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Passive Income Update: November 2020

December 24, 2020 by Lazy Man 4 Comments

Passive Income Pyramid
My Passive Income Pyramid

It’s a little before the middle of the month, so it’s time to review November’s passive income. I usually do all the math on the 5th of the month so that tenant checks have been cashed and our mortgage payments are paid.

Before we get to the financial stuff, here’s a little life update.

It’s been a slow blogging week (or more) for me. The realization that Christmas isn’t really happening combined with unending rain hasn’t put me in the best of moods. Even my 8-year-old said, “What’s the point of decorating for Christmas if no one is going to see it?”

I’ll get into December next month. This article is about November. The big memory I have is about Thanksgiving. We were planning to have one family over as the guidelines allowed. During the week of planning, the governor’s message got mixed to the point that the two days before, I felt like we need to call it off. My wife (who has been running some of the COVID response for the state) politely overruled me (she’s the most tactful person I know) and we did have Thanksgiving with the other family. I was too nervous about everything to really enjoy it.

November is also usually a time for Black Friday shopping. I love finding deals online. This year, I didn’t find much that we needed. I didn’t end up doing much shopping at all. Most personal finance blogs would applaud this, but this is a year where a few good material things may lift our spirits for a while. We have the money for those things because we’ve saved on travel and restaurants.

On the bright side, the kids completed another month of in-person learning without much incident at the school. The school sent home a few grades in the pod for a day or two while close contacts instances are tested. So far we’ve only missed one day for one kid. It’s a big highlight to have the kids in school. It feels so important for my 6-year-old who is just starting to explode in his reading abilities.

We also spent much of the month cleaning out the new rental property and getting it ready for move-in. One of the pictures below is of the kids getting ready to help out. We paid them minimum wage for two hours of work and I threw in a pack of Pokemon cards and a dessert that they like. The kids loved the 2-bedroom place, so I made sure to get a video of them explaining all their hopes and dreams of living in it together. We’ll see if they still feel the same way 15 years from now.

I have fewer pictures to share this month. It’s been that kind of month. What I do have to share though is uplifting, so we do have that.

My 8-year-old found this at a yard sale. It was 25 cents well spent. I liked the message of recycling trash into art.

That’s enough lead-in… let’s start the Passive Income report. I used to call this the Alternative Income Report, but everyone loves passive income better. While I transition to the new terminology, there may be some “alternative income” mentions including the FAQ. If you are a new reader, you’re going to want to refer to my Alternative Income FAQ as you’ll likely have a lot of questions.

The way I calculate these numbers requires that long explanation – it isn’t intuitive at all. The reason why I do things a little differently is that this catalogs a journey. For example, we don’t have passive income from our rental properties while we are paying down their mortgages. Instead, I calculate the percentage of equity we have to show where on that journey we are. Each month you see that the bank owns less and we own more. When we get to owning 100% there will be no mortgages and all that rental income can be used for living expenses.

Lazy Man’s Passive Income – October 2020

I categorize our passive income into 3 main sources that are largely represented in my passive income pyramid. For this report, I ignore the bottom section, “career/job” – that’s not passive at all. (I do have some income in that area, but that’s not the focus of this report.) I combine dog sitting and blogging into one section of “somewhat active” income. I leave real estate and investment income as their own separate main sources of very passive income.

1. Blogging + Dog Sitting Income

November was a very bad month for blogging income. I don’t remember it ever being so bad, but that’s been the way that blogging business has gone for the last decade or so. I expected better because it included a big shopping season which is usually when I can make some extra money referring products. I didn’t see too many deals worth referring though.

Additionally, COVID has killed the need for dog sitting this year. I think this is going to be down until next summer. I’m hopeful COVID will be down with vaccines and everyone getting more time outside. Summer is a big vacation and tourist season for us, so if that happens I can make some money again.

In October, dogs and blogs combined for a total of $1767.85. In November, it was:

Total Blogging + Dog Sitting Income: $1,021.93

While it is depressing to see the number continue down, I have to remember that a lot of it is still COVID. I should be able to make double that. Also, for the number of hours worked, that hourly rate is very, very good. I have some ideas on how I can improve each area, but I’m focusing on getting more done around the house. I can see the direct improvements and that is more uplifting than hoping the extra blogging work turns into something.


My 6-year spent a day and a half building a Nintendo Labo for the Switch over the Thanksgiving break. Once you build your robot, you get to be one in a video game smashing things with your feet and punching your arms. It’s an amazing toy, but it seems hard to find now.

