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.
Finally, my net worth has grown due to continued passive investment income and positive cash flow from Financial Samurai. It is very nice to own an asset that cannot be shut down.
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.
Family Happenings
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.
Related posts:
Your Wealth Is Mostly Due To Luck, Don't Kid Yourself
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.
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Hi Sam,
Thanks for sharing your overview and performance. Amazing to see the returns you’re realizing in real estate, is that on Fundrise or CrowdStreet? I know you endorse both platforms, would be great to hear a comparison on both.
My wife is on the team developing the vaccine for J&J, stay optimistic, good things are coming…
Best regards!
Check out this new post I wrote on Fundrise or Crowdstreet. Fundrise Or CrowdStreet: Which Is The Best Real Estate Platform?
Great job beating the S&P 500 which is my benchmark and being in positive territory. I’m “only” back to even compared to the beginning of the year, but that’s good enough for me. Like you, being even may be a fantasy-land given my real estate holdings.
I was buying into the dip in March, but then Governor Newsom announced the eviction moratoriums (now extended to September 30) with collection of owed rent that could extend another 12 to 15 months until AFTER the Governor declares the emergency is over. As someone who is heavily invested in multi-family, I had no choice but to sell some stocks and build a cash reserve rather than take advantage of the market dip. I certainly understand the need to not displace renters during the health crisis, but for how long will landlords shoulder the burden without relief?
Rents have not fallen off a cliff for me, but I definitely have non-payers. After tenants owe 3+ of rent, there is very little chance they will ever pay it back. In any case, I need to maintain a significant reserve to avoid default on my building expenses.
What asset classes have performed the best in your real estate crowdfunding portfolio? Where do you see potential?
Retired at 53, 4 years ago.
You asked for our financial updates, if we were surprised…
Up 6.7% from the beginning of the year. 15.6% year over year.
Very heavy self managed real estate notes.
Not surprised, pretty typical YOY and month to month. Invest in what you know.
In the process of selling rentals in Memphis moving to 1031 crowd funding in DST to avoid the depreciation recapture and cap gains tax. Less headaches managing, but lower return.
Hi Sam,
This blog will be a record of your history for your grandchild to view and make his/her decision on his/her life accordingly.
WTK
Was the house you were trying to buy just listed today publicly? If so, great looking house and amazing views. I’m interested to see if it will sell above asking price.
Hey Sam, I like your comment about finding a mastermind group. The one piece of advice I would give about a mastermind group from my own experience, is to find a group that charges an admission fee to be part of the group. You get a way higher quality of people if you go that route. I’ve tried the free mastermind groups in the past and it generally is a group of flaky people who are less established in business. People don’t take the commitment to meet seriously and the group falls apart because no one has skin in the game. About 9 months ago I joined a group called Entrepreneurs Organization (EO). They are a global nonprofit that pairs you up with a group of 6-10 other entrepreneurs. The requirement is that you have to have a least a million in sales per year for your business (they verify this with your accountant). Additionally the entry fee is about 4500 per year (although they’ve now discounted it to about 3300 a year because of the economy).
Anyway there’s tons of other good Masterminds out there. Before doing the EO group, I joined a local mastermind group that charged 500 per month. It was great also but I just felt like it was slightly too expensive.
Good point on looking for higher quality / committed mastermind folks.
I don’t think I’m willing to spend $3300 a year, but maybe I can just find folks online in separate spaces to rap with.
What benefits have you found being in yours?
Hey Sam,
I love your website so much. I encourage you to explore the homeschool route if it is something your family is interested in. My mother and father homeschooled the six of us going back to the the 70s. They were pioneers and the homeschool industry has grown so much over the last decades. My wife is pushing to do this with our three children given the pandemic. It’s an awesome journey if your family is up for it.
