The Realities Of Living In Silicon Valley

It’s the amazing sliver of land that extends from San Francisco to South San Jose, nestled in between two big mountain ranges with a big body of water in the middle. Insanely great weather is virtually perennial. Access to the beach, access to the snow, access to the mountains, access to hiking…Silicon Valley is the place to be.

Twenty five years ago life in The Valley was peaceful as I remember the halcyon days of the 80s and 90s. But the landscape is completely unrecognizable from the past as everything is so much more developed now. The bay has undergone a nuclear tech explosion.

But as technology has grown, day to day life has become more unsustainable. I’ve come to the realization that the bay is a tough place to cut it. As much as I love the soil that I grew up on, I had to come up with a list of things that make it harder to thrive in the Valley.

Real Estate

Let’s just mention the obvious here, the big elephant sitting in the middle of the room. This place is punishingly expensive. This is single handedly the biggest drawback about this place. It’s a subject near and dear to any Siliconites heart. We’ve talked about it so much that we just don’t talk about it anymore. It’s trite to even mention it but the problem exists.

The median price for a home in Santa Clara County is slightly over $1M. That means 50% of the houses are even more expensive than that. Mind you, in the Bay Area a house at the $1M mark looks indistinguishable from a glorified hut. A 20% down payment on an entry level single family home in the South Bay would be a staggering $200k. That’s cold cash we are talking about guys. Just the mortgage and property tax alone on the house would be over $5,000/month. That’s just mortgage. Tack on another grand, or two, or three for other expenses.

According to Bankrate, here is what a mortgage looks like on a $1M house with $200K down:

Since many of the younger people and first timers can’t afford to buy here, we resort to renting. And we still blow a big part of our paycheck doing that. A rundown, two bedroom apartment in an average part of San Jose is going to cost you $2,500 per month. Paying top dollar for a dump gets old.

This is what a $1,000,000 “house” in Sunnyvale looks like. I don’t know whether to laugh or cry:

The Population Keeps Growing

I remember watching one of my many childhood videos as my family and uncle took a day trip to Monterey from San Jose. It was a weekend day circa 1985. We filmed the drive down. I think I counted 6 cars in the footage. Do that today and it’s more like sixteen thousand cars.

You will be severely penalized for doing basic daily errands if you do them at the wrong time. Watching movies on a Friday night? Have fun in the nosebleed seats if you don’t come 45 minutes earlier. Do you want to go to the mall at 2pm on a Saturday? Great, 8,000 people also had the same idea. Did you want to grab brunch Saturday morning? Have fun waiting in line for 25 minutes before you get seated. Want to play tennis at the courts at 7pm on Thursday night? So do 200 other people. Get in line. Interested in replenishing your kitchen on a Sunday evening at Costco? There’s a thousand other families who want to do the same thing. You will not escape this if you live in the Bay Area.

Traffic is another obvious issue linked to a bigger population. Usually the South bound highways are worse in the evenings and North bound worse in the mornings. Highways 880, 101, 85, 237 are all bad. 280 is somewhat decent but has started to become a parking lot about 7 years back.

The Employers Are Ridiculously Picky

Insane amounts of talent means that employers are picky. You can get a sense of this by checking how many people already applied for a position on LinkedIn. Any career fair, or corporate open house event is absolutely flooded with people.

You may be the best candidate but if you are not familiar with one software listed on the job description the employer won’t blink an eye before they toss your application in the trash. Being in the Bay Area means that your job is likely highly specialized and the requirements very specific. No corporation or startup needs to interview 30 candidates for a single position. Something seems broken here. Choices spoil people and choices have spoiled employers.

Interviewers will throw out obscure situational questions like what would you do if…such and such. One developer at a premier Bay Area hardware company asked me, “You are trying to figure out the breakdown of how the Marcom team spends their money on advertisements in China. This team is not open to disclosing this type of information to you. How do you get this data? ” My first thought was, how the hell do I know, and how will the answer to this question prove to you that I will do this job well? You can answer this question in so many ways. In another interview I had with a major company, I answered one question incorrectly. That was it. I had to pack my bags and go home. You’re getting the idea of how insane employers are here.

