#and i only have 4 hours to do everything including walking the 6 dogs 2x

[threnodians]

y’all keep me in your thoughts and keep your fingers crossed that my day today and my shift tonight (it’s almost 2am already wtf) goes significantly better than today did 🥲🤞🏻

[smackit17-blog]

Couch surfing is deceiving. It looks easy but it’s really hard

In my inaugural post, I concluded by saying I was heading to Los Angeles for a change of scenery and to explore opportunities. And as it happened, one of the conversations I’d started before arriving, became real on my first full day in LA. We agreed to a 3-month trial and if we both decide it’s a good fit at the end of the 3 months I’ll be relocating from NYC to LA.

The thought is both exhilarating and terrifying. Of course, you want to deliver great results, so that you are asked to stay on, but am I really ready to leave NYC? I mean LA is a fun place to visit, and I’ve talked about it moving here, but with the security of knowing I was locked into NYC- until now. Which brings me to lesson #1 in this post: Don’t underestimate the little things. Remember me espousing the belief that I am currently tethered to nothing and no one? Not entirely true. My family is outside of Philadelphia less than a 2-hour drive from my Battery Park apartment. I have an amazing network of friends with many of the friendships running more than a decade. My favorite workouts, restaurants, hell even the ��go to” drycleaner, who can literally get out any stain. And so much more. It’s called a life and I was so wrapped up in thinking about a job and a relationship that I forgot about all the other things that make up a life.

And now here I am in LA with no net. Not even a go to Dentist. Clearly, I’m not in a 3rd world country, but you get the point. Familiarity breeds contempt, but man when everything is unfamiliar, the longing is palpable.

And I’m still dealing with the post-traumatic stress of the most recent fallout with my ex. (I know horrendous to bring him into a 3rd post, but whatever it’s part of what I am dealing with). Friends who don’t read my blog (and most don’t) have no idea I have seen him in the last year or more. And the ones I confided in are so sick of hearing about it, the ability to have any sympathy is just non-existent. And I don’t blame them. I have zero sympathy for myself at this point. And do question my sanity.

So, all of this is happening, while I start a new job, where I need and want to impress. I’m in a strange city with only a handful of friends. And I’m couch surfing, i.e. staying with an incredibly generous friend. Which brings me to lesson #2 in the post: True selflessness is a humbling. I feel a combination of guilt, relief, and the kind of gratitude you have for someone who has saved your life. Guilt because she has more on her plate than any single person should have to. And adding another body in your already full house is a lot. And let’s be honest — I’M A LOT! She couldn’t be more welcoming and gracious but I feel/am a tremendous imposition. Relief because I don’t have to pay two rents, and I get to come home to a familiar and beloved face (faces including her two kids and 10 -month old lab puppy — more on him shortly). And gratitude for having someone extend such kindness. This is more than a good friend. This is family.

So while I am not technically couch surfing — I have a lovely room which I have taken over from her 6 year old son (yes you read that correctly), I am living in someone else’s home, and just generally imposing on every aspect of her life. Because despite the awkwardness, it just doesn’t make sense to look into something of my own until I have clarity on whether or not this is a permanent relocation. And as it so happens, she and her children are out of town the bulk of the summer leaving a mostly empty house.

Which brings me to lesson #3 in this post: Be careful what you wish for! All those times I wished I could be more free-spirited and accepting of others generosity? Let me tell you this is harder than it looks. I have listened to stories over the years of mooching friends, wondering how they “pull it off,” and thinking, “man I couldn’t do it, but really wish I could!” I’ve always prided myself on total self-sufficiency, and if anything, being the one to pay the tab or let someone crash with me because I was “so sorted.” Also I am a bit of a control freak. I like having my own space, with my things organized just my way, and my whole routine. So being in someone else’s home, carless for the moment, without knowing the places to run errands, or having any of them be walkable, makes you feel incredibly dependent and unsettled.

And there’s the shame of asking a million stupid questions — is there a Starbucks between here and work (don’t worry I’ll make you coffee); how about a drycleaner (I’ll drop your stuff); is there a drawer I could use (give me a few days to clear out my son’s clothes); Do you want to go hiking this weekend (sure! Even though I know the answer is most certainly — NO) Cringe-worthy.

And so, this control freak became determined to be the best damn couch surfer/house guest. How could I do it? Could I cook dinners? No. As it became immediately apparent everyone ate on different schedules. Could I book my trainer friend to train us? Maybe. But would that even be a workout she liked and a time that worked? Keep thinking Julie! And then the answer seemed handed to me on a silver platter…

When my friend picked me up from my AirBnB and was driving me to begin my stay at her house, she mentioned that he puppy was pretty out of control and might be the most challenging part of my stay. THERE IT WAS! I would train this puppy! So we walk into the house and I meet Kota. Well my student was a handsome devil. Pure white with a big square head and inquisitive expression. He was a large one too — about 70 pounds full of wriggling, constant moving, chewing, and barking puppy power. My immediate diagnosis — this dog just needs exercise. So, shortly after entering the house, Kota and I were off for a walk

Kota didn’t have a prong collar, typically a helpful way to train big strong dogs to heel and walk properly. I was not deterred. I’m big and strong and I can do this. Well this dog dragged me to and fro across the neighborhood streets, sniffing and wiggling with joy and abandon. I could see he was happy to be out, but I was beginning to realize I might be in over my head. I had grown up with big German Shepherds, but they were all trained by my mom. And my own beagle, Beemer, had come to me as a show dog — trained and saintly.

But I figured I’d get into a routine, great for both of us. I’d wake up early and walk the loop of my friend’s hilly 1 mile neighborhood. Hell maybe 2x around! Start the day off right for both Kota and me. And I’m sure the more I walked him the better he’d get. I’d pick up a nice prong collar and we’d take it from there. So Thursday am I woke up tired and slow moving on the heels of The Grateful Dead show. But off I went. Letting Kota drag me about half way through the neighborhood before giving up and turning around. Tomorrow would be a fresh day, not hung over and stressed about a new job. We’d start then.

Following work that same day, I arrive back to Bel Air. My friend and her kids were relaxing after dinner and watching some TV. My new best friend Kota greeted me with interest. I had some new hire paperwork and first day email follow ups, so I set up at the breakfast bar in full view of the family so I could maintain some sense of sociability and do what I needed to do.

Which brings me to less number #4: Don’t underestimate your task! I quickly became engrossed in some personal emails and my friend and her kids made their way up to get ready for bed. I remained perched at my breakfast bar stool, face fully into the computer. Kota was downstairs with me. I assumed we were together in companionable silence. We’d probably been alone for 10, maybe 15 minutes when I looked down and noticed one of the two espadrilles I had put on the ground beside me was missing. And almost instantly I knew the culprit. Kota. Sure enough, it was dangling from his mouth. He had been waiting for me to notice. I stood up and watched over and in my most authoritative voice demanded he drop it. Instantly he stood up and ran to the back yard, and then popped his head back in the house and the chase ensued. That fucker was most certainly having a glorious time taunting me. I alternately tried to cajole and demand. Neither worked. I got desperate and offered bread. It worked. Only the damage was done. The entire strap was chewed off and its contents, including the buckle were in Kota’s stomach.

I went upstairs to complain to my friend who was trying to enjoy some quiet time with her daughter. She asked me gently for a few more minutes. I sheepishly left the room and went back downstairs to face my tormentor. And in the 2 to 3 minutes since I’d gone upstairs Kota had not gotten hold of a pen. At some point, he had ripped up a significant area of my friend’s white living room rug and lay chewing on the pen in the newly bare spot on the rug. So not only was it bare it was blue. As was his feet and his tongue. Arghhhh this fucking dog!

