Financial Samurai Newsletter June 30, 2024: Powerful Network

This week's newsletter is brought to you by Fundrise, my favorite private real estate investment platform with over $3.3 billion in assets. Fundrise primarily invests in the Sunbelt region, where valuations are lower and yields tend to be higher. Both Fundrise and I believe there will be a multi-decade demographic shift to lower-cost areas of the country, driven by technology and the rising popularity of working from home. Invest with as little as $10.

This is a free Financial Samurai newsletter that was published on June 30, 2024. Every week, I come out with a free weekly newsletter to help readers achieve financial freedom sooner rather than later. Join 65,000 other readers and subscribe here. This way, you'll never miss a thing.

Financial Samurai began in July 2009 and is the leading personal finance website today with over 1 million organic pageviews a month. Everything is written based off firsthand experience because money is too important to be left up to pontification.

Sam is a pioneer of the modern-day FIRE movement. He attended The College of William & Mary for undergrad, got his MBA from UC Berkeley, and worked at Goldman Sachs and Credit Suisse for 13 years until he retired in 2012 at age 34. Sam is one of the rare personal finance writers who actually has the background and experience in finance.

You can learn more about Sam Dogen by clicking his About page. Subscribe to the free newsletter to achieve financial freedom sooner.

Financial Samurai Newsletter June 30, 2024: Powerful Network

I'm back in San Francisco and attended a friend's 60th birthday bash on Friday night. I had gone to his 50th birthday celebration in London and was reminded of something significant.

If you maintain your health and good character, your life will get easier over time. Why? Because you and your friends will likely become wealthier and more powerful. With wealthier and more powerful friends, everything from affording life to raising capital to helping your kids get opportunities becomes much easier.

In your 20s and 30s, you're mostly grinding away, hoping people will give you the time of day. But in 30 years, if your friends are still working, they are likely to be senior employees. Some might become important clients, and due to your close relationship, you can easily text them to meet up for lunch and close a deal.

If you decide to FIRE, like I did in 2012, you lose a tremendous amount of social and business capital. As a result, life could get harder over time if you're not careful.

Ironically, I became closer to the birthday boy after I left because we started hanging out due to our shared passion for tennis. He was no longer a client, just a buddy with no awkward power dynamics. If I need his help, he will lend a hand without question. If he needs my help, I will do the same.

Fifteen years ago, he was a portfolio manager. Today, he is chairman of the board. Try to be nice to everyone. You never know how successful your friends might become.

Perhaps more than career and financial success is friendship success. Do you have enough friends who will show up to support you? If not, you may want to redouble your efforts.

You Will Always Regret Sacrificing Love For Money

Surprising Solutions To The Loneliness Epidemic

The Perfect Dream House

While sitting on my aunt's deck overlooking the ocean in Hawaii, I spent last week reflecting on what makes the perfect house. After living in a dozen places since graduating college in 1999, I've come to realize there is no such thing as the perfect house. Instead, there's a good-enough house or an almost perfect house that has one or two flaws.

For example, the beach house I was at was under 1,000 square feet with only two bedrooms, making the house smaller than we'd like for a family of four. In addition, the other side of the house faced the main road in and out of the town, which can sometimes be noisy. If only it was set 200 feet further from the road and had 1,000 square feet more of space on a second level. All the same, it was a great three-night stay.

One of the main things I've come to appreciate as I get older with kids is having land. Enclosed land is vital for kids to safely run around and play. Whereas in my 30s, I appreciated ocean views the most. But having lots of land and views of the water is a tough combination to find.

If you're in search of a new house, check out: The Perfect House To Raise A Family In A Big City

When To Buy That Almost Perfect House

The next logical thought process I had was went to buy that almost perfect house. After all, the more you save and invest, the nicer the house you may be able to afford. At the same time, life is finite, meaning you don't want to wait too long to live your idea life.

It's more fun to drive a Porsche 11 Turbo in your 30s than in your 70s. But if you end up splurging on such an expensive car while young, you might never be able to retire! And if you wait until your 60s or 70s to finally buy your dream car, your knees might not be able to handle getting in and out of such a low car.

In my new post, Buy The Dream Home Now Or Wait For A Better Price, I discuss the pros and cons of each decision. Then I come up with a framework on when you should lock down such a house at potentially the best price possible. At Financial Samurai, we're all about coming up with solutions to some of life's biggest financial dilemmas. And I think I've come up with a rational one.

New Podcast On Personal Finance Ratios

Finally, I realized last week why I keep coming up with personal finance ratios to help readers make better spending, saving, and investing decisions. In my finance career, I analyzed companies using ratios such as P/E, EV/EBITDA, P/S, and D/E. These ratios highlight the valuations and financial health of companies, allowing investors to compare one company to another in hopes of making better investment decisions.

As a result, I’ve taken the practice of using ratios to analyze companies and applied it to personal finance. Making decisions in a vacuum is difficult because everything in finance is relative, and there are tradeoffs to consider, which can complicate decision-making.

You may not agree with my methodologies or target ratios, but I believe you will have a much higher chance of ending up wealthier and happier if you use them rather than winging it with your financial decisions. My ratios will help you think more critically about your money.

See: The Most Important Personal Finance Ratio For Most People

Until the next newsletter!

To Your Financial Freedom,

Sam

Thanks again to Fundrise, my favorite private real estate investment platform with over $3.3 billion in assets. Both Ben Miller, the CEO and I have similar viewpoints and philosophies about real estate and AI. As a result, Financial Samurai is a six-figure investor in Fundrise funds as well. Don't forget to subscribe to the Financial Samurai newsletter.