Category: Personal Finance

Arbitrage is the practice of taking advantage of a price difference between two or more assets or markets, and profiting until the price difference disappears. Being able to recognize and then take advantage of kinks in the system will be one of your greatest catalysts towards financial freedom. For example, as a elementary-schooler in Taipei, Taiwan, I would buy Nerds candy at the U.S. commissary for 25 cents and sell them to my classmates for 50 cents. Only foreign service families had access to the commissary. But eventually, other candy stores opened and my profits were competed away. Today, I’ll share[…]

The “above average person” is loosely defined as someone who graduated from college (35% of the American population), works hard, plays well with others, takes full advantage of their pre-tax retirement plans, saves additional disposable income, stays on top of their finances by utilizing free financial tools, expects nothing from their parents or the government and is not delusional. If you were a “C student” and expect to live an “A lifestyle,” you’re definitely not the above average person! Depending on the source, the average net worth in America is somewhere between $150,000 – $200,000. But the median net worth in[…]

Let me tell you one of my favorite jokes. Elizabeth, Donald, and Joe are stranded on a desert island. Their plane crash-landed and they miraculously survived. After living off of only coconuts for two weeks, Donald looks into the distance and thinks he sees land. He’s not sure whether he’s delirious, but he convinces Elizabeth and Joe that there’s only one way to find out. After swimming for more than eight hours, the gang of three happily realize Donald really did see land! They’re elated. About 30 minutes away from shore Joe suddenly stops and says, “Folks, I’m too tired[…]

Money was never my parents’ forte. It was a constant source of stress in their lives – like a sore wound that wouldn’t heal. Thus, it came as no surprise that money was a root cause of their divorce. Growing up in a somewhat broken, working-class family gave me the gift of grit and perseverance. Despite the difficult times, I’m thankful that I managed to have plenty of happy childhood memories. If you ever heard your parents fight about money when you were a child, you know how unsettling and scary it can feel. As a result, I used to[…]

I’ve been delaying this post for a while partly because I didn’t want to recognize the formal end of my 10-year journey. I was also waiting for some divine inspiration to figure out what’s next. Earlier this year, several potential acquirers contacted me about selling my website. I thanked them for their interest and told them I needed to first fulfill my 10-year goal. In July, after achieving my goal, they all contacted me again. This time, I told them I first needed to write my 10-year recap post in order to make the achievement official. Now that that post[…]

As mortgage rates tumble to multi-year lows, there’s been a massive surge in refinances and new mortgage applications. The drop in mortgage rates is one of the key reasons why I don’t think there will be a housing downturn as vicious as the one we saw between 2008 – 2010. Further, it takes about six months for the effects of a large mortgage rate change to show up in the housing data. If you want to get a better indication of what the future might look like, simply check out the performance of a homebuilding ETF like XHB. At the[…]

Over the past two years, I’ve gotten to know another stay at home dad in the neighborhood. Bob has a boy who is also two years old. We try to meet up once a month to see how things are going. Our latest topic du jour is trying to figure out when the right time is for us to go back to work. We’re tired and need a vacation from parenthood. Stay at home parents without endless amounts of money often struggle with this decision. Go back to work too soon and you’ll miss many of your child’s precious milestones.[…]

I strongly believe if you do one hard thing for 10 years in a row, you will achieve results far beyond your expectations. Don’t quit before giving your effort a chance to produce amazing results. My belief of working on something for 10 years to achieve mastery first came from going to high school for four years, college for four years, and then finally business school for three years part-time. It wasn’t until after I went to business school that I felt like I had a solid grasp of finance. 10 years also comes from my experience working at one[…]

When I started my website in July 2009, I only told my Japanese colleague who sat next to me, nobody else. I didn’t want any colleagues who had influence over my career to know about my personal website. My website was my sanctuary to write about what was on my mind during turbulent times. When I negotiated a severance in February 2012, I almost blew myself up because I couldn’t contain my excitement. I told a couple colleagues what I had done and they immediately spread the word across the entire floor. What was meant to be a smooth and[…]

With the 2-year yield higher than the 10-year yield, the yield curve has officially inverted as of 3Q2019. History has shown us there’s a high chance of a recession within the next 6-18 months. I’ll peg the probability at 70%. To parry a recession, the only thing the Fed can do is to cut rates aggressively from 2.25% down to perhaps 1.6% (where the 10-year bond yield currently hovers) or lower to entice consumers and investors to borrow and get the yield curve closer to normal. Even then, perhaps it’s too late. When short term interest rates are much higher[…]