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I had tried to get this article out earlier, but the kids have a weird, invented school “short-day” to give families an excuse to run off early for the three day weekend. We have no plans to go anywhere, it just means a day of minimal productivity. Fortunately, I had most of the article written last week. Let’s move onto the article.

Readers may (and should) be skeptical about my view in this article. Amazon has a commission program and content producers (i.e. me) make some extra cash by reviewing their products if people decide to buy them. Even if I try my best not to be biased, there’s an element of human nature that it isn’t easy to suppress.

With that disclaimer aside, I genuinely like Amazon’s products and services. However, I think the Amazon Fire HD 10 is in another class of value and I wanted to explain why.

Let’s rewind a few weeks.

I sheepishly said to my wife, “There’s a deal on the Amazon Fire, and I think we should get one.” I received the dagger eyes as expected. “How many tablets do you need? You don’t even use them. What are you going to do with the other three we have?”

The truth stings. It stings real bad.

We have a Nexus 7 from 2014. I also bought an Amazon Fire 7″ tablet back in 2014. I also bought a NuVision Windows tablet for $60 on a deal.

These were all great deals at the time, but every tablet was a compromise:

  • That Nexus 7 is still our best Android tablet… and we are in the Android ecosystem. I’d love to find a quality 10″ one for a similar price. You’d think in 4 years the technology would advance to that level.
  • The NuVision Windows tablet is like walking your pet sloth throw a pile of sludge in the wintertime. It’s terrible. I think the only redeeming value is that I was able to grab some free music off MicroSoft’s Music service before they shut down. I need to have a Windows 10 device and that’s the only thing that worked.
  • Our old Amazon Fire is good for watching videos, but non-expandable 8GB isn’t a lot of media and doesn’t have the best resolution. It’s old technology and it was a bargain at the time. I looked to see what I could sell it for now and could maybe get $25-30. That gives you an idea of the quality of this tablet.

Enter the Amazon Fire HD 10… Amazon’s best tablet. It came out last year, so there is that aspect of it being old technology, too. However, a 10-inch, full HD (1920 x 1080) tablet is very different from the tablets above. In any case, a flagship 2017 tablet is going to be better than a 2014 bargain tablet. Maybe Amazon’s top tablet can’t be considered a true flagship, but maybe it is just a notch below.

My secret reason for wanting the Amazon Fire HD 10 is the Scratch Jr. application for our kids. It doesn’t run on a PC and I think it is the best way to get started with it. I tried to introduce the kids to it on our old Fire tablet, but it didn’t go well. They slogged through it with a very cramped display. They got quickly bored of fighting with it. I’m hoping this will work better.

The biggest problem is that the Amazon Fire tablet is locked into Amazon’s world. There are pluses and minuses with that. For example, this “unlocked” all the old books I’ve had over saved or bought really cheaply over the years. I always had access to them, but I was never going to seriously read them on my phone or my PC. I realize that I’m explaining why a bazillion people read eBooks, but this is a new-ish discovery for me.

The other big thing is free new books and media. I was able to set up my library’s Hoopla and Overdrive applications to borrow easily. There’s next-level cool about borrowing a book for free without leaving your couch.

It’s also the perfect device for watching Netflix or Amazon Prime. Those work extremely easily, but I was thinking about adding more complex stuff like Plex to access my DVR media. It’s almost like having an extra television around.

The downside is that it is also stuck in Amazon world. Not all of the Android applications are immediately available (though there are hacks to get them). I haven’t even set up a way to check my email on it. I want to learn to make it more of a family device with different accounts. I want to figure out how to get rid of the lock screen as well. I want the kids to be able to use it and not have me needing to unlock it for them. I could teach them the unlock code, which might be easier in the long run.

There are two more reasons why I jumped on the Amazon Fire HD 10. The most important one was price. It was on sale at $99. Due to an Amex promotion, it was possible to score another $30 off the price.

Final price: $70.

Last November, I had already declared the Amazon Fire HD 10 an exceptional value at $100. Getting it for $70, is probably not something that is going to happen again… until the new version comes out and people upgrade.

However, I can saw that I’ve gotten over $100 worth of value.

The second reason I jumped on the pricing is that I figured, in the worst case, it is a decent digital photo frame. I’m still looking for the perfect app for that, but it is something that I appreciated out of my old HP Touchpad. I’ve been obsessed with Kallax “cubbie” shelving from Ikea lately, and I think a digital photo frame in there would be great when the tablet isn’t actively being used.

I think it’s not bad for being part book reader, library, television, digital photo frame, and a kids’ supplemental education device. I’m sure that people paying much more than $300 for an iPad can say the same thing and a lot more. I personally like spending less money whenever possible and this works for me.

For latest pricing click here.

The post You Should Consider Buying an Amazon Fire HD 10 appeared first on Lazy Man and Money.

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It’s been a busy weekend. We had ALL the regular dogs we sit staying for the weekend. I don’t know why it was so busy, because the big Memorial Day holiday rush is this weekend.

I took yesterday to get a TSA Pre-Check item off my to-do list that’s been there for months. It only took me 2 hours to make sure that I don’t have to wait 30 minutes at the airport. Seems like a good use of $85 if you fly a few times a year, especially with kids like us.

Finally, I’m doing a lot of digital cleaning. My phone bogged down to being almost useless. It seems that around 200 Chrome tabs will do that. A few of the tabs are over a year old. It’s taken quite awhile to get my phone responsive enough to even delete them. It’s getting responsive now with 85 tabs. Next up, I need to clear out old apps. There are some that are 5 years old.

Why all this introduction? Because I’m going with an outside the box personal finance article today. It’s inspired by a friend who is doing some diet research and I thought some of this could help her. I could have told her all this personally, but it’s a lot easier to read. Also, I wanted to have it in place for myself. Keep in mind that maintaining a healthy weight is a great way to reduce the odds of expensive medical bills in the future.

The Extreme Lazy Man Diet (Version 0.1)

I had a thought last year… there are so many types of diets that people claim to work for different reason. Why hasn’t anyone put together a super diet… a diet that encompasses all the different diets? (And why… do I think… and write… in so many ellipses.)

It’s quite possible that someone has put together a diet and that I just haven’t come across it in my reading. Another reason is that this super diet would be extremely hard to stick to. That means it’s almost destined to fail. After all, many of the Biggest Loser contestants gain the weight back. It’s not a sustainable plan.

That’s why this is extreme and also version 0.1. In addition this is one man’s opinion from reading a lot of stuff that he hasn’t taken the time to source very well. That’s another great reason why this is version 0.1. One of the benefits of blogging is that it allows me to organize my own thoughts, evolve them with feedback from others (hint: please comment!), and review them over time. If this sounds good to you, Bluehost is running a 48 hour flash sale on blog hosting. It’s just $2.95 a month. (I will receive a percentage of the sale if you choose to sign-up. I run a couple of small blogs on Bluehost myself.)

This is also completely untested, even by me. I have tested some parts of it in small spans of time. I’ve witnessed other parts work for friends.

Personally, I could probably stand to lose between 10-12 pounds at any time over the last year. I should be doing this through more physical activity. While I can get a number of steps walking my dog every day, it doesn’t get my heart rate up, nor is it provide strength training that I’ve had in the past.

I’ve read that exercise is about 30% of equation and diet is 70% (again uncited). This will attempt to cover that 70% and leave the 30% as an exercise literally for the reader. Maybe in a future article I’ll cover it.

Enough of the set-up, time to get to the substance. Here are the different types of diets I’d steal from and why:

Low-Carb: Atkins, Dukan, or Ketogenic

While Woman’s Health Magazine is probably a great resource, I’m going to keep it simple. I knew a friend who lost a lot of weight on Atkins. However, he went almost entirely carb-free.

For this section, I’ll steal the general best practice of focusing on meals consisting of mostly lean meats. One of my favorite breakfasts is a low-carb, meat-focused omelet.

Low-Glycemic Load

When you are having carbs, it’s best to choose from something that is a low-glycemic load. I’m going leave the science behind the diet for another day. (Wikipedia probably does a decent job).

My choices from this category are carrots, pinto beans, and almonds. Pinto beans are great fiber which is lacking from the rest of this diet. Almonds sneak in because they are the single most nutritious food in the world.

Personally, I’d go with choices from the Volumetrics section (like carrots) that are also low-glycemic and very lightly sprinkle in the almonds and pinto into the diet.

