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Financial Samurai

Slicing Through Money's Mysteries

Why I Won’t Pay Off My Mortgage Until I Retire

Updated: by 58 Comments

Back in 2011, I decided I wouldn’t pay off my mortgage until I retired. I was still working in banking and had a strong amount of cash flow. I thought I was going to work for at least another five years. Then, in 2012, I retired by negotiating a severance package that provided for six years of living expenses.

What transpired was interesting. I ended up paying off one condo mortgage in 2015 and selling my primary residence in 2017, which ultimately paid off its $815,000 mortgage as well. In other words, I paid off two mortgages after I retired.

Today, my family and I live in a home we bought in mid-2020 with a mortgage. We are full-time parents and part-time writers. We just couldn’t pass up a new forever home once the pandemic began. So once again, we are on the mortgage pay down journey. However, it’s fine because we now have three fully paid off properties.

Let me share my reasoning from 2011 on why I didn’t want to pay off my mortgage until I retired. Back then, I was a 33-year-old Executive Director who was focused on career growth. However, I was also starting to burn out.



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The New Rule For Engagement Ring Buying

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To all the ladies in the house, you’re in for a real treat! To all the fellas thinking about proposing, maybe not! It all depends on how materialistic you are in the first place. Even if you are already married ladies, point your hubby to this article about the new rule for engagement ring buying. If you do, you might just get a ring upgrade!

So what’s the new rule for engagement ring buying you ask?

Well before we get into the most obvious new engagement buying rule all of society should follow, let’s discuss some of the current ridiculous engagement ring rules that must be thrown out the window!



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Buying Blogs, Selling Blogs: How I Built My Blogging Business

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Building a blogging business and making money from blogging is one of the most attractive opportunities in the new decade. Buying blogs makes a lot of sense post pandemic.

A blog can be a very lucrative business, especially since it cannot be shutdown. When a blog can stay open 24/7 during a pandemic, of course the reliability of its revenue increases.

Further, with interest rates so low, the valuation of blogs has gone way up because blogs are high margin businesses. When you have a cash cow, please hold onto it for as long as possible, especially in a low interest rate environment!

Below is Mike’s story on how he built a blogging business running his own sites, selling blogs, and buying blogs. Today, I’m much more partial to buying blogs rather than selling blogs.



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The Pros and Cons of Online Dating: What If She’s A Man, Baby?

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Santorini Donkey

If you want to date, then you might as well participate in online dating. With Tinder, Bumble, and a bunch of other apps, online dating is the most efficient way to have fun and find someone.

My buddy, Craig has disappeared.  We used to keep in touch a couple times a week and play some tennis, but not anymore.  After a match at the club yesterday, I saw him walk by with some girl to the hot tub.  Interesting, I thought to myself.  So he’s got a new flame!

After my match, I curiously hopped on back like any good nosy friend would to see what was up.  Unfortunately, she was already gone.  Drats!  But there he was, with a big smile on his face, sipping some sangria he brought from home.  “Wassssssup?” I asked Craig.

“Yo, Sam!  Good seeing you man.  Not much.  I was just on a 3 hour date with a girl I met online!  We chilled in the back, watched the Blue Angels, and enjoyed the bubbles.”, Craig explained.

“Oh really?  Tell me more about this online dating stuff!” I inquired curiously.

Craig proceeded to tell me how he had recently signed up for this free online dating site called OKCupid, and how he was getting all these dates.  “Two a week, at least!”, he mentioned.  “There are so many women online, it’s ridiculous!  I feel like a rockstar!”

After an hour of conversation and some further research on my own (6 months undercover), I’ve come up with Sam’s guide to understanding online dating.

PROS OF ONLINE DATING

* You know what they want. It’s rough for guys to pick up girls at a bar sometimes.  Even if the girl is with her girlfriends or by herself, the law of logic states that if you find her attractive, every other guy will find her attractive, which means she already has a boyfriend and you are wasting your time!  At least if she fills out a profile online, it is certain she’s looking for love, unless stated otherwise.

