I wasn’t going to write tonight cause I wanted to do some testing with Docker, but I figured it was best to do it to keep up the habit. I already posted once today as I never actually published the phishing piece that went up on on my professional network yesterday, so that’s live now. I stayed up late last night, not too late, and my my morning routine was interrupted due to a visit to Hangover City and a visit by my dad for breakfast. We didn’t do much today other than cooking a huge breakfast on my new outdoor griddle and cutting the grass. Ordered Chinese takeout and watched half of Attack of the Clones with the kids.
Actually, that’s not quite accurate. I did have a sort of business call with someone who found my short-lived crypto podcast and wanted to talk about some non-profit business venture that he was trying to pitch. I wasn’t terribly impressed cause it’s not really my wheelhouse. I gave them some local resources to check out and told them I’d follow up in a month to see how things were going.
Also, I went ahead and opened up two additional BlockFi accounts for my daughters and moved their BTC over to it. I also started withdrawing cash from their LendingClub accounts so that I can start the process of converting them to USD coins and add that to BlockFi as well. It’s kinda funny, my oldest is only getting three percent return on her LC account, and her little sister is up around seven. It almost isn’t even worth moving her over to BlockFi, but I’m going to have the interest payments paid out in BTC, so I they can stack sats faster. Migrating their funds will take a while, since the loans are up to thirty six months, so it’s just something that I’ll have to add to my quarterly plans.
That’s it for tonight. No games tonight, just another hour until screens off and books in bed. I’m reading Digital Minimalism by Cal Newport, since I’m doing the exercises in Designing Your Life. It reminds me of the Team Human stuff. And given how much time I’ve been spending on Twitter – and the notifications I’ve been getting, I’m about ready to take a detox from it for thirty days. Well see.
A review of the past year and goals for the next one.
Yesterday was a mess. The kids stayed up too late the night before and were fussy all day. I probably wasn’t in the best mood myself, and wound up losing my temper several times at them. In and out, in and out of the house they went. Made a huge mess in the garage with a mudpile, and even had the gall to take a delivery off the porch to use as part of their games in the back yard. I spent the morning working in the yard. I repurposed one of our unused flowerbeds as for some pepper plants, and what I assume are pumpkin plants that I salvaged when I dug up a tree stump in the back yard. Then I cut the grass.
The girls spent much of the day doing decorations for my birthday today. The dining room is off limits, and I’ve managed not to peek. Something tells me that they chose a Star Wars theme. We’ll see.
I managed to keep to a regular schedule last night. I quit playing Factorio at ten and spent another forty minutes or so reading in bed before I turned off the lights. I got up at seven, and feel pretty well rested right now, Elder has been up, and I hear the rest of the girls rousing. I hope everyone is in a good mood today. My father is coming over, for the first time since the Lockdown, and Missus has arranged a Zoom part with my mom and who knows who else.
Last week was ok. I give it a ‘C’. I can’t really think of any accomplishments that stand out, although I did manage to write every day, including another two thousand word article that went up on LinkedIn and Substack. Building that will take time. I didn’t spend as much time as I should have working on my consulting gigs, but I ran into some technical issues that set me back. And I didn’t apply to many jobs, other than the long-shot for Invest Like The Best.
Looking back at what I accomplished this past year, it’s hard to imagine that a year ago this time I was still involved in a tense political campaign. I wasn’t writing about it then, and it’s probably a good thing, because I still haven’t talked to my campaign manager since. It was that toxic. Finishing school is no doubt my biggest accomplishment, but I’m not quite sure what I would consider my number two. I’ve learned a lot, and completing classes were their own projects considering, but I don’t feel like I’ve accomplished that much.
I’m in the middle of listening to a podcast interview with a serial entrepreneur who spent several years building a successful company and now runs a firm based on Berkshire’s model. He said he doesn’t have the drive to start a new company these days, but that it happens “accidently” from time to time. He much prefers to leave the day to day operations to others, and prefers to swoop in to which ever firm is having problems and fix them. This allows him to shift his focus every two weeks or so.