Once in a while employers have the gall to ask candidates to complete a project before being brought on for an onsite. This startup made me do a a tedious project after passing the phone screen. The task was to compile a database of AI employers in Atlanta. For each employer, I had to come up with a person to contact, list their name, and explain why would they would be a good resource to the company. This was essentially me doing free business development work for this company which was guised as an interview. That was the first and last time I ever agreed to do any type of project as part of an interview.

Lack Of Diverse Views

California is a blue state, and most people that are part of city centers are blue and democratic usually. Many people here are liberal, insanely liberal. SF is probably even more liberal than the South Bay. And so people here tend to have very similar beliefs. People here are not necessarily open to diversity of thought.

The Pressure To Perform Is Insane

Everything is a deal, everything is about funding, everything is about disruption, everything is about solving a problem, everything is about venture capital, everything is about seed money, everything is about growth, everything is about development, everything is about product roadmap, everything is about millions and billions, everything is about out bidding people on a house, everything is about stock price and most importantly everything is about yourself.

People are super absorbed in their first world problems. I have $400k in cash savings and I already own a home, should I buy a secondary property or buy stocks? That’s the type of conversations you have here. Whether you are sipping coffee at Starbucks or taking a walk in the park you will invariably hear people talking about their startups and funding or some deal. It all is a bit much sometimes.  

It’s hard to stand out when everyone is so well educated, accomplished and so brilliant. Whether someone is getting a PHD, seeking startup funding, selling their startup or just working at a FAANG, it’s hard to stand out. The bar is high. You are a small fish in a big pond here.

Public Transit Is Not Stellar

Bay Area is not known for its public transportation. That’s just how California is. We use our cars 95% of the time. Caltrain runs from San Francisco to Gilroy and we have BART that goes from Millbrae to SF and branches off to Richmond and Antioch. It is decades old and we are about 20 years behind on schedule. Both Caltrain and BART are connected to SF downtown. You just have to make sure you live close enough to one of these stations if you commute to the city.

Related: 15 interesting facts on the Bay Area.

Should I Invest My Money Or Use It To Pay Off Debt?

First of all, let me say that if you are a holder of school debt or credit card debt, my sincerest apologies go out to you. You see, I’ve had both of these types of debt. At one point, I had racked up $12K of credit card debt by eating out way too much. And then much later on in my career I decided to get a fancy Masters degree from a private university that set me back $40,000. Student debt for millennials is a killer, especially if you received a degree in underwater basket weaving that can’t get you a high paying job.. But that is a whole different discussion for another day (or rather, article).

But this brings us to an important question. Should you use your income and savings to pay off debt, or invest it instead? Like most questions in life, it depends…

Let’s look at credit card debt by itself. Credit cards these days charge at least 15% interest rate but usually are in the 20-something percent range. And if you miss a payment, the interest goes to an even higher rate. You would have to make a return greater than 15% to make sense for you to invest. This is nearly impossible. You won’t find any investment that gives you 15% to 20% a year.

Student loans are usually in the tens of thousands and are usually around 5%. As holders of school debt know it is very difficult to get rid of student loans via bankruptcy. Remember, filing for bankruptcy destroys your credit score. If you don’t pay your loan within 9 months, the government has the power to garnish your wages and intercept any tax returns that were coming your way.

So the question is what is the best use of your money: Which debt should you pay off first? Should you invest? Theoretically speaking, if your return is higher than your interest rate it makes sense to invest the money. But if your interest rate is higher, then pay off the debt. This is a simplified answer and doesn’t apply to every person. If you pay off the debt then the monthly payment you were making will cease. In a way, that is money back into your bank account. You can put that monthly amount into investing.

I am a single track mind guy and so that means I like to focus on one task and do it really well. I would target the highest interest rate debt and pay it off aggressively. You still want to make minimum payments on the other debts because you know what happens to your credit score when you don’t. I would also pause any IRA or 401k contributions temporarily and divert that money towards the debt.

If you have enough savings to get rid of the debt then please do so. Whatever you pay off is money back in your pocket immediately. If you have $150/month of credit card debt, and $400/month of school debt (like I did), that’s $550/month you can put back into your savings, or even invest it. Paying off debt also brings freedom, motivation and a peace of mind which should never be underestimated. It’s like you have a fresh start.