This dog, that I was going to train, as the legacy of the greatest couch surfer of all time, was making me look like really really really bad. Actually, more like the worst house guest ever. Causing more problems than anything. I had to grab my friend abruptly from her daughter’s bedroom as I literally how no idea how to handle her new blue dog, who by the way wouldn’t drop the pen, and wanted to engage in another game of “catch me if you can.” So, after she windexed as much blue from him as she could and I apologized as much as you can in this kind of situation, I made my own quick exit to bed.

And as I lay in her 6-year-old son’s bed, I was feeling blue. A lot like Kota looked actually. What was I going to do? I was now feeling more than a little overwhelmed by the prospect of this dog. Especially with a new job, which after only one day I knew was going to be long and arduous hours. And as I continued to ruminate on how quickly things had unraveled this evening, it dawned on me that Kota and I had a lot in common, We were both antsy and anxious beings who didn’t know what to do with our excess energy and anxiety and instead of having any ability to self soothe or channel our energy productively we got destructive. Hmmmm. This thought might be too deep to tackle in this post, and it certainly was at 10pm that night. So, I did what the experts say you should do during moments like this– I went the fuck to sleep.

And this brings me to the final lesson for this post: There is always a silver lining! When I woke up in the morning I had new resolve. Surely, I was humbled, but I wasn’t yet ready to give up. I would walk this dog every morning and at minimum and goddammit that was something. So off we went as my friend again readied her kids for school. This time, I managed to let Kota drag me through the whole neighborhood loop, and there were a few minutes where a passerby might think this dog was walking quite nicely! And even better this loop is steep hills throughout. Good for Kota and even better for my ass! WIN WIN! And so here we are. The dawn of a new day and new possibilities for me and Kota, and for finding my missing ass ;)

[jamesgeiiger]

Financial Samurai 2018 Year In Review: Almost A Fantastic Year

Although 2018 ended on a down note with the stock market selling off, I feel good about how things unfolded. I’ll take the ratio of three good quarters to one bad quarter any year.

Believe it or not, my theme for 2018 was: back to early retirement life. I pushed myself to the point of burnout in 2017. But the funny thing about hard work is that it’s over. I only remember bits and pieces of how difficult 2017 was.

At year-end, it’s easy to forget our accomplishments and our failures. With this post, I’m excited to relive the good and the bad in the following categories: Finances, Family, Health, Business, and Odds & Ends.

This post is like a 4-for-1 special. It needs to be thorough so I can prove to my son his old man wasn’t a deadbeat when he inevitably starts rebelling or when I’m no longer here to defend myself. 

2018 Year In Review

Finances – 2.5 Out Of 5 Stars

At the beginning of the year, I predicted we’d see a slowdown in coastal city real estate, a 10-year bond yield under 3%, and a stock market that would have one last hurrah with a 10% return. I was almost three for three with the stock market up ~8% in September. Too bad it gave up all its gains and then a whole lot! At least I got more defensive starting in March.

My net worth is roughly made up of:

30% in stocks/bonds = -3%. After writing Your Risk Tolerance Is An Illusion in the Spring, I reduced my stock allocation in my House Sale Fund to roughly 52% from 70%. As bonds began to outperform stocks coupled with further profit taking, my end allocation is roughly 40% stocks / 60% bonds. Owning a bunch of equity structured notes in my other main fund has helped minimize volatility. But clearly I wasn’t defensive enough and should have taken more profits during the summer.

My House Sale Fund portfolio was up around 13% at one point until I gave all the gains up in the 4th quarter. Right now, it’s holding onto a tenuous 5.4% gain, after the huge rally on Dec 26. Overall, my public investment portfolio is slightly down, which violates my rule of never losing money post retirement. I plan to update this performance daily due to the volatility.

I’m disappointed with my public investment performance. This goes to show that no matter how concerned you are about an asset class or the economy, greed can override logic.

Here’s a good chart that shows how the Vanguard Long-Term Bond Fund has outperformed the S&P 500 since 1999. The next time I start feeling greedy, I need to remind myself that slow and steady wins the race, especially if you’ve already passed the finish line.

6% in cash/CDs = +2.3%. Thanks to rising short-term rates, you can now get around 2% in a money market and 2.5% in a 12-month CD. It’s wonderful to earn something from our risk-free investments now. Cash and short-term CDs have been 10%+ outperformers against the S&P 500. Hopefully, folks will no longer badger me about the risks of underperforming inflation when the real risk is losing absolute dollar value. Unfortunately, I should have had closer to 15% of my net worth in cash and CDs.

30% in real estate = -5%. The online estimates say my real estate holdings have gone up ~6% YoY, but I doubt it now that the stock market has sold off so aggressively from the peak. Online price estimates and public data are always lagging estimates. Prices did continue to go up until about January 2018, but began falling for the remainder of the year. The chart below shows data months before the 4Q2018 stock market correction. Therefore, I’ve manually inputted -5% from +6% for a 11% swing.

Even though my real estate holdings are down, I thankfully feel no stress compared to my stock holdings, which is one of the reasons why I prefer real estate over stocks. One rental property has no mortgage since 2015, my primary residence is providing utility every day by sheltering my family, and my vacation property is generating a positive cash flow. I can’t wait to bring my boy up to Lake Tahoe to touch his first snow in March!

It’s unfortunate that I reinvested $600,000 of the $1,800,000 proceeds from my house sale into the stock market. I should have just stayed super conservative. But I suspect the best I could get now for the house is $2,600,000 today versus the $2,740,000 sale price in 2017. My house was on a busy street next to the busiest street in all of San Francisco. Fringe location properties, even in a good neighborhood, tend to underperform during a market softening.

8% in alternative investments = +5%. My alternative investments in venture debt and real estate crowdfunding seem to be doing well, to the tune of a 11% – 20% IRR. But these figures are probably too aggressive as well, so I’ve assigned a +5% performance instead. REITs and rental property have outperformed all year as rents are stickier than stocks. I remember back in 2009, my rents stayed flat because by the time the lease was over a year later, the recession was over.

25% in my online business = 0% – 150%. My business is the trickiest to value. Revenue and profits are up 20%+ YoY. Therefore, one might conclude that its value should also be up by 20%+. However, valuations have probably compressed since the stock market sell-off. The good thing is that a peer site with about 35% less traffic sold for 2X the value I assigned for my business in my net worth calculations. Therefore, there’s a possibility my site could be worth 2X – 2.5X my assigned value if we normalize for traffic.

From an estate planning perspective, I want my business to be valued as low as possible. It’s the same way you want your house to be valued as low as possible to pay less property tax. To prepare for hard times, I’ve kept my business at 0% growth in my net worth calculation.

Net Worth Growth

Here’s my 2018 net worth progression chart according to Personal Capital. The chart is a little chunky because of cash recognition delays. But overall, it was doing pretty well until the end of the year.

2018 Net Worth = +6.5%

The main reasons why my net worth is up ~6.5% in 2018 are business cash flow and aggressive savings. I continue to save over 70% of my after-tax income. If I didn’t aggressively save, my net worth would have been flat. As my net worth has grown, it’s harder to move the needle as much.

6.5% is OK, but at one point I was up ~11%. Hence, it feels a little disappointing. 10% YoY growth has always been my minimum net worth growth target since graduating from college. Despite the disappointment, I’m glad my net worth didn’t go in reverse.

If you’re feeling bummed out, it helps to look at how far your net worth has come over the past five or 10 years. When I left work in 2012, I was comfortable with what I had. Otherwise, I wouldn’t have left. Having another six years of growth, excluding 2018, has really been a blessing post early retirement.

The key is to not lose all your gains to a bear market.

Related: Recommended Net Worth Allocation By Age Or Work Experience

Family & Fatherhood – 4.7 Stars

I could not have tried harder to be a great stay at home dad. I only have one shot, so I did everything to educate myself about parenthood. I also spent as much time as possible with my son as a stay at home dad.

