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How I'm making up for the $600,000 I lost due to Covid-19 -Kainout

Cut excess spending

Over the past 15 months, about 60% ($13,260) of our monthly passive income ($22,100) was spent on living expenses. Luckily, since April, we've managed to cut back by at least 32% (to only spending $9,017 per month). We plan on using the money saved to invest in more real estate opportunities. Cutting back on the expenses below hasn't been easy, especially when you're raising a three-year-old son and a five-month-old daughter in an expensive city like San Francisco. But we're willing to do whatever it takes. 1. Night doula Monthly savings: $8,000 Our expenses were significantly higher this year because we hired a night doula (a professional who provides overnight, in-home support for families with newborns). This was never part of the plan, but our toddler had been waking up several times in the middle of the night (hence why I regret not doing enough sleep training when he was younger). We were able to handle it at first, but things got increasingly difficult as my pregnant wife was nearing her due date. And by the time our daughter was born in December, we needed the additional help. Our hope was to continue hiring her until both kids learn to sleep more soundly, but a doula is by far one of our biggest expenses that we know we can do without. 2. Food and groceries Monthly savings: $500 or more In 2019, we spent an average of $2,500 per month on food. This year, however, our spending went up to about $3,500 per month — partly due to having a second child, but mostly because we had to rely more on food deliveries. The tips and fees really add up! So far, our new strategy to cut costs by $500 or more per month has been working (we currently spend an average of $16.50 per person, per day): No more takeout or deliveries: We do all our grocery shopping at the store and only cook at home. It's been fun experimenting with different ingredients and recipes.No food goes wasted: Whatever we buy, we eat — including leftovers. Spaghetti bolognese with chopped carrots and celery has been a huge favorite, since it's easy to make and lasts several days.Be strategic with grocery store trips: To avoid multiple trips per week, we always plan ahead by making a shopping list based on what we have and what we need.Be more mindful about what we buy: No junk food. Buy items with a longer shelf life. Never shop on an empty stomach (shopping hungry always leads to impulse buys).Eat less: Binge-eating is no longer an option, which is actually a good thing since I'm trying to lose all the stress weight I gained over the past few months. 3. Non-essentials Monthly savings: $1,000 or more We've been able to cut back on non-essentials by 90%, from roughly $2,000 to $200 per month. This may sound too drastic to be true, but the lockdown has forced a new kind of frugality (e.g., no entertainment or restaurant outings).  We also haven't spent a penny on new clothes, gifts or electronics. Our only recent splurge was a small $100 slide and a $50 push car. We figured it was a smart idea since the local playgrounds have been closed. Even as the economy reopens, we will continue to cut back on non-essentials — just in case there's a second wave of virus cases and the economy falters again.

Focus on the right passive income streams

To identify what sources of income we should — and shouldn't — spend time and money on, we reviewed the risk levels for each of our passive income streams. Surprisingly, our real estate investments in single-family homes have been promising. The two tenants from our San Francisco properties have been paying rent on time; both have essential, high-paying jobs, so we're not concerned about any payment issues down the line. To boost our passive income, we've been searching for a good real estate deal in the city. Our plan is to buy and rent it out (or move in and put our existing property up for rent). Our real estate crowdfunding investments, however, are at highest risk of decline. Two of our investments, both in hospitality, took a massive hit due to shelter-in-place orders. We have very little control since we're minority investors, so our only option is to ride out the storm. I've also been writing more frequently on Financial Samurai, the financial site I started in 2009, to increase advertising revenue. Hopefully, this will lead to other profitable opportunities. (Last year, it generated roughly $50,400, thanks to an e-book that readers can only buy on the site.) When chaos strikes, it's easy to feel paralyzed and do nothing. But, as the saying goes, you should never let a serious crisis go to waste. Although it will take some time for our new strategy to make up for the losses, we're already starting to save thousands of dollars. Plus, now that we've been forced to change our spending habits (for the first time in a while), we will be more financially prepared for the future. Sam Dogen worked in investing banking for 13 years before starting Financial Samurai, a personal-finance website. He received a B.A. in Economics from The College of William & Mary his MBA from the University of California in Berkeley. Sam has been featured in Forbes, The Wall Street Journal, The Chicago Tribune and The L.A.Times. Don't miss: Source link Read the full article

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Mercedes Benz offers customised finance options to lure customers back -Kainout

