Reviewing The Start Of 2021: An Uneasy Feeling Amidst All The Hope

January 2021 went by so fast I almost forgot to do a review. Although January flew by, it didn't feel that different compared to the end of last year. COVID-19 is still out there in force.

When I saw 22,000+ fans at the Super Bowl in Tampa, I was shocked! However, later learning they were all vaccinated gave me relief. Now it's just fingers crossed the vaccine does its job. Let's hope there isn't a spike in cases a month later.

Waiting to get vaccinated is like one big marshmallow test. I've already accepted my family won't be able to get vaccinated until around June. Therefore, we need to remain cautious.

At the same time, it's probably going to get harder to wait as more people share they got vaccinated and more people post about their fabulous lives. Therefore, we must also make the best use of our time.

My beginning of 2021 review will focus on Family, Financial Samurai, and Finances. The three F's of life!

January 2021 Family Review

My daughter is 13-months old and is trying to walk. We are in no rush for her to walk as that would mean two tornadoes in the house!

I clearly remember our son bonking his head and tripping every day for about a year or so once he started to walk. My lower back was always so sore from holding the back of his shirt as he tried to gallop.

Reviewing The Beginning Of 2021: An Uneasy Feeling Amidst All The Hope

My son is 3 years, 10 months now. We're doing a lot of art projects. I'm also taking him to this amazing astroturf field where we practice kicking and dribbling the soccer ball.

My favorite activity is reading him a new Gerald & Piggie book by Mo Willems. Surprisingly, he is starting to read.

With so much homeschooling and 1X1 attention, I wonder if some kids will go back to school way ahead of the standard curriculum for their age? It really feels like you can learn so much more at home. Of course, learning depends on the support of adults at home.

Preschool Potential Part Two

The biggest excitement of the month was our son doing a video interview with two preschool teachers for Fall 2021 admission! How crazy is it that a 3-year-old had to do a 2-on-1 interview with two adults over video?

We got waitlisted last year, which was just as well since we wouldn't have sent him. Getting waitlisted prevented an awkward situation. However, we'd like for him to get in this Fall.

The timing for going to school at 4.5 years old in August 2021 should be good. Hopefully by August, the vast majority of San Francisco residents and Americans will have been vaccinated. This will help us feel more at ease because the school had several quarantines this school year due to coronavirus exposure.

From a developmental point of view, our son should be ready. He needs to learn how to interact with kids his age and listen to other adult authority figures. Perhaps the biggest challenge of homeschool is making a child see the difference between parent and teacher.

If he doesn't get into this school, we have an open invitation to return to our old neighborhood preschool. Therefore, we are not sweating the results. Although, the school we are applying to goes from Pre-K through the 8th grade. Therefore, it would be nice to have this type of visibility, especially if he enjoys it.

Will we be rejects once more? We will find out in about a month!

January 2021 Financial Samurai Overview

This site continues to chug along like normal. There are seldom any big swings in traffic on the upside or the downside. However, this also means I have a difficult time moving the needle on the upside given it's just me and my wife part-time.

I've reviewed and updated roughly 100 previously written posts in January. However, I've still got ~600 to go! I need to pace myself because updating old posts plus writing new posts is starting to feel like a full-time job.

I'm also getting tired of responding to inbound inquiries. In the past, I would always hop at every opportunity. Now, I often forget to respond at all. This probably also has to do with a constantly flooded inbox.

I don't proactively market Financial Samurai because I simply don't have enough energy. Therefore, if any readers want to help spread the word, I appreciate it.

Here's my free newsletter if you want to sign up. I try to make the newsletter a separate track with various nuances. Here's also my iTunes podcast channel where I'll record at least one episode once a month.

My favorite posts of the month are:

I keep fantasizing about re-retiring by 2022 and laying on an empty beach in Hawaii. Before I re-retire, I will update the remaining 600 posts and hire a regular staff writer to pick up the slack.

January 2021 Stock Market Review

The first week of the year actually started a little rough for the S&P 500. See chart below.

Given I published a bullish note about stocks and real estate for 2021, I decided to buy VTI, the Vanguard Total Stock Market ETF during the first pull back. I wasn’t going to buy more stock, but like an addict, I couldn’t help myself.

VTI Buy 2021

Things were going well until there was another sell-off from January 27 to January 31. So I decided to buy more VTI.

Except for buying more Google and Amazon shares, I didn't feel comfortable buying any other single stock names due to expensive valuations. I'm already way overweight the technology sector.

If I was smarter, I would have bought the Russell 2000 index, which is up closer to 16% YTD! I did try my hand at day trading again, which was a nerve-wracking waste of time.

My wife also contributed the maximum gift tax amount in each of our kid's 529 plans. I already super-funded both 529 plans. The 529 plans are getting to a size that makes me question whether further funding is necessary.

Because the S&P 500 is sitting at a high, I feel good about our stock contributions. However, I also feel exposed because I'm at the maximum stock market allocation I feel comfortable with (~30% of net worth). One correction and we're back to where we started.

Things feel extremely frothy with so many speculative investments going ballistic. This is why I feel uneasy, despite so much hope for the future. As a result, my plan is to build up my cash balance again. I anticipate another 5% – 10% correction. I just don't know when.

