Almost-Billionaires

I was watching an episode of Jerry Seinfeld’s new project Comedians in Cars Getting Coffee. It seems an alternative title could also be Almost-Billionaires In The Twilight of Their Careers. In an episode where he sits down with Howard Stern there was a moment of conversation that caught my attention. They were discussing how when they were younger the idea of owning a production company, hiring talented artists to be creative, and having the opportunity to pick what gets developed would be a dream. The following dialogue starts at 8:40 in the episode:

Seinfeld: Would you like to play god with shows? And make shows? And say ‘I like this guy, I wanna do this with him’? How come you haven’t done that?

Stern: I had a production company and I had ten shows sold and in production. And I walked away from it. There’s nothing more exciting than the announcement. ‘Howard Stern now is head of his own network!’ You know, whatever, some big announcement.

Seinfeld: Yeah.

Stern: That’s a great high! But then you actually have to go out and get it done.

Seinfeld: Right (laughing).

Stern: And then you have no life. And that’s the problem. I love the announcement.

Seinfeld: It’s so funny how it works isn’t it? That you get to the point to get that thing. And you don’t want it.

Stern: No (agreeing)

Seinfeld: Why is life so fucking twisted like that?

 

Why indeed! It seems there is something demotivating about financial independence. When you actually have the time, the money, the skills to do that great project you would have loved to had the resources to do when you were in college, suddenly it just doesn’t seem like such a great idea anymore.

Maybe it’s wisdom. – A realization that those kinds of things like big projects or businesses, even though there would be some positive things, some fun aspects, and many good moments, ultimately really just don’t make some people happy and they know enough to keep a distance. Making a priority of family and just enjoying a more carefree life is more important.

Maybe it’s plain laziness and that, ultimately, given the opportunity to avoid the headaches of work, some just default to inaction over action. Though I doubt this is the case. Because people who reach financial independence early, or people like Stern or Seinfeld who amass great wealth, almost always do so through years of hard work and perseverance. Though maybe we’re only born with the ability to tolerate that for so many years before we run out of fuel.

I do see a lot of people with grand plans for when they reach financial independence. – Things like starting companies. – Or making art, movies, novels, or software. – Or working with or starting an organization to fight for an important cause. And there certainly do exist people with enough passion and drive for some things that they actually do pull off those grand plans.

But I also think a lot of people, when they actually get the point where they can make it a reality, succumb to the temptation of comfort and enjoying a quiet life.

My own approach is to just keep the door open. I don’t have any big projects planned. Though I can see how building a business could be fun. Especially if you can do it without the stress of facing potential starvation and financial ruin if you don’t succeed. Or making a independent film would be fun. Or a video game. But I also keep in the forefront of my mind that things are more easily begun, than finished. And what seems like a lot of fun when you’re in the planning stages often ends up being a source of stress, frustration and regret only six months later. And again. I don’t know if that’s wisdom or just plain laziness.

My instinct is to go build something huge. My experience tells me to hold on a minute.

 

Seinfeld & Stern talking.

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Slacking Away

I’ve had a fairly indulgent winter of catching up on reading, keeping up with new movies, and playing through some old video games. I’ve been saving fast towards a new real estate project and expect to buy a place in the next few months. I’ll post all about it when I do. But for now I’ve just been enjoying a lot of leisure time. Since I’m able to get in most of my gaming, reading and movie/tv watching during the work day, I spend my free time doing stuff like playing guitar, hiking/biking, expanding my cooking skills, visiting with friends, and doing a few little projects around the house.

I’ve intentionally avoided taking on any big goals other than continuing to save for my next property investment. I’m really enjoying the leisurely life of the part-time landlord and slacker job combo. And it sits in stark contrast to my life not long ago of working full-time and simultaneously taking on a full course load for years. So I don’t want to ruin the leisure by telling myself I need to use this time productively to learn Spanish, or start a software project, or any number of big, difficult tasks that require a sustained long-term effort. Maybe soon I’ll get bored and decide I do want to take on one of those tasks, and if so, great. But I’m not going to force myself to pursue anything in particular just yet.

I’m having too much of a good time to sacrifice any of it.

