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Dear Financial Samurais,
Greetings from Laie, Oahu! One of the most remarkable things about Hawaii is that every beach is open to the public. No matter how luxurious your oceanfront mansion may be or how influential you are, nothing can stop the poorest person from enjoying the same breathtaking shoreline.
Couple that with warm weather year-round, and it’s a beautiful reminder that the best life is often the simplest—one centered around health, family, and friends. Here on the northeast shore of Oahu, there’s no race for riches or high status. Life moves at a slower pace, with people focused on what truly matters: their loved ones.
It’s a stark contrast to the big city grind that many of us are caught up in. But it’s refreshing to know that there’s another version of the American Dream—one that thrives without the endless hustle.

Related posts:
The Problem With Owning Beachfront Property: The Ocean
The Challenges Of Living And Working In Honolulu
Everybody Is Talking About High Valuations Now
The main reason I’m hesitant to go all-in on public equities is valuations. With so many asset classes to choose from, I prefer to invest in lagging assets trading at more attractive prices.
Historically, commercial real estate and stocks have performed in tandem. However, since early 2023, their performance has decoupled, with stocks racing far ahead. This divergence makes residential commercial real estate a more compelling investment opportunity for me right now.
That said, I’m still buying stock market dips, like the one we experienced again last week, as part of my strategy to increase my net worth allocation to equities to 35%.
Currently, the S&P 500 is trading at a rich valuation of 22–23x forward earnings, which has sparked widespread discussion about its expensiveness. I came across an interesting chart highlighting the inverse correlation between valuations and subsequent 10-year returns. Essentially, the higher the valuation, the lower the future returns.
The chart projects a sub-3% annualized return over the next decade, which aligns with Goldman Sachs and Vanguard’s forecasts for a low-return environment.

Of course, nobody can predict the future with certainty. AI advancements could significantly enhance productivity, and government policies might drive faster-than-expected earnings growth, ultimately boosting returns. However, historical context provides a useful benchmark for setting expectations about potential future returns.
Solving for Purpose While Boosting Financial Security in Retirement
Once you retire, you may experience a sense of emptiness after years of structured work. Suddenly, the purpose that once drove your daily life can feel elusive, especially when your children have grown up and are living independently.
I first felt this emptiness after leaving work in 2012, as I shared in my post: The Negatives of Early Retirement Nobody Likes Talking About. The feeling returned briefly in September 2024 when my daughter started attending school full-time, marking the end of my stay-at-home dad chapter that began in 2017.
This time, however, the empty feeling didn’t linger. I focused on generating active income to fund the wants I desired. By tethering your desires to active income, you not only satisfy your wants in a more controlled way but also strengthen your financial security and create a deeper sense of purpose in retirement.
While passive income is wonderful for covering your needs, it can feel disconnected because you’re not actively involved in its creation. Identifying a want and working to fund it reinvigorates your sense of purpose and accomplishment—it’s a rewarding experience that brings meaning to retirement life.
Check out my new post: Earn Active Income for Wants, Use Passive Income for Needs.
Favorite Posts of the Year
As the year wraps up, I’ve compiled my 12 favorite posts of the year from Financial Samurai, along with a dozen other popular reads. This year, I published 156 posts, 52 newsletters, and recorded 30 podcast episodes. Over 8 million people visited in 2024, reading over 12 million pages.
My goal has been to keep the content engaging, insightful, and relevant to what’s happening in the world. At the end of the day, I simply aim to write the kind of material I’d want to read myself.
See: The Best Of Financial Samurai 2024
I’d love for you to share one of your favorite posts with a friend or family member and spark a discussion. You might be surprised by what you learn about their perspective!
This week, I’ll be writing my year-in-review and outlining my goals for 2025. I hope you’ll also take some time to reflect on 2024. For investors, this was undoubtedly one of the best years we’ve ever experienced!
To Your Financial Freedom,
Sam
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