Financial Samurai Newsletter July 7, 2024: Amazing Times

This week's newsletter is brought to you by Fundrise, my favorite private real estate investment platform with over $3.3 billion in assets. With mortgage rates on the decline, pent-up demand building, and a strong economy, I am positive on commercial real estate. The investment minimum is only $10. Financial Samurai is an investor in Fundrise.

Financial Samurai Newsletter July 7, 2024: Amazing Times

For investors, it's hard to see an environment better than this. June added 206,000 jobs, but there was a 110,000 downward revision in the number of new jobs added in April and May. This brings the three-month average job gains to roughly 177,000, down from the 269,000 seen in the first three months of this year.

As a result, the 10-year bond yield declined by 8 basis points on Friday to 4.27%, while the S&P 500 reached new highs. The chance of a rate cut in September has risen back to 75% (up from 68% last week), with potentially another one in December.

U.S. unemployment rate and the Financial Samurai newsletter

If you want high risk-free income, you got it with money market and one-year Treasury bonds yielding 5%+. If you want greater returns through the stock market, the S&P 500 is up over 15%. Now, if you combine stock market gains, larger cash holdings earning higher real interest rates, and lower mortgage rates, you could see much stronger-than-expected existing home sales in the second half of 2024.

This brings me to my new post, “Having Cash Can Make You Poorer in Many Ways.” Once again, this post is influenced by the existing bull market. In a bear market, everybody loves cash.

If you're curious about how I've invested over $100,000 after a surprise real estate capital distribution in April 2024, I share my log of all my trades. When I look at it, it seems kind of overwhelming. It also shows how much fear I have in investing in stocks near or at all-time highs.

Feeling Like an Outsider Is Terrible

After returning to San Francisco from Honolulu, I spent time reflecting on what it would be like to live and work there. I've been trying to relocate to Honolulu since 2014, but just when I thought I was out, San Francisco pulls me back in.

While I was there, I felt completely at home and welcome. After all, my grandparents were born there in 1906, my father was born there, and I've been going back for 47 years.

However, when I published my new post, “The Challenges of Living and Working in Honolulu,” I was reminded by several comments that I was an “other,” an outsider who might not be welcome.

Here's a comment from Kamalani:

“You forget that you are taking a home a native family won’t be able to afford. That’s not your fault, but you may want to think twice. Your vacation/dream home is someone else’s heritage. Consider how you’re contributing to native hardships. What you do is up to you, but please be more thoughtful than economics and weather driven.”

The comment is fair but also a bummer as it is unwelcoming. My grandmother is half native Hawaiian, making me part Hawaiian too. How much native Hawaiian does one need to be considered part of the community? How many years of property taxes and income taxes does a family have to pay to be considered a local?

Although relocating to a different part of the country or the world may sound nice, beware of the secret disdain locals may have for you. As a minority, I haven't felt this feeling of exclusion since my days in high school and college in Virginia.

Fighting for Financial Freedom

Finally, given it's the July 4th weekend, I thought I'd provide an update on my journey back to financial freedom.

It's been a stressful nine months, but at least I learned a lot from the situation to help you avoid falling into a similar one.

This may be obvious, but please beware that financial stress can significantly impact your personal relationships. Due to financial stress, your patience isn't as high as it normally is. You're also likely working harder to get back to where you once were. Then, if you have young kids, you might find yourself at wit's end.

Whenever you're considering making a big financial move, don't forget to include the downside of potentially a more strained relationship with your partner.

See: The Grind Back To Financial Freedom

Dinner With Fundrise CEO

Finally, I'm grabbing dinner with Ben Miller, CEO and co-founder of Fundrise, in San Francisco. We are positive on the outlook for both real estate and artificial intelligence, so I'm actually trying to find out more about the potential unforeseen negatives.

Sitting here in AI HQ San Francisco, it's hard for me not to feel enthusiastic about leading private AI companies. If you're looking to gain some exposure, you can check out the Fundrise venture capital product, which is open to all.

To Your Financial Freedom,

Sam

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