My job continues to be a walk in the park. I was commended for being a leader at my six month review. The job is a perfect incubator for me right now. I often wonder when I’ll leave it. Right now I’m thinking I’ll stay at least through next year. And possibly a couple of years after that. I’m just not sure. The big impetus that will probably drive me to leave is wanting to take a long, multi-month trip. Like maybe heading to another climate for the winter. If they let me take multi-month leaves of absence I, I hate to say it, but I might never quit. But rest assured, they wouldn’t put up with that, so I’ll be forced to officially retire even from the slacker job at some point soon.

My apologies for the dearth of content. But all I’ve been doing lately is saving money and having fun.

 

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We’re All Investors Now

In the past decade or so I’ve noticed more and more people referring to their discretionary consumer purchases as “investments”. “I decided to invest in a new couch.” “My newest investment is an xbox one.” “I thought it would be wise to invest in a new shower curtain.”

I’ll see it in advertisements too. I suspect that’s where it all started, at some marketing meeting, “Hey, if we convince people they’re ‘investing’ in their future happiness, rather than just blowing cash on something they really don’t need, maybe they’ll feel better about giving us their money?”  “Brilliant!”

So now you don’t buy a car anymore. You invest in one. Your dust-collecting gadgets aren’t signs of impulse purchases for which you should feel guilty, they were just bad investments that didn’t pan out. It happens to the best of investors, right?

If you’ve thought through a purchase and decided you want something then good for you. Go get it. But don’t lie to yourself by calling it an investment. I mean, what exactly is the ROI of a video game console? What’s its dividend rate? Or are you hoping for a future capital gain?

An investment is when a resource is expended in order to gain profitable returns, as interest, income, or appreciation in value. Being able to spend your free time over the next year playing video games is not a profit.

When I’ve confronted people about this in conversation they’ll tell me that they use the word because they are “investing” in their future happiness. So their ROI is their happiness. So now anytime you spend money on absolutely anything it’s an investment. Which renders the word “investment” completely indistinguishable from the word “purchase”.

I just wish people would see that this all started through advertisers choosing a word that creates a feeling of greater self-satisfaction when buying things. So that in the future you’re more likely to buy more things. And by buying into it, and actually using these words incorrectly yourself you’ve completely fallen for it. Now, not only are you allowing advertisers to manipulate you by using incorrect words to make you feel better, you’ve allowed them to trick you into manipulating yourself by internalizing the language and using it in everyday conversation.

It’s become so mainstream to incorrectly use the word “invest” in this way that I hardly even bother confronting it any more.

Well, screw it, if you can’t beat ‘em, join ‘em. I’m gonna go invest in some groceries and a utility bill. Hey! I do feel better…

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Earning The Rent

They say land lording is unlike other investments because it requires a lot more work than just cashing a dividend check. It’s kind of like buying yourself a job. – Greater returns in exchange for a work input. At least, that’s the idea.

So far, with almost three years of land lording under my belt now, I’ve had it pretty good. The only thing I had to do was patch a roof last year after a blustery storm blew off some shingles. It took all of twenty minutes to do once I got there. And it wasn’t an emergency so I was able to get it done a few days after it happened when it was convenient for me.

The mythical 3 am phone call for a clogged toilet has yet to happen to me. And if it did, I wouldn’t pick up the phone. My tenants know that if they can’t reach me in an emergency they can just call a plumber or electrician or handyman and send me the bill. So far that hasn’t happened either.

I did actually have to put some work in last month though. One of my tenants had to end his lease early and move out in a hurry. And he left me with a mess. Not a disaster. But a mess. I ended up spending a good 8 hours at the house earlier last month sweeping, mopping, painting, rehanging a door, maintaining a furnace, and hauling old cheap, irreparable furniture to the dump. No index fund would ask you to do all that.

But it’s really not so bad. I can do the work when it’s convenient for me. I could even hire out some of it if it really annoyed me. And it’s so infrequent that I actually get called to do anything that I really don’t mind it when I do.

I wound up renting the house to a new tenant just a week or so after the old one moved out. Fortunately vacancies aren’t a problem at all. And most of my hands on work, after a property is all rehabbed of course, pretty much involves just depositing checks. So, as far as jobs go, it’s got to be one of the easier ones around.

