About / Admin Archives - Lazy Man and Money

Alternative Income Update: July 2017

August 15, 2017 by Lazy Man Leave a Comment

It is the middle of the month, which means I’m less late than usual in reviewing and writing about my alternative income for the last month. Many bloggers publish their monthly updates a few days after the month is over. One blogger recently shocked me by publishing his report before the month was over. (My crystal ball is in the shop, but I guess his is working at full capacity.)

As a landlord, I have to get all the checks and have them deposited before I can start to compile the numbers. That usually takes about a week. Then there’s usually a couple of days to get my wife’s numbers due to her schedule. (Yes we keep some accounts separate, simply because it is logistically tough to combine/share.)

This month’s excuse for an additional delay is that Monday was Victory Day. Most people haven’t heard of Victory Day, because Rhode Island is last state to officially celebrate it. My understanding is that it was a national holiday to celebrate winning WWII. Time appears to have healed many of those wounds and we don’t talk about it much anymore. I’m personally rebranding it as victory over MLM/pyramid schemes.

The Victory Day holiday didn’t mean much to you, but to me it meant that daycare was closed. I traded a day of writing and working for a day of cheap homeschooling. I’m never prepared for Victory Day, and this year was no exception. Victory Day is undefeated like Father Time. It is obvious by the name. I don’t know why I try.

That’s enough of the history lesson, let’s move forward…

Alternative Income Update: July 2017

For those that don’t know the term, “alternative income”, I invented it 11 years ago to be purposely vague. In general, it is income that comes from passive investment and side hustles. I think of alternative income as anything where you aren’t directly trading your time for money.

This report is about all my alternative income. To work my investments into that paradigm, I have to fudge the numbers a bit. You’ll see what I mean as we go along. Or you can see a more detailed explanation back in January.

If you’ve been following this series, I wasn’t happy with the way I’d been calculating rental income. Last month, I introduced two new calculations that I like better. This month, I’m choosing one as the new standard.

Last month, June, my alternative income added up to $8,094, which was less than a hundred dollars shy of a record for the year. June was a step down for dog sitting as we went on vacation. We had 15 days off with no dogs which isn’t going help the numbers. On the flip side… YAY vacation and quality time with my family! At the end of the day, that’s why we deal with this financial malarkey anyway, right?

When I’m on vacation, I’m not writing much and I’m not working on the blog. It’s a good dry-run for what most people would think of as retirement.

Let’s get to where the title brought us: July 2017

Lazy Man’s Alternative Income July 2017

In looking at our alternative income, I break it down to 4 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

Some “real world” people ask me, “What do you do?” This is my best answer. I’m not a fan of the question… it’s simply rude. I feel the question is often used to pigeonhole someone. Maybe I’m over-analyzing, but my response of “software engineer” seems to be received differently than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do.

This month, based on my wife’s recommendation, I’m adding “male escort” to the list of the things I do. I escort some of the dogs I sit to weddings for pictures with the bride and groom. And yes, I’m paid an hourly rate for my time. However, I’m no Fred Garvin!

The best answer to the “What do you do?” question may be that I’m a stay-at-home dad. The kids go to school/camp/daycare for a few hours, but I usually have some other family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) to run during that time. It can take hours for me to just catch up on all email related to blogging. I don’t think most people grasp the concept of not having a full-time job, but still having a full slate of activity. I’m doing much, much more now than I ever did at a full-time job.

I think everyone assumes that Boss Lazy Man will tell Employee Lazy Man to take the day off from the blog to do non-blogging stuff. That’s not really how it works. People with standard jobs have a lot of insulation where they can say, “See, my boss says that I’m not available.”

Getting back to alternative income, I don’t break out the blogging income vs. the dog sitting income. One impacts the other. When I have a lot of dogs, I don’t have as much time or the focus to blog. When I’m blogging a lot, it’s usually because I don’t have too many dogs to sit.

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” This IS trading time for money. However, I don’t do it directly. Let me explain:

Sitting dogs itself isn’t a time-intensive job… at least with the number of dogs I have. However, there is considerably more overhead than you might think between booking dogs and meeting dogs for suitability. The important differentiation with dog sitting is that I can “double-dip” and earn money from another side hustle, such as blogging, at the same time. It’s different than being an Uber driver… the police tend to frown on blogging and driving. (Hmmm, maybe if I had a voice recorder and translation software I could compose some rough drafts.)

If you are interested in dog sitting, this month I wrote a very detailed article on the subject: Pros and Cons of Dog Sitting on Rover

Blogging is much more time-intensive. However, it isn’t directly trading time for money either. If I write an article for the blog today, I don’t necessarily get any money for it. The money I make from blogging now is a direct result of having built a reputation and a collection of nearly 2500 articles over 11 years of blogging.

July was a very good month on both fronts considering the circumstances. Even though I just finished mentioning the June vacation, we went on vacation in July as well! The June one was the kids were out of school and summer camps hadn’t started yet. This one in July was to celebrate our 10th anniversary. Sometimes the vacation times simply choose you.

Due to the vacation, dog sitting was a big zero for 8 days in the middle of the month. However, due to the July 4th holiday (yay holiday pricing!) there was a lot of demand. It was our best month dog sitting by far. Summer is always a busy time for dog sitting as many people take vacations. It’s a great fit for bloggers, because blog traffic tends to go down while those people are on vacations.

Blogging in July was a bit down. Between the summer slowdown and being on vacation, I wasn’t expecting a lot of traffic. Still it worked out to be an average month, so I can’t complain much.

