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Jim Nickerson
12-11-07, 12:55 AM
About a year ago now, I received an offer in the mail from a company to pay me a bonus of $500 for a four-year lease to the mineral rights to the 0.218 acres where I live. This was for rights to drill beneath it to extract natural gas. I trashed the letter and the the enclosed lease.

Later people began showing up at my front door with a lease and notary stamp in hand for me to sign a lease for four years for the right to drill under our "ranch" (that's what we call it because we are Texans) and receive a bonus of $500 plus, at some point after gas begins to be sold, some monthly royalty check. I kept telling these dudes and dudettes that I didn't need $500.

There is something called the Barnett Shale http://www.thebarnettshale.com/ and Fort Worth is seems (if what I am told is true) sits on some of the best part of this area from which to extract natural gas.

I live in what may be the largest National Historic Home District in the US and most of the lots are as small as ours, and most of the homes 80 or so years old. Just South of us is another district of bigger and pricier old homes occupied by people that probably have a higher average level of education than the average level in my district, also they have properties generally twice or more as big as our lot. A few holdouts from lease-signing in our district began to attend meetings the other district was holding to discuss the leases and what to do about them. They too had been offered the $500 lease-signing bonuses. That district got its shit together and negotiated a lease price of $15,000 per acre for the rights to natural gas. The stragler homeowners in my district, of which we were, got the company, XTO, to offer us the same terms they offered the other district.

So today wife and I went down to the Fort Worth Gas/XTO and leased our mineral rights for natural gas for the next four years (interestly, we, or likely wife after I die, can sell the property and retain the mineral rights until the world ends). The bonus for our "ranch" was 3272 bonars. We didn't need those bonars, but it seems that once a company gets 67% of the land in certain sections under contract, they can begin drilling for gas. Those owners who did not lease their mineral rights will have the gas extracted from within/beneath their properties and will eventually receive some sort of a royalty check but will apparently never receive a bonus.

So my question is what should we do with this small windfall?

Wife wants to cover up our fomica countertops and put in some play-like granite countertops which are cheaper than real granite. She already has gotten a quote for the job--2,300 bonars--and for which the company will let you pay 50% two weeks before installation, then 25% in a month and the same in another month by credit card no less. We got such a "good" price on the deal because I said, if we did it, I would detach and reattach the plumbing to the sink vs. paying their plumber to come from Dallas to do it.

Wife got onto this idea for play-like granite because two close friends back in Nashville had recently had their kitchens done with the stuff.

Whew! What do you tell your wife whom you love dearly? First, I told her I loved her, which I do every day, then I told her that big screen TV's, home theaters, granite tops, designer wear and accessories, diamonds are forever, swimming pools, big fast cars with navigation systems, McMansions, iPods, and video consoles and games are things that Americian marketing-genius, some would call it: genius, has convinced the average dumb American that he or she should have to achieve what is insinuated as "The American Dream."

I told her that with our present wealth we could afford anything we needed, because we had not bought everything that comes down the pike that the advertisers would lead Americans to believe that one must have if one is worth a hoot. Surely she cannot tell her buddies that she has play-like granite countertops on which she can set hot things right off the stove without even stopping to worry about doing such. I told her we already have a lot of little doies on which to set hot things as we have always done. I think in a day or two she'll start speaking to me again.

When someone offers you 500 bonars for the the mineral rights to your land, my advice is don't take it. Unfortunately most of the people on my street about whom I know anything certainly could have used 3K--whether they would have used it wisely or not is another issue, but they all would have benefitted from not jumping on the 500 bonar bonus--which from what I know, all but three of the the 22 home on my street's block jumped on.

I told wife also that I think in two years granite counter tops will be cheaper and if I am wrong about that, then okay, the houses that have them now will be cheaper.

zoog
12-11-07, 01:39 AM
That was entertaining.:D Also pretty interesting about the mineral rights process.