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My Rampant Consumerism

My car, while I’m happy with it, came with a rather sad stereo system that can’t play anything more advanced than a cassette tape. I mean, give me a break. In my previous car I installed an in-dash GPS/mp3 player/radio that I was pretty happy with. But it wouldn’t fit in the Jag’s dashboard. I’m pretty happy with the solution I came up with though and maybe this could help out some of you guys driving around in older cars with outdated entertainment systems.

My solution was to get a used, first gen Nexus 7 tablet off of ebay for $100. This way I can load up all my music and podcasts on it and play it through my stereo. The problem was, my stereo didn’t have an auxiliary input. So I couldn’t just run a plug from the headphone jack into the stereo like a normal person. So how to connect the two?

I wound up finding a device that will convert a bluetooth signal into an FM radio signal that can then be listened to through the FM tuner in the car’s stereo. The device is wired directly into the 12 volt power from the car and the antennae input in the back of the stereo and hides back there, in the dashboard, completely out of sight. While I had the stereo out to install that I also wired in a USB charging cord to the 12 volt cigarette lighter and popped a short USB cable out of the top of the dashboard to power the tablet for long drives.

I also threw another device onto the ODB2 data port (the port you plug into when a check engine light comes on to see what the matter is) that feeds live data over bluetooth to the tablet so I can get real time information about what the engine is doing. This was more for the cool factor than for anything really practical. A sleek dash mount that makes it super easy to place and remove the tablet rounded off the project.

The Nexus 7 also has a GPS antenna built into it so now I always have a GPS, my entire music collection, and automatically downloaded podcasts available to listen to, plus real time engine feedback and immediate readings of any engine issues. The whole project ran me about $180. Cheaper than any in-dash unit that could do all that. Plus, unlike a factory supplied in-dash unit that will look dated in just a few years, it’s modular and upgradable, and I have a tablet I can take with me when I’m not in the car.

The Nexus has a feature so it can set reminders that will pop up on the screen when I have reached a particular GPS coordinate. Which makes it so I can do things like tell it to remind me to do something next time I’m at work, or in a particular city, or driving by a particular store. So when I’m in that area, a message will pop up reminding me of what it was. And with the tablet mounted up on the dash, it’s impossible to miss a reminder.

I don’t pay for a data cell phone plan. I’m still walking around with a dumb phone. So the tablet has no data connection while in the car. But that really isn’t a hindrance to anything I want to do with it. The only benefit I’d really get from a data connection would be lives traffic updates. But that’s not a big issue in the areas and times that I’m normally driving. And if I do want to look something up I can always pull into the parking lot of a place with free wifi.

dash

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New Wheels

I’ve been driving around a 2000 Ford Focus that I bought for $1,500 about 3 1/2 years ago now. I took it from 165k miles to 210k miles in that time. I did have to put some work into it. When I first bought it I spent a weekend grinding rust off the body panels and touching up the paint. I also put a hitch on it (it had a 2k lb towing capacity). And I probably spent about $600 on repairs over that time. Including a new alternator and replacing parts of the under carriage that rusted out. The car was 100% reliable in the 3 1/2 years I owned it, never leaving me stranded.

In the past few months some issues have started to pile up with it though. The engine started leaking exhaust, and some engine sensors have gone haywire, setting off the check engine light. And a few other minor annoyances here and there lead me to decide that it’s time for a new ride.

My first thought was to get a 5-10 year old Civic, or other similar reliable Japanese sedan. But those cars hold their value well and I wasn’t impressed with what I was able to find in the <$5k range (the tentative budget I set for myself). After researching, taking some test drives, and keeping an eye on ebay auctions and craigslist listings, I started to consider other options.

I wound up finding a car on a small used lot that caught my eye. It was a model I’d been thinking might be good for my needs and after taking it for a spin and finding a few things wrong with it to strengthen my side of the negotiation, I made an offer. The seller was asking $6k for this car. I knew I could get the same make/model in similar condition for about $4k.

Now, I hate negotiating. Hate it. I find it awkward, and uncomfortable. But for some reason, this day, it all came fairly easy to me. Maybe it was because I was so well informed about exactly what this thing was worth. Or maybe it was from watching too many reality shows about pawn shops. But I opened the talks with an offer of $2,500. The salesman “checked with his boss” and came back at $3,200. WOW! Almost a 50% drop right from the get go. So I said, “How about $2,650?”

