Slicing Through Money's Mysteries
Everybody has some degree of FOPA, or Fear of Other People’s Approval. We’ve become so accustomed to fitting society’s mold that we’ve stopped thinking and acting for ourselves.
But I argue that to truly make a difference and to truly live your best life, you’ve got to figure out a way to eliminate most of your FOPA. Once you do, you’ll be more comfortable taking on new challenges that may change the status quo.
There’s a common joke here in the SF Bay Area.
How do you know someone went to Stanford? They’ll tell you within the first couple of sentences.
We Americans have a tremendous desire for status and prestige. When we work hard for something, it’s our second nature to tell everybody about our achievement.
You do it. I do it. We all do it. No big deal if we aren’t incessant about it.
But at a certain point, it becomes concerning when we start complaining about our struggles despite being in an extremely fortunate situation.
Let me share one public example and then my own as case studies to illustrate how unaware we truly are about our good fortune.
There will undoubtedly be tremendous turbulence in our lives that will test our faith. But controlling what we can control is a vital part of growth and happiness.
My favorite thing to control is work ethic. Because I realized early on I neither had the mental or physical talent to surpass my peers, the only way to get ahead was to study more after school and train harder on the tennis courts.
Unless you have a severe disability, it doesn’t matter whether you are rich or poor, Asian or Native American, gay or straight; we all have the ability to control our work ethic.
We can fail due to superior competition or unforeseen exogenous variables, but we must not fail because we didn’t try our best.
If you’ve ever been curious about what Sam’s wife Sydney is like, well you’re about to get a peek into her, oops I mean my, personality and – gasp! – my drawers.
I’m a lighthearted, patient (most days), happy homebody who has to know where everything is in the house and on my computer. But staying organized can be really hard, especially with a toddler in the house, and if you’re going at it wrong.
The exciting news is there’s a refreshing new way to organize known as KonMari. I’m sure some of you have heard about it or are already addicted to it like me.
Since I’m also a personal finance fan, I’m going to share why it’s beneficial to KonMari your lifestyle and finances.
Happy 2019 everyone!
With my 2018 finishing with 3.8 4.0 out of 5.0 stars, I’ve thought long and hard about how I can make 2019 better. I’ve found a solution.
My 2019 theme is: live the good life. If you live the good life, how can life not be better?
Some people like to tighten their belts during economic uncertainty. I used to be one of those people in 2008-2009. But after a raging bull market since 2009, I feel it’s OK for my family to start spending more on life instead of letting our investments piss away our wealth.
Besides, if panic increases, there will be lots of things going on sale. Let’s first discuss my outlook for 2019 and then I’ll go over my goals.
As we come to the end of the year, I want to highlight the top posts published in 2018. This year I spent more time than normal writing cautionary articles partly because I felt the good times were going away. It was important to share my growing concerns about the economy in order to better prepare the FS community.
My first hint of financial worry started in May 2017 when the asking rental price for my SF rental house dropped from $9,000/month to $7,500/month, a 16.7% decline after 45 days of diligent searching. May/June are generally great months to find tenants due to the end of the school season. After searching far and wide, there was only one party willing to pay $7,500, a family of six.
At the time, the drop in rents had not yet shown up in real estate prices, so I decided to give up my plan to own the property forever and sell. As a new dad, I didn’t want to deal with tenant hassles, maintenance issues, and pay $23,000 a year in property taxes anymore. I really struggled with this decision at the time, but in retrospect, I’m glad I simplified.
On November 14, 2017, I decided to publish: It Feels A Lot Like 2007 Again: Reflecting On The Previous Peak. My hope was to give people who had never experienced a downturn a glimpse at history in order to prepare for a potential downturn.
Given the rocky times we experienced in 2018, it’s no wonder why some of the most popular posts on Financial Samurai are also some of the most cautious. I know I won’t win many friends by talking about negative things. But showing the dark side in order to provide a more balanced view is better than always being a cheerleader.
Not everybody can buy and hold forever because not everybody can live forever or want to hoard their wealth forever.
A self-inflicted wound is so sad. Unlike financial blindspots, where you can plead ignorance for your actions, a self-inflicted wound is a willful and always a harmful action that puts you in a worse off situation than before.
As the markets tumble, it’s worth highlighting some self-inflicted wounds that could have prevented this fall. We’ll also learn about other common self-inflicted wounds that may derail one’s journey to financial independence.
Remember, the easiest way to never saying, “if I knew then what I know now,” is to simply listen to people who’ve been there before.
Obama considers single people making over $200,000 to be rich. He specifically called for raising taxes on singles making over $200,000 and couples making $250,000 every year he’s been office.
At the end of 2012, there was a compromise in Congress for raising income taxes for those making $400,000/$450,000 and above. Why $400,000 + $400,000 doesn’t equal $800,000 for a married couple to pay more taxes, I’m not sure. The government still harkens back to its old days of believing one spouse should stay at home.
With the new tax plan for 2018, the Trump administration now views individuals making $500,000 and married couples making $600,000 as rich, because those are the income thresholds that now pay the top federal marginal income tax rate of 37%. Further, the estate tax threshold doubles to $11 million per individual and $22 million per couple.
There are two aspects of monetary wealth we can focus on: Income and Capital. Some make a lot of income, but have only a little amount of capital since they are either starting off in their careers, or haven’t saved and invested an appropriate amount. That’s not going to happen to you because you read Financial Samurai and will follow my savings guide to ensure capital accumulation.
Meanwhile, there are those with a tremendous amount of Capital, with little income given they may have inherited their wealth but have no income generating skills. Capital heavy people may have invested skillfully over the years, built great companies, or were incredibly disciplined in their savings. There are many different types of folks in the Capital heavy category. It’s not a bad place to be at all.
Ideally, it’s best to have both high income and a large capital base. This is my goal, and therefore my goal for all of you as well. In this post, we’ll focus on the income side of the equation and what to strive for just in case we don’t have a trust fund from mom and dad.
I recently experienced one of the most satisfying experiences of my life. I’d rank the feeling right up there with getting into college or landing my first job.
As a first-time captain, my team won the annual Labor Day weekend softball tourney! There were 40 players, and I was chosen as one of four team captains to do a player draft, make a batting lineup, and decide on fielding positions.
This was an exhilarating experience because I had zero experience. I had to do a lot of research in the hot tub about each individual player and figure out how to lead a group of men and women I hardly knew. I had so much anxiety about not looking like an idiot that I dreamt of several players making fun of me for drafting so poorly.
I want to go through with you some of the strategic processes that affected this positive outcome. You’ll be able to decide whether preparation means anything. Maybe you’ll change your attitude about how much luck and effort play a part in achieving your goals.
Or maybe you’ll simply not make the connection that how you approach small tasks can make all the difference when it comes to tackling bigger missions.
Making money is like playing a competitive sport. You train hard all your life for those moments on the battlefield where you win all the spoils or go home empty-handed. You console yourself after a loss for having tried your best, but eventually, you realize the game is rigged.
For the past 10 years, I’ve played USTA league tennis. It’s a great way to stay in shape, meet new folks, and keep the competitive juices firing. Everyone needs to balance mental activity with physical activity if they want to stay healthy.
For the past four years, minus one year off due to the birth of my son, I’ve played at the 5.0 level. It’s a treacherous level filled with ex-college players and even ex-pros. Few have a beer gut and everyone has at least one weapon, be it a cannon serve or a heavy topspin forehand.