According to Personal Capital, where I track my six investment portfolios, my overall portfolio is up 7.29% YTD through Feb 8, 2021. The reason for the outperformance is due to the outperformance of tech stocks once again.

I stated in my 2021 outlook that I thought there was a 65% chance the tech sector would underperform the broader market. So far, I've been wrong. Good.

January 2021 Real Estate Review

Given I bought a new home last year, I don't plan to buy another physical property again this year. I'm already managing three rental properties, which is my absolute max.

However, if you have zero rental properties and only a primary residence, I would go hunting. I think rental properties, especially in big cities, are going to be a powerful one-two punch asset class. I expect to see capital appreciation and rent appreciation over the coming years.

The national real estate market was extremely strong in January 2021. According to Redfin and MLS data, home sale prices are up 15% YoY.

Therefore, on a relative basis, big city real estate offers better value because prices are not as hot as the national median. Yet, many tech employees in 2020 saw their tech holdings go up by ~40%!

I wish I had more money to buy a multi-family property in San Francisco. Rents are starting to tick back up. I'm confident there will be a huge rush back to city living and folks moving out of their parents' homes by 2022.

Real estate market on fire in 2021

I feel more at ease with my real estate exposure, despite it being roughly ~40% of my net worth versus ~30% for stocks. One of the reasons why is because I believe with greater confidence real estate will perform in 2021/2022.

Besides being well-positioned to benefit from the eventual rush back to San francisco in 2022, I've still got 14 private real estate syndication investments across the country. After some hospitality investments survived through the worst of 2020, I'm hopeful their businesses will improve.

San Francisco real estate doing well in 2021
[$530K over asking and $325K over Redfin's estimate on 2/11/2021]

In other investments, I sent in my first capital call of 20% to a venture debt fund. It's the third venture debt fund my business school friend has started and I've invested in all three. If anybody cares, I can write more about venture debt investing in a future post.

One Financial Indicator To Be Aware Of

Due to so much bullishness, Treasury bonds have been selling off. As a result, the 10-year bond yield is almost at 1.2%. I predicted the 10-year bond yield to average 1.25% for the year.

10-year bond yield 2021

A rising 10-year yield and a steepening yield curve are good signs for future economic growth. At the same time, a rising 10-year also taps the breaks on economic growth because it results in higher borrowing costs.

With the way the recovery is going, the 10-year bond yield could go back to 1.5%. 1.5% is the level where I think the stock market and real estate market may start getting concerned. Therefore, watch the 10-year carefully.

The one thing you can do is refinance your mortgage rate before mortgage rates go even higher. If you believe, like I believe, there will be a 25%+ S&P 500 earnings rebound in 2021, the chances are high (~75%) rates will continue to inch up.

The 15-year fixed, followed by the 30-year fixed mortgage offer the best value at the moment. Mortgage rates HAVE NOT moved up in lock-step with the rise in the 10-year. But they eventually will.

[Source: Freddie Mac]

You can check the latest mortgage rates with Credible. Multiple lenders will compete for your business and offer you no-obligation quotes. Also check with your existing lender.

January 2021 Went By Fast

I've had more than a month to think about my 2021 forecasts and I'm sticking to them. 2021 should be a good year for stocks and real estate. However, we should all expect to see a correction at some point in the S&P 500.

My kids are growing up too fast. Although the daily tantrums and crying are hard on the nerves, I will miss them when they are over. Therefore, I must cherish every moment now.

My #1 financial goal over the next three months is to build up my cash hoard again. My #1 personal goal all year is to get back into great shape. Let's not waste a single day.

How was your start of the year so far? How was your January 2021? What are some of your goals for 2021? Has your outlook on the stock market or real estate market changed? Commissioned featured image by

For more nuanced personal finance content, join 100,000 others and sign up for the free Financial Samurai newsletter. I've been writing about personal finance since 2009.

75 thoughts on “Reviewing The Start Of 2021: An Uneasy Feeling Amidst All The Hope”

  1. Andrew Ulvestad

    Just wondering why you bought multiple times on the same day instead of all at once?

  2. To all,

    Another great round of information to ponder for future investment options and ideas on how to capitalize on current market conditions!

    Sam mentioned he had friends buying up the properties being sold by the fleeing older Urbanites in New York and California, smart money moves! Once the Democrats cripple America with the $15.00 minimum wage, everyone’s children will have to move back to the cities for meaningful wages!

    Will return later to finish the Post, have a new virtual meeting to attend!


    1. For those of you who are truly educated in market analysis and economic influencers, I have a “Theory that could possibly win one of you a Nobel Peace Prize if your capable and ambitious enough!” to pursue the topic!

      The national minimum wage increase of October 2006, is the most likely crux that drove the U. S. Housing Market collapse that began in early to mid 2007 and snow balled into 2008!

      Basis of the theory is that small business owners across the country who also owned a secondary investment home were forced at the same time to decide to hold the investment home or close their business due to increased labor costs with no new income stream.

      The follow on sales by non qualified homeowners/investors who were trying to capitalize off the frenzied atmosphere then forced the total collapse.

      For those of you who are small business owners and own property/homes pay attention to your recent State minimum wage increases with the past election cycle.
      You should consider selling your Business/Home now while the market is still hot from the irrational exodus from the urban areas.

