Do your job

My Youtube rabbit-hole this past weekend was personal finance videos. In particular, this episode of Caleb Hammer’s Financial Audit struck emotional resonance with me. The person having her finances checked over by Caleb is child of Chinese immigrants. Her family migrated over to America when she was eight years old. So did I! But unlike her, I am not swimming in credit card debt.

But like her, I bore the burden of supporting Chinese parents who did not know the English language, and were wholly unfamiliar with American culture. Whatever childhood we had were arrested abruptly, and we had to become essentially adults soon as we learned English. Any interaction with the outside world was automatically thrusted upon me. Can you imagine needing to go to the hospital, and it's your kid that has to communicate with the staff and fill out forms? Actual adults were suppose to do that!

I couldn’t ask my parents about anything. They simply did not know.

Needless to say, a lot of my proclivities and neuroticism stem from that period. Because I had to shoulder so much more burden than any typical kid, I absolutely detest anyone who cannot put their own weight. Nothing annoys me more at work than people who cannot do the one job they’re suppose to do. Me having to pick up the slack takes me right back to my childhood of performing the adult duties that my parents could not.

Another thing stemming from that time is my inability to ask for help - even when I totally can and should. Because I never could ask anyone for help back then. There was nobody to share that burden. So the adult me ends up trying to do as much as possible, by myself. Not because it’s the best way, but because I simply have not developed any better.

Obviously, I don’t blame my parents. It is, indeed, what it is.

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Geometrically speaking.

I almost moved out?

One thing I’ve always had in mind is that when I do move out of the house, it has to be some place extremely close to work; close enough to get there in around 15 minutes, whichever the method of transportation. Living in the Bay Area I’m quite familiar with the horrid commutes many people have, and the last thing I want is to join that party. If my living situation is going to change, then decreasing the amount of time it takes to get to work is a must-have criteria. Otherwise, I don’t really see a point: there’s no good to having my own place if I’m miserable from the daily commute.

Problem is, obviously, it’s extremely expensive to rent a spot in San Francisco, much less on the west side of the city where the university is. And let’s not even speak of actually buying a house in the area, a downright impossibility, unless the housing situation changes dramatically, or I hit the lottery. That being said, I browse the rental ads on Craigslist periodically to gauge the market, and to see if anything will pop up that’s reasonably affordable, with superb proximity to work.

Last week, one such place did materialize. A mere 10 minute walk from campus, it was a newly refurbished in-law studio renting for $1,600 a month, all inclusive. Squeaking in at just under the 1/3 of income rule for a lease, the place was eminently affordable, somewhat to my surprise (I guess the market has soften a bit). Of course, the most alluring attribute is the closeness to campus; to be able to simply walk to work is an absolute dream. There’s a mall with a Target and Trader Joe’s only two blocks away, so it could not be more convenience in terms of living necessities, too.

Later that week I went and saw the place (it was indeed lovely), and then started on viability calculations before I officially apply. Unfortunately, the math did not rule in the favor of leasing: I can afford the place, but due to rental costs, I’d be saving very little every month (if at all) - house poor, as they say. The problem is the big financial purchase I made this January: my Porsche 911 GT3. Had I bought a way more sensible sports car, one that doesn’t cost four-figures to keep every month, I think I would have handed in the application this past weekend.

I did think about selling the 911, though that has its own conundrums and difficulties. I unconditionally adore the car, and letting it go would leave a huge gaping spot in my car enthusiasm. The GT3 is suppose to be the ‘forever car’, so selling it after only one year of ownership would be devastatingly irresponsible. Porsche cars hold their values well, but that doesn’t mean they don’t depreciate: my 911 have loss about $20,000 in value since January, a real, tangible decrease if I actually sell the car. Not to mention I’ll never get the five-figure in taxes I paid when I purchase the car back. Some States let you offset the tax if you trade for another car; communist California sadly doesn’t.

It seems I have to see that process through with the 911 until I can make another huge financial move. I wouldn’t call the car an albatross, but I think it would be wise to accelerate paying off the rest of it so I can have some flexibility. New years resolution for 2020, perhaps?

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Driving home to a beautiful light.

