Posted onSeptember 20, 2017|Comments Off on Achieving Healthy Smile From Cosmetic Dentistry
Your smile is one of the first physical attributes people notice about you; shouldn’t you make it stand out? Cosmetic dentistry can help you achieve that healthy, beautiful smile that will turn heads!
To obtain a beautiful smile and maintain your excellent oral health care, it is imperative that you find a dental professional you trust. Ask for recommendations from friends and family, and do some research on the doctor. Check the dentist’s accreditations and affiliations, as well as his or her expertise. Visit the dentist’s website and if you are looking for a cosmetic dentist, view the gallery of patients before and after their procedures to see samples of the doctor’s work, and schedule a free consultation, if available. Make sure to ask questions to ascertain whether or not this dentist is the one you want to work with. Once you have settled on your dental professional, the next task is determining the cosmetic procedures necessary to achieve your desired result.
Need a little confidence boost? Teeth whitening is an easy, relatively inexpensive way to change the look of your smile. Have stains from coffee, red wine, smoking or tea? Simple bleaching or whitening can have a dramatic effect on the aesthetic appeal of your smile. These products contain some type of peroxide and the amount varies from product to product. In-office professional teeth whitening such as ZOOM! BriteSmile, and Rembrandt use a whitening gel and ultraviolet light to take your teeth to a lighter shade and to remove stains. KOR deep bleaching is a product that is more expensive than the others but can lighten your smile by 16 shades! Also, the results with KOR are permanent while other whitening options require continued maintenance. Want to try whitening your teeth at home? Dentist near Edmond can give you recommendations for the best at home whitening including gels, toothpaste and whitening strips. Used correctly and consistently, whitening offers a stunning, white smile to you give you the added self-confidence to show off that smile! It’s an uncomplicated, economical way to transform your smile from dull to dazzling!
If your teeth are chipped or your smile could use a little help to be extraordinary, dental bonding is also an inexpensive option to discuss with your dentist. Bonding is just what it sounds like—tooth colored resin is bonded to the tooth and hardened with a high intensity curing light. It can be used to fix chips or cracks, close gaps between teeth, replace silver fillings or even change the entire shape of the tooth. In addition to being one of the most economical cosmetic dental procedures, it is also one of the fastest: each tooth can be bonded in just 30 to 60 minutes in office. The two drawbacks to bonding is that the bonding material can chip so it is best to avoid chewing on ice or hard foods; and bonding material only lasts between three and ten years, depending upon your oral health care. However, bonding can be an excellent way to make your teeth more attractive, even temporarily.
Looking for a more permanent fix to your less-than-perfect smile? Porcelain or resin veneers are thin, custom made covers that are applied to the front of your teeth and then bonded. If your teeth appear too thin, with gaps or chips, veneers can rectify your problem. Veneers can be used to change the color, shape, size or length, dramatically changing your smile! Your dentist will place temporary veneers on your teeth while the permanent veneers are constructed in a dental lab. Once the veneers are bonded to your teeth, they are permanent, making them an excellent choice to achieve the smile you have always wanted!
A simple way to even out your smile is enamel shaping or contouring. If your teeth have an uneven edge or are slightly overcrowded, your dentist can correct those small imperfections by gently reshaping the tooth or teeth in question. If your teeth look fine, but your gums take away from your perfect smile, gum reshaping might be an alternative to consider. If you have a “gummy” smile, one that makes your teeth appear smaller, the gum line can be changed to one or several teeth to expose more of the enamel, which “lengthens” the teeth and improves the overall smile. A discussion with your dentist will determine whether these procedures are right for you.
Considering replacing a silver filling with a tooth colored crown, but don’t want to invest a lot of time? Ask about CEREC one day crowns and see if you might be a candidate for this advancement in cosmetic dentistry. The first step is having the dentist examine the tooth and prepare the tooth for restoration. Your tooth will then be coated with a safe, tasteless powder and then photographed with a special digital 3D camera to create an optical impression. If you always hated the goopy impressions involved with crowns, this new technology makes that a thing of the past. The tooth is then designed on Computer Aided Design (CAD) software, down to the very last detail. This ensures the snug fit of the crown once it is placed. When the rending is complete, it is sent to an onsite milling machine and it makes the restoration within minutes. The new crown is fitted, then polished and bonded into place. No need to wait for a new restoration; a new one can be ready in less than an hour!
Dental implants are a procedure that is changing peoples’ lives. Whether you have lost a tooth or teeth to dental decay or an accident, a brand new tooth can be put in its place, reserving the integrity of your smile. It’s like growing new teeth! A titanium screw is attached to the bone of the missing tooth and a fabricated tooth is attached to an abutment, securing the crown to the implant. If well cared for, implants can last a lifetime! They also look, feel and function just like natural teeth. If you are missing one or more teeth, discuss dental implants with your dentist to see if you are a candidate for this revolutionary procedure.
An investment in your smile can last a lifetime, so having a smile makeover to put your best mouth forward might be worth the time and money involved. Discuss with your dentist your aesthetic goals, budget, and options to determine the cosmetic services to best reach your desired results. A combination of efforts can take an unflattering smile and turn it into your best feature.
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Now it’s out in the open and a decade ago plastic surgery was quite hush, hush and many people are talking about it. It was previously just for the wealthy and famous and now it is for who can manage it and needs to enhance their look. Its all about altering that part of the body which you do not enjoy whether it be belly, your nose, breasts, chin, the sky is the limit these days. With progress and new techniques in surgical instruments the variety of cosmetic operations is growing annually.
Although, most individuals who receive or need cosmetic surgery have a certain aim to reshape, remove or correct imperfect regions of the body, plastic surgery additionally engulfs added kinds of operation including hand operation and reconstructive, microsurgery, burn treatments. In these kinds of operations restoring or correcting function and form into a particular part of the body is not unnecessary.
In the current society the goal would be to appear, behave and feel lovely and youthful. It’s said that cosmetic surgery has grown by 50 percent since the start of the century. This can be a great increase that shows the reality that folks are obsessed with beauty. With cosmetic surgery of looking youthful and beautiful the dream could be a reality. Select an area to improve and a Oklahoma City plastic surgeon can alter your look for your liking. This occurrence just isn’t restricted to race or sex. Men and girls are getting cosmetic surgery in addition to African American, Hispanic and Caucasian.
Typically the most popular aesthetic operations include abdominoplasty, liposuction, nasal surgery, eyelid surgery and breast augmentation. Without needing to eat healthy or exercise with a great number of operations to select from a man could become an ideal specimen.
Nevertheless, having cosmetic or plastic surgery when you get right down to it isn’t all fun and games. Lots of individuals who have plastic surgery need added operations and become hooked. Having a lot of operations can be harmful to to your own body but also to not only your pocket book. Every time open you run the risk of disease and organ failure.
Make a listing of questions to your surgeon when you’ve got your consultation to reply. Ask your surgeon the benefits and drawbacks of your operation. If you comprehend the dangers involved in advance it’s simpler to make a suitable choice. Have your physician summarize all the steps to your own process and after what you should anticipate and so you realize not only what will be going on during the operation but how long it takes to recuperate. Testimonials with graphics are an excellent means to get a sense of what you should expect after surgery. Request your physician if he’s any from previous customers.
Sadly plastic surgery is getting a quick fix for those who are not happy with themselves. It’s these individuals who desire to always have operation after operation and are never pleased. After you’ve had plastic surgery taking yourself can be comparatively simple or hard. Remember that you’re still that same individual even if you’ve had important changes. Operation does not alter the interior we should not rely on a scalpel to make us beautiful and it just alters the outside.
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Acupuncture is an early Healing Artwork which arrives from Japan, China and other Asian nations. Acupuncture operates nicely with other types of medicine. Acupuncture balances a man’s life energy, or Qi (pronounces “Chee”). Treatment is according to the assumption that a free flow of Qi maintains well-being. Disorder may be caused by a block in this flow like heart problems may be caused by a blocked coronary artery. Softly touching the Qi energy is like releasing congested regions, enabling the Qi to yet again circulate thus restoring well-being or opening a gate.
Acupuncture can work for a variety of states, including but not restricted to:
Circulatory and Digestive states
Menopausal and Reproductive issues, menstrual
Depression and other emotional issues
The Immune System additionally reinforces, provides relief from long-term illnesses, and encourages general well being, personal growth and interior core strength. An assortment of individuals of ages have located Acupuncture to be successful where other types of treatment have not been successful. Individuals frequently report an overall improvement of well-being as well as progress in the state they initially sought treatment for, because Acupuncture treats the entire individual.
It’s possible for you to expect to have a thorough history taken during your first treatment, and a thorough check in during subsequent sessions. The acupuncturist will keep a secret graph by which your progress is tracked by her. You may ask any questions you enjoy the acupuncturist herself or about the treatment. Before the real treatment, the professional will feel your beats in establishing the best course of treatment to help her. She’ll also feel your heartbeats after adding needles and by the end of the treatment.
Acupuncture OKC expert will add several really fine, clean, disposable, stainless steel needles into distinct point in your body – . A few of these needles will stay in place for a period, others will be removed promptly, dependent on your beats and your symptom. Maybe you are requested to rest with needles set up for 10-15 minutes. Some of US will feel improvement within their state promptly, for others – either way is not paranormal and cannot be called in advance of treatment.
Acupuncture is practiced by An Accredited Acupuncturist who generally has a master’s level training. The exact same medical boards that control MDs regulate the profession. This is determined by your reasons. If you’d just like to experience relaxation, a decline in pressure-induced symptoms such an overactive mind, stressing, muscle tension, troubled slumber etc – you are extremely likely to see improvement in these symptoms from only one session. This can be particularly helpful in the beginning of your holiday as it allows you take complete benefit of your time off and to leave behind your routine life for the time being. If, on the other hand, you happen to be experiencing illnesses that were more serious, more intensive and/or more routine treatments are called for.
Any kind of painful musculo-skeletal condition responds to 2-4 treatments, scheduled together, say every other day or daily. More long-term conditions respond to 2-3 sessions scheduled together, followed by treatments that are standard, say every 2-6 weeks, according to the state.
I recommend that you just do the following:
Participate in some type of routine exercise.
Be certain you acquire some sort of quiet time every day – it can be short.
There are hardly any side effects to Acupuncture, particularly in comparison to things like operation or drugs. It’s also crucial that you notice which you may experience what’s termed a Healing Crisis – there may be an initial, quite short lived aggravation of your symptoms, continuing up to several hours, followed by noticeable improvement. Healing Disasters are a comparatively common, but usually not a cause for worry.
Auricular (Ear) Acupuncture is another system of acupuncture. Some acupuncturists practice just this kind of acupuncture. Auricular Acupuncture Allergies, and is effective for states like Stress, Depression, Insomnia, Dependence. At Cabot Shores, it’s integrated into an individual Acupuncture session. Auricular Acupuncture is generally supplied in an organization setting, and for habits and mental states it can be more powerful this way. Supplied in an organization setting, it’s exceptionally cost effective along with community-building. Groups like Community Mental Health Centers, Detox Facilities, Chiropractors, Veterans Groups frequently use this type of acupuncture.
Posted onJuly 15, 2016|Comments Off on The Best Way To Spend Less When You Move
You can find many measures to planning and executing an effective move. Each measure is a vital part of the large image. It will help you save cash and keeps you. Each measure is not irrelevant to any kind of moving service you’re contemplating for the move. Setting thought into your move ahead, studying the procedure that is transferring and preparation each step manner in advance will make an effective relocation moves. You need to prevent any expenses that are additional. The matter that is significant is that several measures are easy and can be done way.