Again, checking with the boss, and he came back at $2,850 and thought he had me.

Not satisfied I offered to “split the difference” and ended up driving away with it for $2,750. So now I am the slightly nervous owner of a ten year old Jaguar X-Type with over 100k miles on it. Slightly nervous, because I know of the brand’s reputation for high repair bills. But I took that into consideration in my purchase. I would have to dole out about $3k to $4k in repairs before I even got to the purchase price of a Honda Civic of the same year and mileage. So, as with any used car, it’s a bit of a roll of the dice. We’ll see how things play out over the next couple of years.

It’s been a few months and I haven’t had any issue yet. The car is fine, it’s a decent ride. It’s all-wheel drive, which I wanted for the winters, and it’s a manual shift, which makes it a little more fun to drive. What’s been particularly interesting though has been people’s reactions to the car. Most people seem to think it’s a lot newer than it is. Jags have a kind of classic styling, so long as it’s in good condition, it’s hard to tell a 10 year old model from a 2 year old one. Friends want to ride in it. Co-workers have said they must be paying me too much. And I feel like the evil slum lord when I drive it over to collect the rent from my struggling tenants.

My attempt to get a decent car at a bargain price has ironically made people see me as some kind of… well, I don’t know what. But they think I’ve got money. It’s ironic how spending money (or in my case, being perceived as having spent money) makes people think you’re wealthy, while being frugal makes people think you’re poor. Yet logically, and in reality, the exact opposite is the case.

I hear people often argue that only spending a couple of thousand bucks on a car is a bad idea because the repair bills will end up being more than if you just bought a more reliable car. But that just hasn’t been my experience. I ended up selling the old car for $600. Leaving my cost for the vehicle at $900 (Purchase price minus selling price), plus $600 in repairs, leaving me at $1,500, or about $428/year for me to use that car over the past 3 1/2 years. It’s just so hard to beat the low cost of a fixed-up clunker that you can work on yourself. I don’t know how people justify spending over $30k or $40k on something when, with a little skill, you can get the same function for about 1/20th of the cost.

As an aside, those of you taking notes may have noticed that the purchase price of the car amounts to about 2 weeks of my income. How about that?

Jag

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The Slacker Job

Well I have no excuse for such a long break since my last post, other than that I have just been enjoying doing things other than writing.

I’m almost 5 months into my newest job and I’m feeling a bit of euphoria since I think I’ve found the perfect job for me. Is it because it’s given me a sense of purpose? Or new challenges that give me interesting problems to solve? Or that I get a good feeling being able to help others through my work? Is it any one of those things people describe when they tell me why they like their job and won’t ever stop working? Nope. It’s because I was able to sniff out a position where I can get all my work done for the day in less than an hour, sometimes less than half an hour, and I’m free to spend the other ~7 hours/day doing most whatever I want, so long as I can do it at a desk.

The organization I’m at is over-staffed and I think I’ve basically been hired into a legacy marketing/sales/recruitment position that made sense at one point, but now everything is so stream-lined that the work load is tiny. Plus I spent my first few days writing some scripts to make some of the more tedious parts of the paper work much easier.  I don’t want to give out too many details about where I am but basically it’s an organization that caters to the super rich. They offer highly specialized services in a luxury setting.

Naturally I got myself a gaming laptop after my first few weeks of work. Now my typical work day involves banging out my actual work right when I arrive. That’s typically taken care of in less than an hour. Then I divide the rest of my time between surfing the internet, playing video games, reading some books, watching tv/movies, and socializing with other staff and clients. Not that I’m too overt about these things, I just keep the volume low and my mouth shut about it. It pays just under $50k/year, the hours I work are flexible, and it comes with the typical cadre of  benefits plus a generous amount of paid time off.

I have a business idea I’ve been thinking about trying for a few years so when I’m feeling like I want to be productive I just work on that project with my free time. But I’m in no rush with things, so if I feel like just playing a game all shift, I let myself do it without guilt. Right now I’m just focusing on enjoying myself while still aggressively saving for my future investments.

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Purposeless

I was having coffee with a friend of mine. He’s a minister and a nurse, and one hell of a gardener. We were delving into theological minutiae recently when our conversation progressed to the point where he asked me, “So, then, do you think you have a purpose?”