I am hoping that you have an emergency fund stashed away in case you lose your job or something disastrous happens. It would be wise to build this fund up especially if you are holding debt with low interest rate. Once you have a few months of emergency savings, you can aggressively start allocating money to pay off the toxic school or credit card debt.

Paying off debt is really about choosing a philosophy as much as it is about math and interest rates. For most of us, retirement is really far away, so it doesn’t make sense to pump money into your IRA or 401K if you are sitting on credit card debt at 24% APR.

So just a recap: Assess your situation. There are no rights and wrongs. High interest rate debt needs to be paid off, lower interest rate can be held longer. If you are holding a big amount of debt that is high in interest then you want to tackle this immediately. If you have a lump sum of cash to pay off the loan, then do so, as interest is always accruing. You can temporarily put a hold on retirement investing and aggressively pay off the loan with the highest interest rate.

Paying back debt is a numbers game as much as it is a philosophical game. Figure out the balance that works for you.

Is 2019 A Good Time To Buy A House In The Bay Area?

The Bay Area along with San Francisco has well over 40,000 companies and over 10,000 investors. The region is also home to over 80 Unicorns. In 2018 alone the Bay Area housed 18 Fortune 500 companies. Out of the FAANG grouping of stocks, Facebook, Apple, Netflix and Google are all based in the Bay Area. That’s right, 80% of the FAANG’s are located between San Mateo and Los Gatos. These companies have tens of thousands of employees making six figure salaries right here in the bay. Stock options and all. This precious sliver of land that reaches from SF to SJ is also home to Stanford and Cal blessed with the most perfect weather imaginable to a Homo Sapien.


Since around 1990 we have had 3 major busts: 1991, dot com bubble of 2000, and the September 2008 housing crisis. Even though predicting market movements is difficult we do know with certainty that markets crash from time to time. And even though markets do crash, they bounce back with vigor and then some. The SP500, Dow, NASDAQ and Bay Area housing markets all have a cyclical nature of growth and bust. It’s insane how prolonged the 2011 to 2018 bull market has been for Bay Area housing as seven years of appreciation seems like an eternity. It takes many months, and often over a year to have a subtle inflection point materialize into something that we can actually feel. March 2018 was an inflection point for the Bay Area as housing began to cool off. Bay prices stopped increasing at the rate they were increasing and housing has seen fewer multiple offers. Only in the Bay Area can we safely say that whatever goes down, must come up.

Below is one of my favorite charts about the housing boom and bust cycle. We can see that the Bay Area market has seen a few busts, but what’s amazing is that every single rebound has broken past previous highs. Look at the 2001 to 2008 growth. We saw prices increase 59% and then had a massive crash that reduced prices by 27%. One would think that this would be the end of growth for a very long time and that prices would stagnate for years. But in 2011 the Bay Area market did an 80% increase over the next 7 years. Where else in the world can we see a graph like this? Probably only a handful of cities. Most of the graphs resemble climbing Mount Everest. You have highs and dips, but the end destination is always the summit.


Mortgage Rates Are Generally On The Rise

I’ve noticed a lot of people rushing to buy houses because the interest rate is on the rise. That’s definitely a good reason to lock in a cheap rate. For example, if you are borrowing $500k, an increase from 4% to 5% interest rate will cause your mortgage to jump $300/month. That’s a decent difference, but not a life changing difference. Many of us guilty Siliconites spend that on lunch at work every month. Interest rates are creeping up but also note that housing prices are beginning to decline as well. You may come out further ahead if you buy a cheaper house with a slightly higher interest rate. Do a few calculations of buying now vs later at higher rates and see what you come up with.

This graph is from Jan 2016 to Feb 2019. You can see that the interest rates have started to go up since September 2016, but recently have been coming down since Nov 2018.

Bay Area Counties Performance

Santa Clara County and San Mateo County are the most desirable counties to purchase in. I would put San Mateo County ahead of Santa Clara County in terms of desirability which in turns makes it more expensive. Everyone wants to be on the Peninsula! The average median house in California is $538K, where as San Francisco County is more than thrice expensive. Remember median means half way, so 50% of the homes are cheaper, and 50% are more expensive than the figure below:

It’s 2019 Should I Buy?

If I have to make a call, I’m going to say that it’s not the best time to buy. Prices are not increasing at the same rate as they have been. Multiple offers have cooled down and the stock market has taken a dip but rebounded back to some extent.