At one point he mentioned someone he knows who had an idea and was able to execute it in two or three days, and now makes some fifty thousand a month in revenue. It’s sort of mind boggling. I’ve been toiling away at my day job at Zombie and Boss still hasn’t been able to make it sustainable. I’m still working on my consulting business, but neither of my clients are at the point where they are bringing in any money. We’ll have to change that this year.
Right now I have two goals that I’ve set. FIRE by 2024, and Sixty Days to Six Figures. So far, all we’ve managed to do with the first goal is lose our mortgage insurance, which we’re rolling back into the mortgage. This should shave about four years off the life of our mortgage, which should put us somewhere around 2036. My consulting business has about six months run, but I’ve got to finish the project before I can take on more business. Or, more importantly, before I start another one of my own.
The big question for me in the next year is whether I can build a business, a real business, that can bring in four thousand dollars a month in revenue? I’m not even talking profits, but just revenue. And do so in a way that requires minimal effort on my part? I’m thinking like an ecommerce store or something similar, like selling a book on Amazon. There are lots of questions about how to go about this. Do I build it all myself, or do I use some capital to hire assistants or outsource it on Fiverr or somthing? Do I code it, or do I use a service like Shopify or some of these other no-code platform?
I should correct that. The question is not whether I can, but how fast can I?. There’s no doubt in my mind that I can make it happen, but the real question is how to make it happen amidst everything else happening in my life, at the speed I want. Two hours a week isn’t going to cut it. I have to find a way to work on it every day, to keep pushing things forward faster. To balance being a dad, and a husband, all while working a day job and everything else I got going on.
I feel up to the challenge, so it’s time to work. Here’s to the next trip around the sun.
Yesterday, the host of one of my favorite podcasts put out the call for a position, someone to take over managing some of the operations of one of the top business and finance podcasts in the country.
I literally stopped everything I was doing and wrote him an email as fast as I could, giving a few details and promising to follow up with him later after I caught up on one of his more recent episodes and could provide some additional input. I was literally giddy when my read receipts pinged back.
I picked an episode with Tobi Lutke, the CEO of Spotify, on Building a Modern Business, listened to it while I took notes, then wrote a five hundred word email to Oshag. I wound working over two hours altogether on it, and wound up getting to bed an hour late. Before I turned off the lights, I spent a few minutes reading Design Your Life, the next book on my reading list. I was somewhat amused by the fact that here I was, reading a book about applying design systems to one’s personal and career path, when I had just inadvertently picked a podcast with a similar subject.
The interview with Lutke, like most Invest Like The Best pods, cover a lot of ground in an hour, and much of the conversation focused on systems design, specifically with the context of business. Lutke is a “card carrying” video game enthusiast, and they talked about the skills that he learned from games like Warcraft and Starcraft, specifically the value of attention, which is rpeople learneally the primary resource in these types of games — and in business. I was quite surprised to hear that Lutke spends so much of his time at Spotify focused on teaching philosophy within the organization, and I found his approach fascinating. They also touched on the idea of a personal blueprint, a document which Lutke wrote that he sends to his new hires and collaborators listing his quirks which incorporates personality typing.
I took my own inneogram. My top matches were challenger, achiever, and investigator. My top personality superpower was futurism. I don’t think it’s as much a reflection of who am so much as who I want to be, but it might be something to incorporate into my business relationships. Lutke seems to think that it speeds up the process of getting to know someone and eliminates some of the awkwardness that a team may encounter on their first project. We shall see.
A lot of what he said mirrored what I had read in Ray Dalio’s Principles, most notably designing systems, and his concept around baseball cards. “You have a system by design, or by defaut”, to paraphrase one of his principles. And the baseball cards are analogous to Lutke’s blueprint. What I find most interesting is how this theme has been stuck in my head lately. I had recently been thinking of what I was going to write about for the next installment of my Substack, and it looks like my subconscious has been working on it for me.
One line from Designing Your Life that made me chuckle last night was a line about how as one begins to put their plan into action, it will almost feel like people are conspiring to help you. You will start to attract opportunities. The whole thing will start to feel like a game, and that you will come to take immense joy in the process. Now, I am the last one to preach any prosperity gospel or quotes from The Secret, but I did feel that it described the day perfectly. I knew as soon as I saw Oshag’s tweet that I wanted it, that it was the exact opportunity that I had been waiting for. And I jumped for it.