Mercedes Benz India on Monday launched flexible financial solutions with an aim to instill customer confidence and create a positive sentiment in the market currently reeling under the impact of slowdown and coronavirus-induced lockdown. Under its 'Wishbox 2.0', the German luxury carmaker is offering customised financial solutions including no EMI for first three months, lesser EMIs for the first six months with regular EMIs starting from 7th month of purchase and 10-year extended loan. "As the markets across the country start reopening and operations begin in a graded manner, we are introducing ‘Wishbox 2.0’, a host of customised and highly flexible financial solutions, aimed at reinstalling customer confidence and empowering them to buy their Mercedes," Mercedes-Benz India Managing Director and CEO Martin Schwenk said in a statement. He further said, "Wishbox 2.0 is highly flexible and we are confident will instill customer confidence by offsetting some of their financial commitments. These smart financing solutions are one-of-its kind and are our own way of supporting our customers’ investments and addressing the prevalent market challenges." Under ‘Wishbox 2.0’ a customer opting for a standard loan can avail of an EMI free period for the first three months and monthly installments will only commence after three months of the 3, 4, 5 years loan as customised. Also, the company is providing ‘Step-Up 2020’ option, under which a customer can pay small sum as EMIs for the first six months of the contract and regular EMIs starting from the seventh month. Mercedes-Benz India also said if is offering for the first time ever a 10-year loan tenure with the customer also having the option to opt for a guaranteed buy back after five years. Commenting on business resumption following relaxation of lockdown guidelines, Schwenk said, "We are swiftly getting back to business with gradual re-opening of our dealerships across markets following all the social distancing protocols and adhering to all safety and sanitisation measures. We are confident, we will be able to operationalise the remaining outlets following the local authorities’ directives, soon." if(geolocation && geolocation != 5 && (typeof skip == 'undefined' || typeof skip.fbevents == 'undefined')) { !function(f,b,e,v,n,t,s) {if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)}; if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)}(window, document,'script', 'https://connect.facebook.net/en_US/fbevents.js'); fbq('init', '338698809636220'); fbq('track', 'PageView'); } Source link Read the full article

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Why you can't feel bad about failure -Kainout

Amazon released its first smartphone, the Fire Phone, in July 2014, and the device was broadly considered a "debacle," "a fiasco," "a surprising disappointment." By September 2015, Amazon stopped selling the Fire Phone. It was the type of high-profile flop that might lead some CEOs to start angrily pointing fingers, but not Jeff Bezos."You can't, for one minute, feel bad about the Fire Phone. Promise me you won't lose a minute of sleep," Bezos told Ian Freed, a key leader in the Fire Phone's development, according to The New Yorker.And that was despite a $170 million write down Amazon took because of the Fire Phone's failure.The vignette from Amazon lore gives insight into two of Bezos' tenets for leadership and success.First, failure has to be part of growth."As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn't growing, you're not going to be inventing at a size that can actually move the needle," Bezos wrote in his 2018 annual letter to shareholders.It's worth taking risks, because if you do, one blockbuster success can outweigh multiple losses."We will work hard to make them good bets, but not all good bets will ultimately pay out. This kind of large-scale risk taking is part of the service we as a large company can provide to our customers and to society. The good news for shareowners is that a single big winning bet can more than cover the cost of many losers," Bezos wrote in the letter, published in April 2019.The second secret to success revealed in the story of Bezos' reaction to Freed, is that you have to be willing to take time to float, be curious and experiment.The Fire Phone team Freed led grew to include as many as 1,000 employees and cost the company more than $100 million dollars, The New Yorker reported.But when Freed showed Bezos some of Fire Phone's software, Bezos was enamored with the voice recognition software, which could respond to commands by accessing information in the cloud."I can ask for any song?" Bezos asked, according to The New Yorker. "What about 'Hotel California'?" The song started playing. "This is fantastic," he said.Shortly thereafter, Bezos had Freed start to build a team and the technology to respond to voice commands. (The voice software Bezos first saw in the Fire Phone was licensed from another company, but Bezos wanted his own proprietary technology.)Four months after the Fire Phone was unveiled, Freed released the Echo, The New Yorker reported.At the time, experts saw the Echo as completely innovative. "Amazon has a new product that doesn't really have any current equivalent form any other tech company – a connected speaker called Echo that's always-on, listening for commands that its virtual assistant can then respond to with information or by triggering a task," tech blog TechCrunch wrote in November 2014.The time spent on the failed phone helped propel the Echo's success, Bezos said."While the Fire phone was a failure, we were able to take our learnings (as well as the developers) and accelerate our efforts building Echo and Alexa," Bezos wrote in the shareholder letter, in which he also noted that the Echo and Alexa had their origins in Amazon's research into and development of machine learning technology and the cloud, other areas where Amazon had been "building and wandering for years."At the Consumer Electronic Show in January 2020, Amazon announced there were "hundreds of millions of Alexa-enabled devices" in customers' hands worldwide, according to the technology site CNET. That is more than double the 100 million Alexa devices Amazon said had sold in January 2019. According to Bezos, that success stems, in part, from Amazon's willingness to take chances and experiment.Bezos believes that, to empower measurable invention and creativity, there has to be time for curiosity and chasing ideas."Sometimes (often actually) in business, you do know where you're going, and when you do, you can be efficient. Put in place a plan and execute. In contrast, wandering in business is not efficient … but it's also not random," Bezos says in his letter."It's guided — by hunch, gut, intuition, curiosity, and powered by a deep conviction that the prize for customers is big enough that it's worth being a little messy and tangential to find our way there. "Wandering is an essential counter-balance to efficiency. You need to employ both. The outsized discoveries — the 'non-linear' ones — are highly likely to require wandering."See also:Jeff Bezos finds a masterful leadership lesson in a story about doing a handstandThis chart ranks everyone (even you) by their wealth, and it's a snapshot of inequalityAlibaba billionaire Jack Ma: I know nothing about tech or marketing—this is the secret to my success Source link Read the full article