I would say if you can fulfill all of the criteria below then it makes sense to make a purchase today. Still, I would really wait till the end of 2019 as I  don’t see prices increasing through the end of the year:

  • You plan to live in your house for the long haul, about 5 years or longer. This way if you buy at the dip, you can hold the house long enough to come out in the positive.
  • You can put at least 20% as a downpayment on your house/condo/townhouse. You don’t want to be stuck with PMI. Also, if you can’t put 20% down, you will need to borrow a huge sum which means a big mortgage and a lot of interest cost.
  • You have an emergency fund (remember this article?) that has at least 6 months worth of savings to pay all of your bills. You need to have this after putting your 20% down.
  • You can comfortably pay your mortgage, property tax, HOA, home repairs, and a million other necessary bills and still have some savings left every month.
  • You and your spouse have stable incomes that can pay for massive Bay Area mortgages

What Is An IRA?

A Quick Example

Let me first get your attention by using a simple example. If you are 30 years old with $0 in your retirement account, and you contribute $5,500 annually at a 7% return, how much money will you have when you hit retirement when you are 65? Using Bankrate’s Roth IRA calculator we can see below that your account would balloon to $813K.

Our principal contributions (the money you put in every month) itself is $192k, which helps us yield another $612k through growth.The monthly contribution comes down to about $458 every month. That’s not so bad.


You probably have noticed but the talk about retirement planning is around us perennially. It’s nothing new as we are constantly reminded how underprepared we are on our retirement savings. Radio talk show hosts, webinars on YouTube, Finance experts on the news, the big brokerage firms and their advertising…all of them telling us the same thing: Open an IRA today and start contributing to it.

The IRA, pronounced eye-ruh, stands for Individual Retirement Account which is a special type of account that anyone can open for themselves. The ultimate purpose of this account is to help you live a cushier life after you have retired from your livelihood. You see, we spend on average 40 some years working from adolescence to retirement. We are focused on making money, spending money on ourselves and sometimes saving it if we are smart. But what about saving after you have retired from your livelihood? What about saving for when you need the money say 40 years from now? We will never save for retirement unless we have a structured way of approaching this problem.

So how does the IRA help us live a cushier life in our post-retirement world? Well, it’s an account that you create and fund on a monthly basis. If you reach into that account for a withdrawal you could get taxed and penalized (There’s some minutiae around this which we will touch ahead). An IRA will help you allocate (set aside) money early on. Basically every month, out of your paycheck, you will fund your IRA. You can choose to invest your paycheck in stocks, bonds, and other instruments and you can open one at any bank or online brokerage.

Let’s peel back a layer and get deeper into the details to see how this whole retirement planning thing works.

IRA’s generally come in two different flavors….

Traditional IRA vs Roth IRA

In a Traditional IRA you set aside a few bucks every month into your IRA account. One of the biggest benefits of doing this is that you can deduct this amount from your personal income, which means that your taxable income is reduced and you will ultimately pay less taxes.That’s definitely great. Your money will grow, year after year, and you don’t have to worry about paying capital gains on these when you do your yearly taxes. But….once you hit retirement age and withdraw the money is when you will be hit with taxes. So essentially you see your money grow tax free over the years, but you pay taxes at the end when you withdraw.

In a Roth IRA you also set aside a few bucks every month and deposit it into your Roth IRA. However, you can’t deduct these contributions from your taxable income like you did with the Traditional IRA. And so when you finally withdraw funds from your Roth you can do so without having to be pay tax. Why? Because your monthly contributions to your Roth IRA were taxed as you made the contributions.  Pay taxes now on your monthly contributions and withdraw tax free later without worry. This can be good because say, 40 years from now when you retire, the taxes may be super high. That way you can protect yourself against crazy high taxes in the future. Also it is generally easier to pay taxes when you have a job rather than paying taxes when you are retired. Another reason to go for the Roth.

The Devil Is In The Details

There are a myriad of detailed rules on the Traditional and Roth IRA accounts. They have to do with your age, the age of the account, and qualifying withdrawals you can make without penalty. We are going to keep it very high level so you can can focus on understanding the concept.