Alas, Patrick emailed me earlier this morning that he didn’t feel it was a good fit but thanks anyways, so that’s that. I’m actually pleased with myself that there wasn’t any disappointment on my part. Perhaps I knew it was a long shot, or perhaps it was because I enjoyed the process anyways. I actually took a lot away from it, considering. Just applying and thinking through the possibility of it, the anticipation of waiting for a reply was exhilarating.
So another turn of the wheel, a small adjustment here, a refinement for next time, and we’ll try again tomorrow to bring things into fruition.
Yesterday was very productive. I wrote almost two thousand words yesterday, double what I consider a good writing session. It took most all of the morning, since I had to take several breaks, both to take care of the kids and have my regular Zombie. LLC, scrum call. After I published here, I went and created a Substack and reposted there. I also published it as a LinkedIn article and shared with one of my groups there. I think I’m done with long-form on Medium, although I’m not sure.
I think the Substack could prove most interesting. I’ve got a considerable mailing list through my political campaigns and crypto blog that I ran, probably close to seventeen hundred addresses, not to mention the piles of business cards that have been sitting in my organizer for the past year. I think I’ll wait a week to decided, and come up with another article before I do anything. Hopefully I can “build my tribe” as the saying goes, and maybe even earn some subscriptions out of it.
Zombie lost another client yesterday. Our cornerstone client, one of our first. Boss said our runway was very short. I had to press him on how short several times before he wagered a guess. I figured two weeks, he said another month. It’s very unlikely that we’ll be picking up enough new business to make up for what we’ve lost in the last six months. The writing is on the wall. I can’t imagine what’s going through Boss’s head right now.
Losing the cornerstone, beyond the ramifications for Zombie, have affected my plans for picking up the pieces. I was hoping to take the cornerstone and another with me if/when Zombie folds, but the client was basically lost to another firm without even a “chance to compete”. We’ve known there was a change in ownership among the partners at the firm, but it looks like we failed to foster the relationship with the new primary, and they have apparently been talking to this new firm for at least several weeks. Neither Boss nor I know the details yet, hopefully I can find out when I talk to my contact over there on Monday.
I had a call with the CEO of the new firm yesterday. I stalked him on LinkedIn and sent a connect request, which he accepted. Boss had deridingly referred to them as “fly by night” when he broke the news to me in the morning, but their website wasn’t that bad. Looks like a husband and wife team, with two engineers. The CEO even publishes some long-form content to their blog, which I thought was nice. The call was professional, even though we were blindsided.
I’ve got my first call lined up next week. It’s not a formal interview, but the position is very lucrative. I’m not so much interested in the position as I am in getting to know the CEO and figuring out what the company is like to work for. I don’t want to jump at the first thing that comes up, but I’ll consider any offer with a salary over $100,000 to be a successful conclusion to this goal.
I’ve also been sending out my resume, yesterday I managed to send a finely crafted email out to a staffing agency about a six month contract position. I’m not sure it’s going to fit my requirements, but I think it matches what I’m doing now, and I may need something to fall back on. That’s one line that I’m trying to tread, between jobs that I’m qualified for and those with the skills I want to learn. I’m passing on a lot of positions right now because they have high experience requirements on certain software development skills, but I’m pretty much saving everything else for targeting.
Right now most of my targeting has been through LinkedIn jobs, and I’m also going through my wish list of other big tech firms, ones like Gitlab, Square, Stripe, and Coinbase, for example. So far, I’ve been struggling to find positions that fit, since most of the software development or engineering jobs that are available don’t fit my experience. I’ll keep slogging though.
Each day is just another day to keep plodding forward, taking a step here and there to keep moving forward in the direction that I want. Keep building my network, keep working on my projects and making them better, bit by bit, and building the habits that will bring me success. That’s all that I have control over, and I know that success will follow.
So we’re one-third of the way through our goal. I haven’t been filling out as many job applications that I should have, and my efforts to increase my consultancy are proving more challenging than I anticipated. I am, however, determined to keep increasing my output and leveraging what I can to keep moving forward and making small improvements.