* Try before you buy. You can “wink”, flirt and send messages to an interested candidate all you want.  If she or he doesn’t respond, no big deal because you haven’t spent much effort or any money.  For broke ass guys all around, online dating site is a gift from the heavens.  No longer can you question why the rich, ugly guys get all the women either!

* Way more efficient. Any good playboy or playgirl knows that finding someone is a numbers game.  1 out of 10 will show interest for the average male.  But, what a pain in the ass to talk to 10 different women live!  Instead, you can go online and ping literally a hundred at once (copy and paste your generic sassy message even) and bam!  Much better yield.

* You can search for what you want.  If you like 6′ 6″ inch beefcakes who look Ron Gronkowski of the New England Patriots, you can search for him!  If you like women with unadulterated, butternut skin who look like Jessica Alba………. keep dreaming sucker!  They are already taken!

CONS OF ONLINE DATING

* What if she’s a man, baby. What looks like a woman, could be a man, and vice versa!  You can’t really know for sure what someone looks like until you see them in person.  They could have glamor shots done to make them look skinnier, prettier, or more buff!  How many times do you say “HUH? WTF!” in your mind after seeing someone in real life after you see their photograph?  Deception is so easy!

* Other people might see. You’re putting yourself out there for the whole world to potentially see.  For those who love privacy, this is a tough hurdle to overcome.  Yet, if you try and put up a less than honest picture or bio, you will get less than effective responses from the online community.  That said, you might look so hot that you will be inundated with every horny guy or girl on the planet, which is kind of what you want since then you can choose the best.

* Unwanted attention.  You never know who you’re going to meet online.  Women should probably be more careful than men, because when was the last time you heard of a woman stalker?  If you are a particularly attractive woman, you may get a disproportionate amount of interest online which you cannot handle.  If you don’t respond to some, maybe you’ll offend them.  Then the stalker might come out!

Related: Career Or Love?

TIPS FOR FILLING OUT YOUR ONLINE PROFILE

Successful online dating requires a fantastic profile. Here are some tips.

* Be honest. Everything from a recent picture, to your biography should be honest.  If you start off on an honest track, you know that whoever pings you or accepts your interest is truly interested in who you are.  People get discouraged online as well and therefore start fudging how great they are: age, income, occupation, etc.  The truth comes out in the end, so you might as well be truthful in the beginning.

* Be responsive. If someone pings you, ping them back because you never know if he or she could be a match!  Unless you are super hot and getting an uncontrollable amount of messages, in which case you don’t need to be online anyway, get back to people who make the effort to want to get to know you.  Even a “Thanks, but I don’t think we’ll match” is good enough.  If you don’t want to respond after that, no problem.

* Show your personality. You don’t want to have another typical profile which says that your favorite movie is The Notebook and you like hiking and long walks on the beach.  Try to differentiate yourself with something memorable like “Love skydiving, but am still afraid of heights,” or “Sipping chardonnays and gorging on foot high pastrami sandwich overlooking the Golden Gate Bridge.”  You know, something a little more descriptive and original.

* Don’t just go after the hot ones. You can run with the herd, or you can find your own path.  The hottest candidates are the ones who get bombarded by everyone.  Too much demand!  It’s the same concept with buying property.  Yes, that choice location property is more expensive than others, but it will always command outsized demand and outsized prices forever.  If you can look a little down the quality curve, you will find much more opportunity!

Related: How To Become Happier

Online Dating Is Here To Stay

Online dating has become mainstream.  In fact, I’m surprised not more people go the online dating route.  It’s efficient, accepted, and free often times.  Just beware of women with large Adam’s apples and men with crazy eyes!

As Saito said, “Don’t you want to take a leap of faith? Or become an old man, filled with regret, waiting to die alone?”

Related posts:

The New Rule For Engagement Ring Buying

A Wedding Rule To Follow So You Don’t End Up Broke And Alone

Photo: Donkey Love, Santorini, 2011.  SD.

Improving At Golf Is Like Improving At Life: Impossible After Awhile!

Updated: by 24 Comments

Golf is a taxing sport which requires a lot of practice, and a lot of patience. Not only that, improving at golf can get impossible after awhile. Kind of like life! The first time I played golf was in the 8th grade with my father. Although I was the 5th wheel, I got to tee it up every hole there was a backlog, and hack it up on the site of the fairway as the men played.

