Drunken Money - Finance for Millennials by Millennials

JON SANDERS, MORTGAGE LOAN OFFICER AT STOCK YARDS BANK & TRUST, SITS DOWN WITH US TO EXPLAIN MORTGAGES. JON BREAKS DOWN THE TERMINOLOGY AND GIVES US TIPS ON HOW TO GET A MORTGAGE FOR YOUR DREAM HOME.

Some questions answered in this episode?

• How did Jon Sanders first get into the mortgage business?
• How are mortgage rates determined?
• How often do rates change and what are the current rates?
• What are the most important things to think about when you’re looking to buy a house?
• How do you know if you’re ready to purchase a house?
• What advice would Jon give to somebody purchasing their first house?
• What is the debt ratio and why is it important?
  • What is a good debt ratio?
• How much should you save for your down payment?
• What is Fannie Mae?
• What is mortgage insurance and how big does your down payment need to be to avoid it?
• What information do you need to provide to get a mortgage?
  • How does it change if you’re an entrepreneur?
• What is a good credit score and when should you be worried about it?
• What is Jon’s opinion on 15-year vs. 30-year mortgages and people paying off their mortgages early?
• What is the biggest issue Jon sees with millennials purchasing houses?
• When is somebody ready to reach out to Jon about purchasing a house?
• What is refinancing and when should somebody refinance?
• What is a home equity line of credit?
• How does an escrow account work?
• What are unexpected fees when purchasing a house?
• Who is the perfect person to buy a house?
• Should somebody pay off their mortgage early?

LAST CALL QUESTIONS AND ANSWERS:

• What’s the best career advice you’ve received?
  • Be yourself.
• What advice would you give to your 22 year old self?
  • Be yourself.
• What’s the best purchase you’ve made in the last six months?
  • Begonias (flowers).
• What is your definition of success?
  • Doing something you genuinely care about.
• What book/documentary would you recommend?
  • Wendell Berry poetry 
• What’s your favorite thing to drink?
  • LaCroix with Vodka
  • West Sixth IPA

SHOUTOUTS:

• Brewgrass Homebrew Supply
• El Mundo
• Frank Otte

Be sure to learn more about Jon and say hey by connecting with him on Linkedin or Twitter, or email him at jon.sanders@syb.com.

Have any topics you want to be covered or amazing people you’d like us to interview? Let us know! You can email us at info@drunkenmoney.com. You can also find us on Facebook, Instagram, Twitter, and Linkedin. Please be sure to subscribe to our weekly mailing list at drunkenmoney.com/subscribe.

It seems like all our friends are “investing” in Bitcoin, Ethereum, or the new crypto-currency of the day. I have heard more talk of Coinbase in the last 6 months than Berkshire Hathaway among my peers. Well, we hate to burst your bubble, but we believe cryptocurrency is one of the worst “investments” a millennial can make (note: we aren’t discussing blockchain or how the technology can revolutionize the world, just the pointlessness of purchasing cryptocurrency).

So, why do we think purchasing cryptocurrency is about as useless as trying to make money by gambling on the KY Derby? Our thoughts are summed up perfectly by two of our favorite people, Mr. Money Mustache and Warren Buffett.

As Mr. Money Mustache points out:

“We’ll start with the answer: No, you should not invest in Bitcoin. The reason is that it’s not an investment. Just like gold, tulip bulbs, Beanie Babies, 1999 dotcoms without any hope of a product plan, “pre-construction pricing” Toronto condominiums you have no intent to occupy or rent out, and rare baseball cards are not investments.

These are all things that people have bought in the past, and driven to completely irrational prices, not because they did anything useful or produced any money and value to society, but solely because they thought they would be able to sell them to someone else for more in the future.

When you make this kind of purchase, which you should never do, you are speculating, which is not a useful activity. You’re playing a psychological, win-lose battle against other humans with money as the only objective. Even if you win some money through dumb luck, you have lost some time and life energy, which means you have lost.”