LinkedIn and the Job Search
I still haven’t figured out what to do with LinkedIn. The job search is good enough, and the skill insights which rank me among the other applications is useful, I think. It’s helping me target a bit better, and figure out which skills I’ll need to focus on in the future. There’s still a incongruity between what’s on my profile, and the kind of jobs I’m looking for. I guess that reflects a similar disconnect between what I want and what I need.
My hope was to find just one good job a day, write a quick cover letter during the application process and wait for callbacks. To this point I’ve applied to about six, and nothing back yet. Obviously, this is going to be harder than simply attaching a bachelors’ degree to my name. One thing that was a bit of a surprise to me is that LI’s Fast Apply feature doesn’t allow you to do anything other than attach a resume, which is not ideal from an application standpoint. So it looks like I’ll have to go through the additional step of creating a new PDF for each application. Ideally, I’d be updating my resume for each type of job that I want anyways, one for CTO/management jobs, one for programming and development, and another for data scientist jobs. It seems overwhelming, but all I have to do is take baby steps. One percent in the right direction each day.
What I have not figured out yet, though, is how to use my wall to engage people. I still haven’t posted anything since my graduation announcement, as I’m not sure what direction to take. Choice paralysis, perhaps? I think I’m being overly cautious and worried about Boss taking some action, but that paranoia perhaps. I could share linkbait, posts from others, or I could try my hand at writing long-form content weekly. We shall see.
Day job: Zombie, LLC
Boss sent me a message yesterday. “I’ve got bad news, call me.” He didn’t pick up. I got another message about increasing our seats under management by x. I had some urgent help tickets to deal with, so I didn’t try calling or messaging him back, and he didn’t even try to respond back to me. I can’t wait for this morning’s lead off meeting.
I really should be frank with Boss, but I’m not sure what I should expect out of it. The company is too small for him to furlough anyone on the team, he’d be dead in the water. Our clients are dropping like flies, leads are sparse and competition in the area is dense. I’ve tried to start focusing on business process automation, but my ideas haven’t been received well.
I don’t even know if being able to continue my employment should be perceived as a good thing or a bad one. Obviously getting a salary for the amount of work that I actually do is great, but part of me thinks that having it is a crutch and is holding me back. Boss has told me that we’re in no danger of going under, but there’s an upside if we do: unemployment, for one, plus the possibility of going independent with our larger clients. There’s a lot to unpack for the latter case there and I’ll save that for when the time comes.
A call with a third customer didn’t go quite the way I had hoped. No commitment. They can’t pay me until they can scale, and they can’t scale until they have some improved automation. Instead of developing a Django app, it looks like we’ll be rolling out a hundred dollar WordPress plugin. Que sera.
I told another client about the old saying usually seen in mechanic’s garages: “you can have it done fast, cheap, or good. Pick two.” I told them that we are moving in the cheap and good area right now, and that if they wanted to move faster we’d have to bring in some help. It looks like we may be moving in that direction with one of our projects. I’ve got enough experience to manage several WordPress sites and help with some configuration stuff, but I don’t know anywhere near enough about SEO and theming a site that they’re going to need to move quickly. So I recommended that we engage a marketing firm to help with strategic vision and a laundry list of related to-do items that they came up with. I’m actually looking forward to it, since it will benefit the client and if the vendor is good we may be able to establish a good relationship moving forward.
So we’re one third of the way there, and it seems like no result yet. That’s fine, as I know that it may be a while before we see results. I’m still reading Atomic Habits, and I know that these steps I’m taking will be come habits, and the results will compound. Right now I’m focused on refining my environment to make success inevitable. The results will come.
Why leave cash languishing in a savings account when it could be earning six percent in a USD stablecoin account?
My head has been racing with ideas recently. I had trouble falling asleep last night and got woken up by Elder this morning when she crawled into bed with me. Neither of us could fall asleep after that, so here we are, up an hour before our usual wake up time, on the couch, both of us with our laptops open. She’s working on Typing.com, and here I am with you.