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Americans raiding retirement accounts after job loss -Kainout

More than 38 million people have filed for jobless claims since the coronavirus pandemic started. The unexpected loss in income is causing many Americans to tap their retirement savings just to make ends meet.  And many people who lost a job — or have a spouse or partner whose income has declined — didn't have much money saved in the first place. Half of Americans who were recently furloughed or let go have saved less than $500 for retirement in the past year — and 70% have saved less than $1,000, according to a report by fintech firm SimplyWise. Of those who have an individual retirement account, 401(k) plan or retirement savings account, 1 in 5 now plan to tap those funds.  "It's hard to think about the future when the present feels impossible, particularly given this unprecedented crisis," said SimplyWise CEO Sam Abbas. "It's already hard for Americans to save, let alone for their future and retirement."  Catherine Falls Commercial Many Americans are raiding their retirement accounts to pay for basic necessities, including groceries and household bills, according to another survey by MagnifyMoney. More than a quarter of people who've withdrawn retirement funds in the past two months said they did so after a job loss, while only 15% said they'd pulled money out of retirement accounts because they're worried about stock market losses. More from Invest in You: Expert tips on coping with coronavirus-related money stressors These Gen Xers share their personal concerns about an uncertain future Op-Ed: We're in the middle of a mental-health crisis  Nearly 1 in 4 who tapped their retirement savings said they wanted to take advantage of new legislation allowing for penalty free withdrawals. Under the $2 trillion coronavirus relief package, there is no early withdrawal penalty on coronavirus-related withdrawals of up to $100,000 from IRAs, 401(k)s and other qualified retirement accounts until the end of the year.  Over the last two months, the average withdrawal from retirement accounts was $6,757, MagnifyMoney found. However, many financial experts are concerned that the number of people and the amount of money being taken out of those accounts could significantly increase over the next few months.  Since the $100,000 withdrawal limit is for the aggregate amount of coronavirus-related distributions through Dec. 30, 2020, some retirement plan sponsors said account holders may try to imitate a "paycheck" every two to three weeks through 401(k) withdrawals, taking out a couple thousand dollars each time. Source link Read the full article

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There's more to China's virus story than its statistics -Kainout