[Side note: I highly recommend pesonal finance blogging. It helped me stay accountable. Here’s how to get started blogging with any type blog you might be interested in.]

In June, these two categories added up to $5,536.18. So for July it is…

… before I reveal the July number, I’d like to give a little preview of how August is going. I don’t know if it’s noticeable on the blog, but I’ve been writing less often. I’ve been doubling down on all the other to-do items to get to a point where my mental energy can be focused on projects that I want to do rather than the tedious ones I’m being forced to do. The dog sitting money is coming in fast and might challenge for the most of the year.

Total Blogging + Dog Sitting Income: $5,869.98

That’s nearly $300 more, which is remarkably consistent to June’s numbers. I’d really like to getting back to growing this number, but that growth is my 4th or 5th priority after the kids, supporting my wife’s military career, managing the rental properties, etc.

2. Rental Property Income

Here is where I need to fudge the numbers. Sorry, but it’s necessary.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are on 15-year fixed mortgages. This means that we don’t make money on them now, but we are quickly paying down those mortgages. In 10 years or so, we should be able to collect an estimated income of $38,000+ (in today’s dollars, after expenses) on them.

This is why I have to fudge the numbers. I think it doesn’t make sense to count them as zero income, because it would make me want to sell them and invest them differently to count for this. If someone offered you a million dollars in 10 years or $10 a year now, you’d probably wait for the million. It’s an extreme example, but waiting has value.

So how do I fudge the numbers? Here’s how:

I add up all the properties equity and values. (Zillow is very accurate for these condos as it has a lot of data points to work with.) I then calculate an equity-to-value ratio (which is the opposite of loan-to-value ratio). In short this is the percentage of the property value that we own. I then calculate the rents of all the properties if they were own free and clear.

Here are the numbers for July. We have around 42.1% of equity of properties with an estimated rent of $3200. That comes out to $1,359.33. At the beginning of the year, we only had a ratio of 36.4% which lead to $1174.74. As the years march on, this ratio will grow to 100% the rent, which should be more than $3200 (due to inflation). That’s what gets us to that $38,000 I mentioned above.

Last month the rental property income was $1323.88. At $1,359.33, we’re $35 better off this month in alternative income

Total Rental Property Income: $1,359.33

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers.

We don’t focus on putting our money in dividend stocks, but I’m going to imagine that we do. Instead we have it in index funds (for the most part). Though the index funds do pay dividends, it’s not the core goal. Also, the money I’m talking about here is in our retirement accounts, so it isn’t something that we would tap as “income” anyway.

However, nearly 20 years of nearly maxing out retirement contributions is significant. It will be counted some day, right?

Just like the rental income, we can “pretend” what the portfolio would earn if we moved all the money into dividend stocks or indexes. For the sake of pretending, I estimated that we could earn between 2.30% and and 2.70% in dividends on the portfolio.

I am purposely keeping a wide range because I honestly don’t know what kind of dividends to expect. Also, it conveniently makes it difficult for people to reverse engineer and figure out our retirement portfolios (not that it is a big secret).

Each month, I’ll pick a random number in that range to derive this number. Since it’s “pretend” dividends anyway, there’s nothing lost in being a little vague. The focus is on calculating something that could be accurate if we needed it to be.

The stock market has been doing very well, so the pretend income here has gone up a bit.

Total Dividend Income: $1,259.31

Final Alternative Income

This month I had $8,489 in monthly “alternative” income. That would be $101,863.44 a year. Last month, I had $8,094, which would be $97,128 a year. It’s kind of nice to imagine giving myself a $4 raise. It’s also nice to think this is with taking a vacation and focusing on the other priorities.

I’m still working on writing a book to boost my alternative income. I had always planned it to be an eBook, but if any readers out there know a publisher, I’d appreciate the hook-up. I think I can make a compelling argument for a book that you’d see in a bookstore… that is if bookstores still exist by the time I’m done writing it.

Net Worth Update

I had been calling this a bonus feature, but I’m going to make it a standard footnote to this report.

Since I don’t share real numbers of our net worth, this may not be very exciting. That stated, net worth is one of the most important numbers in personal finance. Showing relative growth should be of some value.

In July, our net worth grew exactly 1.12% which is still great for a single month. From the beginning of the year to now, we have increased our net worth around 12.29%%. That’s largely due to the stock market, real estate appreciation, and paying off debt. We live frugally as well.

These gains can’t go on forever. They why I recommend you read: Why (and When) You SHOULD Try to Time the Market. We’ll let the market forces roller coaster do it’s thing and enjoy the ride.

Until next month, think long-term my friends.

Pros and Cons of Dog Sitting with Rover

August 9, 2017 by Lazy Man 7 Comments

A few days ago, I got an email from a “Community Marketing Manager” with Rover.com. It was a generic pitch that I’m sure a number of personal finance bloggers got.

This picture is a reminder that dogs do NOT like to be hugged. (They feel trapped.)

I got a chuckle when I read, “Did you know that being a dog sitter or dog walker on Rover.com is a great way to make extra income?” I have been writing about my dog sitting gig for awhile now. I include it in all my monthly reports. It’s a little like asking LeBron James if he knew about this basketball sport. Okay, that’s an over-exaggeration. I don’t expect marketing people to read through dozens of articles on hundreds of blogs.