The initial step to saving money when you go, it to write down everything! Keep a laptop and a little pad with you where everything is listed by you. Use a laptop that is sectioned like we’d have used in school. Write everything in pencil rather than in pen. By doing this you keep your moving notebook and always have the option to make changes or corrections arranged. Use colored pencils that are different and create a color code on your own. It’s going to help you.
Begin to list every one of the things you happen to be intending to go. Leave several pages. This way you won’t forget anything, although you always have the option to make changes or delete things on! One piece of advice about carton counts or cartons is that most folks under estimate the amount of cartons we’ll have. Be not conservative relating to this. As you going day gets close changes can be made. Yet this will allow you to to see the bigger picture about how big your move.
You’ll have created a working inventory on your move after you have created a listing of every one of your stuff. The packing material that is most significant will be cardboard boxes. You do not need to go out and purchase unique cartons unless you possess specific things that need handling and unique cartons. Make sure that the cartons are clean and powerful. It’s very important to be sure that every one of the boxes are stack-able, although you want cartons which can be different sizes for different needs. This help you when you must unpack at your place and will save space in your current place. It will likewise help load and unload your stuff in the truck that is moving! One important guideline to remember, although easy is the more heavy the carton, the more difficult it’ll be to proceed. For heavy things including publications, use cartons that are smaller. This is why you’ll want cartons of different sizes.
By gathering cartons that are used, you are going to save numerous dollars. Another excellent way to spare cash on packing materials would be to conserve old papers! This really is a superb packing material. It can be used by you for many of the things you will end up packaging into the cartons. Keep in mind that paper has ink on it , nor use paper for packaging anything which will be sensitive to it (including clothes, since it might create spots which is difficult to remove.) It’s possible for you to use paper for wrap and also shred it positive and if needed it as stuffing within the cartons.
Remember that you’ve got other stuff in you as you are able to use. Some models that are great are all your towels and linens. These may be used to wrap going such as lamps you will be packaging. Even though going is an excellent opportunity to do away with tons of stuff which you may not desire or desire, those old drapes which you might despise might only be convenient so do not throw them out fast when you’re packaging. Save them if you’re able to use them and throw them out.
The following step if you are going in saving money, is contemplating the various kinds of moving services which are accessible for you. You’ve got several choices. Each has its benefits and drawbacks and you’ll need to research them to make an educated choice. If you understand people who have moved over the last number of years you may want to talk about it together and their encounter with the moving service they select. Although moving just isn’t about your property, but can also be a life altering encounter, you may need to consider your personal physical and psychological demands and to what extent you will end up able to participate in the move.
Now it’ll be important that you begin getting free moving quotes to your move! The web also can enable you to study the services that are moving in addition to get free moving estimates. Allow the movers! You are going to want thing list or your inventory helpful when you’re discussing to moving services and moving companies OKC. This can be how they’re going to have the ability to give a free moving estimate to you! Don’t forget to discuss any for going, packaging or possibly storage. It’s crucial that you remember a quote is an approximation and never a a cost that is guaranteed. A “Binding Approximation” for example is only going to be binding if there will be no additional work or materials desired on your moving day and if your stock is right.
Each moving or mover service will have the capacity to e-mail you a free moving estimate for the move! It’s important to prepare yourself about the language of proceeding, so that the moving quotations can be correctly deciphered by you. One crucial move to make when you read a quote that is moving, will be to make sure exactly what you discussed with the company that is moving is written down. Anything not written and assured down will not be binding! Ensure there’s no obscure language on the quotation. Obscure language will mean that someone is attempting to conceal something and that will not function as sort of folks you need to conduct business with! It will likewise mean that day on moving, you are going to have tons of unpleasant surprises which will set you back considerably more income. No one loves that!
Once you’ve made your selection, make sure you be in experience of your moving company or service that is moving. You may need to upgrade your inventory when you’ve got changes to make removing or adding items. The important thing is, to save cash going, plan and you should think ahead of time. You should prepare yourself about the moving services accessible to you personally and the moving business. You must know of going the language. You must be clever and think about where it is possible to save and make use of easily accessible stuff, not spending money on high-priced stuff which you don’t desire or desire. You have to be clever if you are talking with moving services and moving companies. Remember whether it seems too good to be true, it likely is, be bright!
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Posted onJune 22, 2016|Comments Off on Oklahoma Aviation Careers For Oklahoma Aviation Degree Holders
Oklahoma Aviation is profession that is quite fascinating. It’s significant impact on economic condition of world. Oklahoma Aviation sector not only contain aviator/flyers just, all others are belong to Oklahoma Aviation. It includes private jet charter, airport management, space exploration, human factors, jet mechanics, airplane design, electrical engineering, computer systems, and customer service. Oklahoma Aviation professionals works in distinct sections of Oklahoma Aviation sector. Considerable chances will be explored by you in Oklahoma Aviation sector. Aerospace business or Oklahoma Aviation can generally broken up into:
Flight operations that are-
Navigation services and Air traffic
Oklahoma Aviation repair and care
Passenger and cargo services
emergency services and Earth treatment
Design and building
Oklahoma Air Travel management
Airline Professions- Airlines are considered as among the biggest company in sector that was economical. Individuals may believe airline professions are limited pilots and flight attendants. The scenario is completely distinct amounts of professions can be found in airline. Distinct professions can be joined by high school pupils to faculty degree holders with specialized learning Oklahoma Aviation in airline. Following are some professions in airline.Fixed-base Operator Supervisor
Booking Sales Attendant
Engineering Professions: Engineers play several functions in plane production. Pupils with special specialized training and college degrees can join engineering professions in Oklahoma Aviation. Following are some engineering professions in Oklahoma Aviation.
Aviator Professions: Many alternatives will also be accessible for aviators besides airlines. Second class medical certification, commercial pilot certification and specialized training are required to join Oklahoma Aviation as aviator. Airline Transport Standing and first class medical certifications can also be prerequisite to join Oklahoma Aviation as aviator for some pilot professions. Aviator professions that are distinct are offered in Oklahoma Aviation contain following-
Plane Production & Care- Plane making firms assemble broad assortment of plane for example Airbus and Boeing, Pilatus, Cessna and Eclipse. These plane making firms offer many professions in care and plane making in Oklahoma Aviation sector. Working as professional in plane care & making you’ll be designing planes of tomorrow -engine private plane to plane that is enormous. Tech and exceptionally skilled engineers are permitted join this profession. While assemblers, automobile mechanics and tech have to have high school diploma school degree holders can act as engineer. Avionics specialist can also be quite demanding profession in Oklahoma Aviation. Service plane and avionics specialist installs electronic. Following is the list of significant professions accessible production & plane care.
Jig & Fixture Manufacturer Tool
Sheet Metal Manufacture
Tech & Electric Installers
Quality Control Tech
Authorities Professions for Oklahoma Aviation Professional- U.S. government supplies amount of chances in Oklahoma Aviation sector. Livelihood opportunities accessible authorities for Oklahoma Aviation specialist are as follows-
Wages Info for Professions in Oklahoma Aviation- Following is the typical per year salary info for some professions in Oklahoma Aviation.
Airport Professions can earn to 91,563 from $30821
Avionic specialist can bring in $70, to from $40,000 000
Aerospace and o Engineering can bring in $200, to from $24,000 000
Aviator can bring in from $27,000 to $230
Oklahoma Aviation profession is essential part of modern society. Demand for qualified professionals is growing day by day for various professions in the area of Oklahoma Aviation. Oklahoma Aviation sector offers amount of Oklahoma Aviation livelihood chances to personals with backgrounds, abilities and different interest. It depends on private interest which profession you need to join in Oklahoma Aviation sector. To become professional in any area of Oklahoma Aviation you must get any degree in the area of Oklahoma Aviation sciences. Distinct degrees from entry level to progress degree are for sale in Oklahoma Aviation.
These degrees include bachelors in Oklahoma Aviation, associate degree in Oklahoma Aviation, and masters in Oklahoma Aviation. Any degree can be earned by you according to your own demand. If you need to enter in the area of Oklahoma Aviation and are new pupil you are able to join associates degree in Oklahoma Aviation. But you need to enhance your abilities bachelors and master degree and if you’re in middle of your profession in Oklahoma Aviation is best for you. Both of these degrees update abilities and your knowledge. It is now very simple to get these degrees. You are able to go for on-line degrees in Oklahoma Aviation should you be unable to get degree in conventional mode.
Distinct top accredited online universities and schools that are on-line offer on-line degrees in Oklahoma Aviation. Online degrees accessible the area of Oklahoma Aviation comprise On-Line Masters in Oklahoma Aviation, On-Line Bachelors in Oklahoma Aviation and Online Associates in Oklahoma Aviation.
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Posted onJanuary 24, 2016|Comments Off on Some Great Benefits Of Braces In Oklahoma
The healthiness of your teeth cans really enhance besides enhancing the look of your smile. In Oklahoma you can be noticeable in your head more than other things, when you take into account some great benefits of wearing braces in the city. Braces enhancement from Orthodontist Norman OK can align the look of your teeth. But did you know that they are able to do a lot more for well being and the health of the mouth area? This short article will talk about some of the advantages of braces.
They might be made up of various materials including ceramic, steel or plastic. Although it’s more typical for their sake to be glued to your own teeth throughout your therapy some braces may also be eliminated. By putting a bit of stress on the on tooth, gradually pushing them to go into the specified posture, braces work. The time frame you will use braces is determined by the seriousness of the situation. It generally runs from a few years.
Among the very obvious advantages of wearing braces is the enhanced look of your teeth. Your teeth can be correctly aligned by braces and complete differences between them. Your assurance may increase when your teeth are right. By being assured in the look of your teeth, you can be allowed to smile more. It’s been shown the more you grin, the more happy you are feeling. It is sometimes a huge relief in order to smile confidently after years of being uncomfortable about how that they appear or attempting to conceal your teeth.
The healthiness of your teeth cans really enhance besides enhancing the look of your smile. Being unable to wash them correctly often leads to rot. It could result in gum recession and use your teeth for those who have issues with your chunk. This may result in injury to teeth that are specific where the stress is the most heavy.
It may be hard or even also debilitating to chew the food in case your teeth aren’t correctly aligned. Additionally, it may hinder your capability to make presentation sounds that are appropriate. Braces help alleviate these issues and may enhance your sting. Sky Ortho have found various advantages that go beyond simply enhancing the look of your teeth.
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Posted onFebruary 19, 2018|Comments Off on Five Steps To Improving Productivity: A Quora Case Study
Since making money from our investments might be getting more difficult, it’s good if everybody figures out how to improve productivity. During a downturn, corporations try to squeeze employees to do more after letting go of a bunch of people.
But working more is not my definition of being more productive. Working the the same and generating more output, working less and generating the same output, or working less and generating more output is a much better definition.
We often get stuck in a rut, doing the same thing and expecting things to improve. We’re also creatures of habit despite knowing there are better ways to get things done.
One example of being inefficient is tracking your net worth on an excel spreadsheet despite the proliferation of free net worth tracking software. Another example of inefficiency is vegging out in front of the TV instead of also doing something brainless at the same time, like folding laundry. Another example is watching a terrible movie on a 5-hour flight instead of doing some work on a laptop.
In this post I’d like to introduce my 5-step productivity framework using writing answers on Quora as a case study.
Step #1: Identify The Pain Points
Since running out of energy last year, I needed to figure out what were the things that were sucking up my time or causing unnecessary grief. I zeroed in on three things:
1) Responding to comments without getting acknowledgement or a response back when I ask for follow up.
2) Responding to questions when the answer is clearly in the post.
3) Debating about a topic with a reader only to discover they don’t have the relevant experience.
At one point, I was seriously deliberating disabling comments or responding to nobody since all these activities takes around three hours a week. Given I try to keep my work load to no more than 25 hours a week, I was wasting 12% of work time.