The Daily Shake Meal

I’ve personally lost about 8 pounds by just adding this one shake for a couple of days. I love using my

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“Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.” – Robert Frost

I don’t have a lot of rules in life, but one of them is: If I can quote a famous Massachusetts person born on March 26, I will. Since half my life’s in books written pages, I’ll do what I want :-).*

This past weekend my mother brought me a postcard that she got in the mail. It was from real estate agent announcing the selling of this home. I’m sure you’ve gotten similar mail, right?

What makes this special is that I had seriously considered buying a condo in the same complex in 2004. I dug up an old spreadsheet that I had from that time. It’s hard to be 100% sure because I used MLS numbers instead of addresses, but it looks like the owners were asking $324K at the time. From this we can infer that condos that building have roughly appreciated 55K or 17%. (That’s assuming this isn’t an outlier.)

I decided against buying in that building. I don’t remember the exact reasons why, but it was very close to where I grew up, had no yard, and no pool. Instead, I opted to buy a place that was a little further with those things. It was closer to my job and a little further from Boston.

I paid $278K and now it is worth around $250K. In 13 years, it’s depreciated by 28K or around 10%.

I’m going to make a huge oversimplification here. I’m going to ignore that the former property would have stretched my finances. I’ve rented the later property a lot longer than I lived in it with the rent covering most of those expenses. Viewed through that lens the cost of the property is minimized. With all that pushed to the side, the road not taken would have netted $85,000 in equity (turning a 28K loss into a 57K gain).

Flash forward a couple of years to 2006…

My wife and I are living in Silicon Valley. A coworker and I have an interesting conversation. He makes the point that buying a home in Silicon Valley is always a good investment.

That sounds crazy to me. At the time a 1000 sq. foot home that should be torn down was going around $650,000. We were able to rent for a fraction of what it cost to buy. It was one of the few places in the world where the buy vs. rent equation was far in favor of renting. It wasn’t even worth thinking about.

In hindsight the prices in Silicon Valley just kept going up. I haven’t looked up the pricing in the last few years, but I’m sure that $650,000 house is around a million now.

It’s no use crying over spilled milk, but I found it interesting. There’s a lot of truth to the big purchases making a huge difference in your financial life. For every negative, there’s a positive though. We did buy two properties in 2011 and 2012 near the bottom of the market. We’ve been able to build a lot of equity that way.

Do you ever stop to reflect on financial decisions you have made (or didn’t make)?

* I’m quoting Steven Tyler who was born on March 26th for those who didn’t catch that reference.

The post Real Estate Roads Not Taken appeared first on Lazy Man and Money.

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Hmmm, this originally got published under April of 2019, but I reviewed my editing document that I cut and pasted from and it was 2018. WordPress also decided to strip some article tags. It seems like my installation here has been possessed by a goat.

It’s that time of month again. All the rent checks are deposited and all our finances are tallied.

April was the first “normal” month we’ve had this year. We weren’t sick with colds/flus or traveling with kids during a two-week spring break. So everything was set up to be extremely productive in side income right? Not exactly.

My wife’s online master’s class was very writing intensive and time consuming. We had a few weekend plans with the kids, a birthday party and an amazing Candyland event at the local Navy base. We also signed them up for their first sport, soccer.

I admit that I was distracted by the great start of the season by the Red Sox, as well as the playoff runs by the Celtics and Bruins. I usually don’t watch that much sports, and I’m often reading or working while I watch them. Still, there would be nights where I DVR’s 2 games and watched one… then watch the ones on DVR. That isn’t a recipe for peak productivity.

Let’s dig into the details:

Alternative Income Update: April 2018

For those that don’t know the term, “alternative income”, I started using it 11 years ago to be purposely vague. I needed something to cover blogging income. Blogging income can be very erratic, but there’s a residual nature to it as well. Some popular bloggers are still struggling to categorize it. I think alternative income was more passive back in 2007 before social media, podcasting, and video. Today it seems like every blogger talks of hustling (as in moving quickly, not grifting people) and by that they mean “being everywhere.” I feel like the only one dumb enough to just keep writing blog posts… blog posts that often don’t have cool “pinnable” images.

In general, I call alternative income everything that comes from passive investment and these side hustles. The best way to think of it is income where you aren’t directly trading your time for money. This report is about all my alternative income. To include my investments into that paradigm, I have to fudge the numbers a bit. You’ll see what I mean as we go along… or you can see a more detailed explanation back in January, 2017.

The last month I reported, March, my alternative income added up to $6,580.70. (I know I really need to set up a chart. I am certainly living up to my Lazy name here.) March was a boosted by a big advertiser invoice from last year that took forever to get paid. Though due to our vacation we had to turn down a lot of dog sitting opportunities.

In any case, March is ancient history now, so let’s move on to more recent history… April.

Lazy Man’s Alternative Income – April 2018

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

My “real world” friends have asked me, “What do you do?” I’m not a fan of the question… because it’s simply rude. I feel it’s used to size up or pigeonhole someone. My responses of “software engineer” has received very differently reactions than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do. What are those things:

I suppose the best answer is that I’m a stay-at-home dad. The kids go to school for about 6 hours a day. So my “non-Dad stuff” is 30 hours a week. That gives me time to do some basic family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) and dog sitting and blogging fills in the gaps.

At blogging conventions a popular question is “Are you a full-time blogger?” I say yes, but then explain that I spend very few hours blogging. I don’t think most people grasp the concept of not having a full-time job, but still having a full slate of activity. I’m doing much, much more now than I ever did at a full-time job. If you really cared to read much more this gives you even more on that. I think everyone assumes that Boss Lazy Man will tell Employee Lazy Man to take the day off from the blog to do non-blogging stuff. That’s not really how it works. People with standard jobs have a lot of insulation where they can say, “See, my boss says that I’m not available.”

I’ve spent too many words on it, but if you want to read more of what I’m doing check out my “Now” page.

I don’t break out blogging income vs. dog sitting income. One impacts the other. When I have a lot of dogs, I don’t have as much time or the focus to blog. When I’m blogging a lot, it’s usually because I don’t have too many dogs to sit… and there isn’t some other great catastrophe going on. (Sometimes it feels like life is a series of catastrophes. Fortunately, for me, they’ve been minor. I’m sure I’m not alone in feeling that it’s just one thing after another derailing your progress.)

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” Isn’t dog sitting and blogging TRADING time for money? That’s a solid point. However, I don’t do it directly. Let me explain:

Sitting dogs itself isn’t a time-intensive job… at least with the number of dogs I typically have. However, there is considerably more overhead than you might think between booking dogs and meeting dogs for suitability. The important differentiation with dog sitting is that I can “double-dip” and earn money from another side hustle, such as blogging, at the same time. It’s very different than being an Uber driver. The police tend to frown on blogging and driving. (Hmmm, maybe if I had a voice recorder and translation software I could compose some rough drafts. Nah… I’m sure clients wouldn’t want to climb over my kids’ child seats. Also the recent MIT report shows that Uber drivers make far below minimum wage.)

If you are interested in dog sitting, I wrote a very detailed article on the subject: Pros and Cons of Dog Sitting on Rover.

Blogging is much more time-intensive than sitting dogs. However, it isn’t directly trading time for money either. If I write an article for the blog today (such as this one!), I don’t necessarily get any significant money for it. The money I make from blogging now is a direct result of having built a reputation and a collection of nearly 2500 articles over 12 years of blogging.

April was an above average month for sitting dogs. Usually April is crazy busy with many families going on school vacations. I’m going to choose to be happy about above average business instead of disappointed about it not being amazing like last year. I’m more comfortable with fewer dogs anyway.

Blogging was just slightly below average in April. One-off advertising requests have fallen off a cliff as of late. Oh well, when one area doesn’t perform another one seems to step up.

While on the topic of blogging, I’d like to add that it isn’t about the money. I highly recommend personal finance blogging. I wouldn’t aim for creating the greatest blog in the world. Instead, I’d think of it as a way to keep yourself accountable. That’s worked for me. Here’s how to get started blogging with any type blog you might be interested in.

In March, these two categories combined to a total of $3,640.70. But for April it is…

Total Blogging + Dog Sitting Income: $2,953.46

That’s almost exactly the average for the year. Unfortunately, it’s still a good deal below last year’s pace. I’m going to ask you to pick up the slack and spread articles through social media and get clicky on my site. Oh and sign up for lots of Personal Capital accounts. It’s free and I can make a little money by referring you. I’m joking… I think.