I’m not hopeful that employment benefits will be extended. It doesn’t seem that the federal government has the will and organization at this point to effectivley address the public health and economic distress arising from the pandemic. Republican leaders have made it pretty clear that they dont favor any further extensions. Unfortunately, that means the response will be very inconsistent and depend on which state (and even which city) you live in. Working parents also face some challenges ahead– the extended FMLA that was passed back in March helps somewhat but there are still many loopholes, and gaps. If there’s a silver lining to all this, maybe it will bring a renewed national interest in strengthening federal programs to support universal health coverage, working families and unemployment safety nets.
Not surprised, but rather SHOCKED the market has rebounded so quickly given the new is so bleak. It doesn’t make sense, but hey what do I know?
I’ve locked in some gains in the process and want to build my cash buffer. I believe there will be investment deals in the future and I’d like to be a bit prepared. In terms of living, we are converting our garage into a game room for the kids!
Glad you are enjoying your daughter and son, and your wife will be participating more on the FS site. As a reader, the family Samurai ‘slice-of-life’ is fun. Interesting to picture your wedding on the beach, what a moment! Anyway, with both of your writing skills, your kids will be top-tier communicators.
Know what you mean about Jan and Feb, my only memories for those months are Kobe Bryant and impeachment. And both seem like years ago.
Hi Sam
Great post! You mention correctly about protecting the gains in your net worth at this time. Stock market is up. Wondering if you are planning on or have taken some of your gains out of the market at this time ?
I am. Feels so great to have cash.I would feel really bad my wealth went all the way back down.
Sometimes hindsight is 2020 (no pun intended). We think of things that we should have done differently so our lives could be different today. Sometimes they are blessings in disguise (at least for me). I have come to realize an easy solution would just put me in a position where it would be an easy loss of money (easy-come-easy-go).
Interesting that you have 1k shares in “T”. Why not “VZ” in that space? I’m assuming the dividend delta? Just curious overall since I’ve thought about owning T for the yield but have not done it so far.
There are an endless amount of stocks to own. I didn’t do the VZ comparison. Feel free to pitch it to me on why it’s better. thanks.
Thank you for another great written contribution!
Congratulations on your higher than ever net worth at the close of Q2. We found ourselves in the same situation, but I’m still not sure what it all means with so much government support flowing into the markets.
Here in Vancouver public life has mostly returned to normal. There are less people due to the drop in tourism, but overall traffic levels are as they were.
Totally a personal opinion, but I am kinda doubtful a vaccine is coming. Even if there was a vaccine, fast global administration would be a nightmare in this political environment. When I worked through H1N1 many people were fearful of being vaccinated due to safety concerns- legitimate or not. So if a covid vaccine were produced that was voluntary, I’m unsure how compliance would be encouraged without eroding more human rights.
Not sure what to say about home-schooling. Seems like a good idea to me, but my sister-in-law who is a masters specialist in early learning (teaches grade 2) says forget it. Pretty difficult to develop EQ skills if kids aren’t in a classroom.
Thanks, although much of the rebound is luck. And without the income generated this year, my net worth would not have gone back to its previous high. Therefore, I need to grow it by another 2-3%. I’m going to feel like an idiot for losing all the gains if we seriously relapse. Hence why I’m happy to take chips off the table.
It’s good you have a never vaccine mindset. If you’re good with that belief, then you’ve got a lot of upside!
My elderly mother has numerous rental properties, and all but one of her tenants have continued to pay rent due to enhanced unemployment and PPP. Most of the time, we try to be thankful for that, instead of focusing on the one tenant who has not been fulfilling the rental contract. But occasionally, I cannot help but to be furious that they do not pay as agreed, when I know he is getting enhanced unemployment. It is like the state owns her property, because we cannot evict until 90 days after the COVID state of emergency is over! I don’t even think we can evict then, because I read something indicating that back rent will be a civil matter. So mom has new dependents, whom she has never met. It was the second time I used a rental agency to find her a tenant, and I had been locating her tenants myself for 20 years without an eviction. Lesson learned: rental agents just do not care as much as the owners. I hired them because the property was 200 miles away and my kids were in school. On second thought, I should have waited to place tenants until my kids’ winter vacation so I could do it personally. These particular tenants were already paying late before this pandemic and now my mom is stuck with them. I feel sick with guilt that my decisions caused this tenant nightmare for my elderly mom. Other than that, I am grateful my stocks are doing well. I read your post in March about predicting a market bottom and it gave me the courage to buy, so thank you for that. Another positive for my finances is that my spending is way down due to the lockdown, and I intend to keep my increased savings rate going forward.
