Is There A Natural Spending / Savings Balance?

Balanced Spending by Andrew MacGill Flickr Creative commonsFor the past several months, I’ve been spending tens of thousands of dollars remodeling my new old house. I’m only its second owner in the house’s 68 year old history and it needs a lot of work as a result. For example, I just spent $9,000 painting the exterior, the fence, the windows, and all the metal fixtures. The painter estimated the house hadn’t been painted in 25 years! He mentioned that his crew normally uses two gallons of spackle to fix stucco cracks on a house my size, but they used eight gallons to smooth everything out.

Even though I budgeted extra money to bring the house up to date, I still feel dirty spending so much money. It makes me wonder whether we all have some type of self-correcting overspending limit, just like we all have this self-correcting over-eating limit. If we didn’t, we’d all be obese and broke. Nobody I know wants to work forever and feel the constant stress of having no money.

If the average desire to spend is a 5 out of a 1-10 point scale, I’m about a 3. But for the past several months, I’ve been spending at an uncomfortable 9. I’m curious to know where would you rank yourself on the spending scale?

Some of us might have to hit rock bottom before we find our happy spending / saving balance, but at least that makes future spending and savings habits that much stronger.

How To Not Get Pulled Over For A Traffic Ticket: Race And Sex Matter!

Never get a traffic ticket, rolls royceWhen I got my speeding ticket for going 35 mph in a 25 mph zone, all my friends laughed and jibed.

Are you sure Moose can even go 35 mph in two blocks?” (Moose was a slow, 14 year old Land Rover Discovery)

How the hell can you speed during rush hour traffic at 6:45pm? It’s bumper to bumper then!” (SF traffic is horrendous thanks to robust employment compared to five years ago)

Dude, you’re a victim of racial profiling. Out of all the cars out there, they chose your piece of shit? Don’t they have something better to do?

I laughed at all three responses, but then I was asked again, “What color were the police officers?

They were both White,” I responded.

Ah hah! Proof right there. You were targeted!” responded my Hispanic friend.

Come on, that’s just a coincidence,” I replied, even though I was miffed at getting pulled over when everybody was going the same speed during rush hour.

Never forget Rodney King, Don Sterling, Trayvon Martin, Eric Garner and the town of Ferguson!” shouted my friend with one fist raised up high!

Motif Investing Review: The ETF And Index Fund Killer?

Various MotifsAfter spending 13 years in equities on Wall Street, I’ve been able to personally speak to some of the most successful institutional investors around on how to invest and manage money. The one consistent piece of advice I always hear is to invest in long-term trends and forget about the day-to-day minutiae. For example, shorting/underweighting Japanese equities since the late 1980s and going overweight commodities in the 1990s have been great winning decisions.

As a result of my experience working with successful fund managers, I weaned myself off of trying to constantly trade around the market after the NASDAQ burst and have been focused on long-term, idea-driven investing ever since. I’ll always have a Unicorn Fund to punt around for the next multi-bagger stock, but the fund is always less than 5% of my net worth or 10% of my entire equity exposure.

Motif Investing is a fascinating company based right here in the San Francisco Bay Area. I’ve been following them for the past couple of years after they raised a $25 million round of funding led by Goldman Sachs in 2013, won the Finovate Fall 2013 and Finovate Spring 2014 “Best In Show,” and raised another $35 million round in 2014 led by JP Morgan. Motif Investing makes most of its money off transactions (trades) when you buy or sell one of their “motifs” based on an investment idea you have. They might also expand into the money management business as well.

A motif is essentially a basket of 30 stocks you can invest in, which are aimed to profit from a specific idea or underlying theme. Let’s say you think new housing construction is going to quicken in the US next year. You could buy a housing motif which might contains Lennar, KBH, Home Depot, Bed, Bath, and Beyond, Zillow, and more in various weightings. Given my focus on buying winning long-term ideas and ignoring the short-term volatility, I really like Motif’s value proposition for retail investors.

The Epitome Of Perseverance: Joe Locke’s 14-Hour Swim Through Cold And Darkness

Farallon Islands Incredible Swim Joe Locke

Joe swimming at 2am in the Pacific Ocean

Life is funny. I remember looking out my new living room window one morning and seeing the Farallon Islands for the first time. Even on a sunny day, they sometimes don’t appear given they are 30 miles away. But everything was crystal clear this morning and I could see the island’s entire silhouette.

I distinctly remember thinking to myself, wouldn’t it be crazy if someone swam from the Farallon Islands to the San Francisco shore and grabbed a cheeseburger for lunch at Outerlands Restaurant?

Then that afternoon I saw on the news a man had just finished swimming from the Farallon Islands to the Golden Gate Bridge in 14 hours! What’s more, I knew the guy from my previous career in finance. Small world!

I reached out to Joe to have him share his incredible accomplishment of swimming in frigid 53-55 degree waters for 14 hours straight, starting at midnight. I’m constantly looking for motivation, and I just cannot believe Joe was able to persevere for so long. After two hours of swimming in 78 degree Hawaiian water I’m done!