So we talked and she asked if I’d be willing to write about my experience with Rover. It seemed to me that this was clearly a sponsored post situation, because I’d be doing the marketing for them. However, because I love the dog sitting business, I asked for a tiny fraction of what I’d normally charge. So yes, this is a sponsored post, but these are my own thoughts after 2 years of experience.

What is Rover?

I describe Rover as AirBnB for dogs. For many years, when families went on vacation they brought their dog to a kennel. A kennel might have a just a small space for him/her. There are also pet hotels that offer a better experience, but the price for them can go way up. A few years back, DogVacay.com and Rover brought an alternative… people offering their own homes through an online marketplace.

When we moved from San Francisco to Boston and Rhode Island, we found that there were no reasonable pet hotels. I think the place in San Francisco charged around $40/night. In the Boston area it was $80/night because it priced per dog pound. (It was a real “meat market.”) After a little research we found DogVacay, where the prices where around $35/night. We read all the outstanding reviews and decided to give it a shot.

We barely got back in the car before we were being sent pictures. It was much better than our experience with the dog hotels.

And that was the end of my DogVacay story for a long time.

Changing From Sittee to Sitter

While planning one of our vacations, my opinion changed. The military family who had taken my dog in the past got transferred to San Diego. We had a mishap with the next closest person. Finally there was great sitter 45 minutes away. The only problem was the location. If we were going in another direction, it was a lot to go 1.5 hours out of your way.

I thought, “Why weren’t there any dog sitters near me!” The answer hit me in the face, “Because I’m not a dog sitter myself.” I am an ideal sitter. As I wrote in my About page, I am known as the local dog whisper at the local dog parks. However, we also have a sizable fenced-in yard that is a rare commodity. For some reason people tend to use electric fences in my area.

Lastly, I work from home. So 90% of the time people know there will be someone with their dog. That sounds basic, but there are a number of sitters who aren’t there during the day. It may work for some dogs (including mine), but surely someone who is around more is more desirable.

I created profiles on both DogVacay and Rover and people started to contact me. It trickled in at first in 2015, but as I got more reviews, my location, and offering stood out from the pack. In 2016, we had 566 “dog days”, which is about 1.5 dogs per day. So far in 2017, we have 236 “dog days.” It’s a bit of a drop-off. I think some of that may be due to DogVacay and Rover merging to become just Rover. Instead of being in two marketplaces, I’m now in one. Sure some of the DogVacay clients moved over, but maybe not all. And now I’m competing in one pool where I don’t stand out as much. Rover consistently puts people with 5 reviews ahead of me with my 100 reviews even though that person lives farther away or has lower reviews.

Pros and Cons of Being a Rover Dog Sitter

I didn’t intend for the introduction to go so long, but finally we get the point I wanted to cover in the article. Many people are wondering if dog sitting is right for them. Perhaps they’ve had the thought about Uber or AirBnb. I’m going to presume that if you are asking this question, you are comfortable with dogs. No one says, “I think I should be an Uber driver, but first, I need to get a car and learn how to drive. Plus I am afraid of cars.”

The easy answer is whether you should be a dog sitter is: NO!!! I don’t need any more competition! (I hope everyone sees that as the joke it was meant to be).

The reason answer is a lot more nuanced.

Pros of being a Rover dog sitter

There’s the obvious money aspect. I’m not going to go into my specific numbers, but from what I’ve written you can come up with a ballpark figure. I’m more high-volume than most dog sitters. (I write that having had only one dog for one day so far this week.) It would be hard to make career money out of it, but I always say it beats the heck out of selling MLM crap like DoTerra, Beachbody Shakeology, and Le-Vel Thrive. With MLM, more than 99% of people lose money. With Rover I was more profitable on the first day than they’ll ever be.

There’s the obvious dog aspect. If you love dogs, it is sweet to get paid to be around them. Some people get paid millions to play a game of baseball. I get paid much, much, much to play with dogs. Much less. But playing with dogs.

Lastly, I can combine it with my other work from home. Most of the time dogs need fairly little maintenance. It allows me to earn two, albeit small, incomes at the same time.

Those are three very big pros.

However, it’s not all puppies and rainbows (or rainbows at all).

Cons of being a Rover dog sitter

There are times where being a dog sitter is hectic. If you have a few dogs, feeding them can take some time. You have to keep them all separate and only eating their own food. Dogs are most likely to fight over food. Also this is around the time where I’m trying to feed our 3 and 4 year old. Their kid table is the perfect height for a dog to eat off of. So I manage a couple of different rooms. If I have spare time, I make my wife and myself dinner as well. (We eat different things than the kids, because our food isn’t “kid-friendly.”) This isn’t a dog sitting problem, but it is another level complexity.

We found out early on that when one dog pees on a rug, another dog will as well. It’s very difficult to clean the rug to the point where another dog won’t pick up the scent and start the cycle all over. Poop isn’t as bad as it usually sits on top and can be picked up. We ended up tearing up our carpet downstairs and putting some waterproof vinyl composite flooring from Home Depot. We got a a new leather couch that was easier to clean from muddy paws.

We have all sorts of minor damage to the house. There was the dog that scraped at our cabinets. There was the dog that scraped at the door. Our lawn isn’t in the best shape due to all the poop, pee, and occasional digging. At any given time, I could construct four Great Danes out of the spare hair on our floors.

So just like an Uber driver might consider the wear and tear on his/her car, you might consider the wear and tear on your home.

