In a way, October 2020 kind of felt like the beginning of early retirement. We took our medicine for a long time (strict lockdown for months / aggressive saving for years) and now we're finally benefitting from our sacrifices.
It feels a little strange to be free again. You're not quite sure what to do now that you have so many options. Slowly but surely you get back to living the way things were pre-pandemic. But you also know that danger could be just around the corner.
Just like after you retire, you also wonder whether your newfound freedom will last. You ask yourself whether your new life is real and warranted. Maybe you might even prefer to stay at home all day because that is what you’ve become accustomed to.
I'm hopeful things will continue to progress in San Francisco with a sub-1% coronavirus positivity rate. Businesses are opening up everywhere I look.
However, looking around the nation, it seems like just a matter of time before we go back on strict lockdowns again. Therefore, I’m not wasting a day of freedom.
Here's a recap of what happened in October 2020, the seventh month of the global pandemic.
October 2020 Recap
Family (5/5)
Overall, October was our best family month of the year because we finally did a lot as a family.
- Went to the California Academy of Sciences Museum for the first time since February. This was a really special moment because we had been going once or twice a week since our son was born in 2017. For all of us, it was like seeing old friends again. This was the first time we took our daughter as well. Going to the museum made my wife and I feel like we had finally turned the corner.
- Went to the Japanese tea garden for the first time this year. It was more beautiful than I remembered. My son stepping over a stone bridge for the first time gave me a mini-heart attack as he could have easily fallen in the water.
- Went to the zoo for the first time this year with both kids. They saw their first rhinoceros, grizzly bear, black bear, flamingos, orangutans, kangaroo, koala bear, horses, and ostrich. We paid for a year membership in February and then the zoo shut down shortly thereafter.
- Went on vacation to Lake Tahoe for the first time since Fall 2019. It wasn't a very relaxing trip because the kids didn't sleep well. But I'm glad to say we did it, especially if there's another lockdown. Our kids went on their first real hike and I've been teaching my son how to swim.
Other Random Things
I was happy to have set up three playground playdates with our son's old preschool classmates. Not having social contact with same-age kids was starting to concern me after seven months.
We got an inflatable pool for $70. It was perfect because the temperature frequently got to over 80. My son and I loved it.
My daughter is crawling all over the place now. She's also pulling herself up and standing at 10 months. Her feet are so small; I hope they can support her weight. She's always smiling and so excited. Fingers crossed her cheerful personality continues for the rest of her life.
For Halloween, we dressed them up as Number Block O and Number Block 1,000. If you're looking for a good show on Netflix or Youtube to help kids count and do basic math, Number Blocks is a good one.
On the downside, we had a small scare when our daughter started itching and swelling up due to a food allergy. She's at the stage where she's starting to eat solid foods now, so we have to be very careful. We now have plenty of children's Benadryl and an EpiPen just in case.
Finances (3/5)
Given the S&P 500 lost about 3.5% for October, so did ~25% of our net worth. It's never fun to go in reverse, but I'm hopeful the Fed and the Federal government will resume stimulating the economy post-election.
On the rental property front, all of my tenants continued to pay on time because all of them are gainfully employed.
I have been wondering whether my tenants in my 2/2 condo will ever relocate given they've been there for three years and they are two individuals. My hope is they stay until at least June 1, 2021, by which time I'm assuming there will be a viable vaccine. If so, there should be no hit to cash flow during this latest recession as demand for condo living in a prime non-downtown area should rebound.
Demand to rent and buy on the less dense western side of San Francisco continues to be strong. I've been tracking comparable homes every month during the pandemic and I'm continually impressed with what many homes are closing for.
My overall net worth, according to Personal Capital, was flat again for the month (+12% for the year) as a decline in stocks was offset by healthy passive income and online income. I've kept my real estate portfolio valuation flat and bonds have traded sideways for a while. The spikes in my chart are from when I was playing around with my property valuations after a reader said I sold one property too cheap back in 2017.
Every year, my goal is to grow my net worth by 10%. My other financial goal since having kids is to generate $300,000 a year in retirement income so that both my wife and I can be stay at home parents.