Step #2: Replace Wasted Time With Potentially Useful Time
Since identifying my pain points, I’ve stopped responding to obvious questions, included a warning in my comment system about not approving low value commentary, and decided to use the remaining time answering questions on Quora, a Q&A platform with roughly 80 million users who don’t follow Financial Samurai.
My goal is to encourage FS readers to become more involved in the community by providing their own thoughts to other readers’ comments. Further, I want readers who have questions to improve their self-sufficiency by typing their questions into my search box or typing “XYZ Question Financial Samurai” in Google. As I’ve been writing about personal finance since 2009, I’ve covered most financial topics.
Here are the main benefits I thought of writing on Bay Area-based Quora.
Tap a new audience that is unfamiliar with Financial Samurai.
Build link backs to key pillar articles on Financial Samurai.
Build my reputation in Personal Finance, Real Estate, Investing, and San Francisco
Meet potentially interesting people online outside of the personal finance blog echo chamber
Have fun and be intellectually stimulated
Step #3: Establish A Short Window For Testing
I gave myself 30 days to focus on building my profile on Quora.
In one month, I was able to generate 1.1 million answer views, or 33,333 views a day on average. I answered 70 questions in the 30 day time frame. I’m not sure how good this is, but I think the median number of views a user gets is around 1,000 a day.
The summary shows I answered 84 questions. The additional 14 are answers I wrote years ago when Quora first started. Back then, I thought it was a waste of time since it wasn’t very popular and they made you earn credit in order to ask question, which I thought was stupid.
Step #4: Come Up With Specific Goals You Want To Achieve In The Testing Window
Without specific goals, you’ll end up going down a rabbit hole. Improving productivity requires laser focus.
My goals were to:
Become a “Most Viewed Writer” on the subjects I cared most about: San Francisco, San Francisco Bay Area, Personal Finance, and Real Estate.
Try to achieve 1 million views
Stay consistent for 30 days
Build some repertoire with SF media
I became a “Most Viewed Writer” in all subjects I focused on. I’m pleased with my results in the Real Estate section where I achieved the #1 spot with only 13 answers versus the #2 guy with less views, but with 1,242 answers! 1,242 answers is ridiculous and clearly shows an addiction or a lack of efficiency! I don’t even know how he finds the time to eat and go to the bathroom answering 41.2 answers a day on average.
Most Viewed Writer in San Francisco
Financial Samurai most viewed writer in Personal Finance
Financial Samurai most viewed writer San Francisco Bay Area
Financial Samurai most viewed writer on Real Estate. 13 answers versus 1,242 answers for the #2 guy
In the beginning, it was fun to answer the questions. They kept notifying me that my answers had been sent to their Quora e-mail digest of over 1,000, 2,000, and sometimes 100,000+ people. Positive reinforcement felt great.
But over time, Quora started making me feel like a slave to their system until I finally told myself I had had enough and stopped answering every question I had detailed knowledge about. I became pickier. I turned off Quora notifications on my phone as well. As a result, I became happier, much the same way people who use Facebook become happier when they delete it from their phone.
Endless bombardment of annoying Quora answer requests
Step #5: Thoroughly Analyze The Results Of Your Efforts
After 1.1M views, I only received around 20,000 visits from Quora to Financial Samurai. That’s only a 1.9% click through rate.
Think about all the time spent answering questions to only get 1.9% of the traffic while Quora gets to keep 98.1% of the traffic. Further they get to control and reuse your content. I can easily spend $500 in advertisement on Facebook to get 20,000 visitors to Financial Samurai instead.
Do note that having a large site does not preclude you from being able to also generate 1.1M views in a month either. If you can generate 1.1M views on Quora and have a site that gets just 20,000 visitors a month, you will likely double your traffic. Unfortunately for me, traffic only increased by ~2% because I already generate about 1M visitors a month on Financial Samurai.
The only immediate positive I experienced with Quora seems to be a boost in online revenue. Although Quora boosted my online January traffic by only ~2%, my online revenue improved by 10% because of new visitors. Further, there will probably be some long term benefit for now having ~1,700+ followers on Quora and 84+ answers on their platform for their users and search engines to find and read.
Why I No Longer Plan To Focus On Quora
On the 23rd day of Quora answering, I got a notification out of the blue that one of my answers, which I had spent at around 30 minutes to write and had 220K views and 2,277 upvotes was deleted due to a “violation of their writing policy,” which I had not read. It was odd because the answer was no different in format from all the other answers I had written.
You would think that an answer with this many upvotes and views would be a good thing for the community, but somehow it was flagged, probably by a competing answerer to the question. Quora didn’t even ask me if I could edit the post to comply with their policy. They just outright deleted my work. See below:
My initial reaction was not anger that I lost the view count, but annoyance that I had wasted my time and lost my content. After all, my month long goal was to save time or improve my use of time. As a writer, good content should not be wasted.
Luckily, I was able to click a link to view what they deleted, copied the answer and created a new page on Financial Samurai with my deleted answer: Do Wealthy People Think About Retiring At A Young Age? Phew, it feels so good to have saved my work and add my own recommendations at the end without fear of deletion.
Know this. If you are writing on Quora, you are making Quora rich. You are improving their content and traffic. Instead, you should be writing on your own platform and making yourself rich. I recommend everybody have their own website to own their own brand and own their own content and traffic.
You would think they’d treat someone who was able to write 70 answers in a month and generate 1.1M views better, but they haven’t even bothered to respond to my appeal.
If I knew Quora wouldn’t delete my answers, I would continue to give Quora a go. But their apparent random deletion of a popular answer with no response makes spending any significant amount of time on their platform risky and inefficient. Therefore, the smarter move is to first publish on Financial Samurai and then use some of my content to republish shorter answers on Quora if I have nothing else to do with my life.
I plan to now write little to nothing on Quora for the next 30 days to see how much organic views and traffic I achieve from my existing answers.
Productivity Steps Review
I hope my case study gives you an idea of how to improve productivity in something you care about. If you’ve been doing anything for several years, I’m pretty sure there’s a better way of doing it today.
Identify the pain points
Replace wasted time with a potential better use of time
Establish a short window for testing your new use of time
Come up with specific objectives for your new use of time
Thoroughly analyze the results and make logical next decisions
Having a productivity mindset is also important for reaching financial freedom. With such a mindset, you will focus on how to generate more passive income streams to buttress your active income streams so that you might one day be free. It is amazing once you can get your money working hard for you, so you don’t have to.
Readers, what are some pain points you’ve experienced and how did you go about improving your productivity? Any readers out there spending their time making Quora rich instead of themselves?
How Much Can You Make Blogging For A Living?
The 10 Best Reasons Why Everyone Should Start Their Own Online Business
Why Blogging Is The Best Business In The World
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Posted onFebruary 16, 2018|Comments Off on The Marriage Penalty Tax Has Been Abolished, Hooray!
In the past, I used to wonder why two individuals with high incomes or two individuals with a large income differences would ever want to get married. Paying thousands of dollars in marriage penalty taxes didn’t make sense. It seemed obvious that the government wanted one spouse to give up his or her career to stay at home, even if there were no children to raise.
Otherwise, why would the top tax rate of 39.6% for a married couple not kick in starting at a combined income of $836,802+? For 2017, married folks begin paying at the 39.6% tax rate once their combined income surpasses only $470,701.
In the eyes of the government, 1 + 1 literally only equaled 1.12. This is blatant anti-marriage discrimination. Discrimination is not OK even if you aren’t being discriminated against. Below are examples that demonstrate the marriage penalty tax that used to occur under the old tax structure. I used the Tax Policy Center Calculator.
Example #1: Marriage Penalty
Each person makes $200,000. They don’t own a home, and have two children. The results are the same if they have no children. They pay a whopping $15,162 marriage penalty tax.
Example #2: Marriage Penalty
One person makes $500,000, the other person makes $80,000. They own a home with a mortgage and have one child. Lucky for the person making $80,000 to marry the person making $500,000. Not so lucky financially for the $500,000 income earner.
After 20 years, this person will have paid $270,000 more in taxes than if he or she had stayed single or unmarried. Marriage forced this person to pay an average of $13,434 more in taxes a year. Think about what this couple can do with all this money!
Example #3: Marriage Tax Credit
One person makes $60,000, the other person makes $40,000. There is no mortgage and zero kids. We have a winner! Because the combined income is under $110,000, the couple can decide to have a kid and claim $1,000 per child to lower their taxes even further to $10,638 from $11,638.
Example #4: Marriage Tax Credit
Here is the real home-dinger. One person makes $300,000 and marries another who makes $0. They pay $35,000 in State taxes, $25,000 in mortgage interest, $2,000 in charity and have a child. The $300,000 a year earner saves $11,162 a year in taxes. I tried higher than $300,000 a year and the marriage tax credit starts to decline.
Based on the above examples, from a tax perspective it seems clear that you should only get married if your contemplated partner makes a similar level of income up to around $100,000 a year or you anticipate your spouse having zero income. If both of you made much more than $100,000 a year, you paid a marriage penalty tax. How much you paid depended on the number of kids and deductions you had. And given most $100,000+ a year jobs are located in high cost of living cities where housing, education, and taxes are already high, paying a marriage penalty tax was infuriating.
Related: Scraping By On $500,000 A Year: Why It’s So Hard To Escape The Rat Race
There’s Hardly Any Marriage Tax Penalty Anymore
With the passage of new tax reform for 2018 and beyond, the marriage penalty tax is now practically abolished. Based on the new federal income tax brackets below, there is tax EQUALITY up until $300,000 per person. In other words, two individuals who make $300,000 and get married for a combined income of $600,000 will pay roughly the same amount of tax (35% marginal tax rate) as if they were single. Not bad given in the past, they had to pay a 39.6% rate on any income above $470,701.
There are many income permutations to consider when calculating whether or not there is a marriage penalty tax or bonus. However, the key math to consider is at the 10%, 12%, 22%, 24%, 32%, and 35% tax brackets – there is a logical doubling of income thresholds if individuals get married. Therefore, there is no tax penalty for any individual making up to $300,000 a year or married couple making up to $600,000 a year.
I no longer have to spend hours coming up with different married income permutations to figure out when tax penalties start hitting. I can just tell based on looking at the graph. Perhaps this is why the tax industry is so afraid of streamlining the tax system. When things are easier to understand, they lose business.
The only visible marriage penalty tax comes in the form of two individuals making over $500,000 a year. In this case, the marriage penalty tax is 2% X $100,000 = $2,000, which is not much for a $1,000,000+ income family, especially since the past married income threshold was only $470,701+ at a 2.6% higher income rate.
In other words, a $500,000 income earner can always pay a maximum 35% marginal income tax rate. But once that $500,000 individual marries someone who makes $100,000 or more, all income over $600,000 gets taxed at 37%. If the $100,000 income earner stayed single, s/he could have only paid a 24% marginal income tax rate.
Almost Everyone Should Rejoice
Given we know that the top 1% income earner makes roughly $400,000 a year, it’s safe to say that less than 1% of Americans will still pay a marriage penalty tax. Therefore, if you’ve been holding off on getting married until the tax situation gets sorted out, now is the time! If the marriage penalty tax ever gets reinstated, you can always get a divorce.
The only clear financial benefit I see for getting married is Social Security survivor benefits. Under current law, if your spouse dies, you get to keep all the accrued benefits. If you are not legally married, then the government gets to keep all the taxes you’ve paid into the system if you have no children. Talk about a bad deal for the American people.
