Tough Times Ahead at Lorraine

It’s getting to crunch time at my house, which I cleverly, or not so cleverly as I live on Lorraine Drive, call Lorraine. Here’s a recap of how I got to this situation. I had one roommate leave right before the shutdown happened and I have another roommate that is scheduled to move out today. I’ve shown the rooms to two guys but they seem on the fence on about moving in; I think they’re continuing to look at options, as there are more than in the past. There has been an enormous amount of construction the last year and a half in Charlotte, mostly in the form of apartments. This added competition definitely has put some stress on my rental targets. I haven’t raised the rate on the study room, $850/month, since moving in here two and half years ago. And now I’m actually considering lowering the rate just to be done with it and freeing up my time to focus on other endeavors. As I had a full house, generating about $2500/month in rental income (including their utility splits) while I was also living here, when I refinanced about six months ago I elected to put the mortgage on a fifteen year mortgage. My payment only went up about $150, as I eliminated about $300/month in private mortgage insurance (PMI). In retrospect I’m wishing I would have just put it on a thirty year term and paid extra when I was able. That would have freed up about $500/month in extra payments, and I wouldn’t be feeling so strapped. I continue to pay an extra $3300/month to payoff my Michigan rentals by December.

On a brighter note. The Bay City house I offered on got an inspection on Thursday and I’m awaiting the final report. The inspector seemed to elude to foundation instability but I won’t know what he really meant till I see the report. Further I was able to raise $20k, at a 5% monthly nominal rate, which will be good enough I believe if I continue to go through with this deal. I have become very fond of utilizing private capital (some call this shadow banking). Even if I’m paying a higher rate I get to pay to people that I enjoy paying interest to. That coupled with avoiding all the paper work and origination fees and I say it’s a win-win, and loss for the banks.

My book, Make Better Bets, is available on Amazon. It’s a residual stream that I have now setup. Hopefully this will help some young kids coming up and make me a bit of money. I didn’t have a ton of sales in May, shown below, but hopefully as I distribute it to soccer fans and sports analytics people/actuaries the sales will rise. I was posting it on my Facebook pages and on actuarial boards around the country. The sale I was most curious about was the one that came out of Brazil. I really want to figure out how they found it because I still have no reviews so it doesn’t come up on one of the first pages in many “bet” type searches. I need to get more reviews. The economics of my book sales are that I make $3.41/paperback and $3.18/ebook. For the paperback Amazon takes 40% of the gross sale price and I have to cover the printing cost out of my 60%. The printing cost per book is $2.58.

I finally finished Jeff Booth’s book, The Price of Tomorrow. My key takeaways were the following:

  • Technology is inherently deflationary and should trickle to literally every aspect of our life. This is eerily prophetic as we’re seeing just how many jobs are able to function from home, facilitated by great technological services/platforms. People need to start asking themselves why do we live in a system that feeds off of an inflationary environment? Why does deflation have a negative undertone? Simply, deflation means one’s dollars will be worth more in the future. This is bad for debt holders as their debt increases in real terms and savers are rewarded as their dollars will buy more product in the future.
  • Humans are not wired to pick up on exponential growth. Booth brought up a mind bending example where he asks, if you could actually fold a piece of paper fifty times how high would it stretch? In my mind I was thinking like a few inches. Then I thought through the math. 2^50 * (thickness of a sheet of paper). He stated it would reach from earth to the sun. OMG! The thickness measure I saw was a little less than that which would be able to get to the sun but still the concept that my gut reaction was so far off was really eye opening.

I’m on to reading the Freedom Manifesto by Tom Hodgkinson. So far it reminds me a bit of Early Retirement Extreme, by Jacob Lunk Fisker. It underlines the benefits of being a generalist over a specialist. I hope I get some good ideas to reduce my expenses. The underlying thought is if you can lower you’re expenses a lot, by knowing how to do many things yourself, you don’t need to make as much. This is not a shocking concept but it is often not quite thought of in terms of learning many new skills.

10-day BS Refresh

Analysis Intelligence

The Opening NW in the 5/31/2020 column is the closing NW from the 5/20/2020 column. The green numbers are what I was projecting the changes to be on 5/20/2020. Ten days ago I was thinking my net worth would be $320,852 today and, shockingly, it’s $330,772. Lorraine has pulled through and now has a Zestimate, from Zillow, of about $327k, which is the main driver in the “Gain from Property App/Dep”. It feels like a zombie depression out there but I guess houses are still selling. And stocks continue to keep going up…

Crystal Ball

5/31/2020 I ended with a NW of $330,772. I will not be collecting a paycheck in the next ten days but will be paying down a lot of mortgages, with the help from some rental income. Definitely having only having one renter in Lorraine will hurt the cash this month.

Ideas for increasing NW

  • Get more traffic to websites
  • Send out books for free to interested parties if they will write an Amazon review; need to get up in those searches
  • Start thinking of vegetables to grow in a backyard garden, and the steps to make it happen


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