I remember needing to go to the bathroom somewhere on the 6th fairway and running for 5 minutes back to the club house because I wasn’t allowed to pee in the woods. “Pros aren’t peeing in the woods Sam, neither should you.”

With an iron stick, and a ball the size of a plum, golf is one of the hardest sports to learn and excel at. It took me literally a year of constant play to break 100. And, almost 5 years to consistently break 90. More than 20 years later, I’ve hit a plateau. I can hardly ever break 80, no matter how hard I try.

Similarities Of Improving At Golf And Life

Here are the similarities between golf and life that you may enjoy.

After a certain point, there’s no more room for improvement.



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Why Did Oil Collapse And How Low Will Gas Prices Go?

Updated: by 25 Comments

Let’s review why did oil collapse back in 2015 and 2016 and see if we can use the information for today.

Finally, oil has gotten crushed in 2015 and 2016 and remains depressed in 2017. We haven’t seen this large of a decline in oil in years as momentum speculators rushed out like someone discovering their Match.com date looks nothing like their picture. Nobody would have guessed oil prices would have declined by 50% over the past 10 months.

Oil Price Collapse In 2014 And 2015

Let’s try and understand WHY oil prices collapsed so much when global economies are largely recovering.

WHY DID OIL PRICES COLLAPSE?

The US and Canada started drilling more! For years, oil prices were hovering over $100 a barrel until North America decided to ween itself off the dependence of foreign oil. Meanwhile, demand for oil in places like Europe, Asia, and the US began declining at the margin as other forms of energy took off.

By late 2014, world oil supply was on track to rise much higher than actual demand. A lot of unused oil was simply being stockpiled away for later. So, in September 2015, prices started falling sharply.

Low prices are excellent news for oil consumers in places like Japan or the US, where gasoline is the cheapest it’s been in years. Low oil prices act like a tax cut for everyone. Unfortunately, oil is big business for a lot of countries like Russia, Venezuela and the OPEC countries.

Amazingly, OPEC hasn’t cut production at all. After a meeting in November, 2014, OPEC couldn’t quite agree on a response and ended up keeping production unchanged. “We will produce 30 million barrels a day for the next 6 months, and we will watch to see how the market behaves,” said OPEC Secretary-General Abdalla El-Badri after the meeting.

Who knows where oil prices will go from here.  Given most speculators are nothing more than momentum investors, you know that many of them who’ve been long oil have lost a lot of money. What happens when you lose a lot of money all of the sudden?  You become shell shocked and end up doing nothing for a while until momentum returns.

It’s really too early whether oil will climb back, but I’m betting money in my Motif Investing portfolio that oil prices will rebound. I’ve got oil exposure in USO and Chevron, for example.

LOOKING ON THE BRIGHT SIDE

I never thought I’d see gasoline prices for under $2.50 again, but here we are in 2015, enjoying some of the cheapest gas prices in recent memory. Perhaps it’s time to get that big gas guzzling SUV again! Lower oil prices should lower production costs for anything that requires plastic and steel as an input. Airfares should also decline as well. We should all be thankful for the decline in oil, but prepare ourselves for higher oil prices in the future.

In 2021, oil prices have rebounded significantly thanks to a global rollout of vaccines. Demand is coming back and the oil collapse is a distant memory. Electric vehicles should be in higher demand with President Biden’s potential $10,000 tax credit for EV vehicles. Further, there is a lot of infrastructure spending as well.

Related: Tax Rules For Buying An SUV Or Truck

And now for some brilliant humor by Iman Crosson which highlights the main reason for why the commodity bubble popped. This is classic.

RECOMMENDATIONS TO BUILD WEALTH

* Manage Your Finances In One Place. The best way to become financially independent and protect yourself is to get a handle on your finances by signing up with Personal Capital. They are a free online platform which aggregates all your financial accounts in one place so you can see where you can optimize. Before Personal Capital, I had to log into eight different systems to track 25+ difference accounts (brokerage, multiple banks, 401K, etc) to manage my finances. Now, I can just log into Personal Capital to see how my stock accounts are doing and how my net worth is progressing. I can also see how much I’m spending every month.