Looking forward, May’s numbers don’t appear very promising. However, it looks like I’ll be adding another major income stream to the mix. This would be a part-time position in a customer support role. While it doesn’t fit into the alternative income paradigm, it has a near perfect mix of pay, flexibility of hours, and location (from home).

2. Rental Property Income

Here is where I need to fudge the numbers. Sorry, but it’s necessary.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are all on 15-year fixed mortgages. This means that we don’t make money on them now, but we are paying down those mortgages more quickly than most people. In 9 years, we should be able to collect an estimated income of $40,000 (in today’s dollars, after expenses) on them.

So here’s why I have to fudge the numbers. For the purposes of this report, I think it doesn’t make sense to count the properties as zero income. I don’t want this report to push me towards a bad decision. It might make me sell them and invest the money differently to make it better. If someone offered you a million dollars in 10 years or $10 per year right now, you’d wait for the million (I hope). It’s an extreme example, but it shows how the short-term plan should be pushed aside for the benefit of the long-term plan. If I don’t fudge the numbers, the $10 is the better deal.

Here’s how I’ve decided to fudge the numbers.

I add up all the properties equity and values. Zillow is fairly accurate for these condos as it has a lot of data points to work with. Next I calculate an equity-to-value ratio. In short, this is the percentage of the property value that we own vs. the bank. I then calculate the rents of all the properties as if they were owned free and clear. Thus we can say that we are “banking” (in a completely fudgey sense) a percentage of the rent that we would expect to have in the future.

If you are confused (and you probably are), this article on calculating cash flow of cash flowless real estate explains it in more detail.

Here are the numbers for April. We have 46.09% of equity in our properties with an estimated combined rent of $3,325. (This number is after insurance, property taxes, and condo fees.) We were able to raise the rents earlier this year a little bit as the rental market has been good and we turned over to new tenants.

If you multiply $3,325 by 45.98% you get $1,533. At the beginning of 2017, we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 16 months, we’ve seen the number grow around $359/mo. As the years march on, the ratio will grow to 100% of the rent, which is moving up from $3,325 a month (due to inflation). That’s what gets us to that annual $40,000 I mentioned above.

In the previous report, the rental property income was $1,529. This number usually moves slowly and this month was no exception. It’s only a $4 jump. This number only changes if one of two things happen: 1) The value of the properties go up in value. 2) We change the rents. I don’t control the housing market. Tenants are typically locked in for at least a year. The monthly paying off of the mortgages creates a little equity over time. This month one of the properties had a worse Zillow estimate which made our equity gains very minor.

Slow and steady wins this race. My hope is that by the end of this year, we’ll be looking at having 50% of the equity with $3,325 in rent or $1662.50 a month in fudged alternative income. It should be close as we’ve moved from 43.32% at the beginning of the year to 46.09% now.

Total Rental Property Income: $1,533

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers. You can decide if the game is fair. I always appreciate comments!

We don’t focus on putting our money in dividend stocks, but I’m going to imagine that we do. Instead we have it in index funds for the most part. Though the index funds do pay dividends, it’s not the core goal. Also, the money I’m talking about here is in our retirement accounts, so it isn’t something that we would tap as “income” anyway.

Even though all this money is in retirement accounts, we could pull the money out and use it. We’d get tax penalties so we won’t do that, but like the mortgages on the rental property, there’s real value here that needs to be accounted for. My goal here is to capture the nearly 20 years of mostly maxing out retirement contributions.

Just like the rental income, we can pretend what the portfolio would earn if we moved all the money into dividend stocks or indexes. For the sake of pretending, I estimated that we could earn 2.50% in dividends. Most people estimate a 4% safe withdrawal rate, but withdrawal is not our plan here. We are only thinking about the cash that these investments could yield.

April was a good month for our portfolios. Part of that was that the China trade war hit stocks at the end of my last update (around April 6th), giving us some room to recover. Another part of that is that oil prices have been going up. That’s been a hedge we’ve had for some time.

Total Dividend Income: $1,449

Last month, it was $1411, so we gained $38 of theoretical monthly money from theoretical dividends. That $38 is like getting a free cell phone plan for life. Thank you Mr. Stockmarket.

Very Close to Passive Income

This is a newer section, but it’s quickly become a regular fixture.

Most people consider rental property income fairly passive income. It’s not, because you have to deal with tenants. However, when things are going well, there might only be “work” every couple of months. For sake of argument, I think we agree it is “more” passive than writing blogs and sitting dogs. I spend a lot more time on the later than the former.

This “very close to passive income” category is a combination of “rental property income” with “dividend income.” (That’s a lot of quotes.)

It’s interesting to me that these two numbers are so close. It’s like the stocks vs. real estate debate, but for our personal finances. I think of it as putting them in an arena to fight out which is the strongest. The dividend income started out the year with a big, nearly $50, lead. In March it fell behind real property income by more than $100. It’s closed the gap and now there’s only it’s only an $84 advantage for real estate.

The stock market goes up and down which makes the dividends fluctuate as well. The rental property income keeps going up, because the mortgages are always getting paid down every month.

April’s Very Close to Passive Income: $2,981

Last month it was $2,940, so it’s moving in the right direction. That’s grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these sources to $35,772. Investing is awesome! (At least investing in this bull market is awesome.)

Final Alternative Income

Adding up “dogs and blogs” to the “very close to passive income”, this month we on the investment stuff had $5934.46 in monthly “alternative” income. That would be $71,213.52 a year. It was trending towards over $100,000 last year, so seeing this go down is a little depressing. The dogs and blogs aren’t pulling their weight while I focus on more family things. On the other hand, by adding that other income opportunity, things could move back up.

Also, $71,213.52 a year on investments, writing on a blog, and taking care of dogs blows me away. In the long term, we can get by on half of that income, and it doesn’t include any of my wife’s bread-winning pharmacist income or her potential military pension if she retires next year.

Just like every month, I’m still hoping to writing a book to boost my alternative income. I had always planned it to be an eBook, but if any readers out there know a publisher, I’d appreciate the hook-up. I think I can make a compelling argument for a book that you’d see in a bookstore… that is if bookstores still exist by the time I’m done writing it.

Net Worth Update

Since I don’t share real numbers of our net worth, this isn’t very exciting. That’s why it’s just a footnote here.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth is still fun.

I use Personal Capital to track my net worth and it makes everything easy. It’s free and you should give it a try.

In April, our net worth grew 1.73%. That’s a great gain that offset March’s loss of 1.48% (which will forever be known as the China Trade War effect).

In any case, our net worth for the first four months of the year so far is up 4.50%. If it continues, that would be 13% for the year. I think that’s a very solid financial year.

How was your April? Let me know in the comments.

The post Alternative Income Update: April 2018 appeared first on Lazy Man and Money.

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It’s that time of month again. All the rent checks are deposited and all our finances are tallied.

April was the first “normal” month we’ve had this year. We weren’t sick with colds/flus or traveling with kids during a two-week spring break. So everything was set up to be extremely productive in side income right? Not exactly.

My wife’s online master’s class was very writing intensive and time consuming. We had a few weekend plans with the kids, a birthday party and an amazing Candyland event at the local Navy base. We also signed them up for their first sport, soccer.

I admit that I was distracted by the great start of the season by the Red Sox, as well as the playoff runs by the Celtics and Bruins. I usually don’t watch that much sports, and I’m often reading or working while I watch them. Still, there would be nights where I DVR’s 2 games and watched one… then watch the ones on DVR. That isn’t a recipe for peak productivity.

Let’s dig into the details:

Alternative Income Update: April 2018

For those that don’t know the term, “alternative income”, I started using it 11 years ago to be purposely vague. I needed something to cover blogging income. Blogging income can be very erratic, but there’s a residual nature to it as well. Some popular bloggers are still struggling to categorize it. I think alternative income was more passive back in 2007 before social media, podcasting, and video. Today it seems like every blogger talks of hustling (as in moving quickly, not grifting people) and by that they mean “being everywhere.” I feel like the only one dumb enough to just keep writing blog posts… blog posts that often don’t have cool “pinnable” images.

In general, I call alternative income everything that comes from passive investment and these side hustles. The best way to think of it is income where you aren’t directly trading your time for money. This report is about all my alternative income. To include my investments into that paradigm, I have to fudge the numbers a bit. You’ll see what I mean as we go along… or you can see a more detailed explanation back in January, 2017.