My greatest moments of joy all year came from seeing my son’s milestones. He started waddling with help at around 11 months and slowly started to walk unassisted at 12 – 13 months. By 18 months he was able to count to 30, say all letters of the alphabet, and identify eight different colors.

His favorite words and phrases at 20 months old are “hot dog, ketchup, yum, yum, yum” “double wide garage door,” “walk with daddy,” “knock knock,” “verde,” “voila,” and “da hai bao (big seal in Mandarin).” He’s also just begun to sing a couple lullabies, one in Japanese and one in French. We try to talk to him in multiple languages as supposedly that helps brain development. He’s hilarious and full of determination. Oh boy is he determined.

When I’m not working on Financial Samurai or managing our investments, I pretend I’m a pre-school teacher and occupational therapist. Because he has a vision issue, I’ve been helping him track objects, work on his depth perception, and hand-eye coordination. So far he can walk up stairs no problem, but he still needs assistance going down stairs.

Now we’re focusing more on his fine motor skills, like drawing, holding a pencil, brushing his teeth, playing piano keys, and using scissors. The duties are never-ending, but it’s been a blessing to care for him every day and watch him grow.

He is a determined boy

My greatest sorrows have also all come from my son. Between 11 – 15 months old he would fall frequently or accidentally bonk his head on something hard or sharp. I felt his pain each time and admonished myself for not doing a better job protecting him.

As a result of his accidents, I ended up padding everywhere around the house and padding every wall and table corner. Interior design be damned! Thank goodness we live in a modest size house. The padding has saved him from injury numerous times, including on Christmas, when he stumbled on a package and hit his head on our coffee leg corner which was padded, hooray!

It turns out that toddlers between 12 – 19 months fall about 17X an hour on average according to one study of 120 toddlers. Only until about age 4 do most toddlers fully master their walking and running skills. That made me feel a little better, but it still made me so sad whenever he hurt himself. Taking him for a walk with a harness has helped tremendously. I’m teaching him to look both ways before crossing the street.

It’s also interesting it takes up to 24 months before a toddler’s fontanel closes. Therefore, we as parents might as well be as diligent as possible in trying to protect his head before his skull gets to full strength. So much about parenthood the first several years is about survival – from preventing suffocation while sleeping to making sure they don’t walk off a ledge.

The better our boy sleeps and the more he is able to communicate his desires, the more rewarding parenthood has become. Because he is so strong-willed, his temper tantrums are also quite a challenge.

One of my concerns is that he will hurt himself during these temper tantrums by banging his head on something hard or arching his back and hurting himself on the floor. Doctors say temper tantrums peak by around 24 months, subside, and then rise again at around 36 months. Here’s where I need to demonstrate maximum patience as a parent for the next 18 months.

Before my son was born, there was never any whining or crying around the house. But once he arrived, I have heard crying and whining every day, multiple times a day for 20 months in a row. Unfortunately, there is no logical reasoning with a young boy, except to use a technique called “caveman speak” while voicing what we think he wants to calm him down. Adjusting to this new scenario has been hard.

It’s also difficult to write, record a podcast, or mentally relax when there is so much noise. Being able to more easily find a quiet space is one of the benefits of upgrading to a larger house. As a result of needing to find quiet time, I often had to wake up between 4am – 5am to get things done. But I’m proud to say I’ve never lost my temper around my boy.

I’ve still got to improve my patience with my wife and not let business stress or stock market stress hurt our relationship. We operate at different paces, and I need to do a better job slowing down. The whole point of financial independence is to be free from money stress to live your best life.

Given my wife is a full-time mom and absolutely does more of the caregiving, the pressure is on me to make sure our finances never go in reverse. As the stock market melted down in 4Q2018, my stress level definitely increased.

Our goal is to both stay full-time parents for at least our son’s first two years of life and ideally try to be full-time parents for five years before he attends kindergarten. Fatherhood is the hardest thing I’ve ever had to do.

Related: How To Survive The Pressures Of Being A Sole Income Providing Parent

Health & Fitness – 3.2 Stars

I’m the same weight as I was in 2017, which is OK. But I gained 5 lbs in 2017, which was not OK. I need to get down to 162 lbs from 170 lbs. At least I exercised 3X a week on average plus took light walks with my son 5X a week on average. Given my goal is to live until 75, or whenever my son can establish himself and find a life partner, it’s important for me to stay in mental and physical shape.

Luckily, I’ve had no serious injuries or medical mishaps this year. I did catch some flu-like virus that knocked me out for 1.5 days in October, but that was it. We did have our first emergency room visit for my son at 5am because he seemed to have come down with a similar virus I had a month later. We also went to an after-hour care facility for some inflammation. Luckily, things got better after 24 hours.

At 41, I still haven’t sprouted any grey hairs, which is a surprise since I first got several grey hairs at 33, the year before I left my day job. The only reason I can imagine for this phenomenon is that not working a full-time job is less stressful. It’s one thing to say how much better life is after achieving financial independence. It’s another thing for the body to show us.

My most fun physical addition has been joining a softball meetup group that plays every Saturday it doesn’t rain. I must have played over 30 games in 2018. Ah, now I remember sustaining a left knee bone contusion that hurt for six months. My personal highlight was drafting and captaining a 4th of July softball tournament and winning. Curiously, it was one of my most satisfying life moments!

Finally, I found out in December I wasn’t getting bumped down to 4.5 in USTA tennis from 5.0. I did poorly in 5.0 league at the beginning of the year and was hoping to get bumped down after three seasons. When I didn’t, I appealed and got denied.

5.0 level tennis is brutally tough. From an ego perspective, it does feel good to be in the top 1% of all tennis levels. Other players give you respect as you puff out your chest and start thinking you’re the shiznits. But after you start repeatedly getting beaten by players younger than you, it starts to get demoralizing! Therefore, I always try to make fun of myself to others by saying the computers must have malfunctioned to keep me at 5.0.

Business – 4.8 Stars

I could not have tried harder to build Financial Samurai either. Here are some of the accomplishments:

Published three posts a week on average

Published three pages a week on average

Published one newsletter a week on average

Improved my short-form writing skills with the newsletter

Produced over 40 podcasts

Did several podcast interviews on other platforms

Launched the Financial Samurai Forum with 1,300 members thanks to my wife who set everything up over a year

Got mentioned in Business Insider, CNBC, MarketWatch, MSN, Apple News, Forbes, and Yahoo

Updated How To Engineer Your Layoff with a new forward for 2019

Increased overall traffic by 20% YoY, with 50% YoY traffic growth between August 11 – December 27

The 50% YoY traffic surge since August 11 seems like an anomaly. It’s like suddenly turning into a speedboat after being a cruise ship. But traffic has been elevated for almost four months so far, with December being the highest traffic all year. For years, December has always been a quiet month due to the holidays. Perhaps the traffic increase is due to a combination of more production, search algorithm changes by Google, and content syndication.

Overall, I’m just really happy there’s been a correlation with effort and reward. That’s all I’ve ever wanted, hence part of the reason why I left work in 2012. Every year since the birth of Financial Samurai in 2009, Financial Samurai has drastically outperformed the S&P 500 and the San Francisco real estate market. As a result, blogging has surpassed real estate as my favorite asset class to build wealth.

For poops and giggles, here’s another net worth chart if I manually input a business value based on recent comparable sales. The 30% spike is nice, but is also dangerous because it brings a false sense of complacency. It’s best to stay motivated as the economy softens. Just know that creating next level wealth is all about owning growth equity over the long term.

Net worth including market value of business = +30% YoY

Life’s Odds & Ends – 4 Stars

In May, I helped coach my high school boys varsity tennis team to the Northern California Sectional championship. This was the first championship in the school’s entire 40+ year history. This victory was particularly sweet because we had come so close my first year in 2017 only to lose in the finals to a school 3X our size. This was another incredible life moment that had nothing to do with money. I only got paid $3,500 for 3.5 months of work. The relationships I developed with some of the parents were a nice bonus.