As for countertops, I have read that the "real" granite countertops have been coming down in price for the past five years or so. Don't know how to find any hard numbers on this, or long-term highs and lows, but I think you are right in projecting they will be even cheaper down the road, provided the transport costs from quarry to kitchen don't spiral out of control. But if the wife wants new countertops now, what can ya do? Considering that you didn't have to work for the money that's paying for them, there's no real loss if waiting would have cost less.

Jim Nickerson
12-11-07, 01:50 AM
That was entertaining.:D Also pretty interesting about the mineral rights process.

As for countertops, I have read that the "real" granite countertops have been coming down in price for the past five years or so. Don't know how to find any hard numbers on this, or long-term highs and lows, but I think you are right in projecting they will be even cheaper down the road, provided the transport costs from quarry to kitchen don't spiral out of control. But if the wife wants new countertops now, what can ya do? Considering that you didn't have to work for the money that's paying for them, there's no real loss if waiting would have cost less.

My basic attitude about most of the the things I mentioned is that none of them are necessities for most people. It makes no sense to me to rip out and throw away functioning formica to replace it with something more expensive that has no serious greater functionality. My wife's final words was that the play-like granite was something she wanted, after which I went out back and screamed--"we are not average Americans, only our income is." then I threw up. I told her that as soon as I die, she should have enough money to do whatever she wants.

Andreuccio
12-11-07, 02:18 AM
My basic attitude about most of the the things I mentioned is that none of them are necessities for most people. It makes no sense to me to rip out and throw away functioning formica to replace it with something more expensive that has no serious greater functionality. My wife's final words was that the play-like granite was something she wanted, after which I went out back and screamed--"we are not average Americans, only our income is." then I threw up. I told her that as soon as I die, she should have enough money to do whatever she wants.

Great story, Jim. It's been a few years since I bought any property, but if I remember right most of the properties here have already had the mineral rights stripped away. They're owned in perpetuity by the heirs of whomever owned the property when they figured out you could sell a property sans mineral rights and get basically the same price you would get for it with the rights. Why not keep the mineral rights for the grandkids, just in case?

I do have a mineral rights story of my own, though. Many years ago, my great grandfather owned quite a bit of property here in Southern California. There was one large piece of land that he decided to sell off in smaller parcels. Not long after he had sold the last parcel, they discovered oil under the entire area. One of my Dad's cousins new the children of the guy who had bought the last parcel. Apparently, he asked my great grandfather for advice on how to play it, so my great grandfather helped him out. The guy became rich, and his kids drove porsches. (I don't know what, if anything, my Dad and his cousins were driving, but it wasn't porsches.) Oh well.

dbarberic
12-11-07, 09:06 AM
My neighbor was approached by a company to place a natural gas well in his yard. Payout was $20K to drill the well, annual royalties, and free natural gas for the life of the well.

I would have gotten some of the action too. My city has a law that requires all land owners within a 20-acre radius to approve the well and the company was paying neighbors to approve the well too.

Ultimately my neighbor did not put in the well. His land is only about 5 acres and it would have completely flattened the woods on his property and stunk up the yard with the smell of petroleum. My yard is only about 1/5 acre and I would have a nice view of a natural gas well on the right hand side of my yard. Yuck.

I wish though I quite a bit of land up here. Natural gas drilling is pretty hot right now and wells are popping up all over the place here (Northeast Ohio).

dbarberic
12-11-07, 09:07 AM
So my question is what should we do with this small windfall?

How about 2-3 gold eagles..... I'm sure your wife will "love" that.

GRG55
12-11-07, 10:03 AM
My basic attitude about most of the the things I mentioned is that none of them are necessities for most people. It makes no sense to me to rip out and throw away functioning formica to replace it with something more expensive that has no serious greater functionality. My wife's final words was that the play-like granite was something she wanted, after which I went out back and screamed--"we are not average Americans, only our income is." then I threw up. I told her that as soon as I die, she should have enough money to do whatever she wants.

Great story Jim. And I am happy to hear you didn't let the XTO Landman screw you.