For those who have a propensity to quit way too soon, please have a read. There are just too many people who never achieve their full potential due to not sticking things out.

Why Are People So Ashamed About Inheriting Money?

InheritanceHow did I get my million dollars? It was simple. One day, I bought an apple for a nickel. That night, I cleaned and polished it. The next day, I sold it for a dime. With that dime, I bought two apples. That night, I cleaned and polished them, and sold them the next day for twenty cents. I repeated that process every day, without fail, until I had amassed $6.40, whereupon my grandfather died and left me $999,994 in his will…” – A Yahoo commenter named Dave

A funny thing occurred on Yahoo Finance the other day. A fellow blogger by the name of Anton was able to get interviewed for a focus piece on how he became a millionaire by age 27. When I first read the article, I was pretty pumped. I thought to myself, Neat! Another guy showing the world that it’s possible to get rich through disciplined savings and investing! I had experienced some similar luck with investing, earnings, and savings in my 20s as well so I thought his overall story was believable.

I never once questioned how he got to $1 million because he offered solid tips, invested in real estate, and spoke so eloquently on camera. But I guess the massive amount of attention he got from being featured on Yahoo’s front page for a couple days wore on him. He admitted on his Facebook page just days later that he had actually inherited 75%-80% of his net worth from his parents who died years ago!

Immediately, everybody started bashing Yahoo Finance and Anton for the deception in the comments. They’ve got the toughest crowd online. Despite all the blowback, if his new revelation about his inheritance is true, he’s still a millionaire!

Bankers, Techies, And Doctors: You’ll Never Get Rich Working For Someone Else

Although I estimate an entrepreneur needs to make at least 35% more to replicate his or her day job income to run in place, I’m truly beginning to realize after two and a half years how much more upside there is to entrepreneurship than to working for someone else.

I came from the world of banking where 23 year old graduates with one year of experience can clear $100,000 no problem. Despite ascending from Financial Analyst, to Associate, to VP, to Director within 10 years, and earning Director level compensation for three years before leaving, I still wasn’t able to earn and save enough money to buy my dream home in Kahala, Oahu.

Dream House In Kahala, Oahu, Hawaii

Contemplating on never being able to afford my dream home

The above is a picture of me sitting on a lanai, looking down the southeast coast of Oahu towards Koko Head. The home is on Blackpoint Road in the exclusive Kahala/Diamond Head neighborhood. Since I was a kid, I’ve always dreamed about living here one day. But I’ve come to realize my childhood dream will likely never come true.

The asking price for this 6,000 sqft Kahala home with 4 bedrooms and 4 bathrooms is $3.5 million ($583/sqft). The lower level is a 1,800 sqft rental apartment that is going for a below market rate rent of $2,500 a month. The main house is therefore not that huge. $3.5 million is actually great value given the view and the size of the house. Other houses in Kahala are easily asking for $900/sqft or more.

If I had $4 million cash, I would buy this house in a heartbeat. It needs at least $300,000 in renovations given it is quite dated. But the lanai and the spectacular view are priceless. All I think about when I’m looking for my dream home is being able to sit outside in 72-85 degree weather with an ice cold beer and write about various adventures. 

How To Prevent Your Wealthy Man From Straying

Kissing During Sunset

A female friend asked me over a drink one day whether I had any tips on how she can lock down her husband forever. I immediately started imagining her throwing her hubby in a dark cage after sunset and maniacally laughing as she twisted a thick key to keep him hidden from the world. Her husband is a wealthy fella who is charming enough to have a whole lot of extracurricular fun if he wanted to. She’s attractive and successful as well, but still she has fears.

My friend’s situation reminded me of a UC Berkeley study that found wealthier people are more prone to cheating, taking candy from children, and failing to wait their turn at four-way stops. This is pretty obvious if you think about the correlation. When you’ve got more money, you’ve got more options. When you’ve got more options, you’ve got more temptations. When you’ve got more temptations, the chances of fulfilling those temptations goes up.

Men who know you’re the best thing they’re ever going to get are much less likely to cheat. They’ll probably appreciate you much more, be more attentive to your needs, wash the dishes, do the laundry, vacuum the floor, take out the trash, keep the bathrooms clean, give you foot massages, buy you flowers every week, take you on romantic trips to Target, and maybe even let you go out for drinks with your handsome physical trainer. Nirvana right?

I’m always on the lookout for any type of correlation between relationships and money because the topic is so fun! Several years ago a blogging buddy sold his personal finance site for $4 million dollars. Soon after, he divorced his wife and decided to travel the world with another woman. Coincidence? Or did money give him the courage to break free? It’s like Obamacare allowing millions of Americans to no longer be tethered to a job they despise anymore. Screw you boss! I’m outta here!

Let’s discuss three strategies women can deploy to lock down their men and create happier relationships.