When there is some dog sitting my kids can pitch in to help. My 8-year old is extremely good with dogs at this point. He can feed them, let them out, and play with them in the yard. My 6-year-old is good too. This help means that I can pay them a legitimately earned income (a small percentage of the overall dog-sitting income). Because the income is earned they can save money in their kid Roth IRAs and it will be money that they’ll never pay tax on. I want to get them more involved in blogging, taking pictures and things like that, but it’s going slow. They get a lot of school work and home work. We’ll see what happens during the winter break.

(Note: The blue line is the monthly number. The red line is a 3-month average which helps smooth the curve.)

2. Rental Property Income

We recently sold a condo, and closed on the condo in November. We spent some time cleaning it up and it looks like it is ready to rent. We had hoped to get it rented for December 1st, but it looks like it will be January.


In this picture the kids are dancing more than cleaning, but actual cleaning happened, I swear.

As for November’s numbers, Zillow’s estimates of our properties were a little down. We paid down some of the mortgages. In the end, it was mostly a wash. That’s the third straight month that we haven’t had gains here. We’ve gained around $50K in equity this year, so this pause is fine. I expect that early next year, we’ll continue to grow equity by paying down the mortgages and hopefully seeing some growth in the value of the properties.

This month we went from 60.64% to 60.71% of the equity in our properties. Again, it wasn’t much, but we’ll take it. Previously, I calculated that, after insurance, property taxes, condo fees, and estimated maintenance we’d make $3,325 a month. That number because it represents our net gain. I recently updated this with the new property and it looks like we’ll be at $3,387.50 – a minor difference.

If you multiply our expected net rent $3,387.50 by the amount of equity we have (i.e. where we are on our journey) 60.71% you get $2,056 in estimated monthly passive income. When I started tracking this (beginning of 2017), we only owned 36.4% of the properties and they had lower rents. The math worked out to $1,174 back then. So in 44 months, we’ve seen the number grow $882/mo. That’s good passive growth in almost 4 years.

As the years march on, the ratio will grow to 100% of a rent that should net $3,400 monthly after expenses. Since rent is inflation-resistant, we can raise it as costs of living go up, we don’t have to factor in inflation like other investments. So we can think of it as $40,800/yr. of income in today’s dollars buying the same value of stuff in the future. That should be enough money for us to live on with our own home paid off (plus our solar panels, frugal shopping habits, and military healthcare.)

In the previous report, the rental property income was $2,054.

Total Rental Property Income: $2,056

3. Dividend Income

For this section, I assume we will earn a 2.5% dividend yield on our holdings. That could be from a high-dividend ETF or from simply holding strong companies that have a long history of dividend growth. There are some income investing here. We can also look at making passive income with dividend kings. If I wanted to simply retire on this dividend income, I would get Sure Dividend’s newsletter to try to get closer to a 4% average dividend yield. That link to the newsletter has a special discount rate and in full disclosure, I make a few dollars if you sign up for it.


The kids are reading a Pokemon Sword and Shield guide book that I found on sale. It’s hardcover and around 300 pages, but they’ll still spend an hour or two looking up stuff.

On the last snapshot, November, the market was doing great – it’s just been a big bull market. Our portfolio is at an all-time high. We’ll see if investments can continue to grow. Last month I wrote, “with COVID cases continuing to rise, there may be another shutdown in the future.” We’ve seen California shut down and my state of Rhode Island is “on pause.” It was supposed to be 2 weeks, but it’s extended to 3 now. The stock market economy doesn’t seem to care about COVID because it’s looking to the future with vaccines.

We continue to get a profit-sharing check since I bought (a lot of) a company. The business is doing well. It’s actually almost ideally positioned in this pandemic due to its virtual nature. The investment income from this is essentially the same as dividend income. It is taxed differently, but for the purposes of this report, it makes sense to group together all stock ownership in this bucket.

Total Dividend-ish Income: $3,323

Last month, it was $3,143. We are now far past the pre-COVID number highs. This number rarely goes up much (since it’s a small percentage of our nest egg), but this was fairly extreme.

Annualized, this monthly $3,323 is $39,871. If our mortgage was paid off, we might be able to live on this by itself. However, because most of our investments are in retirement accounts, we can’t use much of this potential income for now. (We can use the profit-sharing check as it goes straight to our checking account.) We’ll let this investment continue to compound for another 15 years until we are 59.5. Then we’ll have to see if we want to tap it or let it continue until we are required to take some of it at age 72.

Very Close to Passive Income

Our “very close to passive income” is a combination of rental property income and dividend income. If there were some royalty income from books, movies, or music, I’d include that here. I’m too tone-deaf to have a rockstar music career, but maybe I’ll write a book someday.