      No one payed attention to it n 2006, and only because God loves me I was fortunate to sell both my Business (Quizno’s Franchise) in June of 2006, and my home in early 2007.

      The business was shut down by the new owner within a few years and the home is barely valued at the original cost I paid for it in 2006.

      If you are a small business owner you need to act before the new laws take effect or you will be one of many attempting to survive the blood bath that is coming your way.

      Words of Wisdom from a survivor (By God’s good Graces!) of the last meltdown!

      For those of you who know how to capitalize on these types of economic conditions look now while you can take measured risks with each state’s enactment of the increases.

      Best of Luck to all of you that this might apply to!


  3. Nice job on your recap and month overall! Even though I haven’t gone out for New Years in close to a decade I was annoyed that I couldn’t go out to celebrate even if I wanted to lol. Alas time goes on and I feel like I’m in a better grove now that the “excitement” of starting a new year has faded back into the norm. Even though it doesn’t really feel like a new year because of the pandemic, I’ve been making some personal changes to bring some small positive changes into my day to day. So that feels good. I haven’t done a good job at cutting back on sugar though. It’s become a crutch from the winter blahs. I can’t wait for blue skies and spring weather to come.

  4. I’m very interested in your venture debt fund experience, including how to invest in one.

    I’d also like to see an article about how much is enough for a 529 plan–I started when they were age -1 and stopped around age 9. What happens if one contributes too much?

    Finally, why not take a pre-re-retirement (I’ll call it a “pretirement”) to Hawaii now? Your kids aren’t in school, you work is mobile, and you can lead a semi-normal life on the island with your parents.

    I’m semi-retired. My works a corporate job remotely and my kids are doing remote schooling at the moment, but ironically it’s “retired” me that is holding us back. My investments in real estate (which have done great) prevent us from relocating even temporarily. I hope to stabilize these investments this year so that I’m not tied to my home base.

  5. What is your opinion of investing in venture debt given its somewhat tax inefficent for someone who has to pay taxes?

  6. Hi Sam–

    Agree the stock market is extra frothy right now. Valuations are long detached from earnings (P/E), which scares me. I assume it is due to everyone’s index investments in their 401(k)s combined with pandemic boredom and the user-friendly interface of Robinhood.

    The challenge for me going liquid cash is rates are so low. I felt comfortable earning 2.2% on an high yield savings account. Now they’re all down to 0.5%. Still, like you, I’ve buffed up the gunpowder.

    Respectfully, I disagree about SF rental price uptick. Why would they? Most of SF is still closed. Many tech employers have left or have granted indefinite WFH – indeed Yelp put up its commercial lease the other week. So many restaurants and other small businesses that breathed life into the city are permanently shuttered. I love this city as much as the next person, but sadly the value prop of SF county has decreased significantly and will take a long time to repair. Alameda and San Mateo counties are a bit different real estate markets and I don’t think hit as hard as SF county.

  7. Hi Sam,

    Thanks so much for all your posts. I’ve really loved the mix of investment and personal advice since personal happiness is really the ultimate goal, which we can’t forget. Our situations are strikingly similar (SF, two kids about the same age; fairly similar investment mix and philosophy), only with two biotech employed parents fortunate enough to have some equity exit to be able to support a reasonable living in SF. My goals for this year are to continue being as present with my kids as COVID has allowed me to be this past year (no more 3 hour commuting) and to read more Financial Samurai. February I’ve taken as paternity leave and getting caught up on your work (sharing with friends and family along the way).

    In any case, my main point was to thank you first and foremost, but also to ask a question: we’ll have >$100,000 in extra cash soon; we own our own home in SF (~$1,000,000 mortgage); roughly 43% of our net wealth ($800k [$1,800k FMV – $1,000k mortgage]) is in the house because we recently put in $250k to renovate. Although I’d rather put that extra cash into a US stock index fund, I wonder since the returns on SF property are fairly good whether to put that $100k to repaying part of the mortgage. We took your advice back in August and refinanced to 2.8% so we have a lot of leverage (but why hurry to pay it back?). There’s a lot to consider (i.e how long will we stay, can we re-cast and reduce monthly payments, our portfolio is already weighted to the property, etc.), but if my house has 15% annual growth and the stock market stays at 10%, would it make sense to pay some of that down?

    1. I retired in my early 40s and switched from corporate executive to real estate investor. I also have a $1M 30 year 3.0% mortgage on a $1.8M home. I’d borrow more but I don’t qualify since losing the fat paycheck.

      I refinance all the time. I will never pay off my mortgage and may even borrow more as long as the rates are low (e.g., 3%, 4%, maybe even 5%). I would much rather use those funds to invest in something else whether it be real estate or stocks.

      I also don’t think a 15% annual growth rate in your primary residence is realistic even in a hot market life SF. What is entirely attainable, however, are double digit returns on your capital if the real estate is leveraged. The more equity you have in your home, the smaller your return on equity.

      As an example, a few years ago, I purchased an apartment for $1M (I’m keeping the math simple) with a 25% down payment. Let’s say it’s worth $1.5M today and that I’ve been cash flow neutral. My return is 200% even though the appreciation is 50%.

