One rule I have for our babies is that they can not be dressed in restrictive clothing – footie pajamas, onesies that are too small, and the like. It restricts their ability to grow and they need to be tall for the higher earnings potential and physical intimidation factor. Learning is great, but you can’t teach height.
My wife thinks this is dumb.
To prove my point I bought our 2 year old new shoes, 3 sizes too big. Lo and behold 6 months later the shoes fit.
Sharing a couple of funds I’ve been investing in, as recent conversations have included this discussion.
I’m currently investing in a couple of funds focused on dividend yield. The funds are shown below, but I agree with the many articles that point out chasing dividend yield is dumb. In general I prefer a “total market” fund – like Vanguard Total World Stock Index Fund Admiral Shares (VTWAX) – as long-term growth / appreciation is likely to be better than dividend funds that lean toward mature or potentially declining companies. I like the below dividend funds because of a personal preference for accessible dividend payouts, though this likely reduces the overall long-term return. I also enjoyed the perspective by Jeremy Jacobson of Go Curry Cracker on Episode 169 of the Meb Faber podcast – highlighting that absolute dividend payouts per share typically don’t fluctuate in the same way that stock values do. Essentially, values influence the stated yield on a percentage basis but the dollar amount dividends don’t usually change, at least for healthy companies.
1. Vanguard Total World Stock Index Fund Admiral Shares (VTWAX). Current yield is 5.19%, included in chart below. I have a bent toward international investments in general, given that most of our income and assets are tied to the U.S.
2. Vanguard High Dividend Yield ETF (VYM). Current yield is 2.96%, included in chart below.
With investing in general, a huge part of the equation is simply taking funds and putting them to work. Whether you invest in the above options, or other funds, or start a business, or other productive use matters far less that simply taking dollars away from spending and directing to investing. I like Vanguard in general for investing but also put money into real estate, businesses, private loans, and a variety of other productive uses. Take whatever path(s) suit you best, just make sure you are regularly making investments.
I typically fry bacon in a skillet on the stove top but a friend shared the following recipe to easily make bacon in the oven. It’s simple, and great if you need to feed a big breakfast crowd. Also requires less attention while cooking which is nice.
Wanted to pass along the below information in case helpful for your business. ** Please note this information was pulled together quickly, primarily from the SBA website, and has not been vetted or reviewed for absolute accuracy. I wanted to help raise awareness of helpful funding options for businesses in the current climate and encourage anyone considering these programs to do further research before relying on this article. **
I think the Forbes article at bottom does a good job of running down the options – primarily two at the Federal level.
Economic Injury Disaster Loans – includes potential $10k cash grant (can be forgiven)
Paycheck Protection Program Loan Guarantee – bit more complicated to apply for (done through SBA approved bank).
From SBA site: SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. https://www.sba.gov/funding-programs/loans/paycheck-protection-program
Very good Forbes article with more details on these programs:
Happy to chat about the above and assist if needed. I’ve completed a couple of the EIDL (first link) applications and was quite quick / simple to complete. With so much uncertainty ahead, good to have potential sources of funds accessible just in case.
Germs are sort of like bacteria. Germs can be good and bad. Good germs fight bad germs and bad germs like virus, cold, and flu germs fight good germs. There is a five second rule – if you drop a piece of food on the ground for more than five seconds you should not eat it. If less than 5 seconds if you want you can eat it. The sponge we used to clean our dishes had millions of germs on it every time you use it to clean plates the germs from the plate get on the sponge. To avoid that throw away the sponge every week/few days and use a different one for the next week/few days.
Germs spread by touching other people for a long time (more than five seconds). Fist bumps and high fives are okay, but you should do a fist bump instead of high five. They don’t spread as many germs as touching some one. You can have family rules to keep your family safe from most bad germs.
Dozens of people throughout San Diego had their lifestyle influenced by the coronavirus, a sickness that is leaving destruction in its wake at it moves rapidly around the world. People are going into chaos when the coronavirus hits their country, state, city, or community. New rules are popping up all over countries to keep people safe. The coronavirus epidemic is becoming a world wide struggle. New things that are happening, such as the closing of shops, are going on because people don’t need the things inside the shop, plus when people gather, like to shop or play, germs get on to other people, causing them to become sick. The coronavirus is a contagious disease, which means that if someone else gets the germ that person will get the same sickness. Therefore, shops are closing. Rules such as only ten people in the supermarket at a time are being made world wide to prevent the spreading of germs. Supermarkets are pretty much the only kind of stores open nowadays. Schools have been closed so me and my brother Ambrose have been doing home school to keep up on our learning progress. I can tell you that these changes have been affecting people I know, such as my classmates, teacher (Mrs. Bobier), and my around the block friend Sophie have all had to make many changes in order to adjust to this new lifestyle. Public parks (or at least their parking lots) have been closing due to these changes.