Since everyone believes in equality, everybody should be rejoicing at our new federal income tax rates. I personally believe that a married couple earning up to $315,000 after deductions is the ideal income for maximum happiness. You’re paying a 24% federal marginal income tax rate and can pretty much live a comfortable life anywhere in our great country.
Readers, why do you think people were willing to pay thousands of dollars in the past for the privilege of having a marriage certificate? Wouldn’t you rather save all that money to buy a house, pay down some debt, go on a great annual vacation, or invest? Is there an married income level that is paying a marriage penalty tax that I missed?
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Posted onFebruary 13, 2018|Comments Off on The Key To Living Longer: Fear Being Alone Far More Than Going Broke
I’ve always told my wife that if all goes to hell, at least we’ll still have each other. After all, we met during college when neither of us had any money. We were happy just spending time together between classes in the Sunken Gardens at The College of William & Mary. Having to start over with nothing wouldn’t be so bad.
I’m convinced part of the reason why some couples choose to have so many children despite the cost, the stress, and the time commitment is because they too, fear being alone one day. Having nobody visit you in the hospital when sick is depressing. Having to play children’s games at a nursing home is no way to live out your remaining years.
For me, being alone is far scarier than going broke. When you lose someone, there’s no guarantee you’ll ever be able to find someone as good. But if you lose all your money, there’s a good chance you’ll recover through some ingenuity and hustle.
The Risk Of Social Isolation
I truly believe the key to living longer is having someone to love, something to do, and something to look forward to. Having close personal relationships and a strong community to interact with are the top findings why certain communities have longer lifespans than others. Check out the chart from Susan Pinker’s TED Talk.
Living to 100 and beyond. Click to watch the Ted talk
I’m thankful for all the detailed comments left on Financial Samurai, even the unpleasant ones, because they share windows into different people’s souls and promotes new topics of discussion.
Here’s a comment left by JD on my uncontroversial post entitled, Things Worth Spending Max Money On For A Better Life that is incredibly insightful about why someone people are alone. If you read the post, you know it simply provides suggestions, not commandments, on where you might want to pay a premium to live a better life.
Why not just put anything down? Couldn’t disagree more. With this advice you’d go from frugal to broke in no time at all. You could justify buying anything and everything.
Mattress at the top? My mother was conned into buying a pricey new one by her brother. When you’re old and in pain the bed you’re lying upon in immaterial. I’ve tried it from time to time. It’s okay but not worth $1,000+ but when I’m tired I can sleep anywhere on anything. The people pushing beds are making killings on TV because people are foolish to believe their hype.
Home Appliances & Home Theater systems are Scams. They’re built cheaply designed to break down–All of em! The more money you pump into them doesn’t guarantee quality or quality or longevity anymore. A crap movie is still a crap movie regardless of how big the screen or high the resolution. Maybe you’d like to push Kueric coffee machines too. Fear and Status sell. Means nothing.
Dental Care is overrated and relies upon Fear to sell. A magical sonic toothbrush? Really? They pay you a few bucks to hype this? Just basic brushing, a minimum of once a day is all that’s needed. Even flossing has been proven to be excessive if not dangerous.
Work clothes & shoes – Hint: if you’re Retired (i.e. Not Working!) it matters not!
Especially if you’re not a socialite and enjoy doing things by yourself.
Food – Some of us Enjoy the Simple pleasures of Simple food. I’m surprised you’re not hyping caviar here as well! Junk food is only bad for you if you thrive on it excessively and make meals of it. For some of us it’s what makes life worth living.
Car Safety is another one of those things relying on Fear to scare people into shelling out money. Once upon a time frugal sites said the same thing. All cars made today are basically safe but it is the Drivers behind the wheels one must watch out for. You’re safer driving a stripped-down basic car than one loaded with electronics so you drive while watching a DVD and yelling on a phone while studying a schematic of your car!
Such detailed intentional objection. I figured there must be more to JD’s story so I asked him to share more about himself, and he did.
I’m frugal, and the real deal. I’m financially independent with a high net worth. I’m also not a hypocrite. The simple things in life are free and once you get used to them, luxury living is rather petty and obviously to impress the masses. Furthermore, everything I’ve typed up there is true and I can back each and every statement up.
I’m not negative, I’m real and honest. I’ve also debated people to death and I don’t intend to waste my time doing so online again. Everyone lives in their own realities with their own priorities, petty as they may be. It’s why my personal relationships have never worked out. My own preferences have been exotic and queer to most people at times. I’ve turned down steaks for Big Macs, for instance. Because they taste better to me.
If you want me to reiterate a few. Planned Obsolescence pretty much wipes out the need to buy “the biggest, best, most popular, and coolest” of appliances (in conjunction with the “bathtub” curve regarding breakdowns). A $300 refrigerator will last as long, if not longer than a $3,000 one with a ridiculous touch-screen and wi-fi system, and certainly require less maintenance and make life. Easier for you. Oh, sorry, no bragging rights with an Ordinary refrig.
That’s what it’s all about: Status; impressing the guy next door. Maybe you need such recognition, but I do not. The bottom line is that I saved $2,700 which is more money in the bank making interest. Plus, I’m not pulling my hair out over a touch screen that’s malfunctioning and a unit that needs software updates etc. I could extend this analogy to include all manner of modern “smart” tech which makes live miserable in the long-run, including fancy thermostats which need their batteries replaced constantly and maybe even recalibration. All for Look At Me I’m Better Than You gratification, and a cumulative drop in wallet dough. If you’re secure in Yourself you care not about appearances to project upon others. You are indeed Comfortable and truly at peace. I’ve splurged in the past and I almost invariably feel guilty afterwards. Because the outcome simply was never worth it. Maybe I just need a shrink.
Frankly, I’ve found this website a disappointment. Your early articles were generally good, but you’ve changed over the years. Perhaps this wife of yours has had an influence on your psyche. It’s why I’m not married. If you want real financial know-how, checkout Bell’s Living Stingy blog. Not 100% in agreement of course but I do tend to agree mostly with his lifestyle (minus the BMWs and his sometimes quirky politics).
Although JD said a lot of unflattering things about me and this site, it’s good he followed up with details about his beliefs. Here are some of my observations:
1) There may be some self-esteem issues because he thinks having a nice TV, refrigerator, bath tub and wi-fi system is for showing off to your neighbors instead of for the owner’s personal satisfaction. I’m not sure how our neighbors will ever know about our nice equipment unless we invite them over to a bath tub or online gaming party.
2) Guilt for spending money despite having a high net worth. Many of us have this problem because part of the reason why we got to a high net worth is by being frugal. Old habits are hard to quit.
3) JD is alone. By comparing things with others, bringing up my wife, his shrink, and his failed relationships, it seems he either enjoys being alone or desperately wants to find someone.
How Not To Be Alone
If you want to live longer and happier, then it’s probably beneficial to find someone to go through life with according to the research. To be loved and accepted is all we can ever ask. Although there is no guarantee of finding someone, we can at least improve our odds by doing some of the following:
1) Ask whether you’d be happy hanging out with yourself for hours. Pretend you’re stuck for five hours at an airport due to a computer system malfunction. Would you enjoy your company? Or would you not be able to stand yourself? The airport test is one of the key determinants every applicant must pass when applying for a job that demands rigorous work hours and plenty of travel.
2) Find ways to look at the positive. JD decided to look at my post as an offense to his frugality. Even though my post wasn’t forced upon him or cost him anything to read, he got triggered by my suggestions. Meanwhile, most other people decided to see the positives of the post and share some of the things they value the most. The more you can see the good in things, the more people will start seeing the good in you.
3) Turn on your grateful switch. Whenever I sprain my ankle, I’m thankful I didn’t break my ankle. Whenever my wife is feeling tired after a long night, she is thankful she has a son to be tired for. In the very simplest terms, if we can be grateful for just being alive, our world will change for the better.
4) Smile. Nobody can resist a big toothy smile. Strangers will automatically smile back at you for no reason. A smile is like a powerful magnet that draws people to you. The next time you’re zooming down fresh powder, dancing to your favorite tune, or riding a jet ski, notice how sore your cheek muscles get after the session is over. It’s because you’ve been smiling nonstop without anybody noticing. The more you can smile, the happier and healthier you will feel.
5) Focus on solutions. Problem solvers don’t just accept a bad scenario, they find a way to go around the wall. There is no greater turn-off than the person who complains why life isn’t fair and then sits on their ass all day. The water cooler gossipers at work invariably are the first ones fired. One of the reasons why blogs have taken off is because journalists only report the news, while bloggers not only share the news but also offer actionable steps. When you can build some credibility by consistently doing what you say, attracting others is an inevitability.
6) Take care of your mental and physical health. Nobody will love you if you can’t love yourself. Loving yourself starts with taking care of your mental and physical well-being. You don’t have to look like a swimsuit model or have the mind of the Dalai Lama, you just have to consistently work at reaching your healthiest potential. Stay active. Keep an open mind. Read voraciously. Practice what you’ve learned. Forgive yourself and others.
7) The more people you meet, the higher your chances. Meeting someone you can connect with is a numbers game. Sharing a common interest is the easiest catalyst to start a meaningful relationship. I have one friend who is always on a date despite not being particularly attractive. He’s not afraid to ask every person he meets for their contact information because he’s not afraid of rejection.
8) Stay hygienic. For the love of God, shower, wash your face, brush your teeth, and floss no matter what JD says about not buying a Sonicare tooth brush! If you smell and are dirty, nobody will want to come close to you, let alone kiss you. Ask your friend(s) if you smell, because some people do and have no idea. Let your natural pheromones attract other people in ways that only science can explain.
9) Develop emotional intelligence. If you’re clueless, it’s dangerous because you may not know you’re clueless. This is also called the Dunning-Krueger effect. An emotionally intelligent person understands another person’s viewpoint and works to socialize in a manner that’s agreeable. An example of an emotionally unintelligent person is one who asks things like, “can I pick your brain” without first developing a relationship or providing something of value. Communication skills are key to a high EI.
10) Be generous and kind. Showing generosity and kindness is one thing if you have everything. Showing generosity and kindness when you have nothing is next level humanity. A woman by the name of Kate McClure raised over $360,000 for a homeless man through a GoFundMe campaign after she ran out of gas on an interstate in Philadelphia. Johnny Bobbitt Jr., walked a few blocks and bought her some with his last $20 and asked for nothing in return. Johnny has a second chance in life after drugs and alcohol derailed his plans.
We Are Programmed For Companionship
Having a lot of money is pointless if you have nobody to share it with. During my days in finance, I met plenty of wealthy, but lonely folks who had let their desire for wealth consume them. Every single one of them regretted working so much in their 20s and 30s, and not working more at finding someone they could come home to.
There’s no denying that luck plays a role in finding a companion. But I’m certain we can all do more to increase our chances at finding someone if that’s what we want.
Relationships are hard to maintain because we tend to take each other for granted. Marriage is constantly a work in progress. But I say it is better to have loved than to never have loved at all.
The Average Net Worth For The Above Average Couple
Marrying Your Equal Is Better Than Marrying Rich
Financial Dependence Is The Worst: Why Each Spouse Needs Their Own Bank Account
Readers, why do you think some people remain alone? What are some other ways to improve our chances of finding the one? You can read more of JD’s comments on love and life in the post, The Best Financial Move I Made Is Something Everyone Can Do. They are fascinating to me because they are the opposite of my beliefs.
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Posted onFebruary 10, 2018|Comments Off on Silver Linings Of A Stock Market Correction
With the S&P 500 down over 10% from its high in 2018, we’ve officially entered correction territory. If the S&P 500 closes down over 20% from its high, then we will be officially in a bear market.
Whenever the stock market goes through a rapid retrenchment after long periods of stable growth, it always feels bad. Although its never fun to lose money, it’s good to face the situation head on and focus on the positives and what we can learn.