Not a fan or never heard of Mr. Money Mustache? Well, you’ve probably heard of Warren Buffett, who should be one of everybody’s heroes when it comes to investing:

“A long-time value investor, Buffett compares cryptocurrency to gold, which he sees as a nonproductive asset. ‘It’s essentially not going to deliver anything other than supposed scarcity because you can only mine so many,’ Buffett said at the Berkshire Hathaway annual shareholder meeting on Saturday. ‘So what? What does it produce itself?'”

Additionally, Buffett points out that if you had $10,000 to invest in 1942, you would have $51 million if you invested in the S&P 500, but only $400,000 if you invested in gold. While we won’t know for sure how cryptocurrencies will fair in relation to gold, I would bet everything I have that investing in the S&P 500 will outperform cryptocurrency long-term (and as a millennial investor, you should only care about the long-term).

Also, I won’t bore you with the details, but the IRS treats cryptocurrency as a security (stock), and not a foreign currency, which means every time you trade one cryptocurrency with another, it is a taxable event. Which also means if you have a gain and trade it before a year, you will have to pay taxes at your ordinary tax rate (which is not good and defeats one of the biggest tax breaks you can have – the long-term capital gains tax rate).

So, in summary, cryptocurrency is not a Drunken Money approved investment for millennials hoping to plan for an early retirement. It is an “investment” that is built on speculation and hope, and has no underlying value (it is not a company that makes money for you), and it could result in awful tax consequences if you aren’t careful.

Be a smart investor and choose investments that actually produce value (such as a company that pays dividends), and let your investments grow so you can enjoy an early retirement.

Have any topics you want to be covered or amazing people you’d like us to interview? Let us know! You can email us at info@drunkenmoney.com. You can also find us on Facebook, Instagram, Twitter, and Linkedin. Please be sure to subscribe to our weekly mailing list at drunkenmoney.com/subscribe.

Job Shortages

You’ve probably heard about the job shortage in America. Many cities and towns are struggling to find workers for a wide-range of jobs such as manufacturers, engineers, mechanics, and many more. And with unemployment at an 18 year low (and the Federal Reserve forecasting even lower unemployment over the next year), it is clear that there simply aren’t enough people to fill these jobs.

The Wall Street Journal is reporting now that many midwestern towns are paying millennials to move there to combat this job shortage. These can come in many forms, but few millennials are receiving grants to pay down their student loans, make a down payment on their home, and in one rare case, the chamber of commerce held a ceremony to give the recipient an even bigger check.

Millennials on the Move

Since 2007-2009, many millennials have opted to move away from rural towns instead to big cities such as San Francisco, Austin, or New York, but these cities are having their rents skyrocketing way past wages. Now the idea of moving to some of these cities would be unimaginable because of the rent alone. And the rural towns that these millennials left behind are now struggling in their own way. Small businesses are all ranking labor shortages as their No. 1 business concern, according to the National Federation of Independent Business. What other way to get millennials to move back, then to offer them more money?

It’s clear that there is an issue in America, so these small towns such as Hamilton, OH are finding new ways to bring the right talent to fill in the gaps. Time will tell if this strategy will work.

JONATHAN KLUNK, PRESIDENT OF KEY SOURCE PROPERTIES, JOINS US TO DISCUSS SHORT-TERM RENTALS (AIRBNB), WHICH ARE HUGE IN LOUISVILLE DURING KENTUCKY DERBY TIME.