The next con would be your time. Dog sitting is in demand during the summer, on the weekends, and during holidays. Do you like to do things with your family during those times? Or do you want to be available as a dog sitter? It may sound easy to say, “Oh I’ll take family every time.” I’ve found that being available for major holidays could be worth up to $1000. It’s not just that one day, but people go away for a whole week and holiday rates apply. It’s easy for me to have 5 or more dogs during those busy times.

Giving up a weekend to go visit family could mean the loss of a couple hundred dollars in bookings as well. The last couple of months, I wrote in my income report that we’ve taken a couple of vacations. That’s a big reason why we’ve had fewer dogs this year.

One more con is dealing with the dog owners. A vast majority of them are great. However, just like anywhere else in life, there are always a few who are a little off. I think most animal trainers will tell you that the real trick is training the owners. Again, this is a very small percentage. To be fair, I’ve met some interesting dog owners including a handbag CEO, a New England Patriot, and a house flipper.

The last con is the “false hustle” trap. Someone initiates a booking with you. You explain why the dog will be a good fit and accept the dog. Then they say, “Oh, I booked with someone else.” This happens a lot with Rover because they immediately show competing dog sitters after someone creates a request. In an extreme case like this past Saturday, I had it happen to me 3 times in a span of 30 minutes. One of them even thanked me for my quick response… while they went with another sitter. That’s a lot of productivity for zero money.

It can be worse with Meet and Greets. These are when dog owners schedule a visit to see the place before booking. Being a blogger, I’m not very big on scheduling things. However, I understand the need and do the same for my own dog. It doesn’t happen very often, but sometimes I’ll spend 30 minutes with a Meet and Greet and the person won’t book. Usually because it’s their plans changed (or at least that’s what they tell me to be nice).

Sometimes I do freelance writing and I know a lot of other bloggers who do as well. They bake into their price things like invoicing, buying their own health care, and things of that nature. When dog sitting rates are around $40/day (in my area), it’s easy to see how losing an hour to “false hustle” trap can be a problem.

On the other hand, you never know if the next request is going to be a regular client. Regular clients are tremendous because you know their dogs extremely well and you know the owners well. I can accept booking in less than 15 seconds with a one-liner of “Happy to have Fluffy back again!”

Your Turn

Do you think dog sitting could be right for you? Maybe it isn’t a good fit for your particular life circumstances now, but what if you were able to do some work from home, freelance, or do it as a second act in “retirement”? Let me know what you think in the comments.

Cherry-Picking: Confusing Correlation and Causation

August 7, 2017 by Lazy Man 2 Comments

It’s the weekend*, so I’m going to take a little liberty with this article. At its core, it is about critical thinking, but the journey is going to take us through a lot of sports talk. If sports talk isn’t your thing, please come back tomorrow where I hope to publish another article more related to money. I think the concept of critical thinking is important and this article should show how bad .

As with most sports talk, there’s a lot of bias. As a Red Sox fan, it’s not exactly easy for me recognize great Yankees, but I try to do my best. I recognize how amazing Rivera’s career has been and how great that Judge’s season has been. I have to get this disclosure out of the way because this journey is going to be about Tom Brady. I believe that Brady should be more popular than Beatles when they were popular than… well let’s not make that mistake again.

I’m going to be critical of a person today, but I hope he finds it as constructive criticism. I have great respect for his view and he’s clearly done his research. His main conclusion will be proven correct. Ty Schalter knows his football. (If he’s upset by this article he can always cherry pick that sentence as an endorsement. Hopefully we’ll see what I did there by the end of the article.) And if nothing else, I respect him as a Detroit Lions fan. I can channel my memory of the 1990 Patriots fan and can simply say it can get better. I still hope to have a room someday that simply shows Barry Sanders’ highlights. And even Barry said “I had good meetings with both of them, joked with Quinn about how similar Detroit is to Boston”. (Yes, I’m still disclosing fan bias, because we have to when sports is involved. It’s the ultimate partisanship.)

So the article I have an issue with is Schalter’s Tom Brady Will Be Bad Eventually. We all know that Father Time is undefeated. Pick any sports player and that’s true. Tyson, Trout, or Phelps, eventually every athlete loses the ability to compete… and it extends beyond people named Mike.

What sets this article apart is that it makes the case that Brady may be bad this year. In sharp contrast, a USA Today columnist has Brady leading the Patriots to a 19-0 record. Las Vegas casinos have favored the Patriots in every game this year. These are the best projections I’ve ever seen in more than 30 years of following the Patriots, so it’s worth looking into Schalter’s theory. Maybe he’s seeing things that we aren’t.

Let’s break down Schalter’s article with a few quotes:

“But despite Brady’s unwavering intent to demolish both the AFC East and time, it’s reasonable to ask how much longer he can keep this up.

Brady’s 2016 season didn’t just stand out from the rest of the NFL — it towered over his own recent campaigns.”

In consecutive sentences, Schalter put Brady ahead of the rest of the NFL and asked if he can continue it. That’s a fair question to ask, but it is a little strange in an article suggesting that he’ll “eventually be bad… maybe even this year.” Again, I have no problem with “eventually”, just the prediction of it being this year. I grant Schalter no literal license with “maybe”, because maybe can be like Wayne describing how monkeys might fly out of his butt. It seems to cover the grey area from 0.1% chance to 99.9% chance. It seems that Schalter is clinging closer to the 99.9% chance than the 0.1% chance of Brady being bad.

