One thing I’ve learned as a parent is that “idle hands are the devil’s workshop.” Keep children busy and you keep them out of trouble.
The same is true with money.
Cash sitting in your checking account is just begging you to spend it mindlessly. The longer it sits there, the more likely you are to fritter it away.
That’s one of the things I love about YNAB (You Need A Budget). This budgeting software encourages you to give every dollar a job. But once you give a dollar a job — whether it’s going to be saving or paying down debt or whatever — put it to work immediately.
Here are three ways you can do just that.
1. Make full use of direct deposit
With direct deposit, you can put your money to work without even touching it. It goes right from your employer to the place you need it to go. I fully utilize direct deposit, and there are a couple of different ways that you can use this tool.
The most obvious option is to take advantage of a 401(k). It’s terrific because your employer simply takes the amount of money you choose out of your check and puts it right into your 401(k).
You never see it, and you don’t touch it. You also never have a chance to miss it. It just goes right from your employer to your retirement account.
The other thing you can do is to set up multiple direct deposits with one or more banks. Did you know that you don’t have to have your whole paycheck deposited into your checking account? If you’re trying to save money, you can direct deposit a certain amount into a savings account, and the rest into checking.
You can even have your paycheck split between two banks. For example, you could have a portion of your check sent to your checking account at your local bank. You can then direct the rest to a savings account at an online bank, where interest rates are higher. If you don’t keep a debit card for the online bank on you, you’re less likely to spend that money on things you don’t really need.
In fact, with some employers, you can have more than two direct deposits. So your money can automatically go into a number of accounts. Try not to over-engineer this, but used properly, it can be a good way to save money.
Related: 5 Unique Alternatives to Savings Accounts to Save Money Now
2. Automate your bill paying and investing
Most of our bills — from the mortgage to utilities to cell phone bills — are paid automatically. It avoids the hassle of having to make the payments and the possibility of paying a bill late.
Automating your bills can also save you some money. Several companies now offer discounts for those who go paperless and automate their payments. Some examples include SoFi (student loan refinancing), many insurance companies, and even bank lenders.
Take advantage of an FNBO Online BillPay Account and earn 0.65% APY
You can do this same thing with investing. For example, you can have an automated transfer into your investment account at Vanguard, Fidelity, Betterment, or wherever you keep your investments each month. It happens every month as soon as you get paid.
That puts the money to work immediately, and it’s out of your checking account. That way, you don’t risk spending it.
Resource: 5 Ways To Automate Your Finances
3. Physically or electronically transfer the money yourself
I invest in real estate with a really good friend of mine. We started investing in our first two homes in 2005. So, it’s been a little more than a decade, and we’ve already earned back the money that we put into the homes.
Recently, we started paying ourselves a monthly dividend from the cash flow.
We have a business checking account that’s got money in it for repairs and vacancies. We’re earning a nice cash flow, to the point where we are automatically sending ourselves $250 a month each from the account. I get the money in the form of a check, but we’re going to work on direct deposit to automate it.
For now, it’s just an old-fashioned check that comes in the mail. I immediately deposit it into my checking account. Then, before I spend it, I transfer it — in this case — to my Vanguard account.
Will that $250 a month make a big difference? You bet! Over decades, that investment of $250 a month will have a huge impact.
My concern is that if I just let it sit in my checking account, I’ll spend it and not even remember where it went. So, I don’t waste any time. As soon as the check clears, I transfer it right over to Vanguard and put that money to work.
Bonus Tip: Spend It
That’s right, you heard me. In fact, spending your money immediately can be a great way to put it to work (depending on how you go about it).
It’s advice I recently gave our daughter. Here’s the story:
She is living on her own for the first time while she finishes college. I’ve noticed that she regularly runs out of money just before payday. That’s not unusual, and it happened to my wife and I regularly when we were younger.
One problem this creates for our daughter is transportation. She finds herself out of money and out of gas. She can’t even get to work.