The stock market goes up and down fast, even more so nowadays. That makes the dividend calculation fluctuate a lot more than it normally would. We don’t know if companies can reliably pay dividends anymore. Without customers and profits, many companies have cut their dividends. However, the stock market is looking ahead to summer 2021 with a lot of vaccine and outside time.


Towards the end of the month, the kids helped decorate our Christmas tree with ornaments from over the years.

The rental property income typically keeps going up because the mortgages are always getting paid down every month. Unless there’s a housing market crash, this should continue to happen. We haven’t seen any kind of crash… instead the housing market is booming.

For a few years, I’ve been saying:

I love having both types of income working together for us. I think everyone interested in FIRE should have stocks and real estate income streams. The diversification gives me great confidence that we’ll be better prepared than most people in the case of an unfortunate economic event. We’ll still likely get rent checks if the stock market crashes. We’ll still get dividend checks if a tenant is late paying for awhile. Of course a bad economy may impact both at the same time, but that’s what an emergency fund is for.

Here we are in month 9 of an unfortunate economic event (it’s worse outside of economics, but for the sake of this article, I’ll stick to economics). Stocks went down a lot, but then went back up. Real estate has held steady. Overall, the plan keeps rolling along, even during COVID-19.

While the stock market is doing well, the real economy is very bad. It used to be terrible, but some people are getting back to work and some jobs are coming back. We’re finally getting a president who won’t ignore COVID and hope it disappears. We’re also getting a president who is going to start to reverse the climate change disaster that sees so many natural disasters ravage the United States. Even if you are a heartless soul who doesn’t care about the people losing everything in fires, you should be able to agree that American business works best when it literally doesn’t have to put out fires.

Very Close to Passive Income: $5,379

Last month it was $5,197. The $5,379 extends our all-time high.

This would be ~$62,000 a year of almost completely passive income. What’s better is that there would be no need to touch the investments themselves. We wouldn’t have to sell stocks or get a reverse mortgage. Property maintenance and property taxes for rental properties are already factored in. We would still have all the underlying assets (property, stocks, etc.) and be able to pass these to the kids for them to build on – unless we choose to draw them down for more fun, charity, or other spending.


This is a sample of my 6-year-old’s homework. Everything he does with school work is like this. He’ll change the problem to something else and solve that instead. It makes me laugh. Fortunately, he does the problems correctly, so I know he gets the concept. I’m jealous of his creativity.

This “very close to passive income” has grown from $2,354/mo. in January 2017. It’s worth noting that, once again, these are fudged numbers that aren’t “real” yet (except for the profit-sharing check). We’re just about at four years of tracking this number, and we have gained $3,000 in passive-ish income. I wonder if we can get to $8,000/mo. in passive income by the start of 2025 (which will be another 4 years). I think that would be too aggressive, but it would give us something to hope for.

Final Passive Income

When you add up “dogs and blogs” to the “very close to passive income” you get:

Passive Income: $6,400.93

Last month it was $6,964.85. I’d like to see this get closer to $8,000 in 2021, but I need a plan to add something new – it doesn’t look like dogs and blogs is going to get me there. For now, I’ll just be happy that with four different income streams (and two consistent ones), there isn’t much room for everything to drop.

This nearly ~$6400+/mo income is ~$76K+ a year. That largely hypothetical annual income for writing on a blog, taking care of one dog, and investing is really nice. In the long term, $76K would be a lot more income than we’d need – given our necessary expenses for the next 45 years. Of course, those necessary expenses aren’t going to cover all our spending, but it’s a large percentage of it.

As 2020 has proven, you never know what bad news is lurking around the corner. This preparation gives us the financial flexibility to fight it.

None of the numbers here include my wife’s bread-winning pharmacist income, her vested military pension (more passive income), or the freelance work I’ve been doing over the last couple of years (which isn’t passive at all). That’s the fuel that drives the passive income engine – it allows us to live well and invest. My income doesn’t match my wife’s, but I’m good at stretching a dollar in almost all our spending.

As always, I’m still hoping to write a book someday. That would add some more passive income. My wife will probably get her book out first. She’s had an incredibly interesting life until she met me – I am so boring. I may tip my toe into self-publishing sometime next year. I would love to talk to a real publisher, but I don’t want to take on the “job” of writing. That’s probably a deal-breaker. If you know someone who I could talk to contact me.

My favorite thing about the graph below is that it doesn’t dip down too far. It’s been above $6,000 for a while now. Though we are getting close to dipping below that $6,000 mark. If it dips below $6000 and touches $5000, we’ll have to examine some things.

(Once again, the blue line is the monthly number. The red line is a 3-month average which helps smooth the curve.)