The Positives Of A Stock Market Correction
1) A catalyst to finally learn about risk management. If you’ve only been investing since 2009, the path towards building stock market wealth has been relatively straightforward. I argue its been too easy for the 35 and under generation to build wealth, thereby creating a false sense of security. Being overconfident in your investing abilities can be devastating once you’ve accumulated a large nest egg. See: Recommended Net Worth Allocation By Age
2) The ability to accumulate stocks at lower valuations. The keyword is “valuation,” and not price. If the price is lower by 10%, but earnings are cut by 10%, then you’re paying the same valuation for a stock. But if prices move 10% lower and earnings come out the same, then you’re getting yourself a deal.
The consensus 2018 S&P 500 earnings estimate is ~$155 (+17.8% from 2017). Therefore, at 2,500 on the S&P 500, the market is trading at a reasonable 16.1X. The consensus earnings expectation for 2019 is for earnings to grow by another 10% to $171, or 14.7X 2019 earnings. The trillion dollar question is whether earnings will grow as expected, fall short, or exceed expectations.
Except for the rise in the 10-year bond yield to 2.85%, there was no other fundamental news that wasn’t already out there that could drastically affect earnings. Therefore, at the moment, it looks like investors are getting a valuation discount. And from a bond investor perspective, you’re receiving higher yields.
3) It takes time for corrections to play out. According to analysis by Goldman Sachs, since WWII the average correction is -13% over a course of four months. It then takes an average of four more months before the S&P 500 recovers all its losses. In other words, don’t use all your dry powder all at once if the stock market is down 10%+ in just a couple weeks. Rather, leg in through multiple tranches because timing the market is too difficult.
If you have a long-term mentality, you’ll be able to better contain your rush to sell and rush to buy.
4) A return to humility. Every time I write an article about investing, without exception, there will inevitably be someone who comments or e-mails saying how much money they’ve made in the stock market or how they timed a trade perfectly. Over social media, we witnessed a phenomenon of older folks bragging about their $1,000,000+ 401(k) balances. And younger folks love to shout from the top of their lungs how much they make every month online. After a while, this starts to get old.
Financial writers, like yours truly, will also begin to write with more humility. A downturn helps remind me that the focus of Financial Samurai is on learning so we can become better investors, better partners, better citizens, and ultimately happier thanks to the freedom money buys. My finances are used for illustrative purposes only because nobody should give a damn about my wealth except for my family.
As investors, it’s important to constantly remind ourselves that over the long run we are not smarter than the market. We must not confuse brains with a bull market, nor should we confuse stupidity with a bear market.
5) A chance to finally build your long shot. If it wasn’t for the 2008-2009 financial crisis, Financial Samurai would never have been born. Without Financial Samurai, I wouldn’t have been able to have as much carefree freedom as I have today.
The downturn made me fear for my job and my wealth so badly that I finally decided to do something about my fear. We’re nowhere near financial crisis-level panic today, but the correction that began in February 2018 reminded me of the stress I felt 10 years ago.
If you depend on only your job and your investments to keep you financially secure, a violent correction is the perfect time to start brainstorming new ways to make money. Yes, it helps to whip your spouse into working harder and longer so you can just relax, but spouses sometimes also could lose their jobs and investments.
For most people, investments should be considered a tailwind for financial growth. Building a business where you own most of the equity, performing so well at your job that you get regular raises and promotions, and aggressively saving and investing for a long period of time are what really make you wealthy over the long term.
A Refocus On What Matters Most
If you are not careful, money can suck up all your time and make you a little crazy. During one of the -4% days I realized I was already on my computer for 2.5 hours straight watching the markets burn. I was reading everything I could about the why, the what next, and what to do.
Once I realized my glued obsession, I shut my laptop, went downstairs to see my wife and son, gave them both big hugs and kisses and started to play. After all, the point of financial freedom is to not worry about money.
In 20 years, this correction won’t make a lick of difference. Don’t forget to enjoy your life during the process. If you need me, I’ll be finish up my underground bunker just in case the world comes to an end.
Related: Investment Strategies For Retirement Based On Modern Portfolio Theory
Readers, what are some other silver linings due to a stock market correction?
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Posted onFebruary 8, 2018|Comments Off on Contingency Plans For A Digital Bank Run
When the S&P 500 futures were pointing to another -5% opening on February 6, 2018 I got excited. After all, the S&P 500 closed down 4.5% on February 5. I get aggressive whenever the stock market corrects by 10% or more because history has shown positive returns in subsequent days and months.
The initial down 5% move was blamed on the 10-year bond yield jumping to 2.85%. But since the 10-year bond yield declined from 2.85% to 2.75% after the 5% stock market drop, and futures were signaling another 5% drop in the stock market, I figured it was time to deploy some significant cash. Fundamentally, corporate earnings growth and economic indicators were still sound.
Armed with $200,000, my plan was to use $100,000 to buy the morning gap down and deploy the remaining $100,000 throughout the day just in case the stock market panicked even further (you just never know). I set my alarm clock for 6:15am just in case, brushed my teeth, sat on the toilet, and fired up my Fidelity account to put in my $100,000 buy order.
Preventing A Digital Bank Run
Tried to log on between 6:25am – 7:30am and couldn’t
Of course, when I tried to log onto Fidelity, I couldn’t! I remember this happening to me several times in the past. So, I just kept on trying, all to no avail. While all the previous times, failure to be able to log on immediately was simply annoying, this time it was important because I had some serious cash to put to work compared to my usual $5,000 – $20,000 buy orders.
As you probably already know, the market went from down ~4% at the opening to finish up ~2% that day. We’re talking a 1,000+ point swing on the Dow. My inability to place timely buy orders caused me to lose out on potential gains of up to $16,000. Once I finally got online, I ended up investing only about $20,000, or 10% of my original plan for that day as prices were not as attractive.
I wondered whether other people had the same issue of not being able to log onto their online brokerage account. From the feedback I got over social media, it looks like Fidelity, Merrill Lynch, TD Ameritrade, and some robo-advisors went down as well.
Could it be that financial institutions are purposefully shutting their digital doors to prevent a bank run? I run a website and have had many talks with my system administrator on how to keep Financial Samurai up 99.9% of the time. You would think with multi-million dollar technology budgets, online brokerage firms wouldn’t have frequent outages anymore.
The only time Financial Samurai was down for more than several hours was when a construction worker accidentally sliced a main internet cable underground. Whenever there is a traffic surge or anticipated traffic surge on Financial Samurai, we have proper caching in place. I could tap some keys to shut down my site as well, but I won’t.
If the online brokerage firms are not purposefully shutting their digital doors, then there is some serious incompetence going on because people’s livelihoods are being affected.
If you are an investor, you’ve got to ask yourself this question: during a large and sustained market correction, will you be able to place trades or access your capital?
Based on the historical track record of online brokerage accounts, it’s hard to say yes with full confidence. Therefore, it’s important to develop a contingency plan in anticipation of the next bank run.
Please note I’m not a trader. I’m a long term investor who is trying to build a risk-appropriate portfolio to provide a financial tailwind for my family. Given I have dependents, I need assurances my money will be there if truly needed. If you are a trader, having a contingency plan is important as well because you could miss out on big gains or get wiped out if you cannot exit.
Contingency Plans When Market Freaks Out
1) Have two or more investment accounts. During the Fidelity outage fiasco, I kept trying to log on to their site for 45 minutes until I gave up and decided to do something else. I could have bought stock in my Citibank wealth management account, which was accessible, but by the time I remembered to do so, the stock market was already in the green and I didn’t want to chase. Therefore, the next time there is some huge market move, have all your investment accounts ready to go at once. Unless there is some type of online brokerage conspiracy, hopefully at least one of your accounts will work.
2) Create staggered limit orders before the market is open. I could have potentially bought the gap down on February 6, 2018 if I had put in staggered limit orders the night before or way early in the morning. For example, if the futures were portending to a 5% gap down, I could simply put a limit order on a S&P 500 index fund 5%, 4%, and 3% lower. The same goes for buying individual securities, but their opening prices will be harder to gauge. I just don’t like putting in large limit orders because things change so quickly.
3) Make a phone call. It never occurred to me in this digital age that I could just call Fidelity to place a trade. Perhaps they would have jammed me with a 10 minute hold period, but I don’t know for sure. Again, everything was moving so fast that by the time I could have gotten hold of a live person, the markets would have moved. Therefore, the strategy is to call before the market opens to deliver the trading instruction before things get too hectic. It’s just hard to know exactly what the market will do because the futures market isn’t a 100% reflection of normal market trading.
Feb 6, 2018 DJIA intrada day chart. Tried to buy the open but couldn’t, then the Stocks app on my iPhone froze, hence the straight line.
If There Truly Is A Bank Run
So far, we’ve just discussed three no-brainer things we can do if we wanted to make a trade, add, or withdraw capital. You’re never going to get your timing right, even if you are a full-time trader, so don’t beat yourself up too badly if you miss things. But if you can envision things getting really bad, then it’s probably a good idea to spread around your capital across various banks, and limit each account to $250,000 per person.
The standard FDIC deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. Deposits held in different ownership categories are separately insured, up to at least $250,000, even if held at the same bank.
For example, a revocable trust account (including living trusts and informal revocable trusts commonly referred to as payable on death (POD) accounts) with one owner naming three unique beneficiaries can be insured up to $750,000. This is straight from the fdic.gov website.
If you shorted volatility, you got taken out on a stretcher
During times of uncertainty, everybody needs to do a thorough rundown of their cash holdings. It’s cash that allows you to survive a prolonged downturn without having to sell anything at fire sale prices. It’s cash that allows you to take advantage of panic selling. And it’s cash that allows you to sleep better at night so you can be energized to take care of your family every day.
As for the future of the stock market, I’m still relatively bullish if the 10-year bond yield doesn’t breach 3%. I don’t want to see another 5%+ gap down again, but if there is, I’ll be ready to buy.
Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.
Related: Things To Do Before Making Any Investment If You Don’t Want To Lose All Your Money
Readers, have you ever been blocked from accessing your online investment account? Do you think these financial institutions purposefully deny access to stem any large transactions? How do you protect yourself from a digital bank run? Is this the beginning of the end of the bull run?
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Posted onFebruary 5, 2018|Comments Off on It’s Time To Start Worrying About The Housing Market Again
Despite publishing cautionary posts about investing in the stocks, bonds, and alternatives at current levels, the biggest caution I should be writing about is taking out massive debt to buy property at record highs.
If you lose 50% on your stock and bond portfolio, you’ll be upset, but fine. If your property loses 20% of its value, however, this means you’ve lost 100% of your 20% downpayment. In this scenario, you’ll also probably still be fine – if you don’t have to sell. But when property prices correct by 20% or more, many people become forced sellers because they’ve also lost their jobs.
I understand that millennials are coming of buying age and inventory is on the decline, making competition for buying a home fierce. However, only if you are fully cognizant of the following points I’ve highlighted below should you proceed with a property purchase today.
Things To Know Before Buying Property in 2018
1) Rents have softened from peak levels in many of the most expensive cities. Given property prices are a function of rental income multiples, a real estate buyer should be looking to buy at similar pricing discounts from peak rental periods. For example, research whatever comparable New York property you want to buy today that was sold for in March 2016 and aim to buy at a 14.8% discount to the March 2016 price because that’s how much rent prices are down.
In 2017 I experienced softening rents first hand when I tried to find replacement tenants for my SF rental house at a similar rent of $9,000 a month. After 45 days of aggressive marketing, I only got two offers, both for $7,500 (-16.7%). I even hired a rental listing agent for two weeks to find people for at least $8,000 and he failed. As a result, I sold. Pricing pressure starts at the most expensive markets and works its way down. The large supply of condos in many expensive cities has really put a damper on rents and housing prices.