My dad came to visit three times and my mom twice. My mother-in-law also visited twice and my father-in-law once. It is always great to see them, and I hope they continue to visit us more often. My dream has always been to have three generations spend as much time together as possible. Unfortunately or fortunately, all our grandparents want to remain independent and live in their respective cities. It’s hard to change the older you get, which is why I’ve been trying so hard to move to Hawaii.

I further strengthened a couple friendships. This is huge because as a stay-at-home dad, it’s often hard to make new friends or deepen friendships. There are simply less social events to attend e.g. happy hour. I love having a good buddy to shoot the shit with. I also developed a new in-person relationship with an FS reader, who also so happens to also be a professional athlete on my favorite team. Pretty neat!

I did some decent home maintenance projects this year: caulked the top of our living room window sill to prevent leaks, varnished all our wood planter boxes, rooted the upstairs sink that was clogging, re-roofed the leaking light well, maintained the yard, and fixed a leaky faucet at my rental. Man, I forgot about all this stuff until my wife reminded me. Thank goodness I sold the other rental.

Finally, we finalized our will and revocable living trust. My wife also led the charge getting us through this cumbersome and complicated process. There were so many documents to gather and questions to ask the estate planning lawyer that she estimates the whole process took her about 40 hours. But after we finally signed all the documents on December 20, I felt a huge sense of relief that I could die knowing that my wife and son wouldn’t have to go through probate court.

2018: 3.8 Out Of 5 Stars

Although I didn’t decide to take it easy per my 2018 goal, I have no regrets staying consistent with Financial Samurai. I don’t think I’ll ever change my work ethic until my body starts breaking down. The joy of writing is so tangible because it is an identifiable product that can be eternally consumed.

It’s been hard to accept no longer making a positive return on my public investments after nine years of up, up, up. I’ve got to do a much better job at not letting financial loss negatively affect my mood and my relationship with my wife. Not taking unnecessary risk will help.

During downturns, I envy those in professions that have nothing to do with the stock market. For example, when I asked my estate planning lawyer about what she thought about the stock market collapse in December, she said she had no idea because she outsources all her financial planning to someone else. What a blessing.

I also have zero regrets being a stay at home dad all year. Yes, the days were long and there were many moments of frustration, but just hearing his squeals of joy made full-time fatherhood worthwhile. All I want to do is squeeze and kiss him 100X a day! I’m so thankful my wife has been an amazing mother and partner all year.

Family and Financial Samurai are my two great loves. Everything else comes in a distant second. There was a point where we thought we’d never have a child. So we say a prayer of thanks every evening. Financial Samurai has been a part of me since the bottom of the last financial crisis in 2009. It’s like an old friend that has stuck with me in the worst of times.

The key is to not let my two loves collide, but to let them be synergistic. My family gives me motivation to write, while Financial Samurai is a creative outlet that helps ensure we remain stay-at-home-parents until we decide otherwise.

There’s always a silver lining to a downturn too.

For Financial Samurai, it’s increased traffic as more people are paying attention to their finances. Book sales on how to negotiate a severance are also increasing as savvy employees are trying to get ahead of the layoff curve. Finally, our passive income has also increased due to higher interests rates and my shift towards higher yielding assets like cash, bonds, and CDs.

For family life, it’s being less tempted to go back to work because the return on effort has declined. When all is in shambles, why bother dealing with a commute, company politics, difficult clients, and a declining company stock price.

I hope if my boy one day reads this article that’ll he’ll be proud of his dad. Although 2018 wasn’t a fantastic year, it was filled with many positive milestones.

I’ll be sharing my 2019 outlook and goals next. In the meantime, I’d love to hear some of your hits and misses for 2018!

Related: The Best Financial Samurai Posts For 2018

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[samuelfields]

Financial Samurai 2018 Year In Review: Almost A Fantastic Year

Although 2018 ended on a down note with the stock market selling off, I feel good about how things unfolded. I’ll take the ratio of three good quarters to one bad quarter any year.

Believe it or not, my theme for 2018 was: back to early retirement life. I pushed myself to the point of burnout in 2017. But the funny thing about hard work is that it’s over. I only remember bits and pieces of how difficult 2017 was.

At year-end, it’s easy to forget our accomplishments and our failures. With this post, I’m excited to relive the good and the bad in the following categories: Finances, Family, Health, Business, and Odds & Ends.

This post is like a 4-for-1 special. It needs to be thorough so I can prove to my son his old man wasn’t a deadbeat when he inevitably starts rebelling or when I’m no longer here to defend myself. 

2018 Year In Review

Finances – 3 Out Of 5 Stars

At the beginning of the year, I predicted we’d see a slowdown in coastal city real estate, a 10-year bond yield under 3%, and a stock market that would have one last hurrah with a 10% return. I was almost three for three with the stock market up ~8% in September. Too bad it gave up all its gains and then a whole lot! At least I got more defensive starting in March.

My net worth is roughly made up of:

30% in stocks/bonds = -2%. After writing Your Risk Tolerance Is An Illusion in the Spring, I reduced my stock allocation in my House Sale Fund to roughly 52% from 70%. As bonds began to outperform stocks coupled with further profit taking, my end allocation is roughly 40% stocks / 60% bonds. Owning a bunch of equity structured notes in my other main fund has helped minimize volatility. But clearly I wasn’t defensive enough and should have taken more profits during the summer.

My House Sale Fund portfolio was up around 13% at one point until I gave all the gains up in the 4th quarter. Right now, it’s holding onto a tenuous 5.4% gain, after the huge rally on Dec 26. Overall, my public investment portfolio is slightly down, which violates my rule of never losing money post retirement.

I’m disappointed with my public investment performance. This goes to show that no matter how concerned you are about an asset class or the economy, greed can override logic.

Here’s a good chart that shows how the Vanguard Long-Term Bond Fund has outperformed the S&P 500 since 1999. The next time I start feeling greedy, I need to remind myself that slow and steady wins the race, especially if you’ve already passed the finish line.

6% in cash/CDs = +2.3%. Thanks to rising short-term rates, you can now get around 2% in a money market and 2.5% in a 12-month CD. It’s wonderful to earn something from our risk-free investments now. Cash and short-term CDs have been 10%+ outperformers against the S&P 500. Hopefully, folks will no longer badger me about the risks of underperforming inflation when the real risk is losing absolute dollar value. Unfortunately, I should have had closer to 15% of my net worth in cash and CDs.

30% in real estate = -5%. The online estimates say my real estate holdings have gone up ~6% YoY, but I doubt it now that the stock market has sold off so aggressively from the peak. Online price estimates and public data are always lagging estimates. Prices did continue to go up until about January 2018, but began falling for the remainder of the year. The chart below shows data months before the 4Q2018 stock market correction. Therefore, I’ve manually inputted -5% from +6% for a 11% swing.

Even though my real estate holdings are down, I thankfully feel no stress compared to my stock holdings, which is one of the reasons why I prefer real estate over stocks. One rental property has no mortgage since 2015, my primary residence is providing utility every day by sheltering my family, and my vacation property is generating a positive cash flow. I can’t wait to bring my boy up to Lake Tahoe to touch his first snow in March!

It’s unfortunate that I reinvested $600,000 of the $1,800,000 proceeds from my house sale into the stock market. I should have just stayed super conservative. But I suspect the best I could get now for the house is $2,600,000 today versus the $2,740,000 sale price in 2017. My house was on a busy street next to the busiest street in all of San Francisco. Fringe location properties, even in a good neighborhood, tend to underperform during a market softening.

8% in alternative investments = +5%. My alternative investments in venture debt and real estate crowdfunding seem to be doing well, to the tune of a 11% – 20% IRR. But these figures are probably too aggressive as well, so I’ve assigned a +5% performance instead. REITs and rental property have outperformed all year as rents are stickier than stocks. I remember back in 2009, my rents stayed flat because by the time the lease was over a year later, the recession was over.