      1. Thanks, Ronin. This is helpful.

        How do you factor in the high interest payment on the mortgage, especially the first 5+ years? Does it just eat into your calculator returns? I’ve always felt that paying interest is just wasted money, so it’s a hard pill for me to swallow.

        1. This is arbitrage at its core–borrowing 3% money to earn 10%+–hopefully over a long investment time horizon. If you want to keep things simple between principal vs interest, you can do what I did.

          On my recent Jumbo refi, I had an option between a A. Normal 30 yrs @ 3.0% or B. 10 year interest only @ 3.0 amortized over 30 years.

          I chose option B which greatly lowers my monthly payment. That savings is being re-invested. I want to keep my $1M mortgage balance “forever” because that is the maximum allowable mortgage amount for interest deductions on a primary residence. It’s $750K for new mortgages originated after Nov 2017, but I’m grandfathered in no matter how many times I refi as long as I don’t increase the mortgage balance.

  8. Hi Sam–

    Agree the stock market is extra frothy right now. Valuations are long detached from earnings (P/E) which scares me. I assume it is due to everyone’s index investments in their 401(k)s combined with pandemic boredom and the user-friendly interface of Robinhood.

    The challenge for me going liquid cash is rates are so low. I felt comfortable earning 2.2% on an high yield savings account. Now they’re all down to 0.5%. Still, like you, I’ve buffed up the gunpowder.

    Respectfully, I disagree about SF rental price uptick. Why would they? Most of SF is still closed. Many tech employers have left or have granted indefinite WFH – indeed Yelp put up its commercial lease the other week. So many restaurants and other small businesses that breathed life into the city are permanently shuttered. I love this city as much as the next person, but sadly the value prop of SF county has decreased significantly and will take a long time to repair. Alameda and San Mateo counties are a bit different real estate markets and I don’t think hit as hard as SF county.

    1. Agree on the real estate portion. Things are still grim. Rents are definitely down and vacant units are taking longer to rent. We have 4 units now/soon to be empty, and I have had several rent reductions of between -10% and 20%. When I personally checked some of the rental ads myself with other landlords and a couple of property managers everyone’s saying the same.

      Our PM has 600+ units and is telling us it’s tough and grim. Everyone just wants to get through this year and making deals left and right.

      The only sector that seems to be experiencing upside are single family homes, particularly on the West side, and with more space.

    2. Sure, happy to disagree. That’s what makes a market. But have you tried buying a single family home in SF?

      I’ve been following the market closely since the pandemic begin and just updated another home sale, $530,000 over asking to $3.5 million closed today. The SFH market is pretty hot.

      Here are all the updates:

      Remember what happened in 2001-2003 and 2008-2011. I’m always going to take advantage of opportunity.

      Do you live in SF? Rent or own? Every single one of my wealthy friends is buying up multifamily properties in SF and NYC right now.

      1. Hi Sam,

        Buying at the $3.5M price point, one is indeed wealthy – wealth at that level is likely to be completely insulated from the effects of the pandemic. I’m not sure the devastating effects on the lower to middle class are fully understood and realized by the wealthy yet in the country and in this city.

        As you know housing prices lag rental prices and it is fast becoming a ghost town with small business owners and former tech workers leaving in droves. Of course San Francisco will always have beautiful weather and views, which will command some demand.

        I rent and am looking to buy my first house in the near future using your 30-30-3 rule. My belief is that many people generate wealth through RE, however, just as many lose wealth – it situational and circumstantial. As a millennial who is not inheriting a CA property from my family, I admit, perhaps my optimism may color my view of a potential correction so that folks in my generation can get in this RE market without overpaying. Granted, thanks to prop 13, we still will pay more.

        1. Definitely check out the other 25 or so examples in my post as well. A lot of people make generalizations about the real estate market from what they see in the news.

          But once you’re in the ground hunting for real estate, you’ll be surprised by how much demand there is. When your tech stocks are up 44% in 2020, and rates are down, affordability is way up.

          There are only several 1-3 year windows of opportunity where you can get in until the cycle leads prices up and leaves people behind.

          GL in your search and let me know how it goes.

      2. Sam, are you buying multi-family as well? Just curious what everyone’s time frame for recovery of the market – buy now and expect recovery/upside in 18-24 months? Had originally planned to buy one multi-family this year but busy dealing with getting units refreshed, rented and overall portfolio stabilized. The people who will benefit are those that can purchase all-cash as many of the MF units come with vacancies, and while that’s normally a plus for rental upside, lenders will be stricter in their underwiting.

        Not being in San Francisco personally, it’s hard to read what is really happening on the ground, psychologically speaking. Sounds like people are finally able to go out and dine outdoors again.

  9. I do not think the stock market is overvalued. Maybe historical metrics show it as such, but I think with the low interest rates historical metrics are misleading and in fact when taking into account low interest rates stocks are right about where they should be. I do not see any reason why the S&P shouldn’t get to 5500 in 5 years and 8000 in 10 years. It could be more in 10 years. There will be bumps along the way of course, but the overall trend is not out of line.

  10. Health Goal – put on 5-10 pounds of muscle.
    Financial Goal – continue to max out 401k and deploy funds each month into after-tax accounts.