Net Worth Update

My net worth updates aren’t very exciting as I don’t share the exact numbers. That’s why it’s just a footnote here.

I truly believe that net worth is one of the most important numbers in personal finance so it is worth sharing in some way. Showing relative growth can be useful.

Like most investors in November, our net worth did extremely well. We saw it jump by 3.95%. For the year overall, our net worth is up 21.65%. If you didn’t know better you might think 2020 was another boring, great financial year – a typical saving and investing plan for us. In fact, growing our net worth 21.65% in a year might be above average. With the Rule of 72, we’d double our net worth in a little more than 3.33 years.

Diversification helps a lot in bad times. Even when the stock market was way down, we were still grounded with our real estate. We can’t control the market, but we can be happy that the amazing river of compound interest has been working well for us over the years.

I feel it’s important to acknowledge that everyone is in a different place in their financial journey. I’ve been blogging about personal finance for 14 years. FIRE wasn’t a “thing” back then, but it’s in the news a lot now. We naturally are further along in that journey than some younger readers who may be just starting out. If you are one of these readers, I hope you won’t be discouraged by some of the numbers above. I didn’t start many of these graphs until year 11 of blogging (year 13 of early retirement planning). Please try to use it as motivation for what may be possible (depending on your circumstances and market luck) over 10-15 years.

There’s a big wild card in calculating our net worth. Now that my wife’s pension is vested, it’s reasonable to ask whether to include a pension in your net worth. I decided that it does make sense to include it. She could have earned more direct monetary compensation if she didn’t work for the government. That would have boosted all the numbers across the board. Calculating pension value is not easy, but here’s the best way to know what a pension is worth. In the end, it seems my wife’s pension may be worth $2.3 million. However, like most of the money mentioned in this article, this isn’t money we can spend right now.

Because the pension would dominate our net worth, I’ll note two separate numbers in my personal spreadsheet. I don’t share the numbers anyway, aside from these hints, so I don’t think it should matter much to you. It’s not like I’m suggesting that you might want to make a financial-based decision on a pension.

I always end this article by asking how your last month went. I know that COVID-19 is making everything difficult. I hope that some of it is getting easier. I’m sure that for many the kids going back to school, in whatever form, represents new challenges and anxieties. Feel free to use the comment space to vent, I try to give a thoughtful reply to every comment I get.

Filed Under: Alternative Income Tagged With: alternative income streams

Post-COVID Industry Analysis

December 7, 2020 by Kosmo 3 Comments

Today’s article comes from long-time contributor, Kosmo. I added some of my own thoughts near the end.

The COVID-19 vaccine is nearly ready for prime time.  By the end of the year, the highest risk patients will be getting vaccinated.  It will probably be at least a couple of months before my wife and I will be eligible for shots, and even longer for the kids.  But at some point, things will begin to get back to normal – or as near to normal as possible.  Some industries are going to see longer-term effects and will be transformed – either positively or negatively – by COVID experience.

The winners

Delivery

Delivery services have seen a huge surge during the pandemic.  Employees of these businesses have performed a valuable service by limiting the number of people who need to be inside stores and restaurants.

My family has made heavy use of delivery services.  We haven’t been inside a restaurant since March – but we’ve had many meals delivered since then.  In fact, we’re getting fried chicken delivered in about fifteen minutes.  For us, it’s basically cost neutral when compared to dining out.  The tip for delivery is roughly the same as an in-restaurant tip.  There’s a delivery charge, but that’s offset by not paying for four drinks.  I’ll drink 50 cents worth of generic cola instead of paying $2.19 in a restaurant.  The guy who runs the dominant local delivery service is an acquaintance from our neighborhood, so it’s nice to be able to help out his business at the same time.  I’m sure we’ll continue to use delivery more – and dine in restaurants less – even after COVID passes.  The food is always hot and tasty, and it’s faster than eating in a restaurant.  Also, a restaurant is no longer blacklisted simply because one of us doesn’t like the food.  My wife and kids can get Mexican food delivered, and I can throw a Totino’s pizza in the microwave.  (Totino’s says not to microwave them, but just nuke them for 4:30, rotating once.  Almost as good as using the oven.)

Pickup

The cousin of delivery is pickup.  Not every restaurant in the area has delivery services, but many of them have pickup.  Order online and have them bring the food our to you.  Personal interaction – 15 seconds.  Even less exposure if you have them just put the back seat.