Passive Income Update
I received a surprise $34,981 distribution from my real estate crowdfunding portfolio in October. Before the $34,981 distribution, I had already received $191,679 in distributions for 2020. Therefore, I thought distributions were done for the year, especially with the pandemic hitting the heartland hard in 2H2020.
Unanticipated distributions are like getting surprise presents. However, my tax liability is going to be much higher than expected because I originally forecasted receiving only $69,000 in real estate crowdfunding income for 2020. This miscalculation is too big and needs to be rectified for 2021.
I ended up reinvesting $21,000 of the proceeds into the S&P 500 when it started selling off during the last week of October. I also bought $15,000 more Netflix after they disappointed on their latest results because there was a pull-forward of their subscriber count. If we go into another lockdown, I'm betting Netflix will outperform again. I've owned Netflix for over eight years, so this is not a new position.
In my newsletter, I said I would buy any dips before the election and that's what I did. I'm counting on the Fed to stay accommodative, no matter who wins the presidency.
At the same time, I don't mind hoarding a lot of cash as we go into a potentially dark winter. Since about July, I've been mostly saving the majority of income, paying down some mortgage debt, and investing in a remodel. I definitely feel less anxiety the more cash I have.
Health (4.5/5)
October was the best I felt all year. My occasional shortness of breath I experienced earlier in the year all but went away. I was no longer conscience of my breathing when I spoke.
October was also really fun because we had a softball game every week. There’s so much smack talking among a group of really different personalities. One of the more boastful guys captained a team he drafted and lost by an astounding 21 runs. When I asked him what he would have done differently in terms of drafting, batting line up, and defensive positions, he said he wouldn’t have changed a thing. Love it!
It's interesting, but as I've gotten older, random health issues seem to pop up more frequently now. It's becoming rarer that every single body part feels great at the same time. Playing lots of sports doesn't help my bum shoulder, sore lower back, and achy knees either. Therefore, I've got to space these activities out more and let my body heal. It's just hard to take it easy when things could shut down again.
Mentally, I think many of us are going to look back on this time period and realize we were under much more stress than we realized. I strongly believe mental health leads to physical ailments. Whatever chronic or random pain you are feeling may very well be from stress.
For parents out there trying to juggle work and parenthood, please don't be too hard on yourself. Cut yourself and your kids some slack. These marathon days are intense! If you've got to put them on the iPad for an hour so you can unwind, do it.
It has taken me seven months to finally feel OK with being a parent to two young children during a time of great uncertainty. And I don't even have the pressures of a day job, only a commitment to keep writing on FS.
Financial Samurai (4/5)
I kept publishing 3X a week without fail. My wife and I also recorded a couple of podcasts. I'm thinking of starting a private paid newsletter for $10/month where I'll share more opinions and more investment ideas. But I'm not sure whether I want to take on this commitment just yet.
Some of you may have noticed I finally added published and updated dates on all my posts. There was no button to press to make it possible myself, so I paid someone to code it into the site.
I was also able to add a couple new sponsors in October. However, I'm not really enjoying the business development part of running Financial Samurai. I'd rather just focus all of my time writing.
October, November, and December are seasonally slow months for personal finance traffic. We're all tired and trying to spend more time enjoying the holidays. I expect this year will be no exception. I'm ready to take all of December off myself after taking things easier in Samurai September.
I spent a lot of time writing during our Lake Tahoe trip. Therefore, I should be able to keep up my publication cadence for the rest of the year.
My favorite posts in October are:
Making It Work On $400,000 A Year Before Your Taxes Go Up
Reconciling Three Main Retirement Goals
Your First Money Memories May Dictate Your Entire Future
Praying For Continued Good Health
November 2019 was about the time I started getting sick. My son was in preschool, caught colds, and then got us all sick for several months. Therefore, each day I'm not sick after November 1, 2020 will feel like a win.
I'm hopeful that because our son is no longer going to preschool that we're all going to be healthy for the remainder of the year. I'd pay a lot of money not to get sick ever again.
I'm thankful my kids haven't been negatively affected by the pandemic given they are so young. In fact, the pandemic has probably improved their lives given my wife and I are spending more time with them.
We are reapplying to a new preschool for Fall 2021. We got wait-listed for Fall 2020, which was just as well since we would have deferred. Hopefully, things will be much better next year. If he doesn't get in, that's fine as we're OK with homeschooling for the foreseeable future.