• Jonathan got his start in short-term rentals by trying it out on his own, which caused him to realize how little others knew about the budding industry.
  • He was interested to see if his property would get demand for Kentucky Derby, and was shocked at how quickly his property became booked.
• After requests from his friends to help them out with their Airbnbs, he decided to start a side business.
• The perfect Airbnb property?
  • Jonathan says you should strive to make your property as unique and interesting as possible.
  • Many people love staying in Airbnbs that remind them of hotels, so you should have all the same amenities somebody would ordinarily find in a hotel.
  • Also, remember your guests are on vacation, so they don’t necessarily want to stay in a house that reminds them of their own home – your property should be eclectic and unique to stand out in a crowded market!
• While you might think of Airbnb as somebody staying at your house on weekends, it is becoming more common for investors to purchase properties and use them exclusively for Airbnb/short-term rentals.
  • Additionally, Jonathan has never run into a situation where a property was trashed, so if you’re worried about somebody messing up your house that should not be a concern.
  • It could also be a great idea to purchase a property in a city you like to visit and renting it out on Airbnb to cover your costs.
• While building his company, one of Jonathan’s keys was starting it as a side business and being able to grow it while still keeping a full-time job.
• Jonathan also sees a growing market for corporate rentals – rentals that are greater than 30 days that are popular with business executives.
  • There are also less regulatory hurdles if you operate your property this way – as it is not considered a “short-term” rental property.
• Some considerations if you’re interested in owning a short-term rental property:
  • State and city taxes (including transient/hotel taxes).
  • Increase in property insurance.
  • There is more competition today due to the popularity of Airbnb, so it is important to get in the game early to have more reviews for potential customers to view.
• In addition to Airbnb, there is a growing market for VRBO (Vacation Rental by Owner) as well as other alternatives for people looking to get into the short-term rental business.
• The biggest thing Jonathan has learned being an entrepreneur is how to be a great salesman.
• Jonathan’s favorite thing about the Kentucky Derby is the excitement it brings to the City of Louisville.
• Key Source Properties is looking to expand in the Nasvhille, Lexington, and Frankfort markets in the next year as well as expanding into different services.

LAST CALL QUESTIONS AND ANSWERS:

• What’s your definition of success?
  • Have a nice retirement.
  • Be happy with the trajectory of the business.
• What advice would you give to somebody who wants to be an entrepreneur?
  • Whenever you thing the time is right you need to just do it.
  • Nobody know for sure what will happen.
• What advice would you give to your 22 year old self?
  • To be a sponge and learn about everything – read more.
• What advice would your 60-year-old self give you today?
  • Slow down.
• What’s your favorite thing to drink?
  • Bourbon and Fresca
• The best thing you have spent money on in the past 6 months:
  • Investment plan for employees.

SHOUTOUTS:

• 3 Floyds Brewing Co.
• West Sixth Brewing
• Country Boy Brewing
• Brewgrass Homebrew Supply
• Young Professionals Association of Louisville (YPAL)
• Nathan Shanks
• Goodwood Brewing Company 
• Galaxie Bar

Be sure to learn more about Jonathan and Key Source Properties by checking out the company’s website, Facebook, and Instagram.

Have any topics you want to be covered or amazing people you’d like us to interview? Let us know! You can email us at info@drunkenmoney.com. You can also find us on Facebook, Instagram, Twitter, and Linkedin. Please be sure to subscribe to our weekly mailing list at drunkenmoney.com/subscribe.

JOHN ACKERMAN SITS DOWN AFTER HIS TAX SEASON HIATUS TO DISCUSS THE LESSONS HE LEARNED FROM YEAR TWO IN BUSINESS.

While we sometimes forget, we actually have a millennial entrepreneur as one of the hosts of Drunken Money (me). I just wrapped up my second tax season as a CPA out on my own, so we decided to kick off Season 2 of Drunken Money with Paul and I discussing what I learned from year two as a full-time entrepreneur. This is: Lessons from Year Two.