“Compared with his other recent seasons, 2016 almost looks like an aberration:”

The article continues to show a few graphs of Brady’s statistics that generally move up from 2013 to 2016. They don’t show that 2016 was an outlier and I’m not sure how to “almost” counts in a statistical analysis.

Additionally some of the graphs, such as “win percentage” and “touchdowns per interception” are deceptive. While a QB can and does contribute largely to “win percentage” there are other factors involved (such as the defense)… any football fan would agree.

Touchdowns for a QB aren’t always a great indicator of great performance. The TD can be often decided by a playcall inside the 5 yard line. I’m not throwing it out completely, but it’s a little like using RBIs in baseball.

Interceptions are worse, especially in Tom Brady’s case. He’s thrown very few interceptions in general over the 2013-2016 seasons. The interception rates are 1.8 and 1.1 through 2015 before his record-breaking 2016 number of 0.5. Interceptions are a particularly weird statistic… sometimes the ball bounces off the receiver’s hands and the defender gets it. In baseball terms, we’d call that an error on the receiver. Conversely, sometimes a QB passes the ball right at a DB and he fails to catch the ball. DBs drop potential interceptions all the time. The 2007 Patriots would be 19-0 if not for this dropped interception.

In this case, Brady only threw 2 interceptions in 2016. He’s had other years when he threw 4. As the denominator becomes small, it becomes hard to statistically consider it in such a ratio. One bad bounce and a 30/2 TD/INT ratio becomes 30/3. We can plot a 15 and a 10 on a graph and show a big drop. The drop doesn’t mean anything because it was simply a bad bounce out of hundreds of throws.

Anyone doing statistical analysis will tell you that putting a weird numerator over a weird denominator is just crazy pants.

A third graph in the article shows QBR, which goes up and down. The result is that 2016 is essentially the same as the 2014 season. We’ll get to the down year in 2015 in a bit. As Sarah Silverman might say, “Put a pin in it and we’ll get back to it later.”

Let’s move on:

“Before the start of the 2015 season, Brady seemed to be on the decline; his rate stats in 2013 and 2014 were the worst since he first achieved All-Pro status in 2007. ‘Worst’ is relative: Over this stretch, he was good enough to earn four Pro Bowl nods, four division titles and a Super Bowl win.”

“Before the start of the 2015 season, Brady seemed to be on the decline” works towards the idea that he might rounding out his career. However, there’s the pesky 2015 and 2016 statistical seasons. And it is fair to say that comparing Brady’s stats now to his record-destroying 2007 season with superstar receiver Randy Moss is very unfair. Even with this extreme comparison, it is qualified that “‘Worst’ is relative” along with a bunch of awards.

The idea of Tom Brady’s decline was debunked in 2015 (according to Schalter analysis). But….

“Brady’s numbers improved in 2015 and then skyrocketed in 2016 — but his overall 2015 numbers don’t tell the complete story. In that season, his production started off significantly better than the previous two seasons, but he wasn’t able to sustain it:”

There’s a number of graphs that follow this, but let’s stick with the beginning: “Brady’s numbers improved in 2015 and then skyrocketed in 2016…” This negates all the pre-2015 analysis of a “decline”, right? If Lebron James’ “numbers improved in 2015 and skyrocketed in 2016” would anyone write an article titled, “Lebron James Will Be Bad Eventually” with a subtitle of “Maybe even this year.” If Mike Trout’s “numbers improved in 2015 and skyrocketed in 2016” would anyone write that article?

“The drop-off in his level of play over the last month of 2015 was unmistakable, and it carried into the playoffs. His two-interception, four-sack, 56.4-rated passing performance in the AFC championship game was one of the worst playoff outings of his career.”

It’s true that Brady’s numbers declined after week 12 in 2015. The graphs again are deceptive. In this case there are only two data points… weeks 1-12 and weeks 13+ (includes post season).

While the drop-off might be “unmistakable”, let’s focus on the fact that football is a team sport. Sandra Bullock can tell you about “The Blind Side.” If you need a reminder here’s the opening monologue. That’s one player. Football fans know the offense is a combination of the offensive line, the tight ends, the wide receivers, and the running backs. It is important to keep defenses honest with a running game. A good football statistician would talk about play-action.

What Schalter didn’t mention is that the Patriots had a bad string of injuries that decimated their offense. They lost their “Blind Side” early in the season with Nate Solder’s injury. They were able to compensate for it for a bit.

Wide receivers who can get open in a second like Julian Edelman are gold. Having a certain Hall of Famer Gronk as a tight-end also helps the whole machine work. Edelman got injured and missed the last half of the season. Gronk played through his injury, but he didn’t seem to close to 100%.

Dion Lewis averaged 55 yards/game as a receiver and was most productive rusher (via Y/A). But Lewis got injured and played only 7 games. Blount had 700 yards rushing, but he got injured after 12 weeks… perhaps not coincidentally related to the “Brady drop-off.” The Patriots gave carries to special teamer Brandon Bolden. Steven Jackson and James White combined for 106 yards on 43 carries.

Here’s what a local Boston website said around week 12: The Coaches Know that Tom Brady is Hit Way Too Much:

“As the offense currently stands, the playcalling is putting Brady in the scopes of the defenders since the Patriots aren’t a threat to run the ball. Since defenders aren’t concerned about the run, they’re keying in on the quarterback and hitting him at a relentless pace. The fix will have to come from a combination of better playcalling, better blocking, better rushing, and better route running.”

