How To Evaluate Investments
Whenever I talk shop with another investor, I’m often asked how I determine if an investment is a good one. While the answer is very subjective and personal, I evaluate 5 specific things every time I decide to pour money into a new investment. Today, I share what those are with some basic examples.
How My Investments Are Faring in 2023
Near the end of 2022, about 9 months ago, I shared that my net worth had plummeted a whopping $1.7 million! The losses were primarily attributed to a terrible year for stocks, with the Nasdaq down roughly 33% and the S&P down 20%. Going into 2023, I kept my expectations low due to the Fed’s aggressive rate hike plan and stubbornly high inflation. However, this year has proved to be one heck of a turnaround! In this post, I’ll share how much my net worth has recovered and what I’m doing with both stocks and real estate.
Actions I’m Taking During These Uncertain Times
I can’t believe 6 months have flown by since my last blog post! Life has been absolutely crazy for my family and me, having just retired at the end of last year, moving from California to Texas, selling our California home, moving again from an apartment to our new home, and finally settling in and acclimating to the new area. It was exhausting for me to type out those life events just now! Suffice it to say, I’ve been busy as usual. Blogging takes a surprising amount of time to plan and write out content, and I didn’t want to post something just for the sake of posting.
Anyway, the dust has settled for the most part in my personal life for the time being. However, the world economy has really hit the breaks this year, taking most of us by surprise. With out-of-control inflation coupled with the Fed raising interest rates at break-neck speed, investors like myself have really taken a huge financial hit all of a sudden, scaring me into taking action. Read on to see if you could benefit from doing the same!
How I’ll Spend $2 Million Dollars
After selling my primary residence in California for almost $1 million over asking price, I received over $2 million in cash from the sale. I can’t let that amount of cash just sit around idly; it’s always best to put money to work so it continues to earn more on your behalf. In this blog post, I will share what my plans are for the $2 million. And no. I’m not going to gamble it all away in crypto!
What's A Better Investment: Primary Residence or Stocks?
Normally, a primary residence should not be considered an investment unless you house hack and rent out part of the home while you live in it or you end up selling the home. In the house hacking scenario, your primary residence acts like an investment because renting out a portion of your home could certainly reduce your housing costs. Better yet, if done right, it could even net you a profit!
If you end up selling your primary residence, the home acts like an investment because you will hopefully yield some capital gains after building equity for many years. Plus, selling your primary residence has a nice tax perk where you can exclude up to $250K (single) or $500K (married) of the capital gains from taxes! The latter scenario is what my partner and I recently did when we sold our home in California for nearly $1 million over asking. So how does our primary residence as an investment compare with, say, the stock market? Let’s dive into the numbers today and find out!
7 Traits of Highly Successful People
The past 5 years or so of my life have really kicked my finances into high gear. It’s not just a feeling of success either; it’s real and backed by data. By tracking my net worth over time, I have the data to tell me whether or not my finances are moving in the right direction. And in the past few years alone, I’ve seen my net worth increase by a couple million! That said, it’s important to self-reflect and understand how I’ve come this far in such a short period of time. In this post, I wanted to share the things that have really helped my partner and I become so successful so young.
6 Reasons Why I Invest In Stocks to Build Wealth
A few months ago, I wrote an article on why I invest in real estate to build wealth. While I am a huge fan of real estate investing, there are many benefits of investing in stocks that I also love. In this post, I’ll dive into the top reasons why I invest in stocks to help bring me closer and closer to my $10M fat FIRE goal.
Predictions of 2021’s Economy and Investing Landscape
Between COVID-19, the March 2020 stock market crash to all-time highs for a basket of stay-at-home stocks, no one could’ve predicted what 2020 had in store for us. Let’s have a little fun today by looking into our crystal balls and predict what 2021 has in store for us! At the time of writing, it is December 30, 2020. By the time you’re reading this, some of my predictions may have already come true!
End of 2020 Reflection on My Retirement Accounts
It’s an understatement to say that 2020 has been a crazy year. Nevertheless, at the end of every year, I like to review how well my investments have performed. Regardless of how good or bad each account has done, I find it healthy to review them as objectively as possible to see if any changes should be made to them for the following year. In this blog post, I will go through each of my retirement accounts one-by-one, see if I met my contribution goals, check their overall performance, and determine if my current 401(k) plans need any rebalancing or reallocating.
Ways to Evaluate Rental Properties
There are many factors to consider when evaluating a prospective rental property. While it largely comes down to a numbers game, there are other factors that are important that math can’t highlight. In this article, we will learn about a few ways to quickly evaluate properties at scale, how I scrutinize a prospective property in greater detail, and list out other important factors that are crucial to building a successful buy-and-hold rental portfolio.
Investing In My 1st Triple-Net Leaseback Rental Property
Most investors have never heard of the terms “triple-net” or “leaseback.” For me, my 1st time investing in this niche area of real estate yielded a 58% return on investment (ROI) in just 2 years! So what are they, and why did I invest in such a deal?
9 Ways To Get Started With Real Estate Investing
Most investors I know park their money in the stock market. It’s arguably one of the best ways to build wealth, and it doesn’t require much cash to get started. Many of those same investors hear about the potential of real estate investing, but most of them don’t know how or where to get started. Luckily, there are many ways to dabble into the world of real estate investing nowadays, and they don’t all require large amounts of capital.
6 Reasons Why I Invest In Real Estate to Build Wealth
I know plenty of successful investors who invest entirely in the stock market and in no other asset classes, like real estate. On the other hand, I also know many successful investors (myself included) who have done even better putting their money to work in real estate. Consider the following 6 reasons why I include real estate in my portfolio and why you should consider it too.
Roth IRA or 401(k): Which One Is Right For You?
I hear it all the time, “Should I invest in a Roth IRA or a 401(k)?” To help you answer that question, first we need to know what they are and what some of their benefits are. From there, I will make several suggestions to help you think about your own situation. Ultimately, the answer will largely depend on your current tax bracket, your future retirement tax bracket, and when you plan on retiring. One thing I will say is that no matter how high your income is, it’s possible for you and your spouse to each use both!
Why I Decided to Buy Instead of Rent
Many of us grew up dreaming of owning our own house some day for a variety of reasons. Maybe somewhere along the way, a seed was planted in your mind that buying a house is part of the American Dream. Or maybe your parents owned their own house, and you simply assumed it must be the best path for you, too. Well, maybe. Maybe not. To help you make the right decision (and it’s a big one), let’s put those societal factors aside for a moment and focus on the financial aspect of buying versus renting.
Why I Decided to Invest in Out-of-State Real Estate
I live in San Jose, right in the heart of Silicon Valley, where median home prices exceed $1 million. Yes, $1 million. As a real estate investor, my primary focus is on cash flow. So if I were to buy a property in my local real estate market for a $1M price tag, I’d need to receive a hefty rent check from my tenant if I want to be at all profitable! Let’s dive into this conversation in more detail by using some rough numbers.