The last month I reported, March, my alternative income added up to $6,580.70. (I know I really need to set up a chart. I am certainly living up to my Lazy name here.) March was a boosted by a big advertiser invoice from last year that took forever to get paid. Though due to our vacation we had to turn down a lot of dog sitting opportunities.

In any case, March is ancient history now, so let’s move on to more recent history… April.

Lazy Man’s Alternative Income – April 2018

In looking at our alternative income, I break it down to 3 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

My “real world” friends have asked me, “What do you do?” I’m not a fan of the question… because it’s simply rude. I feel it’s used to size up or pigeonhole someone. My responses of “software engineer” has received very differently reactions than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do. What are those things:

I suppose the best answer is that I’m a stay-at-home dad. The kids go to school for about 6 hours a day. So my “non-Dad stuff” is 30 hours a week. That gives me time to do some basic family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) and dog sitting and blogging fills in the gaps.

At blogging conventions a popular question is “Are you a full-time blogger?” I say yes, but then explain that I spend very few hours blogging. I don’t think most people grasp the concept of not having a full-time job, but still having a full slate of activity. I’m doing much, much more now than I ever did at a full-time job. If you really cared to read much more this gives you even more on that. I think everyone assumes that Boss Lazy Man will tell Employee Lazy Man to take the day off from the blog to do non-blogging stuff. That’s not really how it works. People with standard jobs have a lot of insulation where they can say, “See, my boss says that I’m not available.”

I’ve spent too many words on it, but if you want to read more of what I’m doing check out my “Now” page.

I don’t break out blogging income vs. dog sitting income. One impacts the other. When I have a lot of dogs, I don’t have as much time or the focus to blog. When I’m blogging a lot, it’s usually because I don’t have too many dogs to sit… and there isn’t some other great catastrophe going on. (Sometimes it feels like life is a series of catastrophes. Fortunately, for me, they’ve been minor. I’m sure I’m not alone in feeling that it’s just one thing after another derailing your progress.)

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” Isn’t dog sitting and blogging TRADING time for money? That’s a solid point. However, I don’t do it directly. Let me explain:

Sitting dogs itself isn’t a time-intensive job… at least with the number of dogs I typically have. However, there is considerably more overhead than you might think between booking dogs and meeting dogs for suitability. The important differentiation with dog sitting is that I can “double-dip” and earn money from another side hustle, such as blogging, at the same time. It’s very different than being an Uber driver. The police tend to frown on blogging and driving. (Hmmm, maybe if I had a voice recorder and translation software I could compose some rough drafts. Nah… I’m sure clients wouldn’t want to climb over my kids’ child seats. Also the recent MIT report shows that Uber drivers make far below minimum wage.)

If you are interested in dog sitting, I wrote a very detailed article on the subject: Pros and Cons of Dog Sitting on Rover.

Blogging is much more time-intensive than sitting dogs. However, it isn’t directly trading time for money either. If I write an article for the blog today (such as this one!), I don’t necessarily get any significant money for it. The money I make from blogging now is a direct result of having built a reputation and a collection of nearly 2500 articles over 12 years of blogging.

April was an above average month for sitting dogs. Usually April is crazy busy with many families going on school vacations. I’m going to choose to be happy about above average business instead of disappointed about it not being amazing like last year. I’m more comfortable with fewer dogs anyway.

Blogging was just slightly below average in April. One-off advertising requests have fallen off a cliff as of late. Oh well, when one area doesn’t perform another one seems to step up.

While on the topic of blogging, I’d like to add that it isn’t about the money. I highly recommend personal finance blogging. I wouldn’t aim for creating the greatest blog in the world. Instead, I’d think of it as a way to keep yourself accountable. That’s worked for me. Here’s how to get started blogging with any type blog you might be interested in.

In March, these two categories combined to a total of $3,640.70. But for April it is…

Total Blogging + Dog Sitting Income: $2,953.46

That’s almost exactly the average for the year. Unfortunately, it’s still a good deal below last year’s pace. I’m going to ask you to pick up the slack and spread articles through social media and get clicky on my site. Oh and sign up for lots of Personal Capital accounts. It’s free and I can make a little money by referring you. I’m joking… I think.

Looking forward, May’s numbers don’t appear very promising. However, it looks like I’ll be adding another major income stream to the mix. This would be a part-time position in a customer support role. While it doesn’t fit into the alternative income paradigm, it has a near perfect mix of pay, flexibility of hours, and location (from home).

2. Rental Property Income

Here is where I need to fudge the numbers. Sorry, but it’s necessary.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are all on 15-year fixed mortgages. This means that we don’t make money on them now, but we are paying down those mortgages more quickly than most people. In 9 years, we should be able to collect an estimated income of $40,000 (in today’s dollars, after expenses) on them.

So here’s why I have to fudge the numbers. For the purposes of this report, I think it doesn’t make sense to count the properties as zero income. I don’t want this report to push me towards a bad decision. It might make me sell them and invest the money differently to make it better. If someone offered you a million dollars in 10 years or $10 per year right now, you’d wait for the million (I hope). It’s an extreme example, but it shows how the short-term plan should be pushed aside for the benefit of the long-term plan. If I don’t fudge the numbers, the $10 is the better deal.

Here’s how I’ve decided to fudge the numbers.

I add up all the properties equity and values. Zillow is fairly accurate for these condos as it has a lot of data points to work with. Next I calculate an equity-to-value ratio. In short, this is the percentage of the property value that we own vs. the bank. I then calculate the rents of all the properties as if they were owned free and clear. Thus we can say that we are “banking” (in a completely fudgey sense) a percentage of the rent that we would expect to have in the future.

If you are confused (and you probably are), this article on calculating cash flow of cash flowless real estate explains it in more detail.

Here are the numbers for April. We have 46.09% of equity in our properties with an estimated combined rent of $3,325. (This number is after insurance, property taxes, and condo fees.) We were able to raise the rents earlier this year a little bit as the rental market has been good and we turned over to new tenants.

If you multiply $3,325 by 45.98% you get $1,533. At the beginning of 2017, we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 16 months, we’ve seen the number grow around $359/mo. As the years march on, the ratio will grow to 100% of the rent, which is moving up from $3,325 a month (due to inflation). That’s what gets us to that annual $40,000 I mentioned above.

In the previous report, the rental property income was $1,529. This number usually moves slowly and this month was no exception. It’s only a $4 jump. This number only changes if one of two things happen: 1) The value of the properties go up in value. 2) We change the rents. I don’t control the housing market. Tenants are typically locked in for at least a year. The monthly paying off of the mortgages creates a little equity over time. This month one of the properties had a worse Zillow estimate which made our equity gains very minor.

Slow and steady wins this race. My hope is that by the end of this year, we’ll be looking at having 50% of the equity with $3,325 in rent or $1662.50 a month in fudged alternative income. It should be close as we’ve moved from 43.32% at the beginning of the year to 46.09% now.

Total Rental Property Income: $1,533

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers. You can decide if the game is fair. I always appreciate comments!

We don’t focus on putting our money in dividend stocks, but I’m going to imagine that we do. Instead we have it in index funds for the most part. Though the index funds do pay dividends, it’s not the core goal. Also, the money I’m talking about here is in our retirement accounts, so it isn’t something that we would tap as “income” anyway.

Even though all this money is in retirement accounts, we could pull the money out and use it. We’d get tax penalties so we won’t do that, but like the mortgages on the rental property, there’s real value here that needs to be accounted for. My goal here is to capture the nearly 20 years of mostly maxing out retirement contributions.

Just like the rental income, we can pretend what the portfolio would earn if we moved all the money into dividend stocks or indexes. For the sake of pretending, I estimated that we could earn 2.50% in dividends. Most people estimate a 4% safe withdrawal rate, but withdrawal is not our plan here. We are only thinking about the cash that these investments could yield.

April was a good month for our portfolios. Part of that was that the China trade war hit stocks at the end of my last update (around April 6th), giving us some room to recover. Another part of that is that oil prices have been going up. That’s been a hedge we’ve had for some time.

Total Dividend Income: $1,449

Last month, it was $1411, so we gained $38 of theoretical monthly money from theoretical dividends. That $38 is like getting a free cell phone plan for life. Thank you Mr. Stockmarket.

Very Close to Passive Income

This is a newer section, but it’s quickly become a regular fixture.

Most people consider rental property income fairly passive income. It’s not, because you have to deal with tenants. However, when things are going well, there might only be “work” every couple of months. For sake of argument, I think we agree it is “more” passive than writing blogs and sitting dogs. I spend a lot more time on the later than the former.