If you are under 50 you can contribute a maximum of $6,000 annually in your Roth or Traditional IRA. If you are over 70 you can contribute $7,000 annually. If you are married filing jointly you guys can’t make more than $203K, and if you are single the cutoff is $137K. If you are 59.5 yrs old and haven’t had your Roth opened for at least 5 years then you will owe taxes and a 10% penalty if you withdraw.

Regarding withdrawals from a Roth IRA: If you are at least 59.5 years old and have had the account for 5 years, you can withdraw unlimited without penalty or tax. You are allowed to take out $10k as a first time home buyer without penalty (taxes still apply).

Reasons To Open An IRA

The number one reason anyone opens an IRA is so that your money can grow. We all know that long term growth is really bolstered by big contributions at an earlier age. The goal is to have a nice pile of cash waiting to you by the time you hit retirement age.

Should You Open An IRA?

That’s the big question. We will reserve another separate article to answer just this question. But there’s no doubt that the Roth IRA seems to be a better deal than the Traditional IRA. You can grow your money in a separate account and not be tempted to touch it. Paying taxes in the beginning also seems to be beneficial. This is definitely a step towards creating a cushy post-retirement life.








How To Network in 2019

I’ll be straight up honest. Networking usually doesn’t work. Think about all the times you networked and all the awkward and forced conversations you had. How many of these networks worked out for you? Rarely, if any. The most difficult type of networking is when you need a job. You are desperate, but you are forced to go out and show your best even when you are at your lowest.

  1. Get Out Of The Networking Mindset. Stop being a salesperson. Stop pitching. Stop asking. Strive to meet many people, and keep attending events. Always make sincere conversations and don’t be overly focused on adding people to your network list. Focus on having a good conversation. Things will evolve naturally.
  2. Map Out Your Closest Friends And Colleagues. This is your core group. They will help you much more than a random LinkedIn contact. You know these people well and they know you. Be good to these people. Very good. They will listen to you.
  3. Be Clear On What You Want. Yes, I told you not to pitch. But if someone asks, you have to have an answer. Develop a clear and succinct pitch to the question “What do you do?” or “What are you looking for?”
  4. Ask What They Want. You are not the only one who needs a job, sale or a customer. Other people attend events for the same reason as you. Try to gauge what they are looking for and try to set them up with a contact they may need. Guarantee they will remember you next time ‘round.
  5. Do Not Be Dismissive. Status, title, wealth. Some people have it, most people don’t. It doesn’t matter. Enter relationships with a clean heart.
  6. Build Your Network Before You Need It. Network building is a long term play. You need to gently plant the seed before anything grows.
  7. Follow Through. If you promised to connect someone to another person, you better do it. Don’t break your promises. The only thing that matters is your reputation. Keep that intact.  

Remember, networking is a long term play. Keep conversations genuine and authentic. Also keep in touch when you don’t need anything.

Why Are You Managing Your Money Like A 20 Year Old?

People these days are managing money like they are still 21. These people aren’t “adulting” well and still haven’t a clue about optimizing their finances. They live paycheck to paycheck and with whatever is left over they carelessly leave it in their checking account or move it over to a lame savings account that pays .01% interest.

Below are some of the minimums you should be doing:

Create A Spreadsheet

If it’s not on paper, I am convinced that you don’t know where your money is going. Making an expense sheet requires that you list every single expenditure and get it down on paper. The more granular the better.

I’ve gone absolutely crazy perfecting my spreadsheet getting as nitty gritty as possible. I opened up all my credit cards and downloaded them to Excel. I then categorized purchases and lumped these categories together. I then averaged out these monthly so I knew what I was spending in which categories.

High Yield Savings Account

If you are still banking at Chase and storing your money in a savings account there, you are leaving money on the table. Push this to a high yield savings account. Some time ago, I listed out the best Online Savings Accounts. Rates have now gone up to 2%.

Credit Cards

If you have a credit card balance and you aren’t paying it off in full every month, you are committing a juvenile sin by being charged twenty-something percent in toxic interest. If you are in your 30s and 40s and your credit score is in the 600s, something is seriously wrong. Check out my what makes up your credit score article..

ETFs and Stocks

If you’ve been doing your reading, you saw my article on ETFs. Take a good read and start looking at the best index fund ETFs. Invest for the long term. Also don’t invest anything that you can’t afford to lose.