Comparing Brady’s numbers from weeks 1-12 with the star LT, the 2 star RBs, and the #1 WR healthy is very different from comparing the numbers to them all being injured. Brady has always been able to maximize the talent around him, but the difference between the 2006 and 2007 Patriots might have something to do with upgrading from Reche Caldwell to Randy Moss, Wes Welker, etc. The rest of the roster does matter.

The “drop-off” didn’t actually carry into the playoffs as Schalter claims. Brady had his best passer rating in 3 years of playoffs games in the first game. (And yes this cherry picking a bit, but it negates any kind of “drop-off” logic.) Then there was the AFC championship that Schafter brought up. Despite the numbers, Brady actually performed very well considering the circumstances. As NBC Sports notes Brady was hit more times in that game than ANY QB in ANY game that year. Von Miller destroyed Marcus Cannon and it won him one of the biggest contracts in football.

I had a back and forth with Schalter on Twitter, but he essentially said that it is part of playing quarterback. He’s not wrong, but having a running game and play-action essential… as is an offensive line. You have to give credit to Denver’s defense too. Despite all that, the Patriots would have tied the game if their kicker hit his extra point opportunities.

Let’s get back to the 538 article:

“Unlike in 2015, Brady may have looked sharp late in the 2016 postseason because he had fewer games on the odometer — and not by his choosing. His Deflategate-related suspension for the first four games of the 2016 season not only served as a rallying cry for the entire Patriots organization, but also spared his body and arm from a month of bumps, bruises and repetitions.”

Brady might have also looked good in the 2016 postseason because he had a complete team. Marcus Cannon went from one of the worst offensive lineman to the best when the Patriots brought their sure HoF coach Dante Scarnecchia out of retirement. The book has always been that if you give Brady time he’ll beat you. That alone could be difference. Of course the Patriots also had more weapons even with Gronk injured. Danny Amendola, Chris Hogan, and Malcolm Mitchell caught the ball at 65% or better. Martellus Bennett filled in for Gronk despite battling injuries himself. Edelman was the team’s leading receiver. Blount stayed healthy and James White added more protection from the runnning game.

It’s an easy formula: Brady + protection + dangerous receivers + running game = Great Offense.

The problem here is a classic one of causation vs. correlation. The correlation of the Patriots’ performance drop-off in 2015 lead Schalter to put the blame on Brady when a deeper analysis shows that it might have been the surrounding people. In 2016, we never got data to support any kind of slowdown in performance. All we have to go on is that Brady had the statistically best season of any quarterback in 11 years according to Pro Football Focus.

Yes he was better than he was in 2007 or 2010 when he won the MVP. It doesn’t make sense to speculate on a drop-off that didn’t happen.

So the “pattern” is a bad causation/correlation and something that didn’t happen.

Back to the article:

“This season, Brady will have no such early-season sabbatical. He’ll be facing players who were born while he was in college at the University of Michigan. Thriving at his age in the NFL is certainly rare — but it’s not unprecedented. Warren Moon, Brett Favre and Peyton Manning all had a dominant season at or near age 40. But all three experienced a sudden decline in performance, as if a switch had been flipped on their ability:”

Moon and Favre played in a different era of football. The league protects quarterbacks much more now. Favre took a lot of hits and was certainly a tough guy to take them. Let’s remember that Favre’s good post-40 season came when he went away from the “gunslinger” to the dropping shorter high-percentage passes. I give him credit for learning a new trick as an old dog. However, this has always been Brady’s game and he’s arguably the best ever at it. It stands to reason that he’d fair better than Favre.

Warren Moon was a great passer, but he was also known for his ability to scramble. He had a lot of miles on those legs. When he played in the 80s and 90s, he surely took a lot of hits. This was a time when the Lotts and Atwaters were celebrated for their jaw-dropping hits. I think it would be fair to argue that Moon playing well at 41 would be similar to a player playing at 45 today’s game.

Then there’s Manning. We all know the stories about his injuries. Yes, as the body gets older it’s harder to heal. However, these injuries were extreme. He literally went from being the best quarterback to the worst. He was injured that last season and everyone could see it. Of course Brady could get injured too. It’s also possible that Drew Brees or Aaron Rodgers gets injured too.

Predicting an injury is a difficult situation. I think you talk about when it happens and when you understand the scope of it. I think its fair to say that injuries usually aren’t the reason for a career to end.

There’s a statistical problem of a small sample size here. Each player has their set of circumstances. Brady will eventually has his as well, but we don’t what that is now. There’s nothing in his statistics to show that he’s any different today than he was 10 years ago. What we know is that he’s created a business around being athletic for a long time and loves playing football. This past offseason, he said that football is particularly fun now because he “has all the answers to the test.” You can’t show him something on the football field that he hasn’t seen. Warren Moon didn’t have the benefit of all the advanced film study we have today.

Back to the article:

“New England seems intent on helping Brady replicate his 2016 season. This offseason, the team traded for speedy wideout Brandin Cooks to bolster the Brady arsenal. Patriots owner Robert Kraft compared the impact of this spring’s trade for Cooks to the team’s acquistion of Randy Moss in 2007. That deal sparked the greatest statistical season of Brady’s career. Some experts are projecting the Patriots to go undefeated, as they did after Moss arrived.”

Once again, this goes against the narrative of the article. The Patriots did indeed add more weapons. Also Gronk appears to be healthy. Brady has never had a bad season when he has players out there. Injuries can and will happen. That’s the nature of the sport.