    Would you mind sharing your allocation percentages in your six investment portfolios? You mentioned your overweight in tech, so am I, however my portfolio’s performance is not beating the S&P by quite as much.

    1. It’s pretty complicated. Overall, if tech is a 27% weighting in the, tech is and has been a 85% weighting in my stock portion of my portfolio.

      But I have lived in SF since 2001.

      My outperformance isn’t huge b/c I have a big weighting in municipal bonds too.

  11. Brian Knight

    I have to agree with you here. 2021 may be defined by inflation and the 10 year treasury yield. As the yield rises we may finally see a slight and very brief rollover out of stocks. However it’s so hard to hold cash these days for any extended period and there are not many options to stocks. Also, how much will the Fed allow rates to go before they step in?

    How would you play the fixed income side with inflation and rising rates? Inflation protected ETF or floating rate notes?

    Thank you for your great articles. Keep up the good work.

  12. FrustratedDem

    2021 tax season is looking painful. I predict any family making over $200k won’t get the $2k child tax credit. Which in blue states basically offset the fact that we lost the SALT deduction under Trump. So we never really got a tax cut under Trump and now are set to lose the child tax credit.

    Only hope is they reinstitute the SALT deduction but they will likely increase tax rates and we will be paying thousands more on our income a year. I’m gonna continue living well below my means either way.

    On top of this I’m sure we won’t qualify for any college loan forgiveness. Why do they treat $200k a year W2 earners like billionaires?

    1. Because gov’t charlatans use that ploy successfully to play to the ignorant, greedy masses who think their “crap lives” are due to the “rich” and not due to their own bad decision making.

      It’s a winning message to stay in power.

      Sorry dude – as far as most of country is concerned, your “rich” and you must pay your “fair share.” Heck the idiot President even argued that it’s your American Duty to pay more tax.

      1. To be fair, the masses are “encouraged” in their bad decision making by a zillion $ industry (advertising) that normalizes bad decisions.

      2. The Social Capitalist

        “Ignorant, greedy masses.” First, how is it that one can assume those that have less are greedier?! Seems a bit out of line. Ignorant – with no facts to back it up the only ignorance is the insult.

        Taxes are high, especially when adding on state and local- maybe if govt. (federal, state and local) didn’t subsidize so am my multinationals and spend so much on war we could all complain a little less about giving others a helping hand.
        Yours is not Theo not poor-blaming response here ( minimum wage caused financial crisis!!!), but it is the most outrageous.

        I cannot ask you to comment thoughtfully as it’s not my forum, but I can respond thoughtfully.

    2. I definitely hear your concerns about the SALT increase under Trump. Last year I was over the limit and I will also be over the limit this year, which is a total irritation! To put this in perspective, I make less than 100k per year and own my own home. With Oregon state income tax and my property tax, I’m over the 10k max deduction. SALT should never have a max deduction as you should not pay federal taxes on the same money you used to pay state and local taxes on. Ridiculous.

      1. Disagree.

        Why should all Federal taxpayers subsidize the bad financial decisions high tax, blue states make? I also live in OR, pay several prop tax bills and have two “larger” incomes in the household. We reach the SALT limits in first few months of year. Living in this corrupt, inefficient, high tax state is a bad decision by you and me. Tax reform was bad for us but likely good for country.

        The rest of country should not have to subsidize our stupidity for living here.

        1. I love your comment – nearly all others complain that the SALT limits should be removed. In my case, I live overseas, so at least I am not subject to state taxes but my taxes went up since I can no longer deduct investment expenses. However, I will not say that tax reform was likely good for the country, not when those in charge have absolutely no concern for the money being wasted.
          I remember years ago when I was the accountant at a US Embassy in Africa. Throughout the year, I had cut costs at every corner so when the fiscal year ended we returned 18 percent of our annual budget and even after satisfying every item on the Ambassador’s wish list. Shortly thereafter I had a new management officer who complained incessantly when I attempted to continue to cut costs. She literally told me that if the US government could spend a billion dollars on a B1 bomber she was not concerned about a few dollars here or there. I should probably point out she was a graduate of Brown University and had no concept of what anything should cost. Unfortunately most of those in positions like hers were and are of the same mindset.

        2. I don’t think removing the SALT limit was that unfair considering tax rates on income and the child credit offset the losses for most. But raising tax rates and phasing out the child credit earlier for the tax brackets that were hurt by the SALT limits the first go around is piling on.

          Flyover states get tons of subsidies from Blue states, so I don’t think it’s that unfair that the fed doesn’t get to double dip on our taxes. Red States already net more benefits from federal government than they contribute tax dollar wise for the most part. So I wouldn’t be too quick to complain about SALT deductions being unfair. Wouldn’t call wanting to live where you can earn the highest gross income in your prime working years stupid. (Now in retiring in a blue state.. that’s a different story).

    3. Dude,
      You’re rich! At least as far as the government is concerned. Both parties need to tax the heck out of the 80% of making that kind of money because there simply are not enough rich people. That’s just basic math.

      On another note, why should there be any college loan forgiveness at all? college loan forgiveness is the exact opposite of a progressive Dem idea. Why should the poor masses help you via their tax dollars to provide for your high end college degree? Just so, you can make over $200+?