Yesterday I opened a BlockFi account. They’re currently offering six percent on BTC and eight percent on Gemini and Coinbase’s USD stablecoins, as well as another Ethereum based USD stablecoin called PAX. The rates seem seems really high until you consider their lending options: over nine percent on BTC-backed loans. (We’ll leave the discussion of that for another day.) So they’re taking a small origination fee and a two or three percent spread. Seems like a decent business model. BlockFi was the first product on the market like this; I remember hearing them on a podcast last year, but more and more competitors are springing up such as Crypto.com and now Blockchain.com
BlockFi uses Gemini for custody, which is good, but they’re not FDIC insured, so there’s a risk that customer funds could be lost if they get hacked, but I rate that risk low, since Gemini is focused on providing crypto custody services to the traditional finance industry, and they’ve got good controls. Still, I’m not ready to go all in with my funds quite yet.
I think that earning interest on my long term BTC is a great idea. I’m not ready to hand them over the bulk of my hard wallet, but I’m willing to try a small transfer until I feel more comfortable. The account signup process was pretty quick, I was able to sign up as an individual in a matter of minutes, and only had to provide my address and SSN for KYC.
Compared to the rates that Compound is offering right now, BlockFi is way higher. Since Compound is an Ethereum smart contract platform, they use wrapped BTC (which could cause a taxable event) and there is inherently more of a risk of a block swan like a contract failure or hack. BlockFi is relying on more traditional cold-storage custody solutions.
I didn’t want to break out my hardware wallet yesterday to move funds over to BlockFi, since I’d rather use it as an alternative to a savings account, so I started a small transfer from my bank in order to deposit to a USD stablecoin. That will take several days to clear. In the meantime, I’ll probably be transferring all of my LTC over there, (since it’s basically worthless to me at this point anyways,) and most of my ETH. I haven’t decided what to do about my BTC yet, but will probably be putting a fraction of my funds there at some point.
The advantage to keeping funds in BlockFi compared to traditional banking account is obvious, if one is comfortable with the risk. Missus is not, and curtly said “we’re not keeping our emergency fund in blockchain,” when I raised the subject. I however, am less risk-adverse than her, so I’m looking at it as an option to keep cash available for long term goals while earning considerable interest on it. For example, I’ve been planning on funding my IRA this year, instead of using the money to dollar cost average into Bitcoin, but I didn’t want to actually move the money to my IRA until near the April 15 deadline next year. In the event that I do need the funds for an emergency, I don’t want to deal with the penalty and hassle of withdrawing it. Putting it in BlockFi will allow me to compound it, as well as easily withdraw the entire balance back to my bank account when I’m ready.
If you are sitting on a lot of cash right now, and you should be saving as much as possible during these times, you may want to consider giving BlockFi a try. Please use my referral code.
Five thousand, five hundred dollars a month. That’s what it is going to take to achieve our goal of becoming debt-free in four years. Fifty-five hundred dollars more a month than what we’re currently making at our regular day jobs. The equivalent of an extra $66,000 salary, on top of everything else we’re doing now. During a time when most people are making way less than that, and thirty million are unemployed, it seems preposterous to even set such a goal. If the path lies through full time employment, then I’m not just talking about taking a six-figure job, I’d need to practically triple my take-home pay in order to get there, considering taxes.
I’ll admit that I had a moment of doubt today, browsing the jobs on LinkedIn. A couple of high-salary jobs were in my feed, and I was trying to weed out the ones that I wanted, while my monkey mind was there telling me that I wouldn’t meet the criteria. But does one apply for the job they’re qualified for, or the one they want to grow into?
I have been spending a lot of time on LinkedIn the past week or so, tweaking my profile, looking at others’ news feed and figuring out how to leverage it. You’d think I’ve been on social media long enough I should know how to “build a brand” by now, but to be honest I’ve never truly had success in that way. Part of it may be my “procrasterbation”, or how I tend to flit from project to project without ever really finishing anything. Part of it was how I have tended to treat those platforms like I was starring in my own sitcom. Well, now that I have my goals a bit more focused I can hopefully build more.
I’m using LinkedIn premium, on a trial right now. Being able to see who’s viewed my profile is the most important thing for me at the moment. As is figuring out what searches I’m showing up in. (I haven’t figured that one out yet.) But it’s obvious I need to really focus on building my network up. There’s not a lot of activity in my feed, and not really any that reflects where I want to be, so I need to curate that, and figure out what I need to be showcasing. I never actually talk about my work, or what Zombie, LLC is up too. I think that’s telling. My boss is on there too, and I on some level I’m trying to keep things from him, so that introduces a level of stress in my life. It’s certainly not the radical honesty that I was preaching months ago after reading Principles, is it?