But there is a dark side to this. After all the home reno hype the past decade or so, I was shocked (shocked, I tell you!) to hear that there was still one home in America without granite countertops. Since the owner of said home is refusing to succumb to fashion and the greater good of the economy, one can only conclude that a consumer led recession must be imminent, bonus or no bonus... :)

Jim Nickerson
12-11-07, 10:10 AM
My neighbor was approached by a company to place a natural gas well in his yard. Payout was $20K to drill the well, annual royalties, and free natural gas for the life of the well.

I would have gotten some of the action too. My city has a law that requires all land owners within a 20-acre radius to approve the well and the company was paying neighbors to approve the well too.

Ultimately my neighbor did not put in the well. His land is only about 5 acres and it would have completely flattened the woods on his property and stunk up the yard with the smell of petroleum. My yard is only about 1/5 acre and I would have a nice view of a natural gas well on the right hand side of my yard. Yuck.

I wish though I quite a bit of land up here. Natural gas drilling is pretty hot right now and wells are popping up all over the place here (Northeast Ohio).

What you see are the rigs that are present when the actual drilling is being done. Once a source is found, the rig is removed and low lying infrastructure put into place to collect or carry off whatever natural gas there is.

Jim Nickerson
12-11-07, 10:12 AM
How about 2-3 gold eagles..... I'm sure your wife will "love" that.

I'm seriously considering this option, the question is which coins are the best to buy. I know that is discussed here somewhere, but I'm too lazy to look for it.

DemonD
12-11-07, 02:13 PM
From what I understand krugerrands have the smallest premium, although they have been counterfeited a lot in the past. I think that's why the american eagles have such a high premium (the reliability of them). I'd look into krugerrands personally.

But Jim, cut your wife some slack. She is a chick. Give her like 500 and tell her to buy some nice shoes or a handbag or something and make her happy.

dbarberic
12-11-07, 05:00 PM
Buy your wife one of these for xmas:
http://www.usagold.com/gold/special/angels.html

http://www.usagold.com/gold/special/images/angel-pendant.jpeg

Minted 1871 - 1906
Fineness: .900
Actual Gold Content: .1867 troy ounce
Uncirculated

Invest in gold and buy the wife some jewelry.

Just don't tell her that when gold hits $2,000+ you going to flip it. :)

Jim Nickerson
12-12-07, 12:39 AM
From what I understand krugerrands have the smallest premium, although they have been counterfeited a lot in the past. I think that's why the american eagles have such a high premium (the reliability of them). I'd look into krugerrands personally.

But Jim, cut your wife some slack. She is a chick. Give her like 500 and tell her to buy some nice shoes or a handbag or something and make her happy.


In Texas, we don't cut slack, except probably in politics. My wife is a good woman and moreso because she tolerates me. She generally is happy and not because of stuff that she either buys or is given. I think people are mostly, if not entirely, responsible for their own happiness. I am rather convinced that "things" in themselves do not lead to or maintain happiness, except perhaps in Hollywood.

Jim Nickerson
12-12-07, 12:50 AM
Buy your wife one of these for xmas:
http://www.usagold.com/gold/special/angels.html

http://www.usagold.com/gold/special/images/angel-pendant.jpeg

Minted 1871 - 1906
Fineness: .900
Actual Gold Content: .1867 troy ounce
Uncirculated

Invest in gold and buy the wife some jewelry.

Just don't tell her that when gold hits $2,000+ you going to flip it. :)

Wife worked in Riyadh for 5 years and the thing that was popular there was to go to the gold souqs (sp.?) and buy 18K gold jewelry or so they said it was. She's got gold jewelry she never wears. If push comes to shove economically, wearing gold in some places may lead to it being snatched.

jimmygu3
12-12-07, 11:29 AM
In Texas, we don't cut slack, except probably in politics. My wife is a good woman and moreso because she tolerates me. She generally is happy and not because of stuff that she either buys or is given. I think people are mostly, if not entirely, responsible for their own happiness. I am rather convinced that "things" in themselves do not lead to or maintain happiness, except perhaps in Hollywood.

My advice is to buy the countertops. My guess is that your wife spends a lot more time in the kitchen than you, and I doubt she is the type to go asking for things like this all the time. It's very hard for savers (read:cheapskates) like us to spend money on something we perceive as unnecessary. The hard part is finding enough balance to treat yourselves now and then.