Overall, October was a wonderful month. There were so many things to do it felt a little overwhelming. It would have been nice to make some money in the stock market too. But at least the S&P 500 is still marginally up for the year.
Let’s see if this early retirement freedom can last for at least a couple more months!
Goals For November 2020
For November, we plan to continue taking full advantage of all our favorite parks, museums, zoos, and playgrounds that were closed for so long. The city spent a lot of money remodeling several playgrounds during the pandemic we'd now like to check out.
Right around Thanksgiving is when rainy season begins so we need to take full advantage of the remaining great weather. That said, winter is generally moderate enough where we can all still go hiking and play sports.
My contractor is also supposed to go full steam ahead on a ground floor remodel at one of my rental houses. The upstairs has already been remodeled and rented out. The downstairs can be rented out as a separate unit.
We've blown out roughly 250 sqft of space downstairs that consisted of a weird shaped room and an old half bathroom. In its place will be 600 sqft of space consisting of a living room, bedroom, closet, full bathroom, hallway, and laundry room. The old knob and tube wiring has been completely replaced by modern romex electrical wiring, which is much better for safety.
When the ~$70,000 project is done, it should add about $300,000 in value since we’ve created more livable space. However, I'm focused on building more investment income though rental properties because the value of cash flow has gone way up. Therefore, my goal is to finish the project by January 15, 2021 and rent the unit out for between $1,500 – $1,800 a month.
Fingers crossed the SF Department of Building Inspection gets its act together and my contractor doesn't go AWOL for several weeks like he tends to do.
Here's to an even better November!
Loading ...Readers, how was your October? Any plans for November?
But most importantly, how is progress on your son learning the Jay Chou song?
Very well! Got the chorus down pat and the versus right before the chorus on mother not letting their kids see her hardship. The rest of the song is so hard. But we’re learning Richie Ren’s Kan Guo Lai, which he has now mastered. Yay!
That’s awesome! Yeah, your post was the first time I heard the song and I really liked it. The verse part would be prodigy level haha.
Hey, probably a silly question, but in your November News letter “The Pool Man Gives Me Hope” in the “The Volatility Index In 2016 vs. 2020” section you said “I’m betting he will continue to be very accommodative, especially given we’re entering a third wave of coronavirus cases. Therefore, I’m buying the dip.”
When you said you’ll be buying the dip, are you saying you’ll continue buying the deflated prices of most stocks (excluding Tech), or are you waiting/expecting a post election dip and will then be buying? Was just looking for more clarification on what you meant. Thank you for the great content! Always a favorite read.
Hi Claudio,
From the Finance section of this post:
“ I ended up reinvesting $15,000 of the proceeds into the S&P 500 when it started selling off during the last week of October. I also bought $15,000 more Netflix after they disappointed on their latest results because there was a pull-forward of their subscriber count. If we go into another lockdown, I’m betting Netflix will outperform again. I’ve owned Netflix for over eight years, so this is not a new position.
In my newsletter, I said I would buy any dips before the election and that’s what I did. I’m counting on the Fed to stay accommodative, no matter who wins the presidency.”
Best of luck to us all!
Thx
I wonder if post pandemic we’ll be a bit like our post-depression relatives that used tea bags twice, and hoarded food. I have always tried to practice gratitude and find it especially important now. Noticing the chirps of birds, flowers blooming, and the “blessed normal day” keep me sane in the daily chaos and uncertainly. Hopefully I am the crazy lady in 30 years who is delighted and amazed to travel easily across borders, eat without worry at restaurants, and have INDOOR parties with loads of guests. And tell my children how lucky we are!!!
I think so! Probably permanent second guessing and hesitant regarding hanging around a large crowd of strangers. Always going to calculate the risk reward ratio.
My family has been spending more money during this pandemic to make up the loss of freedom. This is exactly the time to spend more money to maintain a lifestyle you desire, if you have the money of course.
This is the year that all savers Have been waiting for!
I am sad. My life has been changed for the worse. Rgardless who wins, I worry about my country. I feel something is being lost and we will never get it back. Many lives have been ruined and they will never be fixed. This is not me. I’m never this negative. I wonder if what is happening to me is happening to others.
