There are many ways to gauge one’s life. Two of the most popular ways to assess the quality of one’s life is usually either by the amount of happiness, or the amount of money—or both.
A good majority of us yearns to become as rich as possible, as quickly as possible. I’m certain that’s why some of you stumbled here—looking for how you can be rich like those guys on late-night infomercials who guarantees it in 30 days, or your money back.
Since I’m nowhere near being qualified as a psychiatrist or a self-esteem coach, I’m of no use there, so therefore—well, no, I’m not nearly as qualified being a financial adviser or a CFA either, really. But, I wasn’t intending this blog to be a psychological / emotional advice column. Well, alright, I'll help out if I can.
Meanwhile, I’ve been “investing” for the last 15 years in one form or another. The majority of my investing can be considered pop or voodoo investing, really. Call it gambling. Seriously, some experts go so far to actually call it “pornographic.” Investing = pornography?
A little investing / finance background of me:
I opened my first mutual fund account at Coast Federal Bank roughly 15 years ago. Later on, Coast Federal was bought out by Home Savings who was ultimately purchased by Washington Mutual. I remembered we bought B-class shares of-- whatever fund it was. The "broker agent" just seemed like such a nice fellow, indeed. He exhibited *much* more skill and knowledge than anyone in my family-- how could we simpletons know any better than a full-time money-managin’ dude?
Since savings account rates were barely 2% back in those days, I started socking money away into what I thought was the safest investment vehicle at the time, CD's (certificate of deposit). They returned about 2.1% or so. To diversify by intending to experience dramatic capital growth, I subsequently discovered "growth" mutual funds. MANY years later would I realize there was almost no "growth" in "growth" funds-- that account balance only grew because of the one right thing I did: DCA (dollar cost averaging). From mutual funds, I tried my chops, well very little of it really, in the ridiculous dotcom tech-wreck (after I got out of college). Once the glamour of that turned into gloom, back into mutual funds I went, still with Washington Mutual.
Let’s pause for a moment: did I know what I was doing? No, my gut feeling told me I didn’t. My brain agreed with my gut: I *knew* I didn’t. My problem was I didn’t know *how to invest correctly short of working on Wall Street.* OK, let’s proceed.
Getting slightly desperate as I was turning into a thirty-something, I scammed myself into some investment newsletter promising at least 25% CAGR, whose subscription was one of the most regretful big-purchase mistakes I've ever made. Yes, there were some other stupid big-$$$ screw-ups I made, which I’ll disclose maybe some other time. It’s truly depressing to think of how I actually *could* be halfway to being a millionaire by now. Would’ve, should’ve, could’ve. I digress.
As I was contemplating subscribing, my gut feeling told me the newsletter was a sham. However, let’s deny gut feeling even though, well, more often than not, Mr. Gut Feeling was totally on the dot.
Boy, did the newsletter-owners take me to the-- brokerage account! Not only did I lose the $300+ in purchasing the subscription, I lost significant money on the investments themselves. Good thing the authors let me know about the foreign tax withholding on dividends, too. Their answer: a one-line description of an easy-to-complete federal tax form. I'm sure it'd come as no surprise to you that this easy-to-complete form turned out to be, well, not really that simple.
Let’s not forget that one reassuring sales-pitch popular among newsletter-authors: “I’m invested in the same stocks that I’m picking for you, so you’ll be assured that we’re in this together!” The problem is, how credible is the proof? A webpage with dollar figures divvied up among stocks—with pretty pie charts, lots of commas and digits? Hold on tight, because I’ll make myself a millionaire in 5 minutes, too!
So while I’m being dumped gruel onto my dish for my main investment vehicles, all along my side appetizers of stock gambling was a total wash as well.
The final chapter of my pornographic investment history was when I opened up my own business. My CPA helped establish my SEP IRA and steered me towards the American Funds family. A remarkable event, indeed: it was the first time I witnessed considerable equity growth. Only then, did I know for sure my calculator was working, because my calculations equaled to what the statements were showing. Maybe my CPA is onto something…
I almost forgot about my real estate antics.