• When you’re on your own, there are periods of time when you must work nonstop to make sure your business is successful.
• To get started in Year One, I called family friends I knew who might use my services, and relied on word of mouth to grow from there.
  • I overcame initial fears of quitting my job by constantly reminding myself “What’s the worst that could happen?” In many cases, the worst case scenario is just going back to your prior job (most of the time higher up than when you left because of the experience you gain while you’re out on your own).
  • My plan when I started was to make money within  5 years (break even the first 4 years), and rely on my wife’s (who is awesome and super supportive – which is the biggest reason I can work on my own) income to survive the first few years.
  • The biggest surprise I encountered was how busy I stayed year round (accounting is a very seasonal business but there is a lot of work year-round to get ready for the busy seasons).
  • For many entrepreneurs, if you do good work, you will get more clients than you initially expect. In my case, the 8 or so clients I started out with slowly grew through word of mouth. There were also friends and acquaintances I wasn’t expecting to get as clients who called me up to do their work.
• Sales strategies
  • Paul (who is very successful at his job), has a huge network he has developed and is a terrific salesman.
  • I do not like to sell and am not a huge fan of networking events, but I think if you do good enough work for your clients and they trust you/know you have their best interest at heart, your business will grow organically.
  • Also, Drunken Money has done great things for my business as well and has really given me an outlet to market my services without constantly making sales pitches.
• Process of hiring employees
  • This was the most difficult part for me from year one to year two.
  • In total, I had four people helping me this tax season, after never managing employees before, and had to learn how to juggle multiple projects at once along with multiple employees’ schedules.
  • Instead of focusing on one project at a time from start to finish, I had to learn this year how to shuffle multiple projects along at the same time to make sure the projects all were completed by the due dates.
  • Luckily, everyone who helped me this year had a fantastic attitude and was eager to learn.
• Managing Expenses
  • From year one to year two, my expenses increased dramatically due to payroll, rent, and additional computer equipment/software because of the new employees.
  • I went from working out of my house by myself to working out of an office with support.
  • One thing this resulted in was me not being as conservative with my billing and to bill what my time was worth instead of trying not to offend clients by billing as little as possible. I now have many more expenses I must pay for to keep my business open, and need to make sure I bill enough to stay in business.
• Purchasing an office
  • This process took a few months to complete – if you are looking for a space for your business, make sure you leave enough time to close on the space and leave time for renovations before you move in.
  • This was a game changer – as it really made my business more legitimate in the eyes of many clients and gave me a place to always have meetings instead of coffee shops.
  • I’m a big fan of working from home, but nothing can replace having a permanent physical office for necessary meetings and to legitimize your work.
• What is the most important thing an entrepreneur should focus on?
  • Make money and turn a profit.
    • The most important things are not publicity and marketing, it is making money and being able to have a business and not just an idea.
  • If you constantly give away free work (which was my biggest mistake my first year), people will keep expecting you to give free advice and will devalue your work.
  • If somebody thinks your bill is too high, at least in my case, it was often because I did not give a good enough explanation to them about the detail I go into. It is not simply plugging somebody’s information into a computer, there is much more analysis, review, and advice given than what many people initially realize.
• Getting clients and people to believe in you and the work you do is one of the most rewarding things as an entrepreneur.
  • For me, it was getting old teachers from college as clients my first year that really made me feel like I could be successful out on my own.
• What advice would my 60 year old self give me today?
  • Work less
  • It’s a very common answer for entrepreneurs to feel like they work too much, and I have to keep reminding myself to work less and to enjoy the moment each day. So often you try to rush to the finish line instead of enjoying the process.
• What would be my dream job?
  • Chef – I loved Emeril growing up!
  • As Paul noted, my tag line if I was a celebrity chef would probably be “Can we make it vegan?”

SPECIAL SHOUTOUTS AND SHOW NOTES:

• Wild Turkey
• Green Man Brewery
• Alex Wright – Payroll Solutions
• Nikki Chin
• Tarik Nally / Kale & Flax
• Rework
• El Mundo

Have any topics you want to be covered or amazing people you’d like us to interview? Let us know! You can email us at info@drunkenmoney.com. You can also find us on Facebook, Instagram, Twitter, and Linkedin. Please be sure to subscribe to our weekly mailing list at drunkenmoney.com/subscribe.

Everyone likes to talk about how millennials are industry killers. Well we’re going to break it down, talk about a few of these industries, and maybe what we should kill next. This is millennials: industry killers.

Here are the shoutouts:

• MadTree PSA: the beer we drank
• Milewide
• Hooters and Buffalo Wild Wings
• Applebee’s
• Top Golf
• Dave and Buster’s
• Dove Men+Care
• Heuser Health
• OrangeTheory
• NFL
• Exxon
• Ticketmaster
• Venmo
• Smart Data Systems
• Taylor Swift, Foo Fighters, and Phish
• Impossible Patty

Here’s the article with all the industries that millennials are killing. 

SISUN LEE, FOUNDER/CEO OF MORNING RECOVERY, JOINS US TO DISCUSS HOW HE MANAGES HIS STARTUP’S GROWTH IN SILICON VALLEY.