“There are a lot of reasons to believe Brady will stay excellent, from his self-care regimen to the talent around him to perhaps the best head coach in NFL history. But Favre and Manning were both playing their best football immediately before playing their worst.

Brady picking up at age 40 where he left off at age 39? That would be unprecedented.”

Except that Warren Moon got much better from age 40 to 41. Even in Moon’s age 42 season (his last as a starter) he had a higher QB rating than he did during his 4 year span from age 28-31.

Your Turn

I think it’s likely that Schalter was tasked with writing an article that supported an agenda. Since anyone can have a website and express their views (this is one example), a lot of people have the same ideas. It’s at least an interesting idea to explore that Brady hasn’t put together a full 16-game regular season for 2 seasons. Unfortunately, I think analysis of 2015 missed the mark and there’s no data to support a performance drop in 2016. It was quite the opposite. Predictions of a perfect season show that many aren’t expecting it in 2017 either.

Schalter will be right, Brady will be bad “eventually.” Of course Max Kellerman said that last year. And he did it again this year.

Predict something that going to eventually happen enough times and you’ll be right… but you could be wrong a bunch of times first. The problem is that when you are eventually right, people will go back and say, “You were wrong too many times, so this means nothing.”

So what do you think? Do you see cases of odd statistical analysis used to cover up the whole story?

* It WAS the weekend when I started and intended to publish the article.

Turn Your Expenses into Profit

July 26, 2017 by Lazy Man 2 Comments

I was reading an article on WalletHacks about how to make money with your car and it reminded me of an idea that I had for my own car. The idea was pushed very far back in my mind.

What’s the idea? I’m looking to rent my car. People can rent their cars via Turo.com. I have an old (2001) Mustang Convertible with low miles in very good condition. (Yes, I wasn’t always fiscally responsible.) I’ve been keeping it off the streets for a few years because it wasn’t car seat friendly for the kids. The back seat was just too small. It simply wasn’t a very practical car for us.

We live in a beach area, I think there might be a small market for people who want to cruise around. Maybe there’s no market for it, but it’s a try, right?

I had a similar thought a few years ago. We had paid a few thousand dollars for a great fence to keep our dog safe. (I didn’t think it was a great fence, but I’ve had a lot of compliments on it. I didn’t think that complimenting people on their fence was a “thing”, but it seems that it is.)

In addition to the fence a dog costs money. What I never thought about at the time is that a fence and experience with dogs could make me money. Without the two, I wouldn’t have my dog sitting gig.

A few years ago, I got solar panels. The idea wasn’t to make money, it was about limiting our expenses. Solar panels aren’t cheap… they are a big expense themselves. This money we paid literally $2 dollars for electricity (which was subtracted from a large credit we had from previous months). In a decade our Lyft/Uber gPod will make us money.

Finally, there are people who rent out their rooms via AirBnB. It’s not a good fit for us right now. I’m worried about stranger-danger with our 3 and 4 year olds. For many others, it is a great way to make a few extra dollars on the side. I believe that many of them didn’t think, “I’ll buy this really big house to make an income.”

Are any of these ideas of a good fit for you? Do you have some new ideas? Let me know in the comments.

Alternative Income Update: June 2017

July 18, 2017 by Lazy Man Leave a Comment

It is a little past the middle of the month, which means I’m a little late in reviewing my alternative income for the last month. Many bloggers publish their monthly updates a few days after the month is over. As a landlord, I have to get all the checks and have them deposited before I start to compile the numbers. That usually takes about a week. We tend to concentrate my our vacations to the summer time, so it took a little longer to get checks and cash them.

For those that don’t know the term, “alternative income”, I invented it to be purposely vague. In general, it is income that comes from passive investment and side hustles. I like to think of alternative income as anything where you aren’t directly trading your time for money.

To work my investments into the alternative income paradigm, I have to fudge the numbers a bit. You’ll see what I mean as we go along. Or you can see a more detailed explanation back in January.

If you’ve been following this series, I haven’t been happy with the way I’ve been fudging the rental income. This month, I’ve got two new calculations that I like better. I could use your help in the comments deciding between them.

Last month, May, my alternative income added up to $8,145, which was a record for the year. May was a big step forward for dog sitting (Memorial Day!) and the blog had a lot of other advertisements.

Lazy Man’s Alternative Income June 2017

In looking at our alternative income, I break it down to 4 main sources… each with their own caveats.

1. Blogging + Dog Sitting Income

Some “real world” people ask me, “What do you do?” This is my best answer. I’m not a fan of the question, because it is difficult to answer. I also feel the question is often used to pigeonhole someone. Maybe I’m over-analyzing, but my response of “software engineer” seems to be received differently than “dog sitter.” Nonetheless, some response is required. I rotate among all the things that I do.

The shortest answer to the question may be that I’m a stay-at-home dad. The kids go to school/camp/daycare for a few hours, but I usually have some other family errands (shopping, cooking, dishes, laundry, walking my own dog, etc.) to run during that time. It can take hours for me to just catch up on all email related to blogging. I don’t think most people grasp the concept of not having a full-time job, but still having a full slate of activity. I’m much, much more now than I ever did at a full-time job. I think everyone assumes that Boss Lazy Man will tell Employee Lazy Man to take the day off from the blog to do non-blogging stuff. People with standard jobs have a lot of insulation where they can say, “See, my boss says that I’m not available.”