25% in my online business = 0% – 150%. My business is the trickiest to value. Revenue and profits are up 20%+ YoY. Therefore, one might conclude that its value should also be up by 20%+. However, valuations have probably compressed since the stock market sell-off. The good thing is that a peer site with about 35% less traffic sold for 2X the value I assigned for my business in my net worth calculations. Therefore, there’s a possibility my site could be worth 2X – 2.5X my assigned value if we normalize for traffic.

From an estate planning perspective, I want my business to be valued as low as possible. It’s the same way you want your house to be valued as low as possible to pay less property tax. To prepare for hard times, I’ve kept my business at 0% growth in my net worth calculation.

Net Worth Growth

Here’s my 2018 net worth progression chart according to Personal Capital. The chart is a little chunky because of cash recognition delays. But overall, it was doing pretty well until the end of the year.

2018 Net Worth = +6.5%

The main reasons why my net worth is up ~6.5% in 2018 are business cash flow and aggressive savings. I continue to save over 70% of my after-tax income. If I didn’t aggressively save, my net worth would have been flat. As my net worth has grown, it’s harder to move the needle as much.

6.5% is OK, but at one point I was up ~11%. Hence, it feels a little disappointing. 10% YoY growth has always been my minimum net worth growth target since graduating from college. Despite the disappointment, I’m glad my net worth didn’t go in reverse.

If you’re feeling bummed out, it helps to look at how far your net worth has come over the past five or 10 years. When I left work in 2012, I was comfortable with what I had. Otherwise, I wouldn’t have left. Having another six years of growth, excluding 2018, has really been a blessing post earl retirement.

The key is to not lose all your gains to a bear market.

Related: Recommended Net Worth Allocation By Age Or Work Experience

Family & Fatherhood – 4.7 Stars

I could not have tried harder to be a great stay at home dad. I only have one shot, so I did everything to educate myself about parenthood. I also spent as much time as possible with my son as a stay at home dad.

My greatest moments of joy all year came from seeing my son’s milestones. He started waddling with help at around 11 months and slowly started to walk unassisted at 12 – 13 months. By 18 months he was able to count to 30, say all letters of the alphabet, and identify eight different colors.

His favorite words and phrases at 20 months old are “hot dog, ketchup, yum, yum, yum” “double wide garage door,” “walk with daddy,” “knock knock,” “verde,” “voila,” and “da hai bao (big seal in Mandarin).” He’s also just begun to sing a couple lullabies, one in Japanese and one in French. We try to talk to him in multiple languages as supposedly that helps brain development. He’s hilarious and full of determination. Oh boy is he determined.

When I’m not working on Financial Samurai or managing our investments, I pretend I’m a pre-school teacher and occupational therapist. Because he has a vision issue, I’ve been helping him track objects, work on his depth perception, and hand-eye coordination. So far he can walk up stairs no problem, but he still needs assistance going down stairs.

Now we’re focusing more on his fine motor skills, like drawing, holding a pencil, brushing his teeth, playing piano keys, and using scissors. The duties are never-ending, but it’s been a blessing to care for him every day and watch him grow.

He is a determined boy

My greatest sorrows have also all come from my son. Between 11 – 15 months old he would fall frequently or accidentally bonk his head on something hard or sharp. I felt his pain each time and admonished myself for not doing a better job protecting him.

As a result of his accidents, I ended up padding everywhere around the house and padding every wall and table corner. Interior design be damned! Thank goodness we live in a modest size house. The padding has saved him from injury numerous times, including on Christmas, when he stumbled on a package and hit his head on our coffee leg corner which was padded, hooray!

It turns out that toddlers between 12 – 19 months fall about 17X an hour on average according to one study of 120 toddlers. Only until about age 4 do most toddlers fully master their walking and running skills. That made me feel a little better, but it still made me so sad whenever he hurt himself. Taking him for a walk with a harness has helped tremendously. I’m teaching him to look both ways before crossing the street.

It’s also interesting it takes up to 24 months before a toddler’s fontanel closes. Therefore, we as parents might as well be as diligent as possible in trying to protect his head before his skull gets to full strength. So much about about parenthood the first several years is about survival – from preventing suffocation while sleeping to making sure they don’t walk off a ledge.

The better our boy sleeps and the more he is able to communicate his desires, the more rewarding parenthood has become. Because he is so strong-willed, his temper tantrums are also quite a challenge.

One of my concerns is that he will hurt himself during these temper tantrums by banging his head on something hard or arching his back and hurting himself on the floor. Doctors say temper tantrums peak by around 24 months, subside, and then rise again at around 36 months. Here’s where I need to demonstrate maximum patience as a parent for the next 18 months.

Before my son was born, there was never any whining or crying around the house. But once he arrived, I have heard crying and whining every day, multiple times a day for 20 months in a row. Unfortunately, there is no logical reasoning with a young boy, except to use a technique called “caveman speak” while voicing what we think he wants to calm him down. Adjusting to this new scenario has been hard.

It’s also difficult to write, record a podcast, or mentally relax when there is so much noise. Being able to more easily find a quiet space is one of the benefits of upgrading to a larger house. As a result of needing to find quiet time, I often had to wake up between 4am – 5am to get things done. But I’m proud to say I’ve never lost my temper around my boy.

I’ve still got to improve my patience with my wife and not let business stress or stock market stress hurt our relationship. We operate at different paces, and I need to do a better job slowing down. The whole point of financial independence is to be free from money stress to live your best life.

Given my wife is a full-time mom and absolutely does more of the caregiving, the pressure is on me to make sure our finances never go in reverse. As the stock market melted down in 4Q2018, my stress level definitely increased.

Our goal is to both stay full-time parents for at least our son’s first two years of life and ideally try to be full-time parents for five years before he attends kindergarten. Fatherhood is the hardest thing I’ve ever had to do.

Related: How To Survive The Pressures Of Being A Sole Income Providing Parent

Health & Fitness – 3.2 Stars

I’m the same weight as I was in 2017, which is OK. But I gained 5 lbs in 2017, which was not OK. I need to get down to 162 lbs from 170 lbs. At least I exercised 3X a week on average plus took light walks with my son 5X a week on average. Given my goal is to live until 75, or whenever my son can establish himself and find a life partner, it’s important for me to stay in mental and physical shape.

Luckily, I’ve had no serious injuries or medical mishaps this year. I did catch some flu-like virus that knocked me out for 1.5 days in October, but that was it. We did have our first emergency room visit for my son at 5am because he seemed to have come down with a similar virus I had a month later. We also went to an after-hour care facility for some inflammation. Luckily, things got better after 24 hours.

At 41, I still haven’t sprouted any grey hairs, which is a surprise since I first got several grey hairs at 33, the year before I left my day job. The only reason I can imagine for this phenomena is that not working a full-time job is less stressful. It’s one thing to say how much better life is after achieving financial independence. It’s another thing for the body to show us.

My most fun physical addition has been joining a softball meetup group that plays every Saturday it doesn’t rain. I must have played over 30 games in 2018. Ah, now I remember sustaining a left knee bone contusion that hurt for six months. My personal highlight was drafting and captaining a 4th of July softball tournament and winning. Curiously, it was one of my most satisfying life moments!

Finally, I found out in December I wasn’t getting bumped down to 4.5 in USTA tennis from 5.0. I did poorly in 5.0 league at the beginning of the year and was hoping to get bumped down after three seasons. When I didn’t, I appealed and got denied.

5.0 level tennis is brutally tough. From an ego perspective, it does feel good to be in the top 1% of all tennis levels. Other players give you respect as you puff out your chest and start thinking you’re the shiznits. But after you start repeatedly getting beaten by players younger than you, it starts to get demoralizing! Therefore, I always try to make fun of myself to others by saying the computers must have malfunctioned to keep me at 5.0.

