At last, I finally experienced the longest month of my life: June 2020. I'm so glad the month and the quarter are behind us. But it's also exhausting to think about what lies ahead in an even longer July as America experiences a second wave of COVID-19 cases.
In this 2Q2020 Financial Samurai review, I just want to recap some things that happened so I can reminisce more accurately when I'm older. I already don't remember what happened in January and February without checking my notes.
Further, I'm absolutely sure 50 years from now, my grandkids will want to get an idea of what grandad was thinking during a global pandemic. I hope all y'all keep a recorded journal of this crazy time as well!
2Q2020 Financial Samurai Review: Surviving The Rebound
April 2020 was the worst month of the pandemic because it was the first full month of the shutdown. April was when people were max nervous and max uncertain.
May 2020 saw a strong rebound from April lows in all segments: retail sales, home sales, credit card spending, oil consumption, traffic, and so forth. I was surprised by how quickly many things recovered.
I'm sure when the data for June comes out, it will show a continued rebound in many facets of the economy. Although, air travel and dining traffic are still way down.
It's safe to say that over a million people protesting in close quarters about racial injustice in June probably has something to do with the uptick in COVID-19 cases across America. Therefore, we should push back our assumptions for flattening the curve by at least a quarter.
I used to think we'd have an open economy with extensive safety measures by July 31, 2020, when the enhanced unemployment benefits run out. Now I believe the Federal Government has no choice but to extend the enhanced unemployment benefits. The government needs to provide even more stimulus money to the American people.
It's true that some folks don't mind the indefinite lockdowns because they are experiencing a lot of benefits. While others are going to be starved out of existence due to the extended forced shutdowns. It makes me sad that so many Americans have lost jobs. At least the jobless claims are slowing.
Mentally, I'm now prepared to shelter-in-place until July 1, 2021. At which time, I pray a vaccine will have been manufactured and widely administered. Being free and safe would be nice.
Net Worth Overview: Lucky Recovery
Mostly thanks to the Federal Government and the Federal Reserve, my net worth has rebounded back to an all-time high. According to Personal Capital, the free financial tool, my net worth is up 7.1% for 1H2020. I'm pleased with this result because my annual net worth growth goal is 10%. I just have to remind myself the rebound is mostly just luck, not skill. Protecting the gains is paramount!
I'm still down in my equity positions since the S&P 500 is still down about 7% for 1H2020. However, my positions in bonds (3X stocks) and tech stocks have all reached new highs. Therefore, my overall public investment portfolios are up about 5%.
Unfortunately, I shouldn't have sold 75% of my Tesla holdings between $800 – $1,010! If I had kept my once 150 Tesla shares from 2018, I would finally be happy, rich, and free!
Alas, I've consistently proven to myself that I'm not a very savvy individual stock investor. As a result, I keep my individual stock investments to no more than 10% of my public investment portfolio.
Below is a snapshot of where I keep my remaining measly 30 shares of Tesla. The equity positions are all smaller since I have been taking profits. It is in the equity portfolio I transferred over to Wells to get relationship pricing on my mortgage refinance last year.
If you've been sitting on your hands, waiting for a time to start something online, now is the time. You want to build as many defensible income streams as possible. We cannot count on the government to save us forever.
The reality is, my net worth could be up even higher or down given roughly 35% of my net worth is in real estate. For my less-liquid assets, I always try and keep them conservatively valued on the books.
My #1 financial goal is to protect my gains. As a result, I've raised a lot of cash. The first rule of financial independence is to not lose money.
I'm already breaking this rule because roughly 18% of my net worth is in equities which are overall down for the year. However, my overall public investment portfolio is up due to my overweight position in bonds. My goal is to end 2020 with a positive net worth of 10%.
Adventures In Real Estate
Real estate under the $2.5 million price point in San Francisco seems to be doing well. With mortgage rates at record lows and more people wanting to buy nicer homes, the demand is quite strong. However, you never know the true value of your real estate until you sell. I encourage buyers to be very judicious when buying in this market.
Given how much I love real estate, I've been looking extensively for real estate deals in the western part of San Francisco. Not only do you get more space, but prices are also cheaper as well.
Due to the rise of work from home and COVID-19, I strongly believe there will first be a migration to less densely populated areas of your city. Why move to a new city and state when you can save 20% – 40% moving just 15-30 minutes away?
There's just not a lot of inventory for ocean view homes. However, I was able to find one that listed in April 2020, the worst month you could ever list a home. I had several private showings and always had nice conservation with the listing agent.
Unfortunately, the sellers are rich! As a result, negotiating their price down has been very difficult. I've been using every negotiating tactic in the book. Eventually, I'll write about these new tactics for all of you to use as well.
The sellers spent about $200,000 sprucing up the house and fixing all issues. I want to buy the home, but I'm also worried we could be entering an economic depression instead of merely a suppression. As a result, I need a bigger price discount before proceeding.
Alternative Real Estate
As for real estate crowdfunding, after getting a $177,717 distribution in February 2020, I thought I was done for the year. But to my surprise, I received another $9,714.42 distribution in May.
I'm expecting some losses out of my remaining 15 real estate crowdfunding investments because a couple of them are in the hospitality industry (Dallas Sheraton and Virginia Crossing Hotel). Those industries are dead, although there are some signs of life.