I’ve only been inside a grocery store a half dozen times since March.  Twice were because the drive-through prescription window wasn’t functioning.  If we spend $35, we can get free pickup.  Submit the order online and have a store employee figure out where everything is and get it ready for you.  Although there have been some occasions where this has ended up taking way too long (hours, in a couple of cases), it’s been a very positive experience overall.  I’m going to avoid the inside of grocery stores even after this is over – I’ll happily let someone else do the work.  This means that we’ll be doing the bulk of our grocery shopping at that store.  Prior to the pandemic, we’d mostly shopped at their competitor.  The competitor – a somewhat smaller chain – simply doesn’t have the space to allow for pickup.

We’ve also used pickup from other stores, ranging from Target to Hallmark.  Instead of dragging all four of us for a marathon Target trip, we just enter the order over the course of several days, then I run down and pick it up with it’s ready.

Digital distribution

My daughter takes private art classes.  The art studio was shuttered by the pandemic, but the business didn’t die.  The owner pivoted to Zoom classes, and also recorded a series of lessons that could be purchased individually.  The great things about the recorded lessons are that the bulk of the effort is upfront.  Her cost – in terms of labor and dollars – is nearly the same whether she sells a particular lesson to one customer or a thousand.  It also expands her audience.  You might not be free every Thursday from 7-8 PM, but you can consume a canned lesson at your leisure.  Obviously, it’s not exactly the same as a live class, and her pricing does reflect this.

It’s important for these “winning” companies to realize that although their business will remain strong in the future, it will likely slide from the current peak.  Those companies should position themselves to shrink their footprints a bit in the future so that they’re not trying to support their current overhead with fewer orders.

Neutral

Corporate-owned chain restaurants can come out of this in okay condition.  On the one hand, business is suffering.  On the other hand, many of their Mom & Pop competitors have been wiped out by the pandemic.  Even smaller chains have shuttered some of their locations.  The larger chains may have suffered losses in the short term, but when they return to full capacity, the landscape will have changed.  Not only will there be fewer Mom & Pop’s and fewer locations for smaller chains, but there will also be a reluctance for entrepreneurs to launch restaurants for a few years.  After all, there’s no guarantee that we won’t see another pandemic like this next year – or even five years into the future.  This will allow the larger chains to grow their market share.

The losers

Mom and Pop Restaurants

A lot of Mom & Pop’s have been completely wiped out by the pandemic.  Even chains with multiple locations have been affected.  A local sandwich place that served premium hot sandwiches closed.  The quasi-Italian place near my office also closed.  My office complex has a few thousand people.  It’s on the outer edge of the metro areas, without much of a residential population.  The Italian place was probably drawing about 90% of its business from my office.  My office has been shut down since March.  We’ll be working from home through at least the end of June.  Even after we do return, we’ll probably only be in the office a fraction of the time.  The restaurant’s clientele vanished overnight.

Commercial real estate

I’ve been reading the tea leaves to see what my employer will do in the future.  My best guess is that the company will strongly pivot to work from home.  Perhaps 10-20% of the time in the office.  They’ll probably use a “hotel” cube format, reduce the overall footprint, and sell off excess real estate.  I think a lot of companies will do this, particularly in areas with high real estate costs.  Why pay for a Manhattan cubicle for an employee if they can be just as productive in their hometown of Manhattan, Kansas?  In my option, demand for commercial real estate is going to plummet.

Corporate cafeteria, cleaning, custodial

My office complex has two cafeterias.  My employer contracted with a third party to provide cafeteria services.  Those people haven’t been working since March.  My guess is that we’ll only have one cafeteria in the future.

Likewise, my employer contracts with third parties for cleaning, custodial, security, and a variety of other services.  As commercial real estate goes from occupied to vacant, these industries will also take a hit.

Editor’s Thoughts

Kosmo has an interesting perspective that I never thought about with delivery services and dining. One of the main reasons I go to restaurants is to get out of the house and be part of the community. I’ve been working from home for 13 years now, and I think most people can now relate that you sometimes have to get out. My tastebuds are more of the Tortino’s and generic soda variety that Kosmo mentions in the article, so I don’t mind a difference in the food itself much of the time.

I completely understand the draw of not having to do grocery shopping. For many people, it must be great to reclaim that time. Personally, I enjoy grocery shopping. I love looking for bargains. I love doing mental calculations and comparisons. I love having “me” time away from the kids outside of the house.

I don’t know how I feel about digital delivery. It seems saturated. I’ve got an endless number of FinCon (personal finance group) talks from 10 years that I know I will never watch. I got a deal on Masterclass and I’ve only watched a little of it. My wife is very much against paying for Zoom karate classes for the kids.