Debt is bad, and debt with high interest is even worse. Interest rates play a big role in how quickly you can get out of debt. My suggestion is to pay off debt before you invest money. In some cases, I advise the opposite. For example if your company has a strong 401k match, you may want to maximize your contribution. But get rid of that debt quick!


Retirement should be in the back of your mind. You should at least think about how much you need to retire and how much you have. I won’t go into the details as I have a full blown article coming out on this. Understand 401k’s, IRA and Roth IRAs. I’m not a big fan of these instruments as I believe socking away your hard earned dough so that a money manager makes fat fees on your stash while your money remains locked up is not my cup of tea.

Emergency Fund

You know about emergency funds because you read my article on this right? If not, then have about 6 months of emergency funds that can pay for necessities when you lose your income. Remember, your savings should ideally be separate from your regular savings.


An Easy Guide To Index Funds, ETFs and Mutual Funds

It can all be confusing: Indexes, ETFs, Mutual Funds, Index ETFs, Index Mutual Funds. What the heck is all the difference?

So What Exactly Is An ETF (Exchange Traded Fund)?

Everyone knows that we can buy individual stocks. We also know that we can buy a collection of stocks, known as Mutual Funds. But now with ETFs, you can buy a collection of stocks that trade like stocks. You see, mutual funds don’t trade like stocks. They are bought and sold only once at the end of the day.

Ok great, now we know ETFs are a collection of stocks, and they don’t trade like Mutual Funds…

ETFs on the other hand can be bought and sold throughout the day like regular stocks. ETFs are usually cheaper than mutual funds but ETFs still have brokerage, operating expenses and management fees. One more thing about ETFs…they can track an entire index, or they can track a specific sector (tech, health, real estate)

So now we know ETFs can trade throughout the day and still have expenses…

ETF Index Funds

Remember how an ETF was a collection of stocks? Well an ETF Index Fund is a collection of stocks that tries to mimic the market (a big index). Some big Indexes you already know: SP500, DOW, NASDAQ. You can’t buy these, they are just trackers, but if you buy an ETF Index you can mirror them. The purpose of index investing is to diversify your holdings, reduce risk and basically get market return. So if you want to make market returns on your money for the long term, buy an index ETF and sit back. The market usually receives 10% to 12% a year.

What Are The Different Types of ETFs Out There?

Market ETFs – They track the market as a whole, think SP500 or NASDAQ

Sector ETFs – You can invest in Tech, or Oil, or BioTech or Pharmaceuticals

Bond ETFs – US Treasury, corporate, municipal etc

Commodity ETFs – Invest in Gold, Silver, Copper, Oil

Alternative Investment ETFs – Private Equity, Hedge Funds, VCs, Real Estate Development.

If You Are Still Confused…Just Remember This…

Stocks: An individual company that you buy a share in

Fund: A collection of stocks

Mutual Funds: A collection of stocks that can be traded once a day

Index Funds: Usually a mutual fund that tracks indexes (markets), can be traded once a day

ETFs: A collection of stocks that can be traded multiple times a day

Index ETFs: A collection of stocks that can be traded multiple times a day, which also mimics a market or sector


How I Increased My Credit Score 230 Points

It was a tough time. I was young, inexperienced and had absolutely no idea about the importance of a good credit score. My job contract had ended and I was out of a job and essentially out of an income. I had $5,000 worth of credit card debt that slowly snowballed from careless eating out and other small things.

A few months later, I saw my credit score plummet down to 550 points. At one point I needed a car so I headed to the dealership to see what I could qualify for. He ran my credit and quoted me $700/month which really should have been $350/month had I come with good credit. I was stunned.

Essentially I had committed financial suicide…

So how the heck did I get out of this mess?

  1. Pay Off The Debt: I negotiated with the collection agency. I had them slash the original debt into a fraction of the amount. I paid it off in a lump sum.
  2. Don’t Miss A Payment: I decided to make every single payment on time on all of my credit cards. I didn’t miss even one. This was the most important thing I did.
  3. Apply For More Credit: Once my score was out of the red and into the black ( I was making payments on time) I began applying for credit. These cards were basic with small credit lines. But that’s all I was getting approved for. I started charging these cards immediately. You gotta use the cards. They just can’t sit there. My score edged even higher and so I started applying for competitive cards. Banks started to trust me again. They were comfortable giving me more credit.