Priorities change

In a few weeks’ time I will be once again traveling back home to Hong Kong, performing the annual pilgrimage to visit family on my dad’s side. These past few years I’ve been on quite the travel binge, and the trip back home at the end of December crossing over into January marks the culmination and the beginning of a year’s worth of journeys. I’ve said to my friends that my favorite spot in San Francisco is the airport’s international terminal, where anticipation and excitement for the trips ahead is at its most palpable.

I have to say the feeling is surprisingly different this year. No question I am happy to spend time with family, especially those whom I only see once a year, but the run up to this year’s return home has a slight bit of dread to it. I found out the reason why when I started doing my usual preparation of buying necessary supplies and moving money to travel accounts: this trip to Hong Kong will cost money.

What a stupid thing to say; traveling inherently costs money, doesn’t it? Why am I loathing to spend when this trip has been booked since January (got to lock down those cheap airfare prices). Just the past few years alone I’ve spent easily into the five figures on travel, so what’s the problem now?

Right, I’m saving up for a 911.

As they say, priorities change. Since 2014 I’ve been on a bent to maximize travel opportunities, so most of my discretionary income was allocated towards that. Partly why I switched from a Subaru WRX STI to a Mazda MX-5 in 2015 was because the latter was cheaper to run and maintain, therefore more money towards trips. Now, the situation has reversed: austerity measures were put on traveling (I haven’t taken one single trip this year), and the growing cash reserves is earmarked towards cars.

The Hong Kong trip this year is going set me back a bit on those cash reserves, which I think is why I’ve been ambivalent about it rather than pure delight of years past. I’ve had a good run in seeing the world these past couple of years, but it’s time to switch primary focus back to another love of mine: cars. For sure I still love traveling, and there’s still many places I haven’t been (not one foot in European soil yet); surely I’ll get back on that train in a few years’ time.

For now, it’s 911 or bust.

The best colors for an instrument dial: black face, white letters, red needle.

Is the correction coming?

Of course it is. It’s just that none of us know when that is going to be. I’m actually looking forward to the upcoming correction because it means things (stocks or otherwise) can be bought at huge undervalue.

That’s assuming I keep my job through the next recession.

Yesterday the stock markets took a huge dump on us investors: both the Dow and S&P plunged over 3%. Nothing to really panic over (yet) seeing as the S&P merely returned to August (of this year) levels, and the index is still up 9% year-to-date. Smart people advises one shouldn’t pay attention to the daily fluctuations of the stock market anyways; given a long enough time horizon, all the ups and downs aggregate out to constant growth over decades.

Should your time horizon be short, then that money shouldn’t be in the equities market. The yield on savings accounts have finally crept back into respectable levels (my Ally account just got bumped up to 1.9%), so it’s a wonderful time to store funds there risk free (up to the $250,000 FDIC limit anyways). Readers of this blog know I’m planning to buy a car soon, so that allocation of capital is safely in my savings. The precipitous drop of yesterday’s stock market didn’t register there at all.

Where it did register was on the recent deposits into my investment accounts. The money I put in these past few months have completely taken a bath due to yesterday’s shenanigans, and as I’m typing these words it isn’t looking too spectacular today, either. Yes it’ll all even out eventually, but it still hurts on a surface level. I’m optimistic the remainder of this year will round out positively, and ultimately none of this matters much as my time horizon is quite long indeed.

So I shouldn’t be looking at the market’s daily machinations, but my human nature prevents me; stocks are simply too intriguing to not follow. It’s super fun when it’s up, and utterly dreadful when it’s down massively like yesterday.

I found Santa Cruz street in Santa Cruz. Oh and a supremely clean NA Miata as well.

A year with Squarespace

Difficult to believe it’s already been a whole year since I’ve move to the Squarespace platform. It was also a surprise because when I went to check on my money accounts (I use Mint), a hefty charge of $215 showed up on one of the credit cards. That is indeed the yearly fee for the privilege of using this wonderful host sans any limitations.

Much like how the annual fee for Amazon Prime sneaks up on me every year, I can see why people of my generation much prefer these payments to be broken down monthly instead of annually. The emotional optics are simply easier to stomach than having to all of the sudden cough up a few hundred dollars. It’s especially jarring for people like myself who keep monthly budgets as tight as possible.

The new iPhone that costs over one thousand dollars? No it doesn’t! Split into 24 payments it’s only $56 dollars a month! An infinitely easier pill to swallow, isn’t it? That brand new BMW sedan isn’t really over $40,000 dollars; on a lease it’s only costs $300 a month!

