Financial Samurai

https://www.financialsamurai.com/best-time-to-start-a-business-is-duri… “ The Best Time To Start A Business Is During A Downturn”

I always share and discuss this link with friends and family https://www.financialsamurai.com/the-110th-rule-for-car-buying-everyon… I bought a one year old used Mazda 3 from Hertz for 11k out the door. It had a few scratches and 40k miles. It still had that new car smell.

And children who don't have parents with resources to "alternative models," deserve poor education? (I'm assuming you mean a stay-at-home parent who chooses to teach home-schooling because all that's necessary for the survival of this theoretical family is only 1 income earner, not 2). For reference, this is NOT an insignificant percentage of the US population [1]. 1 - https://www.financialsamurai.com/the-median-net-worth-of-us-households…

It's nice that you have such a great perspective on who "everyone" is. It's self-reported and thus probably well underestimated, but only 55% of Americans say they own stock[0]. And 84% of the total stock belongs to 10% of the people[1]. [0] https://www.financialsamurai.com/what-percent-of-americans-own-stocks/ [1] https://www.nytimes.com/2018/02/08/business/economy/stocks-economy.htm…

Part of the problem is that the economic changes have been very uneven, and I don't mean in the "social inequality" sense, I mean, the price increases are very uneven: https://www.financialsamurai.com/wp-content/uploads/2016/08/Inflation-… If you want to buy a big TV and a phone, now is the best time in history. If you want a college degree, some childcare, and some medical care, it's going to cost you a lot more than it did your parents. The other problem is that even putting sarcasm about TVs vs. health care aside, things that increase in price by 125% loom a lot larger in your budget than things that decreased by 80%, just by the sheer numerical weight. Saving $9500 on a TV (not to mention you wouldn't have even bought such a large one if they weren't so cheap to begin with) doesn't make up for the house you want costing $100,000 more.

> It's a world where a 10-20% can afford the "whatever" (e.g. best phone, live in NY/Bay area, university degree not so sure about that line. Many of the whatevs are scraping by. https://www.financialsamurai.com/scraping-by-on-500000-a-year-high-inc…

That is across all ages and I would guess that few here are seniors. At 35 the top 1% is $2.3m. So many here may be more wealthy than you realize. https://www.financialsamurai.com/the-top-one-percent-net-worth-levels-…

One big difference is that many men feel obligated to buy expensive diamond engagement rings to their pretenders to "show his love", i.e., the three salary rule[1]. This kind of cultural/social pressure was built from a long history of, one could say brilliant, marketing campaigns. [1] https://www.financialsamurai.com/the-new-rule-for-engagement-ring-buyi…

Yeah I know right? I read this article on this amazing blog, which talked about making 6 figures income and still not feeling rich. https://www.financialsamurai.com/how-to-make-six-figures-a-year-and-no… Interesting read!

"My sense was that, given the rate at which people typically move, it's normally a wash." The difference between renting and buying isn't just the monthly payment. It's also the range of outcomes. If you buy a place with 20% down, and the property price goes up by 20% whilst you're living there, you've doubled your net worth. In some US states (e.g. California) mortgages are nonrecourse[0], so it's a bit with unlimited upside, but capped downside. If the property price crashes to 50% of the purchase price, you can walk away, losing only your initial deposit. [0] http://www.financialsamurai.com/non-recourse-states-walk-away-from-mor…

> At any rate the median new car price, if we could get it, would be much more telling. Sadly I can't find it anywhere. The best I can find is $24000 [1], which sounds believable. But that's not referenced. There's a lot of articles stating that most people actually can't afford new cars [2]. Those articles, and studies they're talking about, are comparing median income and average car price, though. [1] http://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone… [2] http://www.nytimes.com/2016/07/02/your-money/new-cars-are-too-expensiv…

Throughout this thread I've argued that most people do not spend $40k on a car. That really shouldn't be controversial, since it's easily verified. If you want controversial, here you go: a lot of people in this thread own cars that cost $40k and up on a salary that doesn't justify it. They think they can justify it. Everyone is telling them they can afford it. Their friends all have similar salaries and similar cars. But they're spending too much. http://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone…

> The whole country is a gigantic house of cards propped up by real estate, with horrible service quality, terrible healthcare, no jobs, ZERO innovation, risk taking and entrepreneurship. This is so true it hurts. And while there's some numbers that outsiders can look at and gasp[0] at how absurd it's become, there's a whole lot that isn't being tracked or documented. Official immigration numbers are ~0.5mn for 2023, but (and I've seen it elsewhere, but I can't find it right now) if you use a common sense definition that includes all inflow (e.g. asylum seekers, tfw, foreign students, etc) then it's 1mn+. It's insane for a country of <40mn, with highly socialized services. The quality of life in Canada is horrid in a way that's not comparable to anywhere else other than maybe australia. Everything is silly expensive, with low salaries, and it's not like in europe where you can travel 3 hours to go somwehere with cheaper services. It's crazy. Or what about crime, the right wing, tough on crime party leader yesterday said that if someone has 3 convictions for car theft that it should mean 3 years. It's no wonder that I know some crazy personal stories about people getting their cars stolen and the police doing nothing. Anyways, I don't want to rant even more, all I can hope is that for younger people in Canada to realize that the best thing they can do is hop to the US or something. [0]…

