Self Reflection Sunday

"The days are long but the years are short"
Sept 25, 2016
Self Reflection Sunday

Inertia is a powerful thing, this past Sunday I had promised myself to workout 3 days. Half way through the week I had not taken a step outside. On Wednesday, as tired as I was I forced myself to go out. Many people say the first day is the hardest, but really the second day is harder. On the second day you were already tired out from the first day and you have carry all your aches and pains on this new run. And the third day is harder still, having to carry days 1 and 2. And the 4th and 5th until one day it becomes easier. I doubt that I would ever notice it ever getting easier but perhaps much further down the road I will be able to appreciate how far I have come.

Fiscal responsibility, the requirement to keep you and your household afloat, is tiring. I see friends with many more toys and much nicer things and get envious. I keep looking at my budget and my budget never allows for it, invest first then save then spend. Those shiny toys are never an investment and definitely not a priority, I know they only cost money, and never bring in money. To spend and enjoy now or invest and enjoy later is a difficult. In the long run, investing for later makes more sense. Everything I have learned has taught me that. But the urge to spend what I have for some short lived fun is tempting. Each day having to do it is tougher than the last but I know if I can stay on the path that I am on, then I will be in a much more stable place in a decade. But it will take a decade... a decade of holding tight... no major expenses... no new toys... just slow and methodical. It will not be an easy decade but my choices are to invest and grow my income or spend now be stuck in debt forever. And when I have children, I can either pass on income or pass on debt.


For my real estate education, I have learned that math is a big component of it. Making sure that your purchase is a good purchase the second you buy it is a novel concept. Other people may hope for appreciation to build wealth, but after reading up, it seems good investors have no appreciation for appreciation. Real estate appreciation is icing on the cake, it should not be a factor deciding on whether or not to buy the property.

This past week I was able to run on 3 days and averaged 3 miles a day. This coming week I will continue the inertia and exercise for another 3 days.  I continue to sock away money towards stocks and savings, unfortunately those investments are currently down. I knew the risk I was taking and I have to be prepared to ride out the lows and hope for the highs. In the coming week, I will also aim to analyze another 10 properties. Most people will give up after 1-2 months, but I will promise myself to get through at least 100 properties.

Inertia is a Powerful Thing

"An object in motion stays in motion"
Sept 21, 2016
Health and Well Being

(Image Source)

There was a phrase in the old TV show Bill Nye the Science Guy that really stuck with me: "Inertia is a property of matter." I can no longer remember the rest of the song but the phrase "inertia is a property of matter" for whatever reason is buried in my brain and will likely be with me until I rest in my grave. At the time, I had no idea what inertia even was, the whole concept was confusing to me. Yet the more I learn about inertia, the more intrigued I was in terms of how we can apply it to our everyday lives.

Inertia is the property that an object will keep doing the same thing it has always been doing unless you put in energy for it to do something else. Lost yet? It breaks down to this: if an object is sitting still, it will continue sitting still. If an object is in motion, it will continue to be motion. And this will be true until you put energy to get the sitting object going or put energy to stop the object in motion. The property is true of everything, whether it is a ball or a spaceship.

Inertia is also a property of many people's lives. We often get stuck in our daily routine of waking up, brushing our teeth, eating breakfast, going to work, eating lunch, going back to work, going home, eating dinner, then repeat. It becomes really easy to follow this same inertia every day. However, we may not be satisfied with this routine, and may want to change at which point we would have to confront inertia. Inertia will be working against us, trying to force us back to our same routine. Inertia is why it is so difficult to diet or work out. Our regular routine did not take into account those new things, and we struggle to have energy to do what we had before and take on these new tasks. At this point, inertia is fighting to get this intrusion it out of our lives so we can be back in our old routine. It will take lots of time and energy to get those habits into our daily routine, time and repetition. Once we can accomplish that, then inertia becomes our ally. If we can work our diet and exercise into our daily habit then eventually it will be harder to stop doing it than to just continue. Just think about the last time you did not brush your teeth. How weird was it to walk around all day, possibly with bad breath. We were not born with an urge to brush our teeth, yet it has become such a regular part of our lives that it would be harder to stop. At this point inertia is helping us continue the good habit of brushing.