My kids’ school recorded a lot of videos last year for distance learning that they can reuse again, but I don’t think they do. Khan Academy and numerous other places have online lessons. If there was a universal search engine and these got combined under one umbrella for a low price (or free like Khan Academy) it could be really useful. I believe that digital delivery is the key to providing free college in a way that doesn’t get caught up for decades of politics.

Your thoughts

What are your thoughts?  Which segments of the economy have been decimated by COVID-19, and which segments will emerge is a reasonably good position?

Filed Under: Economy Tagged With: covid-19

Two Motivational Ways to Start Saving and Investing

December 3, 2020 by Lazy Man 1 Comment

motivation start saving investing

Last week, I saw a Tweet from someone lamenting that their relatives could have made a few million dollars if only they invested their money. Instead, they saved hundreds of thousands of dollars in the bank for decades earning little interest. I don’t know all the details of it so I don’t want to get into the specific situation. Instead, I wanted to share that it inspired me to make this Thanksgiving reflection:

Adding that I'm thankful for my mother's financial influence to the list of things I forgot to be thankful for yesterday.

— LazyManAndMoney (@LazyManAndMoney) November 28, 2020

I realize that I’m in the minority… a tiny fraction of a minority of people who learned about saving, compound interest, and investing very early. I live at the intersection of Nerdy and Boring, so those topics interested me. I know I’m weird.

For everyone else, getting started investing is tough. It can be confusing. But before you can get started investing you need to save some money. That’s a huge obstacle for many with student loans, child care, expensive housing, health care costs, stagnant wages, etc. (I’m sure I missed a few in there.)

If you are anything like me or anyone else I know, life keeps you busy. It’s easy to put saving and investing to the bottom of the priority list. You can always find time to save and invest later, right? (Unfortunately, wasted time investing can be costly with to how compound interest works.)

I think it’s a mistake to put off saving and investing. Today, I wanted to present two powerful mental hacks that motivated me to keep saving and investing.

1. “Retire” Expenses for Life

We all have monthly expenses. Wouldn’t it be nice if we didn’t? Who wouldn’t want free Netflix, a free car, or a free home?

Well it’s all possible, but you have to start small. There’s a thing in personal finance called the Rule of 25. It’s the inverse of of the 4% Rule. The 4% Rule can get complicated, but it roughly says that if you have $1,000,000 invested you can spend $40,000 (4%) a year and retire. I cover some of the more complicated parts in the 4% Rule link above, but for now we’ll rely on it as if it were proven fact. The inverse of this means that if you have $40,000 in annual expenses, you should save 25x… or $1,000,000.

Your total expenses are made of many little ones – things like house, car, utilities, and even that streaming subscription.

Let’s take Amazon Prime as an example. Prime is so popular that I’m guessing most of you can relate. It’s $120 a year, which makes the math convenient for us. If you save and invest 25x or $3000, you can have Amazon Prime for life. It seems like a lot of money to save for that expense, but compound interest can really help you out. You don’t have to invest $3000 at once.

2. Track Your Net Worth by Percentage

You may see some bloggers posting about how their net worth jumped 2% for the month making them $40,000. That can happen when you have a $2 million dollar investing nest egg. I’ve got good news and bad news about that. The bad news is that $2 million nest eggs is not very normal. Fortunately, you already knew that bad news. The good news is that the story behind the nest egg is usually saving and investing over a number of years. That’s doable if you have the right mix of income, frugality, steady investment, and some market luck.

When you are starting out, the large numbers can seem either inspiring or scary. I could see people going in both directions. I see it as inspiring, but I’ve read comments from people that say, “I could never do that kind of thing.” Everyone’s situation is unique. I’ve read stories about a 9-year-old who is worth over a hundred million dollars from his YouTube success. I’ve also read stories about the low-income janitor who died with millions of savings. There’s a lot of room for financial success anywhere in between.

When you are starting out, try to focus on your monthly gain of net worth. Hopefully, you are saving some money and because your net worth is low, you can make big gains here. When you have $2 million dollars, it’s hard to grow your net worth by 10% (unless you are a 9-year-old millionaire YouTuber). You are at the mercy of the investment markets. When you are starting out, you might be able to grow your net worth by 20% simply by saving $2000. Saving $2000 may not be easy depending on your situation, but hopefully sneaking $40 away a week in a bank (or investing) account is something reasonable for you.

Final Thoughts

I hope that these tricks help you. The biggest thing is to get started and realize that it is okay to start small. Do you have money hacks that you use to movitate you?

Filed Under: Financial Independence Tagged With: money hacks

Make the Most of Your Giving Tuesday

November 30, 2020 by Lazy Man Leave a Comment

Today is Giving Tuesday. It’s hard to believe, but it’s only been around since 2012. I can’t think of another unofficial holiday that has spread so fast.