My morning routine has changed as well. Instead of going to school in the morning me and my dad have been teaching Ambrose to ride his bike and we’ve been going on rides throughout San Diego (although he complains about hills a lot). Today we rode to South Park and back. My dad spray painted Ambrose’s bike red and black. I have heard that in Italy people are not allowed to leave their house except to get food. My family bikes every morning to get fresh air and exercise because those two things are very important to maintaining a healthy lifestyle, which is important to have due to circumstances beyond our control – the coronavirus.
In response to the coronavirus and resulting changes to travel plans, conferences, etc. Airbnb made a decision to override host cancellation policies (previously set individually by property per preference) and issue full refunds to all guests during a certain period impacted by the coronavirus. From the Airbnb coronavirus FAQ page:
” Reservations made on or before March 14, 2020 for stays and Airbnb Experiences, with a check-in date between March 14, 2020 and April 14, 2020, are covered by the policy and may be cancelled before check-in. Guests who cancel will receive a full refund, and hosts can cancel without charge or impact to their Superhost status. Airbnb will refund all service fees for covered cancellations. “
This policy change has angered a number of hosts that are now left without revenue and with mortgage payments and other costs to cover. I find the policy change acceptable given the circumstances, and that it may reduce pressure on guests to travel when not ideal to do so. Although my properties are all essentially empty for the foreseeable future it seems the right thing to do and I’m happy to refund guests for changes in plans, as is my typical stance. I would guess most other hosts feel the same.
A separate change to Airbnb policies that I haven’t seen disclosed to hosts / owners is that Airbnb has apparently put a 2 week block on any new bookings. I learned of this when a repeat guest attempted to book my property for the next month and was denied the ability, receiving the following message (apologies for the poor image quality):
In case you can’t read the image message it states: “Choose another place to stay. As part of our commitment to your safety, certain last-minute bookings of entire homes are restricted right now. You can still book a hotel or private room for your stay.”
After receiving this message, a call to Airbnb resulted in the information that a “last-minute booking” was any booking starting within 2 weeks. In my experience 2 weeks is not last-minute, which I would generally assume to be 24-48 hours in advance of a stay. It also sheds some light on why my properties were receiving a similar amount of views per week as in the past, but no booking inquiries or messages. I can only guess how many potential guests I (and the millions of other hosts, if this policy is global) have lost on revenue and bookings. Additionally, Airbnb steering customers / guests to hotels, their primary competition, and private rooms, in a time of contagion, seems odd and a bit suspect. Perhaps this advice is to cater to guests that are less likely to cancel or to offload guests in a time of trouble to hotels to deal with?
The combination of overriding host refund policies and then apparently blocking new bookings for the upcoming 2 weeks seems likely to hurt hosts, and potentially guests that are looking for bookings after being removed from college campuses, or other removals due to the coronavirus. Sudden policy changes may also weaken confidence and trust in the platform – a major issue for a marketplace for connecting people.
I wanted to share my experience with other hosts as I was surprised by the block on new bookings and don’t think this information is currently publicly available.
I very much enjoy being an Airbnb host and use the platform almost exclusively when our family is traveling. However, making major changes like these without informing hosts (before or after the changes are enacted) is a problem, and not the only one that Airbnb seems to make without remorse. To my knowledge, over-charging Airbnb guests to San Diego continues years after being informed by multiple hosts the hotel tax calculations are incorrect. Apparently, a world-wide technology company valued in billions of dollars is unable to calculate local hotel taxes they voluntarily offered to pay. All of these aspects don’t make a good look for the “live like a local” ethos of Airbnb.
A short post with some articles and podcasts I enjoyed this week. Hope you do too. Cheers!
Afford Anything (Episode 236) – The FIRE movement continues to gain popularity as a topic to enjoy, detest, or debate. The Afford Anything podcast and host Paula Pant are generally enjoyable and I really liked this episode. A pair of early retirees, now more than 3 years into “retirement” and with an immigrant background from little money. Well worth a listen and the guests have some non-typical ideas about how to structure investments for early retirees.
Animal Spirits (Episode 120) – Not picking this particular episode over another, but wanted to give a shout out to this podcast. Really enjoy the host banter and these episodes are enjoyable, smart, and bring in a variety of articles and surveys with funny input.