I’ve mulled this over before. My response was, “No. I do feel purposeless.” Those words sound so sad when said aloud, we’re used to it being a depressing thought.

But I went on, “But it doesn’t bother me.”

I think my beliefs about certain fundamental truths have some bearing on my choice to just enjoy myself, rather than striving to perform some great feat, or noble duty, or bettering the world.

I suppose my beliefs could be summed up most easily by calling it existential nihilism. The worldview of choice among angst-ridden teens. Though I manage to hold such views while simultaneously whistling a happy tune.

It is basically a belief that the universe, and consequently, life itself, is random and pointless (or “absurd” as the philosophers like to call it). That the collection of atoms that make up my body and consciousness are no more valuable than the atoms that make up the sun or a rock. Indeed, they are the same thing, just arranged differently. And that my self will soon be completely wiped from the face of the universe along with every human being and the memory of every human being who has ever, or will ever live. The sun will explode, the universe will implode, and nothing we do will have meant anything.

If there is some greater meaning, it can’t be known. We can’t trust that our senses aren’t lying to us. I trust that what I see and touch actually exists, I have to in order to get through the day. But I can’t use that information to figure out some fundamental truths about life or the universe, because I can’t be sure I’m not just some brain hooked up to a computer, or that I’m not being tricked by some divine being who’s toying with me.

And I can’t trust logic. It makes sense to me that something can’t both exist, and not exist at the same time. Or that 1 + 1 = 2 .That makes intuitive sense. But how can I know that that’s true beyond any doubt? How can I be sure what appears to be intuitively logical to me is actually so, or if I’m just a product of an absurd universe tricking me into thinking it makes sense? I can’t.

So just like I trust my senses enough to help me navigate through the world, I trust the rules of logic so far as they help me navigate through the world. But I can’t count on either of them to help me get to any undeniable truths since they are both ultimately based on assumptions and intuitions that I can’t be sure are universally true or just things I’m being tricked into believing.

Descartes basically concluded, after wrestling with this problem, that we have to just choose to trust that logic is real, and our senses aren’t lying to us. Because reason itself was created by God, and God wouldn’t lie to us, would he? Descartes asks that you make that choice to trust though, because without doing so, there isn’t much else you can conclude.

Some people, angst-filled teens namely, but also many an adult, when faced with these realizations, fall into a state of despair. Why do anything if everything is pointless?

Indeed many existentialist philosophers spend a great deal of time trying to figure out whether or not the most rational thing people could do is commit suicide.

This leap from “everything is pointless” to complete despair doesn’t have to be the case though. It could actually be a liberating realization. If everything is pointless then you really don’t have any obligation to do anything. Moral codes are optional, duties you might feel towards your fellow man are irrational, so there’s no need to uphold them or feel guilty about not doing so, and you needn’t worry about pleasing any divine beings or following religious doctrines. Simply do whatever you want without guilt.

I happen to find that the fact that life is meaningless doesn’t make it any less enjoyable. Food is still fun to eat. Friends are still fun to laugh with. Love is just as attractive. I like to think of it as mindful hedonism.

If everything is pointless and you can’t really know anything for sure, the best I can do is choose to maximize my pleasure. While my pleasure all might be an illusion, and is definitely pointless, at least I like it.

Now let me quickly try to fill in some gaps of my thinking without being too heavy on the formal logic of the system.

There are some problems that crop up with such a belief system. Such as, well, if everything is pointless and humans are not more special than any other assortment of atoms, why couldn’t I choose to kill people I don’t like? Or why not steal or cheat whenever it benefits me? Why follow any rules of society or morality?

It seems like a real conundrum, but the answer is pretty simple. Because if I did any of those things there is a good likelihood I would be caught, and imprisoned, and thought less of. All of which would lower my overall enjoyment of life. Friends and socializing are an important part of my happiness, and if it is known that I’m a thief or a murderer, well then, I’d probably have a hard time keeping good friends and would be less happy in the long run because of it.

So it becomes a pure utilitarian approach to morality by simply measuring what will bring the most pleasure over the long-term. This typically leads to conclusions that align well with societal expectations and the law.

I also love a lot of people. Given this hyper-rational approach you might wonder how I could embrace such an absurdity. If a person is just a bunch of atoms, why should I feel a special connection to them beyond their utility to me?