Obviously I would need to buy the author's book and subscribe to his newsletter. Sarcasm aside we had such an opportunity just a year ago: crypto and NFT. High risk that potentially would've matched his 3000->150000 (50x) return. It was in the open, in all tech news channels, available to anyone with a bit of money. Ok, most lost money it seems but it's the kind of opportunity the author talks about. In https://web.archive.org/web/20210426154653/https://www.financialsamura… he talks about NFTs, too, with instructions how to buy them. There is a section on caution and skepticism, too. "Now you know a bunch of stuff about non-fungible tokens. We covered what an NFT is and isn’t, how they started, why they’re booming, skeptics’ concerns, how to buy one, and how to create and sell an NFT of your own." That was 2021. Later the author changed the article https://www.financialsamurai.com/what-are-nfts/ and adds more skepticism and "Invest In Real Assets Instead" which conveniently links to his platform "Personally, I’d much rather buy real assets like real estate than NFTs"

For a long time, Google Finance [1] & SeekingAlpha [2] were great sources of content on financial information. The former had great charting/data, but it is completely changed now. The latter, although it was not targeted towards beginners, provided a great amount of value in both articles, has depth of coverage across asset clasess, and the comments sections, but the site is now paywalled.. Mr Money Moustache [3] & Financial Samurai [4] are both good sources of Financial Independence type of content. I used this in conjunction with: r/personalfinance (great for thinking about spend to saving/investment ratios) r/wallstreetbets (best for binary bets and high opportunity situations - only use with a speculative small percent ) r/realestateinvesting (all RE of course) r/investing (general stuff) There are a number of high quality videos on Youtube that I have found to be particularly good, depending on your own financial situation. Dave Ramsey, although maligned, is great for those with debt problems. I have no debt, and so his content has limited application for me. I also read Investopedia [5] for general terms, Tastytrade [6] for options coverage, and many brokers provide a large amount of free content to understand investments. [1] https://www.google.com/finance/ [2] https://seekingalpha.com/ [3] https://www.mrmoneymustache.com/ [4] https://www.financialsamurai.com/ [5] https://www.investopedia.com/ [6] https://www.tastytrade.com/

1. the Pew linked source you give shows numbers in constant 2018 (inflation adjusted) dollars. You seem to be saying in your comment here that the median family in 1970 was making $58,700 in 1970 dollars. It was $9,870 in 1970 dollars per the US Census: https://www.census.gov/library/publications/1971/demo/p60-78.html 2: It's interesting to look at debt, but net worth gives a more complete picture as larger assets can offset larger debts. On this front things we're looking pretty rosy for the median US household up until 2007, when the Great Recession roughly halved household net worth and hasn't seen a recovery since: https://www.financialsamurai.com/the-median-net-worth-of-us-households… - the "good news" is that things aren't worse than where they were in the 60's in inflation-adjusted terms. The terrible news is the truly astonishing racial gaps in household median net worth: https://www.taxpolicycenter.org/fiscal-fact/median-value-wealth-race-f…

I’m not sure I’d do the math the same way. First, it seems to me that the median household income is a better number, as most people share expenses and many households have two incomes. That seems to me to better inform ability to get by. In Washington, that’s $70k.[1] Half that is $35k, or just shy of $3k/month. With ACA subsidies, a person in that situation won’t likely be paying $400/month in health insurance. The max for a family of four at $35k is actually $1300 per year, or a little over $100/month, and an individual at $35k is closer to $200.[2] $2800/month is not a great deal of money, but it’s not living in squalor. And, as you say, it depends on location. A high proportion of of those people will not be living in Seattle, but rather rural areas where the cost of living is cheaper. The median household income in Seattle is closer to $85k. Also note that federal after taxes income after accounting for transfers actually goes up for the second quintile.[3] [1] https://www.deptofnumbers.com/income/washington/ [2] https://www.financialsamurai.com/subsidy-amounts-by-income-limits-for-… [3] https://taxfoundation.org/average-federal-tax-rates-income-group/

I feel like all of your statements contain errors and all these errors happen to benefit the pro-owning view. So I primarily spent my time addressing the errors. I think you kept waiting for me to explain why housing is a bad investment but that was never my point of view. I think people are way too confident on their housing investment. Some FUD is good. > If you have one and feel like it, I'd still love to see a detailed scenario that is easy for a normal person to achieve where renting exceeds buying over a 10 or 20 year term. I recommend that you understand what that NYT calculator does exactly then punch in the numbers for your area and see if you can find rent for the given amount. It really seems to come down to how bullish you are on your local housing market vs your stock portfolio. Plus the premium you are willing to pay for mobility vs the premium for extra space and a yard. As a side not, according to [1] only 37% of Americans live in their house for more than 10 years. The median is 8.7 years. >> It makes no sense to compare renting + no investments to owning with lots of money in equity. > So, just curious, why did you share and defend the calculator that does exactly this? I think you are mistaken about the NYT calculator, it does exactly (1). >> economies of scale keep rental unit maintenance fees lower. > FWIW, that's not what the calculator claims - it states explicitly calculating house rentals comparable to purchases, where there is no economy of…