• Sisun explains how he came up with the idea for Morning Recovery and executed his idea into a successful company.
  • His Korean heritage (and Koreans’ affinity for drinking) was one of the keys to getting the idea for the product.
  • He had tried similar drinks in Korea, and wanted to dive into the science behind the drinks and how he could create his own product.
• DHM, an antioxidant found in Korean raisin trees, is the secret to Morning Recovery’s success.
• After creating the drink with the help of Dr. Jing Liang, a USC professor, Sisun gave prototypes to his friends at Tesla, Uber, and Facebook.
• Overwhelming demand forced Sisun to quit his job at Tesla and work full-time for Morning Recovery.
• Indiegogo was the first major step in evaluating market demand. 
• Sisun explains how he manages the company’s explosive growth.
  • Being first to market was a major factor in the growth.
• To test Morning Recovery, Sisun would give his friends placebo bottles and measure against new formulas.
• Version 2 will be released soon, as the Morning Recovery team underestimated how much people drink with the release of Version 1.
  • We were lucky enough to receive a sample of Version 2!
• Sisun tells us what it’s like managing venture capital and potential investors in Silicon Valley (there are more investors willing to invest than Morning Recovery can accept!).
  • Their Series A round will be launched in the first quarter of 2018.
• Silicon Valley has played a huge impact on the success of the company.
  • It is much easier to be successful if you’re surrounded by like-minded people.
  • Sisun only considered in Los Angeles and New York for the headquarters of Morning Recovery.
  • The location also plays a huge role in finding talent to work for the company.
  • Small things, such as being able to go to parties with social media celebrities, provide invaluable exposure for the company.
• What separates successful startups in Silicon Valley from the others?
  • It all comes down to execution and having a clear focus.
  • Morning Recovery is not the first hangover cure, just as Soylent is not the first meal replacement.
  • The success can be attributed to having great products and being very marketable.
• What is Sisun’s “normal” work schedule?
  • It’s a fire drill – get the most urgent thing done everyday.
  • Every employee is a generalist and can be called on to perform any task.
  • It’s impossible to think even one month ahead because of the intense workload. Everything is day-to-day.
• What’s next with Morning Recovery?
  • Version 2 is coming to market soon and should be the main product in the future.
  • Version 1 was a good test and measure of customer demand, but was primiarily .
  • There also could be pills/powder sold online to provide a cheaper alternative than a bottled drink.

LAST CALL QUESTIONS AND ANSWERS:

• What’s the best career advice you’ve received?
  • You need to focus on the most impactful thing the company needs, identify it, and get it done.
  • Go above and beyond your job description.
• What advice would your 60-year-old self give you today?
  • Be more bold (it seems many older people regret not taking action).
• The best thing you have spent money on in the past 6 months:
  • Nami Sake
• What media do you recommend:
  • Thinking, Fast and Slow by Daniel Kahneman
• Favorite thing to drink:
  • Nami Sake
  • Whiskey
  • Hennessy Cognac

SPECIAL SHOUTOUTS AND SHOW NOTES:

• Indiegogo
• Tesla
• Uber
• Facebook
• Soylent – John’s daily lunch

Be sure to learn more about Sisun and Morning Recovery by checking out the company’s website, Facebook, Twitter, and Instagram.

Have any topics you want to be covered or amazing people you’d like us to interview? Let us know! You can email us at info@drunkenmoney.com. You can also find us on Facebook, Instagram, Twitter, and Linkedin. Please be sure to subscribe to our weekly mailing list at drunkenmoney.com/subscribe.

ABOUT SISUN:

Prior to starting Morning Recovery, Sisun was a staff product manager at Tesla, and a product manager at Uber and Facebook. He graduated with a Systems Design Engineering degree from the University of Waterloo.

His story with Morning Recovery begins with his trip to Korea where he witnessed locals frequently taking drinking supplements after drinking alcohol. Back in the States, he dove into research, and created Morning Recovery with the goal of helping people get back their time.

“We want you to wake up the next morning feeling amazing and ready to tackle your day.”

https://www.linkedin.com/in/sisunlee/

After a lot of work, we’re finally ready to unveil our first episode of Drunken Money News. DM News is our video installment with your host Paul Heintzman to share quick updates on the news as pertains to millennials. We’re on the lookout for exciting stories that may have been missed by the mainstream and will certainly make sense to millennials.

