.

Bill Parrott is the President and CEO of Parrott Wealth Management and is a fan of less stuff.  For more information on financial planning or investment management, please visit www.parrottwealth.com.

April 19, 2017

Note:  Your returns and experiences may be more or less than those highlighted in this blog.