January Round Up

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January was a great month – we spent most of it on the island of Maui as part of a three week trip.  Like a good financial blogger, all of our flights were paid with American Airline miles and Chase Ultimate Reward Points.  We even planned a two night stopover in San Diego on the way back courtesy of our Hilton Honors points. This is nearly twice the length of our longest vacation before we quit work! 

If you’ve never read Tim Urban’s The Tail End, it’s worth a read. It was part of the inspiration to invite my in-laws on the trip for the first two weeks.  My wife commented she hadn’t spent that much time consecutively with her parents since her seven month gap between undergraduate and vet school.  Almost all the time we spend with our parents before we turn 18!

We may have travel hacked the flights, but we paid up for the lodging!

Real Estate in the News:

There’s a lot of discussion in the FIRE community about rental property and house hacking.  My personal investment philosophy has refined over time: I’ll consider buying almost any asset at the right price.  This includes my primary residence. If I can rent a home for 0.8% of its value or less per month, renting appears to be a financially superior choice.   Here is some great content around real estate that came out this month:

Brewing FIRE gives a cautionary tale on what can happen when you pay too much for a “house hack”.   Hint: Even if you live in the house and rent out rooms, the numbers still matter!

The 1500s supplemented their income for years doing slow flips of their primary residences.  He noticed the insanity between sale prices and rents in his neighborhood.

Financial Samurai looked at the other side of real estate investing – Where should you buy based on generational trends

Jocko Wilnick appeared on the Bigger Pockets podcast to give his take and history on real estate.  His solution to affording an expensive area in your 20s? Buy a 3bd house, rent out all three of the rooms, then you sleep in the living room!

Life is good:

We are constantly bombarded with “breaking news” trying to grab our eyeballs for the benefit of advertisers.  Maybe that’s because negative things are easy to notice while positive gains happen slowly (and don’t sell viewership).  Morgan Housel reminds us just how much life has improved since 1981.

FIRE made the mainstream news a couple of times this month.  Steve Adcock had his Five Money Principles syndicated in a few spots and the comments got out of hand.  People generally don’t want advice they already know but aren’t disciplined enough to follow. Its like telling a smoker that cigarettes are bad for them (which I did to family members often as a naive kid growing up).  The usual response? Anger and deflection.

Other Financial News:

The Millionaire Dojo joins the Mileage High Club as he talks about car strategy, specifically how to buy cars with more than 100,000 miles.    Keeping high mileage vehicles has done wonders for our net worth, getting over the fear of buying high mileage cars could do great things for others. 

I’ve started venturing into the world of Bank account bonuses, earning $1325 over the last seven months.  Financial Panther puts me to shame and shows how you can earn Over $7,000 In Bank Account Bonuses In One Year.  I have to figure out if I’m willing to put up with shuffling money around or meeting minimum transaction requirements if I’m going to get anywhere close to Kevin’s numbers.  

What I’ve Been Reading:

I knocked out two non-fiction books this month thanks to recommendations I received on twitter.  The Devil In The White City read as if it were a fiction book and served as a great reminder of just how far civilization has come in the last 140 years since it was based in Chicago in the 1880s. Genghis Khan and the Making of the Modern World was a fascinating read – I knew the name of Genghis Khan, but had no idea how revolutionary his ideas were.  His empire was built on religious freedom, paper money, free trade, and even the anti-bread diet. Fair warning though, I found the middle of the book fascinating, while his childhood story and family legacy was tougher to read and follow. 

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