For this, I just choose to embrace the absurdity. I’m already assuming and accepting that life and the universe are absurd, yet I choose to embrace them. So why not just acknowledge that love is absurd and go ahead and embrace it anyway if it adds to my pleasure?

This includes romantic love, familial love, the love I have for my friends, as well as a Christian-esque love for people I’ve never even met.

Other virtues line up well with an approach to life seeking to maximize pleasure; practicing forgiveness, patience and generosity all make life more pleasant and less stressful for the practitioner. So living with the aim of maximizing pleasure can look very similar to living with the aim of being virtuous or pious.

Practically speaking this purposelessness is freeing. I don’t feel any need to set arbitrary goals for myself, or to constantly progress at things. Everything is ultimately meaningless anyway so I shouldn’t ever worry that I’m “wasting my time” since anything I could possibly do would, ultimately, be no more wasteful than anything else.

I’m not worried that I’ll ever run out of fun things to do. I mean, I spent a year in a desert basically doing no more than sleeping and hiking in near solitude, and I only left that life with some reluctance. My current life offers far more options than that. There’s too much fun to have to ever tire of it. Nietzsche asked, “Is not life a hundred times too short for us to bore ourselves?”

So, am I purposeless? Sure. So what?

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The Temptation To Be Rich

Instead of calling it quits in another year or two and never working again, I could just keep on chugging along. – Constantly reinvesting my growing rental incomes and paychecks. A little quick spreadsheet work shows I could be in the $2M/assets + $400k+/yearly income range within about 6 years at the rate I’m going.

This recurred to me last night when I was looking at projections to figure out when I’ll have enough income so that I’ll feel comfortable quitting working again. What if I just kept going, racing past my goal on into the future? What if I kept up this pace for 5+ years? Where would I be? There are lots of opportunities for failure along a path that long, but I’m confident, if I made it my goal, I could be a multi-millionaire by the time I’m 40, and likely a deca-millionaire before I’m 50. – If I made it my goal.

I could certainly take that route. – Being a hard-working businessman through my 30′s, and a high-rolling investor throughout my 40′s, 50′s and 60′s. – Helping to launch businesses, or rescue them. – Creating jobs and wealth along the way. – Taking on lofty goals like revitalizing a city neighborhood, creating scholarships, or helping fund the search for a cure for some awful affliction.

Then there’s the opportunity for a little decadent consumerism like yachts and pent house suites.

Once or twice a year these types of thoughts will cross my mind. And I entertain them for an hour or so, imagining what such a life would be like. But I always return to my old conclusions. No doubt, such a life would be fun, but I always seem to fall back to the idea that I would have more fun settling for a modest income and filling my time with days at the beach, or on mountain tops and having parties with my friends rather than days on construction sites, or at an office desk working my way through a never ending to-do list of mundane business.

The work-a-holics would likely state just the opposite though, wouldn’t they? That they’d much rather spend the day productively solving problems with like-minded colleagues and helping to build wealth for themselves and others, rather than sitting around yet another camp fire on the beach trading silly anecdotes, half of which they’ve already heard.

I don’t think either approach is intrinsically better than another. It’s just a matter of personal appetites.

Some dime-store psychologists peg me as having a fear of failure. That’s not it though, I’m quite comfortable with failure. I’m just easily happy. And if I can facilitate that happiness with only $20k-$30k/year, why spend decades of my life doing something I don’t enjoy just in order to have $200k-$300k/year? Is that small increase in enjoyment from that much larger amount of money worth sacrificing a decade or more of my life? I don’t think so. Though I concede that for another, the word sacrifice would hardly seem apt, since they could get a great thrill from accumulating wealth and building businesses. While I acknowledge that kind of stuff can be enjoyable, for me it always seems to wear thin after a short while and I always end up wishing I just had more leisure time.

I remember in high school my economics teacher told me that economic demand is limitless. Yet, then in my English class Thoreau told me that, “The community has no bribe that can tempt a wise man.” Somehow I figured out a way to cap that limitless-demand, at least so far as my personal economy goes. I’m not clear whether that’s thanks to wisdom, or the good fortune of not being born with such appetites, or, likely, a little mix of both.