Sure, maybe advertising and what-not has made her want the countertops, but the fact is that she wants them and after a lifetime of (in your words) "tolerating" you, maybe she deserves something that she wants. The good news is that they last a long time and add value to the house. They really are an improvement over the formica ones. And when she is in that kitchen every day, she'll just get a little smile from knowing that her frugal, practical Jim decided to splurge on this one thing for her.

Just my $2.

Jim Nickerson
12-12-07, 12:04 PM
My advice is to buy the countertops. My guess is that your wife spends a lot more time in the kitchen than you, and I doubt she is the type to go asking for things like this all the time. It's very hard for savers (read:cheapskates) like us to spend money on something we perceive as unnecessary. The hard part is finding enough balance to treat yourselves now and then.

Sure, maybe advertising and what-not has made her want the countertops, but the fact is that she wants them and after a lifetime of (in your words) "tolerating" you, maybe she deserves something that she wants. The good news is that they last a long time and add value to the house. They really are an improvement over the formica ones. And when she is in that kitchen every day, she'll just get a little smile from knowing that her frugal, practical Jim decided to splurge on this one thing for her.

Just my $2.

Thanks, Jimmy, for your opinion on this most important financial topic. :)

Actually wife has only tolerated me for a bit less that 10 years. Formica lasts a long time too and is cleansible and doesn't pick up stains. I don't wish to argue heatedly over this, but just how are granite or play-like granite improvements over formica, other than you can put a hot skillet on them--I guess you can do that? As far as adding value, if the prices of homes are going down, what is it in the homes that is maintaining value? I think if one looks at the "value-added" aspect now there is probably nothing that one can put into a home that will return the expenditure anytime soon.

Other than from some social point of view for her, or anyone like her, being able to tell acquaintances or show them that "I have granite or something like it." I see NO value to spending good money to replace something that is perfectly functional and in good repair.

The importance of this, if anyone reads it, is people need to seriously consider why they may buy things besides the fact that the Joneses have something with which one would like to keep up, the marketers say "everyone should have this," or my thinking the only way I can make my wife believe I love her is to give her something--reasonably expensive?

Just so no one necessarily thinks I am a total curmudgeon, wife gets to do a lot of things for her own pleasures and has gotten to do a lot of things in regard to "decorating" our house.

jk
12-12-07, 01:00 PM
i love this thread.:D

jim, my advice, fwiw, is to let your wife decide. tell her you'd be happy to live with the formica and bank the money, but if she really wants the countertops, go for it. what's money for?


to console yourself, tell yourself that the amount involved is [probably] much less than the daily noise in your portfolio's value.

Andreuccio
12-12-07, 01:23 PM
Thanks, Jimmy, for your opinion on this most important financial topic. :)

Actually wife has only tolerated me for a bit less that 10 years. Formica lasts a long time too and is cleansible and doesn't pick up stains. I don't wish to argue heatedly over this, but just how are granite or play-like granite improvements over formica, other than you can put a hot skillet on them--I guess you can do that? As far as adding value, if the prices of homes are going down, what is it in the homes that is maintaining value? I think if one looks at the "value-added" aspect now there is probably nothing that one can put into a home that will return the expenditure anytime soon.

Other than from some social point of view for her, or anyone like her, being able to tell acquaintances or show them that "I have granite or something like it." I see NO value to spending good money to replace something that is perfectly functional and in good repair.

The importance of this, if anyone reads it, is people need to seriously consider why they may buy things besides the fact that the Joneses have something with which one would like to keep up, the marketers say "everyone should have this," or my thinking the only way I can make my wife believe I love her is to give her something--reasonably expensive?

Just so no one necessarily thinks I am a total curmudgeon, wife gets to do a lot of things for her own pleasures and has gotten to do a lot of things in regard to "decorating" our house.