NEW DELHI: Chinese information clamp down on Coronavirus early this year is in sharp contrast to this week's surprising admission by the top leadership that China has taken an economic hit because of the virus. Chinese Premier Li Keqiang admitted at the on-going National People's Congress in Beijing: "At present and for some time to come, China will face challenges like never before." “The horizons for China’s development are full of promise,” Li said, to quote the new York Times, but if the 3000-odd delegates to the country's annual meeting of its legislature were impressed, they did not show it. For, they must have realised that their leaders broke away from tradition and did not set any growth target for 2020. Global economics monitoring agencies suggest that China, along with India, may just about survive recessionary trends in 2020 but the rest of the world will not. However, that brings no cheers to China which realises that statistics don't tell the real story. The size tells the real story: Its size, its massive population, the need for massive production, the need for more massive production in order to export, the gigantic material unloading and storage facilities, the loading areas and transportation complexes, the huge labor force, the unimaginably big infrastructure --- even a multi-billion dollar stimulus – a little over 2% of last year's GDP -- will just be a drop in this ocean. That is the task China faces as it limps out of the impact of Coronavirus which, incidentally, returned for a brief second wave even as the lock down was lifted to restart the economy. There was some good news in April, when exports that month rose 3.5%, but it later became clear the spike owed it to demand for health care equipment like PPEs and face masks from abroad. There are reports of large shipments awaiting export clearance in Chinese godowns, but where are the orders? Exports actually dipped 6.6% in March though they were better than the +15% dip in January and February, 2020. Debt propelled China's economic stimulus programs at the turn of the century. Various factors helped surge growth, but the fact remained China was badly debt-ridden. As of this month, Chinese debt is roughly 48% of its GDP. Post-Coronavirus, the Institute of International Finance (IFF) estimates that "China’s total debt hit 317 per cent of gross domestic product (GDP) in the first quarter of 2020". In the previous year, the corresponding figure was 245.4 per cent of GDP. On the other hand, China’s foreign debt stood at $2.05 trillion last year. Not so easy to dispose off this debt. Most of the country's domestic debt is held in financial bodies controlled or owned by the government. There are hardly any foreign investor presence in domestic financial or wealth schemes. Now, with its growth slowed thanks to Coronavirus, China fears possible default on debt repayments that can cripple its financial scenario. In April, China resumed production as the lock down was lifted. Workers started returning to factories, but the capacity utilisation is said to be much below 100 per cent. The primary reason is two-fold: Lack of foreign orders and a depleted domestic demand. Retail spending has plunged. Remember, it had alone contributed to 80 per cent of the country's economic growth in 2019. Investments in factories halted too. They in fact went down by more than 15 per cent. Unemployment may soon be touching the 20 per cent mark. People are withdrawn cash from banks and sitting on it. They are not spending, contrary to expectations that consumer spending will revive after the lifting of lock down. There is no shopping spree as the businessmen anticipated. People hardly go out to eat. The people are worried that they may lose their jobs at any time. Thousands have already suffered that fate. The government has been promising sops to factory owners and businessmen provided they pay regular salaries to their staff. But that is not stopping the flood of bankruptcies. On top of it, a second Coronavirus scare has forced people to shut themselves indoors. Local institutions, companies and governments are in a financial mire as well, leading to fears of default on loans. As it is, consumer loan repayments have taken a hit. The bond markets, facing a run through defaults since last year, are braced for worse in 2020. According to one newspaper, "in May 2020, listed oil and gas firm MIE Holdings failed to make a US$17 million interest payment on its US$248 million bond''. On the other hand, the local governments and other bodies are not confident of meeting revenue targets either. They suspect they would be forced to return to debt culture. The Chinese government has already bailed out several local institutions, including small banks. Aware of its unhealthy situation, the Chinese leadership appeared uncharacteristically humble at the National Congress meet. It admitted “many weak links have been exposed in public health emergency management'' it said, in an indirect reference to the global criticism of Coronavirus cover-up, adding that “...the people have expressed their views and suggestions, which deserve our attention''. Premier Li also told the US that China remains committed to the phase 1 trade agreement. Under this, China can once again import American farm products including pork. The US, in return, can continue its tariffs on specified Chinese goods. There is an expression of Chinese concern in this reference to the agreement: The agreement has set targets to be met but after Coronavirus, China has not been able to import targeted quantities from the US. It needs to placate the US in order to improve its export side of its economy. President Donald Trump is waging a literal battle against China at the UN, WHO and other platforms apart from the trade and tariff war with China. Faced with such an unprecedented economic crisis, if one expects China to discontinue its bullying tactics or expansionist programmes, one expects wrong. Amid the economic alarm bells, the National Congress heard the leadership announce stricter laws to quell the Hong Kong protests, so much so that the Hong Kong stock market nose dived after the announcement. China's expansionist priorities have not taken a back seat either. India has reported about increased tension at its borders because of bullying tactics by Chinese troops. It continues its belligerent attitude towards Taiwan. It continues to back its Belt and Road Initiative (BRI) in spite of lock downs in several BRI partner-countries stalling projects, disrupting supply chains and availability of labour and possible reneging of Chinese loans to these countries. The budget proposals to be announced before the conclusion of the National Congress will indicate if China is willing to learn from its mistakes or it will simply over-burden its debt-ridden public sector with an unrealistic growth target in face of the troika of troubles – shrinking exports, tumbling private investments and drowning consumption levels. if(geolocation && geolocation != 5 && (typeof skip == 'undefined' || typeof skip.fbevents == 'undefined')) { !function(f,b,e,v,n,t,s) {if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)}; if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)}(window, document,'script', 'https://connect.facebook.net/en_US/fbevents.js'); fbq('init', '338698809636220'); fbq('track', 'PageView'); } Source link Read the full article