So, I’ve told her that as soon as she gets paid, she needs to fill the tank. If she’s halfway to payday with half a tank of gas, fill it up.
The point is to spend the money on necessities before spending it on wants. This ensures that your needs are taken care of before the money even has a chance to run out.
Learn More About How Much to Save (and How to Do It!)
So, these are just four simple ways to put your money to work right away, and they’re simple enough that anyone can do them.
It’s certainly better than frittering it away. Plus, you could even get slightly better returns (or pay less interest on debts) if you move that money to the end goal sooner rather than later.
Topics: Money ManagementThe post 3 Easy Ways To Put Your Money to Work Right Now appeared first on The Dough Roller.
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Investing often comes down to weighing your options and finding the right fit. There are many choices available for investing your money, from stocks to bonds to real estate, and a bit part of the decision process involves deciding where you’re most likely to make money while minimizing your risk. But what if there was a way…
Social Impact Investing – What It Is and How to Get Started is a post from Money Crashers.
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When my husband and I were traveling in our camper full-time, there was one question that came up again and again from fellow campers: “How do you earn money on the road?” If you’re considering hitting the road full-time, the issue of a mobile income is pressing. After all, most people can’t afford to travel…
How to Earn Money While You Travel Full-Time is a post from Money Crashers.
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Is love “enough” for a healthy and happy relationship, especially when it comes to financial troubles?
According to CNBC, in a study done by SunTrust Bank, it was found that money is the leading cause of stress in relationships. 35% of all respondents said that money was the primary cause of friction in their relationship. And, for those aged 44-54, 44% said money was their relationship’s biggest source of stress.
According to the same survey, 34% of survey takers said they were the saver while their partner is bad with money, and 47% said they and their partner have different saving and spending habits.
And, it’s no surprise that money issues are one of the leading causes of divorce.
Related content on marriage and finances:
- 15 Reasons You’re Broke And Can’t Save Money
- 30+ Ways To Save Money Each Month
- 8 Things To Sell To Make Money
- How To Ditch The Revolving Debt Cycle
I’ll be honest with you, I get a lot of questions about marriage and finances. Actually, hardly a day goes by that I don't receive an email or Facebook comment from a reader with concerns about the bad spending and saving habits of their partner.
Here are a few of the situations I’ve recently been asked about:
- My husband spends over $1,000 a month on entertainment but we have a lot of debt. How should I approach him about it?
- My wife is hiding her spending from me and I know she is. How do we work through this?
- My partner isn't trying to find a job but we desperately need the money. What should we do?
Now, if you're in a relationship with someone whose financial beliefs and practices oppose your own, does that mean you're doomed and should end it all?
Not necessarily.
Fortunately, there are ways you can work towards resolving your financial differences and improving your money and marriage behaviors. Before calling it quits due to financial stress, you should:
- Be honest, and stop keeping money secrets from your partner.
- Stop ignoring the problem.
- Make a budget and start following it.
- Make money conversations a priority, even if they have been difficult in the past.
Me and my husband have been together for over 11 years, and we are always trying to work at our financial situation as a team. We all have different spending habits, and in a marriage it’s important to come together to see how your behaviors affect your marriage.
Working together is key for a happy relationship, especially when you want to meet your financial goals.
If your relationship is struggling because of financial differences, here are some steps that you may want to take.
Tips for happy marriage and finances:
Schedule regular money check ins.
A relationship that has regular money talks and budget meetings is more likely to be financially successful and happier than a relationship that doesn’t.
To be successful with your marriage and finances, it is a MUST to regularly check in and discuss money.
Regularly communicating about money is an important step for every relationship. Being open about your money situation can help prevent any surprises, it will ensure that both people in the relationship are aware of what’s going on, and so on.
Here are some of the ways for these check ins to help you with your marriage and finances:
- You can work together and succeed. If you are both putting effort towards your financial goals, you can tackle them as a team and are much more likely to have a positive outcome.