“Globally, roads are deadlier than HIV or murder” , The Economist – I’m an advocate for bike infrastructure and generally safer, more enjoyable places to live. It’s sad that the US lacks nearly every peer country (on wealth basis) in fatalities per capita. This is a good, short read about the body count from our car culture globally with an interesting breakdown between countries on country economic status lines.
I hope you will be rooting for the Chiefs of Kansas City in the Super Bowl as Mac Lethal surely is.
The term “Latte Factor” was popularized by David Bach in his best-selling book, The Automatic Millionaire. The concept highlights how small purchases everyday add up to big money over time – in this case exemplified by a daily $5 latte. It’s a specific example of how opportunity costs work. When you use your resources for one thing you are giving up alternative uses for that money. Per Webster Merriam the formal definition follows.
– the added cost of using resources (as for production or speculative investment) that is the difference between the actual value resulting from such use and that of an alternative (such as another use of the same resources or an investment of equal risk but greater return)
Bach’s book popularized the art of slamming Starbucks purchases as extravagances for spendthrift millennials that have no long-term financial sense. It’s a good concept, and the math works. If you take the $5 a day and instead put it into low-cost index funds or other investments the accumulation over time is enormous.
Here’s a July 2018 example post, using the $5 latte example, from US News. Over 50 years, $5 a day invested across the stock market would yield you an $800,000 portfolio balance. It’s a great, powerful example of how returns compounded over years can add up to big money. The big missing piece of getting these returns, however, rests upon actually investing the $5 a day. Opportunity costs only really matter if the alternative uses are uses that one will actually take. You may not like Starbucks at all so you never spend $5 a day on coffee, or you may have incredible willpower and forego your treasured cup of mocha java daily for years on end. Unless you take those individual $5 savings and everyday invest them you will not see the $800k pot of gold at the end of the 50-year rainbow. If the money sits in your checking account and is then used for a trip to Disneyland, or a shopping trip, or the monthly dozen streaming service bills it has not been saved, nor invested. It’s been spent on a different consumption use. Unless one is very diligent or budget-focused it is hard to monitor each dollar and actively redirect from spending to investing.
I had the Latte Factor in mind when I was considering how to be a better, more consistent investor about a year ago. It was shortly after the New Year and resolutions were on my mind. I decided to use the idea of the Latte Factor in reverse – by starting with investing and making a daily investment the priority. My thinking was that if I made the $5 investment a priority each day, and automated it I would be embracing the investing side of the Latte Factor which is the most important part. Getting your money to work for you is the goal, not self denial at the coffee counter. They are both part of the equation, flip sides of the coin, since we all deal with finite time and money. Although they are related, I view the investment side of the coin as more important than the saving side. And knowing myself, giving up my daily coffee just isn’t in the cards.
I used my existing Vanguard account to create a recurring weekly investment for each day of the week. (Since you can’t create an automatic investment on a weekend day I doubled up on a couple of week days to have 7 total investments a week.) Here’s my current latte investing setup – there’s an additional 8th weekly transfer to a money market fund as an emergency savings additional goal.
I’ve blanked out the amounts above as I don’t think it’s relevant and will depend on each person. For you, the $5 a day may be a great start. Perhaps you earn a lot more money than I and $500 a day would be a better fit. The important bit is to start, and automate, your investing so that you remove the need for active attention and willpower to ensure it happens. This is likely already the case if you have a 401k or other employer investment plan – you set it up once and rarely think about it again. Adding an investment plan for yourself individually can be a great complement and remind you that your financial future is ultimately in your hands, and needs to be on your mind.
In addition to the power of compounding, I’ve enjoyed the psychological element of having a daily investment habit. When I’m winding down at the end of the day I can tally a small win, every day, that even if I did go out for coffee, or dinner, or booked an expensive trip I was also investing for the long-term. That little bit of positive reinforcement and encouragement has been meaningful to me. My wife and I both set up our own daily investments in this vein. It’d be a bit cleaner and simpler to just lump the investment dollars together and do it once a day instead of twice. However, just as you can’t have another person eat well for you, or do your daily exercise routine I find it important for us each to be invested in the process and have a daily win.
Our first year of latte investing went well, and with the calendar turning over we took a few minutes to discuss and update our daily investments. Things have been going pretty well, so we were able to increase our daily amounts a bit. Maybe in the future we’ll need to decrease the amounts. Either way, I plan on continuing this daily habit to have our small daily money wins and to remind ourselves that everyday we are going to be investors. Hopefully, as the years go by, the returns will grow and our balances will accumulate.
I hope sharing this daily habit is helpful to you, and if you have ideas to share about building wealth for the long-term I’d love to hear them. Cheers.