This “very close to passive income” category is a combination of “rental property income” with “dividend income.” (That’s a lot of quotes.)

It’s interesting to me that these two numbers are so close. It’s like the stocks vs. real estate debate, but for our personal finances. I think of it as putting them in an arena to fight out which is the strongest. The dividend income started out the year with a big, nearly $50, lead. In March it fell behind real property income by more than $100. It’s closed the gap and now there’s only it’s only an $84 advantage for real estate.

The stock market goes up and down which makes the dividends fluctuate as well. The rental property income keeps going up, because the mortgages are always getting paid down every month.

April’s Very Close to Passive Income: $2,981

Last month it was $2,940, so it’s moving in the right direction. That’s grown from a combined $2,354 in January 2017. Since then, this has gone from an estimated annual income of $28,252 from these sources to $35,772. Investing is awesome! (At least investing in this bull market is awesome.)

Final Alternative Income

Adding up “dogs and blogs” to the “very close to passive income”, this month we on the investment stuff had $5934.46 in monthly “alternative” income. That would be $71,213.52 a year. It was trending towards over $100,000 last year, so seeing this go down is a little depressing. The dogs and blogs aren’t pulling their weight while I focus on more family things. On the other hand, by adding that other income opportunity, things could move back up.

Also, $71,213.52 a year on investments, writing on a blog, and taking care of dogs blows me away. In the long term, we can get by on half of that income, and it doesn’t include any of my wife’s bread-winning pharmacist income or her potential military pension if she retires next year.

Just like every month, I’m still hoping to writing a book to boost my alternative income. I had always planned it to be an eBook, but if any readers out there know a publisher, I’d appreciate the hook-up. I think I can make a compelling argument for a book that you’d see in a bookstore… that is if bookstores still exist by the time I’m done writing it.

Net Worth Update

Since I don’t share real numbers of our net worth, this isn’t very exciting. That’s why it’s just a footnote here.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth is still fun.

I use Personal Capital to track my net worth and it makes everything easy. It’s free and you should give it a try.

In April, our net worth grew 1.73%. That’s a great gain that offset March’s loss of 1.48% (which will forever be known as the China Trade War effect).

In any case, our net worth for the first four months of the year so far is up 4.50%. If it continues, that would be 13% for the year. I think that’s a very solid financial year.

How was your April? Let me know in the comments.

The post Alternative Income Update: April 2019 appeared first on Lazy Man and Money.

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Sometimes trying to saving money is an extremely difficult job.

A couple of weeks ago, I wrote about this Red Pocket Mobile Deal. In short it was unlimited cell service on AT&T Network (5GB LTE) for a year at $240. That’s $20/mo. for those who are math challenged. I’m paying $35 a month for similar service at Cricket Wireless.

Who wouldn’t want to save $15/mo., right?

It looked to me that Red Pocket Mobile is one of those resellers who run on very thin margins, which is what leads to the low price. I’m used to going with the frugal option and giving up customer support. My view is that typically once you get service up and running on reliable network (AT&T) it’s smooth sailing.

One thing concerned me about the deal, the return/refund policy. I’d need something very solid if I’m committing to buying a year’s worth of service. Hidden away at the bottom of the Ebay store listing is a tab of “cancellation/refunds.” Clicking it gives you their policy, which is:

“We want you to be delighted with your purchase of this prepaid service. If you are not satisfied with your service and it is within 30 days of receiving your starter kit, we will refund your purchase in full. However, if you have consumed more than 30 minutes, 30 texts, or 30MB of data, it will be considered buyer’s remorse and a refund will not be available.

If you do not contact us to cancel the plan within this 30 day period, or if you consume more than 30 minutes, 30 texts or 30MB of data, your purchase will be considered buyer’s remorse and you will no longer qualify for a refund.”

Okay, if it’s within 30 days, they’ll refund… great. Oh wait, if I talked to someone for 30 minutes, received 30 texts, or used 30MB, they’ll consider it buyer’s remorse and not give a refund.

This scared the hell out of me. I took to Twitter.

Hey @RedPocketMobile, I wrote about your Ebay deal today (https://t.co/nhzkYZOb44). I want to buy, but the 30MB limit is 1/5th of one day of the data.

Can't you at least give 5 days no limits on a yearly purchase?

— LazyManAndMoney (@LazyManAndMoney) April 19, 2018

Just checking back, @RedPocketMobile. Any thoughts? Would love to give you my business. https://t.co/opjsJPdtd7

— LazyManAndMoney (@LazyManAndMoney) April 20, 2018

Happy day! I scooped the @cheapskateblog with my article yesterday: https://t.co/nhzkYZOb44

Too bad @RedPocketMobile won't respond to my Tweets about the extremely tough return policy. https://t.co/ZTMoDwg8af

— LazyManAndMoney (@LazyManAndMoney) April 20, 2018

Okay, I DM'd you, but I'm not sure why it has to be private.

Yesterday, I explained my concerns about the 30 minute, 30MB data limit on a year commitment as being very, very light. That's not much of a test of service.

— LazyManAndMoney (@LazyManAndMoney) April 20, 2018

That last request drew a wise response by @MLM_Police:

You know it’s shady when they want to talk via DM

— MLM Police (@mlm_police) April 21, 2018

I followed up on DM and asked the same questions that I did publicly. On April 20th, they said escalated the request. By April 23rd, I reached back out to them, as it had been 4 days and I feared the deal would be removed or sold out before I received my response. On the 24th, they got back to me and said that they hadn’t received a response yet.

I decided to take a chance and buy, mostly because I believed that paying $20 for AT&T service is better than paying $35 for AT&T service.

I ordered my sim and it sat a few days while I found the free time to focus on getting it installed and activated. I started the process on Friday, May 4th early in the day. I decided to port my phone number because some of my dog sitting client text me directly. In hindsight, this was probably a bad idea.

Here’s the number portability section of the Red Pocket Mobile’s activation website. I highlighted two interesting sections.

Let me tackle the second highlight first. It’s very strange that a pre-paid phone company would ask for your Social Security Number. This Forbes article covers it a bit. In this case, Red Pocket Mobile doesn’t require it, which tells me they don’t need it. They’d like to have it. I remember thinking, “Hmmm, you escalated my question about the return/refund policy 2 weeks ago and I haven’t gotten a response yet. I’m not sure I’d like you to have my Social Security Number. Thanks!”

The other highlight is the “Account Password” of my (then current) carrier, Cricket Wireless. I used the password for the Cricket Wireless website. Big mistake.

This is the first time I’ve ported a phone number in years. I had read it takes a couple of hours. Here’s the thing they don’t tell you about porting your phone number. You never get notice (such as an email) about the completion of the port. And you have to reboot your phone for the new activation to take effect. So you fill out this form try back in 3-4 hours and hope for the best.

When my service wasn’t activated in 4 hours I called Red Pocket Mobile. They said that the PIN didn’t match. I said, “Of course it isn’t going to match my PIN… your website asked for the password. If you wanted the PIN you should have asked for it.”

I gave them my PIN and they submitted the new request to port my number. Four hours later, I still didn’t have service. Time for the second call to Red Pocket Mobile.

After one person disconnected me when they went to investigate, I got one who would work with me. She said that the PIN was denied. I asked what she had for the PIN information. She read the same information I submitted from the website hours ago, not the information I gave in my last call. It seems as though the call that I had four hours ago never happened.

Four hours later, I still didn’t have service. At this time, it’s getting late, so I decide to resubmit the activation and port request with the correct PIN from the website. My theory is that it can’t hurt. Maybe they are only allowed to go off of what is submitted through the website?

The next morning I call back and the customer service representatives tell me the PIN was denied again. Once again, she reads me the same password that I originally submitted and not the PIN that I’ve now corrected twice over the phone and once online. After I explain to her that I seem to be caught in a low-budget, direct-to-video version of Groundhog Day 2, she puts me on hold to investigate some more.

She comes back and says that it should work now! And amazingly it does! I can make a phone call! She painstakingly reads me through at least 10 APN settings to get the mobile network configured. Near the last one, my phone inexplicably erases the previous 9. I thank her and tell her that I’ll just do it through the Red Pocket Mobile app as the company intended.

It works without a hitch. I decide to take my dog on a short walk around the block while I check up on some news, Twitter, and email. (We were off the “beaten path”, so not this “phoning and walking” wasn’t really a danger.) Everything seemed normal and great with the LTE coverage.