On today’s episode we cover the following:

• Home Depot panics over millennials
• Bitcoin mining rigs to heat your home
• Housing prices growing twice as fast as wages
• Retail returns returning to landfills
• Industry killed my millennials

With that being said, this is our first episode, so we’re hoping to have many more! If you find something interesting in the news, please share! Also, please let us know what you think of this new medium below!

HOW TO DO IT ALL:  ZACK PENNINGTON MIGHT BE THE COOLEST GUY WE KNOW. IN ADDITION TO BEING A CO-FOUNDER OR CO-OWNER OF HERELANCER, U.S. CHIA, AND FLYING AXES, HE IS ALSO THE LEAD GUITARIST FOR LIGHT TREASONS AND IS A SALES MANGER AT EDJANALYTICS.

• Zack is one of the owners of Flying Axes in Louisville.
  • Although his initial reaction was that it wasn’t a great idea, after going to an axe-throwing venue in Canada, Zack realized it was a great industry that appealed to everyone (similar to darts and bowling).
  • The team also received great publicity thanks to Jennifer Lawrence on Jimmy Fallon.
• After graduating from college, Zack was in a band and toured across the country. He credits this band for helping him with business, sales, and marketing.
• When Zack was getting his MBA, he started U.S. Chia, a domestic chia seed production company.
  • He started the company with a plant scientist, who had a patented variety of chia seeds that would grow in the United States.
  • Zack’s biggest strength was giving the pitch in business plan competitions.
  • The secrets to a great pitch:
    • Make it simple enough for the average person to understand it.
    • Be confident and credible enough to make it seem like you know all the jargon and technical aspects of the company/industry.
• Once U.S. Chia was established and could operate as a stable business, Zack and his partner decided to sell the company in November 2017.
• Recently, Zack decided to start a new band, Light Treasons.
  • Listen in for a quick taste of “The Romantic”.
• Zack also started Herelancer, which connects people in the community with local freelancers.
  • With Herelancer, Zack was able to focus on aspects of the business other than strictly sales by teaming up with a partner who also has similar strengths.
• Within the last few months, Zack pulled a 180 and went to work for Edj Analytics as a Sales Manager.
  • Since he is the first person in his position, Zack still gets to play the role of entrepreneur even though he works for somebody else.
  • He explains his reasoning for taking a comfortable job with a salary while still investing in other ventures.
• How does Zack manage all his projects?
  • It’s amazing how much can be accomplished when you condense your time and focus on the most important tasks.
  • He turns off all notifications and distractions on his phone and batches his time to get the maximum amount done.
• What’s the most important thing somebody should focus on when starting a business?
  • All that matters is how many people you can convince to purchase your product/service and how expensive is it to produce?

LAST CALL QUESTIONS AND ANSWERS:

• What’s the best career advice you’ve received?
  • Invite people out to lunch who can teach you something or you can help.
  • Reach out to people you think are unavailable.
• What advice would you give to your 22-year-old self?
  • If you make enough money early, you can do what you love forever.
• What advice would your 60-year-old self give you today?
  • Your optimism was the only asset that was perpetual.
  • Invest in the inevitable.
• The best thing you have spent money on in the past 6 months:
  • Buying food for other people.
• What media do you recommend:
  • The Hard Thing About Hard Things
  • Seth Godin
  • Rework
• Favorite thing to drink:
  • Bourbon and Tecate 
  • Angel’s Envy

SPECIAL SHOUTOUTS AND SHOW NOTES:

• Woodford Reserve – according to Zack it’s scientifically the best bourbon.
• Jameson Irish Whiskey
• Old Forester
• The 4-Hour Workweek
• Ballotin Chocolate Whiskey

You can learn more about Zack by connecting with him on LinkedIn.

Have any topics you want to be covered or amazing people you’d like us to interview? Let us know! You can email us at info@drunkenmoney.com. You can also find us on Facebook, Instagram, Twitter, and Linkedin. Please be sure to subscribe to our weekly mailing list at drunkenmoney.com/subscribe.

The boys at Drunken Money have a lot to be thankful for in 2017.