- Knowing your financial situation will help you keep a budget. Understanding your financial situation means you can create and keep a budget that works for the both of you. You will know more about the amount of money you are spending, whether you are living paycheck to paycheck, and more.
- Being aware may prevent everything from falling on one person. Everyone should be aware of their financial situation. It's not fair for one person to manage it all, and you would be in for a rude awakening if something were to happen to that person.
- Being involved can help you with your family's goals. It would be quite difficult for a person to work towards their family's financial goals if they weren't aware of their financial situation. Being involved will keep everyone motivated and aware of what's going on.
- Regular money talks can lead to less fighting. When you are open about money in your relationship, you are less likely to have financial surprises and money fights. This is because conducting regular money talks and budget meetings means you will both be aware of what’s going on.
Recommended reading: Family Budget Meetings – Yes, You Need To Have Them
Be open about money.
Talking about money is seen as taboo, even among married couples. According to a survey done by Fidelity, 43% of respondents don’t know how much their partner earns, and 36% are unaware of the amount they have invested.
You and your partner should sit down every so often, such as once a week, once a month, or whatever timeframe works best for the two of you.
To be open about your finances, your money meetings should include:
- Your financial goals, money values, and more.
- How the two of you are doing financially.
- What changes may need to be made.
- Any financial problems, and so on.
The key here is that both of you are up-to-date on what is going on with your marriage and finances so that everyone can work together on your family’s financial goals.
Always be honest.
According to an article on Forbes, 20% of those in the U.S. keep financial secrets, and 7% between the ages of 18-49 have a secret bank account or a secret credit card they keep from their partner.
Also, according to a survey taken by the National Endowment for Financial Education, 31% of survey takers admitted lying to their spouse about their finances. These aren't just little lies either, as most of the 31% stated that if their spouse found out about their lie, then a divorce may be on the horizon.
The problem with financial infidelity is that it can lead to even bigger financial problems (like debt piling up beyond what’s imaginable), stress, unhappiness, it may start impacting other areas of a person’s life (such as work), and it may even lead to divorce.
Unfortunately, it’s possible that you may already be a victim of financial infidelity. Here's how to recognize the signs of financial infidelity:
- There are no more bills in the mail. This could be a sign that someone is hiding the bills.
- There are calls from debt collectors. These may actually be legitimate calls!
- Your credit cards are being rejected. This could be a sign that someone is overspending without your knowledge.
- Your partner no longer wants to talk about money. This could be a sign that your partner is too afraid to talk about money with you because they fear that you will uncover the truth.
Set spending limits for each other.
Some couples tell each other about every single purchase they make, whether they buy something for $1 or if they buy something for $1,000.
Others only tell their spouse if they reach a certain amount, such as $100.
Whatever you decide, it's a good idea to sit down with your spouse and determine what kind of limits you should set for your specific situation.
Doing this can help keep the communication lines open with your marriage and finances so there are fewer arguments about money.
Is your partner bad with money? What marriage and finances advice or situations would you like to share?
The post What To Do When Your Partner Is Horrible With Money appeared first on Making Sense Of Cents.
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Posted by: Richie Bernardo
Main Findings Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/5335/geochart-school1.html" width="556" height="347" frameBorder="0" scrolling="no"></iframe> <div style="width:556px;font-size:12px;color:#888;">Source: <a href="http://ift.tt/2uMBZmS;
Overall Rank |
State |
Total Score |
‘School-System Quality’ Rank |
‘School-System Safety’ Rank |
---|---|---|---|---|
46 | Mississippi | 36.63 | 46 | 26 |
47 | District of Columbia | 35.10 | 50 | 24 |
48 | Arizona | 35.03 | 47 | 33 |
49 | Alaska | 34.36 | 45 | 45 |
50 | New Mexico | 33.30 | 51 | 27 |
51 | Louisiana | 30.33 | 49 | 51 |
Note: The metric “Safest schools” from the above image refers only to the percentage of public school students in grades 9–12 who reported being threatened or injured with a weapon on school property.