I recently had an experience with inertia while working out. Unfortunately I have not made a habit of working out quite yet. And when I do not work out for a while, then my desire to work out diminishes substantially, and it becomes harder and harder to get started again. I made myself a promise this past Sunday to work out for 3 days of the week, and found myself half way through the week without having started. So I forced myself to go for a run, feeling my heart race, and my lungs strain. They too were out of practice by this point. I must put in energy to get my inertia going, to the point where working out would be a regular as brushing my teeth. Today was day 1 of 3 of for my workout, and I am happy to say it is done. Hopefully this inertia continues on to a workout for the rest of the week.

Once inertia has started moving forward it will be tough to stop. I can see this applying to the other aspects of my life including learning to invest and honing my skills. I know that if I want to make those changes in my life, then I need to put in energy. Right now it sounds difficult and tiring... and it's late...but I am off to brush my teeth so I know it is doable.

Toastmaster Tuesdays - The High Cost of an ER Visit

Sept 20, 2016

Social  Group

(This was project 4 of the Competent Communications Manual. It won best speech of the night)

Project 4: The High Cost of an ER Visit

 

It is no secret that the cost of an emergency room visit can be very high, astronomical at times. A recent study conducted from 2006 to 2008 showed that the average cost of an ER visit is $1,233 but costs on the high end can be $17,000 for a headache and $24,000 for a sprain. I don’t know about you but thinking about those numbers gives me a headache…whoops there goes another 17 grand. For the average person, a $1200 bill can be a setback, but many have little choice but to use it. Tonight I will not be talking much about the high cost of medical services, though yes it is a big concern, but I will actually be talking about homelessness.  I would like to talk about why homeless people use more medical services, explain how we can provide housing for the homeless, and talk about why providing housing will actually save money.

Homeless people are much more likely to use hospital services than the average person. One hospital reported that 225 homeless people had visited the ER for a combined total of over 2100 times in a one year span, roughly 10 visits per person per year. Without adequate shelter, homeless people are much more prone to infections, violence, abuse, and extreme weather. Small cuts can turn into large infections, repeated exposure to violence and abuse can lead to prolong recovery periods, and extreme weather can lead to permanent damage. Often times a homeless person would get picked up by an ambulance when they are on the brink, taken to the hospital where they are patched up, and then discharged into the streets where they are susceptible to the exact same risks again. The ER becomes a revolving door, taking in patients only when their conditions have gotten to a critical status, spend thousands to patch them up, only to kick them out then have them return a little while after with the same conditions. While many of us may dread spending a night in the ER, many homeless people will pick a safe night in the ER over spending a night in the cold or in the streets.

A solution to homeless people using the ER like an Airbnb would be to build them housing. You may be thinking that we already have housing for homeless people, but often times the shelters are temporary solutions to a very long term problem. Instead we can provide homeless people with tiny houses, houses that they can call their own. Tiny houses are 100-200 square feet homes that are durable. They will keep the person off the street reducing the risk of infections, shelter the person from others, and protect them from extreme weather.. They will have a bed, electricity, and indoor plumbing; luxuries that many currently have no access to. Because of their small sizes, cities can house many homeless people in areas that would otherwise not be utilized such as an abandoned lot. It is much easier to establish a solid foundation once the basic necessity of housing is accounted for. Once a homeless person is able to get on their feet, able to hold steady employment, then they can start paying their own mortgage on their tiny home, and eventually own it. Employment that gets a homeless person to the point where they can pay their own mortgage is what will make this solution sustainable.