You may be asking right now, “Isn’t alternative income about NOT trading time for money?” This IS trading time for money. However, I don’t do it directly. Let me explain:

June was a very good month on both fronts considering the circumstances. For some strange reason, my son’s school ended 2 weeks before camps started. For most of those two weeks, I was 100% focused on full-time child care. We chose a few days to take a local vacation. It wasn’t an ideal vacation overall and (a small) part of that was that I had no real internet access. As I wrote in the preview last month, “Hopefully, I can cram a month’s worth of work into 10 days. If not, June may be a decent test of how passive this type of income is (or isn’t).”

Due to the vacation, dog sitting was extremely quiet in the middle of the month. The last week of the month was very, very busy. I’d like to say that lead to something unexpected, but it was essentially an average month. Summer is a busier time, so I’d be typically look for very good months, but I’ll take it.

Blogging in June also went well. I didn’t have time to write very much, so I wasn’t expecting much. It turned out to be an above average month. That might be due to the slow start I had at the beginning of the year with the change in theme design. The average month was really brought down there.

[Side note: I highly recommend pesonal finance blogging. It helped me stay accountable. Here’s how to get started blogging with any type blog you might be interested in.]

In May, the two categories added up to $6,272.43. So for June it is…

… before I reveal the June number, I’d like to give a little preview of how July is going. The first two weeks have been difficult because of Independence Day and my wife and my 10th anniversary. We took another local vacation (this time without the kids) to celebrate that. July is looking to mirror June a bit, but I think I can beat it if I hunker down a bit.

Total Blogging + Dog Sitting Income: $5,536.18

It’s down from May, but all things considered I have to be very happy with that number.

2. Rental Property Income

Here is where I need to fudge the numbers. Sorry, but it’s necessary.

We have three rental properties in our real estate accidental “empire”. (“Empire” is in quotes for a reason – it is a joke.) They are on 15-year fixed mortgages. This means that we don’t make money on them now, but we are quickly paying off the mortgages. I noticed that they aren’t appreciating at all this year, but they did well last year. In 10 years or so, we should be able to collect an estimated income of $38,000+ (in today’s dollars, after expenses) on them.

In previous updates, I imagined that we refinanced the properties to 30-year fixed mortgages so that we would make money on them now. There were two problems with that idea. As mortgage rates change (they are higher now), the idea of refinancing them actually becomes a penalty. Also as I pay off the mortgages, refinancing makes very little difference. If you are down to your last $5,000 in payments, refinancing means next to nothing.

As I wrote in the beginning, I have two new calculations for this update.

Method 1:

The first calculation is making the assumption that I sell the rental property with the most equity and use that to pay off the mortgages on the other two. Unfortunately, it’s only enough to pay off 1.5 of those mortgages. From Zillow, I could sell the first rental property for X and the other two properties add up to Y. Those Y rental property would likely bring in $1800 a month if we owned them free and clear. Unfortunately the sale of X is only worth only about 55% of Y. If you take 55% of $1800, you get $990. In reality, I could only buy one of the properties in Y free and clear by selling X, but I’d have some left over money unaccounted for. So my fudging here is to use that $990 number.

I don’t blame you if you didn’t follow that. I needed a spreadsheet to keep the numbers straight. I hope it does make some sense. This is an improvement over the previous model because as the properties gain value, they build more equity. Also every month, the mortgages on Y are getting smaller. It doesn’t rely on unpredictable mortgage rates.

Method 2:

For this calculation, I add up all the properties equity and values (Zillow is very accurate for these condos as it has a lot of data points to work with). I then calculate an equity-to-value ratio (which is the opposite of loan-to-value ratio). In short this is the percentage of the value that we own. I then calculate the rents of all the properties if they were own free and clear as this will be the alternative income when they are paid off.

Fudging the numbers, we essentially have that equity percentage of those rents/alternative income. So we have around 41.1% of an estimated rent of $3200, which comes out to $1,323.88. At the beginning of the year, we only had a ratio of 36.4% which lead to $1174.74. As the years march on, this ratio will grow to 100% the rent, which will be should be more than $3200 (due to inflation).

I prefer method 2 because it seems easier to understand. It also takes all the properties and their rents into account. The caveat is that it isn’t like we have this money as income now.

Which method do you like better? Either is better than the old refinancing method, right?

Total Rental Property Income: $1323.88

3. Dividend Income

Like the rental property “income”, I’m going to play a game with the numbers.

However, nearly 20 years of nearly maxing out retirement contributions is significant. It will be counted some day, right?

The stock market has been doing very well, so the pretend income here has gone up a bit.

Total Dividend Income: $1,234.26

Final Alternative Income

This month I had $8,094 in monthly “alternative” income. Last month, I had $8,145. The methodology of how I calculate real estate bridged some of the gap of the blog/dog sitting earnings. At some point, I’ll go back and restate all the numbers with the new real estate methodology. That is, if I continue to use it. (And again, please, please, PLEASE give me your thoughts.)

Because I wasn’t able to do much work for half of the month, I’m going to categorize this as a big win.

Bonus! Net Worth Update

(Can I call this a “Bonus” when I’ve done it for a few months now?)

Since I don’t share real numbers of our net worth, this may not be very exciting. Still net worth is one of the most important numbers in personal finance. Showing relative growth should be of some value.

In June, our net worth grew exactly 1.34% which is great for a single month. With half the year over, we have increased our net worth around 11%. That’s largely due to the stock market, real estate appreciation, and paying off debt.

These gains can’t go on forever, but we’ll let the market forces roller coaster do it’s thing and enjoy the ride.

Until next month, think long-term my friends.