Business – 4.8 Stars

I could not have tried harder to build Financial Samurai either. Here are some of the accomplishments:

Published three posts a week on average

Published three pages a week on average

Published one newsletter a week on average

Improved my short-form writing skills with the newsletter

Produced over 40 podcasts

Did several podcast interviews on other platforms

Launched the Financial Samurai Forum with 1,300 members thanks to my wife who set everything up over a year

Got mentioned in Business Insider, CNBC, MarketWatch, MSN, Apple News, Forbes, and Yahoo

Updated How To Engineer Your Layoff with a new forward for 2019

Increased overall traffic by 20% YoY, with 50% YoY traffic growth between August 11 – December 27

The 50% YoY traffic surge since August 11 seems like an anomaly. It’s like suddenly turning into a speedboat after being a cruise ship. But traffic has been elevated for almost four months so far, with December being the highest traffic all year. For years, December has always been a quiet month due to the holidays. Perhaps the traffic increase is due to a combination of more production, search algorithm changes by Google, and content syndication.

Overall, I’m just really happy there’s been a correlation with effort and reward. That’s all I’ve ever wanted, hence part of the reason why I left work in 2012. Every year since the birth of Financial Samurai in 2009, Financial Samurai has drastically outperformed the S&P 500 and the San Francisco real estate market. As a result, blogging has surpassed real estate as my favorite asset class to build wealth.

For poops and giggles, here’s another net worth chart if I manually input a business value based on recent comparable sales. The 30% spike is nice, but is also dangerous because it brings a false sense of complacency. It’s best to stay motivated as the economy softens. Just know that creating next level wealth is all about owning growth equity over the long term.

Net worth including market value of business = +30% YoY

Life’s Odds & Ends – 4 Stars

In May, I helped coach my high school boys varsity tennis team to the Northern California Sectional championship. This was the first championship in the school’s entire 40+ year history. This victory was particularly sweet because we had come so close my first year in 2017 only to lose in the finals to a school 3X our size. This was another incredible life moment that had nothing to do with money. I only got paid $3,500 for 3.5 months of work. The relationships I developed with some of the parents were a nice bonus.

My dad came to visit three times and my mom twice. My mother-in-law also visited twice and my father-in-law once. It is always great to see them, and I hope they continue to visit us more often. My dream has always been to have three generations spend as much time together as possible. Unfortunately or fortunately, all our grandparents want to remain independent and live in their respective cities. It’s hard to change the older you get, which is why I’ve been trying so hard to move to Hawaii.

I further strengthened a couple friendships. This is huge because as a stay-at-home dad, it’s often hard to make new friends or deepen friendships. There are simply less social events to attend e.g. happy hour. I love having a good buddy to shoot the shit with. I also developed a new in-person relationship with an FS reader, who also so happens to also be a professional athlete on my favorite team. Pretty neat!

I did some decent home maintenance projects this year: caulked the top of our living room window sill to prevent leaks, varnished all our wood planter boxes, rooted the upstairs sink that was clogging, re-roofed the leaking light well, maintained the yard, and fixed a leaky faucet at my rental. Man, I forgot about all this stuff until my wife reminded me. Thank goodness I sold the other rental.

Finally, we finalized our will and revocable living trust. My wife also led the charge getting us through this cumbersome and complicated process. There were so many documents to gather and questions to ask the estate planning lawyer that she estimates the whole process took her about 40 hours. But after we finally signed all the documents on December 20, I felt a huge sense of relief that I could die knowing that my wife and son wouldn’t have to go through probate court.

2018: 3.8 Out Of 5 Stars

Although I didn’t decide to take it easy per my 2018 goal, I have no regrets staying consistent with Financial Samurai. I don’t think I’ll ever change my work ethic until my body starts breaking down. The joy of writing is so tangible because it is an identifiable product that can be eternally consumed.

It’s been hard to accept no longer making a positive return on my public investments after nine years of up, up, up. I’ve got to do a much better job at not letting financial loss negatively affect my mood and my relationship with my wife. Not taking unnecessary risk will help.

During downturns, I envy those in professions that have nothing to do with the stock market. For example, when I asked my estate planning lawyer about what she thought about the stock market collapse in December, she said she had no idea because she outsources all her financial planning to someone else. What a blessing.

I also have zero regrets being a stay at home dad all year. Yes, the days were long and there were many moments of frustration, but just hearing his squeals of joy made full-time fatherhood worthwhile. All I want to do is squeeze and kiss him 100X a day! I’m so thankful my wife has been an amazing mother and partner all year.

Family and Financial Samurai are my two great loves. Everything comes a distant second. There was a point where we thought we’d never have a child. So we say a prayer of thanks every evening. Financial Samurai has been a part of me since the bottom of the last financial crisis in 2009. It’s like an old friend that has stuck with me in the worst of times.

The key is to not let my two loves collide, but to let them be synergistic. My family gives me motivation to write, while Financial Samurai is a creative outlet that helps ensure we remain stay-at-home-parents until we decide otherwise.

There’s always a silver lining to a downturn too.

For Financial Samurai, it’s increased traffic as more people are paying attention to their finances. Book sales on how to negotiate a severance are also increasing as savvy employees are trying to get ahead of the layoff curve. Finally, our passive income has also increased due to higher interests rates and my shift towards higher yielding assets like cash, bonds, and CDs.

For family life, it’s being less tempted to go back to work because the return on effort has declined. When all is in shambles, why bother dealing with a commute, company politics, difficult clients, and a declining company stock price.

I hope if my boy one day reads this article that’ll he’ll be proud of his dad. Although 2018 wasn’t a fantastic year, it was filled with many positive milestones.

I’ll be sharing my 2019 outlook and goals next. In the meantime, I’d love to hear some of your hits and misses for 2018!

Related: The Best Financial Samurai Posts For 2018

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Financial Samurai 2018 Year In Review: Almost A Fantastic Year

Although 2018 ended on a down note with the stock market selling off, I feel good about how things unfolded. I’ll take the ratio of three good quarters to one bad quarter any year.

Believe it or not, my theme for 2018 was: back to early retirement life. I pushed myself to the point of burnout in 2017. But the funny thing about hard work is that it’s over. I only remember bits and pieces of how difficult 2017 was.

At year-end, it’s easy to forget our accomplishments and our failures. With this post, I’m excited to relive the good and the bad in the following categories: Finances, Family, Health, Business, and Odds & Ends.

This post is like a 4-for-1 special. It needs to be thorough so I can prove to my son his old man wasn’t a deadbeat when he inevitably starts rebelling or when I’m no longer here to defend myself. 

2018 Year In Review

Finances – 3 Out Of 5 Stars

At the beginning of the year, I predicted we’d see a slowdown in coastal city real estate, a 10-year bond yield under 3%, and a stock market that would have one last hurrah with a 10% return. I was almost three for three with the stock market up ~8% in September. Too bad it gave up all its gains and then a whole lot! At least I got more defensive starting in March.

My net worth is roughly made up of:

30% in stocks/bonds = -1.5%. After writing Your Risk Tolerance Is An Illusion in the Spring, I reduced my stock allocation in my House Sale Fund to roughly 52% from 70%. As bonds began to outperform stocks coupled with further profit taking, my end allocation is roughly 40% stocks / 60% bonds. Owning a bunch of equity structured notes in my other main fund has helped minimize volatility. But clearly I wasn’t defensive enough and should have taken more profits during the summer.

My House Sale Fund portfolio was up around 13% at one point until I gave all the gains up in the 4th quarter. Right now, it’s holding onto a tenuous 0.6% gain, excluding the huge rally on Dec 26. Overall, my public investment portfolio is slightly down, which violates my rule of never losing money post retirement.

House Sale Fund Portfolio went from +13% to just +0.6%

I’m disappointed with my public investment portfolio performance. This goes to show that no matter how concerned you are about an asset class or the economy, greed can override logic.