I’m going to make a point to connect with everyone I can, maybe start with my personal contacts and anyone interesting that I can think of from Twitter and elsewhere. Maybe make a point of it to connect with anyone I’ve dealt with as clients in and out of work. Time to go through the hundreds of business cards I collected during my campaigns.
I’ve been trying to hone the skills I have listed on my profile, hoping that it will help me get found by a headhunter or recruiter. LI has added new skill assessments aimed at knowledge work. They’re quick, fifteen question quizzes on programming languages or other knowledge work applications, and if you score in the top 70-percentile, you get a little badge to put on your profile. If you fail, you have to wait three months before you can take the same one again. I failed the first one I took, on C++, but was able to get two earlier today, one for Python and another for Django. I will probably go through several more, but they’re probably more useful for people without experience than someone like myself.
Ultimately, I’m still not a hundred-percent convinced that a salaried position is going to get me where I need to be. Part of the doubt is probably coming from the fact that the kids are still home. I don’t see an end to the COVID pandemic for us until next fall when the girls go back to school, and part of my brain hasn’t figured out how to reconcile that with getting things done.
In the long run, it’s going to be the project work that gets it done. Building a stable of retainer clients to develop some sort of residual income stream is going to be necessary. Building websites and ecommerce systems, via WordPress, Shopify, or the like will probably take me part of the way there. I’ve got opportunities; I just got to finish them. I just don’t think that’s going to happen with the way I’ve been working, breaking my two hour a week chunks into fifteen minutes here, half an hour there. It’s going to take a lot more deep work sessions, which are really hard to come by the way things are right now.
So, for tonight, I’ll make sure I get to bed on time, with a clear purpose of what I’m going to do tomorrow, and I’ll make damn sure to execute.
Friday night we had the neighbors over. I broke out the slip and slide, cooked a couple of pizzas and drank beer with Missus and neighbor dad. Talked about Bitcoin. Wound up letting Elder stay up till 11:30, playing video games and watching half of The Gate. She got scared right when we got to the good part and we turned it off. Seemed everyone in the house was sleep deprived and more hostile to each other than normal. Kids finally went down the street to play. Younger thinks she can just take out the front door and walk over there whenever she wants, and threw a huge fit yesterday afternoon when I told her her she needed to stay in the house during the hot part of the day.
I did fix a broken thermometer, though. Broke out the soldering iron and the hot glue gun. Saved a whopping fourteen bucks. Every dollar counts, y’know?
Spent a couple hours balancing the house books, throwing all our bank statements into GNUCash. The arrangement I have with Missus is a bit hard to keep up with via bookeeping, cause I’ve been trying to account for things that we pay for separately in our own personal accounts: cell phone in mind, and various insurance products through her payroll deduction and checking accounts. I’ve decided that we need to move them over to the house account as much as possible. Since we don’t have daycare expenses right now, it’s hard to figure out how to balance that. We’ll be consolidating as much as we can into the joint account, both to make accounting easier, and to make a proper budget.
Right now we’ve got more than six months cash on hand, for mortgage and utilities. Not including cell phone, groceries, our various insurances, or other incidentals. My credit card spending has gone down quite a bit since the start of the lockdown, but it’s too early to tell exactly how that’s going to work out long term. Zombie, LLC is still above water, so we’re looking good. I don’t keep any long-term savings in my personal account, as fifteen percent of my weekly salary goes straight into Bitcoin.
And for now, it looks like that is going to have to change. There’s a couple factors, but the main one is that I need to get the tax savings from a fully funded IRA. I can still gain bitcoin exposure through GBTC. And being able to take gains off the table in an IRA, tax free, is the best part. Unfortunately I won’t have access to it without taking taxes and penalty, but the goal here has been to build wealth, not to generate income. I’m still going to stack twenty five bucks for Elder and Younger like I’ve been doing, but my own wallet will have to stay where it’s at for the time being.