Hopefully your mothers tenant will eventually honor the contract. It might help to think about the Non-payment is just something temporary.
How did you screen tenants in the past?
Hi! I recently came across your blog last month and am really enjoying it so far! You mentioned that you “…keep my individual stock investments to no more than 10% of my public investment portfolio.” Do you have any suggestions in terms of ETFs for where to invest the remaining 90%? I’m fairly new to investing so I’m not ready to delve into real estate investing (besides my mortgage). However, I’d like to get into the habit of transferring a certain amount of money into my brokerage account each month – just not sure where to invest that money.
Thanks for another great article; however, I’d like to correct this statement:
“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.”
I don’t think this is safe to say because the data actually shows that this isn’t true. Cases in cities with the largest protests aren’t in fact spiking, and instead, the data shows that the spikes are happening in states where governors chose to re-open early. Cases are increasing in Florida, Texas, Arizona, and others which all fully re-opened in mid-May. This goes along with Fauci’s statement that *indoor* (not outdoor where the protests happened) are the most dangerous places right now.
I know this correction has little to do with the substance of the article, but I think it’s an important correction to make. Thanks.
Why do you think the government has banned a lot of public gatherings if you don’t think all the protests matter? It seems inconsistent by the government. If what you say is true, that makes me very bullish that we can open up the economy sooner.
We have to do our best to look out for ourselves.
I don’t think it’s inconsistent. Several months later, we now have a lot more data about what works. We know that face masks and social distancing are incredibly effective and that the virus is easily transmitted indoors. The government is always going to error on the side of being more cautious, and large outdoor gatherings generally violate social distancing rules. As we’ve also seen, some people can be pretty hesitant about wearing masks. Large gatherings increase the chances that someone violating social distancing and mask rules can potentially contact a lot of people.
Just look at what some of the more…science-based governors are doing. Just today Newsom is closing indoor businesses in 19 counties. A few days ago masks are now required in public when social distancing isn’t possible. Today Fauci said that bars remain the most dangerous places for virus transmission. You can’t drink with a mask on, and as I’m sure you know, bars in some cities are TIGHT.
Got it. If you think the government is always going to err on the side of caution, why do you think the government let over 1 million people protest in mass for a couple weeks?
To be clear, I have already mentally prepared to shelter in place for another year until July 1, 2021.
I think the government let over 1 million people protest because it’s protected by the 1st amendment. I’m not an expert, so I had to do a little bit of reading. It seems like the George Floyd protests fall under the protections of a “spontaneous protest” which means they didn’t need permits (planned protests need permits.) A lot of the cities enforced a curfew which is within their legal right to do, but they have no legal grounds to ban the protests as long as they were spontaneous and peaceful.
I agree with you Robert. I think the government bans public outings, but allows a million plus protestors because the virus can differentiate between people protesting for good and people who are not protesting.
I also agree with you that the 1st amendment is more important than saving lives from the coronavirus. The government can’t restrict protesting and speech, but the government can restrict our freedom, limit our livelihoods, and shut down our businesses.
How old are you and what is your net worth? What do you do for a living?
Following
Sam,
Appreciate the article and originally planned to hit you on this topic. Still, while quite clear that protests are less harmful than indoor activities, they do pose some risk. Arguably (supported by evidence) rallies and conventions pose much greater risks.
Still, the point of the article is moving through a crisis, adapting and overcoming. Great points on all fronts.
This is the thing. When playing in the market, play for it all.
Hi Sam,
I too am strongly considering home schooling my child for the upcoming year. My wife and I got a taste of it when our county switched to e-learning for the end of the school year and we were elated to see him excel at home, whereas he struggled in the traditional school environment. Don’t get me wrong, his teachers were certainly dedicated and committed to him, but he seemed to respond very well to the one on one attention at home (he was in the 2nd grade).