The commercial real estate that seems to be in high demand are data storage and self-storage e.g. commercial real estate that doesn't involve a lot of people!
Below is an example of a self-storage investment by CrowdStreet. I have not done the due diligence on this investment. It's just an investment that popped up in my e-mail that looks interesting.
My daughter is now six months old, yay! She is so cute. I absolutely adore her and love to snuggle and kiss her cheeks 10X a day. If there's any time to have a baby, it's during forced lockdowns. Even if the economy was open, we wouldn't have traveled for at least a year.
At six months old, she is blowing raspberries, rolling over, and sitting up on her own. Over the next three months, we will continue to work on her gross and fine motor skills. By nine months, perhaps she will be able to crawl and stand with assistance. We feel blessed she is a happy baby who is always smiling.
My son is three years and two months old. He's finally sleeping through the night, most of the nights. Hooray! He continues to be a ball of energy and I love to play with him every day. Unfortunately, he doesn't like lots of hugging and kissing. Further, he still prefers his mommy. Wah.
I will continue working with him on his gross motor skills: catching a ball, climbing ladders, walking on a balance beam, and riding on a trike. He is beginning to write numbers and letters.
Family Is Everything
Whenever I think back to the 2008 – 2009 financial crisis, the main memory that stands out is our little 16-person wedding on a beach. I'm hoping 10 years from now, the main memories that will stick out are my time with my family. Is there really anything more important?
We're seriously considering homeschooling our children for life. The pace of learning seems so much faster than at school. For those of you who are more productive working from home than working in an office, it's the same thing.
If we do go the homeschool route, we just need to find other homeschooling families so our kids can all play together. I'll be responsible for PE, Math, Economics, Mandarin, Business. My wife will handle the rest!
Finally, we are extremely thankful none of us have gotten sick since the lockdown began on March 18, 2020. Previously, our son had been sick constantly while attending preschool, infecting all of us in the process.
I know they say it's good to get sick early and often to develop your immune system. However, it's also nice to have a reprieve. Besides, he is still getting plenty of germs from me, my wife, and his baby sister.
Financial Samurai 2Q2020 Review
July 2020 is Financial Samurai's 11-year anniversary. Wahoo! I told myself in 2009 that I would write 3X a week for 10 years. Once that goal was achieved last year, I decided to keep on going.
I have been experimenting more with monetizing Financial Samurai this year. So far, so good, despite all that's going on. I'm always curious about new products that enable us to make more money, save more money, or better manage our finances. If the company can also sponsor Financial Samurai, then great.
However, I'm discovering that focusing too much on business development and revenue generation bums me out. There's just an endless amount of things I could be doing to try and generate more revenue. When the economy is uncertain, it's only logical to try and build a larger financial buffer.
I feel the bloggers who focus on monetization first and writing second are more susceptible to dissatisfaction and unhappiness. There's this fine balance between doing what you love and getting paid for it that everyone must discover on their own.
At the end of the day, I'd like to just write. It's nice to keep things simple, instead of trying to manage a big team of freelancers pumping out content for the search engines. That would feel very much like work. Keeping lean is also nice during times of uncertainty.
New Help On The Way
What I am excited about is having my wife do more writing and backend work. We made a pact that after our daughter turns six months, she would start helping more with Financial Samurai. I think it would be wonderful for her to share her perspectives.
Recently, she wrote about how she was able to get double the life insurance coverage for less money. The post did great, so I'm putting her in charge of life insurance and family finance topics from now.
Perhaps I'll even hire a regular staff writer who can publish a couple posts a month for more variety.
2Q2020 Financial Samurai Review: Mostly Luck
Things could have been so much worse in 2Q2020. Thankfully, the government stepped in and most of us cooperated during shelter-in-place.
For the second half of the year, I suggest everybody:
- Boost cash reserves
- Build new streams of income
- Find the ideal living arrangement
- Mentally prepare for in-person schools to remain closed until 2021
- Find a mastermind group to keep you sane and motivated
- Protect the gains you've made
- Get busy living
If the stock market and the real estate market reach new record-highs, then we should celebrate. But let's not expect our investments to continue performing with so much economic devastation all around us. Frankly, it feels absurd that our investments have rebounded so much.
The economy is highly susceptible to rolling lockdowns. Therefore, we must get used to them.
The good thing about locking down for a couple weeks at a time is that it'll seem like nothing. When you've already locked down for four months, anything less won't be as troublesome.
I'm personally tired of keeping my life on hold. I want to get busy living now. As a result, I'm determined to spend money on anything that will improve the quality of our lives today.
Reader Questions And Suggestions
Readers, please share how your 2Q2020 went. Are you pleasantly surprised we've rebounded so much? What are some ways in which you plan to protect or strengthen your finances? What are some nice wins you achieved? I hope you enjoyed my 2Q2020 Financial Samurai review.
Check out Personal Capital, the best free tool to help you become a better investor. With Personal Capital, you can track your investments, see your asset allocation, x-ray your portfolios for excessive fees, and more. Staying on top of your investments during volatile times is a must.
Pick up a copy of Buy This, Not That, my instant Wall Street Journal bestseller. The book helps you make more optimal investment decisions so you can live a better, more fulfilling life.
For more nuanced personal finance content, join 55,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. 2Q2020 Financial Samurai review is now complete.