For the less financially inclined it’s of course easy to fall into the “affordable” monthly payment trap and go way beyond proper spending limits. But for the financially savvy - which I think of myself as - sectioning a big monetary outlay into tiny bits can be an excellent strategy to maximize returns (however small they may be). I rather do a piecemeal plan and hoard as much cash as possible to at the very least earn interest in a savings account.

This is precisely why instead of the typical lump sum every 6 months, I pay my car insurance every month. I can do the bi-yearly plan no problem at all, but it’s more prudent to keep the leftover cash in an investment account to accrue some modicum of gain. Plus, it’s far easier for budgeting purposes.

Anyways, it’s been a good year, Squarespace. Please don’t raise your fees.

The charts match the chairs and floors.

How long you've had a credit card matters

One of my major New Year's resolutions this year was to implement austerity. The past few years I’ve been highly cavalier with my money, mostly towards doing an immense amount of traveling. I don’t regret any of it as it’s been some of the best times in my life, but what with me turning 30 I figured time was right to store up some cash for headier times.

Midway through the year however I decided I was going to purchase a Porsche 911 in the near future, so austerity could not have come at a more perfect time. Slavishly save money just to then squander it all? That’s just how life works. To paraphrase Ludacris’ character in the Fast and Furious franchise: what’s the good of making money if you don’t spend any of it?

Nevertheless I’m still keeping to my resolution, and it’s been going great. With less expenditure I’ve whittled down the number of credits cards I use to only a few (the Chase line of Freedom and Sapphire cards are awesome). With no activity on the spare cards, I was content to let the credit card company close on them, thinking that it won’t do much damage to my credit score.

Well I was wrong. A few weeks ago I did my periodic routine check of my score on Credit Karma, and a particular item serendipitously caught my eye: the age of credit history. Turns out the length of time a credit card is open bears a positive attribution to the credit score, with it signifying trustworthiness and whatnot. Unfortunately for me, the cards I haven’t been using are the one’s I’ve had the longest.

I can’t let those cards expire now and risk damaging my credit score, not with the need to get financing for the Porsche next year. So in the past few weeks I’ve put tiny purchases on each formerly disused card to restart the closure clock, so to speak. My score is currently in the low 800s, and I aim to keep it that way.

Pro tip: don’t let your old credit cards expire unless you’ve got an equally old credit card you plan to keep using, because it will impact your credit score greatly.

The lonely nights.

Retirement savings goals

Yesterday I saw this tweet of jean Chatzky's: 

By the time you’re 30, aim to have 1x your annual income set aside for retirement. At 40, 3x; at 50, 6x; at 60, 8x; and by retirement, 10x.

— Jean Chatzky (@JeanChatzky) November 1, 2017

Upon reading the tweet, I actually felt pretty good. I turn 30 next month, and in solid humble-brag fashion I can say the goal of having 1x annual income saved for retirement is of no issue. Ramit Sethi's book on personal finance taught me the ropes back when I started working full-time. Saving for retirement isn't a chore - it became automatic. I don't think about it at all.  

However, judging by the replies to the tweet, I guess I'm an uncommon case amongst my peers? The responses were full of millennials lamenting their financial misfortunes, being burdened with the likes of student loans, outrageous housing costs, and stagnant wages. Plenty of avocado toasts and 10 dollar lattes jokes were mixed in there as well. Lots of excuses given on why people don't have the appropriate amount of retirement savings, if at all. 

While I don't doubt the veracity of these people's situations, I question their defeatist/victim attitude.  

Let's all agree that saving for retirement is important, no? Barring any natural disasters or nuclear holocausts, our generation should live quite a long time beyond the current 65 year retirement age. Having enough money to sustain a suitable lifestyle is going to take some time accumulating, and people should start as early as possible.

For sure external circumstances have made it difficult for millennials to find jobs and save. However, complaining about the situation - as in the tweet's replies - isn't going to do anything positive. Is the government (or some other macro entity) going to suddenly forgive all student loan debt, build massive amounts of affordable housing, and provide people a better paying job? Of course not. It's all up to you, the individual person, to fight for what you desire, and in doing so save for retirement. 

Don't we often joke that Social Security won't be there by the time us millennials reach our autumn years? People can say how unrealistic those goals set by Chatzky are, but the fact remains you still have to save. If my family of four can do it on $1,500 per month income way back when, so can you.