Before we dig into Giving Tuesday, I have a little blog housekeeping from the last week to catch up on. You may have noticed that I haven’t been writing as much. The kids were home all week for Thanksgiving and while my 6-year-old is great at building a Nintendo Labo he needed a little help. I intended to write articles about all the Black Friday and Cyber Monday deals, but I didn’t find a lot this year. Everything seemed to be about wireless earbuds.

Now, let’s get back to Giving Tuesday. In a normal year, giving to charity is important. I don’t need to write about what it means in 2020. With that in mind, I have a smorgasbord of charity thoughts that may help guide you. These have been my guide for any year, but let’s see if they work in 2020.

1. Make the Most of Matching Funds

One of my favorite ways to multiply my giving is to look for charities that are looking to match gifts. Essentially these charities have donors who are looking to boost the giving for the charity overall. At the bottom of this article, I’ve got a couple of examples of how that works with two charities that I give to any year. I’ll be looking to give more in 2020, so if you have suggestions of matching funds going to help COVID victims, please don’t be shy in the comments.

Someday, I hope we can be one of those donors who are offering to match gifts. However, we need to be large donors. We’ll have to get the kids through college before we can tackle something like that.

Make Your Dollars Go a Long Way

This is one of the best ideas I’ve seen regarding a charity donation. It comes from Dollar Revolution:

Rethought my answer, I’d likely buy $1million of medical debt & forgive it. You can sometimes buy it incredibly cheaply (which shows how inflated it can be).

Depending on each individual debt, that could erase over $100million in debt, freeing over 10k from that ball & chain.

— ? Dollar Revolution ? (@dollarrev) November 10, 2019

You and I probably don’t have a million hanging around, but I’d love to explore this further and see what can be done on a smaller scale. Or maybe we can combine into a charity that does have a million to do just this. It’s a fantastic way to impact a lot of people in a great way.

2. Giving Tuesday Ideas

There are many organizations that are looking for your charitable contributions today. Personally, I like local organizations such as food banks. However, there are many worthy charities around the world. I also like supporting the military, because I see firsthand how awesome organizations like the USO are.

If you have reward points, many charities will take those well. I don’t know exactly how the Red Cross handles a ton of American Airline miles, but I’m sure they need to fly people around. Maybe American Airlines allows them to be converted into cash.

3. Is This a Good Charity?

Sometimes it can be hard to know which charities are reputable. Every now and again, you read stories that only a small percentage of the money actually makes it to the people it’s trying to help. The rest of it gets eaten up in high salary C-level execs and other expenses. In some of the very worst cases, some scammers will purposely name their charity similar to a legitimate one in hopes of getting some free money from the confusion.

There are three great places to review charities:

  • Charity Navigor
  • Carity Watch
  • BBB’s Wise Giving Alliance

If you are unsure, it is always worth a look.

4. Can Deduct My Donation to this Charity from my Taxes?

As with any area of taxes, it is best to consult your tax advisor before doing anything that I might suggest.

A charity needs to qualify as a 501(c)(c) organization for you to be able to deduct it on your taxes. How can you figure that out? Fortunately, the IRS has an easy charity search for you.

I read that there’s an “above-the-line” charity deduction of $300 in 2020. That should mean that it should still be deductible if you take the standard deduction, which isn’t always the case.

5. Who I’m Giving To this Giving Tuesday

I still need to look into the companies helping with COVID and may settle on a local food bank. However, here are the two that I mentioned earlier who I give to every year.

This is a little difficult to write, but I’m going to do it anyway. We’re giving to my kids’ private school. It certainly doesn’t scream out as a need such as many food and health charities. I’ll start by explaining why we’re giving to the kids’ school and then ask you to suggest some charities in the comments.

There are five main reasons why we’re giving to the kids’ school:

  • They’ve been decimated by 2020

    They’ve had to buy new ventilation systems, lots of plexiglass, outdoor, equipment, video conferencing devices, etc. You get the idea. The teachers are working overtime and we’re lucky enough to have our kids in school without, knock on wood, a COVID case yet. There was one in a family, but the students at the school themselves tested negative and quarantined.

  • We Do It Every Year

    We give to the school every year. It’s enormously helpful for them to seek other donations when they can show that all the parents care to give. They are mostly focused on participation, so the gift doesn’t have to be big. Last year, they got to 100% participation for the first time in the school’s 80 year history.

  • Matching Funds

    The school has 3 other donors matching funds up to $10,000. Our donation on this specific day helps ensure that the school will get close to $40,000 and maybe even more.