I got back and it was time for the kids soccer practice. My wife drove the mile (maybe 1.5 miles) down the street. I don’t know why I had my phone out for such a short trip, but I noticed that I didn’t have LTE coverage. I only had “H” coverage and pages were slowed to a crawl. Uh oh. It’s panic time!

I looked at how much data I used. It was at 28MB. I had 2MB of data to spare before I had wasted $240 on cell phone service that I wouldn’t be able to use. In a panic, I quickly put my phone into airplane mode.

When I got back home, it was time to call Red Pocket Mobile again. I asked if they’d waive the 30MB requirement like I did in all the Tweets. Instead of promising they would, the phone person jumped to “Let’s see what we can do about this coverage. Turn your phone off airplane mode and we’ll get started.”

It seemed that he couldn’t understand the position I was in. If I turn the phone back on, it could get email updates and get over the 30MB limit. In order for Red Pocket Mobile to attempt to troubleshoot my problem, they’d effectively be demanding that I waive any right to a refund.

We went back and forth like this for what seemed to be forever. It was unfortunate, but I feel that Red Pocket Mobile put me into a corner where I couldn’t be their customer.

Finally after number calls over the 24+ hours, I decided to give up on Red Pocket Mobile. My wife was quite relieved.

I called up Cricket Wireless and said, “Please let me come back!” Their customer service representative said, “Sure, no problem. We’d love to have you back.”

Oh there were problems! We’ll continue that story in Cell Nightmare 2…

Red Pocket Mobile Conclusion

Like everything in this article, this is just my opinion based on my experience. It’s quite possible that the service is good and that I freaked out due to the refund policy before I had the chance to get a good feel for it. However, their lack of customer support and that policy really made it difficult for me to fairly review the actual phone service itself.

If you are thinking of giving Red Pocket Mobile a try, I’d recommend porting your number to something like Google Voice and then using that to route a new Red Pocket Mobile number to that Google Voice number. This has worked well for me in the past, with the exception of people getting confused when their caller ID gives them the underlying carrier number instead of my Google Voice number on outgoing texts and calls.

The post I Feel Scammed by Red Pocket Mobile (Cell Nightmare 1) appeared first on Lazy Man and Money.

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Last weekend, my son told us that other children in their school have watch Star Wars. I thought 5 (almost 6) might be a little too early, but even if a lot of it goes over his head there’s not much harm there.

The library doesn’t bite, but interrupt me again and I will!

We went through the age-old question of which order to introduce the movies. Fortunately, my wife and I both agreed on the chronological order of release date meaning that we started with the 4th movie.

There was just one small problem. How do you watch Star Wars nowadays? I couldn’t find it streaming on Netflix or Amazon Prime. Star Wars isn’t there. Amazon and Google Play were willing to sell me the digital movie for around $20. We were simply looking to rent it for the day and maybe explore buying a collection in the future.

We went down to the local Blockbuster, but strangely they only had pizza and subs there. I looked online to see if it was at my local Redbox kiosk. That was a dead end as well.

My wife was going to start calling up random friends and co-workers, before she came up with a better idea, “Why don’t we go to the library?”

This may sound strange, but we had never gotten library cards. For whatever reason we’ve been running around from one thing to the next or simply enjoying all the books, Netflix, Amazon Prime Video that we already have at home. We were long overdue to become members and reap all the benefits of our taxpayer dollars at work.

Libraries: Much More Than Books

Of course the Library had all the Star Wars movies. We grabbed episodes 4 to 6… even “upgrading” to Blu-Ray for A New Hope. I put upgrading in quotes because it was the same price of “free” as the DVDs. They also had a bunch of new releases in Blu-Ray as well. While it isn’t a new release, I never got around to seeing Deadpool and that caught my eye.

We watched the Star Wars movies and my kids picked up some of the large plot ideas. Show off my ability to talk like Yoda did I? My kids didn’t know that Dad was good friends with Yoda. (More accurately, his college linguistics class analyzed such sentences and how we still what he’s saying.)

When I returned the movies, I noticed that they had a section of kids movies. There we found the original Pete’s Dragon, which is something my wife and I wanted to introduce to our kids. It’s been very hard to find that on streaming services as well. Next, I spied a real treasure: School House Rock: Multiplication. I grabbed that just to watch my kids’ heads explode at Three is a Magic Number. They only know the Jack Johnson version from the Curious George movie Reduce, Reuse, Recycle. Multiplication is not typically taught to a 5 year old (much less our 4 year old), so my expectations are zero. However, the songs were fun for everyone. Any math that stuck is a bonus. (Note: There should be a much more extensive post about my planned “Summer of Math” with the kids coming soon. Don’t worry, we got them in camp and soccer – stuff that some silly kids think is more fun than math.)

Beyond books and DVDs, libraries have a number of very cool things. My library even has few fishing poles and tackle boxes that you can borrow with a library card. That’s the most unusual thing they have.

There’s one more huge benefit of my library (and I bet your library too): Free digital content. Last night I signed up with Hoopla, which has videos from The Great Courses. I grabbed the one on chess and was watching it in minutes like it was Netflix. (I don’t think Hoopla and Chill is going to catch on, especially with my chess video.) I grabbed an episode of Mr. Wizard’s World and the first episode of the 4th season of Octonauts (which I don’t think has made Netflix yet.) My library limits me to 6 pieces of content per month, so it’s not going to replace Netflix, but it’s a very good supplement.

There’s a similar service for free music via a company called Freegal. I haven’t looked at that yet. There’s also something called Mango Languages, which is normally $20/mo.

The library also a 3-D printer and 3-D classes. I think the only cost is the plastic for the printer itself. We’ll probably explore this sometime in the near future.

I realize that this article fits squarely in the “But Lazy Man, I already knew all this!” area. I had an idea that most of these things were available, but I had simply forgotten them. I’m going to have to start a spreadsheet of things like, “Rainy Day activities”, so that I can remember to take advantage of all the awesome stuff the library has.

We have an affiliate relationship with one or more of the companies linked in this article.

The post Reminder: Libraries Can Save You Hundreds of Dollars appeared first on Lazy Man and Money.

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One of the great pastimes of investing is comparing performance. The standard comparison is usually with S&P 500, or worse, the Dow Jones Industrial Average.

For example, I signed up with SigFig years ago. Now that I use Personal Capital, I rarely look at SigFig, but they do send me weekly emails. Here’s part of this weekend’s email:

I’d like you to take two things away from this chart:

  1. I’m clearly a superb stock picker… even if most of my investing is in Lazy-approved index funds.
  2. This shows the typical DJIA and S&P 500 comparisons that I’m referring to

What’s wrong with comparisons to the DJIA and the S&P 500? The DJIA consists of 30 of the largest stocks in the United States. The S&P 500 consists of 500 of the largest stocks in the United States. That means that the DJIA is a subset of the S&P 500. There’s 100% overlap in that very small data sample. The S&P 500 is better, but again, it only covers stocks of large US companies.

Here are my performance results from Personal Capital:

(I’m going ignore this week’s performance and pretend that didn’t happen. I’m more interested in long term averages in general.)

I like Personal Capital’s update better. They decided that one large US stock index is enough and kicked the DJIA to the curb. Good choice in picking the more diversified index.

They make another wise decision and provide two new index comparisons, foreign stocks and bonds. This is particularly useful because every diversified portfolio I’ve seen recommended includes at least one, but usually both of those. Maybe there is someone out there who advocates to just put your money in the S&P 500, but I haven’t come across him/her yet.

That’s the problem with all these comparisons: A well-constructed, diversified portfolio shouldn’t be compared to any single index.

Let’s look at the Personal Capital chart again. Did you notice the words at the bottom? My “holdings fell… underperforming the S&P 500.” That feels like shaming to me. It seems to imply that I should have just put all my money in the S&P 500 and done better. (Am I alone in feel this way?)

I’ll let you in on a secret: I don’t invest in the S&P 500. I prefer to invest in the the Wilshire 5000 because it includes midsize and small companies. The market tends to move together so it isn’t a big difference, but I don’t see a compelling reason to avoid around 4500 companies just because they are smaller. I choose index funds because they are diverse. More diversity is better.

In other words, if you are going to use US stocks as a comparison, why not choose the most inclusive index?