New Tires is a very strange (and illogical) reason to purchase a new vehicle. How is that any more frustrating than filling your gas tank when it's empty? All vehicles (used, new, gas, electric) need new tires after x amount of miles. This is a regular and expected maintenance item that all vehicle owners must deal with. It would be a different story if a critical component like your transmission unexpectedly went out well before it's life expectancy. Honestly, if you consider $1,000 on new tires to be a frustrating expense, then you really can't afford to purchase new cars in the first place. A new vehicle is a multiple of the cost of new tires and even more so when the balance of your last vehicle is rolled into the new financing and spread out over payments with interest. I worked at a car dealership while in college. There's a reason the "finance guy" drove a 10+ year old Honda that he paid cash for. http://www.mrmoneymustache.com/2011/11/28/new-cars-and-auto-financing-… http://www.financialsamurai.com/the-110th-rule-for-car-buying-everyone…

If you're under 40 years old, it's better to invest entirely in growth stocks over dividend stocks[1]. In theory, dividends are a great source of passive income, but with effective yields of 2-3% you'd need a lot of capital to generate any meaningful income, i.e., a $1M investment would pay around $30,000 annually. Dividend stocks have never performed that well; they never appreciate 10-20x like certain growth stocks, they usually underperform relative to the market, and when the market declines they all go down just the same. Here's an example: over the past two years P&G (PG) and Coca-Cola (KO), two dividend stock favorites, are up about 20% and flat respectively. The S&P 500 index is up 40% in the same period, Facebook (FB) is up over 200%, and Tesla (TSLA) is up over 700%. [1]: http://www.financialsamurai.com/better-to-invest-in-growth-stocks-over…

>you're still personally on the hook for any post-foreclosure deficiency judgment Depends on the state: https://www.financialsamurai.com/non-recourse-states-walk-away-from-mo… >both by shielding the PE fund from debts and the use of bankruptcy and restructuring of the acquired company to discharge liabilities, including those from litigation. Who's extending credit to these companies? Individuals can do something similar by declaring bankruptcy. I think banks can be considered sophisticated enough that if they got hosed on a LBO deal, that it's hard to feel sympathy for them.

https://en.wikipedia.org/wiki/Nonrecourse_debt https://www.financialsamurai.com/non-recourse-states-walk-away-from-mo… (have walked away from underwater fha mortgage from 2008 gfc in a recourse state, ama)

To Hossenfelder, I'd add Ben Thompson on "the business, strategy, and impact of technology" and the Financial Samurai on personal finance... https://stratechery.com/2024/elon-dreams-and-bitter-lessons/ https://www.financialsamurai.com/minimum-investment-threshold-amount-w…

I wasn't aware of the divide between recourse and non-recourse states. Google tells me: <<Alaska, Arizona, California, Connecticut, Idaho, Minnesota, North Carolina, North Dakota, Oregon, Texas (sometimes), Utah, Washington>> Ref: https://www.financialsamurai.com/non-recourse-states-walk-away-from-mo… It looks like resource vs non-resource also impacts the likelihood of foreclosure.

Also it is not just the "landed gentry" who will feel like they lost their investments but also the 64% or so of Americans who own their own homes. [1] Ithaca NY has the unusual situation that much of the land is owned by universities, colleges and other non-profits that don't pay property taxes so residential property taxes are high. In recent years tenant organizations have come to perceive that any increase in property taxes is going to be added to their rent so in addition to trying to get more money out of Cornell they are becoming increasingly spending skeptic. [1] https://www.financialsamurai.com/u-s-homeownership-rate/

Could some of it be due to the tax write-off for a large vehicle (over 6k lb)? https://www.financialsamurai.com/tax-rules-for-buying-a-vehicle-and-de…

There are some games that can be played with various types of trusts - irrevocable trusts, irrevocable life insurance trusts, grantor retained annuity trusts and other things I believe. https://www.financialsamurai.com/how-do-millionaires-and-billionaires-…

Home mortgage (for first house) is only somewhat non recourse in 12 states, and even then, some of those do not let you just walk away (like Washington): https://www.financialsamurai.com/non-recourse-states-walk-away-from-mo… https://www.cga.ct.gov/2010/rpt/2010-R-0327.htm >It is difficult to classify states as strictly recourse or non-recourse. Almost all states allow deficiency judgments under certain conditions, for certain types of property or foreclosure proceedings. However, many states restrict not only the conditions under which deficiency judgments are allowed but the maximum recovery for the creditors. >he hasn't personally guaranteed them. Source? I imagine the terms of the loans for the Twitter purchase are not publicly available.

> people who make more than average amounts of money have a hard time retaining meaningful amounts of it Do you have a source for this? This conflicts with the data that I've seen: https://www.financialsamurai.com/the-average-savings-rates-by-income-w…

Financial Samurai strikes me as sadistic. His post about Mr. Money Mustache's divorce is pretty horrible example of soulless SEO headings kicking a rival blogger when down https://www.financialsamurai.com/mmm-divorce/