There’s some additional decisions I need to make about what we’re doing with our idle cash. Holding six month’s expenses in the bank where it earns a whopping 0.01 percent interest is stupid. A CD might be better, but not much. Even Compound’s DeFi rates seem to have dropped of a cliff lately, so I’m not sure what the right answer is. Do nothing for now, I suppose.
I’m also considering scaling into some alcoin positions. ChainLink is looking good, and IDEX tokens will increase my earnings on my DEX node. The only other thing I’ve been considering is Ternio, but I’m not sure I want to KYC at another exchange. I’m still bag holding mining proceeds from Ravencoin, Haven, Arrow and a few others, and I still haven’t touched any of my 2017-19 ERC bags like BAT, 0x, and others. Again, I’ll do nothing for now. I just can’t bring myself to do anything when BTC looks like it’s on the cusp of exploding. I might actually add some Grayscale Ethereum Trust, but I need to take a hard look at that first.
Increasing your monthly payment could save you more money
I’m feeling like some kind of dad genius this morning. Elder came in my bedroom earlier and told me she did her bathroom and bedroom chores. “Good,” I said, and rolled back over, not ready to get out of bed. She walked off and a minute later I heard her unloading the dishwasher. This kid really wants her extra screen time, man. I told her if she does all her daily chores I would give her an extra hour. And she’s currently two-thirds of the way to her DadPoints goal, so I guess we’re getting a cat next week.
I was really happy with yesterday’s post about my trading performance and figured that a more accurate assessment was needed. I hate to say it, but I think I need to do some more work in Excel, to figure out how to group transactions and join several sheets together. I don’t know if it’ll work or if I’ll need to get more complicated and throw it up in Python (or Google Collab) but at the minimum I want to see what things look like when I remove long term positions like Amazon and NVidia.
Today I want to talk about something that I wanted to mention yesterday, but took out cause of time constraints: refinancing our mortgage. Missus and I were discussing it as part of our FIRE plan, so I reached out to our mortgage agent to see if it was worth it. The short answer is no, and it’s likely that, for most people who are looking to pay off their mortgage and pay less interest, simply paying more on the collateral is a better play.
We’ve been in our house for five years, put ten percent down and have a twenty five year fixed rate mortgage on the house. Our payment includes escrow for taxes, as well as mortgage, flood and property insurance. After the first year, the escrow estimate went down, and we’ve been paying the difference into the principal each month. The city assessment on our home has gone up more than ten percent as well.
You can take a look at the this refinance calculator to see your own options, but our results weren’t very encouraging, only about $35 a month, or $420 a year. Considering that we would pay 1-2% on closing costs, we’d have to stay in the house for another seven years just to start recouping the money. And the total savings would only be about $8400 over the life of the loan. No sir. Instead, have a look at the savings we’ve gotten from throwing that extra $60 capital in each month. First, here’s a payoff calculator with a five year old mortgage with an original value of $200,000:
And here’s the result with an extra $60/month thrown on top of it.
Almost thirteen thousandin savings. That’s the value of compound interest, right there, folks.
Since we’re now under the 80% loan to value (LTV) on our home and are no longer required to carry mortgage insurance, I emailed our loan adviser and had him run the numbers for me, just to make sure I knew what I was talking about. They gave me several options, including a 20 year fixed with almost a whole percentage point lower rate. The savings? Sixty dollars a month. Now, while that does change the original estimate, we’re still talking about thousands in closing costs, which would take at least five years to recoup. And we can save three-quarters of what we would with a refi just by doing what we’re doing now.
So for now, we’ll just take the PMI payment and roll it back in to our principal every month, shaving over four years off of our original maturity date.
Before we bought this house, I had no idea how much I would hate the payment summary on my mortgage statement every month. The interest portion of the bill alone was enough more than I paid for my first apartment! It’s crazy. Thankfully Missus and I are on the same page, and focused on getting debt free and FIRE as quickly as we can.
Job search, investing performance, and BTC reFIREment plan
So here I am writing at night again today, as getting up early just hasn’t been my thing lately. The girls are enjoying the quarantine bubble that we’ve formed with the family down the street, and they spent most of the day outside playing today. It was the most productive day I’ve had in a long while.
I applied to two jobs the past two nights, one, a fast-growing firm that provides AI-enabled insights for customer data, Outlier.AI, and a startup trying to “cancel the endless cycles of extractive capitalism,” Good Money.