Let’s move on from the US stock indexes. My portfolio consists of so many things. Here are just a few examples: Europe/Asia companies, emerging markets, frontier markets, oil, monkey butlers, bonds, REITS, and cash. (We hold real estate, P2P lending, and other things as well, but those don’t fit in a normal brokerage account framework).

[Note: I’m considering selling my monkey butler holdings as Amazon ramps up their home robot business.]

Comparing my holdings to the S&P 500 is nonsensical. I’m not looking to perform like the S&P 500. If I was, I’d just invest in the S&P 500. Instead, I’d like my investments to grow over time, while not losing as much money if/when the US market goes south.

Sometimes when I’m critical of something, people ask, “So how do you suggest we change and do better?” I think an easy stopgap measure is for companies to switch to the Wilshire 5000 instead of the DJIA or the S&P 500. I’m hopeful that’s just a few lines of code for the software engineers at the company.

Longer term, I’d like to see companies ask about people’s risk tolerance and create a blend based on those preferences. One simple example could be the common 60/40 stock/bond portfolio. Imagine the Personal Capital chart above with a “Target” that gives the YTD performance of a portfolio with a 60% Wilshire 5000 index and a 40% broad bond index. In this case, the “Target” would be down around 1% for the year. (This can be more complex to include foreign stocks and monkey butler investment performance if necessary.)

That seems like an improvement, right? Let me know what you think in the comments.

We have an affiliate relationship with one or more of the companies linked in this article.

The post Stop Comparing Investment Performance to the S&P 500 appeared first on Lazy Man and Money.

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Last week, I read Why FIRE Is Such a Compelling Story on RetireBy40. The article compares Joe’s journey to FIRE (Financial Independence / Retire Early) with the classical hero’s journey blueprint that underscores many successful stories.

To explain it, he goes step by step through Christopher Vogler’s book The Writers Journey. He contrasts his FIRE journey with a movie about a motley crew of space travelers who overthrow an all-powerful oppressive regime. It’s an old movie, so I doubt you heard of it. I think it was called Space Battles something.

Joe invited other bloggers to join in on the idea. I’m throwing my hat into the ring.

I need to start by saying that I don’t think FIRE is “heroic.” It can’t be compared to saving a city full of people.

I’m going to take his old 20th century movie about a motley crew of space travelers who overthrow an all-powerful oppressive regime and give it a 21st century update. I know there are a lot of Space Battles fans out there, but this is for the Firefly/Serenity fans out there.

This is going to be challenge. As io9/Gizmodo writes in Eight Reasons Why The Hero’s Journey Sucks:

“But over time, lazy writers like George Lucas have used [the hero’s journey] as a checklist… It discourages originality… Instead of championing stories that are different, like say, Firefly/Serenity… What about a group of people who decide to work together to change the crappy status quo?”

Fortunately, I found some help with this hero’s journey of Serenity. I’m curious how this is all going to work out. If I don’t know where this going, you can’t have a clue either right? Good!

Let’s dig in.

Serenity and My FIRE Hero’s Journey 1. The Ordinary world:

Normal life before the adventure begins.

Serenity: It’s the year 2517, and humans have moved to a new solar system after Earth was overpopulated. Our hero, Captain Malcolm Reynolds (Mal), and his crew can best be described as space pirates. They go from planet to planet on smuggling jobs living paycheck to paycheck.

FIRE Journey: Lazy Man graduates college with a computer science degree. He quickly moves up to management at an top internet company.

2. Call to adventure:

Something happens to disrupt ordinary life.

Serenity: Mal decides to bring 16-year old River on a job because she has the rare gift of being able to read minds which might be helpful. River’s brother, Simon, has broken her out of a secret assassin/brainwashing training lab run by the evil Alliance. The job doesn’t go as planned and River was put in danger, and Simon announces they are off the ship at the next planet.

At the next planet, a television plays River’s secret assassin trigger word and she destroys a bar until Simon says her sleep word.

FIRE Journey: The internet goes bust and everyone lays off software engineers. Lazy Man goes from contract to contract. After a few years, joins a new start-up. Lazy Man starts to develop the idea that software engineering may be outsourced to India and other places where the cost of living is cheap.

3. Refusal:

The hero fears the unknown and is reluctant to change.

Serenity: The crew (sans River who is in her bunk listening) meet in Serenity (the spaceship). Mal has no explanation for why he didn’t leave them on the planet like the plan. In this case, it is the top mercenary, Jayne, who fears the unknown and Mal agrees with him.

FIRE Journey: Lazy Man continues to work. Despite being paid in the bottom 5% of his Salary.com peers, he is happy to have a job and doesn’t want to rock the boat.

4. Meeting a mentor:

Serenity: Mal contacts Mr. Universe to try to find out what happened. Mr. Universe watches all the media in this universe, “Can’t stop the signal, Mal. Everything goes somewhere, and I go everywhere.” He learns that the Alliance triggered River with the television commercial so that they could find her. The Alliance needs to get River back because they made the mistake of having someone with all of their secrets in the same room with her… and her ability to read his mind.

FIRE Journey: Lazy Man reads an article about bloggers who are sharing their income and spending, but not their names. He comes across Rich Dad, Poor Dad. Lazy Man starts to think that working smarter might be better than working harder. (It would be some time before he realizes that Rich Dad, Poor Dad is only good for motivation and Kiyosaki gives terrible personal finance information.)

One of my prized possessions. Signed by everyone in the cast except for Gina Torres. 5. Crossing the threshold:

The hero leaves the ordinary world and journey into the special world.

Serenity:

FIRE Journey: Lazy Man is getting serious with his girlfriend. Her active duty status means she’s eligible to retire with a pension at age 43. Lazy Man starts this blog in 2006, with the hope of finding some path to retire with her in 2019. The idea of retiring in 2041 at age 65 is not appealing. He explores investing in condohotels, P2P lending, and ways to save money.

After a few months, he learns that what he’s been calling a “money blog” is actually something called “personal finance.” Years later he would learn about the FIRE acronym.

6. Tests, Allies, Enemies:

Hero encounters difficulties, helpers, and challenges.

Serenity: Mal meets up with Shephard Book and gets some practical advice. Book says the Alliance is sending an assassin, an Operative, because they want to keep this a secret. Mal also receives some spiritual advice and starts to realize that he has a strong moral compass (despite all the thieving, smuggling, and the other stuff they do to get by.)

Mal gets a call from Inara (former passenger and Mal’s unspoken love interest) who claims to need help with local unrest on her planet. Mal, knowing that it is a trap, goes anyway. He gets in an epic fight with the Operative, but is clearly outmatched. On the verge of getting killed, Inara saves him with a perfectly timed distraction.

FIRE Journey: Lazy Man creates friends with dozens of bloggers. He joins one formal network where everyone promotes each other’s work. Lazy Man spends a lot of time in personal finance forums building relationships with other bloggers. He reads and comments on a dozen blogs each day.

7. The Approach:

Long journey and preparation for the major challenge in the special world.

Serenity: River has a vision of the secret that the Alliance wanted to hide, a planet called Miranda. They return to Shephard Book’s planet to find out more about this hidden planet and found that the Alliance was there first. In a touching moment, Book tells Mal that he doesn’t care what Mal believes in, just that he believes.

The Alliance is taking out anyone and everyone in the universe who has ever sheltered our heroes, leaving them no safe haven to run to.

Mal orders his crew on a “suicide mission” through “Reaver space” to get to Miranda and learn the secrets there. Reavers are humans who have become almost like a pack of wolves hunting other humans like bunnies. It’s a big stretch to call them human and I’ll spare you the too graphic description of how they treat humans.

The crew doesn’t agree with this plan, but this journey is the one place they can live where the Alliance won’t follow. As the pilot, Wash says, “There’s nothing about this plan that isn’t horrific!”

FIRE Journey: Lazy Man’s fiancé, against all odds, gets a job opportunity across the country in San Francisco. The two go out and build new friends and alliances.

They have to turn their condos into rental properties because they can’t be profitably sold. Lazy Man get more and more interested in blogging and less and less interested in software engineering. Silicon Valley is no place for a 32-year old geezer engineer anyway.

Six years later after the birth of their first son, the heroes move back to the East Coast. Just days before they do, they finalize a HARP refinance on those rental properties. The new 15-year at 3.5% rate cuts years of payments off of the old 30-year at 6%.

Lazy Man and wife continue (as they have done all along) to do their best to max out retirement accounts and take advantage of the power of compound interest.

8. The Ordeal:

Greatest personal challenge, everything is on the line.