Note: Spendings Ranking refers to “Total Current Expenditures for Public Elementary and Secondary Day Schools per Student” (Highest Amount = Rank 1)
Embed on your website<iframe src="//d2e70e9yced57e.cloudfront.net/wallethub/embed/5335/geochart-school2.html" width="700" height="450" frameBorder="0" scrolling="no"></iframe> <div style="width:700px;font-size:12px;color:#888;">Source: <a href="http://ift.tt/2uMBZmS;Ask the Experts < >
- William Coplin Professor of Public Affairs and Director of the Public Affairs Program in the Maxwell School of Citizenship and Public Affairs at Syracuse University
- Lawrence O. Picus Associate Dean for Faculty Affairs and Professor of Education Finance and Policy, University of Southern California
- Lara Perez-Felkner Assistant Professor of Higher Education and Sociology, and Senior Research Associate in The Center for Postsecondary Success at Florida State University
- Walter Feinberg Professor Emeritus of Education Policy, Organization and Leadership at the University of Illinois Urbana-Champaign
- David J. Menefee-Libey Professor of Politics at Pomona College
- Timothy Dohrer Assistant Professor and Director of the Master of Science in Education Program at Northwestern University School of Education & Social Policy
- Vicki Bartolini Professor and Chair of the Education Department at Wheaton College in Norton, Massachusetts
- Michael Goetz Director of Research at Allovue
- Shomon Shamsuddin Assistant Professor of Social Policy and Community Development at Tufts University School of Arts and Sciences
- Scott Ashmann Associate Professor of Science Education at University of Wisconsin-Green Bay
- Khuram Hussain Associate Professor of Education at Hobart and William Smith Colleges
- Chris Wood Associate Professor of Educational and Clinical Studies at University of Nevada, Las Vegas, College of Education
- Joseph G. Serico Instructor of Public Policy and Administration in the Department of Public Policy and Administration at Rutgers University - Camden
- Attendance and lateness rates that are measured accurately rather than lied about;
- Percentage of students who have a viable career path after high school graduation;
- Schools heavy on project learning and basic computer skills;
- Students who graduate on time from whatever post-secondary education they choose;
- Survey of alums where they are asked if they are prepared for life after college.
- Available health and dental services;
- Well trained, respected teachers;
- Small comfortable classes;
- Strong after school community programs;
- A policy of inclusion.
- Geographic location;
- Per pupil spending;
- Student-Teacher ratio;
- School climate;
- Family engagement.
- A stable home life with at least one consistent caring and nurturing adult;
- A safe neighborhood where stressors associated with poverty are diminished;
- Access to prenatal and early childhood healthcare;
- Proper nutrition;
- Regular exposure to rich language and vocabulary from birth;
- Regular exposure to books and being read to from birth;
- Access to high quality and affordable child with college educated professionals prior to starting school;
- Access to high quality and affordable before / after school programs with college educated professionals;
- Parent education and support programs, such as home visiting programs;
- Opportunities for regular, creative play with others;
- Frequent and intensive early intervention for those children identified as having special needs.
- Regular ongoing high quality professional development for teachers and school staff;
- High quality early and intense intervention programs for students struggling with reading, math, etc.;
- Social competency programs for children to develop respect for themselves and others;
- Regular / early support for English Language Learners by trained personnel;
- Leadership that has “walked the walk”, respects and trusts their staff, knowledgeable of curriculum and partnering with other community agencies and families;
- Opportunities for children to play during school with regular recesses (which are disappearing);
- A developmentally appropriate and challenging rich curriculum is essential - one that encourages inquiry, investigation, problem solving and creativity;
- Support personnel including school nurse, social worker, adjustment counselor, behavior specialists, psychologist, ESL teachers, etc.