I try to find one thing that is a ray of sunshine and I can’t find it.
I have more than I deserve and it seems to no longer matter.
I hope you are doing better than I am.
I also own Netflix. Their shows sometimes make me laugh and I am grateful. Maybe, Netflix is my ray of sunshine?
I love your attitude! I needed this on for me a scary Election Day!
Looking at what’s happening to Europe right now, I think another lockdown here is inevitable (assuming Biden wins). They were able to get infection rates way down over the summer and still they’re seeing record breaking new infections now. How long do you think the stock market can continue acting as if nothing is wrong? A lot of pundits are still forecasting a big drop.
We used to do a lot of international travel, so the fact that Americans are still persona non grata in most countries is a clue that things are still far from normal.
Yes Europe got their numbers down last summer, but Europe is not a country. Western Europe has a similar population size as the US, similar industry and culture. In mid-August western Europe was not as good as people think, with a death rate of 439 per million versus 504 per million in the US (statista.com numbers).
Yes, we need to enjoy our freedom now before the high potential for another lockdown.
My goal is to be outside, play lots of sports and enjoy the playgrounds every day until we must shelter in place again.
But maybe we get lucky and get a viable vaccine. Let’s see.
So glad October was a great month for you Sam. It is always nice to spend time with the family. I have two kids too, albeit a bit older than yours by four years. Boy and a girl too. Some times money is not everything. When you realize that, boy do you really see things differently. But financial independence and a nice net worth does make it a bit easier to enjoy life.
I too took a hit in October. I have more exposure to the stock market than you. But I am sitting on a large cash position right now so I missed the ups since May. Got into it in early October but last week all that growth was wiped out in three days. Oh well. It is what it is.
That crowdfunding portfolio has done well for you. I need to look into that to offset the losses in the equity market.
For sure money is secondary to family. It’s not even close. Once you got enough to live comfortably, there’s really no comparison.
Hopefully rainy day savers are using their funds this year to maintain their quality of life.
Hope all is well!
Congrats on a great October! The month went so fast for me it felt like a blur. I always want time to slow down this time of year. I don’t feel ready for the holidays to be around the corner. Although I am looking forward to hopefully some good Black Friday sales. I’m thinking about getting some kitchen appliances and maybe a new washer dryer if there are good sales.
It has been nice getting to go to more things living in SF. I do wonder if SF will shut down again if things continue to get worse nation wide since SF took such a conservative approach early on. Wouldn’t surprise me if they did again. So it’s good to get out and enjoy things while we can (and safely of course) Here’s hoping to a great November for everyone!
Excellent book…”Is your mamma a Llama?” We read it to our little ones too. Your little one looks to be growing quite fast. Stay safe
Nice month! It sounds like your family had a great time.
October was pretty slow for us. We didn’t do much, just work and school.
August was the best month for us this year. We went on a couple of road trips and enjoyed the summer. Now, we’re hunkering down for the winter and waiting for 2020 to be over.
Next year should be better.
“Slowly but surely you get back to living the way things were pre-pandemic.” —————————MAYBE NEXT YEAR AT THIS TIME BUT NOT BEFORE—–AND NEVER AS LONG AS SOB TRUMP IS IN EXISTANCE!
So glad to hear that you’re getting out and about with the kids. We’re in FL so easy to get out — 1) b/c things are so lax here; and 2) b/c we opt for a pretty empty beach where we can easily socially distance.
Now that we’re empty nesters we don’t have to worry about weekly excursions with the kids but issues still pop up — college scheduling, early career questions, etc. With the pandemic I am expecting even more multigenerational living.
Glad that your real estate is going well too — ours as well, all tenants are paying, and with borders opening in Costa Rica, we expect that to pick up as well.
Probably right on multigenerational living.
Do you like Florida living overall compared to the Bay Area? And does it feel pretty safe, regardless of the case count?
Good lord let it be Biden. Another 4 years of this circus is too much to take…
Um can you stop the political nonsense. This is a financial site. Besides if you are higher income, you will get killed on taxes if your guy gets in. Are you ok with that? Or are you just voting to let someone else pay if you haven’t been successful enough to be high income.
Did you miss the poll at the end of the article?
Way to oversimplify the issues in the election.