True to my former self of "buying high, selling low, and ditch any great opportunity", I jumped onto the real estate bandwagon very recently. I eschewed a Rowland Heights rental property in 2002-2003 for a mere sum of $90,000, which I'm confident is now worth north of $500,000 today. But later on, I purchased my own condo in downtown Long Beach, CA back in the latter-half of 2005, right when word of the housing bubble peaking began gathering steam. See what I mean? You'd think by now I'd learned my lesson about "buying low, selling high." Then, halfway through 2006, I entered my first foray in income properties with a four-plex in Texas.
Since then, I sold off my condo in late 2006 with a surprising gain (it was a surprise since I didn’t expect *any* gain at all), and the four-plex is treating me quite well. I guess the condo sale was one relieving outcome, and a highly motivated one, after looking around me and noticing listings being active and revised downwards for 6 months or even longer for comparable properties.
So, that's my wobbly road to non-riches in a nutshell. For those of us whose main job or career doesn't have anything to do with finances or investing, we tend to think of finance and investments as the stuff of weird-math nerds and multi-trillion-dollar big-money firms, or something equivalent to black magic. There's too much static out there, and we could care less, as long as our savings comes out ahead tomorrow vs. today. So, why don't we just “set and forget” our investments: toss the keys to our retirement to a skilled CFA or broker?
I’d say this is a good point to stop and draw the line in the sand. I’m done with investing blindly. I’ll stick with regular pornography for now. And now, a cliché: a new leaf is being turned.
Only within the last year or so have I stumbled upon some ideas that, although the returns seem meager at face value, may ultimately end up be a worthy lifelong strategy.
Before creating this blog, I've spent some time scouring the Web for other people’s personal experiences and anecdotes applying investment principles. Sure, I've seen some "projected portfolios", and some over-the-top macroeconomic analysis and websites. Other websites I've seen contain seldom-updated, extremely vague personal diaries written by other confused people trying to find the ultimate investing solution, or displaying their account balances but leaving the audience to wonder precisely how it was executed, what their positions are. And yet others simply RSS a quote ticker. Greeeaaat.
Of all the research I’ve done, only one website displayed a real-time, running counter of that person’s asset portfolio by simply multiplying asset units with unit value. Neat.
Confused about finance and investing, like I’ll admit I have been? I'll attempt to simplify and demystify it. Here is where you’ll find epic tales of missed opportunities, lessons learned, some projects and ideas, strategies, and true dollar figures—both mine and the people in my life.
I like to think of myself as always being a humble student of the infinite wisdom of finance and investing. Even more so, I have absolutely no interest to be condescending or arrogantly presumptuous to fellow investors, conveying any notion that *you* need a course from *me* because I know just slightly, but not thoroughly, more than you do. My approach is to explain strategies, execution steps, my reasonings, and engage in conversation with you (or maybe just myself, I guess) about what I've done. I'll leave the "courses" to the "experts."
I cater to no special interest (except to retire sooner myself), and am only funded by myself in this venture. Other than the funds my parents used to raise me from infant to teenager (such as bailing out of jail), I never freely took a monetary obligation without paying it back. I think. Eh, well, if any friends of mine are reading this and I haven’t paid you back, let me know. Pronto.
The strategies I'll employ require no exorbitant minimum starting balance, or options exclusively for the privileged or truly loaded. I'm as average Joe as they come: I was born with a plastic-vs.-a-silver spoon from a Gerber's bottle, I laugh at any possibility of an inheritance or becoming an estate recipient, and, at least for this lifetime, I can never claim TFB status.
I'm starting small, so if you follow my progress and mistakes, you'll be able to see how I'm rewarded and punished, what challenges I face. Stats and numbers I’ll post serve not only to feed my selfish exhibitionist qualities, but also to backtrack past projections and outlook.
Lastly, some of you readers are my friends. You may find me anonymously referring to past experiences which I may tie together with my own knowledge and experience. I’m sure I already have everyone’s consent in doing so.