- Difference in academic outcomes by race, class, gender and other subgroups;
- Overall proficiency rates at 3rd, 8th, and 10th grades;
- High school graduation rates of freshman class;
- Per-pupil spending compared to state/national average (adjusted by region);
- Climate survey results (school/district level)/vision for education (state).
- Are teachers collaborative? Teachers that work in teams to plan and problem-solve, and use master teachers as mentors are better equipped to address a wide array of learning needs.
- Are educators institutionally supported? School systems with institutionally supported professional associations, unions, tenure and promotion opportunities as well as highly competitive salaries yield better outcomes than schools without such supports.
- Does the school support learning communities? From class size, to student cohorts, creating a small community that learns together is measurably effective at improving student learning in ways that isolated or overcrowded classrooms do not.
- Is there authentic, school-wide leadership? Authentic leadership entails school-wide participation in issues of school governance and policy making by students, parents and staff. The absence of school-wide leadership is indicative of top-down school structures with limited capacity for community-engaged learning.
- Is there deep commitment to multiculturalism? Schools that recognize and honor students’ home cultures in the curriculum promote inclusive and engaged learning. Furthermore, school systems that empower students to address social inequalities related to cultural differences help to build inclusive and just learning communities.
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Why do people eat comfort food? To make ourselves feel better, of course. So when NASA was looking for ways to reduce the stress of space flight for the astronauts (and for ways to get them to eat more), they turned to an expert on comfort foods. Traci Mann (of the University of Minnesota’s Mann Lab) and her team tested the effectiveness of comfort foods on earth.
The researchers showed their subjects clips from movies like The Hurt Locker and My Girl to induce negative moods. They then gave the subjects either their self-reported comfort food or gave them a food that they liked, but that wasn’t their comfort food. In other experiments, they gave some subjects granola bars, or no food at all. They compared each person’s mood after eating (or not eating, for the control group).
What they found: comfort food doesn’t provide any more comfort than other foods, granola bars, or even no food at all. Everybody’s mood improved the same amount.
Put down the brownie batter and relax with a Tell Me Something I Don’t Know episode filled with facts on quiet rooms, pillows, comfort food, and …Spam?
Krista Tippett (host of On Being) is our special guest co-host, with Maggie Ryan Sandford (science writer, researcher and producer) as real-time fact-checker.
The post Creature Comforts: TMSIDK Episode 25 appeared first on Freakonomics.
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To eliminate financial distortion, make sure I’m within my risk tolerance band, and push myself to continuously reinvest cash flow in order to survive permanent unemployment, every quarter I’ll be reviewing my investments. I’ve found that after even just a couple months, if I don’t write things down, I simply cannot remember how much and what I invested in.
For the past five years, my goal has been to earn a conservative 4% – 6% yearly return on my overall net worth given I reached my target number. It felt so amazing to escape the rat race in 2012, I was comfortable with what I had. Now, however, thanks to hedonic adaption, I’ve become used to the freedom and have turned greedier with my desired returns.
Today I’m shooting for a 10% yearly return based on my following new money investment allocation for 1H2017: 57.4% Real Estate Crowdfunding (10% target return), 11.27% Bonds (4% target return), 9.41% Stocks (10% target return), Venture Debt 3.3% (12% target return), 8.27% Mortgage (4.25% return), and Home Improvement 10% (20% return).
Let’s dig deeper into the numbers!
Financial Samurai Mid-Year 2017 Investment Review
April Investments
Stocks: Unlike in 1Q2017, where I just increased my exposure to the S&P 500 through an index ETF, I purchased $10,000 of Netflix at $141/share after 1Q results. At the time it felt a little painful to purchase since my original position was at $92/share. But I loved their portfolio of original content despite their massive cash hemorrhaging. Their business is sticky and inelastic. They can easily raise prices by 20% a month and lose less than 20% of their customer base to increase revenue. Reed Hastings, the founder, spoke at my 2006 Berkeley-Haas MBA commencement. Wish I had put my life savings in the name at the time!