Many people may hesitate at the thought of paying to house homeless people. But they often forget that they are already paying to house homeless people. Homeless people typically cannot afford one night’s stay in an ER, meaning that the ER does not get paid for those services. Those services are offset by charging everyone else more. So even if you are not trying to pay for someone else’s housing, you ultimately are if they enter the ER. Tiny homes are also very cheap to construct, costing no more than $10000 or as a 30 year mortgage would be less than $50 a month, meaning you can house a homeless person for 2 years for the cost of a single ER visit. Also by providing housing, homeless people are less likely to end up sleeping in parks and commercial areas where they can negatively affect businesses meaning the community as a whole would benefit as well.

We know that homeless people are more likely than the average person to utilize expensive medical care such as the emergency room visits. Providing homeless people with tiny houses that they can eventually own will provide them a sense of permanence and be much more cost effective. Ultimately, permanent housing allows homeless people a chance to pick themselves up, to have a safe place to go at night, a place to shower and use the restroom, and to reach gainful employment. Because once we take homelessness away from homeless people, then what we are left with… are people.

Happy Mid-Autumn Festival (aka Mooncake Day)

" The mid-autumn festival isn't about the laterns or the mooncakes, it's about family... and who has the nicest lantern and the last piece of mooncake..."
Sept 18, 2016
Self Reflection

(image source)

The mid-autumn festival, also known as the harvest moon festival, also known as mooncake day is upon us and oh boy is it wonderful. The celebration is held on the the 15th day of 8th month of the lunar calendar. This year, the 15th happens to be on the same day as the gregorian calendar (the calendar we typically use), however it is a different month. As is typical with most Chinese celebrations, you will find people celebrating with bright colors, lanterns, and fireworks. But what sets this holiday apart are the mooncakes.

Mooncakes are seasonal treat, similar to fruit cakes, but infinite times better. Most are packaged in a decorative box containing 4 cakes, each about 3 inches wide. The most common and my favorite type of mooncake consists of lotus paste and one or two salted egg yolks inside. It is the duck confit of the baked dessert world, a rich decadent treat that is both sweet and savory. The filling should be thick and smooth, never oily or spoiled. The egg yolk should be hardy and fragrant. Though the lotus paste and egg yolk combination is the most common, mooncakes can come in whole host of different flavors. There are ones with nuts, sesame paste, wax gourd, red bean, and some are even chilled dessert style. Be especially careful to avoid durian, a smelly fruit delicacy, unless you know what you are getting yourself into.  If you have never had a mooncake before, I would highly recommend going to your local Chinatown or Little Saigon and picking up a box.

In my family, we like to cut the small cakes into 8 pieces. Potentially this is because 8 is a lucky number in Chinese culture.  It is also good practice because of how rich this treat is, you may become overloaded trying to eat a whole one by yourself. We would enjoy these mooncakes with tea and good times.

This year I am hosting the get together, so I am cooking up some up a Chinese classic, Memphis style baby back ribs... just like nana used to make. It will be paired with a side of salad, fresh fruits, apple cider, and madeleines. We are celebrating a little late, because this was the soonest we were able to bring the whole family together.

All this eating the last few weeks have made my face a look a little more moonish as well. Goal for this coming week is the work out for 3 days to get the blood going. I am furthering my research into real estate investments, and am looking to buy a place in the next few months. The whole prospect is scary but exciting.

What I learned from spending my vacation days watching TV

"Wasting time is very expensive"

Sept 14, 2016

 

I have always had a inclination towards Reno. Reno is a fun little town with gambling, cheap booze, and pretty good food. I like to think of it as the poor man's Vegas. I used to come here during my college days en route to snow boarding. This trip however I skipped the snow (not that there is any to be found in early September), and ended up watching TV in the hotel room. 

My trip began with a complimentary 2 night stay at the Grand Sierra Resort. It was short notice as these promotions typically are, but my wife and I just happened to be off, so we took the chance. Reno is a 2 hour drive from our house with lots of spotty radio coverage. Topically this would mean a long ride with one of us asleep or staring out the window but on this trip we had a better idea. Right before heading out, we checked out an open house in our home town. We are not looking for a new place but we do enjoy looking at ideas on how to improve our current place. We found that we had plenty to talk about on our way up. Design talk lead to money talk, which lead to a good discussion on investing and retiring. 