      1. Loan forgiveness is first step towards Socialized higher education. How an you forgive loans in 2021 but not in future.

        This is just a step towards a longer term goal.

        1. Loan forgiveness simply rewards bad behavior. In 2019 while hiking the Camino de Santiago in Spain, I met a young American university student. She had worked during high school and college to pay for much of her education whereas she has friends who took out loans and partied while she was working. She was frustrated that not only was she paying for her education, she was also going to be forced to pay for that of her classmates. Loan forgiveness also guarantees tuitions will continue to rise. Imagine housing prices if the government would start paying everyone’s loans!

    4. I think families making over $200K will get a CTC. Families up to $400K are now and Biden said he’s not raising taxes on households making more than $400K.

      But hopefully, you haven’t been counting on the CTC gift to make ends meet at that income level?

      1. From what i’ve been reading about the new $3600 credit legislation.. they are capping it similar to the recent rules for stimulus. Before Trump..the child tax credit phased out between $150K-$200K. It’ going back to that based on the verbiage in the current bill be spitball around. To be fair, there’s no way to balance the books by giving the SALT deduction back to blue states AND keeping the child tax deduction intact. I’m not really advocating that. But clawing back both from $200K dual earners is big cities.. while likely increasing tax rates will put $200K earners at higher income tax rates than under Obama.

        We don’t need to keep taxing to death the $200K-$400K earners. We make $230K in Los Angeles… and we live in a smaller less updated home and drive the same cars as my family making $75K in flyover country. The good news is I’ve been offered to work remotely from my job permanently.. so we will eventually have the freedom to move wherever soon. Something that was not a possibility pre-pandemic if I wanted to maintain even 50% of my current income.

        The only positive from all these lower income benefits is I don’t need any insurance against job loss… the government benefits for those that lose their job are getting high enough that there’s no need to worry if you have your retirement and finances in order outside that W2 income.

  13. Ms.Conviviality

    I expected stocks to do well this year but didn’t expect my holdings to be up 29% since the beginning of the year. Real estate is still going strong in our area. We closed on a property back in November when there were no sales activity on our street. Homes in our neighborhood were built in the 1950’s. Even the renovated house next door, going for $500K had sat there for 18 months until it was sold last week. This past month, two seperate vacant lots were cleared and look like they’re being prepped for new construction. Stocks and real estate seem to be off to a good start.

    1. Wow! Amazing performance. Can you share the makeup of your portfolio and size range if comfortable?

      I would be so tempted to sell half and call it a year.

      I am lacking the guts to invest in more single stock names right now. But it does seem like it’s just momentum one-way direction up, which is why I at least allocated more capital to the S&P 500.

      1. Ms.Conviviality

        86% stocks, 13% ETF (all in ARKW), 1% Bitcoin.   Breakdown of stocks is:
        52% Tech, media, telecom
        23% Finance
        17% Healthcare
        8% Consumer goods

        All these are long term holds but I am tempted to sell off Fulgent Technologies since it increased 482% since purchasing 5 months ago. Gluu also did well due to a merger.

        We are trying to build a real estate portfolio so the stocks are just for fun. Retirement will be dependent on real estate, pension fund and 403(b).

        1. Ms.Conviviality

          I forgot to mention that the stats above are from my Robinhood account which holds 26 stocks.  I also hold a couple of stocks with Fidelity which are in OTC commodities stocks. I invested in a uranium stock URCCF four months ago and that’s up 106%. Also have gold miner stock that hasn’t moved much, but not really surprised since the rest of the markets are doing so well.  Trying to keep my holdings to 30 stocks or less otherwise I’m spreading my capital too thin to make a difference since all my stocks were expected to make at least 1X in five years. So far so good since overall return is 129% since I started investing in Dec 2016.

          1. Ms.Conviviality

            Sam, I don’t know if I ever mentioned this, but I discovered your blog at the beginning of 2016. After reading multiple articles of yours about stocks and proper asset allocation, I decided that I needed to start owning some stocks. It never crossed my mind to invest in stocks because it seemed like something that only rich people did. My parents never mentioned anything about stocks other than the one time I asked my mom about it and she said that it was like gambling (similar to the Big Mama in another of your recent articles). Just wanted to say thanks for getting me started with investing in stocks.

              1. Ms.Conviviality

                My co-worker is Chinese and her parents are immigrants. She is a super saver. She has a full-time job as a professional and also has a part-time job, 4 hours per week, as an accountant for a small town close by. I asked her why she was working so hard and she said that now that her house is paid off (at age 36) all she needs to do is meet her “number” so she can retire. I commented that any stock investments she had was surely helping her reach her goal sooner but she said she didn’t own any stocks. She said, “Nah, I don’t own stocks. I’ll just keep saving.” She is the type of person that gets stressed from uncertainty so I didn’t push her on the benefits of investing in stocks.

  14. Bitcoin has grown by 200% per year for 11 years. That’s my retirement basket. The plandemic is about depopulation, just look at the poorest countries to see what’s coming. These dangerous RNA vaccines will cause more harms than the virus. Don’t believe all the mainstream media.

    1. Awesome! It’s always good to make a 200% return a year. And that’s the thing, so many people are getting rich. Even if there is a 10% correction, who cares if you’re up to hundred percent right?