A few questions:

How long do you plan to stay in the house? I'd forget about cost/payoff. I agree with you about dropping home prices, but if you'll be there a while it's more a fuction of cost vs. utility combined with comfort factor/beauty. Only you (and your wife) can make that calculation.

Have you gotten other bids? One place you might try, if they have these in your area in Texas, is independant tile/granite supply houses. Here in L.A. there is a whole area of these. You can get a better price on the materials, and they'll have business cards from contractors they can recommend. You might find the price for real granite to be lower than the "play-like granite" your being quoted on now.

Consider materials other than granite. We went to a tile supply place and found an outdoor porcelain tile with coloring that looks like granite. With a colored grout, it's a really nice look. It's indestructable, and was relatively inexpensive. The tile itself was a closeout, so we got it for less than $1/square foot. The other materials are minimal (grout, backing board, etc.), and it sounds like you're fairly handy, so you could do the install yourself. If you're curious, let me know and I'll email you pictures.

Jim Nickerson
12-12-07, 02:17 PM
i love this thread.:D

jim, my advice, fwiw, is to let your wife decide. tell her you'd be happy to live with the formica and bank the money, but if she really wants the countertops, go for it. what's money for?


to console yourself, tell yourself that the amount involved is [probably] much less than the daily noise in your portfolio's value.

jk, you guys are all too easy. If wife decides, its a done deal.

The question of "what is money for?" is an excellent question, almost on the level of "what is the value of anything?" and "why is there a universe?"

The answer to the question that I have heard my entire life is that "money is to be spent." Certainly that is true, but the important questions should be "on what?" and then "why?".

On these fora it seems some are worried about their retirement. How are they going to achieve the "American Dream"? I think I have opined that the only way to get to retirement with anything if you are an average worker is not to spend every cent one makes along the way. i.e. consume less. Wife has life expectancy of 30 more years which, of course, she may or may not make, or alternatively she could exceed that. She is not highly educated and has no unique skills, so if along her way push comes to shove, she is not going to go out and earn much.

We also talk or at least read about the lack of savings in the US. If one buys stuff one does not need then it is hard to save, assuming one is not obscenely wealthy.

Andreuccio, I am handy, and I could put in tile. I put in a play-like Jacuzzi with nice tile (and which we never use) for probably 2K vs. a quote of ~7K. Still I'd have to cover up or take out a perfectly functional contertop and the top of an island and do a good bit work to get back to where I started functionally, but it would look different. I lived in a big condo once that had tile countertops. I don't remember that I was any happier there nor did that wife seem to be.

I'll tell you what I am going to do. I am going to put up a retractable awning over our back deck, assuming I can figure out how to get it stably attached to our house. In the summer mornings that will have some value in lessening the heat penetration into the house. We have one of these on the travel trailer, and it almost is like adding a room to the trailer.

And, yes, jk, I do have days were I lose more than we are talking about, but that does not circumvent the issue of doing away with something that has nothing wrong with it and replacing it with something primarily because it is "in." Before granite countertops became "in" I don't recollect anyone I ever knew complaining about their countertops and in the same breath saying "I wish granite countertops existed."

I think this dead horse is dead.

jimmygu3
12-12-07, 02:19 PM
i love this thread.:D

jim, my advice, fwiw, is to let your wife decide. tell her you'd be happy to live with the formica and bank the money, but if she really wants the countertops, go for it. what's money for?


to console yourself, tell yourself that the amount involved is [probably] much less than the daily noise in your portfolio's value.

jk, as usual, has the right idea. Let her decide.

If you just blew the money on a vacation, a party, a limo ride, etc., you would have nothing left to show for it. With the countertops, it is something your wife will enjoy for a long time, and that will add value to your house.

I wasn't saying that you'll get every penny back out when you sell the house, only that it is a home improvement that will provide some perceived added value over formica at the time of sale. Maybe it helps you sell the house faster to avoid carrying costs or maybe you actually get more for the house than you would have with formica. Whether home prices rise or fall is irrelevant. To a home buyer, granite or quartz-composite countertops are a premium feature that makes a house more desirable.