Mortgage: Paid down $3,000 of my 4.25% Lake Tahoe vacation property mortgage. My goal is to pay random small amounts each month so that I feel no pain paying down my worst investment ever. If I see a Bank of America branch on my way back from lunch, I may swing by and pay down whatever is in my wallet. The goal is to pay the $346,000 mortgage off by June 15, 2022.
Real Estate Crowdfunding: I invested $250,000 in the RealtyShares fund in January 2017. Instead of inputting the entire $250,000 in January, I spread it out over a six month period. It’s really just accounting as I didn’t know exactly how quickly they’d be able to invest in the 10+ deals they have in their mandate.
In April, the fund made a $600,000 investment in the acquisition and renovation of College Town Tucson, an 88-unit, 247-bed student housing apartment complex several blocks from the main campus of the University of Arizona in Tucson, AZ. Constructed in 1972 and partially renovated in 2006 and 2013, the Property consists of a mix of two, three and four-bedroom units and includes amenities such as a clubhouse, fitness center, swimming pool and property-wide Wi-Fi.
I’ve always wanted to gain exposure to an apartment complex in a college town due to the consistent high demand. I just never wanted to physically own and manage such a property due to the frequent turnover. Can you imagine what a PITA is to be a landlord of a student housing complex?
Home Improvement: After my landscaper finished my backyard, I asked him to landscape my side yards and front yard. I was extremely pleased with his workmanship and his price. As a result, I referred him to a friend who hired him to do ~$25,000 of work. I’m now 100% done with my home remodeling/expansion projects for the fixer which I bought in early 2014. It was a long journey due to the complexities of the inspection system and the idiosyncrasies of each contractor.
May Investments
Bonds: Invested $26,600 in two, 20-year maturity, California municipal bonds with a yield to worst of 3.8%. Based on my estimated 32% effective tax rate (federal and state), the gross yield is therefore 5.5%. Instead of putting more into bond funds, like I did between November 2016 – January 2017, I decided to focus more on individual bonds so that I know I’ll get par value ($100/share) back upon maturity plus the coupon payments for all those years.
Many bond funds have rallied back to pre-election levels, so I felt hesitant allocating more money. If you add 1.5% for the 6-month yield to the principal appreciation so far, we’re talking a pretty healthy ~6% total rate of return.
Related: The Case For Buying Bonds
Mortgage: Paid down another $5,000 of my 4.25% Lake Tahoe vacation property mortgage. I decided to rationally no longer pay down my 2.375% rental home mortgage and my 2.5% primary home mortgage until the Lake Tahoe vacation property mortgage is paid off.
Real Estate Crowdfunding: The RealtyShares fund made a $700,000 common equity investment in the Virginia Crossing Hotel and Conference Center, a full-service hotel located in Glen Allen, Virginia.
Opened in 2001, the Hotel comprises three colonial-style buildings with guest amenities, including 2 full-service restaurants, an outdoor swimming pool, fitness center, 24 conference rooms and a 4,700 SF ballroom. The Hotel is located adjacent to The Crossings Golf Club, one of the greater Richmond area’s premier semi-private courses, and is strategically located at the convergence of Interstates 95 and 295.
I’m very excited about this acquisition and repositioning because there’s a special place in my heart for southern Virginia since I went to school 40 minutes south of this hotel at The College of William & Mary. I love colonial style buildings and would happily retire in Williamsburg for three months of the year if I wasn’t living on the west coast.
Home improvement: I decided to fulfill my dream of getting a hot tub for $15,825 now that the back yard is done. The whole process took nine months since I first visited the show room. Since installation, I’ve averaged about five hours a week in the hot tub. The maintenance is easier than expected. What is kind of scary is how much home improvement costs add up. I can see how a homeowner can spend an endless amount of money upgrading their home if they don’t set a limit. I’ll be putting together a home remodeling guide in the future.