IMO, this is a great time for many people to take the leap. Our county is offering everybody the option to return to school or to e-learn the whole year. (I think this is pretty common across the country right now. Is there anything like this in San Fran?). An entire e-curriculum has already been developed, so parents just have to make sure the children are logging in every day to do the work and to assist when needed (I plan on being very hand-on, though). There are also teachers that will be available everyday to assist e-learning students. When I thought about homeschooling in the past I was worried about having to develop a well-rounded curriculum, but now it’s all done and it sounds like it will be available (at least for us) for all of my child’s school years.
Also, there are a lot of kids in our neighborhood that are constantly playing together, so I’m not worried about him being cut off from having friends his age either.
I’m about 80% sure right now this is the path that we are going to take. But I’m gonna sleep on it a little longer. We have another week left to notify our school system which path we are taking.
I would love to hear about some of your thoughts on this, perhaps in a future post.
Thank you for the great work here! I’ve been reading for years, but this is my first time leaving a comment!
Homeschool for 1 more year until there is hopefully a vaccine sounds like a good idea.
If I do this, my kids will be 1.5 and 4.8 years old.
Let’s see what happens and keep things flexible.
Thanks for the in-depth review and recap! And wow congrats on the 11-year anniversary!
It’s surreal that we’re still in lockdowns. But I’m happy to see more people out and about and businesses open with modifications. There’s definitely more traffic on the roads than 1-2 months ago. I used to look out my window and barely see any cars. Now I see constant traffic and full parking lots like back in January.
June went very fast for me. Heck the whole Q2 went fast for me. It doesn’t feel like today is July 1 at all. Shocking how fast time has gone considering the circumstances.
I’m hopeful for the months to come. There may be bumps but we’re gonna come out just fine.
Been reading for many years. I am happy for your success despite the difficult times many face.
Thank you for your willingness to share your life. Most impressive is your perspective on money. That it should be use to give your family (an others) a good life. Enjoy your time with your little kids. It goes fast.
I’ve been surprised how little all of this seems to have affected my portfolio (thus far, knock on wood). I did wind up with about ten percent of it in cash after moving the last chunk we had in Edward Jones over to Vanguard. That was timely, but now I worry about when the best time to put it back in will be, although granted, it’s not a bad problem to have compared to many.
When I finally got to see my barber again last week I paid him for the two haircuts I never got, as well as for the one I was getting. He owns his own place and has evidently spent a lot trying to make the chairs more isolated, as well as other things.
Financially the first half of the year has been pretty damn good. Our business went from the brink of being forced close to a last minute exemption, “Deemed Essential” to record sales. Combine that with the PPP money and were doing pretty good. I’ve used the PPP money to give hero pay to all my employees so needless to say they are thrilled as well. Equities wise I’m up 1% on the year. Buying stocks on the way down and the way up has really payed off. Its cliche to say but I invest by the mantra Don’t fight the Fed and that has really worked out well so far.
Personally, the pandemic has really killed my spirit. My wife and I like to take a trip once a month. We love the casinos and restaurants. We love traveling to new golf courses. We love hanging out with friends. All of that is gone. Instead we pull weeds, mow the yard and watch Netflix.
I’m still extremely bullish on America. I know the pandemic and protests will eventually subside. Its just hard when your stuck in your own little bubble. I realize many people have it way harder than I do and I should be more grateful than I am. I should probably work on that instead of watching Breaking Bad for the third time.
Thank you for all content you’ve put out. Especially during this lock down, It’s one of my biggest highlights each week.
Bill
If you have 1 million dollar cash now what would you do with it ?
I always enjoy reading your posts. We didn’t homeschool our daughter but she attended an online high school. It was Stanford Online High School and it was tough and rigorous. They really prepared her for college and life at work. She can outthink and outwork any of her coworkers. They don’t have an elementary school but they do have a middle school.
That was a pretty amazing distribution as a percentage of capital ($177k on $810k capital). Did an asset in the fund get sold and make that kind of return?