We had stuff called Silestone in our last house. Basically crushed quartz with some sort of binder holding it together, making it stronger than granite, according to the brochure. My wife loved it and I thought it looked 100% better than our scratched-up, painted-over formica. You could put hot things on it, cut vegetables on it, and it has the look and feel of stone instead of plastic on plywood.

Not that formica isn't completely functional and decent looking, but so are faux wood paneling, linoleum, push mowers, cars without air conditioning, etc. I have had times in my life when I would have been thrilled to have any of the above, because I had no money and I lived within my means. But for those with the money, there are upgrades available, and they should not simply be dismissed as frivolous. As jk said, "what's money for?"

Disclaimer: I am not affiliated with the Silestone company or the kitchen renovation industry. ;)

GRG55
12-14-07, 01:53 AM
jk, you guys are all too easy. If wife decides, its a done deal.

The question of "what is money for?" is an excellent question, almost on the level of "what is the value of anything?" and "why is there a universe?"

The answer to the question that I have heard my entire life is that "money is to be spent." Certainly that is true, but the important questions should be "on what?" and then "why?".

On these fora it seems some are worried about their retirement. How are they going to achieve the "American Dream"? I think I have opined that the only way to get to retirement with anything if you are an average worker is not to spend every cent one makes along the way. i.e. consume less. Wife has life expectancy of 30 more years which, of course, she may or may not make, or alternatively she could exceed that. She is not highly educated and has no unique skills, so if along her way push comes to shove, she is not going to go out and earn much.

We also talk or at least read about the lack of savings in the US. If one buys stuff one does not need then it is hard to save, assuming one is not obscenely wealthy.

Andreuccio, I am handy, and I could put in tile. I put in a play-like Jacuzzi with nice tile (and which we never use) for probably 2K vs. a quote of ~7K. Still I'd have to cover up or take out a perfectly functional contertop and the top of an island and do a good bit work to get back to where I started functionally, but it would look different. I lived in a big condo once that had tile countertops. I don't remember that I was any happier there nor did that wife seem to be.

I'll tell you what I am going to do. I am going to put up a retractable awning over our back deck, assuming I can figure out how to get it stably attached to our house. In the summer mornings that will have some value in lessening the heat penetration into the house. We have one of these on the travel trailer, and it almost is like adding a room to the trailer.

And, yes, jk, I do have days were I lose more than we are talking about, but that does not circumvent the issue of doing away with something that has nothing wrong with it and replacing it with something primarily because it is "in." Before granite countertops became "in" I don't recollect anyone I ever knew complaining about their countertops and in the same breath saying "I wish granite countertops existed."

I think this dead horse is dead.

Jim: I can hardly wait to follow all the advice you're about to get on awnings... :)

dbarberic
12-14-07, 08:46 AM
Mistake #1 was telling the wife that you're receiving a windfall of $3K.

It was already spent before the ink was dry on the check.

Jim Nickerson
12-14-07, 10:43 AM
Greg, I lead a low-level life in regard to social interaction--iTulip being the exception. I am surprised anyone replied to this tread especially about the countertops. I have garnered some value from the discussion.

dbarberic, acutally she got the estimate for the countertops before she knew the amount of the actual mineral rights lease, so she is not guilty of having money that is burning a hole in her pocket, so to speak.

Wife is completely, and I do perceive completely, over whatever was her disappointment with my position on what to do to our house. Wife is a good woman and not prone to sulking beyond about 24-36 hours.

I appreicate you guys' thoughts.

GRG55
12-15-07, 01:27 AM
Greg, I lead a low-level life in regard to social interaction--iTulip being the exception. I am surprised anyone replied to this tread especially about the countertops. I have garnered some value from the discussion.

dbarberic, acutally she got the estimate for the countertops before she knew the amount of the actual mineral rights lease, so she is not guilty of having money that is burning a hole in her pocket, so to speak.

Wife is completely, and I do perceive completely, over whatever was her disappointment with my position on what to do to our house. Wife is a good woman and not prone to sulking beyond about 24-36 hours.

I appreicate you guys' thoughts.

IMHO this community is much the richer for it Jim.