Outlier is a rather large firm that has an office nearby and meets my salary requirements; Good Money is an unknown, but it’s a startup and the culture looks so awesome. I’ll keep applying to my dream list over the next few days: Square, GitLab, Stripe, Twilio. I’m also continuing my consulting gigs, but I don’t know that I can grow that fast enough to reach my goal. We shall see.
Other good news today is that the retirement account hit a new all time high. I was finally able to figure out my actual account performance by looking at my cost basis gains.
APPLE INC (AAPL)
AMBARELLA, INC. (AMBA)
AMBARELLA, INC. (AMBA)
AMBARELLA, INC. (AMBA)
AMAZON COM INC (AMZN)
AMAZON COM INC (AMZN)
ACTIVISION BLIZZARD INC (ATVI)
BAUSCH HEALTH COMPANIES INC (BHC)
8POINT3 ENERGY PARTNERS LP (CAFD)
8POINT3 ENERGY PARTNERS LP (CAFD)
3D SYSTEMS CORP (DDD)
3D SYSTEMS CORP (DDD)
FORTINET INC (FTNT)
NVIDIA CORPORATION (NVDA)
OCEANEERING INTL INC (OII)
2018 Realized Gain/Loss
Obviously Amazon and NVidia were the big dogs here. My portfolio was imbalanced with the sheer amount that I was holding there, and I had a bad feeling about the economy. I wanted cash in hand, so I sold about half my position via a trailing stop. It looks like genius in hindsight.
2019 wasn’t too great from a gains perspective. On paper it’s only about 4%, but realistically it should be more since I was covering positions, covering my initial capital investment while retaining the rest of the position, risk free. I was able to take profits on GBTC, Paypal, RestoreBio, and Yext, but lost most of it in Aurora Cannabis and Cronos Group when weed stocks collapsed. I also got stopped out trying to play a very volatile penny stock involved in Bitcoin mining operations.
2020 hasn’t seen any major sells, my trading is automated now via my value averaging protocols. Very low volume, so to speak, and a modest 4.7 percent realized gains. My unrealized gains, however, are sitting at a whopping 38.54 percent! Most of that is Amazon (2014), NVidia (2016-17), GBTC, (2019-20; about one-third of my total portfolio,) and Netflix (2013). Major losers include Sierra Wireless, Hive Blockchain Technologies, FireEye, Overstock, and 3D Systems Corp. I’m currently holding thirty-one positions in all, seven of which I’m currently value averaging into.
Before I go tooting my own horn too much, though, I’ve got to acknowledge a bit of cherry picking here in the results. Due to my original brokerage being acquired, I don’t have access to my full trade history prior to the last four years. I’m sure it’s ugly. It’s not really fair to cout gains on positions I’ve held since 2013 while tossing out the ones I lost on during that time frame. I also closed out my traditional brokerage account, about one-fifth of my IRA at the time, and put it into bitcoin in 2017, before it broke 10K.
I am obviously putting my money where my mouth is with Bitcoin. Between my hardwallet and GBTC holdings, I have well more than half of my liquid net worth in the big orange coin, and a smaller bit more in Ethereum and other tokens. I’ve done the calculations and am looking at a BTC price target of $67K, at which point I will have more than enough to pay off all mortgage and student loan debt and establish my financial independence. My target date is sometime before the next halving, which I based off of the stock to flow model, which predicts BTC ranging above $100K before then.
There are lot of details to be worked out before we get there though. Obviously taxes is going to be the big one. I assume we’ll be looking at long term capital gains in the case of Bitcoin. GBTC gains in my IRA are untaxed, but withdrawing anything will be subject to income tax plus 10% early withdrawal penalty. So the best strategy right now is to continue to accumulate and hodl. Since I think BTC is going to accumulate price much faster than my four percent loans, it makes more sense for me to continue to accumulate BTC while making the regular payments.
One change I will be making moving forward is that I am going to resume contributions to my IRA, which I suspended in favor of buying bitcoin directly the past few years. I am missing out on the tax savings from my contributions, which is going to be a big factor next April given my expected increase in income. Once we’ve topped that bucket off, I can make a final decision on where my additional savings will go.