We checked into our room, which was far nicer than we were expecting, especially for being comp. It was nice and spacious, and even had a couch. One of our favorite features was the cable TV. I have not had cable for over a decade now, although my wife had only recently cut the cord (when she agreed to marry me). My wife and I ended up spending about 3 hours just watching TV. We got hooked on a marathon of Fixer Upper and was amazed at what can be done with old homes. Watching the show brought us back to our discussion about investing and potentially using real estate as an investment vehicle. I practiced using some of the techniques I learned from Bigger Pockets to gauge the potential value of the properties. Overall it was a relaxing time, but also insightful. The other thing I learned was how big of a distractions TV can actually be. 3 hours went by and we barely knew it. I have not had cable for over a decade, and the sudden availability of 24 hour programming and catching commercials was constantly fighting for my attention. It is a good thing that we do not have cable at home, otherwise we may never get any work done. 

I was able to gamble a little while in Reno, how could I possible pass up the black jack table while I am here. One thing I did notice was how many people were playing the slots. Per regulations, slots in Nevada have to return 88-93% of the money that is put into them, meaning that the casino has a 7-12% return on any given machine. That is why they have so many slot machines and they give out points and comps for playing those same machines. I saw dozens of people playing the slots at any given time but what really caught my eye was that one of the machines guaranteed a "100%+" payback meaning that you can actually win money if you play long enough. Surprisingly, no one was playing at this machine. There were plenty of people playing within range that surely must have spotted the sign, but no one was actually playing the game. The machine turned out to be a video poker machine, very old and toned down compared to the 3D slots with their giant vibrant screens, loud noises, and flashing lights. It dawned on me that the majority of people who play slots are not really playing to win money, they are playing for the flashing lights and sounds which are far more exciting than winning the actual money. 

Reno was a fun getaway, the free room definitely helped. Truth be told, I still ended up spending a good amount of money on food and gambling despite the free room. I learned about how addicting gambling can be, where people will forgo winning money to hear loud noises and see bright lights. I also learned how addictive TV can be, and how hours can be lost without knowing it. As I have written before, time is our most valuable asset, wasting time is therefore very expensive.

Self Reflection Sunday 9/11

Aug 11, 2016
Self Reflection

This week, I took a step back and looked at how fortunate I have been. I live in the greatest country in the world because my parents took a chance over 20 years ago to start a new life. We have been fortunate and have enough to eat, have shelter, and clothing. Although I still have concerns about the future and investing, I have to take a step back and appreciate how lucky I have been in life. Statistically the odds may have been against me, growing up poor and with my parent both working 10+ hours a day 7 days a week. I never thought I would have to chance the chance to explore San Diego, Portland, and Seattle just to have enriching experiences. I am fortunate enough to have my parent give me their 2005 Honda, which still runs great, to have road trips. I do not need a shiny new car, though I would like to have one in the future; I will have to earn it first. It is incredible that we live in a time where we can travel hundreds of miles away and still make it back from our trip to sleep in our own beds at the end of the day. We have technology that will GPS us all the way there and tell us what the good sites and food are. We are truly fortunate and living in a great time.

I only posted one new article this week on the blog regarding investing versus gambling but it was one that I was proud of. It made me realize how important information and education truly are. This week I have been focused on creating a business plan and learning more real estate investing. Both processes require lots of forethought and calculations. I really wished someone would have taught me this stuff back in high school.

Today is also the anniversary of the 9/11 terrorist attacks on the twin towers. It was such a heart breaking moment that will forever change US policy, diplomacy, and rhetoric. Those people in the towers were just going about their day to day lives to have something so heinous happen. Unfortunately we cannot control the universe, so we have to make the most of our time on earth.