Here’s a good chart that shows how the Vanguard Long-Term Bond Fund has outperformed the S&P 500 since 1999. The next time I start feeling greedy, I need to remind myself that slow and steady wins the race, especially if you’ve already passed the finish line.

6% in cash/CDs = +2.3%. Thanks to rising short-term rates, you can now get around 2% in a money market and 2.5% in a 12-month CD. It’s wonderful to earn something from our risk-free investments now. Cash and short-term CDs have been 10%+ outperformers against the S&P 500. Hopefully, folks will no longer badger me about the risks of underperforming inflation when the real risk is losing absolute dollar value. Unfortunately, I should have had closer to 15% of my net worth in cash and CDs.

30% in real estate = -5%. The online estimates say my real estate holdings have gone up ~6% YoY, but I doubt it now that the stock market has sold off so aggressively from the peak. Online price estimates and public data are always lagging estimates. Prices did continue to go up until about January 2018, but began falling for the remainder of the year. The chart below shows data months before the 4Q2018 stock market correction. Therefore, I’ve manually inputted -5% from +6% for a 11% swing.

Even though my real estate holdings are down, I thankfully feel no stress compared to my stock holdings, which is one of the reasons why I prefer real estate over stocks. One rental property has no mortgage since 2015, my primary residence is providing utility every day by sheltering my family, and my vacation property is generating a positive cash flow. I can’t wait to bring my boy up to Lake Tahoe to touch his first snow in March!

It’s unfortunate that I reinvested $600,000 of the $1,800,000 proceeds from my house sale into the stock market. I should have just stayed super conservative. But I suspect the best I could get now for the house is $2,600,000 today versus the $2,740,000 sale price in 2017. My house was on a busy street next to the busiest street in all of San Francisco. Fringe location properties, even in a good neighborhood, tend to underperform during a market softening.

8% in alternative investments = +5%. My alternative investments in venture debt and real estate crowdfunding seem to be doing well, to the tune of a 11% – 20% IRR. But these figures are probably too aggressive as well, so I’ve assigned a +5% performance instead. REITs and rental property have outperformed all year as rents are stickier than stocks. I remember back in 2009, my rents stayed flat because by the time the lease was over a year later, the recession was over.

25% in my online business = 0% – 150%. My business is the trickiest to value. Revenue and profits are up 20%+ YoY. Therefore, one might conclude that its value should also be up by 20%+. However, valuations have probably compressed since the stock market sell-off. The good thing is that a peer site with about 35% less traffic sold for 2X the value I assigned for my business in my net worth calculations. Therefore, there’s a possibility my site could be worth 2X – 2.5X my assigned value if we normalize for traffic.

From an estate planning perspective, I want my business to be valued as low as possible. It’s the same way you want your house to be valued as low as possible to pay less property tax. To prepare for hard times, I’ve kept my business at 0% growth in my net worth calculation.

Net Worth Growth

Here’s my 2018 net worth progression chart according to Personal Capital. The chart is a little chunky because of cash recognition delays. But overall, it was doing pretty well until the end of the year.

2018 Net Worth = +6.5%

The main reasons why my net worth is up ~6.5% in 2018 are business cash flow and aggressive savings. I continue to save over 70% of my after-tax income. If I didn’t aggressively save, my net worth would have been flat. As my net worth has grown, it’s harder to move the needle as much.

6.5% is OK, but at one point I was up ~11%. Hence, it feels a little disappointing. 10% YoY growth has always been my minimum net worth growth target since graduating from college. Despite the disappointment, I’m glad my net worth didn’t go in reverse.

If you’re feeling bummed out, it helps to look at how far your net worth has come over the past five or 10 years. When I left work in 2012, I was comfortable with what I had. Otherwise, I wouldn’t have left. Having another six years of growth, excluding 2018, has really been a blessing post earl retirement.

The key is to not lose all your gains to a bear market.

Related: Recommended Net Worth Allocation By Age Or Work Experience

Family & Fatherhood – 4.7 Stars

I could not have tried harder to be a great stay at home dad. I only have one shot, so I did everything to educate myself about parenthood. I also spent as much time as possible with my son as a stay at home dad.

My greatest moments of joy all year came from seeing my son’s milestones. He started waddling with help at around 11 months and slowly started to walk unassisted at 12 – 13 months. By 18 months he was able to count to 30, say all letters of the alphabet, and identify eight different colors.

His favorite words and phrases at 20 months old are “hot dog, ketchup, yum, yum, yum” “double wide garage door,” “walk with daddy,” “knock knock,” “verde,” “voila,” and “da hai bao (big seal in Mandarin).” He’s also just begun to sing a couple lullabies, one in Japanese and one in French. We try to talk to him in multiple languages as supposedly that helps brain development. He’s hilarious and full of determination. Oh boy is he determined.

When I’m not working on Financial Samurai or managing our investments, I pretend I’m a pre-school teacher and occupational therapist. Because he has a vision issue, I’ve been helping him track objects, work on his depth perception, and hand-eye coordination. So far he can walk up stairs no problem, but he still needs assistance going down stairs.

Now we’re focusing more on his fine motor skills, like drawing, holding a pencil, brushing his teeth, playing piano keys, and using scissors. The duties are never-ending, but it’s been a blessing to care for him every day and watch him grow.

He is a determined boy

My greatest sorrows have also all come from my son. Between 11 – 15 months old he would fall frequently or accidentally bonk his head on something hard or sharp. I felt his pain each time and admonished myself for not doing a better job protecting him.

As a result of his accidents, I ended up padding everywhere around the house and padding every wall and table corner. Interior design be damned! Thank goodness we live in a modest size house. The padding has saved him from injury numerous times, including on Christmas, when he stumbled on a package and hit his head on our coffee leg corner which was padded, hooray!

It turns out that toddlers between 12 – 19 months fall about 17X an hour on average according to one study of 120 toddlers. Only until about age 4 do most toddlers fully master their walking and running skills. That made me feel a little better, but it still made me so sad whenever he hurt himself. Taking him for a walk with a harness has helped tremendously. I’m teaching him to look both ways before crossing the street.

It’s also interesting it takes up to 24 months before a toddler’s fontanel closes. Therefore, we as parents might as well be as diligent as possible in trying to protect his head before his skull gets to full strength. So much about about parenthood the first several years is about survival – from preventing suffocation while sleeping to making sure they don’t walk off a ledge.

The better our boy sleeps and the more he is able to communicate his desires, the more rewarding parenthood has become. Because he is so strong-willed, his temper tantrums are also quite a challenge.

One of my concerns is that he will hurt himself during these temper tantrums by banging his head on something hard or arching his back and hurting himself on the floor. Doctors say temper tantrums peak by around 24 months, subside, and then rise again at around 36 months. Here’s where I need to demonstrate maximum patience as a parent for the next 18 months.

Before my son was born, there was never any whining or crying around the house. But once he arrived, I have heard crying and whining every day, multiple times a day for 20 months in a row. Unfortunately, there is no logical reasoning with a young boy, except to use a technique called “caveman speak” while voicing what we think he wants to calm him down. Adjusting to this new scenario has been hard.

It’s also difficult to write, record a podcast, or mentally relax when there is so much noise. Being able to more easily find a quiet space is one of the benefits of upgrading to a larger house. As a result of needing to find quiet time, I often had to wake up between 4am – 5am to get things done. But I’m proud to say I’ve never lost my temper around my boy.

I’ve still got to improve my patience with my wife and not let business stress or stock market stress hurt our relationship. We operate at different paces, and I need to do a better job slowing down. The whole point of financial independence is to be free from money stress to live your best life.

Given my wife is a full-time mom and absolutely does more of the caregiving, the pressure is on me to make sure our finances never go in reverse. As the stock market melted down in 4Q2018, my stress level definitely increased.