      It does make me nervous, but then again, everybody is a rational investor. We don’t invest more than we are uncomfortable losing.

  15. christopher Kitzmann

    Money junk aside I recommend getting a good camcorder (not a phone) and taking daily or weekly snippets of your kids doing mundane, everyday things.

    We have a few gigabytes of our kids laughing, playing, whining, dancing etc…

    It is a personal treasure and we get to re-live parts that went by too fast.

  16. Hi Sam
    Bonjour from France
    Yes please write more about Venture debt investing. :)
    Many thanks for your work and inspiration

    1. Ditto on this one Sam. I invested in my first VC fund last year and I’ve recently been considering a venture debt fund next. I’ve read the article you wrote on it before but would love more info.

  17. I feel the same way in many regards. My taxable accounts are up 17% this year. I would move to cash and sit out the rest of the year but I fear inflation is heading higher than most think. Maybe new dollars will go to cash and wait for better valuations.

    Some schools in my area are considering mandatory summer school to catch kids up. I feel like kids are suffering more than most.

  18. Hey Sam,
    Before I even read your post, the title of it set off a song in my head that says, “when life looks like easy street, there is danger at your door” -Robert Hunter. I’ve been feeling the same way for a bit now.

    Couple things struck me in your post. First, your mention of 3 rentals being at your Max to manage. I’m there too. I currently manage 2 of my 3. The third was turned over to property management as it had been a “problem child” property. Earlier today, my property manager texted to say that the current tenant would like to stay another year. The home has been uneventful for 3 years now. I think I’m starting to get the itch to pick another up!

    The other aspect of your post that grabbed my attention was your mentioning that time is going by so quickly with your family. Sam, just last week (it feels) my oldest daughter was born. She turns 18 in 17 more days. While it’s fun to investigate college opportunities and have a little girl that has turned into a wonderful young lady, I can’t help but wonder where the time has gone? Don’t get me wrong, I am beyond thankful for our time together (I had the flexibility to take her to and from school everyday. We practiced volleyball every day after school, talked, took walks and vacations, all of it). But, I’m going to be taking her to Boulder to attend the University of Colorado in just a few short months. I’m happy but I’m sad. Enjoy every single minute with your family. I can attest, when the old timers tell you that time flies, it really does.


    1. Yes, the time factor when one has kids really makes you cognizant of time’s speed.

      I know I’m going to cry my eyes out if I have to send off my kids to college one day too. Maybe I’ll buy a rental property wherever they go and go with them to the parties on the weekends! j/k maybe

  19. I like the transparency. You know that day trading is a colossal waste of time and yet you still did it anyway. I have a bad habit of doing that as well. As long as I don’t lose all of my net worth in one day, I don’t think I will ever stop doing it from time to time.

    I commented that I thought S&P wasn’t just expensive, but just downright bonkers expensive. Judging by how the year’s going you may actually have been more right than me in that regard. I am glad that I am so lazy (I actually don’t know how to navigate my broker’s UI to sell my stocks) that I didn’t even think about selling.

    Cheers to a great 2021.

  20. With all of the news of new covid variants and the possibility that the vaccines will be less effective, it seems as if this year will not return to normal any time soon. I’m really hoping they start pushing out the Johnson and Johnson vaccine which while less effective in phase 3 trials has at least been tested in South Africa unlike the mRNA vaccines. Additionally it only requires one shot, so that should speed up the vaccination program, especially in the third world where logistics are much more difficult.
    On a separate note, Biden’s changes to immigration with respect to releasing those detained at the border into the general population without even a covid test just seems downright frightening when you consider that even American citizens require a test just to return home by plane. The policy should be all or none or new variants will find there way into the US even more easily.

    1. J&J would be a good addition. More is better. Just have to mentally wait until June or July to get your shot and everybody else as well. If we can survive through the 4th of July, we’ll be in better shape.

      Let’s rock.

  21. “Things feel extremely frothy with so many speculative investments going ballistic. This is why I feel uneasy, despite so much hope for the future. As a result, my plan is to build up my cash balance again. I anticipate another 5% – 10% correction. I just don’t know when.”

    I have done that since I last put money to work in October. I’ve got what is equal to 10% of my equity portfolios in cash now. I am concerned as the year moves on and the anticipation of the economy roaring back over the course of it as people get vaccinated and life is expected to, hopefully, get back to something near normal, that, with the stimulus program about to be passed by Congress, the market will continue to roar forward. I was looking for one more “air pocket,” one more decent drop around now. Before the continuation of the run. I hope last week’s 4% drop wasn’t it. I may have to think seriously about putting the “dry powder” I have accumulated through dividends not re-invested into the market if I don’t see it by the end of March.

    1. Agree about the potential for a correction of at least 5-10%. I have taken some profit and have 18-20% cash across taxable, IRA and Roth accounts. I’ll put 25% of the cash back in the market for a drop of 5%, another 25% for the second 5% drop, and 25% for each 10% drop after that.

    2. Sam/Millbank:

      Agree with the feeling of frothiness. I have cash sitting on the sidelines as well and not sure how much to put in now…bought some on the dips in Jan but kept a big chunk still in cash.