The best tool is their Portfolio Fee Analyzer which runs your investment portfolio through its software to see what you are paying. I found out I was paying $1,700 a year in portfolio fees I had no idea I was paying! They also recently launched the best Retirement Planning Calculator around, using your real data to run thousands of algorithms to see what your probability is for retirement success. 

Once you register, simply click the Advisor Tolls and Investing tab on the top right and then click Retirement Planner. There’s no better free tool online to help you track your net worth, minimize investment expenses, and manage your wealth. Why gamble with your future?

Retirement Planner Personal Capital
Personal Capital’s award-winning retirement planning calculator. Are you on track?

For more resources check out my:

Financial Samurai has been online since 2009 and is one of the most trusted and largest independently-run personal finances today.

The Government Passes A Renters Tax! Time To Pay Up

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In good old fashion political jockeying, the House finally agreed to a budget and unknown to many, they also passed a Renters Tax!  The idea is for all Americans to participate in our simple tax system and shore up our huge deficit.  The new law states that starting October 1, 2011 all renters shall pay a Renters Tax equal to half the value of their rented home as determined by the government every year.  Landlords equally pay the other half.

Example: A nice 3 bedroom, 2.5 bath property is assessed at $500,000.  A taxation of 1.2% = $6,000 must be paid once a year.  Since the renter benefits from living in the home as well as the public parks, roads, libraries, and schools, the renter writes a check for $3,000 to the local state county tax board.  Meanwhile, even though the landlord does not enjoy any of the benefits of living in the home, s/he receives rental income, potential long term asset appreciation, and the option to move back in at his or her choosing.  As a result, the owner pays for half the annual property tax by sending in a check as well.  Perfect equality.  Both renter and owner have “skin in the game” and look to better their surrounding community.

THE GOVERNMENT BELIEVES WE SHOULD ALL PITCH IN TOGETHER

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How To Be Clutch In Stressful Situations And Win

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Watch Texas Rangers relief pitching if you want to learn how to NOT be clutch! Wow, I mean come on.  How does that one kid throw 11 balls in a row and walk two SF Giants batters in the 8th inning of Game 2 when the bases are loaded?  It’s absolutely unbelievable how bad the Texas Rangers relief pitching was, and it’s simply due to mental weakness.  Texas going from having a chance down 0-2 in the 8th to losing the game 0-9 is a 100% ass kicking.

I understand how difficult it is to close things out due to competitive tennis.  I’ve blown my share of 5-4, third set leads before, and 9 times out of 10, it’s because my mind broke down.  Tennis, like many one-on-one sports is a complete mind bend.  I started worrying and thinking about all the “what ifs”.  What if I shank the ball when going for it?  What if my calves start cramping?  What if he starts catching fire?  As soon as I start filling my mind with doubt, my body follows suite and then before I know it, I’ve blown the lead and lose.

I’ve since been able to calm some nerves that have helped me cross the finish line in tight situations before.  Here are some tips for keeping your head in the game.

How To Be Clutch And Win

* Think of nothing. During a competitive situation, my mind literally goes blank.  It’s as if I’m out of my body observing myself act.  From the service motion, to driving the top spin backhand cross court, there is nothing on my mind except the 100% commitment to win.  Some people call this act “zoning.”  To zone, I picture a pure white cloud of nothingness before each serve.  It fills up my entire mental surrounding.  There is nothing infiltrating my mind as I go ahead and act.

* Know that you will win.  In order for you to compete effectively, you have to already believe you have won.  You know this largely due to your preparation.  You don’t have to know that you are better than them at everything.  All you need to do is believe you are better than them at one thing.  I’m convinced I will be able to outrun my opponents and drive them into the ground.  They will collapse from exhaustion if they try and rally, so they try and go for more and make errors in the process.  Knowing that they will eventually wilt from exhaustion gives me confidence to succeed.