June Investments
Venture Debt: I received a capital call of $3,001 for my second venture debt fund investment. For these types of funds, you commit a certain amount of money, and the fund will call a percentage of your commitment over a certain period of time, usually within two years. The first venture debt fund I invested in almost three years ago is looking like it will return 13% a year net of fees because they’ve almost returned all the capital. As a result, I’m considering investing more capital into the second fund now that the guys have even more experience and a larger fund to spread out the expenses.
Mortgage: I was paralyzed with what to do in June since bonds and stocks did well, so I decided to pay down $22,000 more of 4.25% mortgage debt. When in doubt, pay down debt.
Related: Debt Optimization Framework For Financial Independence
Real Estate Crowdfunding: The RealtyShares fund approved a $775,000 JV equity investment in the Sheraton Dallas Forth Worth Airport Hotel, a 302-key full-service hotel located in Irving, Texas. DFW International Airport is ranked the 4th busiest airport in the US, and the DFW region is booming. The Hotel is approximately 15 miles northwest of downtown Dallas, one the region’s largest employment centers.
I’m bullish on the heartland of America. The fund had already made an Austin, Texas multi-family residential property investment in December 2016, and I was hoping they’d continue to invest more in Texas. The Dallas area has one of the most robust income growth trends in the nation.
Capital Commitment Review
$272,426 of new capital was put to work in 2Q, which equates to $90,808 a month on average. This figure surpasses my goal of $30,000 – $50,000 a month, but it’s due to arbitrarily spreading out my original $250,000 RealtyShares investment across six months.
If I take out the entire $250,000 real estate crowdfunding investment, I ended up investing $32,333 a month on average. With a baby on the way, I knew I wouldn’t have as much time to focus on my investments this quarter. Hence, I knew that if I invested in nothing else, I would average $41,667 a month for six months ($250,000 / 6 months).
When income generation is good, it’s important to stay disciplined and maximize your investments in order to prevent lifestyle inflation. Pay yourself AND your investments first! When difficult times inevitably come, your investments will hopefully carry you through until the next bull run.
Pro Forma Performance Analysis
I’ve allocated capital to achieve a potential 10% objective return based on my risk tolerance (green). Of the $435,571 in 1H invested capital, I’m looking to return roughly $42,744 based on my base case objective.
I’ve also included my current estimated returns, which comes out to about 15% (blue). The only thing that looks aggressive is a 50% return on Home Improvement. But the 50% return could be conservative because competing landscaping bids were 100% – 150% higher since my guy did the job as a side hustle for cash. For example, one competing landscaper quoted me $50,000 to do my front yard, and my guy did it for $17,000, including materials. Further, it’s a bull market on the west side of SF. Remodeled houses are going for tremendous premiums.
Although the RealtyShares fund has a 15% target IRR over five years, and all three investments in 2Q2017 have target IRRs greater than 15%, I’m keeping the current estimated return at 10%. All the deals are equity deals, so it’s good to stay conservative until there are exits.
Bonds have done very well as you saw in the chart above, and my stock returns have been solid due to investments in Amazon in 1Q and Netflix in early 2Q. Due to valuations, I still can’t get excited about putting a large allocation into stocks, so I’ll just wait for a pull back if one ever comes to invest a more meaningful amount of capital. At least I didn’t short the market!
Going forward, my Home Improvement weighting will decline, but my Real Estate Crowdfunding, Bonds, and Venture Debt weightings will increase. The total return target will still be 10% a year.
My biggest financial fear is not a bear market, but a precipitous decline in income. I feel like a young man again because contributions are currently far surpassing returns. I also want to have enough fire power to invest during a downturn. Therefore, despite the constant sleep deprivation of being a new father, I promise to keep slicing away. After all, a 50% increase in family size warrants a 50% higher wealth target right? Let’s rock.
Related: Ranking The Best Passive Income Investments
Readers, what type of investments did you make in 2Q2017? How are you feeling about the current investing environment? Any risks you see from my 2Q2017 asset allocation? Where can everything go wrong? I will might put together a mid-year passive income report as well.
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