I am planning a few more road trips coming up, and will get some pictures on here as soon as I can. Fun times ahead and I am feeling very fortunate for what I have. But there's no resting now, I am going to strive to do more and live even better.

Self Reflection Sunday

"The one investment that will always generate returns is investing in yourself"
Sept 4, 2016

Last week I was attempting to figure out what is the best course for my career, either going for that 1 in a million chance to become further specialized in my field or taking a side route. After a long period of discussion with my wife, I have settled on the side route. Normally this would be because I was too lazy or unmotivated to work for this other job, but this time it is because I want to take that time and energy to invest in myself.

Working in my field is great but all the financial advice I have gotten have led me to the conclusion that diversifying your income stream is best. And since there are only so many hours in a day, and days in a year, I know that passive income through stocks, technology, and real estate will be my goal. I have started using Robin Hood for stock investing, Android Studios to learn app building, and Bigger Pockets for real estates.

I will not allow myself to use the time I would have had needed to simply relax and enter a vegetative state, I will improve and develop. I want to be able to retire early, work only if I want to, not because I have to.

Gambling vs investing

 

Sep 5, 2016
Financial Safety

Is the picture above gambling or investing? How can we spot whether something is a gamble or an investment? Is blackjack a gamble or investment? What about stocks? A business? If you ask different people in different situations, they will tell you a different answer for each of those examples. Gambling and investing has a lot in common but one small difference but important difference makes it wildly different. 

Both gambling and investing involve risk. Whether you put your money on a blackjack table or into an index fund, there is always the risk of walking away with less money than when you started.When you go to a casino to play blackjack, the odds are against you. Just being forced to act, having to decide whether to get dealt another card or not, before the dealer increases your risk of busting and you losing. Most people would consider money you put in at a casino gambling because the odds are greater that you would lose money than you would win money. Stocks and even index funds have risk as well. On any given day, a stock or index can go up or down. Index funds consists of hundreds or thousands of stocks, and attempt to reduce the risk of losing all of your money all at once. The argument is that historically index funds have always increased over time, however even the best investors will tell you that past trends are not indicators of future performance. Historically, stocks spend more time in a bear or slow market than a bull or rising market. That means if you own an index fund, you would need to know if your stocks are in bear or bull mode. Eventually you will have to sell that index fund to make money, which means you will have to time the market, trying to figure out if your stocks are ready to sell or being sold prematurely. Timing the market is a big taboo for people who do buy index funds. So now you have a bunch of stock, that you believe we will increase over time, but not know how long to hold it for or when to sell. Also  most people have no idea the make up of an index fund. If your index fund is full of junk stocks, then you will simply have hundreds of well diversified junk stock. You only have to look at the stock market crashes of 2009 and 1987 to see recent examples of the magnitude of risk involved when you put money in the stock market. There is an inherent risk in either blackjack or stocks.

Gambling and investing also involve reward. People play blackjack at a casino because they want to win money. If they just wanted to have fun, they can easily pick up a deck of cards for $1 and do the same thing at home; it sure would be much less expensive. Each time the player decides whether to hit or stay, they are hoping that they will win money. Each time a stock trader or investor buys or sells, they are hoping that they had bought and sold the stock at a good price. In either situation, there is no guarantee that the gambler or the investor will come out ahead, but they are certainly hoping that they do. That reward is what they are playing for, and they take on the risk of losing their initial investment in order to achieve that potential gain.

The biggest determinant that separates a gamble from an investment is knowledge. Knowledge of the product and risks and rewards involved.Warren Buffett, one of the richest men in the world, often advises the average investor to put their money into low cost index funds. However, Warren Buffett does not put his money into index funds. Is he being hypocritical? No. That's because the average investor does not have the knowledge and resources that he has. Warren Buffett spends much more time and energy analyzing companies to figure out which has the best return on investment. The average person would have no idea, and therefore would take on a much larger risk betting on individual companies than a large swath of companies that represent the overall economy (such as the S&P 500). In the case of blackjack, if you are playing blackjack, chances you are gambling. If you are new to the game, then you may not be fully aware of the rules or strategies that you can utilize. However if you are the casino, then you invest in blackjack.  You know that on average the gambler will lose 5% of whatever they play with. In the picture above, it did not matter whether the player wins or loses that one hand, the casino knows that if enough players keep playing, the casino will make money. 