* Put everything in perspective. Once you tell yourself it’s just a game you start to relax.  When you know it’s OK to lose, you start swinging away.  Once you start swinging away you no longer worry about the little things because everything just clicks.  Having perspective is healthy in sports, work, blogging, and practically everything you do.  Once you know you are not an unattractive person, but a beautiful monkey, you start feeling great!

Being Clutch Is A Mindset

Being clutch is a complete state of mind.  Nowhere do you see more examples of clutch than with Olympic gold medalists.  They’ve done the moves time and time again during practice.  It’s those few moments that really count where they excel the most.  Playing competitive sports definitely helps one’s abilities in non-physical arenas such as work.  There’s a reason why so many firms look to hire student athletes, and so many CEOs are single handicap golfers.  They know what clutch is and how to deal with difficult situations.

Who knows who will win the 2010 World Series.  But, if I was a betting man, I’d go all-in on the San Francisco Giants baby!

Related: When In Doubt, Just Keep On Winning

Readers, what are some of the things you do to calm the nerves in crucial situations?  Have you ever surprised yourself with your clutchness?

PS For bloggers out there, it’s the same thing.  Survival is a tough one and it is a long slog.  How can you go straight to the top with so much content out there and competition?  You simply zone and write like no one else for a methodically consistent period of time.  And then you patiently wait for things to percolate.  You know you will win because blogging is easy compared to surviving in the Amazon jungle, naked, with no matches or food!

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Regards,

Sam

Even Millionaires Can’t Resist Free!

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Once you become a real millionaire, not much is going to change. For example, even millionaires can’t resist free lunches and free goodies!

It’s been a hectic second week back after labor day and I’m so encouraged by what I’m seeing in the economy.  It’s as if the world decided to suddenly get back to work after a long dormant summer.

The one tip I want to leave you guys with is that no matter how rich your client, your boss, or your prospect is, they cannot resist free.  It doesn’t matter whether you take them out to lunch, buy them a drink, take them to a baseball game, or send them a book.  He or she can be worth hundreds of millions of dollars, and that small $20 gesture will do the world for you!

You may think it’s odd that you are giving something to someone who can afford anything, but you are mistaken.  Those who are richer than you and can afford anything are generally the ones who are always giving.  Hence, as soon as you give them something, you’ll stir up their appreciation that they never knew they had.

In the spirit of free, here are some of the posts out there which do just that.

Yakezie Giveaways Galore!

* Elle at Couple Money is giving away a free laptop for her first year anniversary.

* Kevin at Invest It Wisely is celebrating his 6 month anniversary with various prizes.

* Mrs. Accountability at Out of Debt Again is celebrating her 3 year anniversary with $800 in prizes thanks to various friends.

* Yakezie.com hosting our second book giveaway, How Rich People Think thanks to Elle.

* Christian PF is hosting a iPod Touch giveaway.

* The three winners of the Financial Samurai The Simple Dollar giveaway are: Jason @ Redeeming Riches, Suba @ Wealth Informatics, and Little House.  Please send me your mailing address by Monday, Sept 20th or else I will announce new winners.

Millionaires Are Just Like You And Me

Millionaires can’t resist free, neither can you. Here are some great millionaire-related posts to keep you motivated for more.

Your Chances Of Becoming A Millionaire By Age, Sex, And Race

The First Million Might Be The Easiest

$10 Million: The Ideal Net Worth Before Retirement

Keigu,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

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The Reply Button Is There For A Reason: Email Efficiency Is Important

Updated: by 25 Comments

Graphic by Hime

The following is a guest post by Hime, one of Financial Samurai’s first readers.  Hime is a manager at a strategy consultant firm who likes the violin and going on unplanned adventures.  Hope you enjoy!

All right everyone, how many times have you read an email and said to yourself “I don’t feel like replying now I’ll just do it later” only to have that email disappear into the deep abyss and completely forget that you left the sender hanging?

Come on, I know you’ve done that at least once.  If you do that more like every third email – CLUNK!  That is me hitting you over the head with an oversized rubber hammer as I resist the urge to shake the stubbornness out of you.  Think I’m overreacting?  Maybe a little but I am trying to save your career and relationships so please pay attention!

DON’T LEARN THE HARD WAY

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Buy this not that WSJ bestseller 728