I look forward to the end of quarters as there when I get the larger distributions from my syndications but nothing to the level of what you got (even though I have more capital in play than your example).
I’m hoping the 2nd wave dies down and does not recreate April again.
Although the time period from about March 12- through 2nd quarter seemed to drag endlessly, this article really helped me put some things in perspective. First and foremost, I have been spending so much time with my daughters. I’ve always been a “Dad first” person, but this lockdown only magnified my approach to time with my girls. My oldest is entering her senior year of Highschool and will soon be leaving our nest. We’ve hiked and talked and passed the volleyball and continue to build on our already solid relationship.
Financially, my approach has been to boost my cash reserve and pay down rental mortgage debt. I’ve opted to continue my focus on one rental at a time. I’ve put my payoff priority on my rentals as opposed to my principal residence as I feel right now, that my rentals will be a long term hold position. Whereas, I am actively looking to trade up to find our forever home. Might as well have 3 paid off properties that will offset a new principal residence mortgage if/when we find our perfect home. If not, I’ll just pay off the current home and retire early to hike and travel. Win/win.
In Dec of last year, I set a 24 month goal to achieve a NW of 2 million. At the time, I was at $1,793,000. This article served as a nice check point and I found (surprisingly) that I had increased to $1,829,000 through second quarter (61% real estate, 35% cash, retirement, savings, 4% misc./classic car). Again, my focus has been to boost cash savings and whittle down the debt on my best rental first, which also happens to have the highest interest rate and lowest balance.
Personally, I’ve really begun to enjoy talking longer walks to clear my mind, plan and reset myself mentally. I’ve tried to get 4 miles in every day and I’ve been very diligent. This also helps to offset the evening IPA beer that I have been enjoying a bit more frequently. Financial Samurai has been instrumental in helping with my psyche as well. I really look forward to the articles and the comment section as we navigate Covid. Thanks Sam and the other contributors/posters.
Jim
Congratulations Sam on an amazing Q2; especially on the personal front with you enjoying time with your kids.
Totally agree wrt monetization vs having fun on the blogging journey. After all the goal of early retirement is to enjoy each day.
From the age of about 10 years old and up, your son will want to be with you much more.
I would not hold your breath on a vaccine. Since when are vaccines easy to create? SARS still doesn’t have a vaccine, and it’s been over 15 years.
There are no guarantees in life, and it’s illogical to think we can shut down the economy until a vaccine is found.
Agreed that vaccines are hard and there are no guarantees.
I am personally optimistic that there will be at least one vaccine being distributed by November, for the reason that the entire world’s attention is on COVID. Humanity can collectively accomplish immense things if sufficiently motivated.
I hypothesize that COVID would damage the economy similarly regardless of personal or government actions. We can stay home and SIP (primary economic damage) or we can live life normally and overwhelm the healthcare system, resulting in economic damage as a secondary effect.
The reality is of course more complex and sectors are impacted unequally, but it seems to me that an effective vaccine remains the best chance to close this chapter and remove the economic headwinds. The probable alternative is a very drawn out literal and economic malaise.
If a vaccine comes in November 2020, my oh my will there be the biggest rebound and then some of consumer spending and capital investment in our history!
Hoping for the best. Hopefully the lure of billions of profits for companies who create these vaccines will be incentive enough.
Might be countered by the impacts of Biden + Dems taking senate and expectation of higher corporate income tax and higher personal income tax rates through bracket changes.
Also, the 1st vaccine is probably going to be 50-75% effective, which is good for something in 1 year or under, but may not get us to herd immunity if only a small percent of the population gets it. 40% of the population getting something that’s 75% effective, for example, only gets us to something north of 30% immunity after adding in people with temporary natural immunity.
This quarter was really good for me. I ended up recovering all my investment losses from earlier in the year. My household income actually went up, and our monthly expenses went way down. I would say financially, this was a really good quarter.
I was also able to refinance my house at 2.8% fixed, so basically inflation.
I really do wonder how many people are looking at 2020 so far and saying, at least financially, it hasn’t been half bad.