Serenity: After successfully getting to Miranda, the crew learns the Alliance’s secret. With that secret they forge a plan to tell the world.

FIRE Journey: Over time, Lazy Man learned the secrets of how MLM/Pyramid Schemes scam people into false “business” opportunities. He broadcasts logical explanations of what they are and how they work including information that they are designed so that more than 99.9% of people lose money. When the people lose money, they are told they aren’t working hard enough or that they need to buy more training so that they can continue to feed money to the 0.1% at the top of the pyramid.

Lazy Man is attacked by unscrupulous lawyers hired by the MLM/Pyramid Scheme industry. They threaten to bankrupt his entire family to suppress people from learning the truth about the scams. (This was before John Oliver exposed them on HBO and the FTC publicly lambasted them.)

Lazy Man gains new respect for the movie Serenity as he struggles against legal loopholes that are used to silence free speech.

9. The Reward:

The hero takes possession of the prize and becomes stronger.

Serenity: Mal and the crew gets the proof to share the truth about Miranda. If they can get the proof to Mr. Universe, they can broadcast it to all the planets in the universe and the corruption of the evil Alliance will be revealed.

FIRE Journey: The power of compound interest and the great on-going bull market propels Lazy Man and his family towards financial independence.

10. The Road back:

One minor test to drive the story to completion.

Serenity: Mal and crew head to Mr. Universe, but they have to get back though Reaver Space and the Operative/Alliance. One small ship against hundreds? Our hero creates a plan. If the plan to get to Miranda was “There’s nothing about this plan that isn’t horrific!”, the plan to get back is a hundred times more horrific.

One could make a case that this fits in the next section.

FIRE Journey: Lazy Man and his wife have two awesome boys. Lazy Man’s wife has a work situation of golden handcuffs. In addition, her active duty status grants the boys a tremendous discount at a tremendous school. If she retires, the education costs go up while our income goes down.

The search for a solution to this is ongoing. We don’t know how the story will end, yet.

11. The Resurrection:

The hero has a final encounter with the danger. This is the climax of the story.

Serenity: Mal gets in a final fight with the Operative. The Operative runs a sword through him, but an old war injury saves him. Mal has the opportunity to kill the Operative, but instead traps him and forces him to watch as he spreads the truth about Miranda which changes the ‘verse.

FIRE Journey: Lazy Man and wife don’t know what twists and turns life will throw at them, but there will certainly be some encounters with danger.

12. The Return:

The hero returns home or continues the journey, bearing some type of treasure or power to change the world.

Serenity: Mal has a final talk with the defeated Operative about the changed world. His love interest, Inara, is on the fence about whether to join the crew or go back to her planet. Mal settles in with his new co-pilot, River.

FIRE Journey: At some point in the future, Lazy Man and family, pack up their stuff, rent out their house, and spend summers in Europe. The boys have a difficult decision of choosing the best financial aid packages from Princeton, Harvard, and Stanford. Lazy Man’s wife manages the boy band they all co-founded.

As for Lazy Man, he grows up and figures out what he wants to do.

What’s Your Journey?

As you can, our FIRE journey is still a work in progress. If we wanted to retire next year when my wife is pension eligible we could. We could put the kids in public school. We could sell off the rental properties and use the money to pay off the mortgage on house we live in. We’d have very few expenses with paid off cars, solar panels, house, and relatively cheap health care from the military.

However, these aren’t necessarily the best choices to make. It may be cutting things close. We would be sacrificing things that are important to us.

More FIRE Journeys

Anchor – Retire By 40: Why FIRE Is Such a Compelling Story.

Story 1 – Dividends Diversify: FIRE hero’s journey.

Story 2 – Route to Retire: Why Spiderman’s Path is Like the Journey to FIRE.

Story 3 – Mr. Tako’s Escape: Darth Vader and The Path to FIRE

If any bloggers are looking to join this chain, the instructions are at the end of the Anchor article by Retire by 40 above.

I really need your comments on this article, readers. I’m not sure I did Serenity justice or if I put it in the right mold. I did my best to minimize spoilers, but it’s been 13 years, so you had your chance.

I also want to hear what you think about your FIRE journey. Does it fit the hero’s journey?

The post The Serenity of My FIRE Journey appeared first on Lazy Man and Money.

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I don’t typically get the time to watch too many movies. Well, with a 4 and 5 year old, I’m on top of most of the “G” rated ones. Last week, I made it a point to hit my local Redbox and catch a movie I had wanted to see since Christmas, Downsizing. After a discount code they texted me, I had to shell out a little more than 50 cents.

I won’t blame you if missed the movie. We’re all busy around the holidays. In any case, here’s the trailer:


Downsizing (2017) - Official Trailer - Paramount Pictures - YouTube

In this fictional world, scientists create a way to shrink people to around 5″ through a process called cellular reduction. As the trailer explains, “$52,000 translates to $12.5 million” when you are small. A city of people can fit in a normal backyard. The same city can share a couple of apples. At the end of the trailer, you see them filling up a pitcher from a bottle of Absolut vodka. (This scene wasn’t actually in the movie.)

I’m going to interrupt the financial explanation of Downsizing. In the spirit of Earth Day, this movie does take a strong stance that Downsizing is the best way (perhaps the only one) to save human life on Earth. And now back to the financial aspects of the movie…

The main characters, Matt Damon and Kristen Wiig, decide they are going escape the rat race and get downsized. With the equivalent of $12.5 million, they can retire in the lap of (small) luxury.

It’s a great premise. Unfortunately, this alone doesn’t necessary make for a workable movie. There needs to be conflict, a plot, and things like that.

The trailer covers about the first 25% of the movie that sets up the premise. After that, the movie could go in almost any direction… and that’s exactly what it did. The last 75% of the movie didn’t rely on the Downsizing premise at all. It could have happened in normal-size world with very few edits.

Here’s part of the review:

“I’m here to tell you that everything you think about this movie is wrong. Cowriter and director Alexander Payne (Nebraska, The Descendants, Election) takes that intriguing concept and inexplicably flushes it down the toilet… The second-half execution is an epic fail, nonsensical in its plotting and disturbing in its venom for other human beings.

Characters are tossed aside. Sturdy plots are tossed aside. Even the visual gimmicks go away. We clean up the mess. The chaotic zig-zagging story (written by Payne and Jim Taylor) goes to new places with wild, irresponsible abandon. This is a would-be hero’s journey in which everybody is the villain. Damon is pathetic, not sympathetic. Waltz is even more despicable. You will not care about any of them.

This is exactly how I felt watching the movie.

Since Downsizing was no longer the Financial Independence/Retire Early (FIRE) movie that I was expecting, my mind wandered off on many tangents. Here are a couple of the thoughts I had:

  • There were a lot of All-Star cameos. Or maybe they are all-stars to me: Jason Sudeikis, James Van Der Beek, Patrick Gallagher (Glee), Neil Patrick Harris, Laura Dern, Donna Lynne Champlin (Crazy Ex-Girlfriend), Kerri Kenney (The State)
  • In contrast to most movies, there was a good deal of male full-frontal nudity and zero female nudity. The nudity was in a medical setting, which is something to note if male full-frontal is your thing.

The biggest thing my mind kept going back towards were the inconsistencies. They make a point that the Downsizing process requires removing teeth and hair. After being Downsized, dental implants are put in and hair grows back (eventually). I’m not sure why hair cells wouldn’t shrink. I’m also not sure teeth would behave differently from bones that do shrink. (Note: The movie review above says it was just teeth with metal filings, which makes more sense.)

The vodka scene that didn’t appear in the movie.

The shrunken world amazingly has cellphones and HD televisions. The cell reduction technology can’t work on these, so it seems that 2-inch screens with 2 million dots is cheap.

That may sound nit-picky, but it plays into bigger questions in the movie. Sometimes making quality small things is expensive. I suppose that small people could be making small ovens and refrigerators. However, the downsizing pitch is retirement on a relatively small amount of normal US dollars. Maybe people in extreme poverty can get downsized and perform labor for what we might consider a middle-class lifestyle? I wish the movie explored these types of questions.

The real shame of Downsizing is that it would be a better fit for a television show. The core concept can lead to numerous story lines. These story lines could actually be related to the act of “downsizing” unlike the movie itself.

For those looking for a mainstream movie about FIRE, the search continues.

The post Downsizing: The FIRE Movie That Wasn’t appeared first on Lazy Man and Money.

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