  • Local Community

    For the most part, the money stays in the local community. The largest expense for the school is the staff.

  • I’m a Little Selfish

    This is at the bottom of the list for a reason. There’s some personal gain with the donation. It’s an investment in my kids’ education.

I also give to my alma mater which had a similar target goal of getting a set number of donations. My wife shamed me a bit because I didn’t give much, but I want to help them unlock those matching funds. Students at colleges are getting a raw deal and the colleges aren’t always doing the well with COVID either.

This is where you come in. I’d like to help people who are in real need in addition to schools with large tuitions. Leave a comment about your favorite charity that fits the bill and why I should give to it. I’ll give extra consideration if it has matching funds.

If I don’t get any comments, I’ll give to Lucy’s Hearth as I did before. It’s a local charity that aims is “a 24-hour emergency and transitional shelter for mothers and their children who are homeless due to economic hardship, family crisis, divorce, eviction…” It checks the box of being local and helping people “in need.”

What are your plans for Giving Tuesday? Do you have some unique ideas of your own? Who will you be donating to? Share your thoughts and ideas by letting me know in the comments.

Filed Under: charity Tagged With: Giving Tuesday

Giving Thanks…

November 29, 2020 by Lazy Man 1 Comment

The annual Thanksgiving article has always been a difficult article one for me. I mulled this one until it’s almost too late to post. While I feel it’s important to reflect on all the things I am grateful for, each of them is very personal. I don’t think you gain much by reading my ramblings about how privileged I’ve been over the last year. When I give thanks for something, I realize that someone else reading it may not have that. That’s not much fun for anyone to read.

Because of that, I usually skip writing a Thanksgiving article. But here we are in 2020.

(And because it’s 2020, I can break all my English teachers’ rules about which words not to begin sentences with. Or even how not to end them.)

We are globally united by a common foe. Everyone’s experience with COVID is unique, but no one’s is good. There are a lot of people who have very good reasons to not be very grateful this Thanksgiving. I can give thanks that I’m not one of those people. There are about a billion ways that any of this could have personally worse for us. Fortunately, none of them happened. I only have minor nuisances to complain about (in comparison).

One of those complaints was teaching two curriculums, kindergarten and first grade, at the same time, on different floors of the house. We got through it, and the kids almost (almost!) seem to have grown because of the experience. In a normal world, learning to read and writing emails come in a different timeline. We learned some important life skills like cooking. A couple of times the 6 and 8-year-old surprised us with breakfast (usually cereal, but that’s because we like to supervise watching the stove being used).

The kids’ school has opened up this fall and so far everything has gone smoothly. The school had a planned, whole week off for Thanksgiving. The idea was to give teachers and kids a chance to recharge their batteries. With rising COVID cases, the timing couldn’t be any more perfect. With my wife still working, it was a long, long week. When the kids don’t have school, they feel like they should do nothing but sit and watch TV all day. Oh, they’ll fit in some video games too. I get frustrated by that, but they haven’t had much TV/video game time since school started in September. We always seem to have an activity like Boy Scouts or Karate. Both of those are paused for the rest of 2020 though.

Money Thankgiving

Because this is a money blog, I should write about money, right?

This is a tough year financially for so many people. It’s impossible for me to single each occupation out. I wouldn’t know where to begin.

My dog-sitting business has been terrible. I’m thankful that we don’t rely on that income. As much as I appreciate it, the money feels like a drop in the bucket. Our investments, like the stock market, are skyrocketing. It’s hard for me to write about money articles that aren’t around investing nowadays.

In February, I moved some of my retirement savings from stocks to bonds. It simply felt that after a 10-year bull market, I should try to preserve my investment gains. It was perfect timing. Sometimes it’s better to lucky than good.

As the markets dropped, I sold some of those bonds and bought more stocks. So now my retirement accounts are up 23% for the year. I was nervous about the stock market jumping back then. I’m at a complete loss on what to do now. Part of me wants to just sell everything. However, I know I have years until I can access the money, so it’s best to just let it sit and grow.

Final Thanksgiving Thoughts

With COVID cases rising and more things shutting down, I’m hoping the kids can get through a couple more weeks of school. After that, the winter break will kick in anyway. It’ll give the kids the carrot stick they need to put in those two good weeks. After the break, it will be 2021 and we can try to put some of 2020 behind us. By that time, vaccines may be able to start helping some of the spread. We get a good spring and summer maybe start to put COVID-19 behind us.

[The hope this week is to get back with a fresh personal finance article by Tuesday or Wednesday.]

Filed Under: Announcements Tagged With: thanksgiving

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