Our goal is to both stay full-time parents for at least our son’s first two years of life and ideally try to be full-time parents for five years before he attends kindergarten. Fatherhood is the hardest thing I’ve ever had to do.

Related: How To Survive The Pressures Of Being A Sole Income Providing Parent

Health & Fitness – 3.2 Stars

I’m the same weight as I was in 2017, which is OK. But I gained 5 lbs in 2017, which was not OK. I need to get down to 162 lbs from 170 lbs. At least I exercised 3X a week on average plus took light walks with my son 5X a week on average. Given my goal is to live until 75, or whenever my son can establish himself and find a life partner, it’s important for me to stay in mental and physical shape.

Luckily, I’ve had no serious injuries or medical mishaps this year. I did catch some flu-like virus that knocked me out for 1.5 days in October, but that was it. We did have our first emergency room visit for my son at 5am because he seemed to have come down with a similar virus I had a month later. We also went to an after-hour care facility for some inflammation. Luckily, things got better after 24 hours.

At 41, I still haven’t sprouted any grey hairs, which is a surprise since I first got several grey hairs at 33, the year before I left my day job. The only reason I can imagine for this phenomena is that not working a full-time job is less stressful. It’s one thing to say how much better life is after achieving financial independence. It’s another thing for the body to show us.

My most fun physical addition has been joining a softball meetup group that plays every Saturday it doesn’t rain. I must have played over 30 games in 2018. Ah, now I remember sustaining a left knee bone contusion that hurt for six months. My personal highlight was drafting and captaining a 4th of July softball tournament and winning. Curiously, it was one of my most satisfying life moments!

Finally, I found out in December I wasn’t getting bumped down to 4.5 in USTA tennis from 5.0. I did poorly in 5.0 league at the beginning of the year and was hoping to get bumped down after three seasons. When I didn’t, I appealed and got denied.

5.0 level tennis is brutally tough. From an ego perspective, it does feel good to be in the top 1% of all tennis levels. Other players give you respect as you puff out your chest and start thinking you’re the shiznits. But after you start repeatedly getting beaten by players younger than you, it starts to get demoralizing! Therefore, I always try to make fun of myself to others by saying the computers must have malfunctioned to keep me at 5.0.

Business – 4.8 Stars

I could not have tried harder to build Financial Samurai either. Here are some of the accomplishments:

Published three posts a week on average

Published three pages a week on average

Published one newsletter a week on average

Improved my short-form writing skills with the newsletter

Produced over 50 podcasts

Did several podcast interviews on other platforms

Launched the Financial Samurai Forum with 1,300 members thanks to my wife who set everything up over a year

Got mentioned in Business Insider, CNBC, MarketWatch, MSN, Apple News, Forbes, and Yahoo

Updated How To Engineer Your Layoff with a new forward

Increased overall traffic by 20% YoY, with 50% YoY traffic growth between August 11 – December 27

The 50% YoY traffic surge since August 11 seems like an anomaly. It’s like suddenly turning into a speedboat after being a cruise ship. But traffic has been elevated for almost four months so far, with December being the highest traffic all year. For years, December has always been a quiet month due to the holidays. Perhaps the traffic increase is due to a combination of more production, search algorithm changes by Google, and content syndication.

Overall, I’m just really happy there’s been a correlation with effort and reward. That’s all I’ve ever wanted, hence part of the reason why I left work in 2012. Every year since the birth of Financial Samurai in 2009, Financial Samurai has drastically outperformed the S&P 500 and the San Francisco real estate market. As a result, blogging has surpassed real estate as my favorite asset class to build wealth.

For poops and giggles, here’s another net worth chart if I manually input a business value based on recent comparable sales. The 30% spike is nice, but is also dangerous because it brings a false sense of complacency. It’s best to stay motivated as the economy softens.

Net worth including market value of business = +30% YoY

Life’s Odds & Ends – 4 Stars

In May, I helped coach my high school boys varsity tennis team to the Northern California Sectional championship. This was the first championship in the school’s entire 40+ year history. This victory was particularly sweet because we had come so close my first year in 2017 only to lose in the finals to a school 3X our size. This was another incredible life moment that had nothing to do with money. I only got paid $3,500 for 3.5 months of work. The relationships I developed with some of the parents were a nice bonus.

My dad came to visit three times and my mom twice. My mother-in-law also visited twice and my father-in-law once. It is always great to see them, and I hope they continue to visit us more often. My dream has always been to have three generations spend as much time together as possible. Unfortunately or fortunately, all our grandparents want to remain independent and live in their respective cities. It’s hard to change the older you get, which is why I’ve been trying so hard to move to Hawaii.

I further strengthened a couple friendships. This is huge because as a stay-at-home dad, it’s often hard to make new friends or deepen friendships. There are simply less social events to attend e.g. happy hour. I love having a good buddy to shoot the shit with. I also developed a new in-person relationship with an FS reader, who also so happens to also be a professional athlete on my favorite team. Pretty neat!

I did some decent home maintenance projects this year: caulked the top of our living room window sill to prevent leaks, varnished all our wood planter boxes, rooted the upstairs sink that was clogging, re-roofed the leaking light well, maintained the yard, and fixed a leaky faucet at my rental. Man, I forgot about all this stuff until my wife reminded me. Thank goodness I sold the other rental.

Finally, we finalized our will and revocable living trust. My wife also led the charge getting us through this cumbersome and complicated process. There were so many documents to gather and questions to ask the estate planning lawyer that she estimates the whole process took her about 40 hours. But after we finally signed all the documents on December 20, I felt a huge sense of relief that I could die knowing that my wife and son wouldn’t have to go through probate court.

2018: 3.8 Out Of 5 Stars

Although I didn’t decide to take it easy per my 2018 goal, I have no regrets staying consistent with Financial Samurai. I don’t think I’ll ever change my work ethic until my body starts breaking down. The joy of writing is so tangible because it is an identifiable product that can be eternally consumed.

It’s been hard to accept no longer making a positive return on my public investments after nine years of up, up, up. I’ve got to do a much better job at not letting financial loss negatively affect my mood and my relationship with my wife. Not taking unnecessary risk will help.

During downturns, I envy those in professions that have nothing to do with the stock market. For example, when I asked my estate planning lawyer about what she thought about the stock market collapse in December, she said she had no idea because she outsources all her financial planning to someone else. What a blessing.

I also have zero regrets being a stay at home dad all year. Yes, the days were long and there were many moments of frustration, but just hearing his squeals of joy made full-time fatherhood worthwhile. All I want to do is squeeze and kiss him 100X a day! I’m so thankful my wife has been an amazing mother and partner all year.

Family and Financial Samurai are my two great loves. Everything comes a distant second. There was a point where we thought we’d never have a child. So we say a prayer of thanks every evening. Financial Samurai has been a part of me since the bottom of the last financial crisis in 2009. It’s like an old friend that has stuck with me in the worst of times.

The key is to not let my two loves collide, but to let them be synergistic. My family gives me motivation to write, while Financial Samurai is a creative outlet that helps ensure we remain stay at home parents until we decide otherwise.

There’s always a silver lining to a downturn too.

For Financial Samurai, it’s increased traffic as more people are paying attention to their finances. Book sales on how to negotiate a severance are also increasing as savvy employees are trying to get ahead of the layoff curve. Finally, our passive income has also increased due to higher interests rates and my shift towards higher yielding assets like cash, bonds, and CDs.

For family life, it’s being less tempted to go back to work because the return on effort has declined. When all is in shambles, why bother dealing with a commute, company politics, difficult clients, and a declining company stock price.

I hope if my boy one day reads this article that’ll he’ll be proud of his dad. Although 2018 wasn’t a fantastic year, it was filled with many positive milestones.

I’ll be sharing my 2019 outlook and goals next. In the meantime, I’d love to hear some of your hits and misses for 2018!

Related: The Best Financial Samurai Posts For 2018

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