Knowledge can mitigate and change your risk therefore altering your risk to reward ratio. In blackjack a player can learn to odds given what they have in their hands versus what the dealer is showing. They know for example that the dealer has to abide by certain rules such as staying on a 17. If the odds are that the dealer has 17, and the player has 18, then he is more likely going to stay. He is able to use that knowledge to his advantage to reduce his risk of busting and losing. The advanced players can even make use of surrender bets where they would give up their bet for half of what they bet initially and even keep track of the number of each card that has been dealt to mitigate their potential loses. They are able to utilize these advantages such that when they play for the long term, they will win overall even if they end up losing any given hand. These advanced players have changed the game of blackjack from gambling to investing. In the stock market, Warren Buffett is able to analyze the companies he wants to invest in. He does not rely on someone else to create a batch of stocks, instead he has the knowledge necessary to pick individual stocks and companies. So even when Warren Buffett buys individual stocks, he is investing and not gambling.

In any situation that comes to money, knowledge is the key. If you do not understand where your money is going, and the full business of what you are putting your money into, then you are gambling. It does not matter if you are buying bonds, stocks, indexes, housing, rentals, commodities, or commercial buildings, if you do not know the business, then you are gambling. You are putting in money, just like the blackjack player, and hoping that money comes back. To be an investor, you must put in time to gain the knowledge needed to mitigate your risks and maximize your potential returns.

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Man With a Plan

Aug 31, 2016
Self Growth

I play a little game with my brothers call Million Dollar Idea. The whole idea behind the game is that if you can come up with one million ideas that are worth a million dollars each, then even if you have a one in a million chance of becoming a millionaire, then chances are you will become a millionaire. That may be a bit of a tongue twister and perhaps a brain twister, but the idea boils down to a fun exercise of coming up with potential business plans and strategies. For example, what if we made top ramen more refined and luxurious, for those college students that are on a budget but still want to eat well. The ramen could have more than just noodles, or is organic, or whole wheat, or some other unique feature that would appeal to a slightly different clientele than those that eat top ramen. It can have unique flavors, vegetables, sauces, oils, and a medley of proteins. Surely we would make millions.

Well after a few months of this game, my wife challenged me to actually write out a business plan and proposal. I took her up on the proposal, because who honestly does not like a good challenge.I had toyed around with so many ideas already it made sense to take my favorite idea to the next level and create something more formal, to assess the strengths and weaknesses of the idea. I found a template online and sat down to begin writing. To my surprise, the template was Twenty-Nine Pages long! Wow, I had no idea that the plan would take this long to actually develop. Having a 29 page template would likely mean that the business plan would be 50 or more pages and may take days or weeks to create. As I begin reading through each of the prompts on the template, I realized how undeveloped our Million Dollar Ideas actually were. It took much more time to figure out financing, competitive advantages, growth in the industry, etc. Even my favorite idea would require much more time and energy before it can become worth of a million dollars. What I also noticed was that although some of the prompts had features that I had not considered before, they were questions that can be answered with additional research. I can find industry growth charts and stock values of companies a proxy on growth. I can research wholesale acquisition cost and price per square foot on real estate rentals. There is so much that I still need to learn but this does appear to be a worth challenge worth taking up.

On a side note, I had previously attempted to write an app for Android. Since the bug incident, I have uninstalled and re-installed Android Studios and the Java Development Kit but the program still will not boot. I am starting to lose heart that I will become a programmer, but for now I have more pressing issues and a business plan to write.