Buying at peak prices when rents have fallen from peak levels means you are paying a higher valuation. This is a dangerous scenario when prices are at record highs.
Rents in 12 of the most expensive markets as of January 2018
2) Mortgage rates are rising. With the surge in the 10-year bond yield to 2.85%, mortgage rates are following suit. My last mortgage refinance was in 2016 when I locked in a 5/1 Jumbo ARM at 2.5%. This same mortgage is now 3.58% based on the latest rates. In other words, if I were to take out the same mortgage today, my monthly payment goes from $3,951 to $4,535, a 14.8% increase. A 14.8% increase is significant because average income only increases by ~2% a year.
5/1 ARM Mortgage Rate Breaking Out
While 3.58% is still relatively low for a 5/1 ARM, everything is relative, especially since property prices in some cities have risen by double digits since 2012. If the average interest rate for the 5/1 ARM were to rise to recession levels 10 years ago, a $1,000,000 mortgage payment would go to $6,321, a whopping 60% increase.
10 year history of the 5/1 ARM mortgage rate
Here are the latest mortgage rate averages as of February 2018. You can check for a free quote hear with LendingTree, a stock I should have bought for under $100 a share when I first met up with senior management a couple years ago. TREE has tripled in price.
3) Prices have blown past their previous peaks in many cities. While every city is different, if you look at the prices in Denver and Dallas, you’ll find that the prices are roughly 45% higher than they were in 2006-2007. This price performance is similar to San Francisco’s. Meanwhile, hot cities like Seattle and Portland are only about 20% above previous peaks.
The US median existing home price is about 12% higher than its previous peak, which is a modest rise since over 10 years have passed. As a real estate investor, your goal is to invest in markets that have both underperformed and have the potential to catch up.
Do you think you should be selling or buying at these prices?
4) Tax reform takes time to negatively impact housing prices. Conceptually, we all know that limiting state income and property tax deductions to $10,000 and limiting mortgage interest deductions on new mortgages up to $750,000 are net negatives for expensive coastal city real estate markets. Until homeowners file their 2018 taxes in 2019, however, no financial pain will be felt.
Some will argue that lower income taxes will offset these deduction limitations. Perhaps. But nobody really knows for sure until 2019 tax returns are filed and accepted. Tax reform is a headwind, not a tailwind for coastal city property price appreciation.
5) It takes a while to recognize a peak. The housing boom that began in January 1996 ended in March 2006. But it wasn’t until the beginning of 2008 that people started to accept that the housing market had already peaked. Until 2008, property investors were still clinging to hope or at least were in denial that prices would no longer be going up. Once Bear Sterns was sold for nothing to JP Morgan in March 2009, people started to panic. Then Lehman Brothers went under on September 15, 2009, a full two and a half years after the housing market peaked. And things got even worse!
Below is a great chart that shows how badly housing prices corrected in some of our major cities. Notice how the previous boom lasted 10 years and the crash lasted 5 years. We’re now going into the 8th year of a bull market.
Keep Your Unbridled Enthusiasm For Housing In Check
The mass media and the real estate industry will focus on strong demand, strong job growth, and a dearth of inventory as drivers for higher property prices in 2018 and beyond. If you look at property nationwide as a whole, prices will probably continue to go up in the low single digits percentage-wise.
However, if you look at individual markets, you are beginning to see cracks in the foundation. I don’t recommend leveraging up to buy expensive coastal city real estate as an investment at this point in the cycle. Look to the heartland instead, where valuations are much cheaper and net rental yields are much higher.
If you’re dying to buy a primary residence today, make sure you can withstand a 20%+ correction over a five year time frame, if history is any guide. If you don’t have a financial buffer equal to at least 10% of the value of your property after putting down 20%+, then you are not financially prepared for a downturn.
Too much debt is really what will kill you if we ever return to hard times. Buy a house to enjoy life instead of looking to make a profit. I doubt we’ll have a correction as violent as the last one given lending standards became far tighter after the housing crisis. All the same, please buy and borrow responsibly.
Related: Buy Utility, Rent Luxury: The Real Estate Investing Rule To Follow
If you are buying property in this market, what are your reasons for buying? What are your reasons for not buying earlier? What are some bullish and bearish anecdotes you’ve observed in your respective property markets? When do you think the peak of the real estate cycle is? What are some worries you have about the property market?
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Posted onFebruary 1, 2018|Comments Off on Here’s When You’ll Become A 401(k) Millionaire
Thanks to the unrelenting rise in the stock market since 2009, there’s now a trend on social media to share your 401(k) balance, especially if it’s over a million bucks. Despite the distastefulness of bragging, just the fact that more people are talking about saving for retirement via their 401(k) is a good thing.
Make no doubt about it, being a 401(k) millionaire is very impressive given the maximum contribution limit has never been higher than 2018’s contribution limit of $18,500. When I was first able to contribute to a 401(k) in 1999, the maximum contribution limit was only $10,000. Check out the chart below for details.
Here’s When You’ll Become A 401(k) Millionaire
Given we know the various portfolio returns based on asset allocation in my post, How Much Investment Risk You Should Take In Retirement, one can simply do a little math to figure out roughly when someone will become a 401(k) millionaire if they are starting with $0, max out their 401(k) this year and every year after, and return the average annual return of the portfolio composition since 1926.
100% Equity Allocation (10.2% historical return): 401(k) millionaire in 18 years.
80% Equity / 20% Fixed Income (9.5% historical return): 401(k) millionaire in 19.5 years.
70% Equity / 30% Fixed Income (9.1% historical return): 401(k) millionaire in 19.7 years.
60% Equity / 40% Fixed Income (8.7% historical return): 401(k) millionaire in 20.5 years.
50% Equity / 50% Fixed Income (8.3% historical return): 401(k) millionaire in 21 years.
40% Equity / 60% Fixed Income (7.8% historical return): 401(k) millionaire in 21.5 years.
30% Equity / 70% Fixed Income (7.2% historical return): 401(k) millionaire in 22.2 years.
20% Equity / 80% Fixed Income (6.6% historical return): 401(k) millionaire in 23 years.
100% Fixed Income (5.4% historical return): 401(k) millionaire in 25.5 years.
100% Cash (1% assumed return): 401(k) millionaire in 44 years.
Of course, historical returns cannot guarantee future returns, but after a 10-20 year period of investing in your 401(k), your average annual portfolio return will likely begin to mimic the historical averages. Further, if your company provides a generous 401(k) match or profit sharing plan, then it is likely you will become a 401(k) millionaire sooner.
For those readers with more than $0 in your 401(k), simply find an online compound interest calculator and input your data for your specific results. The good thing is, all the numbers above can be considered the maximum longest amount of time it will take to get to 401(k) millionaire status in a normal market.
Let’s say I’m 40 years old with $500,000 in my 401(k) and will max it out every year. I’ve got a 70% Equity / 30% Fixed Income portfolio and expect to earn 9.1% a year based on historical averages. Using a compound interest calculator, I’ll simply input my current principal, annual addition, interest rate, plus a guess number in the Years to Grow field. When the future value equals roughly $1,000,000, you’ll know about how long it will take for you to achieve 401(k) millionaire status.
The Key To 401(k) Millionaire Status Is Longevity
I worked for 13 years for two employers and got my 401(k) balance up to ~$400,000. But once I left my job in 2012, I rolled over my 401(k) to an IRA. If I worked for seven or eight more years, I probably would achieve a $1,000,000 401(k) balance due to strong returns and great company profit sharing. But alas, I’m not a 401(k) or even a rollover IRA millionaire.
The key to 401(k) millionaire status is being able to work at an employer with a great 401(k) plan for as long as possible. The year before I left my employer, I was receiving ~$20,000 a year in company profit sharing.
Before you decide to leave your cushy job, please first calculate what you are forgoing in company benefits. The same goes for people who are contemplating leaving higher paying, stable jobs to go work for startups which may have no 401(k) plan or most definitely have no 401(k) matching benefit since most startups are loss making.
Let’s review my 401(k) savings targets by age and see when various age groups of savers may become 401(k) millionaires if they are able to work at a job with a 401(k) plan for several decades.
Click to learn more about the methodology
Based on my 401(k) by age estimates, older age savers (50+) should be able to become 401(k) millionaires around age 60 if they’ve been maxing out their 401(k) and properly investing since the age of 23. If not, then best of luck with Social Security, a paid off house, and hopefully after-tax investment accounts.
Middle age savers (35-50) should be able to become 401(k) millionaires around age 50 if they’ve been maxing out their 401(k) and properly investing since the age of 23. I’m expecting to be a 401(k) millionaire when I turn 50 in 2027 by contributing to a Solo 401(k) plan.
Younger age savers (20-34) should be able to become 401(k) millionaires around age 40 if they’ve been maxing out their 401(k) and properly investing since the age of 23.
Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.
Treat Your 401(k) As An Insurance Policy
According to Vanguard, the average 401k plan balance was ~$100,000 in 2017 and the median 401k plan balance was ~$27,000. If you get to 401(k) millionaire status, pat yourself on the back.
The funny thing about your 401(k) is that it doesn’t really matter if you have millions in your account. You can’t tap the funds without paying a 10% penalty before age 59.5 anyway, so it’s more like a retirement insurance policy. What you should really be doing is building up your after-tax investment account aggressively so that you can retire well before you are 59.5.
As you’ve only got one life to live, you might as well figure out a way to escape the grind sooner, rather than later. Not a day goes by where I’m not thankful for aggressively building a portfolio of non-401(k) investments in my 20s and 30s to have the courage to leave my 401(k) behind.
Readers, when do you plan to become a 401(k) millionaire? Are you aggressively building your non-401(k) investment balance?
Recommendation: Run your 401(k) through Personal Capital’s 401(k) Investment Fee Analyzer to see how much you’re wasting in fees. I ran mine through and found out I was paying $1,748.34 a year in fees I had no idea I was paying. After discovering how much I was wasting on actively managed mutually fund fees that didn’t have a perfect track record for beating their respective benchmarks, I switched to low cost index fund ETFs. Their Investment Checkup tool also allows you to analyze your investment risk exposure and make appropriate adjustments.
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Posted onJanuary 29, 2018|Comments Off on How Much Investment Risk To Take In Retirement: Various Portfolio Compositions To Consider
Congratulations for being retired or having enough money to never work again! Don’t listen to the naysayers who tell you retirement life is boring. Be assured that only boring people get bored. One question you should consider thinking about, however, is exactly how much investment risk should you be taking.
In 2012, I retired from the salt mines because I thought I had enough to provide a humble life for a family of up to four in San Francisco. But once I stopped receiving a bi-weekly paycheck, reality hit home that maybe my passive income and side hustle income wouldn’t be enough. The fact that I tried to sell my primary residence in 2012 to live in an apartment 65% smaller and cheaper shows that I had reservations about whether it was wise to leave a healthy paycheck at 34. But I was determined to provide a free life for my wife and I both before the age of 35.
In early retirement, I concluded that I needed to take the least amount of risk necessary to maximize my chances of never having to go back to work full-time again. At the same time, I was still pretty young and it looked like the economy was recovering so I ended up constructing a 60%-70% stock and 30% – 40% bond portfolio with the hopes of achieving a 4% – 6% rate of return each year. Doubling my investments by the age of 50 seemed like a good enough goal to have.
But thanks to a bull market in stocks and bonds, my public investment portfolio returned more. And thanks to a strong recovery in San Francisco real estate, everything has turned out fine so far. I wasn’t smart, I just stuck to an investment framework that fit my risk profile.