These three rules helped me boost my credit from the 500s to the high 700s. This isn’t a one month process. This can take a couple of years. Just be steadfast and stick to the plan.

How To Prepare For A Recession

The Data, Generally Speaking

Stocks have been on a tear since Mid-2009. That is 9 years of explosive growth and one of the longest contractions we’ve ever had. Real estate has been on a rebound since early 2012 as Bay Area homes show no signs of a slow down. But that seems to be changing as we’ve hit an inflection point. You can talk to a hundred experts and you’ll get a hundred answers. But one thing is for sure, the market has never been higher.

SP500-Over The Years

So the 64 Trillion dollar question is: are we headed higher on the graph or are we headed for a free fall? As of August 2018 more news is coming out about an impending crash. Investors are quickly putting on the brakes.

But regardless of what the market does, what I really want to know is, are you prepared for a crash? How resilient are you to a market meltdown?

Let’s dive in and look at all the housekeeping you have to get in order before the going gets tough:

Pad Up Your Emergency Fund

Let’s get one thing straight, your emergency fund is completely separate from your savings. The emergency fund is there to carry you over in case you lose a job. A comfortable padding should allow you to take care of all your mandatory expenses for 6 months without any type of income. Money is time so the more you have stashed away, the more time you bought yourself.

Create A Budget

So how much are you really wasting on lattes? Be meticulous in putting it together. Typical expenses include: rent, car payment, school payment, groceries, utilities, cell phone, credit cards (better pay this fully each month!), gas, cable, subscriptions, clothing, travel…and you get the idea. If it’s not written down on paper you most likely can’t see it. Trim the fat!

Are You Invested In The Markets

Do you have a financial plan? When I say ‘plan’, I’m really talking about a playbook. The younger you are, the riskier your portfolio. The older you are the more conservative your portfolio. So think fixed income (bonds, T-Bills, CDs) or high yield savings accounts. If you are highly invested in equities (stocks), you may want to think about reshuffling. Many experts say to not time the market, and let the money grow long term.

Clean Up Your Resume and LinkedIn

Polish up your resume and Linkedin and start reaching out to your contacts. Get a conversation going with your friends, colleagues and especially LinkedIn contacts. You don’t want to reach out to them out of the blue when the situation is dire. Build connections now.

Attend Events and Network

Start attending events, workshops, conferences and just get out there. Most of the good events are paid, and the mediocre ones are free. Definitely pay for the good ones, they are worth it and attract a higher caliber crowd usually. You can volunteer at events and attend them for free.  Meet people, and add them to your network/Linkedin. Beef up your network so that you can tap into it later. Be ready to offer the help too.

The 5 Commandments Of Being Rich

We are living in a world of insane opulence. More millionaires and billionaires exist today than any other time in history. But the overwhelming majority of us, as in 98% of us, are just middle classers putting food on the table and keeping the lights on.

But…if you pause just for a second and straighten out your fundamentals, you can significantly increase the quality of life and see incredible results.

Below I have listed the 5 Holy Commandments Of Being Rich. Follow them, and avoid the pitfalls that most folk make:

  1. Pay Off All Debt

Debt is toxic. Do you really really need to make that purchase? A car, a Master’s degree, an expensive shoe? Bring awareness to your spending. If you can’t pay off your credit card  completely at the end of every month, you are spending too much.

      2.  Pick A Job That Is A Fit, And That Hopefully Pays Well

Pick a job that you love, can do for a long period of time and can master. Having a good, consistent income is the cornerstone of life.

      3. Have A Strong Credit Score

This is the most important number in your life. Having a good credit score is like being in a full blown relationship. Guard it. Respect it. Build it. Imagine what kind of savings you can get over the duration of a car loan or home loan. The savings literally in the thousands of dollars.

      4. Consistently Add To Your Savings and Investments

Sock away your paycheck. Invest your money in passively managed funds: Index ETF Funds, Index Mutual Funds (we’ll explain these in a following article). Keep what’s left over in a high yield online savings account.

      5. Make The Right Relationships

They say you are the average of your 5 closest friends. It’s true. Be selective in friendships, your love life and all relationships. Be purposeful in who you connect with. Time is limited.

That’s it. That’s my list of Commandments to a happier life. Thoughts? Leave me a comment!