      If the anticipated correction is on only 5-10%, isn’t the larger risk of missing the upside? Assuming it does correct 10%, if it rises 5% before correcting 10%, and then starts the “roar” forward you’d have to time it perfectly getting in at the bottom to make it all worthwhile?

      As it is if the cash was invested S&P/VOO/VTI since Oct, there would already have been a 16% gain.

      I ask because I am trying to rally myself into putting more now, with some DCA on the minor dips.

      1. You point out exactly the difficulty of timing the market.

        The reason why I decided to invest more capital of the stock market during the January corrections was because I wrote that I had a 4088 price target on the S&P 500. Therefore, when the S&P 500 correct it back down to 3700, I held my nose and bought because I believe in my predictions.

        I guess my question to you is, which of your portfolios are you trying to invest more in? Because we’re talking about tax advantageous portfolios like your 401(k), but I think it’s much easier to just invest and go through the process of maxing it out.

        But if you’re talking about your taxable portfolio, like I’ve highlighted in this post, it is a much trickier situation. You’ve got a look at your net worth composition and allocate Capital accordingly.

        1. I love that — “Held my nose and bought because I believe in my predictions.” That’s discipline.

          For me, this is all taxable accounts. Have done a plan for extra cash due to an inheritance but just need to commit to the plan/exact timing. Watching market every day to wait for an opportunity to buy.

  22. My goals are:

    1. Don’t day trade, but get back into systematic investing that made me successful.
    2. Leave job ; spend more time with family
    3. Get healthy (steady workout program + weight cut)
    4. … come with a better plan for life

    Our lives are pretty similar some ways. I’m about 1 year ahead on kids, similar geography, and similar goals (beach in Hawaii… I can tell you which specific one I imagine that to be) with some constraints of reality.

    I’m currently trying to understand geo-arbitrage, or even moving from VHCOL to MCOL places or international. ie: retirement in SFBay is expensive but is the cost of missing things worth it? Also island fever if we move, or generally having trouble getting a mortgage if I leave job.

    Also considered the tax / life / hassle implications of re-domiciling to Nevada for the pandemic. Sometimes I think the state tax savings alone + super low cost of housing could justify a purchase there to live in for 1-2 years. The mortgage would essentially be free. (but only if remain in high income job)

    1. If you only had $1000 a month to invest after getting company match 401k and hsa would you focus on investing in 401k, Roth IRA, traditional ira, taxed investment account, or hsa, or would you invest $200 in each? I’m 34, married, one child on the way, and looking to FIRE one day.

    2. All I know is that I’ve been playing tennis 4X a week and softball once a week during this winter and would really miss that if I lived in Minnesota right now.

      Pleasant weather all year around to do activities outside is priceless to me.

  23. “With so much homeschooling and 1X1 attention, I wonder if many kids will go back to school way ahead of the standard curriculum for their age? It really feels like you can learn so much more at home.”

    The problem is for most kids and their parents it’s not happening that way. Kids have a tough time keeping disciplined to do school, even via zoom from and to the schools, with so much around to mess with their concentration. Parents can’t make sure that they do stick to the “straight and narrow” because they have to go to work. Also, the lack of social interaction is not healthy. Everybody needs to be around other people. This is especially so for children. They need social interaction with other children. They need to be around elders and adults of authority beyond their parents. They also don’t need to get sick and, in some cases, die. Neither do their teachers. It’s a tough situation fraught with social, economic, educational and health issues that are not easy to work out or work through.

    1. Great points. It’s definitely a difficult situation right now. Not everybody has the flexibility to work from 5 AM to 8:30 AM and then spend time teaching their kids.

      It must also be easier for us to homeschool our children since they are so young. I have to imagine kids between the ages of 6 to 12 might have it the hardest? What do you think?

      1. I think it probably depends on the parents work situation.

        My wife and I have teamed up to teach our 5 year old to read and get him ahead of his Kindergarten curriculum for next year. Meanwhile our 3 year old is far ahead of where our 5 year old was at the same age.

        BUT, many of the parents I know with older kids are having a terrible time and some can’t get their kids to even sit through class. I know another Mom who simply left the workforce for this very reason.

        I am glad that I was able to exit the workforce when I did to really help during this time, but I am worried overall for how America will adjust with some kids excelling and others behind a year.

      2. I think all ages do, Sam. It is said that the most well adjusted children are those that interact with other kids at a very young age. I don’t have kids but, I was one and I can’t imagine any time in my childhood, even through university, where social interaction wasn’t an important part of my growing up. I feel for kids so much. I feel for parents so much. Especially those of meager means. This reminds me that there is something to be said for living with or near multiple generations of one’s family. Something that got lost to a great degree after World War II with the search for jobs and the ascendancy of the automobile.

    2. I’m semi-retired and my wife works from home, so were giving our kids an extraordinary amount of attention even before Covid. We’ve also been very happy with our private school’s remote learning curriculum.

      However, for most working parents, I know it has been a struggle making sure their kids stay engaged. Public schools have technology challenges in addition to lack of student motivation. We have the luxury of time on our side.

      Remote learning has also made us far more comfortable with the idea of remote learning and home schooling. If we are ever unhappy with their school options, we may switch to the home option. Our kids remain connected to the community through sports and scouting.

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