But I “Missed Out BIG TIME”
In 2017, my public investment portfolio returned 15.9%. Given my annual return objective was only 4% – 6%, I was feeling pretty good about the performance. Then of course a reader left this lovely comment after reading my investment lessons from a surreal 2017 post. I wrote that due to uncertainty, I didn’t pile into stocks at the beginning of the year.
You missed out BIG TIME then. Seemed pretty obvious that the stock market would soar once Trump was elected despite what many so called experts said. Regardless of accomplishments, investors gained trust in the market again once a businessman was elected as opposed to another career politician (on either side).
Isn’t it interesting how all investment decisions are obvious in hindsight? Yes, my combined stock and bond portfolio underperformed the S&P 500 index by about 3.5%, but my stock only exposure outperformed since I was heavy in tech. I didn’t invest my entire portfolio in the stock market because I wasn’t comfortable with the risk.
For those of you who may feel bad about your investment performance or were criticized by others for not doing better let me share some following thought gems:
1) You’re already free. Money is a means to an end. If you’re able to earn or accumulate enough to be free to do whatever you want every day, you win. It’s much better to only be up 10% and do your own thing than be up 50%, but still have to report to someone.
2) Don’t forget the absolute dollar return. As someone who is close to retirement or in retirement, you’ve likely already got way more capital than someone who is still far away from retirement. Therefore, the absolute dollar amount you return is also much greater. It’s much better to be up $1 million on a 15.9% return than be up $100,000 on a 100% return.
3) Don’t forget all your other assets. You likely have a wide assortment of investments as part of your net worth compared to most Americans who have most of their net worth in their primary residence. Even if your public investments underperform, your other asset classes such as coastal city real estate, private equity, venture capital, real estate crowdfunding, venture debt, fine art, etc might outperform.
4) More money won’t make you happier. After you earn more than ~$100,000 a year in a non-coastal city or ~$300,000 a year in a coastal city, you won’t be happier. The same can be said with building a greater net worth beyond what you’ve deemed necessary to retire on. But if you want a specific net worth number, I will say anything above a $3 million net worth won’t make you much happier if you are truly free to do what you want and don’t have to make your partner work to enjoy your lifestyle.
5) It’s great to sleep well at night. All retirees know what it’s like to lose money because we’ve been through enough down cycles. When you can combine the freedom to do what you want with not having to worry about ever going to work because your investments are generating enough income, you feel like the luckiest person on Earth. Not only have you won the game, you get invited back as a VIP with front row seats and all you can drink and eat privileges.
Retirement Investment Risk Levels
Zero risk: Your baseline investment goal in retirement is to at least beat inflation. You can easily beat inflation with no risk if you invest all your money in treasury bonds. With inflation hovering around 2% a year and the 10-year bond yield providing a ~2.7% yield, you’re golden, forever. Treasuries will almost always yield more than inflation. So long as you hold your treasury bond until maturity, you will get all your principal back plus the annual coupon.
Minimal risk: The next investment you can make is to invest your entire liquid net worth in a portfolio of the highest rated municipal bonds in your state. You can find 20-year municipal bonds yielding 3.8% – 4% tax free. AAA-rated municipal bonds have default rates under 1%. In 15.5 years, you’ll double your money. So long as you hold your municipal bond until maturity, you will get all your principal back plus the annual coupon, if the municipality doesn’t go bankrupt.
Moderate risk: The Barclays U.S. Aggregate Bond Index provides about a 5% annual return each year, depending on which 10 year time frame you’re looking at. You can take more risk buying individual corporate bonds, emerging market bonds, or high yield bonds. But overall, buying the aggregate bond index is a moderately risky investment. If you buy an index fund, you have no guarantee of getting your principal back. You are riding appreciation or depreciation and collecting coupons. Corporations can default or corporate bonds can lose principal value if a corporation experiences financial difficulty. There are no guarantees. If you bought Venezuela sovereign bonds you’d be down big as the government is in disarray and inflation is sky high.
Higher risk: The stock market has returned anywhere from 8% – 10% a year on average, depending on the time frame you are looking at. Just like in the bond market, you can buy all sorts of different stocks with different risk profiles. But as we know, the stock market can have violent corrections. See the recent number and magnitude of corrections below in the chart.
Retirees will have a combination of different types of risk levels. The question to ask is what type of investment weightings one should have in each based on their risk profile.
There is no right answer because everybody’s risk tolerance is different. But we can start by looking at the risk / reward metrics of different types of portfolios.
Income Based Retirement Portfolio
Income based portfolios are what the typical, truly satisfied retirees should focus on. There’s minimal risk to principal and only modest medium-to-long term growth of principal. Given retirees are generally in a lower tax bracket, an income based portfolio is also usually more tax efficient.
Even with a super conservative 100% allocation in bonds, your average annual return would be 5.4%, beating inflation by roughly 3.4% a year and twice the current risk free rate of return. In 14 years, your retirement portfolio will have doubled.
With a 30% allocation to stocks, you could improve your investment returns by 1.8% a year. But if you are already satisfied with the amount of money you have, who cares about an extra 1.8% a year? The improved performance will make no difference in your lifestyle. With a potential improvement of 1.8% a year, you increase the magnitude of a potential loss by 75% (from -8.1% to -14.2%) based on history.
Balanced Retirement Portfolio
A balanced-oriented investor seeks to reduce potential volatility by including income-generating investments in his or her portfolio and accepting moderate growth of principal. This type of investor is also willing to tolerate short-term price fluctuations.
For most retirees, allocating at most 60% of their funds in stocks is a good limit to consider. An average annual return of 8.7% is more than 4X the rate of inflation and 3.3X the risk free rate of return. But you’ve got to ask yourself how comfortable you’ll feel losing over 20% of your money during a serious downturn. If you’re over 65 years old with no other sources of income, you will likely be sweating some bullets.
For the first two years after leaving work, my public investment portfolio was around 60% stocks / 40% bonds. Once I got out of early retirement mode by working on my online business, I got more aggressive in stocks because my business income began to surpass my investment income.
Related: Ranking The Best Passive Income Investments
Growth Based Portfolio
To be comprehensive, let’s take a look at the risk / reward metrics for portfolios with 70% – 100% allocations in stocks. These portfolio allocations are mostly for those who are looking to build a retirement nest egg you’ve already built.
Even with a 100% allocation in stocks, the average annual return is only 10.2%. But there have been 25 years of losses out of 91 years, and in the worst year you would have lost 43% of your money. Losing 43% of your money is fine if you are 30 years old with 20+ years of work left in you. But not so much if your goal is to spend the rest of your days cruising around the world.
Unless you retired before the age of 50, have a variety of passive income streams, run a lifestyle business, or have a net worth equal to over 30X your annual expenses in retirement, I wouldn’t have greater than a 70% allocation to stocks.
Related: Target Net Worth Amounts By Age Or Work Experience For Financial Freedom Seekers
Eliminate Financial Worry In Retirement
Now that you know what the risk/reward metrics are for the above portfolio compositions, you can decide on an investment strategy that best suits your needs.
Don’t let money get in the way of a wonderful retirement. Your investments should be a relatively worry-free tailwind that ensures you never have to return to the salt mines again. If you are starting to worry about your risk exposure, then dial down risk by raising more cash or rebalancing more towards treasury bonds.
Yes, it can get annoying if you underperform your respective benchmarks. But you’ve got to remember that you’ve already won the game. Every single dollar you make above the rate of inflation is gravy. During bull markets, you’ll sometimes be able to return a greater amount from your investments than you would make at your job.
The pain of losing money is always much worse than the joy of making money. If you’ve already got all the money you’ll ever need, there simply is no point taking outsized risk.
The Main Types Of Risk Exposure To Be Aware Of
The Fear Of Running Out Of Money In Early Retirement Is Overblown
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Posted onJanuary 26, 2018|Comments Off on The Best Financial Move I Ever Made Is Something Everyone Can Do
After warning about financial destruction due to scams and get rich quick schemes, I’d like to balance things out with an uplifting financial story. As part of my productivity push, I’ve been spending some time answering questions on Quora, a Q&A platform, instead of spending time answering questions on Financial Samurai where the answers are readily apparent in the content.
One of the questions I answered was: What is the single best financial move you have ever made in your life?
I selected this question because it made me think hard about positive choices. I’ve been too hard on myself lately with the responsibilities of fatherhood and being the financial provider for my family. This answer ended up getting a couple hundred thousand views and 5,000+ upvotes in only a week, so I thought I’d share it with all of you.
The Best Financial Move I Ever Made Everyone Can Do
Getting on a bus at 6am.
While a junior at The College of William & Mary, I got on a bus at 6am on a Saturday to go to an investment banking career fair. Nobody else boarded the bus. So after 30 minutes of waiting, the bus driver drove me to his office and we switched to a Lincoln Town Car. He then privately chauffeured me 2.75 hours from Williamsburg, VA to Washington D.C. Even though William & Mary was a good school, it wasn’t a target school of any of the major investment banks. Therefore, I didn’t have a nice schedule of official interviews lined up.
Nobody else was on the bus, so after 30 minutes of waiting the driver drove me to his office and we switched to a Lincoln Towncar where he privately drove me 2.75 hours from Williamsburg, VA to Washington D.C. Even though William & Mary was a good school, it wasn’t a target school by any of the major investment banks.
At the career fair, I chatted with a bunch of firms, but nobody gave me the time of day. I remember a snobby Merrill Lynch recruiter looked me up and down said, ”Nobody will take you seriously.” She was making fun of my blue tie which had a pattern of a teddy bear holding a balloon. A loved one had given me the tie so I wasn’t going to take it off for no one.
The only company that invited me to meet for a real interview was Goldman Sachs. The recruiter, Kim Purkiss and I had a long and intimidating conversation where she peppered me about my thoughts on the economy, stock market, and Federal Reserve. I don’t think she smiled once. A month later, she invited me up to Super Day at their world headquarters in NYC, all expenses paid.
I was shocked because GS was the #1 bank to join back in 1998. The firm was still private, so it had this incredible mystique about it. All the candidates I met came from private schools like Harvard, Yale, and Columbia and boarding schools like Exeter and Andover. Nobody came from a public college or public high school like me.
55 interviews and seven rounds over seven months later, I finally got a written job offer to join the International Equities department as a Financial Analyst at 1 New York Plaza on the 49th floor. It took so long probably because they were unsure of whether hiring someone like me was a good idea. The interviews started on the derivatives desk, and after realizing I didn’t know a lick of derivative math, I moved on to the US trading floor and then finally to the Emerging Markets / Asian Equities desk where I actually had some experience having grown up in Asia for 13 years.
I got the job offer e-mail while I was visiting my girlfriend in Tokyo the month after I graduated from college with no job. I was hopeful Goldman would come through during commencement, but it still felt unsettling to graduate with no job offer after four years of studying. Perhaps subconsciously, getting my offer in Japan is why I named my site Financial Samurai.
I felt like I had won the lottery. In two years at GS (1999–2001), I gained a ton of knowledge and connections and parlayed my position into a higher position at another investment bank in San Francisco. I aggressively saved and invested ~70% of my after tax income for the next 11 years and left the workforce for good at the age of 34 in 2012 after negotiating a severance package worth six years of living expenses. I haven’t been back to work since.
I thank my lucky stars that my girlfriend at the time encouraged me to set my alarm at 5:15am after a late night of partying to get on that darn bus at 6am. She knew at least I could sleep on the bus ride up. I guess showing up really is half the battle!
My girlfriend is now my wife and we are full-time parents after the birth of our precious baby boy in 2017. Ever since that fateful Williamsburg morning, my life motto has always been: never fail due to a lack of effort, because effort requires no skill.