I imagine that titan entrepreneurs and hard-driving business people, people who could afford to choose to never work another day in their lives if they wished, face the opposite temptation. – The temptation to call it quits. I imagine, just like me, they mull it over for an hour or so a couple of times a year, imagining what life would be like with all that free time. Much like I imagine what life would be like with all that productivity around me. And they conclude, much as I do, that they couldn’t possibly be happy doing anything else.

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The New Surplus

Well my garden is in full swing. My composting worm population has tripled. I’ve explored a lot of my new hometown on my bicycle. I’ve been playing quite a bit on the guitar lately. And I’ve been seeing a lot of my friends and family. Plus my tenants are all doing well with no complaints to hear of.

The quiet life suits me. Though it is a bit dull and uninspiring when it comes to blogging material.

The good news for my readers though is that I’ve accepted a job offer, set to commence in just a couple of weeks. So I should have plenty to complain about very shortly. My job search only lasted about six weeks. And it consisted of a few different tactics including talking with my old school buddies to see about opportunities at the places they’ve been working at for about a year now since graduation. Also in taking advantage of both my law school and undergrad alumni job boards. – Checking out the typical job search sites. And mentioning to all my friends and family members whenever I would visit them that I was back on the job market just in case they may have heard of anything suitable. I was fairly selective about it and after sending in maybe 15 resumés I wound up attending four job interviews and receiving two offers, though one interview went very well just a few weeks ago and I was told I should “definitely expect a call within a couple of weeks,” but that was three weeks ago now so whatever.

I wound up accepting an offer for, what I think will be, a fairly low stress position at a local satellite office of a Boston-based non-profit organization. I picked it mostly because it’s a short commute, has a kind of quirky/casual office environment that I think I won’t mind too much, and there’s no expectations to ever put in more than 40 hrs/week.

Interestingly enough, my nearly twelve month break from both school and work wasn’t even brought up in one interview, and for the others, when I explained I was a real estate investor and spent some time rehabbing a place, plus took a month-long trip to Africa, suddenly we were talking about the real estate market and Ghana instead my resumé gap.

I’ve decided I’m going to keep working until at least the following goals have been reached, in order of priority:

1. I buy two more rental properties with cash (bringing my total to 4).

2. My BF, and likely future spouse, has 4 properties of his own. It won’t be any fun for me to quit my job if my partner is still limited to 4 weeks of vacation a year. He’s on the road to buying his first place this winter with all cash. I told him I’d contribute 50% towards his 2nd property to speed things along. And he has great credit and a long work history so the plan after that is for him to take out a home equity loan on one of his first two properties in order to purchase two more. So we would each have four rentals bringing in money. Which, incidentally, means that the day we marry will likely also be the day we enter the millionaires’ club given our potential combined net worth.

3. I rehab a house and offer to sell it to some close friends of mine, a married couple, at a discount, something over my costs but below market rate. They’re great people that have grown up in some difficult circumstances and have had limited help from their families and I want to help give them a leg up. But if they refuse the offer or it doesn’t work out I would just sell the place at market price to whoever.

4. I buy/build a bunch of stuff (or at least have the money set aside for it). On the list right now: An alternative energy vehicle, rebuild the 2-car garage at our house that wasn’t really built right the first time, a grid-connected solar pv array, a small in-ground pool, and a nice second-hand RV.

 

I could quit after reaching goal #1 and then just use passive income to finance the other 3 goals. But that would stretch things out over the better part of a decade whereas, if I worked, it could all be done in less than two years. Which, so long as I don’t absolutely hate my job, I’d prefer to do.

So, for the last several months I’ve been living off of passive income from rentals. And my income has exceeded my expenses by about $500/month. Now, with this job starting up, my income will exceed my expenses by about $5,000/month. So I should be able to save up for a couple of more $25k houses fairly quickly. And when I start collecting rent on those I’ll be looking at closer to a $7,000/month surplus. Which makes the prospect of reaching goals 2,3 and 4 seem fairly trivial.

That’s part of the power of being FI. All my expenses are already covered by my rental income so I can save 100% of my earnings from my labor.

I know just from reading my own archives that my plans often adapt as circumstances change, so who knows how closely I’ll stick to this particular path. But working my way down it can only lead to good things, so I’m not going to worry about that.

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