As I finish up this answer, I realize the best financial move I ever made was actually choosing the right life partner. She’s made all the difference in the world.
One Small Move Made All The Difference
I hope you enjoyed my story. At the time, it was really hard to imagine the benefits of going to a career fair because hardly anyone ever gets a job at a career fair. I knew it was just one big marketing opportunity for the companies to say how awesome they were without ever expecting to hire anybody there. The people they wanted to hire had been already contacted directly on campus. But I went anyway because I figured, you just never know.
When I started Financial Samurai in 2009, I had already been waffling for three years. In 2006 my dad had suggested I start a personal finance site since he knew I had a passion for finance and writing. But I was always too busy with work and didn’t think I had the energy or the ability to build something significant. When the financial crisis hit, however, I figured once again, you just never know.
Now I’m on my podcast journey because I want to build a huge library of audio content for my son to listen to just in case I pass away before he gets to really know me. Yes, it’s also a good opportunity to practice verbal communication and to tap new consumers who only consume via audio. In the past, I’ve only made a half-hearted attempt at podcasting. Since our son’s arrival, however, I’ve refocused and figured, best get going because you just never know.
It’s really impossible to predict how your life will end up. I hope everybody lives long and prospers. What’s certain is that if you do nothing out of the ordinary, nothing out of the ordinary will ever happen to you. Are you ready to get on that 6am bus? If not, we’ll talk about finding that life partner in a future episode.
Readers, I’d love for you to share your single best financial move you ever made. What are some extraordinary things you ended up doing that resulted in extraordinary results?
Be Unapologetically Fierce About Pursuing Your Dreams
The First Million Might Be The Easiest: How To Become A Millionaire By 30
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Posted onJanuary 22, 2018|Comments Off on Things To Do Before Making Any Investment If You Don’t Want To Lose Everything
This post is a reminder to myself and to all of you that we can and will lose money if we invest in risk assets for a long enough period of time. The only way to never lose money again is if we never make any investments.
I’ve personally reached a level of investing discomfort that feels a little bit scary. After deploying a couple bucks in 2017, I invested a large chunk of change in the stock market during the first week of 2018. After all, I wrote in my 2018 outlook that 2018 would be the last year of good times. Not following through with my beliefs would be a waste of time.
The problem right now is that it feels like I’m suffering from investing FOMO and so are many of you. When you experience FOMO, you tend to do some incredibly irrational things. I hate the way money can make us greedy. Hopefully, this post will help those of you who feel the same take a pause and think about risk more.
How To Lose All Your Money Easily
Now that I’m back in retirement mode, I’ve done more consuming and less producing. And one of the things I’ve been observing with great fascination is all the get rich quick schemes that have popped up thanks to the rise of cryptocurrencies.
There is this one guy who boasted making minimum wage a year ago and is now a cryptocurrency millionaire. He shows his electronic wallet on social media for all to see in order to create FOMO in his followers. He succeeds.
He began aggressively promoting Bitconnect in 2H2017, a bitcoin based lending platform where they take your cash or Bitcoin and give you a GUARANTEED interest of between 0.25% – 1% a DAY with Bitconnect currency. They said they have a “proprietary bitcoin trading bot” that produces such returns.
In other words, if you invested $1,000, after 3 years of 1% daily compounding interest, you would have something like $53,000,000! Come on! Check out this chart from Bitconnect highlighting their promised returns and capital back time table.
Bitconnect’s false promises
When the Bitconnect platform realized they were running out of money to pay their new users, they decided to shut down their exchange, leaving all those who gave them cash or Bitcoin stranded. Their Bitconnect currency proceeded to plummet 90% overnight and its fate remains to be seen. Where did all the cash and Bitcoin they collected go? Who knows!
Bitconnect investors lost 90% of their money in one day
Once I saw the price plunge and learned about the promoters and how Bitconnect worked, I thought to myself there’s no way anybody could have been so gullible and fall for this scam. Here’s a comment after the plunge that parodies an Eminem song.
OK, people must be joking. Nobody could have given Bitconnect money right? Then I saw more serious comments from people who claim to have lost a lot of money in Bitconnect. Here’s one from a guy who supposedly invested $500,000 in Bitconnect and wants to take out a $5,000,000 loan to invest more in cryptocurrency!
Still unconvinced about the seriousness of these comments, I kept on reading the feedback and stumbled across this Youtube video of a guy who lost $30,000 in loans in Bitconnect. After watching this video, I’m now convinced there were actually people who did fall for Bitconnect’s wild promises. It does not look like he’s acting.
Seeing all the carnage, I couldn’t help but feel it’s my duty as a personal finance blogger to make sure more people don’t lose a ton of money investing in scams. I’ve gotten scammed before and so have some of my loved ones and I hate it!
Let me share some exercises I go through before making ANY investment. Hopefully these exercises will help keep you grounded as you seek to build your fortune.
Steps To Take Before Making Any Investment Decision
1) Calculate how many hours, days, weeks, or months you need to work to make up for a loss. Let’s say you make a $10,000 investment in anything that has risk. You earn $20/hour. If you lose all your money, you will have to work at least 500 hours to get all your money back. Since you have to pay taxes, you have to work more like 650 hours. Given you’re only making $20/hour, the job probably isn’t something you love to do. Knowing the “pain of recovery period” will help keep your FOMO in check and help you make more risk appropriate investment decisions.
2) Look for keywords such as “can’t lose,” “guarantee,” and “get rich quick” in the marketing material. If you find any of these keywords, run the other way. There is NO GUARANTEE to any investment except for an FDIC insured savings account up to $250,000 per person or holding a US Treasury bond until maturity. Even then, the US economy could blow up. It baffles my mind that people believed Bitconnect had a sophisticated trading bot that would earn them 1% a day forever.
3) Ask yourself whether you truly understand the business model. If you cannot easily explain the business model with a straight face to a loved one, you do not understand what you are investing in. If you don’t understand what you are investing in, you should not invest in the product. For example, I had one guy ask me why he hadn’t received any returns three months after making a $25,000 equity investment in a three year real estate crowdfunding deal. He’d confused an equity investment with a debt investment and obviously hadn’t understood the literature about the deal discussing their strategy of selling the property in three years for a target profit.
4) Calculate your net worth composition to understand risk. You must understand your net worth composition in order to understand how much risk exposure you have or are comfortably able to take. Losing $30,000 in Bitconnect is survivable if you’re worth at least $300,000 and have a steady job making at least $60,000. But it doesn’t sound like the guy in the video has much more than $30,000 to his name since he said he “lost his life’s savings.” There’s a reason why professional money managers diversify client holdings. Related: Recommended Net Worth Allocation By Age
5) Limit all alternative investments to no more than 10% of your net worth. I define alternative investments as any investment other than publicly traded stocks, bonds, CDs, physical real estate and savings. Investing in stocks, bonds, and physical real estate is good enough to build enough wealth for financial independence. There is NO NEED to invest in anything else. Alternative investments do have the ability to generate higher returns than non-alternative investments, but they are often illiquid, more difficult to understand, carry higher fees, and may carry much higher risk. You are not the $25B+ Yale endowment with 50% of their fund in alternative investments because you don’t have the same amount of access, power, and team of investment professionals tracking the fund full-time.
6) For goodness sake, please don’t take out a loan to invest in alternative investments. The people who get into real trouble during a correction are those who not only invest too much of their net worth in the investment, but also take out a loan. Yes, margin investing in the stock market is at all-time highs, which is scary because the stock market is also at all time highs. Yes, taking out a mortgage you can’t afford when real estate prices are at all-time highs is also a terrible idea as we saw in the 2008-2010 financial crisis. If you lose 100% of 10% of your net worth, you will be pissed off, but survive. If you lose 100% of 100% of your net worth, you will be devastated and perpetually depressed, but will likely survive if you have a job. But if you lose 100% of 200% of your net worth due to debt, you will be ruined and likely stay poor forever. Related: Only A Petulant Fool Borrows From Their 401k
7) Please understand the background and history of the person trying to sell you something. If the person is a broke fella who was packing boxes for minimum wage a year ago and is now telling you how to get rich, be wary. If the person is a high school student teaching you about the fundamentals of investing, be wary. The person should have a multi-year track record before you listen to their advice. And even still, be wary. There’s a reason why institutions wait until a fund has at least a 3-year investment track record before investing any money. There’s a reason why funds that have a 10-year or longer track record tend to have the most assets under management.
This promotional video of Bitconnect is too hilarious. If you are spending thousands of dollars to go to an investment conference, the only person guaranteed to get rich is the one running the conference.
8) Get feedback from at least three people before making an investment. It is easy for us to get excited about an investment that could make us rich. We start fantasizing about what we would buy with our profits, where we would travel, or how we would quit our jobs. Yes, money makes us go crazy. Therefore, you must share your investment thesis with at least three people: a parent, a sibling or best friend, and the smartest person you know. Listen to all their criticism. I get someone telling me I’m an idiot every week for my investment decisions, and I appreciate it! If you have truly listened and still believe in your investment thesis, then go ahead and take a risk with no more than 10% of your net worth.
Invest Responsibly Please
One of the reasons why I’m so much happier just being a personal finance blogger than working in investment banking is because I’m not calling or e-mailing anybody to buy anything. If people want to read my writing by bookmarking this site, subscribing to my e-mail feed or private newsletter, or listening to my iTunes channel, folks are welcome to do so for free. You’re not going to get your face ripped off by learning about one guy’s perspective on money.
Please invest responsibly folks. Don’t ever give your money to someone you don’t know or invest in something you don’t thoroughly understand. Be wary of folks who are saying you just can’t lose. Please try and tame your desire for getting rich quickly. If you can avoid stepping on financial land mines, you will be able to reach financial independence more easily.
As for me, I’m back to building up a large cash hoard. I’ll still invest in risk assets when I see some opportunity. It’s just that the amount I’ll be investing will be much lower than usual. The Bitconnect implosion has really reminded me about risk. I’ve already gone beyond my comfort zone and plan to get back to my safe place.
If you think about it, every investment except for hard assets like real estate or your 1952 Mickey Mantle rookie card are just digital numbers on the screen. Your screen might show a fortune one day and a big fat ZERO the next. It’s the reason why I’m so much more comfortable investing in real estate than any other investment.
Finally, I leave you with this final investing thought. You can never lose if you lock in a gain. Yes, you might sell something too soon and kick yourself for not holding on for more gains. But selling early is much better than selling too late. The floor drops out from under you when everybody starts to panic.
Readers, do you feel your investing is out of control or has ever gotten out of control? What are some things you do that’s not mentioned in this post before you make any investments? Why don’t people spend more time researching an investment before making a decision? Any examples of investments where you lost big? Or am I the only one?
It Feels A Lot Like 2007 Again: Reflecting On The Previous Peak – This is a must read for those of you who are going crazy with your investments. If you learn from history, you have a better chance of not repeating the worst times of history.
How To Invest In Speculative Investments Without Losing Your Shirt And Underwear – If you must speculate, then I suggest starting with the income from your stable investments. If you have no investment income, then don’t invest in speculative investments.
What A Potential Real Estate Crowdfunding Loss Looks Like – I’m bullish on investing in non-coastal real estate, but I am by no means delusional into thinking that you can’t lose investing in cheaper property with higher rental yields. There’s operator risk, natural disaster risk, economic risk, interest rate risk, etc.
Real Estate Investment Mistakes To Avoid – I lost big during the financial crisis because I stupidly bought a $710,000+ vacation property in Lake Tahoe in 2007 because I thought my income would go up forever.
Perpetual Failure Is The Reason Why I Continue To Save So Much – Saving aggressively is the best coping mechanism I’ve found to withstand all the mistakes I’ve made in my career, finances, and business decisions.
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